Maine is sending more money than ever to the University of Maine System, but it isn’t keeping up with the system’s rising costs.
The University of Maine System received more than $300 million from the state this fiscal year. Despite that being a 44% jump from what the system received a decade ago, the proportion of university expenses it covers is shrinking.
A combination of dropping tuition revenue, inflation and state funding lagging behind rising expenses has forced administrators on campuses across the system to enact budget cuts. The University of Maine’s $19 million budget shortfall, which administrators also attributed to federal funding uncertainties and more than $1 billion in deferred campus maintenance, is the most recent example.
In 1989, state-appropriated funds covered almost three-quarters of the system’s total expenses, an all-time high. Those funds are now projected to account for less than half of all expenses next fiscal year, according to system spokesperson and legislative liaison Samantha Warren.
The percentage of expenses covered by state funding has stayed “flat or slightly up” in the last decade, Warren said.
The funds also aren’t keeping up with inflation. This year’s funding is worth just $10 million more than what the system received in 2014 when adjusting for inflation, according to the U.S. Bureau of Labor Statistics. The system received $75 million more this year than in 2014.
A lack of meaningful increases has required universities in the system to rely on student tuition and fees to fund themselves. Despite enrollment rising across the system over the last four years, tuition revenue has been “flat or even falling” due to demographic shifts and scholarships or aid awarded to students, Warren said.
With layoffs and retrenchment looming, UMaine faculty, staff and students have called on the state to increase funding to the institution. The system has been doing the same, Warren said.
Through advocacy, which is not labeled as lobbying because the system is a state agency, Maine awarded $2 million for a research opportunity this fiscal year and raised funding by 4%, Warren said. In total, the system received $303.5 million this fiscal year.
But that 4% jump doesn’t even cover how much compensation costs went up last year, Warren said.
Even if state funds continue to go up and tuition is raised, universities will still need to cut costs or find other ways to bring in revenue, Warren said.
“If we remain committed to maintaining the most affordable higher education in New England and our state funding consistently falls short of keeping pace with rising operating costs, we need to cut those costs, find reliable new ways to generate revenue or do both, which is what UMaine is thoughtfully undertaking now,” Warren said.
Other New England institutions receive funds that cover less of their expenses. The University System of New Hampshire and University of Massachusetts System receive funding that covers roughly 10% and 23% of their expenses, respectively.
Although it wouldn’t solve the upcoming cuts, Sen. Mike Tipping, D-Orono, said there’s more opportunities to increase funding to public universities in the state.
The Legislature has been “shooting ourselves in the foot” by not funding the state’s universities, Tipping said. Investing in higher education brings revenue to Maine through the workforce and research, he said.
Funding for the university system has had bipartisan support in previous years, which led to the 4% hike that Tipping spearheaded. Although the state is facing a projected $1.3 billion shortfall next year, it shouldn’t be difficult to find more money to support higher education, Tipping said.
“We have other options,” Tipping said. “We still have tax breaks on the books for wealthy folks that I think we should take another look at for wealthy corporations. It’s all about priorities.”
The university system has already sent its priorities to the state for the 2028-29 fiscal year, Warren said.
The request falls short of what the system expects operating costs will be and what the state could fund, but it conveys to Gov. Janet Mills and whoever is next elected to the Blaine House that the system has “urgent needs for greater operations, capital and research funding,” Warren said.
While it’s unknown how the request will be received by the next governor, Warren said the university will continue to push for more funding through the state legislature.
“The system will fight like hell in Augusta to make the case for these needed new dollars, and demonstrate each day across our state how public investments in our public universities directly strengthen Maine’s people, economy and communities,” Warren said.