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Barron Builds the Penn State Budget Piece by Piece for Students

by on March 31, 2015 9:20 AM

Penn State President Eric Barron knows that many students might not fully understand the university’s budget or how it impacts tuition.

So Barron built the budget piece by piece in front of his students on Monday evening in an open forum setting, where he fielded questions and concerns from all of Penn State’s campuses.

He said Penn State’s total income is a little over $4.6 billion dollars, with over 34 percent of that income coming from student tuition and fees. Income from the university’s health systems make up another 32 percent, while private grants and donations are about 11 percent, with miscellaneous sources rounding out the rest. 

Tuition from University Park students brings in about $889 million, while commonwealth campuses bring in about $417 million. Other university endeavors like Penn College and the Ag Extension research programs are largely self-sustaining, and don't contribute very much to the bottoms line.

Tuition dollars primarily go toward serving the students, Barron said. About 42 percent of tuition dollars go to faculty salaries and instructional support; over 20 percent goes to academic support functions like libraries and IT services; about 15 percent goes to administration, police, fundraising and other institutional supports; and 10 percent goes to grounds and building maintenance. Research costs, student service offices like admissions and the registrar and public services like WPSU take up the rest.

“Fundamentally, the budget that counts the most for you,” Barron said to the students, “is $1.9 billion, which is tuition and fees plus our state appropriation.”

The problem is that state appropriations have been on a steady and dramatic downward trend since the early 80’s, while Penn State faces costs that are constantly on the rise due to inflation and other factors.

To meet these challenges, Barron either has to bring in more money or reduce costs. Bringing in more money requires raising tuition, so his first step is to look for places in the budget where services can be cut, reduced or made more efficient. For next year’s budget, Barron says the university has found $34.3 million in cuts – but that’s not as much as it might sound like.

Even with the cuts built into next year’s budget, Barron still has to propose a small tuition increase of 2.73 percent, which translates into roughly $32.8 million dollars. But if all goes well in state legislature, funds might not be so tight for Penn State next year.

“For the first time in a long time, we’ve seen a significant increase to Penn State’s appropriation proposed by the governor,” Barron said, referring to Governor Tom Wolf’s proposed $49.6 million increase to Penn State funding.

If this proposal, which represents a total state appropriation of $263.7 million, passes the legislature, then Barron has promised to freeze tuition for in-state students across all campuses. Barron said the governor's proposal is an exciting reversal of a trend that’s lasted for too many years.

“The [state appropriated] dollars we have to work with are in the bottom half of the Big Ten. … On the other hand, the ranking of Penn State among public institutions in the Big Ten puts us at number two or four, depending on the year,” Barron said. “… We’re not wasting our money on things that don't deliver quality, and the quality of this institution is something that's going to affect you for the rest of your life.”

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Michael Martin Garrett is a reporter and editor for StateCollege.com who covers local government, the courts, the arts and writes the Keeping the Faith column. He's a Penn State alumnus, a published poet and the bassist in a local indie rock band.
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