Employees at the University of Arizona can expect increased wages soon.
On Thursday, the Arizona Board of Regents approved the universityβs projected $2.3 billion budget for fiscal year 2023, which starts July 1. It sets aside more than $70 million for increases in salaries, wages and employee benefits.
This comes amid an increased state minimum wage as well as inflated food, housing and gas prices facing consumers in Arizona, where inflation is even higher than the national average.
According to the UAβs report to the boardβs Finance, Capital and Resources Committee, it plans to increase its budget for salaries and wages for its roughly 16,000 employees by about $51.5 million, or 5%.
A campuswide effort is aiming for permanent baseline salary increases of 4% beginning as early as next month.
University administration is recommending that 2.5% of that 4% to be an across-the-board raise, Lisa Rulney, the UAβs chief financial officer, told the finance committee last month.
The remaining 1.5% is intended to be a merit-based raise for faculty, staff and graduate assistants, though departments can offer more if desired. In its report to the committee, the UA said the $25.9 million itβs setting aside for annual performance-based raises is part of its strategic investment plan βto reward employees and improve its competitiveness in retaining (these) highly valued resources.β
The increased salary and wage budget is also accounting for an expected overall increase in the number of workers as the campus resumes pre-pandemic levels of operation.
The amount of money the university spends on employee benefits, like health insurance offerings, is also set to increase, by $19.3 million.
Increased expenses
In total, the 2023 budget the board approved Thursday reflects a $69.7 million (3.2%) increase in expenses compared to last year. In addition to an increase in employee salaries, wages and benefits, other changes in the UAβs projected expenses compared to last yearβs include:
All other operating expenses are expected to increase by $29.5 million (5.5%), mostly as a result of increased grant and contract activity as well as the return of auxiliary sales and the increased cost of goods being sold.
Refinancing efforts made during fiscal year 2021 contributed to a $4.3 million decrease in interest on debts.
The one-time federal Higher Education Emergency Relief Funds provided some money for scholarships and fellowships last year. But since those funds arenβt available this year, students will see a net decline of $34.7 million in available aid.
Increased revenues
In the new fiscal year, the UA is projecting it will bring in $2.32 billion in revenue. Thatβs a $48.3 million increase (2.1%) compared to last yearβs estimated revenues and comes from the following projected changes:
- An $8.8 million increase in state funding, as proposed in Arizona Gov. Doug Duceyβs budget, which is still in legislative limbo. Over the past several years, state funding has made up between 11% and 13% of the UAβs annual budget; the $8.8 million would represent around 15% of the universityβs budget.
- $27.7 million increase in grants and contracts, most of which is expected to come from sponsored research in medical sciences. Last fall, the UA outlined its goal to reach $1 billion in research and development expenditures by 2025.
- $64.9 million increase in net tuition and fees. That will come from an expected net enrollment growth of 1,520 full-time students next year (a 3.1% increase), which is expected to be driven by an influx of non-resident undergraduates pursuing both online and traditional pathways. Additionally, the boardβs recent approval of tuition hikes for students who matriculate in the fall of 2022 (2.6% tuition increase for resident undergraduates and 5.6% for non-residents) will also contribute to this increase.
- The complete return of on-campus events and services, after a modified two years due to the COVID-19 pandemic, is expected to return $31.8 million.
- Fiscal year 2022 was the last year the federal government offered one-time federal HEERF money, which has resulted in a decrease of $88.1 million for the new budget.
- Updates to projections for departmental sales and investment income is expected to cause a $2.3 million decrease in other revenues.
Strategic investments
With an increase in available funding, the UA has outlined a strategy for how it will invest that money. In addition to investing more money in faculty and staff via salary increases, other strategic investments include:
$24.2 million toward studentsβ financial aid, which is consistent with last yearβs levels.
$25.9 million toward improving retention, completion and new program development.
$3 million in extra student services to keep up with expected increase in enrollment.
$5.9 million for facilities costs; $27 million toward information technology infrastructure.
$2.7 million to support medical students; $6.5 million to support a new cohort of veterinary medicine students.
