Budget cuts to USM and UMD

cuts.txt

January 16, 2015

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.

Sincerely,

Wallace D. Loh
President