Dear Faculty and Staff,
I am writing to share additional information on the university’s budget outlook for the coming fiscal year, as well as our long-term work to enhance our budget-planning capabilities.
As we shared with you last month, the State of Maryland has set an operating budget of $70.8 billion for Fiscal Year 2027. Following significant reductions in the state’s allocation to the University System of Maryland in FY26, the new budget does not contain any direct cuts to our institution and provides a modest increase of $7 million, or 0.3 percent, to the system overall. The state’s allocation to UMBC for FY27 will be approximately $210 million.
I invite you to learn more about the higher education-related outcomes from this year’s legislative session by reading the USM’s 2026 Legislative Session Report, which provides detailed information on budget and policy actions taken this year. We are grateful for the state’s continued support of higher education, keeping the USM’s operating budget whole even as the state grappled with a $1.5 billion shortfall.
Meanwhile, we are engaged at UMBC in important work to better understand how resources are allocated and managed across the university and to develop a clear, straightforward, and more sustainable budget-planning model for the years ahead. That work involves thorough analysis of expenditures, operations, staffing, and long-term financial projections across academic and administrative units.
In light of the state’s allocation and this ongoing long-term work, we will maintain a flat operating budget for FY27. We believe this is the most thoughtful and responsible approach as we gather more complete information, strengthen our financial planning processes, and develop the tools and projections necessary to support future decisions.
The state’s budget provides $35.7 million toward a 1.5 percent cost-of-living-adjustment (COLA) for state-funded employees across all USM institutions, effective July 1. That allocation will not cover the full cost of the increase for UMBC employees; we will absorb the remaining cost centrally to be able to provide the 1.5 percent COLA to all employees. We recognize that such support for faculty and staff is critical in the current challenging economic environment.
Indeed, these continue to be challenging times for many individuals, families, and for the sector of higher education. Many colleges and universities, including UMBC, are navigating significant financial pressures, including challenges related to evolving federal priorities and research funding; rising operational costs, including utilities and benefits; enrollment pressures; and broader economic uncertainty.
All of this underscores the need to improve our budget planning and to ensure that our resources align with our strategic priorities. Over the past year, we have taken a number of strategic steps to help manage financial pressures, including carefully evaluating vacant positions and choosing not to refill some positions when doing so would not negatively affect core operations or student support. These decisions, while not always easy, have helped reduce immediate financial strain and position us more thoughtfully for the future.
As you know, we also are making great strides in our strategic planning process. In a time of financial pressure, it is essential that we think carefully and create strategies to remain focused on our highest priorities. Strategic planning helps us clarify our priorities, identify where we can have the greatest impact, and inform where to focus our resources to advance UMBC’s mission and future. Our strategic plan will help guide decision-making about what we sustain and strengthen and provide clarity about what we cannot or should not do.
I look forward to setting this course with all of you with a new strategic plan in the fall. As we proceed on that path and in our budget-planning work, we will keep you informed. We are committed to collaboration, transparency, and thoughtful decision-making as we build a stronger long-term financial model and a bright future for UMBC.
With appreciation,
President Valerie Sheares Ashby