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Report on 2015 MD General Assembly: support for higher education

Dear University of Maryland community:

With the conclusion of the legislative session in Annapolis yesterday, next year's financial prospects for UMD look better than they did four months ago. At that time, the State faced a structural deficit of some $800 million and made deep cuts. The University System of Maryland had to give back some $40 million, squeezed into the remaining six months of this fiscal year.

In this session, Governor Hogan and the General Assembly provided some relief for, and showed their commitment to, higher education. Their actions represent progress in a year when state revenues have yet to rebound fully and money remains tight.

With respect to the operating budget, which pays for day-to-day expenses, Governor Hogan increased funding for the University System of Maryland by 1.3% on a base budget that was reduced mid-year by the previous administration. In effect, he restored about 40% of the $40 million reclaimed last January to cut the structural deficit. The General Assembly concurred. This partial restoration of support will enable us to end furloughs—an interim measure because of the earlier deep cuts—as of this June 30. It also enables us to lift the hiring freeze as of this July 1.

However, the State-approved budget also included a 2% base budget cut to all state agencies and does not fully fund all our mandatory cost increases. System-wide, these unfunded requirements could total as much as $47 million. Even with the partially restored funding, we must continue to monitor carefully all hiring and spending throughout the coming year.

This is why the University of Maryland will develop new sources of entrepreneurial revenue and implement new cost-savings and operational efficiency actions based on recommendations of the Flagship 2020 Commission. I again invite your suggestions at www.umd.edu/Flagship2020.

With respect to the capital budget, the good news is that the General Assembly and the Governor funded major building and renovation projects for UMD, including St. John Learning and Teaching Center; Clark Hall Bioengineering building; and the health research/medical clinic/athletic complex in Cole Field House. They pre-authorized funding for the Iribe Center for Computer Science and Innovation. They also funded major deferred maintenance projects.

The funding for all these projects comes from bonds that the State sells to investors and from philanthropic gifts—moneys that can only be used for these capital purposes and not for operating expenses.

The General Assembly enacted higher education-related legislation, including a Student Government Association-backed anti-discrimination protection for interns; a requirement to conduct sexual assault surveys; and reforms to facilitate the commercialization of university innovations in order to promote economic growth and job creation in the State.

Our elected leaders could not quite overcome the gulf in their budget priorities to preserve a 2% cost-of-living increase for state employees that took effect last January. As of this writing, the State will rescind the COLA as of July 1. This COLA is certainly merited by all our faculty and staff given the dedicated work and the sacrifices they have made, including several recent years of no salary increases.

Despite differences on this matter and others, the Governor and the legislature did balance the FY2016 budget and reduced the accumulated deficit. I thank our elected officials in Annapolis for their support of higher education and their progress in strengthening the State's fiscal stability moving forward.

My thanks, too, to all the faculty, staff, and students at UMD, and to Chancellor Kirwan and his staff at USM, for all their efforts in Annapolis that made 2015 General Assembly as successful as possible. 

Sincerely,
 
Wallace D. Loh
President
University of Maryland