Despite a tuition increase, increased enrollment and a $10 million increase in state funding, the University of Maine System is planning to dip into reserves to close a roughly $3 million shortfall for the fiscal year ending in June 2020.

Staff is recommending the system close that gap by dipping into campus reserves at UMaine Augusta, UMaine Machias and the law school in Portland, and using about $1 million in system reserves, according to budget documents prepared for the system’s finance committee.

The committee will review the budget for the first time on Tuesday and vote on a recommendation to the full board of trustees at their May 3 meeting. The trustees will vote on the proposed $573 million budget at their May 19-20 meeting. It is a 3.8 percent increase from the current $552 million budget.

The state appropriation in Gov. Janet Mill’s proposed budget is $198 million, up $10 million from 2019. Her budget includes a 3 percent increase in funding overall, and about $3.5 million a year earmarked for both early college programs – for high school students to get college credit – and adult education programs. The Legislature is working on the budget now and that figure could change.

“That will be critical for our campuses,” system Chief Financial Officer Ryan Low said of the appropriation. Low said the system’s budget overall is “about where we expected” as the system continues recovering from acute financial shortfalls about six years ago.

“We were in a very, very difficult spot and we knew it would take us a while to recover,” he said. “I see lots of positive signs.”

UMaine Augusta will use $1.4 million from campus reserves; UMaine Machias will use $494,277 from campus reserves and the University of Maine School of Law, part of the University of Southern Maine, will use $425,000 from campus reserves.

The law school and UMaine Farmington will each get another $500,000 from the system’s budget stabilization fund, leaving it with an $11.7 million balance.

System officials reported an increase in enrollment in both in-state and out-of-state students last fall, to 29,735 students. Out-of-state enrollment was up 4.3 percent to a total of 5,972 students, and in-state enrollment was up 2.1 percent – notable given that in-state enrollment was down 3.5 percent they year before.

Tuition revenue is expected to increase by $17 million or 5.4 percent, from $315 million in 2019 to $332 million in 2020, according to the proposed budget. At the same time, personnel expenses, which make up the bulk of the system’s expenses, are expected to rise 3.7 percent, from $365 million to $378 million in 2020.

Financial aid for students is scheduled to increase 7.6 percent, from $87 million in 2019 to $93 million in 2020.

The budget also includes tuition increases – roughly equal to a cost of living increase. Tuition at the law school, which has not changed since 2013, will go up 4 percent, from an in-state annual tuition rate of $22,290 to $23,190.

The cost of in-state tuition, fees, and room and board will increase from $17,819 a year to $18,314 a year, up an average of 2.8 percent.

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

ngallagher@pressherald.com

Twitter: noelinmaine

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