Administration

2015-16 budget plan seeks modest increase from state

Proposal also urges economic development partnership

UNIVERSITY PARK, Pa. — The Penn State Board of Trustees' Committee on Finance, Business and Capital Planning today (Sept. 18) recommended for approval a budget plan for 2015-16 that includes a request to the Commonwealth of Pennsylvania to increase general support appropriations to the University by $9.4 million. Additionally, Penn State is requesting an investment of $7.9 million to benefit a partnership between the University and the Commonwealth with a strategic goal of transforming Pennsylvania’s economy.

Penn State’s proposed 2015-16 budget plan and appropriation request reflects basic operating cost increases of $53.5 million. The University is proposing to fund the increase through modest tuition and fee increases, additional non-tuition income from investment returns and indirect cost recovery and the appropriations request to the state. The plan still requires approval from the full board at the Sept. 19 meeting. If the board approves the plan and the Commonwealth provides the requested funds, the University's appropriation in total would increase from $289.7 million this year to $307.1 million in 2015-16.

“One of our top priorities is student success, and keeping student tuition increases low while maintaining the quality of our academic programs and providing the high-value education that our students deserve is part of that success,” Penn State President Eric Barron said.

The appropriation request includes an increase of $4.8 million, or 2.2 percent, for the University’s Educational and General Budget. It also includes $2.2 million to maintain the level of services provided through programs in Agricultural Research and Cooperative Extension; and $1 million in program funds to support Pennsylvania’s agriculture sector in implementing new federal food safety regulations by hiring food safety faculty and extension educators.

The University also is requesting $879,000 in continued support for the Pennsylvania College of Technology to build on recent increased state investments to expand instructional capacity for technical fields that are in high demand. An additional $591,000 is requested for the Penn State Milton S. Hershey Medical Center to support State and Federal Medical Assistance funding.

Barron said that as a land-grant university, Penn State also is committed to stimulating the state’s economy and contributing to the betterment of residents of the Commonwealth.

“Penn State’s 24 campuses, agricultural research and cooperative extension programs and other outreach activities have the potential to bring economic vitality to communities across the Commonwealth, but we propose to do much more,” Barron said. “With focused investment, a Penn State-Commonwealth partnership has extraordinary potential to stimulate the economy in ways that will launch our students and others into successful careers with new companies that would be attracted to Pennsylvania and startup companies based on commercialized intellectual property generated by Penn State researchers. We often talk about economic impact, and I would like to talk about our being an economic driver for the state.”

Penn State is requesting a $7.9 million investment for a strategic partnership that will target technology commercialization and entrepreneurial education through an Entrepreneurs-in-Residence (EiR) program; enhancement of engineering; business and nursing education; and strategic investment in the Institute for Natural Gas Research (INGaR) and the Institute for CyberScience (ICS) to support Commonwealth priorities.

Of that request, $1.8 million would be used for the recruitment of eight Entrepreneurs-in-Residence to work with faculty, staff and students to promote the transition from University invention and creativity to company startups in the state marketplace. Another $600,000 would be used to recruit and support new personnel to staff the EiR program.

Penn State has identified three disciplines where $3.5 million of the strategic partnership request would be allocated, including engineering ($2 million), business ($720,000) and nursing ($720,000). Additionally, the INGaR and ICS — producers of cutting-edge research that has a direct impact on economic development in the Commonwealth — would each receive $1 million of the requested strategic partnership funding.

This is the first step in the appropriations process and there are many factors that will contribute toward a final University budget to be adopted in July 2015 by the Board of Trustees. If the request is fully funded, the base tuition increases would range from 0 to 2.4 percent for Pennsylvania resident students at Commonwealth campuses and 2.99 percent at the University Park campus.

The budget plan is targeting $34.4 million in expense reductions. This includes funds available from restructuring post-retirement health care liability, funds set aside in prior years in anticipation of the rapid rise in the employer contribution rate for the State Employees’ Retirement System and targeted administrative budget reductions.

Last Updated April 21, 2017

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