November 20, 2003


Of all the expenses of the Montana University System, salaries paid to employees consume well over 75% of our budget. Compensation paid employees of the Montana University System have been reduced or frozen for some time and the disparity between what we offer and what is available elsewhere continues to grow. Consequently, at almost every level, retention of highly qualified personnel is becoming a significant problem. Further, cost of health care and other benefits continues to rise.

Future projections at some campuses indicate there appears to be a bow-wave of personnel costs that will begin to overwhelm our budget considerations by FY06. Projected retirements in the next ten years will only make the issue more severe. There is also no doubt that it will cost the campuses relatively more to replace full professors with new assistant professors than in the past because of compression in many of the disciplines over the past decade or two. And, replacing all retiring full professors with new assistant professors may not be in the best interest of our curricula. This combined with projected reduced net revenues indicates the need for a comprehensive system-wide Strategic plan to address all these issues.  I suggest the Commissioner and Campus CEO's begin the process of developing a Strategic Plan for Compensation for consideration by the Regents, with updates at regular meetings of the Board.


Submitted by Regent Roehm