Employee Comments on Cornell’s Financial Crisis

Dear Cornell Employee:

Communicating the collective budget-related thinking of our employees to the faculty is among my highest priorities.

Please take a look at the  FPC overview and share your thoughts below.

For total anonymity, don’t enter an email or name when prompted. Your comment can be uploaded to the moderator without that information. However, we always double check to make sure  the posting is anonymous before it is made visible.

Of course, you  can always include your name in the posting  itself. That is not edited.

Charlie Van Loan
Dean of Faculty


 

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23 thoughts on “Employee Comments on Cornell’s Financial Crisis

  1. I applaud the administration for the intent to spread the pain with an equitable salary/retirement reduction for both endowed and contract colleges. This is an improvement over the way things were handled in 2009. My question concerns the proposed retirement incentive. Is it intended to offer similar equity across colleges? The retirement incentive of 2009 excluded employees receiving more than 25% of his or her salary from any grant or contract. Our unit, comprising over 200 employees, was mostly excluded on the basis that we are funded through a contract with a different NYS agency. As a result, several staff members who were ready to retire decided to forgo retirement when they learned they were ineligible for the incentive. Other staff were subsequently penalized to meet budget goals. Employees whose salaries are partially supported through long-standing state contracts should not be excluded, especially when supervisors and administrators of the unit fully support their retirement plans.

  2. I listened in on the meeting on Tuesday. I echo others comments arguing that salary cuts should not the first line of defense. But if they are to be implemented then I’d like to add very strong support for implementing the salary/reduction reduction in effect as some type of zero interest loan from the faculty/staff to the university.
    During this health (and increasingly economic) crisis, the university needs all hands on deck with good morale and readiness to take care of students (and research) selflessly. That is how we have always operated and that is what makes us a strong institution. If the faculty and staff are going to be asked to sacrifice financially today in large part to save the future strength of the institution, then, when the institution recovers that strength, Cornell should make it a priority to recognize that sacrifice.
    In short, if cuts are to be made, I would find the reduction far more palatable if the university makes a promise to make up for the sacrifice at some later date. Cuts today without such a future promise hurts morale in untold ways into the future. Without such a promise, every future big spend by the university will be seen with a jaundiced eye and bitterness. Instead, with such a promise, those projects and endeavors will be seen rightly as a success and source of pride and accomplishment by all.

  3. I agree that the university needs to rethink this seriously and needs to now go to the endowment. The only acceptable year-long hiatus in contributions to our retirement would be if it were to be considered a short-term loan on our part, to be repaid in full to us by the university within a concrete time frame. Shared sacrifice? We took an enormous hit in 2008 and were subsequently abused and mistreated by our Dean (I still bristle at the email telling us there would be no raise, sent to us the DAY AFTER our annual reports, which we had been relentlessly hectored to submit, were due). Even in the “best of times” we were being nickeled-and-dimed by the institution so I have to say that I have little sympathy for the shared sacrifice narrative. None of us as faculty were responsible for the egregious financial decisions made prior to 2008 but we’ve been paying ever since and now this comes along and we’re asked yet again to tighten the old belt. I am not here to ensure the long-term health of the institution. I am here to do my work and be fairly remunerated. I don’t want to hear about loyalty to the institution or brand. I saw what such loyalty earned some of my colleagues in 2008: nothing. When push came to shove, they were shown the door. I realize the situation is grim and I don’t want to be unrealistic nor make light of the dire consequences down the line. But if we’re in uncharted waters then it can’t be business as usual with faculty and staff taking the hit. This is growing encroachment on basic aspects of how we are remunerated for our work and I think faculty need to hold the line now. Time to use the endowment.

  4. In theory, I support progressive salary cuts in the event that the university is indeed in a financial crisis. However, I have been reading the materials coming out of the university and finance committee and, as someone with a background in finance, I do not think they come anywhere close to providing me with the type of information I would need in order to evaluate the merits of the proposals currently on the table. Specifically, I would like more information about the size of the endowment, the revenue stream it has historically generated, and the current and historical uses of that revenue stream. I would also like to understand whether the university has conducted a thorough investigation of its potential borrowing costs and, if so, what it has found. Without that information, it is really difficult for myself and others to understand what constraints the university is really facing and, thus, whether the current proposals are necessary and just.

    Assuming that salary cuts are the best way forward, I also have a variety of questions about how they would be implemented. On the more administrative side, it would be incredibly helpful to know the proposed size and duration of the cuts as soon as possible. As I am sure the university can appreciate, this information is essential in order for families to plan for the future. On the more technical side, I would like to know more about how the university intends to implement “progressive” cuts. To take one of many possible examples, using a faculty member’s current salary to determine the cuts would miss out a wide range of relevant information. My own salary, for example, is several times my average salary over the past 10 years: a fact that is extremely relevant in terms of my family’s financial position and ability to weather any cuts. At the same time, my current salary does not take into account my spouse’s income, which at the moment is currently zero as a result of visa issues resulting from our move to Cornell and the fact that the pandemic has resulted in the complete shutdown of U.S. visa process services. While no methodology will be perfect, the lack of information about how the university envisions implementing any cuts does not promote a great deal of confidence in the process or encourage any sense of shared sacrifice.

