NEW BRUNSWICK – A coalition of 19 unions representing 20,000 workers across three Rutgers University campuses is protesting a recently announced fiscal emergency that could lead to wage freezes and more layoffs caused by $183 million in revenue lost during the COVID-19 pandemic.
The protest is based on a lack of furloughs, reserve spending and the enactment of several other suggestions issued by the coalition, some of which could have saved the university $130 million if enacted when initially proposed a month ago, union representatives said. Each week, the savings dwindle by $10 million, according to the coalition.
The university previously announced layoffs of nearly 1,000 dining-service employees and adjunct professors, who won't be returning in the fall. The fiscal emergency could create more layoffs and freeze a 3 percent raise union employees would receive on July 1, according to the university.
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"We declared a fiscal emergency as is referenced in certain labor union contracts, which then triggers a mandatory 21-day negotiating period," Rutgers spokeswoman Dory Devlin said. "During that time, the university and its labor unions investigate steps that could be taken to address the emergency before any action is formally taken by the university, including the postponement of a scheduled 3 percent wage increase on July 1."
Economic challenges
Rutgers has spent $50 million to refund students for unused campus services, such as dining, housing, and parking during remote instruction since mid-March. However, the university faces a class-action lawsuit for reimbursement of on-campus tuition and other expenses for services not utilized because of campus closings caused by the pandemic.
Earlier in the year, the university announced that it will lose $60 million in surgical procedures at Rutgers medical centers canceled because of the pandemic, plus, because of a state spending freeze, $73 million in state appropriations through an extended fiscal year that ends on Sept. 30.
Rutgers will get some of that back from the $68.8 million Governor’s Emergency Education Relief Fund portion of the CARES Act, according to the state Secretary of Higher Education, but the amount hasn't been determined yet. According to the U.S. Department of Education, Rutgers also will receive another $27 million from the CARES Act to fill unanticipated costs caused by the pandemic.
In the meantime, the university has been drawing on a $600 million reserve fund, Devlin said.
"We will continue to draw down upon them because we will still have a deficit in (fiscal year 2021) even after taking extraordinary financial measures to fill the more than $260 million deficit projected for the balance of (fiscal year 2020) and for the next fiscal year which begins on July 1," she said. "We have been negotiating in good faith and intend to continue to do so, especially during this critical 21-day period. We just reached an agreement on a furlough program with AFSCME that will save 450 jobs and are hopeful that more agreements can be reached."
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Devlin said the university also has cuts by $7 million its athletics budget, which was $93 million in 2019, according to university documents. She said that includes a cut to the nearly $9 million the university's football coaches originally were contracted to receive, nearly half to returning coach Greg Schiano, who took a four-month 10 percent pay cut to his $4 million annual salary. Each of his coaches took a four-month 5 percent cut.
Fiscal emergency
Earlier in the year, the university's senior leaders also took a 10 percent pay cut for four months and the next 100 top administrators took a 5 percent cut over the same period.
But the coalition said it would like to see more of its cost- and job-saving suggestions met during the 21-day negotiation period and is hopeful incoming president Jonathan Holloway will make a positive administrative impact when he takes office on July 1.
"By declaring a financial emergency, Rutgers is tearing up our contracts and unilaterally attacking our unions and our most vulnerable members," the coalition said in a statement. "It is also turning its back on the plan developed by our coalition to confront the COVID-19 crisis with a work-sharing furlough program that would prevent layoffs and program cuts, protect the most vulnerable, and bolster the university’s financial health. We ask President-designate Holloway and the Rutgers Board of Governors to exercise leadership and act now to steer a different course."
Rutgers does not face a true fiscal emergency, according to the coalition.
For the remainder of fiscal year 2020, the university is forecasting a negative change in Fund Balance Operations of almost $58 million, Devlin said. That figure doesn't warrant a fiscal emergency, said the coalition, which also stated that the university hasn't tapped enough into its $600 million reserve.
"Generated in large part through hikes in undergraduate tuition over the past several years," the coalition said, "these reserves are a literal 'rainy day' fund that could be used to balance the budget and provide support for graduate students and other vulnerable groups as we battle the overlapping public health and economic crises in New Jersey."
In addition to state and federal relief funding, the university also will generate revenue from its COVID-19 saliva test, which was produced by union members, the coalition said.
The hiring of Jackson Lewis, which the coalition described as one of the country’s most notorious union-busting law firms, reveals that this battle is not primarily about money, union representatives said.
"Instead, after squandering $10 million a week of potential savings from work-sharing, the administration is imposing a top-down vision of austerity on our state university that downplays its responsibilities to Rutgers’ students and workforce," the coalition said. "This is all the more troubling given the unwillingness of the Rutgers leadership to take a significant salary cut during the crisis. While 312 high-level administrators make a total of $65.1 million in salary alone, they have only agreed to a 1 to 3.3 percent reduction in their total annual salaries because of the crisis."
In comparison, the coalition said, the administration at Harvard University has taken a 20 percent pay cut for an entire year.
The coalition said that it will organize to enforce contracts and pressure the administration to settle outstanding agreements and stop retaliating against medical faculty who speak out on behalf of union members.
"We will demand that Rutgers preserve and enhance the pay of front-line health care workers facing the ongoing coronavirus pandemic," the coalition said. "We will insist that the administration rescind the order that effectively laid off 20 to 25 percent of our (part-time lecturers.) We will fight for a one-year funding extension for teaching assistants/graduate assistants, as well as for hardship funds for students who can’t receive federal relief and for all affected communities."
Email: bmakin@gannettnj.com
Bob Makin covers Rutgers for MyCentralJersey.com and the USA TODAY NETWORK New Jersey. To get unlimited access to his informative and entertaining work, please subscribe or activate your digital account today.
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