State Department of Finance and Administration suspends cost of living raises for 2011

June 18, 2010 -- Non-classified employees at Arkansas State University will not begin receiving on July 1 the two percent cost of living adjustment (COLA) or other raises for fiscal year 2011, according to a statement made Thursday by Richard Weiss, director of the state of Arkansas Department of Finance and Administration.

The two-percent cost of living adjustment was approved by ASU’s Board of Trustees in the board’s meeting on May 7. The suspension of the pay raises affects state agencies and all state-supported institutions of higher education. Weiss’ statement says that the state’s official forecast of general revenues for fiscal year 2011, which begins July 1 of this year, triggered the action.

“I am very disappointed in this turn of events because of the adverse effect this will have on our non-classified faculty and staff,” said Chancellor Robert L. Potts. “Classified staff will have the second half of the pay plan implemented on schedule as previously approved by our Board of Trustees.

“Our non-classified faculty and staff, who have been dedicated and worked hard for the benefit of the university, also deserve to have wage and salary adjustments that at least address the reduction of buying power caused by inflation each year.  They received no raise this year, and now we are being required to defer raises that have been promised to them beginning July 1.”

Chancellor Potts went on to say, “The ASU-Jonesboro administration has every intention of following through on implementing these promised wage and salary adjustments retroactively to July 1, 2010, if and when permitted to do so by the director of the Arkansas Department of Finance and Administration. 

“To that end, we will escrow for that purpose the money that has been allocated in our budget to implement these increases.  We remain hopeful that the economy of Arkansas continues to improve and that these raises can be implemented retroactively as early as possible in the new fiscal year.”

In a meeting of the ASU Board of Trustees, Friday, June 18, the board approved the administration’s recommendations. Board member Mike Gibson of Osceola stated, “We need to do this. We’ve made a commitment to our faculty and staff.”

According to Weiss’ statement, “The pay plans will remain the same as Fiscal Year 2010…it has been determined that the FY2011. . . cost of living adjustments (COLA) will be suspended at this time . . . [and] will not be applied to employees’ June 30, 2010 salaries.” The document went on to say that, in addition, annual career service recognition payments and classified and unclassified employee merit increases will be suspended for fiscal 2011.

However, these decisions will be reconsidered if the Arkansas economy has improved after the first two quarters of 2011.

Weiss’ statement says the decision to suspend raises is in accordance with Arkansas Code 21-5-211 and Act 688 of 2009.
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