President John Simon announced a $40 million projected budget shortfall and other cost-saving measures. The announcement is in response to the financial challenges brought by the coronavirus pandemic. (Ryan Bonshak/B&W Staff)

BREAKING: Lehigh announces $40 million budget shortfall

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An email sent from the Office of the President to university faculty and staff on June 1 announced a $40 million budget shortfall for the upcoming fiscal year.

In efforts to circumvent significant financial damage, President John Simon will be taking a 20 percent salary cut. All senior university leadership and college deans will face a 10 percent salary cut as well.

In addition, all vice presidents and deans have been asked to reduce annual budget expenses by 10 percent.

Simon noted in the email, shared with The Brown and White, that despite initial commitments to not implement furloughs or layoffs during the 2020-2021 fiscal year, circumstances have required the university to identify employees who can’t perform their jobs remotely and furlough them temporarily.

Furloughs will begin the week of July 1 with the option of starting sooner to redeem $600 weekly additional federal stimulus payments to those who are eligible. Simon emphasized his intent to restore all employee furloughs as soon as fiscally possible.

Amid unprecedented challenges as a result of the COVID-19 pandemic, the university has faced financial instability along with the higher education industry as a whole. Contributing factors to the projected budget shortfall include lower-than-expected enrollment projections, hindered revenue streams, increased need for student financial aid and campus-wide safety precautions to minimize infection spread and additional risks.

Lehigh had previously frozen all hirings, suspended employee raises and position reevaluations and reduced unnecessary travel.

“While these actions are difficult, and we remain committed to supporting our faculty and staff who are so critical to our mission, we believe these measures are imperative and responsible in light of continued economic uncertainty,” Simon said in the email. 

This fiscal adjustment model is similar to that of Lafayette College, whose university leadership has faced a combination of pay cuts as well as staff furloughs.

Responding to questions regarding the university endowment fund, Simon explained the endowment covers over 9 percent of the planned annual operating budget and additionally supports a significant percentage of student financial aid and academic programming.

Most of the endowment is restricted by the gift agreements with those donors,” Simon said. “We have the responsibility to steward these resources, assure they support the intended efforts today, and continue to be a source for that support in the future.”

Simon concluded with an uncertain, but hopeful nod to the future. He highlighted the extreme sacrifices being made to open Lehigh as quickly, but safely as possible, as well as the efforts being made by all university leadership to minimize damage while working to uphold the strength of the Lehigh community.

Lehigh has announced it will announce a decision on the fall semester by June 15. Northampton County is currently anticipated to move to Gov. Tom Wolf’s “yellow” designation in his phased reopening plan on June 5, which would lessen some restrictions from the stay-at-home order but maintain public health measures.

Still, Simon said the restrictions implemented under the “yellow” designation would “preclude us from holding in-person classes.” If Northampton County moves to the “green” designation and the university meets “prerequisites,” Simon said, Lehigh can “welcome undergraduate students back to campus and resume in-person activity.”

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6 Comments

  1. Lehigh finally doing what should have been done 3 months ago just like private industry did. With pay cuts & huge furloughs. Even now they should be furloughing people June 1st not giving them the option to wait until July 1st.

    Too many overpaid Director Title & Asst positions all over campus that need to be eliminated.

    If they expect Alumni to donate they needed to take actions a lot sooner than this to show that they were serious about budgets.

  2. Sounds like parking citations boutta be $500 next semester. Awful timing since no alumni will donate now with admin’s stance on greek life. This admin has destroyed Lehigh.

  3. Asa's Ghost on

    Pull out an Epitome from 1992, just about the right number of administrators.

    Cut coordinators and various deans – pay profs and grad students more.

    Make an active plan to be ready by mid – August.

    Use this opportunity to refocus on the primary mission – educating students. Get rid of the more recent mission – running student lives.

  4. Please just demolish the new construction for the health school. Expanding is the worst possible thing we could do during a depression. Lehigh’s path to prominence should be cutting costs, reducing admission rates to keep the school elite like it once was. Less programming and activites led by the school. Let the kids be kids and socialize themselves. Not everything has to be run or overseen by big brother lehigh.

  5. Hmm a $40 M budget issue even though Lehigh took PPP funding intend to help small business.

    Serves them right!

    Alumnus 1978

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