Marquette University announced a financial action plan to mitigate the effects of a decline in freshman enrollment for the 2020-21 academic year and other coronavirus-related budget shortfalls.
Marquette President Michael Lovell announced the school’s plan for the coming year in an email Monday. It includes leadership salary reductions, cancellation of merit salary increases, reduction of discretionary spending, suspension of employer contributions to Marquette’s retirement plan and a continued freeze on nonessential hiring.
“Marquette stands at 16% below what we budgeted for our incoming first-year students, mainly due to the COVID-19 pandemic,” Lovell said in his email to Marquette faculty and staff. “We must take action as a university to address our own revenue shortfalls and protect Marquette’s future.”
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In 2020, the school experienced a $15 million budget shortfall, $11 million of which was due to room and board refunds caused by the pandemic, according to Lovell’s email.
In the 2021 fiscal year, the university faces a “known financial risk” of at least $20 to $25 million. Lovell’s email stated that this amount could increase, depending on the final number of incoming students, the effect of the pandemic on campus operations, and other potential revenue losses.
As announced earlier in the year, Marquette will resume campus operations in the fall, as long as it is deemed safe to do so. The semester will begin at the end of August and finish before Thanksgiving.
The email estimated that in the coming year, the university can save $10 million by suspending its contributions to the retirement plan. This policy will not affect employee contributions to their own plans.
The cancellation of merit increases for employee salaries will save the university an estimated $4 million, and a 10% reduction of discretionary spending will save roughly $6 million.
Additionally, members of the University Leadership Council — including vice presidents, deans and vice provosts — will experience a 5% salary decrease. A few campus leaders, including Lovell, volunteered to take a 10% decrease.
“We will continually assess our financial situation and may need to take additional actions based on how the academic year unfolds,” Lovell said. “Expect more information on this in the coming months as we look ahead to create long-term sustainability for the university.”
Senior Vice President and Chief Operating Officer Joel Pogodzinski did not respond to Milwaukee Magazine’s request for further comment on Marquette’s announcement.