The University of Maine System will start its next fiscal year on a rocky financial footing after it had to close an $18.8 million gap to balance its budget.
The system’s board of trustees on Monday finalized a $616.7 million budget for the 2023 fiscal year, which starts July 1. But the $18.8 million gap the system had to close through tapping campus reserves and stabilization funds presages cuts to come over the next two years and requests for more state funding.
The University of Maine at Augusta and the University of Southern Maine are the only two institutions that didn’t have to close budget gaps for the 2023 fiscal year. The University of Maine in Orono had to rely on $11.9 million from reserves to balance its budget, accounting for the majority of the gap.
“You always want to align your revenues and expenses, and any time you don’t it means the next year is going to be a challenge,” said Ryan Low, the university system’s vice chancellor for finance and administration. “One of the things this will mean is, when we start our budget work for 2024, we’re already going to have a structural imbalance.”
The budget difficulties add to the challenges that University of Maine System Chancellor Dannel Malloy is facing following a bungled search for the next president of UMA that spurred no-confidence votes from professors at three campuses.
The university system hasn’t seen its enrollment bounce back to pre-pandemic levels, translating to less tuition revenue and accelerating a long-term enrollment decline connected to a shrinking number of high school graduates in the state.
For the coming academic year, most universities are seeing reduced numbers of admitted students agreeing to enroll, Malloy said. In addition, fewer students are opting to live on campus, meaning less revenue connected to residence and dining halls.
“We live in the oldest state in the nation, and the demographics aren’t good to begin with,” Malloy said. “I think one of the lasting impacts of COVID may be that it discouraged or delayed students coming to university.”
News that there could be more cuts in the next two years comes on the heels of the elimination of nine professors’ positions at the University of Maine at Farmington, which is losing nine other professors to early retirement. Those cuts have provoked student protests and factored into the faculty no-confidence votes at UMA, USM and UMF.
There likely will be cuts across the university system in the years to come, but they won’t be as dramatic as those in Farmington, Low said. Those cuts were unique, as they were the result of the western Maine campus operating with an unbalanced budget for nearly a decade.
“We’ve been going through this pattern for a while and there are no easy solutions,” Low said. “If they were easy, we would have done them 11 years ago.”