Education

A $2.5 million retirement incentive at Erie Community College

Erie Community College is offering a new retirement incentive to faculty members and administrators to nudge them to cut short their time at the college. College leaders hope providing payments to professors and executives who agree to retire early will ultimately save the struggling institution millions of dollars in salary costs.

The savings could bring the college up to $6 million each year, which would “help stabilize the college’s future,” said Erie county executive Mark C. Poloncarz in his recent State of the County address. He announced that he would dedicate $2.5 million of the county’s budget surplus from last year to the incentive.

“The college has experienced a significant decrease in enrollment while trying to maintain staffing and infrastructure designed for a bygone era,” Poloncarz said in his address April 7. “The financial stress caused by the pandemic has pushed this issue to the forefront, and the college must take substantial action now, or it will face bankruptcy.”

Erie Community College, part of the State University of New York system, has fallen on hard economic times, not unlike many community colleges across the country during the pandemic. Enrollment had been falling for more than a decade, but the college experienced especially steep declines during the past two years. Enrollment fell to 8,140 students in fall 2021, down from 10,031 in fall 2019.

“The people who have the greatest experience with SUNY Erie, the longest tenure with SUNY Erie, those who make some of the greatest contributions to our region and to our students, unfortunately they’re paid significantly higher than we can afford for the amount of students they’ve been supporting,” said David Balkin, who became president of the college in February.

He noted that dipping into cash reserves and federal COVID-19 relief dollars has provided only a temporary fix to long-standing financial problems. He expects the college to face a $9 million budget deficit in the next academic year if the institution doesn’t cut costs.

Balkin believes the three-campus college has more faculty and staff members and administrators than it needs. Currently, 144 employees are eligible for retirement. He said RPK Group, an education consulting firm recently hired by the college to conduct a realignment study, told him that “they’ve worked with over 200 colleges and they’ve never seen a college with as much infrastructure redundancy as SUNY Erie.”

For example, he said the campuses are roughly 20 minutes apart, but an academic department might have a separate person leading it at each campus.

Balkin wants to “rightsize” the institution. Seven academic programs have already been cut during his tenure, though he said the programs could be brought back in the future if there’s increased demand for them. One website design program had only a single student, he said.

Erie Community College isn’t the only institution trying to save money by encouraging faculty and administrators to retire. As of January 2022, 17 percent of higher ed institutions had a retirement-incentive program, according to a survey by CUPA-HR, an association of human resources professionals in higher ed. Almost a third of these institutions added a retirement-incentive program or expanded an existing program in response to the pandemic.

For example, the Iowa Board of Regents voted last week to offer a retirement incentive to some faculty members at Iowa State University as a part of a plan to downsize its College of Liberal Arts and Sciences, the Ames Tribune reported. The goal is to trim $15 million from the college’s annual budget by July 2025.

Ohio University launched the Voluntary Separation and Retirement Program in 2020 and this year reintroduced it; it offers tenured professors a year of additional pay if they retire early.

Ohio University’s chapter of the American Association of University Professors opposed the program, warning it could result in “significant loss of highly experienced researchers and teachers,” and, in doing so, “severely weaken existing academic programs and further damage morale among the remaining faculty, who must bear the burden of sharply increased teaching loads.”

“The administration seems not to understand or appreciate that slashing the faculty risks deep and lasting harm,” read a statement from the chapter. “Once the number of faculty in a department or program drops below a critical threshold, maintaining and delivering the coursework becomes difficult if not impossible.”

Christina Hubbard, senior director in strategic research at EAB, an education consulting firm, said she usually advises community college leaders against measures that reduce their full-time faculty head count. She noted that when community colleges lose full-time faculty members, they tend to hire part-time instructors; over half of community college classes are taught by adjunct faculty. She thinks phasing out specific programs with dwindling demand or bolstering student supports to improve retention rates are better options for handling budget shortfalls.

There are strategies for colleges’ financial health that don’t require “reducing student access to full-time faculty who oftentimes are the ones who provide that mentorship and career guidance and other critical components of the higher ed experience,” she said. “My fear would be if we even further increase the ratio of adjunct to full-time professors, a lot of community college students might suffer.”

Andrew Sako, president of the Faculty Federation at Erie Community College, said he has “mixed emotions” about the retirement incentive.

“My attitude has always been that you have to put money into the people who are staying,” he said. When people leave, “we lose institutional knowledge, we lose experienced individuals … and they’re also mentors to many of us. What about the people who are left behind? Are they getting what they should be getting in terms of salary and compensation?”

He said he’s usually wary of efforts to urge faculty members to retire, but he believes a retirement incentive is a welcome alternative to layoffs and an opportunity for older faculty members to retire with some extra money after two grueling years of teaching during the pandemic. He also recognizes that the incentive is a “way to stop the bleeding” and may help stabilize the college’s finances.

“Over all, it’s a good incentive for those people who choose to take it,” he said.

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