The University System of Maryland detailed some of the ways they will be adjusting to what they expect to be at least a $500 million shortfall in their fiscal year 2021 budget.
The system said in a Wednesday news release that it would look for ways to avoid personnel layoffs but added they are a possibility given the massive loss of revenue streams — including state appropriations.
The $500 million figure does not take into account the $230 million lost in 2020 when the system refunded portions of students’ room, board and fees as institutions made the transition to virtual instruction in the spring as the COVID-19 pandemic spread.
USM Board of Regents Chancellor Jay Perman said the system has already put cost-cutting measures in place — such as a “near freeze” to all hiring, deferral of future construction and maintenance projects, and temporary salary reductions at the executive levels — but that more cuts are needed in order to handle the losses.
“Protecting faculty and staff to the extent we can is a guiding principle for us, and executive leadership systemwide has committed to bearing a greater share of any pay cuts we have to make,” Perman said. “Even so, I acknowledge that the size of our deficit means that, to some degree, employees will likely have to share in the pain of budget cuts.”
The release said the USM office and each USM institution will put out its own budget within the next few days.
In addition to hiring freezes, USM staff may see temporary pay reductions, furloughs and layoffs.
Other actions the system is considering include reductions in operating costs, cuts to spending and the use of the system’s financial reserves.
The release said the board hopes to avoid wide-scale layoffs and financial burdens placed on USM staff because “the fact remains that the University System is one of Maryland’s biggest employers, supporting $3.5 billion in wages, and $285 million in state and local taxes,” Perman said.
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