In a conversation that revolved mostly around the University's ongoing budget struggle, President Robert N. Shelton addressed questions about the rising cost of benefits, a lack of pay raises and differential budget cuts during Tuesday's Staff Town Hall.

The meeting, hosted by the Staff Advisory Council in the Gallagher Theater, gave classified staff members a chance to ask Shelton questions on any topic in an open forum.

Shelton opened the town hall by addressing the UA's continuing budget woes and the effect, including stress, they have had on the campus. The University sustained about a $77 million, or 18 percent, cut in state funding last fiscal year and is expected to suffer an additional 5 to 7 percent cut this year, Shelton said.

While federal stimulus money will provide a "temporary cushion" of $60 million this fiscal year and $50 million the next, Shelton has warned that we'll be coming to a financial "cliff" in 2012. He told staff the challenge over the next two years is coming up with a strategy to prepare for that, saying, "If you're looking for a challenge, 2012 will be it."

Throughout the meeting, audience members were invited to the microphone to ask questions, while SAC members read inquiries submitted via Internet by employees unable to attend.

Many questions focused on low salaries in the wake of rising costs.

This year, monthly health insurance premiums for UA employees increased by as much as about 62 percent and monthly dental insurance premiums by as much as about 87 percent, depending on employees' coverage. The majority of campus parking permits also increased in price by $50. Meanwhile, raises, while left to the discretion of individual supervisors, have diminished as the budget has suffered.

Shelton acknowledged that many of the people in attendance at the forum are probably earning salaries below market value and that lower paid workers have likely felt the effects of increasing costs on their take-home pay more than those in higher income brackets.

However, he said measures like instituting a differential payment plan for benefits or reducing higher-paid employees' base salaries as a means of distributing wealth more evenly are unlikely.

"Policywise it's very difficult – not impossible, but very difficult – to cut someone's base salary. We just don't have precedent for that," he said.

"I think it's very hard to take money away from somebody and give it to someone else."

Salary increases, when possible, are a better option, Shelton said.

"I think the only way we solve this problem is we start to get salary increases and apply those differentially for people that are working the hardest, the ones most meritorious," he said.

Noting that declining state support has made raises difficult, Shelton said he frequently emphasizes in discussions with state leaders the fact that people are the University's most valuable asset.

"And right now, as I tell people, we are on the edge of losing top-notch people," he said.

Shelton said many full-time employees are seeing 50 or 60 hours worth of work on their desks every week as budget restraints have led to departmental cuts and unfilled positions, with many units now "doing more with less."

"I'd like to think we could eat into that and make these jobs more manageable," he said.

In regards to benefits, Shelton addressed concerns about a bill signed by Gov. Jan Brewer earlier this month that redefined a dependent in a way that would exclude domestic partners – of the same sex or opposite sex – and their children, as well as full-time students over the age of 23 and disabled dependants 19 and older.

Shelton called the decision "worrisome" and a competitive "step backwards" for the University.

Human Resources officials estimate that the change will affect 172 domestic partners and children, about 300 children over 18 and 40 disabled children.   

Shelton said campus leaders are working with the Arizona Department of Administration to clarify the details of the change and how it will be implemented and said a memo regarding the topic is expected to be sent out to campus today.

"We're looking at ways in which we can provide financial support for people in these groups," Shelton said.

Shelton also addressed the idea of instituting a four-day workweek. While it was proposed as a potential cost-savings option last year, when gas prices were skyrocketing, it is no longer being considered, Shelton said.

The change would have been too difficult to implement since the University is essentially a 24/7 operation, Shelton said. Plus, gas prices have declined.

Shelton also discussed the University's decision to implement differential, as opposed to across-the-board, budget cuts on campus, a decision he defended at Monday's Faculty Senate meeting. 

Shelton has said three primary criteria will be used in determining the amounts to be reduced from each unit: which units have the capacity to generate new external revenue beyond tuition dollars, which units have the greatest outreach and impact in the state, and which units are most likely to have a positive economic impact on the state, with an emphasis on job creation and growth. (Read more in Shelton's Aug. 24 and Sept. 9 memos to campus.)

Shelton said college deans have received their budget cuts and are working on plans to implement them. After they are finalized, each department's numbers will be made available to the entire campus, he said.

Finally, as mounting stress has the potential to breed rumors on campus, Shelton said it's essential to get the facts out and encouraged staff to talk with Staff Advisory Council members or e-mail him directly with any concerns at robert.shelton@arizona.edu.