University of Maine Confronts $19 Million Budget Shortfall

The University of Maine in Orono and its regional campus in Machias plan to lay off staff and cut faculty to address a $19-million budget shortfall projected for the next fiscal year. University of Maine President Joan Ferrini-Mundy and Provost Gabriel Paquette detailed the deficit and the consideration of workforce reductions in a letter to faculty and staff on Sept. 17.

The university projects $303 million in expenses for the coming year against only $284 million in revenue. Operating costs are rising faster than tuition income and state appropriations. Federal changes, including reduced funding and policies restricting international students, are also straining the budget. The institution has more than 2,400 employees, not including student workers, at the two campuses.

The university has not yet determined exactly how many people will lose their jobs. Faculty retrenchments and staff layoffs will be part of the process for achieving financial stability. UMaine leaders said "options to limit those cuts will be 'pursued aggressively.'" The university will cut about 20 percent of vacant positions as part of short-term measures. It has already reduced operating expenses, found new revenue, saved money through attrition, and spent one-time funding resources.

State and national context shows broader financial strain

Other universities and state systems face similar budget pressures. Commonwealth University of Pennsylvania is confronting a $17 million deficit and could cut up to 175 jobs, including through layoffs. The leader of Minnesota State Colleges and Universities said the 33-institution system will likely have to turn to campus closures to address budget difficulties. Chancellor Scott Olson said: "I think we probably will have some campuses that close... But not institutions." He said institutions would more likely align or merge.

Nationally, the financial and political landscape for higher education is shifting. The U.S. Department of Education is redirecting roughly $235 million to historically Black and tribal colleges that was originally intended for other minority-serving institutions. Last year, the department canceled $350 million in funding for similar grant programs. Separately, a group of researchers sued the National Institutes of Health this month, arguing the agency violated their First Amendment rights by screening grants based on keywords related to subjects the previous administration disfavored.

Internal reactions and union pushback

University employees were asked to cut 7% from their budgets this fiscal year, contributing to staffing shortages and increased workloads. The UMGWU-UAW union released a letter arguing staff cuts are unnecessary. It stated the deficit can be fixed by reducing administrative overhead and increasing state funding. The union's letter argued that labor’s share of the UMaine budget has fallen by nearly 10 percentage points over the last 10-15 years, and that faculty salaries, adjusted for inflation, are roughly $10,000 lower than a decade ago.

UMaine's chief external affairs officer, Samantha Warren. 17 that any workforce reductions would follow collective bargaining agreements, including notifications and severance. She clarified the letter reflected a proposed solution, not a final plan. Faculty Senate President Brian McGill said the current budget process is better than last year’s approach but emphasized the need for shared governance and more information to confirm the necessity of the cuts.

The path to a final budget

The university is taking a data-informed approach to its FY28 budget proposal, which would begin on July 1, 2027. It aims to reduce expenses in academic affairs by $10 million, which amounts to about half of the entire budget shortfall. The university previously planned to address a budget shortfall for the current fiscal year without cutting faculty and by laying off fewer than 10 people.

UMaine Student Government President Cynthia Shelmerdine stated that deferred maintenance costs are a significant source of the budget deficit and that program and staff cuts had been considered for a long time. She added that recent building projects are funded by donations, not student tuition, and are unrelated to the deficit. Budget proposals from Maine’s public universities are due to the System in January 2027. They will undergo a Board of Trustees review with public comment opportunities before a final vote in May.