Michigan State University expects $150 to $300 million in losses, more cuts
Michigan State University has announced a new round of cost-saving measures arising from the financial impact of the COVID-19 pandemic.
In an email on Monday to all university employees, MSU President Samuel Stanley Jr. said the university is looking at financial losses between $150 and $300 million for the 2021 fiscal year, beginning July 1, 2020. That's on top of the $50 to $60 million in estimated losses MSU announced last month for the current fiscal year ending June 30.
According to Stanley, the additional budget challenges for fiscal year 2021 arise from a possible significant drop in state funding for the university and in athletic revenue.
Stanley said another reason for the projected budget shortfall is the economic toll of the pandemic on the ability of families and students to afford college, adding that is why MSU decided to freeze tuition and housing rates for the upcoming academic year.
Stanley said the university is considering campus-wide pay cuts, and it's also considering reducing its above the match retirement plan contributions.
Stanley said MSU will continue the salary cuts for senior administrators that were announced last month.
Other previously announced measures that MSU plans to continue include:
- Tightening limitations on hiring and filling vacancies
- Evaluating all capital projects for possible pause, delay or indefinite postponement
- Limiting travel
Stanley also announced plans to implement a minimum three percent budget reduction for all academic and administrative units.
"Given all of the hard work you have been putting in during this time, both personally and professionally, it is very difficult for me to ask even more of you," wrote Stanley in his email. "But I do need to ask you for greater sacrifices to address the current situation and preserve the long-term strength of our great university."
Stanley wrote the proposed cuts may need to be extended beyond the 2021 fiscal year "given the scope and scale of the pandemic and its financial impact."