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On June 18, University of Michigan President Mark Schlissel announced an end to the University’s spending restraints that began in April 2020 as a result of the COVID-19 pandemic.

The restraints included a hiring freeze and prohibited base salary increases. The University also permitted employees to voluntarily take an unpaid furlough or reduce their working hours. Additionally, construction projects were paused, as was non-essential travel, purchases, consultant use and advertising.

Rising LSA sophomore Ava Ben-David said she is particularly excited about the return of non-essential travel because it opens up potential for guest speakers and lecturers in her classes.

“Having guest speakers and lecturers and being able to hear from really accomplished people is why Michigan is such a good school,” Ben-David said. “It’s a really good thing for students to be able to experience this because (incoming sophomores) haven’t been able to see just how prestigious Michigan really is.”

Rising Engineering sophomore Sam Sugarman said he hopes the increased resources available this year will help improve the quality of some of his classes.

“We really needed the resources (last) year,” Sugarman said. “I think (instructors) did the best they could, but they dropped the ball in some classes… so I think (more resources this year) will be useful.”

In April 2020, Schlissel said he anticipated losses between $400 million and $1 billion to occur by the end of 2020. He said this shortfall would be due to refunds of student housing contracts, loss of revenue from non-urgent medical procedures, a potential decrease in demand for classes and a potential decrease in state and federal funding.

While spending restraints have been lifted, Schlissel said this June that University resources remain limited. Schlissel said the University is still encouraging fiscal prudence due to continued uncertainties regarding its financial situation. 

These uncertainties regarding current resources are due to continued uncertainty surrounding state funding, the duration of the pandemic and related lockdown measures, as well as the amount of resources available from federal emergency relief funds. In an email to The Michigan Daily, University spokesperson Kim Broekhuizen wrote that the amount of state funding U-M will receive may not be certain until September.

The elimination of spending restraints comes amid the Lecturers’ Employee Organization (LEO) negotiating a new contract. One of LEO’s demands is pay parity across all three University of Michigan campuses. Currently, lecturers on the Ann Arbor Campus receive higher minimum pay than lecturers on the University of Michigan-Dearborn and University of Michigan-Flint campuses.

Kirsten Herold, a School of Public Health lecturer and LEO President, told The Daily that she does not think the University’s new spending announcement will help LEO members as it doesn’t include adequate salary changes.

“As far as we can tell (the lifting of spending restraints) is not helping us at all,” Herold said. “They have given us extremely modest salary proposals, with no increases to starting pay in Ann Arbor and some annual raises between two and three and a half percent.”

Most spending decisions will be returned to individual program leaders, such as college deans, directors and executive officers. In his statement, Schlissel said the Office of Budget and Planning will send additional details to units in its annual General Fund budget letters.

Schlissel added that the University and its employees can learn from the fiscal prudence exhibited during the pandemic to implement different budgetary solutions in the future.

“We’re encouraging all employees to consider lessons learned during the period of constrained spending,” Schlissel said. “We’ve been challenged to work in new and different ways, and our experiences this past year can help us continue to implement creative and innovative solutions that best deploy our resources.”

Daily staff reporter Justin O’Beirne can be reached at justinob@umich.edu.