Penn State Intercom......December 12, 2002

Penn State budget cut again; mid-year
freeze takes back $3.23 million

Pennsylvania Gov. Mark Schweiker on Dec. 10 announced a mid-year budget freeze for the Commonwealth that includes a 1 percent reduction for Penn State and other state-related universities. For Penn State, this latest cut amounts to $3.23 million. Over the past 14 months, mid-year reductions and permanent budget cuts have reduced Penn State's appropriation funding by $25.5 million.

Gary Schultz, senior vice president for finance and business, said that the appropriation cut will be met by making reductions across all areas of the University. "For our educational and general line item, half of the reduction will be covered through cuts in both administrative support and academic unit budgets, and the other half through central administration reductions," said Schultz. "Reductions on the other line items will be covered entirely by those units, including Cooperative Extension, Agricultural Research, Penn College and the Hershey Medical Center." Each unit receiving a cut will make its own determination of what areas to pull back. Classes are already scheduled and faculty hired for the Spring Semester, so it is expected that the cuts will be made in areas outside the classroom.

"The impact of a mid-year cut is exacerbated by the fact that you have a shorter period of time to recover the lost funds," said Schultz. "But our deans had been advised this year to budget with the understanding that there could be another cut, and we will make every effort to ensure that the University's core missions continue to function in ways that are least disruptive to our students and other constituencies." This latest budget cut reduces Penn State's appropriation to $319 million. Last year the University absorbed two separate mid-year cuts totaling more than $10 million, then took a $12.2 million permanent cut to its base budget at the start of the current fiscal year.