Montevallo reports on $8 million deficit, enacts 15% departmental reductions

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July 3, 2025

The University of Montevallo’s student-produced newscast, Vallo Vision News, is providing an in-depth look into the school’s ongoing efforts to address a multi-million-dollar budget shortfall that began surfacing earlier this year.

According to a report by Vallo Vision News, the financial issues came to light in February 2025, when university leadership acknowledged a growing gap between revenue and expenditures. The shortfall, originally cited as $7 million, was later clarified to be closer to $8 million during an April meeting of the board of trustees.

University administrators attributed the budget gap to a variety of rising operational costs. These included significant increases in utilities, insurance premiums, and mandated state insurance, as well as higher salary expenses from raises and adjustments for faculty and staff. The university also cited investments in campus infrastructure, including safety-related projects like roof repairs and the replacement of high-voltage underground wiring, as contributing factors.

In response, the university initiated sweeping budget adjustments. A target of 15% initially reduced departmental budgets, although the exact cuts varied depending on the needs and flexibility of each unit. Additionally, 24 staff positions were eliminated. UM’s executive leadership team took voluntary pay reductions, with the president accepting a larger percentage cut than the rest of the cabinet.

Plans to reduce the institutional scholarship “discount rate” from 53% to 35% over the next several years were also announced. This change is expected to take effect with the fall 2026 incoming class and will be phased in over a five-year period.

Despite budget challenges, Vallo Vision News reports that student services, including student employment and organization budgets, have not been affected. Fall enrollment remains steady, and the university aims to maintain focus on teaching and learning throughout the transition. Administrators are currently evaluating options for the next fiscal year, with the possibility of additional departmental cuts ranging from 20% to 25% still under consideration.

UM officials have emphasized the importance of long-term financial planning in light of broader pressures on higher education, including anticipated enrollment declines and potential shifts in federal and state funding.

Sherri Blevins is a staff writer for Yellowhammer News. You may contact her at [email protected].