MU budget problems make employees' February bleak

Thursday, February 19, 2009 | 11:57 a.m. CST; updated 3:29 p.m. CST, Wednesday, March 4, 2009

February has never been my favorite month. It's usually cold and gray. This year, even the one bright spot we can count on – the opening of spring training – is clouded by drugs and, for the Cardinals, even more uncertainty than usual.

Neither the month nor the mood in Columbia got any brighter Monday afternoon. That's when Betsy Rodriguez, our university's vice president for human resources, stood before 100 or so of us employees to explain the fiscal hole into which the institution has fallen and the price we'll have to pay as we try to dig our way out. The crowd seemed a mix of the confused and the disgruntled, with a fair number in both categories.

My guess is that when the session ended there was less confusion but no more joy.

Vice President Rodriguez put her master's degree in psychology to work immediately by assuring us, "We're in a pretty good position here." It turned out that her point of comparison was such real basket cases as Arizona State University, where furloughs, layoffs and program slashing are already under way. A bit later, she admitted, "I didn't bring a lot of good news." By not a lot, she meant none.

As she walked us through the procedures for possible furloughs ("unpaid vacation") and layoffs, she emphasized that the bosses see those as undesirable and unlikely, but not impossible. If, for example, the state were to demand a major give-back at the end of this budget year, June 30, the unlikely might become unavoidable.

In case layoffs do become necessary, she said, plans are being drafted to ease the pain with severance pay and continued university contributions to insurance coverage.

For sure, one thing we won't see is another early retirement offer. With 4,000 employees eligible, that would be too expensive and too disruptive, she said.

She quoted President Forsee as saying, "The worst thing that can happen is that we delay action." Then she explained the undelayed action that will take money out of people's pockets. That, of course, is the requirement effective July 1 that, for the first time, all benefit-eligible employees will begin contributing to the pension fund.

We've all heard about that. The hit will be 1 percent of salaries up to $50,000 a year and 2 percent above that. No exceptions, no opt-outs, she reminded us. A good many of her listeners were less than happy about that, and she seemed sympathetic but firm.

Until now, she said, our university has been one of the few to require no employee contribution. Her PowerPoint slide showed one result: Our pensions rank 14th out of the 15 institutions with which our decision-makers compare us. At least, that's better than faculty pay, which remains dead last among AAU institutions.

The pension problem, she explained, is simple. The fund that pays them has lost 28 percent of its value so far this budget year. It's currently valued at about $2.1 billion, as against $2.7 billion in pension commitments. Higher contributions will be needed for at least the next several years to keep that fund healthy and pensions protected. The money has to come from somewhere, and employee contribution is the least-bad option. For the fiscal year beginning July 1, employee contributions are expected to total $11.9 million.

To reach that number by pay cuts, for example, would mean lower pensions later, she pointed out. And eliminating such perks as the tuition break for employees' dependents would hit lower-paid staff the hardest.

She convinced me. I even thought, in a burst of no doubt unjustified optimism, that once we get past the crisis, continued employee contributions could mean higher pensions for future retirees.

The tone of the meeting was captured by a plaintive request at the very end. Somebody asked whether, in view of the new pension deduction and the promise of no raises, "we can't at least get free parking."

Vice Chancellor Jackie Jones, who has been Dr. No on the Columbia campus as long as I can remember, practically leaped from her front-row seat to explain why that can't happen.

Maybe the federal stimulus will hasten spring.

George Kennedy is a former managing editor at the Missourian and professor emeritus at the Missouri School of Journalism.

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