University of Maine officials said Wednesday that they expect to cut $8.5 million from the school’s $242 million budget the year ending June 2016 without layoffs or eliminating any academic programs.

The latest budget proposal would cut $3 million from academic affairs, but it also includes $1 million to hire new faculty in key areas. Other major cuts would include $1.1 million in administration and finance and $450,000 from the president’s office.

Despite the deficit, Orono officials noted that enrollment and credit hours are up this year, boosting tuition revenue, particularly from out-of-state students who pay nearly three times the in-state rate and now make up 26 percent of all undergraduate students. Out-of-state students made up 37 percent of last fall’s freshman class, up from 21 percent in 2010.

The budget also includes money for additional hiring and investment in certain “signature and emerging programs” that are top academic priorities for the school, and an increase of $5 million for scholarships and tuition waivers for certain groups. Overall, student aid is at $44.4 million, up from $29.5 million five years ago.

“The $8.5 million cut is in part because we’ve made the decision to invest,” said Provost Jeff Hecker.

Last year, 57 faculty members retired, but school officials have approved hiring only 47 faculty positions, a net loss of 10.

Last year, then-UMaine President Paul Ferguson balanced the $249 million budget by using almost $1 million in emergency system funds and cutting about $10 million by leaving positions vacant and laying off about seven non-faculty employees.

All seven campuses in the system are in the process of finalizing their budget proposals for the fiscal year ending June 2016. The board of trustees will review them in March and approve a final systemwide budget in May.

At the University of Southern Maine, President David Flanagan announced a plan last fall to close his school’s expected budget gap of $16 million in part by eliminating 50 faculty positions and closing two academic programs.

Last year, USM used $7 million in emergency funds to help close a $14 million gap in the school’s $134 million budget for the fiscal year that began July 1.

For years, the system has faced budget deficits, which officials say are the result of flat state funding, declining enrollment and three years of tuition freezes.

The governor’s proposed budget, unveiled last week, would increase state funding for the system by 1.7 percent, from $176.2 million to $179.2 million, for the fiscal year ending June 2016; and by 1.93 percent, to $182.6 million, for the following fiscal year.

Ryan Low, UMaine’s vice president for administration and finance, said Orono’s projected deficit increased $1.5 million since last October, largely because of costs associated with shifting one-time Orono employees in IT, human resources and certain back office positions to the university system office. Those positions at all seven campuses are being centralized in an effort to end redundancy, streamline services and cut costs.

Those changes are part of an overhaul plan to close a projected $69 million systemwide deficit by 2019. In the most recent budget approved in May, officials cut 157 positions and used $11.4 million in emergency funds to close a $36 million deficit in the system’s $529 million budget for the year. In recent years, all seven campuses have made deep cuts to staff, not replaced retired faculty, put off capital improvements and cut sports teams.

Staff Writer Noel K. Gallagher can be contacted at 791-6387 or at:

ngallagher@pressherald.com