UMBC Budget Update June 2007

June 7, 2007
TO: The UMBC Community
FR: Freeman Hrabowski
Arthur Johnson
RE: Budget Update
We would like to share information with you about campus budget developments as we end Fiscal Year (FY) 2007 and prepare for FY 2008.
First, we expect to end FY 2007 (on June 30) with a balanced budget thanks to the cost-containment efforts of all divisions and a very conservative approach to hiring.
Over the spring semester, in consultation with deans and vice presidents, we developed an FY 2008 budget based on an expected $6.1-million increase in State general fund support, a projected 100 FTE student enrollment increase, and a tuition freeze mandated by the State. The State allocation included funds to offset the tuition freeze.
In mid-May, however, we received word that USM institutions are being asked to participate in a statewide $200-million base-budget reduction the Governor is initiating as he begins to address the State’s structural budget deficit. The initial proposed reduction for the USM is $20 million, which could result in a reduction in UMBC’s budget of as much as $1.7 million. The System is engaged in discussions with the Governor’s Office regarding the extent of the USM reduction, and we are hopeful it will be a smaller amount. While the possibility of an additional reduction weighs heavily on us and extends our FY 2008 budget planning process, we are able to share with you at this time some important elements of next year’s budget.
• Our FY 2008 State general fund support includes funds for a 2-percent COLA pool and 2.5-percent merit pool for faculty and staff salary increases.
• Students will benefit from a freeze this fall on undergraduate, in-state tuition, and UMBC has taken the initiative to freeze graduate and out-of-state tuition as well. The FY 2008 budget also increases need-based financial aid by $126,000, to a total of $1.38 million.
• The State capital budget for FY 2008 includes $2.7 million in planning funds for our new Performing Arts and Humanities Facility, and architectural design of the building has begun.
As we finalize the FY 2008 budget under challenging circumstances, we will be guided by two principles: preserving the quality of our academic programs and providing resources to support additional student enrollment as the University grows at a modest rate.
We appreciate the interest you have shown in understanding the budget challenges the campus faces and in exploring solutions to reduce costs and enhance revenues. We will continue to keep you informed about budget developments.