State College, PA - Centre County - Central Pennsylvania - Home of Penn State University

Penn State Loses $68 Million in Formalized State Budget

on July 01, 2011 9:56 AM

After three months of debate, Pennsylvania lawmakers and Gov. Tom Corbett have finalized the state's $27.15 billion budget for 2011-'12.

Corbett signed the spending plan shortly before midnight Thursday night, marking the first time in eight years that the state has completed its budget on time -- that is, before the start of the new fiscal year.

For Penn State, the budget will mean a state-funding decline of 19 percent in the university's educational budget appropriation; a 19 percent state-funding cut for agricultural research and Cooperative Extension; a five percent cut for Penn College; and a 50 percent cut in state support for the Penn State Hershey Medical Center, according to a university news release.

In all, the university will lose about $68 million from its 2010-'11 state appropriations. That will bring to $279 million the level of its overall state support.

"We are very pleased to have a state budget and Penn State appropriation completed on time," university President Graham Spanier said in a prepared statement. " ... I want to thank the many legislators who supported moderating the size of the cut originally proposed for Penn State. The original $182 million proposed cut would have had a devastating impact on our students and our employees."

That original proposed cut, set forth by Corbett in March, would have amounted to a 52 percent overall reduction in the university's state funding. Local lawmakers, university officials and student activists were among those who lobbied -- successfully -- for moderation in that cut.

According to its news release, Penn State has been "implementing both across-the-board and targeted cuts" as it prepares for the lower state-support level. Cost trims have come through a variety of avenues, including an internal Core Council process that's trying to establish new efficiencies at the university, according to the news release.

In the past three months alone, the release says, Penn State's cuts and additional new internal savings have amounted to nearly $30 million.

Spanier added: "Other savings are being generated by changes to our health-care benefits system. We have implemented a program of significant energy savings, cut funding for our capital-improvement program, identified savings for our property and liability insurance and cut back on funds aimed at new programs. The elimination of our normal salary increase this summer also generated significant savings."

The university administration will introduce proposed tuition rates for 2011-'12 at the next Board of Trustees meeting, scheduled for July 15 at the Lehigh Valley campus. Board members will vote on the rates the same day.

Administrators have said they're committed to keeping the rate increases to a very modest level.

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