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.”