BANGOR, Maine — The current global financial crisis has officially hit the University of Maine System.
UMS Chancellor Richard L. Pattenaude announced Monday afternoon a series of spending control measures, effective immediately, that the system hopes will reduce operating costs at its centralized operations center and seven universities.
The measures include the regulation of temperature in university buildings, deference of salary increases for employees, restrictions on filling vacancies and hiring employees, and limitations on travel, printing, mailing, employee overtime and purchases.
The University of Maine System’s board of trustees recently approved a plan by Pattenaude that would cut $19.1 million for the current budget year and subsequent budget years.
“That plan, implemented during a period of increasing operating expenses and low revenue growth, was designed to protect academic quality, access, and affordability — and to minimize the size of student tuition increases,” Pattenaude said in a statement issued Monday. “However, the latest assessment of economic conditions indicates that even more must be done to adequately address those objectives and balance our FY09 budget.”
Pattenaude is not considering layoffs or a hiring freeze at this point, University of Maine spokesman John Diamond said. The system already was reduced by 140 employees last year through retirement, some layoffs and normal turnover, Diamond said.
A downturn in enrollment this year, along with uncertainty about the state’s financial picture and the recent volatility of the stock market, are the three main reasons for the most recent cost-cutting measures.
Diamond said enrollment is running about 1½ percent — the equivalent of about 360 full-time students — behind last year. The system usually has 33,000-33,500 full-time students; that number is below 33,000 this year.
Including part-time students, the system has more than 45,000 students enrolled in its seven universities, 10 outreach centers, law school, and 75 other interactive sites.
“[It’s] the uncertainty about the economy,” Diamond said, reflecting on the potential causes for the decline in enrollment. “People feel a greater commitment to maintaining jobs and family responsibilities … the cost of fuel [also] becomes a factor.”
The more direct spillover effects of the financial crisis, however, may put even more pressure on state budgets, which help finance the public universities, and on the university system’s operating fund investments.
The university system currently gets about 32 percent of its revenue from the state, which could see cuts in the FY10 and FY11 budgets.
“With [Gov. John Baldacci] asking all state-supported agencies and departments to look at possibly a 10 percent reduction, it’s possible the cut, if it occurs, would affect us and our students,” Diamond said.
Pattenaude is also concerned about the negative impact of the financial crisis on the market value of UMS operating fund investments and the uncertainty about any income the investments might generate. About 4 percent of the system’s revenue comes from investments, Diamond said.
Pattenaude listed a series of measures the system will take starting immediately to cut costs.
University employees will be asked to set thermostats to 68 degrees during the heating season and 75 degrees in the cooling season in an effort to save on energy costs.
“The university system has to do what homeowners and renters and others have to do, and that’s look at every possible way of saving money,” Diamond said. “It’s clear that we’re not alone in this. Other universities around the country, other businesses and organizations have to do this.”
Vacant positions will be filled on a case-by-case basis, and a hiring would have to be justified as essential. In addition, some departments and programs may face the elimination of activities that have been a long-standing part of their operations.
“Departments have been told the last couple of years they have to do more with less … and now they may have to do less with even less,” Diamond said.
Additional spending reduction steps may be announced as a result of a more detailed review to be completed in the coming weeks, Pattenaude said in Monday’s release.
Diamond said the system is hoping the cuts will have as little impact on students as possible, especially academically.
“I am comforted, even though it may sound like I’m trying to put a bright light on the situation, knowing all of these actions are being done to protect the interests of our students and their families,” said Diamond, whose son Johnny is a University of Maine freshman. “The actions being taken are designed to be [felt as minimally] as possible by students.”
On 10/21/08 at 1:27 AM,
Johninphilippines wrote:
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Poor souls at UMS...they increase student tuitions, demand millions from the State of Maine, and now they want to apply for federal funding because they are suffering downswings. This is simply a "hard-luck" story...you know...like the guy who cannot afford to pay his bills and keeps telling the loan company or the bank all kinds of stories just to keep him going from month-to-month...
On 10/21/08 at 8:13 AM,
Bangorian wrote:
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There is a ton of waste at the University - there's no reason why they can't operate with a few less dollars.
