In the face of a potential shortfall of $11.9 million for fiscal year 2015, university officials stand behind the work of the Direction Package advisory board as the best way forward.
Besides the $5 million in cuts the university is making to meet budget in the current fiscal year, Chief Financial Office Dick Campbell also estimated last March that the university would be required to make a $3.75 million reduction for fiscal year 2015. That estimate more than tripled after enrollment rates came in at 6.6 percent below budget. Low enrollment, Campbell explained, in combination with other factors, may result in an $8.2 million drop in revenue for the fiscal year 2015, and costs could increase by $3.7 million dollars on top of this, he added, bringing the total estimate to $11.9. Part of those costs are from the university’s recent four-year commitment to increase financial aid by $1 million a year.
This, Campbell said, is “if we do nothing.” He stressed that the projection is still a working number, and it will likely change with the incorporation of spring enrollment figures and other variables, like the result of the faculty contract negotiations, which may be resolved in early January.
The University of Maine System also recently released a four-year financial analysis that projects a potential system-wide shortfall of $60 million from fiscal year 2015 to fiscal year 2019. That will be the case if enrollment, state appropriation, tuition, capital investments and workforce remain at their current levels, according to system Chancellor James Page. In the analysis, which was presented at the November Board of Trustees meeting, it was reported that each of the seven branches of the system could face a shortfall in the next fiscal year.
“There’s a lot we can do to change those trend lines,” said Page. “We’ve got to do something.” Page explained that more collaborative academic work across the system could help ease the financial burdens of each campus.
Across the system, he said, classics, for instance, has been stripped down “so that they are almost extinct, and that’s unacceptable.” Funding classics at each campus, he said, is currently financially unrealistic, but classics could be offered virtually through USM’s professor Jeannine Uzzi.
“We have to look at everything,” Page said, when asked what other solutions there may be going forward. “I can’t think of any sacred cows,” he said. The solution will likely be a combination of efforts, from attempting to increase enrollment, making cuts and looking into state funding. The system has to increase revenue and cut expenses, he said.
USM is facing a similar process in the process ahead. “That’s a very tough number, 8.6 percent of our operating budget,” wrote President Theo Kalikow and advisory board co-chair Jerry LaSala in a release to faculty and staff. “We do not yet have the answers on how we will address USM’s challenges, but the Direction Package Advisory Board is meeting frequently through February,” they wrote.
The board is made up of 32 members of faculty, staff, students and community members who, LaSala said, are tasked with defining a long-term direction for the university and helping to identify specific areas for budget reductions to meet the shortfalls.
Campbell stressed that the Direction Package will be a vital part of the work successful move forward. “The purpose of the Directional Package work is to tell us how to be looking at what we’re going to be doing in that future,” he said. “We will have to do additional modeling once we have a better understanding of what that looks like.”
USM is not unique in its financial struggles or its efforts to come up with a solution with work like the Direction Package. Campbell added. He explained that there is also a push from the for more collaboration between campuses.
It’s also clear that the university’s financial struggles are far from new. “I don’t remember a time when I was here when we didn’t face a budget problem,” said Mark Lapping, distinguished professor from the Muskie School of Public Service. Lapping came to USM first in 1994 to act as provost and has since acted in various capacities at the university. “I don’t that we were ever adequately funded,” he said. “We’re not cutting any fat. That went away years ago. We’re now cutting into the bone,” he said.
LaSala agrees with Lapping that funding for the university has always been inadequate. “Fundamentally, this is a problem that goes back decades,” LaSala said. The geographic nature of USM, with its three distinct campuses, he said, has made funding a challenge.
“When I came to USM … there was a real sense of movement. This place would sing,” Lapping said.
With reorganizations and cuts a common theme at the university, “a lot of people are tired,” he said. “The process is nevertheless important,” Lapping said.
“People thirst for honest and open conversation.”
LaSala and Kalikow stressed that they want the Direction Package work to be as transparent as possible in the November release.