FSU Implements More Cost Reduction Strategies to Balance FY26 Budget

Jun 27, 2025 11:00 AM

Frostburg State University announced that it would implement more cost reduction strategies to achieve a balanced budget and to move forward without a structural deficit in FY 2026. The University System of Maryland (USM) had to absorb a 7% funding cut to their state appropriation for Maryland to balance its $67 billion budget. Frostburg’s portion of that cut is $4.34 million – 2% more than originally expected. Additionally, the state mandated salary increases totaling $1.57 million.

“Thankfully, we did demanding work and made tough decisions last year that have left us in a much better position to withstand these additional funding cuts,” said FSU interim president Darlene Brannigan Smith, PhD. “Using our Educational Market Alignment Plan (EMAP), FSU transformed a $7.7 million structural deficit into a balanced budget for FY 2025.”

However, while FSU will continue to capture the savings from last year’s budget decisions, the University must further decrease costs through operational efficiencies. Frostburg’s operating budget will be reduced by approximately $900,000; eight vacant staff positions will be eliminated while others will only be filled on an as-needed priority basis; and eight staff members will be laid off.

“Reducing our workforce is not a decision we made lightly but was necessary to ensure Frostburg’s long-term financial stability,” said Smith. “This decision is not a reflection of anyone’s value or dedication to FSU, and we will be offering support to those staff members affected as they work through this transition.”

USM Chancellor Dr. Jay Perman released a video message earlier this month to show his support for the work that all the USM institutions are doing to remedy budget challenges happening across the system.  “Each of our universities has unique financial challenges and opportunities, and so the mix of strategies they use to close their budget gaps must be unique as well,” said Perman. “That said, the sheer size of the cut we’re absorbing means that, for some universities, personnel actions can’t be taken off the table. A 7% cut simply can’t be achieved on every campus in a way that doesn’t touch any of our people.”

Frostburg has implemented a pathway to stabilize enrollments because enrollment growth is the only viable strategy to strengthen the University and reduce its dependency on state appropriations. However, more work is needed. “As a community, we must continue to develop innovative market relevant programs, ensuring that course delivery is friendly to the returning, working adult student learner, many of whom are transfer students,” said Smith. “I also encourage everyone to share the great stories of FSU’s accomplishments and to tell our story with pride.”