July 13, 2020

UMS trustees explore new funding plan

GORHAM — For 30 years, the University of Maine System has divided money among its seven campuses the same way. With a bit of prodding from the Legislature, that is about to change — a little.

A new, more flexible funding “model,” unveiled Monday at the system’s board of trustees meeting at the University of Southern Maine, would give additional money to campuses that gain enrollment while taking a little away from those that lose enrollment.

The Augusta and Farmington campuses also would get an extra $600,000 and $300,000 a year, respectively, because of complaints that those campuses are chronically underfunded. That money will come from systemwide cost savings.

Last year, several lawmakers sought to change the decades-old formula which gives 50 percent of the system’s state money to the University of Maine, 25 percent to the University of Southern Maine, and lesser amounts to the smaller campuses.

Rep. Elizabeth Watson, D-Farmingdale, a student at the University of Maine at Augusta, sponsored legislation to create a funding formula based on the number of students who attend each campus. Her proposal also would have allocated money based on whether students were studying for an associate, bachelor’s and advanced degree. She complained the current formula discriminates against smaller campuses.

Her bill was put aside to let the UMS trustees come up with their own plan.

House Speaker Elizabeth Mitchell also criticized the old formula for allocating so little money to the Augusta campus, which serves a large number of commuter students.

The plan presented to trustees Monday, which is based on a report by an out-of-state higher education consultant, would contain an enrollment component but also consider each campus’s mission.

On the enrollment side, any increase in state money that is not designated for a specific purpose would be distributed among the campuses based on growth or decline in the number of students. Campuses would receive a 0.8 percent increase in state funding for each 1 percent increase in enrollment and a 0.4 percent decrease in state funding for each 1 percent decrease in enrollment. Gains and drops would be figured over two years to prevent dramatic shifts. This change would take place in fiscal year 2000.

“If this looks to be gentle, that’s by design,” said Trustee John DiMatteo, chair of the board’s finance committee.

The plan, which would be reviewed every three years, also allows the board of trustees to decide what priorities they wish to fund. For example, the plan calls for a $2.5 million university bond issue to be matched with $2.9 million in private funds to improve the libraries at the system campuses.

A public hearing will be held on the proposed plan in February, and trustees will vote whether to accept it in March.

While campus personnel generally support the new mechanism, they do have reservations. Orono campus officials are concerned that it doesn’t allocate additional money to the flagship campus for the scientific research it conducts.

“If the university system says we support research but doesn’t fund it, that’s a problem,” UM President Peter Hoff said in an interview.

For the time being, the system is looking to the Legislature to provide more research money, Chancellor Terry MacTaggart said. Lawmakers will soon consider a proposal to provide $20 million in additional money for university research. Half the money would come from a bond issue and the other half would be an annual increase in funding for the university system.

Ivan Fernandez, UM’s faculty representative to the board, also suggested that the new formula differentiate between undergraduate and graduate students and that the Orono campus’s numerous scientific programs should be accounted for.

MacTaggart said those considerations, as well as whether both full- and part-time students should be included in its enrollment calculations, will be taken into account as the new method is further refined.

Owen Cargol, president of UMA, said he appreciated the new money but did not know how it would be spent because his campus has a lot of financial needs.

“It’s a step in the right direction,” he said.

Arriving for the afternoon meeting, trustees were greeted by three USM clerical employees who reminded board members, with signs and voices, that the system has yet to reach an agreement with its classified employees on a new retirement plan.

Negotiations have progressed a long way since the system offered to contribute 0.25 percent of clerical employees’ salaries to the retirement system for each 1 percent the workers put in. The last time the two sides met, the system’s ante had been upped to 8 percent for each 4 percent the employees contribute to the plan.

The system puts 10 percent of faculty salaries into a similar plan for each 4 percent the professor contributes. The two sides are scheduled to resume talks today.

“They should tell the Legislature, `We need more money,’ and pay us,” said Betsy Hanson, an administrative assistant in the USM honors department.

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