University System Thanks Governor for Minimizing Impact of State Revenue Shortfall

ORONO – The University of Maine System issued the following statement today after the Mills Administration announced it would limit the curtailment of State funding for Maine’s public universities to $2.25M:

“I want to thank Governor Mills for protecting our institutions from deeper economic harm as we work to provide the education, workforce training, service, research, and innovations Mainers need to rebuild their lives and our economy during the pandemic,” said University of Maine System Chancellor Dannel Malloy. “The COVID-19 global pandemic has been financially devastating to us all at a time when our universities are more important than ever before. While any State-funding cut is challenging, this manageable curtailment will not require reductions to student aid or the scope of our service to the state.”

The $2.25M curtailment represents about one percent of the total State appropriation this year for UMS. The cut will be shared between System spending reductions on strategic initiatives and proportional expense reductions at each System university.   

UMS Board of Trustees Chair James R. Erwin said, “The COVID pandemic has demonstrated the vital importance of the System’s public service to the State of Maine, its citizens, and our students. On behalf of the Board, I want to add my thanks to Governor Mills for preserving the State’s strategic investment in Maine’s largest public education asset.”

The Governor’s Executive Order exempts the Maine Economic Improvement Fund (MEIF) from cuts. Though flat-funded since FY2016, MEIF supports UMS research, economic development and commercialization, with every dollar in MEIF funding leveraging an additional $4.40 in external funding. Past investments in MEIF were a primary driver behind the response of Maine’s public universities, and in particular its flagship research university, the University of Maine, during the COVID-19 public health emergency, including producing mask fit-testing chemicals, PPE, and hand sanitizer for thousands of frontline workers.

UMS service to Maine through the pandemic went further still, as System universities provided housing for the homeless and meals for first-responders on their campuses; graduated needed nurses and laboratory technicians early; and created Wi-Fi hotspots in hundreds of school and library parking lots. 

Chancellor Malloy added, “By holding the curtailment to this level, the Governor is also recognizing the role of our universities in supporting local economies, especially in rural regions of the state where our campuses are leading drivers of jobs, wages and spending.” A Federal Reserve report recently noted that Maine leads states in the region for the number of towns and cities with economies that are highly dependent on their postsecondary institutions.

The COVID-19 impact on UMS in FY20 was greater than $50M, including $12.8M paid back to students for room and board refunds when students left campuses early; $22M lost from research redirection and downtime at UMaine; the cost of technology upgrades to enhance quality remote learning and faculty support; pandemic-related pay to ensure income and benefit stability for student and regular employees; and unrealized auxiliary and racino revenue. 

Despite receiving no increase in State appropriations in FY21, UMS has honored CPI-based pay increases for its employees and their families, while investing an additional $30M to safely return students and employees to their campus communities earlier this month. This included foregoing $15M in housing and dining revenue to reduce occupancy, reserve rooms for isolation, and shortening the semester to reduce the travel-related risk of virus transmission; and investing $12M for asymptomatic COVID testing and $3M in technology upgrades, facilities modifications and PPE to support science-based state social distancing requirements. None of the System’s pandemic investments have been passed on to UMS students and their families.