PSU Requests $361 Million In State Appropriations For 2001-2002
September 8, 2000
University Park, Pa. - Penn State is seeking a 4.25 percent base state appropriation increase for the 2001-2002 academic year. In addition, Penn State is asking for a $16 million increase for special appropriations to support the College of Medicine, the School of Information Sciences and Technology, and environmental compliance.
The Board of Trustees today (Sept. 8) approved the request for the $29.34 million increase over the 2000-2001 state appropriation.
"Penn State is the institution of choice for the plurality of the Commonwealth's most talented students, and a major contributor to workforce development," according to a report on the state appropriation request. "Penn State is the principal engine of research and technology transfer in Pennsylvania and the major source of university outreach. One in every two Pennsylvania households has someone participating in Penn State programs."
President Graham B. Spanier explained that it is the University's practice to bring the appropriation request before the board for review and approval before sending it on to the Department of Education for consideration by the legislature. Last year's state appropriation was $331,949,000.
The requested increase will be used primarily to support basic operating costs. Special emphases are improving faculty and staff salaries, meeting escalating health care costs, and providing support for facilities improvements and deferred maintenance -$13.8 million has been requested for these costs.
"The competitiveness of Penn State's faculty salaries is a serious concern, said Spanier. "Penn State faculty salaries have continued to slip when compared to the Big Ten public institutions and to regional peer institutions." The budget plan includes a 3.5 percent increase in the salary pool, a 1.0 percent pool for special merit, market and equity from the President's Excellence Fund, and an additional 1.0 percent pool to be funded from tuition revenues.
The cost of employee benefits is also slated to increase by 12.5 percent. In addition to the general increase in the cost of health care benefits, there has been a steady increase in the number of employees who are choosing TIAA/CREF for their retirement plan. While it has varied over the years, currently the cost of this plan is higher than the state plan.
The third area of emphasis in the basic operating budget is funding for critical needs in three areas: the maintenance and operation of new or newly renovated facilities; deferred maintenance - Penn State has a backlog of major maintenance projects estimated to be more than $192 million; and the on-going capital improvement program. 2001-2002 will be the third year of a six-year capital improvement program to meet the University's facilities needs.
In other expense changes, Spanier said that "We will continue our program of internal budget reductions that is part of our strategic planning process. This is the 10th consecutive year for internal budget reductions, resulting in a total of 12 percent recycling of our departmental operating budgets. He also outlined a number of other changes:
Penn State is also requesting special support for three areas of critical importance to the University and the Commonwealth - the College of Medicine, information sciences and technology and environmental compliance.
The University is requesting a $10 million increase in the base allocation for the College of Medicine this year to ensure its viability. The College is the only non-urban academic health center in Pennsylvania and it produces the largest number of practicing primary care physicians in the Commonwealth. Historically, the College of Medicine has received a much smaller share of its operating budget from Commonwealth appropriations than have similar institutions in other states, relying instead, on clinical revenues to support the college. "However," said Spanier, "because of changes in health care nationally, no College of Medicine can be supported solely on clinical revenues - including ours."
Information sciences and technology is the second area of special need and the University is requesting an additional $4 million to be added to the base operating support. This fall, more than 1,200 students are enrolled in the new School of Information Science and Technology, "far exceeding our expectations," Spanier said.
"We have already begun to find many ways to partner with business, industry, and government through the IST Solutions Institute that is up and running and the eGovernment Research Education Center that is being planned." Funds will be used to support hiring faculty, the development and delivery of IST courses on the web; and partnering with Pennsylvania businesses, state government, and non-profit organizations.
The University's environmental compliance is the third area for special funding, and is budgeted at $2 million. These funds will help Penn State comply with federal and state environmental regulations, focusing on improving air and water quality, enhancing hazardous materials management and for the remediation of contaminated lands owned by the University. The University expects to make a similar request in 2002-2003.
"We know that all the changes I have described today cannot be supported entirely by an increase in the state appropriation," Spanier said. "This means that we will also be asking for increases in the rate of tuition to support these much-needed improvements."
The basic tuition increase for 2001-2002 is proposed to be 4.75 percent, with an addition of 1.0 percent to be used to support the capital improvement program and a 1.0 percent increase to support the faculty salary initiative.
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Contact: Christy Rambeau (814) 865-7517 or e-mail at