Financial Impact

MSU is estimating nearly $300M in lost revenue for FY 2021 due to the impact of COVID-19 on the university. Looking forward to the next fiscal year, MSU anticipates an additional $300 million in lost revenue to the university’s general fund budget and auxiliary units.

Additionally, there is the risk of a significant decline in MSU's state allocation based on forecasted large decreases in state revenue and new expenditures associated with the pandemic.

There are many difficult budget and employment decisions that are impacting the campus community. President Stanley on June 22 announced further plans to address the budget shortfall. Below are the steps the university is taking to address the current financial situation: 

• President Stanley has announced all MSU executive managers and deans are taking a 2% to 8% temporary pay cut based on salary levels. He will be taking a 10% pay reduction. Previously these cuts were for FY 2020 but now also will extend into FY 2021. Additionally, executive managers will not receive any pay raises in FY 2021.
• MSU is implementing a minimum 3% budget reduction to academic and administrative units. The Office of Planning and Budgets has started its communications to colleges and units about this process and continues to provide updates to leadership on the progress of identifying reductions. MSU will save about $20 million through this process.    
• MSU is implementing a wage reduction for non-union faculty and academic staff, at an average of a 2.3% salary reduction. The temporary wage reduction uses a graduated scale ranging from 0.5% for those with the lowest salaries to 7.5% for those with the highest salaries. All postdoctoral scholars (regardless of salary level) and any academic staff with salaries below $50,000 are exempt from the temporary pay reduction, which takes effect Sept. 1. Reductions will be in effect for at least one year but may be extended depending on the university’s financial situation. More details will be shared by Academic Human Resources.
• Effective July 1, MSU will reduce its matching contributions from 10% to 5% of employees’ compensation. This applies only to executive management and non-unionized faculty and academic staff, because MSU cannot unilaterally implement such a change for employees covered by collective bargaining agreements. The temporary retirement reduction will be in effect for at least one year and will be reevaluated as we learn more about the university’s long-term financial circumstances.
• Several MSU unions and the university have reached agreements on furloughs. Furlough notices have begun going to employees in different units across campus. As of the end of June, about 700 employees have been furloughed, including 280 that were voluntary.
• Athletics department contract employees making $100,000 or greater are taking salary reductions on a sliding scale Sept. 1, 2020, to Aug. 31, 2021.
• A university-wide hiring chill was announced in March, with some exceptions. President Stanley has announced that chill will be tightened, and the filling of vacancies will be limited. All hiring decisions must be approved by the relevant vice president or provost. 
• The university is continuing to examine all capital projects to determine which can be paused, briefly delayed or indefinitely postponed. A current list of deferred and proceeding projects can be found here. In total, this will save MSU nearly $77 million.
• MSU will reduce or eliminate consultants wherever possible. 
• Discretionary expenses, including travel (which already has been curtailed greatly), are being reduced to the greatest extent possible.