    Bottom line: I would argue that extraordinary circumstances demand extraordinary transparency around the university’s financial position and the decisions it is making.

  5. Since I am not a senator I didn’t want to take up space in the meeting but I have a few observations:

    First, the proposed one year suspension to retirement funds on the endowed side is progressive in that everyone gets the same percentage of contribution so those at higher salaries will take a bigger hit than those at lower salaries. The downside is that this may delay future retirements and hence have some impact on the future of the University.

    IF the cuts are taken from salary, then the level of spending in the community will get reduced partially defeating one of the purposes of reopening—that Cornell is the economic engine of the area.

    I would love to see the balance sheet for each scenario. For example, if we stay on line in the fall the expenses for testing, tracing, costs of utilities, laundry of uniforms, cleaning services, and other expenses are all reduced. I imagine there may be some impact on financial aid as well. If more students take a gap year who would be getting financial aid then the financial aid figure is reduced. I’m not sure the faculty has a clear picture of both sides of the balance sheet.

    Finally, why are some departments able to fill positions with the hiring pause and others not able to do so?

  6. Several years ago the central administration announced a consolidation of the Cornell Tech and Ithaca campuses in one budget and administration called “Cornell One.” Yesterday, the Provost gave us data on the budget only for the Ithaca campus in an ostensible plan to “break even” during the coronavirus crisis. He gave no data on Cornell Tech which is certainly running a serious deficit. In effect, we are back to “Cornell Two” and the obfuscation regarding the Cornell Tech deficit, combined with the (at best) “break even” budget in Ithaca strongly implies that the central administration will be reaching into the endowment in order to keep Cornell Tech afloat. The central administration, if it does not clear this matter up, is not being completely honest with us.

    Richard Bensel (rfb2)

  7. Like most comments on this page, I also want to strongly oppose the salary and retirement cuts to faculty and staff. Faculty and staff are our most important asset, and to put them first on the list for cuts is foolish and grossly unfair. I understand why we shouldn’t cut student financial aid, because we made a commitment to them, and supporting students is important. But the same argument applies even more strongly to faculty and staff. We made a commitment to them, and financially supporting them at this difficult time is important.

    The cuts should come almost exclusively from the endowment. The reason is simple. Stock market is at record highs, and the endowment presumably benefited from that enormously. This is a good time to use those gains to deal with the current crisis. Current crisis should be met with current gains as much as possible. Even if endowment is reduced, that is the proper and fair way to deal with the crisis, because it will distribute the burden over many future generations, instead of loading it all to current faculty and staff. The crisis was not caused by current faculty and staff, and they shouldn’t bear the full burden. The burden should be distributed over long term and many generations. Politically and socially, that is the only fair and acceptable solution.

  8. The faculty are continuing to do their jobs and more. Why should we accept a pay cut ? Surely a more sustainable long term approach is needed? We can start by closing the loss making satellite campuses and reducing the number of administrators by at least 25%. Faculty can then return to concentrating on the core research and teaching missions.

  9. I don’t understand the difference between endowed 10% and contract 1 to 5% decrease in compensation. Does not seem equitable. Also, can the cut to the retirement contribution be progressive by income level?

  10. The retirement contribution pause is a 10% reduction of compensation . Statutory salary reductions would be capped at 5%. Why the difference?

  11. I agree that salary and benefit cuts should not be the default answer to the current University financial crisis. I encourage the financial committee to think broadly about what constitutes a fair and equitable solution. Many are advocating for salary cuts to those with higher salaries but in truth, many of those earning higher salaries have years of schooling and education, advanced degrees and educational loans. Additionally, these individuals are often in positions of accountability. Why should these individuals be penalized in the current financial crisis more so than others. Additionally, across the board cuts to benefits in a time of a health crisis is woefully misinformed. In terms of staff, due consideration should be given to time at the University as well as employee performance and contributions. I urge you also to consider policies that allow for individual choice such as voluntary benefits reduction, furlough vs. layoffs and reduced or staggered work weeks.

  12. Cornell’s primary responsibility is to sustain its staff, students, and faculty – it is only through the labor and care of these people that the university has any future at all, let alone the ability to actively maintain the “revolutionary spirit that founded our university and encourage each other to pursue unpredicted lines of thinking in order to effect change on local and international scales.”

    The rhetorical strategies employed here seem intended to dissuade creative thinking about what the endowment’s purpose actually is. Instead of being the last resort, it would be wise – and humane – to recognize that solutions to this current dire situation cannot be borne by the people already serving this university, and to think FIRST of what the endowment can and should be used to sustain.

