News

Baldacci cuts UM budget by $5.3M

Board attempts to cap tuition rise at 6%

Posted on Nov. 20, 2008, at 12:00 a.m.

The University of Maine System set a goal for in-state undergraduate tuition per campus to rise no more than 6 percent next year, which – if successful – will make tuition $251 per credit hour at UMaine, according to UMS Director of Budget and Financial Analysis Miriam White.

Gov. John Baldacci ordered UMaine to reduce its budget by about $5.3 million Nov. 19, which may make the 6 percent goal difficult to reach.

UMaine’s undergraduate in-state tuition increase was 9.6 percent in 2009. If UMaine’s state funding decreases next year, the university will likely see a similar increase in undergraduate in-state tuition balanced with program reductions, according to UMaine President Robert Kennedy.

Baldacci signed an official curtailment order demanding reductions of all state agencies on Nov. 19. Baldacci ordered UMS to reduce its budget by $8,372,135 – approximately $2.2 million less than originally anticipated. UMaine is shouldering $5,375,308 of the curtailment.

Campus security, student employment, scholarships and student food services budgets may have to be reduced to fulfill the order, according to a curtailment impact report from the governor’s office. UMS campuses may have to consider tuition “adjustments,” but only as a last resort, according to the report.

Of the seven colleges in the UMS, UMaine has the second-highest undergraduate tuition rates – second only to the University of Maine at Farmington, according to the system office 2009 fiscal year budget report.

UMaine had the second-lowest in-state undergraduate tuition increase rate in the 2007, 2008 and 2009 fiscal years. According to Janet Waldron, vice president for Administration and Finance, the reason UMaine’s tuition is so much higher is because UMaine does more research than universities like UMA or UMF.

State funding to UMS increased by approximately $300,000 in the 2009 fiscal year to $186 million. This was a 4.4 percent drop in the annual rate and $7.7 million less than 2008′s increase. If this trend of declining state funding continues, tuition will rise because UMaine will get less money than it needs.

Students won’t be left with the whole bill, according to the university.

“We get our fair share of the state appropriation, and if the state appropriation decreases, then we have to turn to tuition in order to balance our budget. But we never increase tuition to the level that would cover all of our costs, because we would then lose our students,” said Claire Strickland, director of Budget and Business Services.

For the last four years, UMaine has been forced to decide how much to increase tuition each year, at the same time trying to decide how much that increase will deter students. The university looks at increases other land grant universities are considering and what has worked for UMaine in the past to decide where to cap tuition. Then the university tries to increase financial aid and marketing to out-of-state students while cutting parts of the budget to make up the difference, according to Strickland.

“We look at what all of our costs are for the next fiscal year including compensation, including student financial aid increases including library acquisition increases, energy, etc., and then we look at what the gap is between our projected revenues and our projected costs, and we try to peg tuition such that it isn’t inordinately affecting students’ ability to come back to school,” Strickland said.

The resulting tuition increases, when combined with other revenue sources, leaves a negative gap between income and the university’s costs, according to Strickland. UMaine uses that gap to determine what to cut from the budget.

“The campus then needs to decide what it needs to give up – give up in positions, give up in operating budgets – in order to balance the budget, and that’s where you see positions that have been eliminated and operating budgets that have been reduced,” Strickland said.

UMaine’s students, operations and visitors generated $360.6 million in revenue during 2006, according to a university economic impact report. The money Maine puts into the university doesn’t produce revenue that goes straight back to the state government, according to John Diamond, executive director of External Affairs. UMaine benefits the economy, but students should still expect tuition increases to coincide with state funding decreases.

“The distinction is that the economic impact of the university is not money that necessarily goes into the state general fund; it’s money that flows through the economy, some of which comes back to the state in the form of sales tax or income tax, but a lot of it does not,” Diamond said. “It supports business of all kinds; it helps pay local property taxes which are not part of the funding stream that the university receives – and a host of other purposes.”

Most of the revenue UMaine produces comes from sales of sporting event tickets, food and returns from grants and state funding, according to Todd Gabe, professor of agricultural economics.

Campus Currents: John Baldacci