In an update sent to faculty and staff on Thursday, Chancellor Boyce and Vice Chancellor for Administration and Finance Larry Sparks announced that vice chancellors should be prepared for budget cuts as large as 7.5% as a result of the COVID-19 crisis and decreasing enrollment.
“The financial impact of the pandemic has already been significant for us as we provided millions in refunds from the spring semester, invested in new ways to deliver courses remotely, incurred added costs to implement new protocols for the fall 2020 semester and more,” the email said.
Budgets for each fiscal year are usually announced on or around July 1, but the pandemic created significant delays in the announcement. Now, the university will wait until classes begin on Aug. 24 to confirm enrollment since most of the budget comes from student tuition and fees.
Currently, vice chancellors are told to prepare for cuts of 4.95%, but that number could grow as information regarding enrollment is released. Though enrollment at the university has steadily declined for the last three years, UM was able to get through last fiscal year without budget reductions.
“We know this is difficult news,” Boyce and Sparks’ email said. “It must be noted that we don’t know the full depth and duration of the pandemic’s impact on our finances, so it is vital that all of us make very prudent use of any FY2021 budget authority.”