The University of Hawaii today announced salary reductions for 216 executive-managerial employees, effective Nov. 1, in preparation for a significant budget shortfall caused by the COVID-19 pandemic.
UH President David Lassner has directed a salary reduction of 9.23% for all executive-managerial employees. Any remaining portion of salaries above $200,000 will be reduced by 11%.
Lassner volunteered to reduce his own total compensation of $395,004 by 20%.
“This is not related to your amazing efforts for the university and people of Hawaii,” said Lassner in a message Tuesday to the employees announcing the pay reductions. “Payroll savings represent one of a handful of tools we have available for substantial cost reductions until we can achieve the structural savings needed to thrive in the new environment.”
The university’s executive-managerial employees, which include chancellors, deans and various directors, account for 6% of the approximately $600 million in annual salaries paid to about 7,342 employees across the 10-campus UH System.
These salary reductions, the university said, will save UH $2.2 million this fiscal year (2020-2021), and another $3.4 million annually in fiscal year 2021–2022 and beyond, if they remain in place.
“This should convey the serious level of importance regarding our current financial situation,” said UH Vice President for Budget and Finance and Chief Financial Officer Kalbert Young during today’s Board of Regents Budget and Finance Committee meeting. “This strongly demonstrates all management personnel’s sacrifice and contribution to help the university during this time of financial shortfalls.”
The state is projecting a $2.3 billion operating budget deficit to the current biennium budget.
Approximately 60% of the 10-campus system budget comes from state General Funds. Economists and the State Council on Revenues have forecast state revenues will not return to pre-pandemic levels until after fiscal year 2025–2026, at the earliest.
Tuition revenue accounts for about 40% of UH’s operating budget, and is projected to decline this fall compared to the previous year.
The salary reductions follow other cost-saving measures, including a freeze on hiring and suspension of all non-extramural-funded travel.