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KEVIN GUTTING

University of Massachusetts Chancellor Robert Holub, seen here at the 2009 commencement in Amherst, says the campus faces a potential budget cut of more than $18 million in the next fiscal year.

AMHERST - The University of Massachusetts at Amherst is facing a potential budget cut in the next fiscal year of over $18 million, or nearly 8 percent, according to Chancellor Robert Holub.

In a letter emailed to the campus community earlier this week, Holub said he expects that no increase in state funding, coupled with the end of federal stimulus money, could lead to significant cuts in fiscal year 2011-12 from the university's current budget of $215.1 million.

"We will continue to work hard to bring our case to the state for funding of higher education in general and the Commonwealth's flagship campus in particular," Holub wrote. "But with the absence of further stimulus funding and the large structural deficit in the state budget, we do not anticipate anything more than a flat budget from the state for the coming year."

The commonwealth's budget deficit of about $2 billion, which also has an impact on other state schools, is the big impediment for next year's funding, Holub wrote, though he noted that UMass will also face higher expenses, including for increased employee salaries from a number of collective bargaining agreements.

"I wish I could report that our budget difficulties are behind us, but I cannot," he said. "Although tax revenues have begun to pick up since the lowest point of the economic downturn, no one expects the increase in (state) revenues to come anywhere near to closing the funding gap that is projected for FY2012."

For the current fiscal year, which began July 1, UMass has received $196 million in state money and another $18.7 in federal stimulus funding.

But the overall budget for the five-campus system, currently $464.5 million, is down over 7 percent this year. And Gov. Deval Patrick, after committing about $38 million in federal stimulus funding earlier this year to the UMass system, has said funding for next year looks much more "problematic."

Holub did not indicate where on campus next year's budget deficit might be felt, and neither UMass trustees nor the UMass president's office has yet indicated whether there could be tuition or fee increases next year. Trustees voted last spring not to increase those costs for the 2010-11 year.

Overall, Holub said the Amherst campus had put itself on solid financial footing in the past few years in a number of respects, through a variety of cost reductions and by generating $10 million in new revenues on its own through measures such as alumni contributions.

As well, the university has added a number of major new buildings in recent years, including a $114.5 million Integrated Science Building, and several other facilities are on tap, including another science building. In September, university trustees also approved a plan to build $182 million worth of new student housing and spend nearly $22 million to renovate other residential areas.

In addition, the university has a long-range plan to boost undergraduate enrollment - and with it student-generated income - in part by recruiting more out-of-state students, who pay roughly twice what Massachusetts students do for tuition and fees.

But for the foreseeable future, Holub said, the university will likely have to look inward to find additional sources of money, trim operating costs and keep the campus running smoothly.

"The bottom line is that we must continue to be mindful of base spending," he said.

"My goal for the coming fiscal year is to incur no further reductions in the budgets of campus units," wrote Holub. "Since I anticipate no increases in income from public sources, the only increase in our budget will come from what we ourselves generate in revenue."