  13. First, I appreciate very much that you are asking for staff and grad student input and that the faculty are concerned about potential staff cuts and/or furloughs. Second, I appreciate that the date of the meeting was altered due to the shut down stem occurring on Wednesday.

    I agree that with one of the comments above that suggests that salary and retirement should not be the first go to cuts in a crisis. That said, if cuts are required I agree that there should be some sort of graduated approach with people on the lowest end of the pay scale having little or no cuts compared to people on the higher end of the scale. I also think if at all possible a plan to catch up those cuts and get people back to where they should have been when things are better should be pushed for. I also appreciate the comment of one of our grad students and wholeheartedly agree that the financial security of Cornell’s employees should not depend on sympathetic faculty members. If not tapping the endowment now, shouldn’t we at least tap it on an ongoing basis to create a fund specifically to avoid this situation the next time.

    I also realize that the faculty have limited control over the ultimate financial decisions. However, I suggest one concrete thing faculty could do is commit to be more proactive about deadlines that involve staff so staff can be as flexible as possible about working from home/flexing child care needs etc.

  14. Salary and retirement should not be the first go-to cuts to solve this crisis, but the last resorts to be considered, and only after higher admin salaries are cut down to the level of an average faculty salary (make that an average female faculty in the humanities salary), and not without a clear statement of commitment to reinstate salaries to their pre-COVID levels, and prorate lost retirement contributions and SIP increases ASAP. But surely there are other more creative approaches to think through before we get to that point. I’ve read many of them in the comments here.

  15. “For a generation now, while many institutions of higher education have struggled to pay their bills, America’s richest universities — like so many of our richest institutions and individuals — have been obsessed with hoarding their ever-more staggering fortunes.” https://www.nytimes.com/2020/06/06/opinion/sunday/colleges-endowments-covid.html

    Cornell should not obsessively rank its endowment in comparison to other Ivy league institutions. That is unless it measures its own relative generosity in accordance with its willingness to share endowment money to take care of its community – its staff, students, and faculty. The endowment should be saved until it is needed for rainy days. This is just such a storm that necessitates dipping into the endowment. What good is accumulated wealth when it is withheld and not used to care for and sustain the community that exists now?

    1. Thank you for this comment. I concur. It is legitimate to use the endowment for this purpose. Can an argument really be made that our generous donors would really argue against the moral imperative for Cornell to meet its benefit obligations?

      One note: We see the FPC document but not the proposal that it appears to be responding to from the Cornell senior administrators. Could that also be shared?

  16. This is not a question of equity. Administrators have been guilty of mis-management before this health crisis and staff and administrator numbers have ballooned while faculty numbers have remained constant or declined. According to official University statistics there are 1,684 faculty members on the Ithaca campus and 7,485 non-academic staff. I see no justification for faculty members who are constantly being asked to do more with less to accept a salary cut (which is what a hiatus the endowed side retirement benefit contribution). We did not get the University into financial difficulty and there is no faculty governance at Cornell. It is essential that Cornell return to the core mission of the University; research and teaching and stop the run-away train of bureaucracy. The University needs to start valuing the faculty, otherwise we will lose talent and esteem – which I will emphasize derive solely and directly from the faculty members.
    What the heck is the endowment for if not for this purpose?

  17. As a staff member I very much appreciate the Faculty including us in these discussions. We are not getting this kind of attention from other parts of the university, despite the employee forums that supposedly answer questions. Including us all in reviewing the working documents is a true collaboration and counters the sense of being managed.
    Thank you.

  18. Regarding the plan to put on hiatus the endowed side retirement benefit contribution, it seems to me that a truly progressive application of this is simple: apply the hiatus to those employees who have a salary of more than 100K (or 120K or some level that the Center for the Study of Inequality can give us readily), while leaving those under that level whole. That would be progressive and fair.
    The 10% flat contribution is only “non-discriminatory” in a theoretical sense. In actuality we all know that a higher salary gives one that much more through the retirement contribution (e.g. a salary of 100K is actually 33K more than a salary of 70K). Many of us have lost thousands of dollars a year through this system, due to starting at low salary levels and never being able to advance despite SIP. To now further penalize lower salaried employees, in the name of non-discrimination, is bad faith or at least Kafkaesque.

      1. Both of the above proposals are discriminatory in that they make a prejudicial distinction between different categories of people. The person claiming they’ve lost thousands of dollars per year because retirement contributions are a percentage of salary is making a foolish argument. How can something be theoretically non-discriminatory, but not so in actuality? They twist their example to focus on dollar differences in compensation instead of percentage differences. In percentage terms, the differences are the same. And in fact, once progressive marginal tax rates are taken into account, the percentage difference is actually smaller than on gross income.

        As for the individual calling for a blatantly discriminatory policy of cuts for males only, I can only chuckle. I guarantee the EEOC and civil courts will make quick work of that one and the university lawyers know it. On the other hand, if you think you have a defensible claim, you should go ahead with it – you will have to bring more evidence than some overall averages though.

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