News Column

University of Maine System trustees OK $529 million budget, spend most of reserve funds

May 19, 2014

By Nick McCrea, Bangor Daily News, Maine



May 19--BANGOR, Maine -- The University of Maine System Board of Trustees passed a $529 million budget on Monday that dips into rainy day funds and eliminates more than 150 positions in an effort to close a $36 million shortfall.

The trustees' financial committee recommended approval of the budget during a meeting earlier this month. The full board backed the budget during the second day of its two-day meeting at the system offices in Bangor.

"It's not an ideal budget. It's not the budget we'd like to see," trustee Norman Fournier, who chaired the committee, said before the vote. "But it's a transition budget" and the "best budget we could put forward this year."

In the budget, the system plucks $11.4 million from its emergency reserves of $15 million.

Of the $11.4 million, $6.9 million goes to the University of Southern Maine, $1.3 million to the University of Maine at Fort Kent, $1 million to the University of Maine at Presque Isle, $900,000 to the Orono campus, $800,000 to the University of Maine at Machias and $500,000 to the University of Maine at Farmington.

The system's vice chancellor for administration and finance, Rebecca Wyke said any further dip in enrollment or state appropriation could prompt more cuts or a deeper dig into reserve accounts.

The University of Southern Maine was tasked with finding $14 million, or about 10 percent of its budget. USM President Theodora Kalikow proposed eliminating three programs -- American and New England studies, geosciences and arts and humanities at the school's Lewiston-Auburn College facility. The board also approved those program eliminations Monday.

Twelve USM professors received notice in March that they would be laid off, but those layoffs since have been taken off the table and faculty have been asked to weigh in on where they think cuts should be made. USM still has to figure out where it will find $2.5 million.

Officials say the structural deficit was a result of flat funding and frozen tuition rates, which resulted from an agreement with the state that the universities wouldn't raise rates if the state agreed to maintain its appropriation levels. The system also has seen declining enrollment since 2007.

All campuses except for UMPI eliminated positions in an effort to help close that gap.

"This level of deficit spending is not sustainable and is stark evidence that the current operating model is broken," Wyke said in presenting the budget Monday. "It is incumbent upon the Board of Trustees and the senior leadership of the seven university system to address this situation and ensure that Maine's public universities are available for generations to come."

BDN reporter Nell Gluckman contributed to this report.

Follow reporter Nick McCrea on Twitter @nmccrea213.

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Source: Bangor Daily News (ME)