FROM: Interim President Joseph S. Wood
Newsletter #17: Update on Our Work for FY 2009
April 10, 2008
Dear Colleagues:
Given the understandably high levels of anxiety about budget cuts -- not to mention the stress usually generated as we approach the final weeks of the spring semester -- I want to update you on budget-related initiatives.
Before doing so, I want to acknowledge some positive developments which underscore the quality and resilency of this university and the relevancy of our work.
As of late March, we were running approximately four percent ahead of last year in fall undergraduate applications, and approximately 15 percent ahead of two years ago. In addition, our Accepted Student Days in Bangor, Gorham, and Portland have attracted a record number of prospective students.
Next week (April 17-18), some 230 students will present papers or posters as part of Thinking Matters, our annual two-day symposium highlighting student research, scholarship and creativity.
I recently was privileged to represent USM in Augusta as the Maine Campus Compact, a consortium of 18 higher education institutions dedicated to promoting community service, civic engagement, and service-learning, honored USM students and faculty. Students Khadra Jama and Becki Quimby of USM Lewiston-Auburn College were named the 2008 recipients of the Heart and Soul Award for their commitment to using campus resources to address community needs. At the same ceremony, Professors David Harris (Natural and Applied Science at LAC) and Lynn Kuzma (Political Science) were named the 2008 recipients of the Harward Award for Service Learning Excellence.
Monday evening April 7, USM hosted over 700 community members at the third annual Schair Memorial Lecture on Genocide and Human Rights. This year’s lecture featured UCLA Professor Judea Pearl, father of slain journalist Daniel Pearl, and Professor Akbar Ahmed of American University, in a Jewish-Muslim dialogue entitled “Beyond the Clash of Civilizations: A Dialogue for Muslim-Jewish Understanding.”
Also this week, Professor Annette Kolodny, College of Humanities Professor of American Literature and Culture at the University of Arizona lectured on “History as Told by Native Peoples: Joseph Nicolar’s The Life and Traditions of the Red Man” and presented a Convocation address, “Why Did Academic Freedom Become So Controversial? Strategies for Protecting Free Speech and Academic Freedom at Public Universities.”
These accomplishments, and many others, are the reasons we must build a balanced and sustainable budget, one that will ensure we continue to provide highly engaged, transformative learning opportunities.
Work continues on building that budget. Much of what follows has been reported before, but I want to repeat it so that we’re all on the same page as we enter the final weeks of the semester.
LOAN FORGIVENESS?
I want to address the issue of the System forgiving the $8.2 million in debt. You’ll recall that we borrowed $8.2 million from System reserves to cover previous and projected year-end deficits, and we agreed to begin to repay the System in 2010 after fixing and balancing our budget.
In a recent news story in Mainebiz, Chancellor Pattenaude is reported as saying that he is open to the possibility of the System forgiving the debt.
(http://www.mainebiz.biz/story.html?story_id=1095)
Yes, this opens the door to a conversation, but it is premature. Our first and foremost priority is to stay focused on making the internal cuts and reallocations necessary to fix and balance our budget. Then, and only then, should we begin to advocate for loan forgiveness and consider dedicating funds that would have gone to loan repayments to investments in the institution, including such important areas of need as financial aid.
STATUS OF FY 09 BUDGET
Our original plan for balancing the budget called for us to cut a minimum of $2 million in fiscal years 2008 through 2010, followed by annual payments through 2014 to replenish the aforementioned $8.2 million in University System reserves used to cover the deficits.
Faced also with fixing the budget and meeting a projected gap between increased revenues and increased expenses, we determined we needed to set a minimum $6 million target in the upcoming 2009 fiscal year, the year that begins this July 1. That was before the Legislature finalized University funding in next year’s State budget. We will be level-funded going into next year, which means we still need to cut more than $6 million.
Making the cuts in one year will allow us to balance revenues and expenditures; make reallocations to fix year-to-year structural deficits in specific budget lines; invest in recruitment, marketing and related areas to support growth that will help protect us from future shortfalls; and move on. In short, it is a painful, but the most expedient way, to return us to fiscal sustainability.
WHAT IS THE PROCESS FOR DETERMINING CUTS?
We are proceeding cautiously on finalizing the details of our budget cuts for fiscal year 2009.
We now have a minimum target of well over $6 million in cuts and reallocations. Vice presidents and deans have submitted their proposals for how they will make the targets in their respective areas. We now are going through these proposals line by line to make sure that each and every dollar is available to be booked as a permanent, base-budget cut. This is a time-consuming process, but I feel strongly that it’s important to take the time to make sure we have the final amount right before announcing details, including the number of positions eliminated.
IMPACT ON POSITIONS
You may have read or heard news reports announcing that we plan to eliminate a minimum of 30 more positions. That actually is a figure that we first announced early last semester. We said at the time that we had eliminated 30 positions in 2006-2007 and would eliminate a minimum of 30 more in 2007-2008 and again in 2008-2009. When asked last week for an update on the budget situation and the number of positions eliminated, I repeated the original projection of at least 30 more positions but refused to speculate on exactly how many until we had completed the review of the current budget-cutting proposals. All I know for sure at this point is that we will be eliminating more than 30 positions. Many will be eliminated through voluntary attrition, but others will be eliminated through layoffs.
The final total dollar amount of the cuts, and the specific impact of those cuts on positions, will be announced internally before we share details with those off campus. I hope we can make that internal announcement in early May.
Please bear in mind that the size of the cut will be more than $6 million, depending on final tuition rates, early summer enrollments and other cost or revenue increases.
Finally, I realize that this is a stressful time of year under the best of conditions. I am trying to make these final rounds of painful decisions in as straightforward and as humane a fashion as possible.
Thank you for your continued patience as we work though this difficult process.
Sincerely,
Joe
For more information, please click on http://www.usm.maine.edu/mcr/update This site includes the breakfast speech; the latest digest of ideas e-mailed to movingforward@usm.maine.edu; our work plan; and notes from the recent series of town meetings.
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