The budget for Maine’s largest driver of educational attainment and economic development is dependent upon State appropriation proposed by Governor Mills being provided by the Legislature, a modest tuition increase and employee attrition
PRESQUE ISLE, Maine — Amid unprecedented uncertainty, Trustees approved a University of Maine System (UMS) budget for next year but cautioned that cuts could be coming if the Legislature does not provide the State appropriation proposed by Governor Mills and federal funding is further reduced.
The $688.9 million Fiscal Year 26 (FY26) operating budget (External Site) for Maine’s largest education and economic development enterprise, unanimously approved by the Trustees at their regular meeting today at the University of Maine at Presque Isle (UMPI), assumes modest enrollment growth despite difficult demographics. Gains are expected among out-of-state student credit hours (+5.5%) and in subscriptions to the host institution’s popular YourPace competency-based degree online program (External Site) (+25%), which has tripled UMPI’s enrollment over the past five years. Residence hall occupancy is budgeted at 93%, the same as the school year that just ended, with wide variations across UMS universities largely because of the condition of aging dormitories.
The budget also assumes a 4% increase in the System’s State appropriation proposed by Governor Mills and endorsed by a bipartisan majority of the Legislature’s Education and Cultural Affairs Committee but not included in the so-called continuing services budget passed by the Legislature in March, which flat-funded UMS in both FY26 and FY27. The Governor’s proposal also subsidized the System’s initial costs to implement Maine’s new mandatory paid leave program, which will cost UMS an estimated $4 million in annual required premium contributions.
The System and its partners, including the Maine Education Association, are now advocating for those critical appropriation increases, which total $13.58 million in FY26, to be added into a second State budget bill currently being negotiated by lawmakers.
“Our public universities provide the best value proposition for Maine’s students and taxpayers. When confronted with challenges, our System has made the difficult decisions necessary to deliver a balanced budget and affordable, high-quality education to Maine families. We need the Legislature to do its part to support our students and stave off painful workforce reductions,” said Board Chair Trish Riley. “Now more than ever, Maine must invest in its most powerful and proven engine of economic mobility.”
The additional State appropriations are essential to the System’s ability to mitigate budgeted tuition increases to just 3% for Maine students next year, despite bargained compensation costs climbing $27.2 million (+6.6%) in FY26 for UMS and other inflationary impacts. UMS is one of the state’s largest employers and about two-thirds of the System’s budget is dedicated to compensating its nearly 13,000 faculty, staff and student workers.
UMS also relies on federal funding, especially for research and innovation activities at the University of Maine and for student financial aid across the System, like need-based federal Pell grants and work-study. Currently, millions of dollars of UMaine’s federal funding has been terminated or paused, with reductions in high-impact research and extension activities and employee layoffs already underway, though new opportunities are also emerging.
“The University of Maine System is delivering with demographic-defying enrollment, record student retention and record workforce and research impact, as evidenced by the more than 6,500 career-ready professionals we graduated this month,” said Chancellor Dannel Malloy. “We thank Governor Mills and the Legislature’s Education Committee for recognizing the significance of our public universities’ progress to Maine and urge the full Legislature to make the investments necessary for us to maintain tuition affordability and sustain the faculty and staff who support the success of our students and our state’s economy and communities.”
Even with the modest increases, the average cost for in-state students to attend Maine’s public universities, inclusive of tuition, mandatory fees, room and board, will still be the most affordable in New England at $22,944 next school year. That’s significantly less than the $35,815 students in Massachusetts will pay to attend (External Site) their state’s flagship based on published rates.
At one time, the State funded 72.5% of UMS operations. However, appropriations for Maine’s public universities have dramatically decreased since the Great Recession when adjusted for inflation and in FY26 will again account for a smaller share of revenue (38%) than from student tuition (39%).
With State support failing to keep pace with inflation since 2008, the System has maintained affordable student access to postsecondary educational opportunity by initiating a hiring freeze, retrenching faculty and staff, incentivizing faculty retirement and leaving hundreds of positions vacant. UMS has also delayed deferred maintenance — the burden of which has ballooned to $1.8 billion — and recently sold nearly 100,000 square feet of built space.
In FY26, the System is further budgeting nearly $10 million in attrition savings, including through more retirements and vacancies.
“Every year is challenging but this year we are facing unprecedented uncertainty — even beyond what we experienced during the pandemic,” UMS Vice Chancellor for Finance and Strategic AI Integration Ryan Low told Trustees. He said the Board would make adjustments at its October meeting if external funding and fall enrollment actuals did not align with the approved budget.
Following the implementation this year of legislation that added a second student member to the Board, the FY26 UMS budget is the first in System history for which two students — an undergraduate and a graduate — were able to cast votes.