ORONO — Despite success bringing in more high-paying out-of-state students, the University of Maine is projecting a $7.2 million budget gap for the fiscal year beginning in July, campus officials said Monday.
The gap is about the same as in the current $242 million budget, which officials handled without cutting staffing or programs. Almost half the current gap, $2.8 million, reflects a 2 percent pay increase for employees.
UMaine President Sue Hunter said it’s too early to say how campus officials will close this gap, but the goal is to avoid cuts. The seven University of Maine System campuses must turn in balanced budgets to the system office by Jan. 31. The trustees vote on a final budget in May.
“We want to minimize the impact on students and employees,” said Hunter, who presented the figures to about 200 people at a campus budget meeting.
The provost will meet with deans and department heads to discuss ways to save money, and administrators will also look for cost-cutting proposals.
The proposed budget also includes investments, among them a $2 million increase in financial aid, $1.25 million earmarked to bolster “foundational” academic areas in general education, and $450,000 earmarked for UMaine research and programs that already have national or international prominence, such as the College of Engineering, the marine sciences program, the Honors College and the Advanced Structures and Composites Center.
“We want to make sure we don’t lose sight of how important those areas are,” Hunter said of the $1.25 million proposed for general education.
The increase in financial aid is also critical, she said, in attracting students to Orono, where in-state tuition and fees are about $10,606 per year. Direct financial aid is currently about $24 million.
Hunter also announced two new financial aid packages, one aimed at Maine students, one for out-of-state residents.
A new “Maine Matters” financial aid package would provide additional aid for Maine students whose families earn between $30,000 and $75,000. For out-of-state students, Orono will offer financial aid packages to New England students, and those in Pennsylvania and New Jersey, that will bring their tuition and fees to the equivalent of what they would have paid in-state at the flagship campus of their state’s public four-year university.
Hunter said the financial aid package is intended to target New England students and those choosing Penn State and Rutgers.
This fall, Orono saw a 7 percent increase in enrollment of out-of-state students who pay about three times in-state tuition. Orono currently enrolls the equivalent of 8,127 full-time students, with 3,157 of them out-of-staters.
The entire system has faced challenging budgets for years. The current $518 million system budget, which began in July, uses $7 million in emergency funds despite cutting 206 positions systemwide and reflects a 3 percent drop in annual revenue to $515 million, due in part to fewer students enrolling and the campuses offering tuition breaks to attract students.
The system faces a $52.6 million budget gap in 2020, according to five-year projections.
Last week, the University of Southern Maine announced a preliminary budget gap of almost $6 million for the fiscal year beginning next July, down from a $16 million gap the year before. USM’s current budget is $128 million.
USM officials said they expected to close the gap without cuts by leaving vacant positions open, putting off some building maintenance, cutting administrative budgets and draining almost all of the school’s $3 million in reserves.
Over the years, all seven campuses have hollowed out academic departments by not filling noncritical vacant positions.
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