A first look at the University of Maine System’s budget for next year shows enrollment issues continue to plague the state’s public university system.
In a marathon budget presentation Wednesday, Ryan Low, the University of Maine System’s chief financial officer, alongside leaders from each of the universities and law school presented grim financial pictures with only one institution coming in with a fully balanced budget. The financial gaps — which total about $11.4 million — are primarily driven by continued lower enrollment and lower residence hall occupancy rates across the universities, Low said.
Enrollment projections show that, for the next academic year, credit hours are estimated to be about 7.4 percent below this year, according to Low’s presentation. Credit hours are one-way colleges and universities measure enrollment as opposed to counting each individual student.
Lower credit hours indicate that there will be fewer overall students enrolled at any given university.
The University of Maine System in June 2022 anticipated a 4 percent decrease in system-wide enrollment, but the official student count on Oct. 15 was down 5 percent from last fall, representing a decline of about 1,000 students. The system’s enrollment matches a national trend of fewer students attending college during the COVID-19 pandemic.
It’s a trend with profound effects on the system’s financial health because it increases the chances of having to raise tuition in the coming years.
Student tuition represents about 47 percent of the system’s overall revenue, so further declines in enrollment numbers mean less money coming into the system.
Digging deeper into the system’s enrollment projections, Low said in particular that the number of in-state students next academic year will likely be down about 19 percent.
The University of Maine at Fort Kent, for example, has seen declining student enrollment since 2017 and will need to use $1.2 million of its campus reserve funds and an additional $500,000 in system stabilization funds to close a projected $1.7 million deficit, said UMFK President Deb Hedeen.
UMaine Fort Kent anticipates it will see 14,151 credit hours next academic and fiscal year, down from 20,911 credit hours budgeted in 2021.
The system’s flagship, the University of Maine, will also have to close a $7.4 million gap, due to its continued declining enrollment and credit hours, Low said.
For the next academic and fiscal year, UMaine is projecting that students will enroll in 258,137 credit hours, a decrease of 24,941 hours from this current year.
On top of lower enrollments, Low said fewer students are opting to live on UMaine system campuses, which also affects revenue.
Next year’s troubling financial picture comes just months after UMaine and UMaine Farmington finalized plans to close budget shortfalls in their current operating budgets.
UMaine had to close a budget gap of $15 million, which is nearly 4 percent of the campus’ operating expenses. UMF, which has already experienced painful belt-tightening in prior years, had to bridge a $2 million shortfall.
Last year, UMF lost 18 professors due to position eliminations and early retirements to bring the campus’ budget back into balance after years of financial decline. But the loss of those professors has also taken a toll on the student experience at the western Maine university.
Over the coming weeks, there will be more budget meetings to refine next year’s financial picture, Low said. It is likely that budgets will be approved at the board of trustees May meeting, he said.
