More Universities Approve Record New Budgets, $15-An-Hour Minimum Wage For FY 2022

Several universities are within the framework of the substantial budget increases planned for the coming year … [+] Introduced a minimum wage of $ 15 an hour.

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Before the start of the new financial year, the university councils vote on their administrations’ budget proposals for the financial year 2021-2022. And what may come as a surprise to many – just a year or so after the height of the Covid-19 pandemic and warnings of financial wiping out for higher education – several major universities are proposing significant increases to their new budgets. In some cases, the spending plans are the largest in the history of the institutions.

Last week the University of Kentucky, Florida State University and Virginia Tech approved record-breaking operating budgets for the next year saw significant gains.

Last week that University of Kentucky Board of Trustees approved a new budget of nearly $ 5.1 billion, the largest in the university’s history and $ 700 million more than the current budget. The highlighted priorities for the additional funding included:

• An increase in the minimum hourly wage to $ 15 by next January;
• A million dollar increase for student financial aid;
• A $ 1,000 one-time bonus for all full-time, regular, non-UK HealthCare faculties and staff, in addition to a 2% performance pool increase effective January;
• A reintroduction of the 2-to-1 retirement allowance for employees, which was temporarily reduced last year when the university closed its budget gap caused by the pandemic.

Earlier this month Virginia Tech passed its largest budget to date – $ 1.74 billion – for fiscal year 2021-2022. The educational and general portion of the budget is $ 974 million, an increase of 3.7% over the previous year.

As with the University of Kentucky, the new budget includes an increase in financial support for students and a substantial increase in compensation for faculty, staff and graduate students, with 5% increase pools established for the various categories of staff.

At the various locations of the Indiana University system, the budget will hit $ 4 billion next year, an increase of about $ 300 million over the previous year. The new editions include:

• A $ 72 million increase in student financial aid;
• A minimum wage of $ 15 per hour for staff;
• Withdrawal from salary and hiring freezes imposed during the pandemic.

Also last week, Florida State University approved an operating budget for the new fiscal year of nearly $ 2.2 billion. That’s a $ 317 million year-over-year increase, and the state of Florida has a budget of more than $ 2 billion for the first time.

“This budget will allow Florida State University to return to pre-pandemic campus operations in August and continue our rise as one of the best public universities in the country by investing in our students,” said FSU President John Thrasher.

The minimum wage of $ 15 / hour

Although President Joe Biden, in his first speech to a joint session of Congress on April 28, called for a national minimum wage of $ 15 an hour, his proposal has not found its way into legislation. Instead, Biden signed an executive order that will raise the minimum hourly rate for state contractors to $ 15 by 2022.

Now several other universities – in addition to those mentioned above – are following this example and that of an increasing number of private employers and are increasing their minimum hourly wages for employees in their new budgets. The wage increase is seen in many universities as a policy that promotes racial and social justice.

At a meeting on June 17th Board of Directors of the University of Michigan approved a minimum wage of $ 15 an hour for permanent employees on the Ann Arbor campus as part of a $ 2.4 billion general fund budget for the institution’s fiscal year 22.

The University of Colorado will also introduce a minimum hourly wage for employees of $ 15 out of its total system budget of $ 5.2 billion, including $ 2.01 billion for the flagship Boulder campus.

At the beginning of this year the University of Memphis raised the minimum wage to $ 15 an hour, a victory for the campus workers union that had long advocated the increase.

As reported in Inside Higher Educaion earlier this month, minimum wage increases are also being implemented at several private universities, including Johns Hopkins University, Clarke University (Iowa) and the Rochester University. Case Western Reserve University also introduced a lower wage limit of $ 15 effective July 1.

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How are these budget increases financed? The additional money comes from multiple sources.

• At the top of the list is federal economic finance, which has allowed universities to increase financial aid to students and cover expenses and lost income due to Covid-19.
• Second, layoffs, vacations, deferred maintenance, and caps on travel and other expenses have saved many institutions millions of dollars over the past year that are now available for further redistribution.
• Third, while most institutions that pass tuition increases keep them at inflationary levels or less, some plan to increase enrollments, generating more net tuition and fee income.
• After all, many state budgets have recovered from the pandemic more and more quickly than expected, partly because of the rapidly recovering economy and partly because of the billions in federal funding they received through the American rescue plan.

Bold as they are, the new budget proposals rely heavily on one-off funding – mostly in the form of federal stimuli and institutional “lecture” dollars. Whether this turns out to be a clever or risky strategy remains to be seen, but one thing is certain: While many universities are still filling the budget holes created by the pandemic, the general outlook – at least for the large research institutions – has turned more bullish for next year.

source https://collegeeducationnewsllc.com/more-universities-approve-record-new-budgets-15-an-hour-minimum-wage-for-fy-2022/