New Mexico State University plans to save about $190,000 annually starting Friday, when Chancellor Garrey Carruthers and many other high-ranking employees take pay cuts.
The cuts are part of the university’s still-developing plan to address a $10.7 million annual budget deficit caused by decreased state funding and falling enrollment.
Carruthers, Provost Dan Howard, and many other employees making $200,000 a year or more will see their pay cut by 3 percent on Friday, when the new fiscal year begins. Many employees making between $150,000 and $199,999 annually will see their pay cut by 2 percent. The salaries of many employees making between $100,000 and $149,999 will be cut by 1 percent.
Faculty are exempt from the cuts because the university has spent several years trying to bring their pay up to market value, NMSU spokesman Justin Bannister said. Coaches work under legally binding contracts and their salaries also won’t be cut, he said.
In addition to Carruthers and Howard, all deans and vice presidents are among the employees taking pay cuts.
Carruthers first announced the cuts in an April 4 memo to employees. The chancellor, like coaches, is a contract employee who could have been exempt, but he wrote that he opted for a pay reduction “because I want to be part of a team solution.”
During the current fiscal year that ends Thursday, Carruthers made $385,000. For the fiscal year that begins Friday, he will make $373,450, Bannister said. Howard will see his pay decrease from $289,722 this fiscal year to $281,039 next fiscal year.
Of course, the $190,000 in salary cuts doesn’t come close to addressing the budget crisis. And the Board of Regents rejected a proposed tuition increase to help cover the shortfall in April.
The university is considering other options. On Monday, the Regents cut annual leave, sick leave and insurance benefits for many current and future employees. But how much money that will save isn’t clear.
Initially the savings from reducing benefits won’t add up to much, Bannister said. Employees hired starting Friday will receive fewer benefits than current employees, so the savings will add up over time.
For example, the university will continue offering retiree health coverage for current employees but won’t for employees hired starting Friday. The university currently spends $3.5 million a year on retiree coverage, Bannister said, so the savings will grow over time as new employees replace current workers.
The university will also quit buying back sick leave when employees stop working at the university — a cut that applies for most current employees and all workers hired beginning Friday. The university had been spending about $178,000 a year buying back sick leave, Bannister said.
“These cuts bring the university more in line with the best practices offered by other employers today,” he said.
The university is considering other options. Eliminating the Employee Health Center is among the possibilities that has been discussed. Administrators will hold a town-hall meeting in July, Bannister has said, “to bring the community up-to-date with the current budget situation, university restructuring efforts and what additional measures may be needed.”
The university has set up a website with documents, archived video of town-hall meetings, and other information about the budget situation.