Panel Calls for Tapping UMS Reserves to Close Budget Gap
Program and job cuts at some University of Maine campuses have failed to close the overall budget deficit facing the seven school system system. So this afternoon, a committee of the system's board of trustees gave administrators the OK to use more than $11 million in reserve funds to make up the shortfall. The full board will vote on the budget at its meeting in two weeks. Jay Field has more.
Only one of the system's seven campuses, the University of Maine at Augusta, was able to balance its budget this year. UMA achieved that difficult feat largely through a painful mixture of layoffs and cuts to employees work hours.
Members of the system board's Finance, Facilities and Technology Committee were quick to compliment UMA officials, in part it seemed because their story offered a rare, hopeful moment in an otherwise sober afternoon of presentations.
Rebecca Wyke, the system's vice chancellor for finance and administration, kicked the afternoon off with the view from 10,000 feet. "And this is a brief overview of the budget. The FY 2015 Unified Operating Budget for the University of Maine System is not balanced," Wyke said.
Now, a reminder of how the system got here: The number of young people enrolling at UMaine's seven campuses has been steadily declining in recent years. At the same time, funding from the state has remained flat. So there's this growing gap between revenues and expenses.
System administrators have refused to raise tuition to cover the shortfall - a move they say would only worsen the enrollment problem. This spring, after giving campuses a mandate to make steep cuts to their individual budgets, Wyke says the system is nonetheless being forced to dip into its reserves in an effort to cover a roughly $37 million shortfall.
"This level of deficit spending is not sustainable," Wyke said. "And it is stark evidence that the current operating model is broken."
The budget headed to the full UMaine board calls for using just over $11 million in system reserves to help cover next year's deficit. But Wyke says using this money will only allow the system to cover 61 percent of its shortfall for fiscal year 2015.
Critics of Wyke and other administrators argue that the system could use much more of its roughly $183 million in emergency money to take control of its budget problems. But Wyke and others note that most of those funds are set aside for capital expenditures and other urgent needs on the seven UMaine campuses.
The full UMaine board will vote on next year's budget in two weeks.