Officials fear cutting 5 percent increases would be a serious blow to morale

Across-the-board raises recently promised to UA employees may be in jeopardy, a possibility that administrators fear will devastate morale among university employees.

The 5 percent raises - which apply to all state employees, including University of Arizona faculty and staff - came under fire Wednesday when Gov. Jane Dee Hull asked the Legislature to permanently eliminate them from the budget to combat a state budget deficit that may exceed $250 million.

The pay increases were spared during budget negotiations late last year, when lawmakers cut $675 million from the state budget, including $15.8 million to UA.

The state budget deficit has continued to grow since that round of cuts was completed, and lawmakers are now faced with cutting $250 million more, a prospect that has put the raises in jeopardy for at least this year.

Hull, who has said for months that the pay raises may be sacrificed to combat the cuts, called them "irresponsible" in light of what may be a $1 billion shortfall next year.

But UA President Peter Likins said eliminating them entirely would be devastating to the university because employees were promised in December that they would receive raises this spring.

"From the university's perspective, that pay raise was the only good news that came out of the last legislative session," Likins said.

But he also said that delaying the pay raises until the next fiscal year - which begins July 1 - would be a solution that university officials could live with, as long as the increases are not put off for another year after that.

"People would not only lose money, but lose confidence (if the raises are delayed until 2004)," Likins said.

The raises had been touted as a way to quell the "brain drain" problem, which involves the loss of faculty to higher-paying institutions, and Vice President for Campus Life Saundra Taylor said if the Legislature decides to eliminate them, it would be a "serious blow to morale."

"It does feel devastating in the sense that we have been told on several occasions that we'll get those," Taylor said.

But Hull said that given the current state of the economy, an across-the-board pay raise that would cost Arizona $124 million could be tantamount to laying off thousands of workers.

"Look at it in terms of a pay increase or a job," her statement to the Legislature read. "In this economy, I believe a job is preferable to a pink slip. The fact is that $124 million equals about 2,600 state jobs."

Likins and Taylor both said they understood Hull's reasoning, but Taylor said the state should seek other sources of funding before cutting salaries. She cited, as she has in the past, the rainy-day fund and bonds for school construction as possible alternatives.

"I'd rather see us exhaust all those possibilities before we cut salary raises for staff," she said.

The university will continue to lobby legislators to protect the pay raises, but will do so with the understanding that the deficit is hurting all state agencies, said Nancy Guthrie, assistant vice president for university advancement.

Guthrie said that although officials recognize that the governor is "in a very difficult position," they will continue fighting for the increases.

The Legislature is meeting in special session to address this year's budget deficit, and Hull's press secretary Francie Noyes said that if the $250 million shortfall is not resolved by Thursday, all other business in the state House of Representatives and Senate will cease.