Hitch’s say on budget cuts

The following letter was sent as an e-mail to UVU employees on March 29 regarding budget cuts:

Dear UVU employee,

At long last, the 45-day legislative session has concluded. On the positive side, UVU received $2.8 million for planning money for the Science building addition (hurray!) and some one-time federal stimulus targeted funding. On the downside, the budget outcome for UVU is consistent with what happened to all higher education institutions and is a 17% base tax fund reduction of ($11,615,200 for UVU) for 2009-10. In good years, we generally receive a legislative appropriation for salary or benefits increases. We did not receive an increase for salary and benefits this year.

For several months, we have known that a significant tax fund reduction was likely and identified a comprehensive list of possible tools to address such a cut. We are addressing the cut using every tool in the toolbox. In summary, UVU’s response to the tax fund reduction are distributed as follows:

Many submitted suggestions encouraging the use of tools like unpaid furloughs, salary reductions, premium increases and other compensation reduction ideas. After careful consideration of our current salary/benefits structure and consideration of the most equitable solution across employee categories, we selected an increase to the employee medical premiums as one response to the budget reduction.

Given the lack of legislatively funded increase for medical premiums, the Benefits Committee reviewed plan change options, as well as increasing the employee premium share. In order to maintain the richness of our benefits package, their recommendation was minimal plan design changes and an employee premium increase of $5.58 per month for family coverage. That recommendation was accepted by President’s Council.

In order to address our budget shortfall, President’s Executive Council has approved an additional employee premium increase of $19.42 per month for family coverage. Individual and couple premiums will be impacted proportionally.

After combining the rate increase recommended to maintain our benefit plan and the amount we are applying to the budget reduction, the total employee premium share for a family will increase from the current $15.14 per month to $40.14 per month. Our research reveals that this amount is substantially below most USHE institutions’ employee premium share for less-rich medical plans.

We have continually kept the governance groups aware of the range of tools in the budget reduction toolbox and have considered carefully their feedback (and yours, through the electronic “suggestion box”) as we crafted the final response to the budget reduction. In keeping with our interest in consulting widely and being as transparent as possible in addressing the significant budget cuts, we reviewed the decision to increase the premium share this week with Faculty Senate Executive Committee and with PACE’s Executive Board.

Please watch for additional benefits plan and premium information from Human Resources in the coming week in preparation for Open Enrollment that begins in April.

These are challenging times. While we regret having to use any of the tools in the toolbox, we believe they have been deployed at levels that have minimized the need to eliminate positions and employees, have allowed us to continue to serve students well, and have ensured fiscal responsibility for the future.

Thank you for all you are doing to keep UVU alive, well and moving forward!


Liz Hitch, Interim President

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