BANGOR – The University of Maine System’s impact on the state’s economy – estimated at more than $1.5 billion in 2007 – is the focus of the system’s annual report released today in newspapers across the state.

For every $1 of state appropriated money that’s invested in the university system, $8.10 of economic activity is generated throughout Maine, UMS spokesman John Diamond said Wednesday.

“Many people who read [the report] will be surprised and impressed about the economic impact of the university system on the economy,” he said.

This is the second year that the report has been distributed in this fashion in Maine newspapers instead of the more corporate magazine form in which it previously was distributed.

“The report itself covers a lot of different aspects of the university,” Diamond said. “The overarching theme is explaining the relevance of the university as a partner and resource in Maine’s economic development.”

The report made available to the public doesn’t provide an in-depth analysis of the university’s financial data, but more detailed information is available by clicking on the 2007 annual report on the UMS Web site at www.maine.edu/system/oft.

The year’s report was compiled in-house and partially underwritten by the University Credit Union.

“It is very important that the people of Maine know where our revenues come from and how they are spent. This is an attempt at greater transparency,” UMS Chancellor Richard Pattenaude said Thursday. “It’s also important for the people of Maine to know that they have outstanding universities that are contributing to the future of the state, but it also helps spread the word that students have great choices for higher education right here in Maine.”

During fiscal year 2007, the system’s total revenue was nearly $679 million system-wide, while expenses totaled about $662 million, most of which went toward instruction and related student support costs.

An estimated $15 million in revenues was dedicated or restricted to specific purposes and projects that were not considered expenses in that fiscal year, Diamond said. Those include money to cover post-retirement benefit liabilities as required by law, to complete capital improvement projects and to fulfill the university’s cost-sharing commitments related to state and federally funded research projects, Diamond said.

To a lesser degree, the difference between revenues and expenditures also includes donations made for a specific purpose that did not take place during the last fiscal year. The restricted expenditures will appear in subsequent annual reports, depending on when they actually take place.

The majority of revenues for fiscal year 2007 at each campus came from tuition and fees, state-appropriated funds, and grants and contracts.

In recent years, some campuses have experienced financial difficulties, and the system is working to remedy that.

In January, the board of trustees approved internal loans and repayment schedules to take care of deficits at two of the system campuses, the University of Southern Maine for $8.2 million and the University of Maine at Machias for $1.3 million to cover operating deficits while they undergo financial and organizational restructuring. Each loan has a four-year repayment plan to begin July 1, 2009.

“Right now, we are reducing our costs,” Pattenaude said. “We have an effort under way called Facing the Challenge to reduce operating costs across the system by $5 million, so we look at every expenditure very carefully.”

In addition, the system is focused on Pattenaude’s Agenda for Action, which makes improving the financial situation a priority.

“What we’ve done is increase the efficiency of our operations,” Pattenaude said. “We’ve learned to be more efficient, we’re attracting more grants, we’re attracting more out-of-state students, and we’re attracting more gifts. For each dollar, we’re producing more economic activity and we’re graduating more students.”

In 2007, faculty, staff and students in the system submitted 925 grant applications to federal, state and private agencies. Of those, 669 were approved for a total of $107 million.

“All of our campuses are taking an increasingly active role in building a sustainable economy,” Pattenaude said, adding that there will be more of this type of activity in the future.

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