BANGOR – The University of Maine System Board of Trustees voted Monday to freeze tuition and approve a $518 million budget for the fiscal year beginning in July that uses $7 million in emergency funds despite cutting 206 positions systemwide.

The budget reflects a “significant drop in revenue,” down 3 percent from $531 million last year to an estimated $515 million, due in part to fewer students enrolling and the campuses offering tuition breaks to attract students, according to Rebecca Wyke, the vice chancellor for finance and administration.

Trustees voted to freeze in-state tuition for the fourth year in a row, if the governor’s two-year proposed budget is approved.

UMaine tuition remains higher than the national average of $9,139 annually. At Orono, in-state tuition and fees are about $10,606. Tuition and fees at the University of Southern Maine are $8,540 a year.

Trustee Jim Erwin noted that enrollment is declining faster than the state’s demographic decline, a sign that not only are there fewer potential students, but that some students are choosing to attend other higher education institutions.

“This budget holds us functional, but work lies ahead,” Erwin said. “We haven’t hit bottom yet, in my opinion.”

Last year’s $529 million system budget required using $11.4 million in emergency funds and cutting 157 positions.

Wyke said ongoing financial problems could result in the system’s bond rating being downgraded by Standard & Poor’s. A lower credit rating would mean the system would have to pay higher interest rates on any future borrowing.

In February, the New York credit agency downgraded its long-term outlook for the system from stable to negative, citing declining enrollment and high turnover among leadership at the seven campuses. S&P left the system’s credit rating unchanged at AA- on outstanding revenue debt, and also assigned a rating of AA- to the system’s $46.24 million in 2015 bonds.

Wyke said the system does not have any cash flow issues now, and does not plan to go out for a bond anytime soon, but S&P will at some point reassess the system’s ratings.

“My view is, yes, we should brace ourselves,” Wyke told the trustees. “I’d be lying if I didn’t say that if things didn’t turn around for us, we would be downgraded.”

Enrollment was down 2.5 percent systemwide last fall. Overall, enrollment is down 7.5 percent over the last five years, and five campuses have interim presidents.

UMS faces a potential $90 million deficit by 2020, based on trends in the system’s current budget.

Also Monday, system officials announced a new credit transfer agreement with the Maine Community College System. The agreement will automatically allow students to seamlessly transfer 35 units of general education courses, university officials announced Monday.

“This is the first time in 45 years we have had this degree of cooperation, coordination and integration between the two systems. It should be of tremendous benefit,” Chancellor James Page said, announcing the agreement at the board of trustees meeting on Monday.

A signing ceremony will be held in the upcoming weeks, Page said.

The agreement is important because students have complained that credits earned at the community colleges did not easily transfer to the state’s four-year universities.

The trustees also approved a plan to consolidate financial and administrative functions across the system, as part of the decision to move toward working as a single, unified system instead of as seven distinct, separate universities overseen by one central office.

As part of the reorganization, the system’s central office in Bangor will close, and the various systemwide administrative units will be located at whichever campus makes the most sense, Page said. Purchasing, for example, is located on the Augusta campus.

The system already consolidated information technology and purchasing functions into single, systemwide units in the past two years, and the trustees approved consolidating human resources functions last fall.

In other business, the trustees approved a five-year strategic plan for University of Maine Augusta that puts focus on distance learning and serving students across the state.

They also approved the creation of a new multi-campus bachelor of science degree in cybersecurity, offered through a collaboration between University of Maine at Fort Kent, the University of Maine at Augusta, and the University of Southern Maine.

Staff Writer Noel K. Gallagher can be contacted at 791-6387 or at:

[email protected]


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