Lincoln University's faculty union has a plan to avoid layoffs, the union announced Tuesday, after being previously informed from university administrators Lincoln's projected financial situation necessitates a reduction in faculty.
That's the definition of financial exigency — "a condition of projected deficit in the university's operating budget of such magnitude that reduction in faculty is necessary" — in LU's contract with its union, Lincoln University National Education Association.
The university previously gave notice of financial exigency to the union in order to start a discussion about the idea of cuts, for which the union then had a chance to respond.
The union spoke with LU administrators earlier this month, and LUMNEA's vice president Michael Scott announced a plan Tuesday to avoid layoffs of instructional faculty.
LU's financial situation has become such because of the COVID-19 pandemic, which has led to state budget restrictions for the university in the current fiscal year, uncertainty about higher education funding in next year's budget and projected declines in enrollment — and the associated collection of tuition and fees — for this summer and fall.
The pandemic's uncertainty about the immediate future of in-person college education also comes for LU after several years of enrollment declines at the university.
LU's President Jerald Jones Woolfolk has said the university is not in any immediate danger of going under: "Lincoln is not about to close its doors."
The state budget withholds for 2020 were enough, however, to prompt a freeze on hiring and spending by the university.
According to the most recent financial audit of the university, by BKD CPAs & Advisors, LU took in approximately $12.9 million in operating revenues in fiscal year 2019, primarily tuition and fees, and auxiliary enterprises such as the collection of room and board fees.
Lincoln had more than $51.5 million in operating expenses, however, including more than $30.8 million for compensation and benefits — of which, more than $10.7 million was for instruction.
The university did take in more than $36 million in non-operating revenues. That was mainly from more than $19.8 million in state appropriations and more than $14 million in federal grants and contracts.
Scott said in a news release Tuesday, "As a union and faculty, we presented concrete proposals to the administration to avoid layoffs and ensure students are receiving the high-quality education they have come to expect from Lincoln University."
He said the union's proposal is to use a hiring freeze and retirement incentives to reduce instructional faculty compensation costs by 20 percent.
Scott added that in meetings with administrators, "The union cautioned laying off any additional faculty will make it impossible for some students to complete courses necessary for graduation and will close profitable class sections, further undermining LU finances."
"The proposals from LUMNEA coupled with Lincoln University's $16 million reserve fund and federal COVID-19 relief funds would allow LU to avoid instructional faculty layoffs through the current emergency," the news release added.
The university received approximately $1.3 million through the federal Coronavirus Aid, Relief and Economic Security Act, which should cover the university's expenses this spring from refunding room and board charges to students.
The university also expected to receive $3.4 million through the CARES Act as part of a broader aid package for historically black colleges and universities, which could be used for lost revenue, reimbursement of incurred expenses, technology costs with the school's transition to remote learning, staff training or payroll.
LU's Board of Curators will vote on a budget for next year sometime in June.