SLIPPERY ROCK — Up to 20 employees at Slippery Rock University could be out of work as the school decides the number of layoffs it must make to help cut an estimated $4.2 million budget deficit for next year.

The university will not know the scope of the layoffs until it can determine how much will be saved from a voluntary retirement incentive offer, which ended Friday.

In a May 17 letter, President Robert Smith detailed the circumstances of the cuts. He cited numerous financial losses to the university, including a federal stimulus reduction of $3.1 million dollars, and ballooning State Employees Retirement System costs as significant hurdles SRU must overcome.

The university will not surmount those figures without tightening its finances.

SRU is one of 14 universities owned by the Pennsylvania State System of Higher Education. The network of schools, like other academic institutions across the country, has been forced to cut funds for each of its universities. For SRU, this has left few options short of layoffs to fully account for the difference in funding.

The voluntary retirement incentive program, approved by the state system board of governors early this year, ended Friday.

The retirement option was offered to SRU staff to limit the number of involuntary job cuts made. The option had a one-time payment of $6,000 to $30,000 with the exact amount based on the employee's salary and years of service.

The university faculty opted out of the retirement incentive.

About 50 university staffers qualified for the retirement option. As of Thursday afternoon, 33 staffers signed the offer.

According to Smith, this number is subject to change and cannot be factored in as money SRU will save.

This is because many staffers who have accepted the retirement offer must be replaced, according to Smith. SRU will be able to hire replacements for these retirees at lower entry-level rates, but will not save as much money as it would if the positions were eliminated outright.

Smith said lost talent is something no finance sheet takes into account.

"We've been surprised at some of those that have responded," Smith said, referring to the offer. "You're looking for savings, but you're losing a lot of talent."

Smith anticipates $750,000 to $1 million will be saved by the job cuts, but the full savings will not be realized until later this year or in 2011 because the university must make one-time payouts to staffers who opted to take the retirement incentive. But eventually, it will create payroll savings over the course of the school year.

Smith said it is likely the full scope of the savings won't be on the books until the 2011-12 budget year.

Other universities in the state system are experiencing similar budget shortfalls, including Kutztown University in the eastern half of the state, which is eliminating 39 positions in an effort to save $4.2 million.

SRU and the 13 other state system schools have adopted a stance that makes students the number one priority in the face of difficult budget decisions.

In addition to money that will be saved by job cuts and the retirement incentive option, SRU has opted to cancel a number of graduate assistantships and several master's programs that were not performing well.

President Smith is eager to see where the state system will set tuition costs for the coming year. Tuition costs could help offset some of the deficit the university faces.

"The worst situation we could be in is to cut something from the bone and realize you didn't need to," Smith said.