4/24 Email
Dear Lehman Colleagues:
You may have learned that Chancellor Félix Matos Rodríguez sent a memo to all CUNY college presidents this week. In that memo, he outlined CUNY’s developing response to the approved New York State budget, as well as the growing state and city revenue shortfalls due to COVID-19. Everyone knows that the entire nation is in an economic free fall at the moment. What we don’t know is whether we are attached to a bungee cord and poised for a rapid return to “normal,” or whether we will have to laboriously climb back to where we were before COVID-19 hit.
At the beginning of the budget season, New York State faced a $6 billion shortfall due to Medicaid costs. CUNY asked the state for an additional $136 million beyond fiscal year 2019-2020, or FY20, to cover the new Collective Bargaining Agreement (CBA), other mandatory costs, and new programmatic initiatives. We also pushed hard for funding to reduce or eliminate the TAP gap.
We are in a different world now, and the “flat” budget that became law on April 3rd added only $50 million for increased fringe benefit costs in the new CBA and other labor agreements. Coming as it did in the middle of the COVID-19 pandemic, the budget that passed seemed better than we feared. But the budget bill included three dates, April 30, June 30 and December 31, when the state budget director can unilaterally modify the budget, based on actual state revenues.
The state budget director had recently projected an eight percent reduction in FY21 revenue, but this morning the Governor projected a $13.3 billion revenue drop, which is 14 percent. These are estimates based on the current situation, and do not assume a federal stimulus package that would include payments to states. Governor Cuomo has requested at least $10 billion.
The CUNY budget framework
So how does this alter our financial planning at CUNY? While there will be a good deal of unanimity in the way all the CUNY colleges plan for FY21, each college also has its own financial situation that will impact the decisions it is able to make.
Two weeks ago, Chancellor Matos Rodríguez established a Fiscal Scenarios Group to create the most realistic estimates about how the CUNY budget could be impacted by the state’s finances. Then, after he spoke with the college presidents, he issued the memo I referred to above. In it, he laid out four immediate actions:
CUNY is implementing a freeze on all personnel actions, including all hires and discretionary salary increases. Some exceptions that will be considered include health and safety positions and faculty searches in which an offer has already been made. Such cases will need to be presented to a CUNY Vacancy Review Committee that will be created in the coming days; Per state and city regulations, the University must pause all active campus construction projects, with the exception of those that are COVID-19 related; For the remainder of the fiscal year, colleges should refrain from any new one-time or recurring expenditures, with the exception of those that are related to COVID-19 or distance learning instruction; and, Campuses should not be entering into any new long-term contractual obligations (new or renewals) until further notice and should consult with the Chief Financial Officer’s Office for any exceptional situations.