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USM prepares for cuts, presents itself as an opportunity for recovery

Dr. Jay Perman

Dr. Jay Perman

The University System of Maryland and its institutions can be vehicles for investment in the state’s economic recovery from the COVID-19 pandemic, Chancellor Jay A. Perman argued Friday as the system faces state budget cuts due to declining tax revenues.

The system has also seen its own revenues decline by an estimated $223 million this spring as it refunds students money they paid for room, board and other fees and as patient revenues at the University of Maryland, Baltimore, have declined. Those declines come on top of expenses due to the shift of learning online, including technology expenses.

Perman, addressing the Board of Regents at its regularly scheduled May meeting, said hard decisions would be coming to the system.

“The uncertainties we face as a result of the COVID-19 pandemic impact our students, faculty, and staff and will inevitably have negative impacts on our financial position,” Perman said in his prepared comments included in the meeting’s agenda. “We need to prepare for the tough decisions ahead of us – we will need to make hard choices regarding our funding sources and the use of our funds. Believe me: Tough decisions are coming. As we continue to gather information, project various scenarios, and continue the planning process, I will keep everyone fully informed.”

Typically at this spring meeting, the regents would approve the system’s budget for the next fiscal year. That has been postponed as the system continues to figure out both what the final numbers for this year look like and what numbers for the next year will look like.

Enrollment projections for next year have become a moving target. Pre-coronavirus, the system expected an enrollment decline, especially at the University of Maryland Global Campus, the system’s online university, though that could change as more people shift to online learning environments.

The system could also seek to take advantage of more residents’ unwillingness to leave the state for school.

Budget changes in Maryland will likely affect the system. The comptroller projects a $2.8 billion revenue shortfall just through the end of the fiscal year.

Perman reminded the regents Friday both of the work the system has done to help respond to the COVID-19 crisis and of its potential as an engine for economic recovery in the state.

“Second, while the level of state funding supporting the USM will almost certainly be reduced, thanks to several years of working closely with legislative leaders, aligning USM priorities with those of the state, and the hard work of so many professionals — both at the campus level and in the system office — the USM will be addressing any funding reductions from a position of strength,” Perman wrote. “We are seen as an investment more than an expense, and that will serve us well going forward.”

In his report to the board, Perman mentioned work that faculty and researchers at institutions have done to respond to the virus, including faculty at the University of Maryland School of Medicine who are advising Gov. Larry Hogan.

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