The University of Hawaii has modified its “;last, best, final”; offer to the faculty union and is now calling for a 6.667 percent reduction in faculty pay beginning Jan. 1 and may attempt to impose the pay cut, a university spokeswoman said.

In a letter to the university community, UH President M.R.C. Greenwood said she is “;deeply disappointed”; over a deadlock in contract negotiations with the University of Hawaii Professional Assembly.

“;We're not formally saying we're going to impose the contract,”; said UH spokeswoman Carolyn Tanaka.

But Tanaka added, “;We are at an impasse. At this point we don't see any hope for a break.”;

Tanaka said the university will have to do something to cut its budget and UH expects to go to court over possible pay cuts “;before the end of the year.”;

Greenwood noted that the university's budget has been cut by $154 million over two years and next year, the state is expected to restrict UH general fund spending by an additional 13.8 percent.

“;We cannot cover our deficit sufficiently without our faculty also accepting temporary pay reductions through this extremely difficult biennium,”; Greenwood said in the letter.

Greenwood's letter posted on the UH Web site outlined negotiations with the faculty union.

Greenwood said UHPA had agreed to a temporary 5 percent salary reduction for the first two years of the contract. But the union also wanted 7.5 percent increases in each of the next two years.

UH had proposed a 5 percent pay cut for the first two years and restoration of pay in the third and fourth years with an option to renegotiate the last two years of the contract.

UH also proposed not to lay off faculty members for budgetary reasons during the first two years of the contract.

UHPA also proposed a temporary payroll lag during the first two years of the contract.

Because no agreement was reached, Greenwood said on Wednesday, the university administration told UHPA a 6.667 percent pay cut would be needed over 18 months beginning Jan. 1, rather than a 5 percent salary reduction over two years.

“;In the long term, I believe we must increase faculty salaries to remain competitive,”; Greenwood said. “;However, the university simply does not have the money to meet UHPA's expectations during the current funding crisis.”;

UHPA officials were not available for comment last night.