President Theodora Kalikow announced the final round of cuts needed to balance the budget for fiscal year 2015 on Friday and opened up discussion for future cuts for fiscal year 2016 and beyond.
In an email to USM staff, Kalikow said the $14 million gap between expenses and revenues for FY15 has been closed and that the budget will be submitted to the Chancellor’s Office on Monday, June 16.
The $14 million gap was reduced significantly by budget alterations earlier in the year with $4.5 million being attributed to positions left vacant, 26 staff layoffs during the last year and flat funding of deferred maintenance, and one-time infusion of $7 million from the System’s Budget Stabilization Fund, for a total reduction of $11.5 million.
USM faculty and administrators have been working over the past six weeks to identify areas to find the remaining $2.5 million.
“We can’t do everything we are used to doing. We are at a point where strategic and sometimes hard decisions must be made,” wrote Kalikow.
The majority of the remaining deficit was found by reducing the amounts budgeted for positions across the board at USM, including the voluntary separations of 5 faculty who were previously identified for retrenchment, not replacing certain administrative positions and replacing retiring faculty with new staff who will be paid less. These resulted in a savings of $1,575,000.
The savings from positions involved five voluntary separations, 11 faculty retirements, and one staff layoff.
Another $483,000 was found by reducing non-compensation expenses like delaying equipment replacements in facilities, reducing funds budgeted to support faculty research awards and awards for service, and reducing the use of external consultants.
When Kalikow recinded faculty layoffs in April, she asked the Faculty Senate to find those savings in other places, which they presented two weeks ago in a detailed plan.
“I especially want to thank the Faculty Senate for their participation in this difficult process within a short period of time,” wrote Kalikow. “However, these reductions, for the most part, will not take full effect in FY 2015.”
The costs saved based on the senate’s recommendations was closer to $575,000, according to Kalikow.
Kalikow also announced that the university will be looking at a $12.5 million gap in FY 2016.
“We will, as a community, continue to make hard choices that position this university for the future and provide a first-class, affordable education for our students,” wrote Kalikow. “We have to focus our academic offerings so we can better serve students, build healthy enrollments for the university as a whole, and function more efficiently, thereby regaining fiscal stability.”
The budget recommendations also include continuing the process of eliminating three academic programs including American and New England Studies, Arts and Humanities at LAC, and Geosciences, which were discussed earlier this year.
“The financial challenges facing us are the result of financial and demographic trends, disruptive technologies and increasing competition for fewer students. The good news is that we do not have to meet these challenges alone,” wrote Kalikow. “We must collaborate on campus but also partner with our community stakeholders and the resources available across the University of Maine System to achieve efficiencies and develop a stronger and sustainable model of public higher education for the future.”