University of Maryland President Wallace Loh announced via email that the school is now facing a $750 million budget cut and expects it to increase to $1 billion.
Loh also announced that UMD must return roughly one half of funding from the state of Maryland as a result of these cuts.
In the full email below, Loh describes his four point plan for responding to the university’s budget concerns including a mid-year tuition rise for students and possible furloughs (days off without pay) for university faculty, staff and administrators.
Dear University of Maryland community,
Last month, I alerted you that we face budget challenges. The State of Maryland now anticipates a deficit of about $750M that is projected to rise to $1B, if no spending adjustments are made.
Last week, the state Department of Budget and Management announced immediate budget cuts for all state agencies. The cut for the University System of Maryland (USM) is $40.3M. UMD’s proportional share of this cut is $15.6M.
To put this in perspective, it means that we must return about one-half of the extra funding the state gave us to meet this year’s rising costs.
USM officials have lobbied hard to minimize the cuts. I have also met with officials in Annapolis to advocate for the flagship university, which is a major driver of economic growth, job creation, and social mobility. Nonetheless, the state faces a significant structural deficit and we must do our part to help put its fiscal house in order.
We will implement the $15.6M budget cut informed by principles of shared sacrifice (all members of UMD share the pain) and fairness (the most financially vulnerable members will share a lighter burden):
1. Faculty, staff, and administrators will have furloughs (unpaid days off) for up to 3 days. I recognize that, until recently, salaries of University employees were frozen for four years and there were also furloughs. We will minimize the furloughs of our lowest compensated employees. Details will be forthcoming shortly. This action will save $3M, equal to 19% of the cut.
2. Savings from the recently implemented hiring freeze on faculty and staff positions and suspension of construction renovation projects will be $3M, equal to 19% of the cut.
3. UMD will return $6M of its fund balance. This action is 37% of the cut.
4. A mid-year tuition adjustment will generate $4M, or 26% of the cut.
Today, the USM Board of Regents in special session voted to approve mid-year tuition adjustments for spring semester 2015.
At UMD, tuition for full-time, resident undergraduate students will increase $76 plus a one-time surcharge of $76 (totaling $152). Full-time, non-resident undergraduates will have a one-time surcharge of $279. Adjustments will be made accordingly for part-time students. Pell grant-eligible students–those with the greatest financial need–will be exempt from any increase. All graduate students will have a one-time surcharge according to their credit-hour load, up to a total of $100.
Details on this mid-year charge–including timeline for payment–will be made available soon.
I understand the pain these measures will cause students, faculty, and staff. Nobody knows when the state’s economic travails will end, but they will end. We have faced hard times before. We have emerged stronger.
For now, we, and all state employees, must make sacrifices. In addition, we will continue to practice fiscal discipline; reallocate budgets to protect academic quality; advocate tirelessly for state funding; expand new sources of revenue; and invest in our strategic priorities, which include contributing to the growth of our state economy through education, research, innovation, and entrepreneurship.
Together, we will meet these challenges. The University of Maryland remains unwavering in its commitment to academic excellence. I thank each of you for doing your part.
Wallace D. Loh
University of Maryland students are expressing their thoughts on the tuition increases and budget cuts on Twitter.
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