Wong Outlines Budget Challenges, Reduction Proposals

Northern’s $4.6 million projected shortfall for fiscal year 2010 would be a softer blow than the $10 million worst-case scenario that surfaced early in the state budget process. But NMU President Les Wong made it clear that cost-saving measures, perhaps including a university-wide salary freeze, will be required to counter the double-barreled impact of state appropriation decreases and NMU operational increases.

Wong stressed that stimulus dollars will provide only a temporary boost. They will arrive in waves rather than a lump-sum payment and cannot fund long-term structural cost increases. In the wake of stimulus support, Michigan universities in 2012 will be left with base budgets that are equal to their 2008 levels. Wong said Northern, through advanced planning, has positioned itself well to meet the challenges ahead. All departments were charged last semester with identifying potential reductions of 6 and 10 percent. The lower scenario aligns most closely with the new projected shortfall of $4.6 million.

“Everyone in here has been part of the process,” Wong said. “The effort all of you have put forth has generated a number of good ideas. It’s not like all of a sudden I’m standing in front of you today saying, ‘Okay, where are we going to get $4.6 million?’ I think we have some ideas and that’s why I wanted to get the planning process out in front of you early.”

Short-term proposals that are being researched include a salary freeze, which would save about $2 million and help preserve jobs. Wong said he met with all union leaders March 23 to share the idea and ask for feedback. “We’re trying to learn more about the implications, but I do want to say that all of this is subject to negotiated agreements.”

Other short-term possibilities being analyzed are: cost savings through reorganizations, job sharing and new processes; cooperative programs that provide strength-in-numbers savings, similar to NMU’s current participation in the Michigan University Consortium on Health (MUCH); hiring reductions, postponements or freezes; using one-time dollars strategically; and identifying scheduled maintenance and construction projects that could be deferred.

“A lot of bond arrangements that we’re currently under require construction by agreed-upon timelines. So if you see construction going on this summer, it might be part of bond obligation we’re already under. But we will move forward with any construction or renovation that results in permanent energy savings.”


Wong also outlined long-term proposals, which are dependent on the final state appropriation figure and the direction of the state’s economy. These include an extended salary freeze or possibly salary reductions, strategic retirement buyouts, closing buildings/alternate scheduling and reorganization. Another suggestion is furloughs, or periods of unpaid leave, for non-essential personnel. These could be voluntary or mandatory. They might also be graded—the higher the salary, the more furlough time expected—or seasonal. Wong said one proposal is a summer furlough, in which the university would close and employees would leave at 2:30 p.m. Fridays from May 15-Aug. 15.  

Before the end of the semester, Wong plans to solicit feedback from union leadership, non-represented employees and students. The President’s Council will prioritize the 6 and 10 percent plans so that some recommendations can be implemented over the summer, as needed. NMU will also identify stimulus bill projects for when the dollars become available. Wong said he plans to keep the campus community informed and involved.

“The last thing I want to do is top-down implementation,” he added. “Change is going to happen and I want you to be a part of it; I don’t want you to be surprised by it. We have risen above these challenges in the past and I am confident we will do it again.

“This has been one of the more heavy-toned presentations I’ve made. I don’t want you to leave here without realizing we’re a healthy institution. It would be easy for me to identify thousands of schools that would like to be in our shoes right now. Even though we have a tough road ahead, we have the skills, heart and experience. We’re prepared.”

Wong’s entire presentation is viewable online.


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Updated: April 1, 2009

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