PORTLAND – Increasing costs and political and economic uncertainty have University of Southern Maine officials looking to cut $5 million from the school’s budget for the coming year, possibly including staff cuts.

President Theo Kalikow said Tuesday that she does not know exactly how USM will reach that target. She set preliminary cuts of $3.2 million from academic affairs and $1.8 million from administrative units. She has asked deans and department heads to make specific recommendations in the next few weeks.

“It strikes me that we’re going to be making some tough decisions,” Kalikow said.

Gov. Paul LePage’s budget calls for no funding increase for education, and the University of Maine System Board of Trustees has frozen tuition.

That leaves USM with a $139 million budget for 2013-14, up slightly from the current $138 million budget.

Kalikow and Chief Financial Officer Dick Campbell noted that USM will increase its amount of financial aid from $7 million this year to $8.2 million in 2013-14.

In general, the school’s expenses are going up, enrollment is down and the state appropriation increased only $150,000 this year, Kalikow said.

In coming years, those factors aren’t likely to change, so USM must find long-term solutions, she said.

USM will have to cut $3.75 million in 2014-15, $2.2 million in 2015-16, $750,000 in 2016-17 and $890,000 in 2017-18, Campbell predicts.

“That’s a slow-motion tidal wave,” Kalikow said Tuesday. “It’s a signal that we have to think about how we’re doing business.

“We can’t count on more state subsidy every year. And the fact also (is) that the political wheel is changing about what you support in society,” Kalikow said. “There is way more competition in higher ed. Students are learning differently.”

The changes, she said “are forcing us to find a way to become viable and invaluable in a period of transition unlike any that we have seen in our careers.”

For example, although tuition rates are frozen, USM anticipates an increase of $750,000 in tuition and fee revenue in 2013-14 because of more aggressive recruitment and retention efforts.

Among the budget elements:

n The single biggest increase in expenses is $2.6 million for employees’ compensation and benefits. USM is in contract negotiations, and faculty members and other employees across the University of Maine System haven’t had cost-of-living raises since 2009.

n USM is also facing $200 million in costs for deferred maintenance. The system’s trustees require the campuses to keep up on maintenance annually to stop the growth of deferred maintenance, which has been a significant issue systemwide for years.

Even with an additional $1.5 million going to USM’s physical plant, “we’re still just putting a dent” in deferred maintenance, Campbell said.

The proposed budget will be presented to the University of Maine System Board of Trustees in May, along with the budgets of the other UM System campuses.

 

Noel K. Gallagher can be reached at 791-6387 or at:

ngallagher@pressherald.com