Shared Understanding About UMaine’s FY27 Budget Development Process — Dec. 12

Dear University of Maine and University of Maine at Machias communities,

We begin by affirming the essential mission of UMaine, which is to offer high-quality, high-value learning experiences to our students.

At our October Presidential Town Hall, we were candid about the fiscal challenges we face that will require our FY27 budget process to be inclusive, innovative, and carefully focused on our strengths and strategic priorities as a learner-centered R1 university.

Over the last five years, UMaine has secured record levels of state and federal, private, and philanthropic investment — much of it for specific, one-time purposes — that reflect well-deserved recognition of your excellence and the university’s importance to the success of Maine and the nation. We have launched relevant academic programs that are attracting new learners and advancing their economic mobility and the state’s workforce. Our research performance and productivity have earned UMaine R1 Carnegie Classification and are providing needed solutions to our world. And we have made long-overdue infrastructure improvements that are enhancing student life and learning. 

Despite this progress that has positioned UMaine as a premier destination for education, research, and employment, as we shared at the fall town hall, our initial budget projections for FY27 show a significant shortfall that must be addressed through long-term, structural solutions that include strategic expense reductions, revenue generation, and new efficiencies. Driving this projected deficit is our commitment to maintaining tuition affordability consistent with our public mission; external pressures like federal changes, inflation, and demographics; costs of contractual obligations, especially benefits; and increased debt service as we responsibly tackle decades of deferred maintenance. 

Instructions for developing draft FY27 budgets were distributed last week and included a target for all colleges/units, including administration and athletics, to reduce E&G expenses by 7%. This is the amount needed to close the nearly $18 million gap we currently project so that UMaine can present a balanced budget proposal to the System in February. You may notice this shortfall is $2 million less than stated at the town hall, as leadership has already identified new revenues and expense reductions, including transferring additional scholarship funding from the UMaine Foundation and charging the System more for endowment management. 

We know that meeting this target will require difficult decisions. All options to balance our budget must be considered, including retrenchments and layoffs, as we have already seen at so many of our peer institutions across the country in recent years. 

We are committed to moving forward transparently, while

• guided by our unique responsibilities to our students and the state as Maine’s premier R1, D1, land, sea and space grant university;
• informed by data and our ongoing Strategic Re-Envisioning priorities; 
• adhering to the expectations of shared governance and collective bargaining agreements; and
• minimizing negative impacts to our students and ability to fulfill our mission.

As part of our commitment to transparency and to ensure we are moving forward together from a place of mutual understanding, now that college/unit leaders have had time to review the FY27 budget development memo, we wanted to also share it with you (attached). 

Hard and strategic work is underway across the university. We thank the Cabinet, Deans, Directors, Unit Leaders, and their teams who are collaborating and contributing creative ideas to inform the draft budget proposals that must be submitted to the finance office by Dec. 19. 

Our financial challenges are real, and many are beyond our direct control. But they do not define our tomorrow. All of us have an essential role in strengthening UMaine and stabilizing its finances for the future. 

Student tuition and fees account for the largest single share of our revenue (46%), making enrollment our largest lever to grow revenue and reduce our structural deficit. While the demographics in our region are daunting, we can all do our part to recruit and retain more students. The academic innovation, world-class research learning, winning athletic teams, ongoing capital improvements, and student success and career pathway initiatives that you directly support through your public service are our best opportunity to increase enrollment beyond current projections. 

Thank you for your dedication, creativity, and stewardship of the resources we have to ensure the success and long-term sustainability of UMaine, the state’s learner-centered R1 university. 

Sincerely,

Joan Ferrini-Mundy
President

Jenny Boyden
Interim Vice President for Finance and Administration & Chief Business Officer
University of Maine and University of Maine at Machias

Attachment: Dec. 2 Budget Memo to campus leaders