Dive Brief:
- Colleges within the University System of Maryland can consider employee furloughs and temporary salary reductions to manage budget shortfalls following unanimous approval of a resolution by the system’s board of regents Monday.
- Under the resolution, any furloughs or salary reductions planned for fiscal 2026 must generate enough savings to contribute “meaningfully to the institution’s financial stability.” Plans could also call for closing institutions temporarily as long as essential services and class schedules are provided.
- The vote comes as USM faces cuts to both federal and state funding. At the state level, Maryland’s fiscal 2026 budget — which was signed into law on Tuesday — cuts 7% from the system’s base appropriations, amounting to $155 million, officials said at a meeting last month.
Dive Insight:
Colleges within USM — which houses 12 institutions — are already making cuts as they contend with significant funding uncertainty and reductions.
At the University of Maryland, Baltimore, the combination of lower state appropriations and reductions in grant and contract funding translates into a $33.8 million reduction to its budget for fiscal 2026.
In response, the university is laying off 30 full-time employees, eliminating another roughly 30 open positions and will likely institute modest salary reductions for 1,000 employees, UMB President Bruce Jarrell said in a community message last week.
“Please keep in mind that these difficult decisions do not account for future actions that might be taken by the federal government,” Jarrell said. “The actions of the past 100 days have had significant negative effects on UMB’s mission, especially our research enterprise.”
The overall system is vulnerable to the administration’s disruption to and pullback from research funding.
Federal grants and contracts accounted for about $1 billion to the system in fiscal 2024, Ellen Herbst, UMS vice chancellor for administration and finance, said at last month’s board of regents meeting. And while officials are “very proud” of their federal grant portfolio, Herbst acknowledged the system’s research funding is not diversified — it relies mostly on federal money.
Along with unilaterally slashing research grants, the Trump administration is indirectly impacting the state’s universities. Mass cuts to federal jobs will likely lower Maryland’s revenue, thus affecting the state budget going forward.
In 2023, some 252,000 households in the state reported $26.9 billion in wages from federal jobs, making it the most vulnerable of any state in the country to federal layoffs, Herbst said.
“Declining income tax revenue from increased unemployment is real and will have an impact on the state budget, as well as having an impact on how we project our own financial position,” Herbst said.
