Earlier this month, the WVU Board of Governors approved modest tuition and fee increases for WVU students starting next year. The headline-grabbing angle was that the hikes were the smallest in at least 20 years.
The less well noticed nugget out of that BOG meeting was about spending cuts. “The Board plans to reduce salaries, benefits and supplies by $14.8 million,” MetroNews’ Jeff Jenkins reported.
Yesterday details of that planned reduction became clearer when WVU announced a Voluntary Separation Incentive Program (VSIP). That’s a fancy name for employee buyouts.
Under the program, WVU may offer one-time lump sum payments to “eligible faculty and staff, who in return would agree to separate from employment with the University either by resignation or retirement.”
The buyouts are open to all faculty and staff who meet the eligibility requirements, which include holding a regular, benefits-eligible position at the University and having 20 or more years of service. WVU Vice President for Strategic Initiatives Rob Alsop said that about 1,300 employees qualify for the buyout and the University estimates up to 130 will take it.
“Most of those employees are happy and not ready to retire or separate,” Alsop said. “From that, a small fraction of that (1,300 employees), we think, less than 10 percent would make it all the way through the process.”
Employees who agree to take the buyout before the end of this year will receive a lump-sum payment equal to one year’s salary. Those who wait until next year to leave would be paid an amount equivalent to 50 percent of their annual pay.
“We think that ultimate savings to the University on an annual basis would be about $7 million,” Alsop said on Talkline.
WVU has offered voluntary separations before, but the buyouts are on a larger scale this time. Colleges everywhere are adapting to flat or reduced state aid and pushback over annual tuition increases, while also coming to the realization that they cannot continue with a “business as usual model.”
For example, last October 60 tenured or tenure track professors at the University of Kansas took early retirement as part of a plan to cut $20 million from the school’s budget. Penn State offered a voluntary retirement plan to eligible employees in 2016.
“This (the buyout plan) is one of the strategic ways we’re trying to reduce costs, remain financially sound, and make strategic investments,” Alsop said.
The buyouts are voluntary, however, it’s reasonable to expect some of those who qualify will notice a shift of direction within their departments and see the handwriting on the wall. What happens if not enough employees take the buyout? Alsop said the University has several options before there would be any layoffs. “This is not a crisis,” he said.