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Budgeting for less, UM explores buy-outs

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State and campus administrators are considering a buyout program as one way to reduce faculty and staff at the University of Montana. At the request of UM interim president Sheila Stearns, staffers in the Office of the Commissioner of Higher Education are exploring legal and logistical questions to determine if buyouts could help reduce salary expenses at the cash-strapped campus, confirms Kevin McRae, the deputy commissioner for communications and human resources.

While those discussions appear to be in an early stage, they indicate how quickly Stearns' interim administration is moving to develop cost-cutting strategies. In her first public address, on Jan. 19, Stearns echoed earlier statements by campus and state officials suggesting that UM may need to reduce the percentage of its budget spent on salaries by as much as 10 percent. She has not announced a timeline for any such reductions.

The Indy became aware of the buyout discussion after reviewing a copy of Commissioner Clayton Christian's calendar, which the office supplied in response to a records request. The calendar contains a Jan. 25 appointment titled "Discuss UM Buyout Plan."

McRae says the appointment consisted of a "20-second" meeting between him and Christian in which the commissioner asked him to study options regarding an early retirement buyout or incentive program. Specifically, administrators want to determine if buyouts could be offered in a nondiscriminatory way while still achieving strategic goals, he says.

"The nondiscriminatory aspects that come into play sometimes make it an unwieldy concept to administer," he says.

UM's Director of Communications, Paula Short, was unaware of any buyout discussions when contacted by the Indy. After meeting with Stearns in Helena, where the president was receiving a Governor's Humanities Award, Short says that Stearns' request of Christian "was informational for her benefit and based on a question posed to her recently during a strategic planning session."

Stearns and Christian have met at least weekly since she assumed presidential duties on Dec. 12, the commissioner's calendar indicates. By comparison, Engstrom and Christian had no private appointments scheduled between Aug. 5 and Oct. 31. On Oct. 31, the pair was scheduled to visit for three hours.

Stearns, in a subsequent conversation after an online version of this story was published, said the buyout information request was one of "dozens of wide-ranging questions" she's asked during her first month.

UM interim President Sheila Stearns says she asked state higher education officials to research whether the university could offer buyouts as a way to reduce staff. - PHOTO BY CATHERINE WALTERS
  • photo by Catherine Walters
  • UM interim President Sheila Stearns says she asked state higher education officials to research whether the university could offer buyouts as a way to reduce staff.

Campuses in the Montana University System have not offered widespread faculty buyouts in recent history. The commissioner's office did coordinate with Montana State University approximately 10 years ago to offer early retirement packages to a handful of faculty, according to McRae.

Nationally, however, buyouts are becoming an increasingly common method for public and private universities to cut costs, particularly as faculty get older. The Atlantic reported on the trend last June, noting that the proportion of professors over age 65 doubled from 2000 to 2011.

"The buyout programs seem like a direct path to reducing the numbers of most highly paid employees," the magazine reported. "But it also poses a risk: When those professors leave, their tenure-track positions may be replaced with non-tenure-track ones, meaning that over time, the number of tenured positions on campus could plummet."

Given UM's enrollment crisis, University Faculty Association President Paul Haber sees buyouts as a good alternative to outright terminations. The idea has come up during his conversations with other faculty, and Haber says he's glad to hear administrators are also thinking about it.

"I'd certainly rather have people resign and feel good about it than have to fire people," he says. "I like that a lot better."

A year ago, then-President Royce Engstrom oversaw the elimination of 192 full-time positions from the general fund budget. Most of the reductions were accomplished by scrubbing already-vacant positions and funding others through alternative budget sources. That budget-cutting exercise included 27 terminations.

UM's budget was balanced this academic year, but the future is less certain. The university system is likely to take a funding cut from the Montana Legislature this spring, while Stearns has said that her budget team is planning for a 1,400-student enrollment decline next fall.

Stearns also told the mid-year address audience that UM must report its 2018 fiscal year budget to the Board of Regents in May, according to the Missoulian. McRae says campuses don't typically present budgets until the regents' September meeting, but adds that regents "could and might" decide to accelerate the process.

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