A projected system-wide budget shortfall of almost $30 million will likely lead to increased tuition and may affect plans for a parking garage, according to University officials.
USM is looking at a projected shortfall of $1.8 to $2.2 million, even after receiving help from the state and a proposed tuition increase of 3.5 percent.
“We’re very concerned, we know we’ll have significant budget problems,” said USM President Richard Pattenaude.
The University of Maine system is looking to the Maine Legislature for help, proposing an increase of 9 percent in state funding over each of the next two years. However, the state has tentatively approved more modest increases of 4.2 percent next year and 2.5 percent in the year to follow. In a memo to the University community, Pattenaude describes the state’s proposed increases as “far below what is required to support the maintenance of ongoing programs.”
As a result, the University will depend on extra revenue generated from a tuition increase. Pattenaude said that a 3.5 percent tuition increase is likely for next year, though such an increase would have to be passed by the UMS Board of Trustees. For instate, full-time students, the increase translates to approximately $100 more per semester, according to Pattenaude.
“The simple solution is to hike up tuition at a rapid rate,” he said. “We’re trying to avoid that.”
A 3.5 percent tuition increase system-wide would provide UMS with approximately $20 million, cutting the budget shortfall from almost $30 million to the current projected shortfall of $5 to $9 million.
Pattenaude said the shortfalls are due to rising health care and energy costs. He said UMS’ health care costs alone are expected to increase by $10 to $16 million.
Effects of the budget crunch may also translate into problems for departments which already have tight budgets. Student Development, for example, was faced with a budget shortfall this year of $400,000.
“We’ll try not to impact departments that already have tight budgets,” said Pattenaude.
He said the University will cut costs by being conservative on new expenditures and by carefully scrutinizing all new positions. He said he couldn’t rule out layoffs.
Also in question is the $14 million parking garage proposed by the University to help ease the parking crunch.
Though approximately $9 million for the garage could come from a $65.2 million bond issue Mainers will vote on in November, the University must still raise almost $5 million on its own to complete the project.
“Helping the parking situation is a priority,” said Pattenaude. He said that funding for the garage is separate from the University’s actual budget, but upcoming money problems may affect plans for the garage.
The University also faces an uphill battle over the summer as both the professional staff union and the faculty unions’ current contracts expire.
Carol Chipman, member of the professional staff union which just settled an 18-month contract dispute which will expire at the end of June, said that the union is concerned about the effect of rising health care costs.
“The whole issue of health care will be a huge item in the next round of negotiations,” said Chipman. “It is definitely going to be a negotiable item.”
Though not a member of the University’s negotiating team, Pattenaude said he’s going to advocate for “reasonable raises for faculty and staff in the next round of negotiations.”
The University won’t know the exact nature of its budget shortfall until the Legislature passes its budget. The Legislature has until the end of June to do so.
“I’m suspecting we’ll know by early June,” said Pattenaude. “I’m not expecting them to change from 4.2 and 2.5 [percent increases], but I’m continuing to hope.”
In the meantime, Pattenaude has planned a day of meetings so the University community can give input on the current situation.
“Not getting the money we need to operate can hurt the University, but we don’t want to alarm people until things are clear,” said Pattenaude. “We believe it’s prudent to begin planning now and that begins with sharing information.”
The meetings will take place May 8, at different times in Portland, Gorham and Lewiston/Auburn.
News Editor Steve Peoples can be contacted at: [email protected]