The University of Maine System was recently featured in an article by Melissa Korn of The Wall Street Journal, titled “Maine’s State Colleges Hit the Skids,” in which she contrasts Maine’s anemic funding for universities with economic rebounds seen in other states.

The biggest difference? Maine hasn’t seen a rebound yet. However, throwing money at a problem won’t necessarily fix it. Not only do we need to increase state funding, but we also need to ensure that its allocation is equitable.

We have seven university campuses spread across a large state with a small population. The largest universities are the University of Maine in Orono, hailed as our flagship, and the University of Southern Maine. The inherent problem is how best to allocate scarce resources without being subjected to institutional favoritism. Unfortunately, there is an “Orono-first” culture that has manifested itself in an outdated, inequitable funding formula for the seven campuses.

The university system’s funding formula is long overdue for an overhaul. The formula used thus far hasn’t been substantially altered in nearly four decades and has served only to prop up Orono at the expense of other campuses.


Despite USM conferring as many degrees as Orono, awarding more advanced degrees than Orono and teaching nearly as many credit hours as Orono, the current funding formula provides USM with only half as much money from state appropriations as it does Orono. To find a root cause for USM’s reported deficit, look no further than the inequitable allocation of state funds.

Subsequently, after decades of pressure from academics, students and politicians, the University of Maine System is reassessing its funding formula. The system is going to move toward what it calls an “outcome-based funding model,” where campuses are allocated funding based on a series of predetermined benchmarks. At first glance, this sounds like a great idea: a neutral allocation system that could uniformly allocate funding based on merit and performance. However, the newly recommended formula based on outcomes has criteria that are neither neutral nor uniform.

Instead of holding campuses to similar standards and metrics, the model establishes individual, customized metrics for each campus to achieve. For example, 24 percent of USM’s outcome-based funding would come from productivity, which the system defines as “degrees conferred per $100,000 of revenue”; only 18 percent of Orono’s funding would hinge on productivity. Similarly, degrees awarded would determine 61 percent of USM’s funding but only 45 percent of Orono’s funding.

The new funding formula would emphasize productivity at USM and research at Orono: Research production would determine 30 percent of Orono’s funds but only 5 percent of USM’s funds. Initially, it seems that the new funding formula could help USM by providing more funding, as USM is enormously more productive than Orono.

However, incentives are powerful, and so the long-term implications of the formula have the potential to harmfully shape USM’s future. As outcome-based funding becomes fully implemented, USM will have no choice but to continuously find ways to cut costs, and likely quality as well, while Orono will be able to increase its funding without emphasizing cost controls.


Ultimately, USM will offer fewer and fewer courses, in larger and larger classrooms, taught by less-qualified instructors, while Orono will have the freedom to pursue research while offering high-quality courses with tenured faculty. The long-run outcome of the new funding formula will be no different from that of the old formula, where a budget-starved USM financially props up Orono.

We understand the appeal of having a flagship university and campuses with varied specializations, but we question the efficacy of overemphasizing one university over another and the risk that runs in underserving citizens in other regions.

As business strategist Michael Porter of Harvard Business School states, “You can’t be all things to all people,” and so it makes sense that the system should differentiate its campuses. However, we believe this is being done without shared governance and ignores Maine’s core competencies.

USM serves the economic engine of our state. Seventy percent of our economy is driven by urban activity, as Maine economist Charles Colgan stated recently: “Maine is an urban economy. We have to start thinking about ourselves as an urban place.”

If Maine is to have a vibrant economy that attracts young people, professionals and families, it cannot do so if they have reason to doubt our commitment to public higher education. Maine must increase state funding for our universities, but it must do so wisely and equitably and in proportion to the size of the regions and the number of citizens they serve.

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