Trustees OK 10% tuition increase $520.7M budget at UMS approved

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PRESQUE ISLE – The University of Maine System board of trustees adopted a $520.7 million budget Monday for the upcoming fiscal year, which includes an average 10 percent increase in tuition at Maine’s seven university campuses and a $15.7 million cut in personnel and operating costs.

“We treat tuition and fees as the revenue source of last resort,” UMS Chancellor Richard Pattenaude stated in a press release Monday. “The combination of budget cuts and tuition increase were designed to maintain academic quality and to minimize, to the greatest extent possible, the size of the tuition increase.”

State funding constitutes roughly half of the UMS general operating budget with student tuition and fees making up the other half. Excluding targeted appropriations for university-based research, the state budget for the new fiscal year funds the system at essentially the same dollar amount as for the current year.

The current state appropriation is $185.7 million and has been approved by the Legislature to increase about $300,000 in the upcoming fiscal year – essentially flat-funding the system.

But the situation isn’t unique to Maine, “especially this year,” UM President Robert Kennedy said in a phone interview Monday. “While we lament the situation, we also have to be grateful that the Legislature did try to protect higher education and the University of Maine System as much as they could.”

During its meeting at the University of Maine at Presque Isle on Monday, the board of trustees approved a 2.6 percent increase in the system’s budget for the next fiscal year, which brings the total to $520.7 million, not including restricted funds such as grants and contracts.

“The cuts effect [the University of Southern Maine] most deeply, but it’s part of the university’s plan, which they call ‘Moving Forward’ … to prioritize and downsize certain aspects of the university to contain costs,” UMS Spokesman John Diamond said.

The University of Southern Maine has seen financial difficulties in the past few years and is working to bring its budget back in line.

USM to date this fiscal year has eliminated 91 full- and part-time positions as part of a plan to cut and reallocate more than $6 million in fiscal year 2009, which begins this July 1, 2008, according to a press release Monday from the campus.

The 91 positions include 67 full-time and 24 part-time positions for a full-time equivalent total of 79 since July 1, 2007. This is about 6.5 percent of USM’s full-time equivalent work force of 1,237. Since September 2006, USM has eliminated 109 full-time equivalent positions.

Eighteen of the 91 positions involve layoffs, including 14 full-time and four part-time people. The remaining 73 positions have become vacant due to retirements, resignations or the elimination of fixed-length positions.

This year’s elimination of 91 positions results in total salary and fringe benefit savings of about $4.9 million. Changes in business processes, the use of revenue-generating operations to fund select positions, and permanent reductions in equipment budgets account for the remaining $1.1 million in cuts.

Original plans called for USM to cut a minimum of $2 million each year in fiscal years 2008 through 2010 in an effort to balance the campus’ budget by 2010. Earlier this spring, USM Interim President Joseph Wood decided to move more aggressively to balance the budget.

At the flagship campus in Orono, the tuition increase approved Monday equals 9.2 percent and will bring the annual cost of tuition and fees to $9,100 for a full-time, in-state student, Diamond said Monday.

“This is the second or third year that we’ve had to cut budgets and redirect because of budget shortfalls, so it’s certainly starting to have an effect on class size and the number of faculty we have and class load,” Kennedy said. “The general consensus is that we really can’t go much further. It is a situation that we’re trying to make the best of.”

The system average for tuition and fees for out-of-state undergraduate students will rise to $19,738, an increase of $1,675.

To help offset the tuition and fee increases systemwide, the new budget also includes an 11.4 percent increase in student financial aid.

The reason for the increase in tuition and operating cost cuts is similar to examples found in many households throughout the state. In the average household, Mainers are having to cut back portions of their expenditures, such as what they spend on clothing, to pay for other necessities that have increased drastically in price, such as fuel.

For the upcoming fiscal year, UM will eliminate 44 more positions for a two-year total of 94, according to UM spokesman Joe Carr.

“Most of these involve retirements or resignations and also elimination of positions that had been held vacant,” Carr said.

There are also some employees who will face what Carr called “involuntary work schedule reductions,” and there already has been one layoff on the university’s professional staff.

The campus already has reduced its expenditures by $5 million for the coming fiscal year to help offset increases in other areas.

UMS board Chairwoman Meg Weston and Chancellor Pattenaude cited five primary reasons that influenced the budget cuts and increase in tuition rates:

. Enormous increases in the cost of heating oil and other utilities.

. Increased health care costs.

. Turbulent global financial markets, which negatively affect the system’s endowment funds and other investments.

. The implementation of new national accounting standards for post-retirement benefits that require a higher level of funds be set aside than in past years.

. No increase in the state appropriation with the exception of research and development funds.

Tuition rates have gone up each year since 1996 with last year’s rate increase set at an average of 10.5 percent system-wide. Despite cuts on each campus and at the system office, a tuition increase couldn’t be avoided, Pattenaude said.

In other meeting business, the board:

. Approved an “RN to BSN” degree to be offered by the University of Maine at Augusta. Under the program, registered nurses in the work force who hold an associate’s degree may work toward a baccalaureate degree to allow them to perform at a higher level. The move was designed to help address Maine’s growing shortage of nursing professionals.

. Appointed Donald N. Zillman as president of the University of Maine at Presque Isle.

. Appointed Susan J. Hunter as vice president for academic affairs and provost at UM; Jeffrey E. Hecker as dean of the UM’s College of Liberal Arts and Sciences; and Rosa S. Redonnett as executive director of student affairs for UMS.

. Elected Lyndal J. Wishcamper of Freeport as incoming chair of the board, succeeding Weston, and re-elected Barry McCrum of Mars Hill as vice chair.

. Thanked Weston and Charles L. Johnson III of Hallowell after completion of 10 years of service on the board. With their terms of service completed, Gov. John Baldacci is expected to appoint successors in the near future.

The next UMS board of trustees meeting is scheduled for July 13-14 at University College in Bangor.

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