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UT President, Executive Staff Take Voluntary Pay Cut, Relinquish Staff Cars

December 18, 2008

University of Tennessee President John Petersen and all members of his executive staff will take a voluntary pay cut of 5 percent and will relinquish University vehicles provided as part of their total compensation.  

Combined, the pay cut and relinquishing of vehicles are worth more than $400,000 a year in savings.  

Timing of the cost-cutting measure coincides with the release of official state funding reductions anticipated in the next fiscal year. On Tuesday, the Tennessee Higher Education Commission relayed to UT System officials the expected higher education funding reductions. Today, Petersen made the announcement following a meeting of his executive staff via videoconference. 

The initial reduction for all higher education is expected to be $181.7 million, or 14.576 percent. The University is planning for a reduction of up to $100 million, or 20 percent. Budget officials were continuing to work today to determine more exact figures. 

“The budget numbers from the state further emphasize the need for significant cost reductions to a degree that obviously necessitate sacrifices. It’s inevitable we’ll be making difficult cuts, including programs and probably some positions. These will be real cuts and we take them seriously,” Petersen said. “We felt it was appropriate to begin with the leadership responsible for developing those plans.” 

The salary cuts are effective Jan. 1. Vehicles –- with an estimated compensation value of $5,000 each annually –- will be relinquished on or before April 1, 2009, to provide time for any needed arrangements to secure personal vehicles.   

The cut in salaries for 22 staff members equates to $254,206, and the money saved will go back to their departments and be used against their budget reduction. 

Salaries of the men’s and women’s athletics directors at UT Knoxville do not come from public funds, but both athletics directors – who report to Petersen -- will donate the equivalent of 5 percent of their base pay to the University to support academic programs. That combined amount is equal to $24,700.  

The University expects to save about $150,000 a year on the relinquishing of 19 staff vehicles.  

“Over the past several weeks we have been reviewing potential reductions, and this is our first step in response to the official numbers we got from THEC on Tuesday,” Petersen said. “Developing a budget is a long process, and this is one of many steps as that process continues.” 

UT System officials are committed to making administrative cuts ahead of academic reductions, Petersen added. 

“Our campuses are handling their own processes, and they have their own targets. They will propose their own measures for reaching those targets. There will be more System cuts to come as we meet the same percentage reduction requirements as campuses, but we felt this is an appropriate step.” 

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Contact: 

Gina Stafford, (865) 974-0741, stafford@tennessee.edu