On 10/21/08 at 8:29 AM,
Coolfusion wrote:
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We will be able to judge the sincerity of the Department of Education in making rational and prudent budget cut decisions when we are able to view their proposals and see that the Maine Maritime Academy has been fully scrutinized and appropriate and sizable cuts have been initiated to their lavish state subsidizations. Acquiring $1,600,000 mansions for their president from the 2007 enacted bond fund and to maintain a $multi-million dollar alumni center for a student body of 800 is beyond comprehension. Aggressively recruiting out-of-state students which currently make up 1/2 of the student body that leave immediately after graduation is not in the interest of Maine taxpayers nor Maine youth which are seeing tuition increases and facility budget cuts. A small college the size of a junior high school doesn't need their own Augusta lobbyist on their payroll.
On 10/21/08 at 8:55 AM,
mrclam wrote:
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What a joke Patenude is. He ran USM right into the ground and now he'll do the same for the whole system. Raise tuition and cut costs - that's a good one. Sounds to me like you need still more cuts - and more management ability. I have three children at UMO and I can tell you, as a 20 year business owner, that there is more money wasted there than anywhere in the state of Maine. Food service, maintenance, heat, an army of duplicate do nothing employees, large facilities that see little use, and on and on......... These people live in a parallel universe, one that is funded by you and me. They never feel the pinch of lay-offs, pay loss, benefit cuts, etc. It is a true Eden.
On 10/21/08 at 9:22 AM,
MrBeane wrote:
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UMaine brings in much more money from out of state than it receives in State funding, most of which gets spent in State - funding the flagship campus gives us a very good return on investment. If you think the economy in Maine is bad now, just wait and see what it is like after UMaine is neglected even more than it is now for several years. I think there could certainly be consolidation of administration and elimination of duplicate majors in the smaller campuses.
On 10/21/08 at 9:52 AM,
pjramsay wrote:
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In defense of Mr. Pattenaude, some of the fiscal problems were inherited from his predecessor, Mr. Westphal. Additionally, the economy itself can be blamed for as well.
Maybe canceling a sporting event or laying off Dr. Westphal ($250,000 per year) might be a good start.
On 10/21/08 at 10:48 AM,
David889327 wrote:
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Umaine should be privatized. It's an oasis for Vietnam war era draft-dodgers.
On 10/21/08 at 11:07 AM,
Bangorean wrote:
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I didn't see anything regarding Administration cuts. I remember in the '70's the outrage over the pay level of the "Chancellor." I believe if one had an administrative flow chart in front of them, some appreciable, no-harm cuts would become painfully evident. Instead, then, as now, increased costs would be laid on the backs of the people providing the service (teaching) and paying for the service (tuition), simply to provide for a bloated, self-protective administrative system.
On 10/21/08 at 11:10 AM,
Bangorean wrote:
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Umaine is an oasis for Vietnam war era draft dodgers? Wow. Brilliant commentary.
On 10/21/08 at 12:10 PM,
baltimorean wrote:
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Bangorean, I detect a note of sarcasm which completely out of place. The vast majority of students at UMaine had the nerve to not even be born for at least 10 years after we withdrew forces from Vietnam. The cowards.
On 10/21/08 at 1:42 PM,
BrianMurphy wrote:
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At an inflated salary of $162,145 plus the very generous UMS employee benefit of having half of his child Johnny's tuition paid by UMS, Mr. John Diamond is hardly the appropriate Mainer to reference for how the cuts will impact an average Mainer making $35k with NO such fringe benefit for their college student.
On 10/21/08 at 3:38 PM,
Johninphilippines wrote:
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David889327's posting was short and sweet. He meant that the professors at UM (and I'am sure not all of them fall into this categorry) are as he described...stuck in time, as I alwasy said. Better just listen to the rhetoric coming from these professors in their articles and manner of demeanor and dress next time; observe. David, and 99% of these comments are correct in their assertion. David was not alluding to students. Could it be the professors are trying to impose their communist theories into the vulnerable minds of the UM college attendees? Think about it.
On 10/21/08 at 3:40 PM,
Johninphilippines wrote:
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please don't criticize me about the spelling above...it's 3:30 or so in the mornbing over here...I just woke up and cannot see too well. You get the message, anyway (above).
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