Gov. Paul LePage is offering the University of Maine System an additional $7.2 million in funding in exchange for freezing tuition and earmarking some funds for early college programs and scholarships.
The move comes at a time when many states are reducing allocations to their public colleges and universities, forcing many to raise tuition.
The finance committee of the University of Maine System’s board of trustees took an informal vote Monday to support the governor’s proposal.
“The governor has made us a generous offer and we should embrace it,” said Trustee Norm Fournier, chairman of the finance committee, before the unanimous vote at the system’s office in Bangor. “Yes, it’s a great gamble, but it’s worth the gamble.”
The UMaine System has had a tuition freeze for the last five years, compared to an average 13 percent tuition increase at public universities nationwide over the same period. In-state tuition and fees at the flagship campus in Orono are about $10,606 per year, slightly higher than the national average of $9,410. Tuition at the University of Southern Maine is about $8,000 annually.
“It’s not Christmas but it’s a step in the right direction,” Trustee Karl Turner said of the proposal.
The governor wrote a letter on March 4 to the system’s trustees, saying he was ready to request additional funding for the UMaine System if they continued to freeze tuition another year.
“Should the Board of Trustees extend the tuition freeze for an additional academic year, I am prepared to submit a supplemental budget to the Legislature that will request additional funding for the University of Maine System,” LePage wrote in the letter.
The governor’s $7.2 million proposal includes about $4.65 million that would offset a possible 2.3 percent tuition hike, and $2.5 million for Early College programs for high school students taking college-level courses, pre-law programs for needy students, and scholarships for adult learners.
The trustees are considering raising tuition – or approving the additional state funding – because of a projected $9.5 million gap in the system’s proposed $521 million budget for 2016-17, according to system finance chief Ryan Low. That figure assumes the use of $1.3 million from the system’s budget stabilization fund and eliminating 20 positions, mostly through attrition.
The gap is much smaller than the shortfall in previous years.
“I feel like we’re making some significant progress,” Low said.
The trustees had to use $7.2 million in emergency funds and eliminate 157 positions across the seven campuses to balance the current $518 million 2016 budget, for the year ending in June.
Closing the current $9.5 million gap will take one-time emergency funds of $3 million from unallocated administration savings, $2.7 million from campus reserves, and either accepting the governor’s proposal or raising tuition by 2.3 percent, Low said.
The finance committee and the full board of trustees will vote on the budget – and the governor’s proposal – in May.
Aaron Chadbourne, the governor’s education policy adviser, said the $4.6 million for the tuition hike offset would be added to the system’s baseline budget going forward, while the earmarked funds are one-time funding.
“The governor would love to see a sixth year of tuition freeze,” Chadbourne told the finance committee. Under the proposal, the governor would put the funding in a supplemental budget next January. It would still need to be approved by the Legislature.
The governor’s offer could change, he said, depending on the economy, the university’s continuing efforts to consolidate and cut costs, and coordinating the proposed funds with overall state education funding, which also goes to grades K-12 and community colleges.
“It’s a vigorous conversation he’s already begun” with K-12 and community colleges, Chadbourne said. “That being said, he’s very firm in his commitment to the university system and he encourages you to move full speed ahead.”
Campus leaders also briefed the finance committee on their individual budgets at Monday’s meeting.
Before receiving additional funding from the system, only the University of Maine at Augusta has an operating budget in the black, with a balance of $58,529. The other campuses have deficits: the University of Southern Maine, $3.2 million; the University of Maine in Orono, $1.8 million; Fort Kent, $1.8 million; Presque Isle, $1.5 million; Machias, $1.1 million; and Farmington $40,759, resulting in the overall budget gap of about $9.5 million.
Low noted that all of the budgets remain in flux as campus officials continue to update them, particularly around evolving fall 2016 enrollment information.
USM President Glenn Cummings and campus budget chief Buster Neel said they thought they could lower their deficit to about $1.5 million by not filling some vacancies and using on-campus resources. Cummings noted that fall 2016 enrollment looks strong, and they are hopeful the additional tuition revenue could close the gap even more.
Orono campus officials said their proposed budget includes an extra $2 million for scholarships, from $45 million to $47 million, and only one layoff out of six eliminated positions.
University of Maine President Susan Hunter also noted that the Orono campus has seen a 160 percent increase in the number of inquiries from juniors since launching the “flagship match” program. That program allows academically qualified students from Massachusetts, New Hampshire, Connecticut, Vermont, New Jersey and Pennsylvania to attend UMaine at the same price that they would have paid to go to their home state’s flagship university.
Inquiries from New Jersey jumped 815 percent, from 699 to 6,396, while inquiries from Pennsylvania jumped almost 600 percent, from 514 to 3,561.
Chancellor James Page praised UMaine for its investments and innovative recruitment efforts.
“I think it’s a whole new day for the flagship in the state of Maine,” Page said.