05/30/2023
By Julie Chen

As we approach the end of Fiscal Year 2023 on target to meet our budget requirements, I wanted to write to share a candid assessment of what will be a very challenging budget year in FY24.

I know for some this may cause confusion, as most of our revenue streams – including research funding, tuition and fees, room and board and state funding – are trending in the right direction since the lows caused by COVID-19.

However, 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.

That’s why every interaction with a prospective or current student is important. Student enrollment and retention is the job of everyone on this campus because each of us can take actions to help make sure students feel welcome and that they belong.

As of today, we have a wide range of potential budget scenarios for the coming fiscal year. During the summer – as the state finalizes its budget and our own enrollment and retention and collective bargaining picture grows clearer – we will have a more detailed sense of our financial realities.

Looking toward the fall, we have ample reasons for optimism:

  • Applications and deposits are up for incoming freshmen compared to this time last year.
  • 75% of first-year students have already re-enrolled and after continuing summer efforts we are projecting total retention to reach 82% or 83%.
  • Our housing contract numbers have already exceeded our goal.
  • Philanthropic gifts – buoyed by record Days of Giving and annual totals these past few years– continue to grow.
  • Research funding continues to accelerate.
  • Auxiliary revenue streams, such as from external events held on campus, are growing.

But we also face the reality that our planned additional departmental budget reductions will likely not be sufficient next year.

Rightsizing UMass Lowell’s budget will mean rethinking how we operate. We’ll need to reallocate, reprioritize, restructure and revisit programs and structures and we’re looking to everyone across the campus to recommend solutions.

As in the past, some potential options may include other budget and personnel actions such as a hiring freeze on vacant positions and other efforts to reduce costs.

We don’t yet know the final numbers for all of the variables — enrollment and retention, collective bargaining outcomes, and the final state budget — to solve our budget equation. But we can best address the challenges we will face with new ideas and an ongoing commitment to educating students and the pursuit of new knowledge.

We will keep you informed as we learn more.

Thank you for all you do for UMass Lowell.