THE UNIVERSITY OF MAINE SYSTEM
From 2019 to 2020, applications for federal financial aid from Maine high school seniors, also known as FAFSA forms, were down 12%. This phenomenon could be explained by the pandemic uncertainty, but it also demonstrates the ongoing shift away from youth seeking four-year college degrees. Ultimately, Maine will be sending fewer students to its institutions of higher learning as more forgo the contemporary college experience right after high school graduation. With fewer high-schoolers seeking an education through Maine’s universities, especially post-pandemic, now is the time to fully audit these costs to taxpayers.
Every year, Maine taxpayers are asked for no less funding for fewer and fewer students. Undergraduate enrollment in the University of Maine System (UMS)—excluding “Early College” students (highschoolers taking college courses)—dropped nearly 7% over the last five years. This includes double-digit enrollment losses at the Augusta (17.5%), Farmington (12.1%), Fort Kent (16.8%), and Machias (18.5%) campuses.
Over the last biennial budget, the University of Maine System received more than $400 million through the General Fund, 30% more than both New Hampshire and Massachusetts spend on higher education as a share of their budgets. This is a conservative number since Maine partially excludes tuition, fees, and employer contributions to health benefits and pensions in higher education expenditure reporting.27 By reducing taxpayer disbursements to the University of Maine System to levels comparable to our neighbors, lawmakers could return nearly $80 million to be used for the most critical state priorities.
In Governor Mills’ latest budget proposal, the administration proposes to flat fund UMS over the next biennium. While state leaders should be interested in a full audit of the university system’s balance sheet, one part of the budget proposal would diminish transparency and oversight of UMS borrowing. An aspect of Part PPP, the final section of the FY22/23 budget proposal, would exclude certain projects related to “capital lease obligations, financing for energy services projects or interim financing for capital projects” from legislative input. Maine law currently states that any borrowing exceeding $350 million in the “aggregate principal amount” must be submitted for legislative approval “at least 30 days before closing on such borrowing.” A UMS official confirmed to Maine Policy that this change would exempt borrowing for these projects from the statutory cap.
Maine taxpayers currently spend more than $16 million every year on debt service from UMS borrowing. Why should taxpayers and lawmakers have less oversight on this budget line? While UMS debt is not backed by the credit of the State of Maine, excluding certain projects from borrowing limits could facilitate a perverse incentive toward runaway spending and borrowing, leading to a weaker UMS credit rating and requiring greater financing from taxpayers. To avoid this potential pitfall, lawmakers should revise Part PPP of Gov. Mills’ budget proposal and remove this provision.