In the weeks between the initial presentation of USM’s budget on Nov. 15 and Dec. 9, when the estimate was revised, the structural gap between the funds available and the funds required to keep the university running for the coming year has grown from $11.9 million to $13.9 million.
Dick Campbell, USM’s chief financial officer, attributes the majority of this budget shortfall to declining enrollment. When Campbell presented the increased estimate for the budget gap to the Direction Package advisory board, he said that the increased estimate is based on higher costs in the employment contracts for USM faculty and professional and classified staff.
A certain amount of increase in compensation for faculty and staff was factored into the first budget projections, Campbell said, but the contract for the Associated Faculties of the Universities of Maine, which was approved provisionally in November and finally ratified in early January, was higher than anticipated. The full-time faculty of the universities of Maine have been working under the terms of an expired contract while negotiating with the university system since 2011, and the projections for what that contract would entail have fluctuated over the course of negotiations
These higher than anticipated costs enumerated in the new AFUM contract had further effects as well. “Based on the settlement of the AFUM contract, the costs of settling contracts with other bargaining units and the increases to non-represented employees were revised,” Campbell said.
Another reason for the change in estimated shortfall, which grew by approximately $2 million per fiscal year for the next five years in the three and a half week period, Campbell said, is “the expectation that the campus will invest more in maintaining the physical plant.”