Copyright © 2020 Albuquerque Journal
Words such as “incredibly depressing” and “hopeless” were used during regent committee meetings Tuesday on budget adjustments needed at the state’s flagship university.
University of New Mexico regents gave tentative approval Tuesday to more than $33 million in cuts to the school’s main campus operating budget for the current fiscal year. The full board will vote next week on the budget reduction, which was brought on by the coronavirus pandemic and its impact on state finances.
Several regents urged university administrators to create a formal process so the university could be transparent when making specific cuts. Regent Rob Schwartz, in a finance and facilities committee meeting, suggested that instead of making across-the-board cuts, the university strategically think “about reducing the number of academic programs that we offer.”
On UNM’s main campus, the revised budgets cut more than $33 million from projected revenues and expenses, which is more than 6% of the entire budget, according to UNM documents provided to regents.
Two major factors led to that new forecast: a decline in state appropriations and an expected drop in enrollment.
State appropriations for UNM’s main campus operations were reduced from $199 million to about $186 million, plus the state isn’t providing UNM with about $8.7 million for raises for main campus employees. Tuition revenue this fall, according to a recent letter to the campus community from Provost James Holloway, is likely to be about $8.6 million less than expected, and student fees could decline by $2.5 million.
State appropriations accounted for about 25% of the main campus’ previously approved operating budget. Student tuition and fees were about 19%.
There are other side effects of the virus that will hurt UNM financially. Revenue from things like athletic games and other special events on university property will likely be down for the foreseeable future, as will housing and parking revenue due to fewer students on campus. And the university has also faced unexpected COVID-19-related expenses for such things as cleaning and technology improvements, according to regent documents.
Holloway said the university will face “hard and immediate choices.” But he cautioned against making quick decisions when asked about giving entire academic programs the ax. He said the university could try to save money by not filling most positions when employees retire or leave the university.
“We have to be shrinking. As we shrink, we have to do so in a strategic way,” Holloway said.
UNM branch campuses and the Health Sciences Center also need to make budget revisions.
All the revisions received preliminary approval on Tuesday.
Teresa Costantinidis, UNM’s senior vice president for finance and administration, said the budget adjustments are the “high-level” overview of how the university will trim its budget during the current fiscal year, which started July 1. She said detailed cuts to various university programs will be decided in the coming weeks and months.
Regent President Doug Brown asked that UNM officials develop the “administrative framework” to make the changes.
“These times of great challenge do provide the opportunity to look at some of our sacred cows that might be let out to pasture,” Brown said.
UNM isn’t alone in the country, or the state, with its budget challenges.
Marc Saavedra, the executive director of the Council of University Presidents, said that during the special session last month, New Mexico colleges and universities’ state appropriations were collectively cut by about $56.4 million, or 6.6%.
In one move that higher education officials tried to block, the state reduced appropriations by a percentage of what each institution received as part of the Coronavirus Aid, Relief and Economic Security Act.
Across the state, that particular deduction took away about $20 million from New Mexico colleges and universities, Saavedra said. About $5.2 million was shaved from UNM’s main campus, according to UNM documents.
Saavedra said those relief funds from the federal government had restrictions and were intended to help universities respond to the virus.
“The thing we really fought against was that they took what they called a federal funding swap,” Saavedra said. “We’re (using those funds) to try to reopen our campuses.”