The university implemented a hiring freeze that went into effect yesterday in response to a mid-year budget reduction that should be coming in the next few days, officials said.
The reduction means some open positions may go unfilled for now, and the university may delay maintenance projects. Many student services, which are supported by student fees and not by the state, will be unaffected by the cuts, but cuts will likely be made to academic and administrative areas that are paid for using the roughly $400 million the university received from the state this year.
While university administrators had anticipated a budget reduction, the reduction now seems to be a certainty.
“We will receive a budget reduction,” said Joseph Vivona, the chief operating officer and vice chancellor for administration and finance for the University System of Maryland.
Both Vivona and university President Dan Mote said the state’s increasingly difficult fiscal situation means the university, along with most other state agencies, will see budget cuts. Vivona said the size of the reduction should be decided by Friday.
However, Mote and Vivona both said the reduction should be relatively small.
“We shouldn’t consider this a crisis,” Mote said. “We shouldn’t get too alarmed.”
Vivona said it will be a “reasonable reduction, relative to the size of their [deficit].”
Some student services, such as Dining Services, the Department of Resident Life, the Stamp Student Union and the Department of Transportation Services, are paid for entirely by student fees and won’t be impacted. Costs that are supported by private donations, such as endowed chairs and the athletic department, also won’t see cuts.
The budget reduction is necessary because of a slumping economy, which has resulted in lower-than-predicted revenue from sales, income and other taxes. The state now anticipates receiving about $400 million less in revenue this fiscal year than it originally expected. The decline in tax revenue means the state could face a deficit of $1 billion in the next fiscal year.
The poor economy is causing the deficit to grow, despite a variety of tax increases and budget cuts passed by the state legislature during a special legislative session last fall.
Although the reduction’s size could be announced in the coming days, it won’t become official until the state’s Board of Public Works approves it. The board, which consists of Gov. Martin O’Malley (D), state Comptroller Peter Franchot (D) and state Treasurer Nancy Kopp (D), has its next meeting Oct. 1.
The university last faced mid-year budget reductions in the 2002-2003 school year, when the state also faced a large deficit. In total, the system had to return 12-to-13 percent of the funds it originally received from the state, totaling about $100 million. That budget reduction forced the Board of Regents to raise tuition between the fall and spring semesters, but Mote has said previously that option can be avoided.
O’Malley said last week “hundreds of millions” in cuts to the state budget would be coming.
The most immediate impact of the cuts will likely be the hiring freeze, which went into effect yesterday. The freeze means some professorships and other positions will go unfilled for the time being. Lower-cost positions such as lecturers, graduate teaching assistants and student employees are exempt from the freeze.
Exceptions to the freeze can be granted by Mote at the request of one of the university’s vice presidents, but only if the hiring is essential to the department.
Vivona said the university system also implemented a hiring freeze in 2002, and it lasted through parts of two fiscal years. He said the length of this freeze will depend on the size of the budget reduction.
While administrators are waiting on word from the state about the size of the reduction, departments are trying to figure out how to deal with the reduction and the hiring freeze.
Charles Rutherford, associate dean for faculty affairs at the College of Arts and Humanities, said he wasn’t sure exactly how the hiring freeze would impact the college because they were waiting for more information.
“Right now, it’s sort of a wait and watch for us,” he said.
Rutherford added that during the last hiring freeze, the college was only able to make two hires, compared to about 17 or 18 during a normal year. Right now, the college has 38 open positions for faculty listed on its website.
Linda Clement, the university’s vice president for student affairs, said her division receives about $12 million of its $150 million budget from the state. The state money supports the career, health and counseling centers, as well as the offices of student conduct and parent and family affairs.
Clement was unsure of how student affairs would respond to the cuts.
“We’re just beginning to talk about it now,” she said.
Vivona said although there was no alternative to the budget reductions, the university system would do its best to spare students from the brunt of the cuts.
“We’ll do everything to minimize the impact on academic programs, teaching programs,” he said.
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