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William Kirwan
William E. ‘Brit’ Kirwan, University System of Maryland chancellor, says member schools continue to develop plans to reduce spending. (File photo)

Budget crunch for universities, but capital projects move on

Maryland’s fiscal 2016 budget could have been much worse for the state’s higher education facilities, officials say, but the University System of Maryland will still feel the squeeze of a $47 million shortfall.

As a result, institutions in the system can expect to face hiring freezes, larger class sizes and other service reductions in the coming year, said William E. “Brit” Kirwan, chancellor of the university system.

The budget adopted by lawmakers Monday made no cuts to what Republican Gov. Larry Hogan proposed for the university system in January — for which officials were thankful, Kirwan said — but carried over $40.3 million in cuts made by outgoing Democratic Gov. Martin O’Malley in early January.

That leaves the system with an effective shortfall of $47 million that will need to be addressed, Kirwan said.

Hiring freezes at most campuses and mid-year tuition hikes adopted by four institutions in January helped address the problem but didn’t come close to solving it, Kirwan said.

“More action will have to be taken,” he said. Institutions within the system were currently developing their reduced spending plans, and Kirwan said he expects to have them within the next couple of weeks.

But there was good news in the capital budget. Kirwan said the university system’s allocation of about $325 million was its largest ever, and included funds for important projects including a health science facility at the University of Maryland, Baltimore and an interdisciplinary science building at the University of Maryland, Baltimore County.

University system employees would also benefit from the 2 percent pay increase that all state employees received in January and which lawmakers agreed to maintain in the final budget, Kirwan said. But Hogan, who revoked the pay raise in his proposed budget, has threatened not to spend the money lawmakers restored Monday and instead save it to reduce next year’s deficit.

Baltimore City Del. Maggie McIntosh, a Democrat who chairs the House Appropriations Committee, said that the state’s public universities had generally fared well in the final budget and that lawmakers also restored some of the funds that Hogan proposed cutting from state’s private universities and community colleges.

But McIntosh said those changes were part of the roughly $200 million that Hogan is threatening not to spend, so those institutions may never see the funds.

Lawmakers reduced a proposed $13 million cut to community colleges to $9 million, and a proposed $6.5 million cut to private universities to $5.1 million, according to the Department of Legislative Services.

Morgan State University did not fare as well this session as officials had hoped, said university President David Wilson, receiving an increase of $814,000 to its operating budget when it had requested an increase of $19 million. Now, the school will likely raise tuition, Wilson said.

But Morgan State was also pleased with its capital allocation, which included $30 million for a new behavioral and social sciences building, Wilson said. Officials plan to break ground on the project, which has an overall price tag of $70 million, in two weeks, Wilson said.

Apart from the budget, universities scored a victory with a bill changing the state’s rules regarding online higher education courses, Kirwan said.

The measure allows Maryland to join an agreement with other states requiring that online higher-education programs be authorized only in the states in which they are based, rather than in each state in which their students live.

Kirwan said the adopted bill was “extremely beneficial” to the university system because it will make it easier to recruit online students from out of state.

But the measure also had critics, including State Sen. Paul Pinsky, D-Prince George’s, who chairs a subcommittee on education. Pinsky said that some for-profit institutions had a history of saddling their poorer students with a lot of debt, and he was concerned that the authorization process for these institutions in other states might not be as rigorous as in Maryland.