U of A lost 328 jobs including 13 vice presidents as it cut deficit

The portion of the University of Arizona's workforce paid by unrestricted funds the UA controls shrunk by 328 between July 2023 and July 2024, to 12,650 employees, says Chief Financial Officer John Arnold.

Among the cuts, the UA's total of 109 vice presidents was trimmed by 13, said Arnold, who is also the chief operating officer and a senior vice president himself. In those cases, either the vice president position was eliminated or the employee's title and stipend were reduced.

A breakdown of other job classifications included in the losses isn't yet available, he said.

After shaving the university's projected deficit from $177 million to $63 million in fiscal year 2024, "We're done with deficits this (fiscal) year," Arnold declared in an interview Friday with the Arizona Daily Star.

The UA will return to net positive revenue in fiscal year 2026, he said.

The unrestricted funds operating budget for FY 2025, which began July 1, is nearly $1.3 billion, Arnold wrote in a September report on the budget.

The UA's overall workforce, including positions supported by restricted funds such as federal grants, dropped from 21,150 to 20,514 in FY 2024, a reduction of 636 employees.

But among the 308 losses of jobs contingent on those restricted funds, many simply ended when the grant funding ran out and that's an area of routine churn in employment numbers, Arnold said.

Also, when it comes to the shrinkage in jobs supported by the unrestricted funds, "The university is constantly separating and adding employees for a myriad of reasons, such as employee voluntary decisions, academic hiring cycles, termination or reductions in force (layoff)," he wrote in the report. " ... Given these circumstances, the university cannot always determine if a specific position is impacted by a hiring freeze or a budget change."

Hiring, compensation

Arnold wrote that the deficit was slashed by a total of $114 million through "temporary measures implemented by the university, coupled with better than projected revenue performance."

A hiring freeze enacted in December 2023, which applied only to positions using unrestricted funds, was lifted on June 30 this year. Other temporary, large-scale measures taken to reduce "cash outflows" included a compensation freeze, restrictions on travel, delays in capital projects and restrictions on procurement.

"We did have a hiring freeze last year. That doesn't mean that people weren't hired," said Ron Marx, UA interim provost and senior vice president for academic affairs, in an interview Friday with the Star. "It wasn't a total freeze. We reduced the amount of hiring by about 75%."

Explaining that figure, Arnold said the UA administration "allowed departments to use up to 25% of their savings to hire."

As for employees' compensation, "We're not doing a university-wide salary adjustment in (fiscal year 2025)," unlike the past three years, Arnold said. The UA does plan to provide one in FY 2026.

The deficit reduction was achieved partially through spending cuts of $35.6 million, $13.5 million in delays in grant programs, and $7 million in delays to capital projects, Arnold wrote in the report .

"We probably could have done it faster, but didn't need to do that kind of shock therapy to the system," Arnold told the Star, referring to the university's overall handling of the financial crisis. "And so, we wanted to be whole by fiscal '26 (because) people don't want to live in deficit land. So, we're working towards that goal and we'll get there."

On the revenue side, the UA benefited from $20.5 million in unanticipated grants, $10 million in investment earnings above forecast, $10 million in health sciences program revenue above forecast, and $17.4 million in auxiliary earnings above forecast, he wrote in the report.

Spending cuts

"Excluding auxiliaries, 18 of the 39 budget units spent in excess of the established forecast in a total amount of $36.6 million. The remaining 21 underspent," Arnold wrote. Auxiliaries are independent revenue-producing units such as the bookstore and on-campus student housing.

The report also included percentage cuts in budgets faced by the units, offices and colleges in the university, including reductions of 10.3% for the President's Office, 27.1% for the Secretary's Office and 36% in Alumni & Development, all in the UA administration. A full list is contained in a box running with this .

Among the colleges, the College of Engineering (-7.6%) and Agriculture, Life, & Veterinary Sciences & Cooperative Extension (-6.7%) took the biggest budget cuts, while the Eller College of Management (-1.1%), College of Social & Behavioral Sciences (-2.6%) and Libraries (no reduction) took the smallest cuts.

Cooperative extension, a key part of the UA's land grant mission, "is not only super important to the university, it's super important to the state," said Arnold.

"Unfortunately, our Legislature has limited their investment in that cooperative extension mission despite years and years of requests," he said. "So, they did provide some dollars, but they chose to make them short-term dollars or one-time dollars that are expiring. And so, we have to adjust to that legislative reality."

Intercollegiate Athletics took a seemingly minimal budget cut of 1.9%.

Arnold said athletics had "significant restructuring" done, including restructuring of debt and "operational functionality." "Some of that is going to take some time before it produces the type of expenditure reductions that we're looking for," he said.

"We've done a number of things to lower travel costs, including a new carrier for the football team; we're contracting out, long-term, the hotels to break down those costs; we're booking further in advance," said Arnold. "So, those types of solution sets, we won't really see the benefit of them for six months to next year."

Getting "back to a budget surplus"

Looking ahead, "the operational realities in FY 2025 are different than FY 2024," the report said. "Fall enrollment is up over 3 percent, students on average are taking more classes and enrollments have changed across colleges.

"Each budget unit will have an opportunity to meet after the first quarter to discuss updates to budget levels."

Arnold projects a $65 million deficit for FY 2025, up slightly, but says the deficit reduction so far "alleviates the risks to the university's operating cash and lays a solid foundation for the following step, to bring the university back to a budget surplus."

"Throughout fiscal year 2024, the university experienced significant upheaval," noted Arnold in his report.

"We identified budget deficits, implemented temporary and long-term cost reduction measures, and reorganized operations, all while experiencing changes in senior leadership, notably the appointment of the next university president," he continued, referring to Suresh Garimella , previously president of the University of Vermont, who took over Oct. 1 from former UA President Robert C. Robbins, who stepped down amid the budget deficit.

"Yet this university has prevailed. Our reputation is strong, students flock to campus, and the work of our faculty and staff proceed at a pace never before matched. It is a great time to be a Wildcat," wrote Arnold.

"University leadership is unendingly grateful for the cooperation, collaboration and the commitment of the thousands of faculty and staff who, every day, demonstrate their expertise and dedication in serving our community and creating a world-class student experience, often with sacrifice and with too few resources," he wrote.

Reporter Prerana Sannappanavar covers higher education for the Arizona Daily Star and Tucson.com . at .

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