Addressing UMass Lowell’s Fiscal Year 2024 Budget Challenges

May 23 Email to Campus

On May 23, Chancellor Julie Chen began a campus-wide conversation explaining the state of a challenging Fiscal Year 2024 budget and her conviction that UMass Lowell needed to start thinking about reorienting itself to achieve the goals of the 2028 Strategic Plan in a higher education environment that’s changing faster than ever before.
“… while we continue to work to return our revenues to pre-pandemic levels, inflation and personnel costs have resulted in increased spending at a much faster rate. For example, our mandated fringe rate, which is the rate we are charged by the state to cover the cost of employee benefits, has increased 11%. And while the state covers more than half of collective bargaining wage increases, UMass Lowell funds nearly half of those additional costs.
“Other budget stresses include the end of one-time federal pandemic funding and our commitment to maintain a positive margin. Our enrollment numbers and housing numbers will also need to increase as we successfully graduate our students more quickly.”

July 19 Video Message to Campus

On July 19, Chancellor Chen spoke to the campus community about efforts already underway to reduce duplication, reorganize and reprioritize resources for revenue-generating efforts such as enrollment marketing.
“The universities that will thrive in the decades ahead are those that distinguish themselves from their peers and clearly demonstrate to students the return on their college investment.”

July 20 Budget Announcement by Steve O'Riordan

“Even with a 6% increase in tuition rates from Fall 2019 to Fall 2023, net tuition is down 5%. The reason? This May we graduated the last of our large classes recruited pre-pandemic, which are replaced with smaller COVID-era cohorts that continue to matriculate, entering their junior and senior years. …
“At 58% of all university costs, salaries and benefits are UMass Lowell’s largest expenditure. And those costs are increasing by 8% and 11% respectively. The state provides just over half of that increase (54%), leaving the remainder to the university to fund.
“Additionally, costs of goods and contracted services, utilities, construction materials, course materials, computers, and lab equipment and chemicals are all increasing.”
O’Riordan also announced the establishment of a Voluntary Separation Incentive Program (VSIP), saying the number of participants would determine the scope of any additional university personnel actions.

Chancellor Julie Chen’s Aug. 17 Announcement to Campus

On Aug. 17, Chancellor Chen provided a budget update that included a link to a list of Frequently Asked Questions to provide details around suggestions and recommendations from the university community, particularly regarding facilities investments and expenses. Chen also established several committees to identify new ideas, new structures and new solutions to meet critical campus needs specifically around:
  • University Events
  • Marketing and Communications
  • Office Space Consolidations
“I encourage you to stay engaged in these discussions. There will be a number of Town Hall meetings in September to provide general institutional updates, which will include a focus on the status of the FY24 budget and the broader conversations I’ve mentioned here. 
“The next several months will be difficult. Our challenges are not unique in higher education. But for those universities that put off these hard choices… their difficulties may well become permanent. Instead of asking you each year to do more with less, I believe that together we can rethink some of our models entirely. And I think that path will propel us toward a future this university has earned.”

Faculty/Staff Open Forum Recordings Available

Recordings of the Sept. 11 and Sept. 12 Faculty/Staff Open Forums are now available for those who were unable to attend.

The same presentation was given at each open forum, although some of the audience questions that were asked differed.

During the forum, Chancellor Julie Chen reminded attendees of the webform that has been created where the campus community can anonymously share ideas for consideration. She also highlighted the budget websites where the campus can review frequently asked questions regarding budget items as well as messaging about the budget sent during the summer that may have been missed.

Nov. 8 Email to Campus

On Nov. 8, Chancellor Julie Chen updated the campus on university's financial situation, explaining that despite reducing operating budgets by 15%, deferring spending where possible and using discretionary funds  to help fund millions in student financial aid and other operating expenses, staff reductions were still necessary.

"To reduce that ($37 million) shortfall, we focused first on non-personnel solutions. ...We have made tremendous progress and greatly decreased the number of necessary layoffs compared to our initial estimates. But we were not able to find savings to eliminate layoffs entirely.

"As we look to the 2028 Strategic Plan, we remain on a course to help transform the City of Lowell, power economic development across the Merrimack Valley, strengthen our role as a welcoming, inclusive campus, discover new knowledge with national partners and provide our students with a hands-on education to become leaders in their careers."

See Also