Commonwealth Court's dismissal last week of three University students' lawsuit to see top administrators' salaries has at least one of the plaintiffs fuming, but school officials welcomed the decision.

"It shows us that for the purposes of tax legislation, we do have certain privileges that have been affirmed by the court," said Steve A. Garban, the University's senior vice president for finance and operations.

Attorneys for the University had contended that Penn State's "unique nexus with the Commonwealth" made it a public and a private institution simultaneously.

That assertion is confirmed when last week's appellate court ruling is coupled with its October decision exempting the University from $228 in local real estate taxes the county tried to collect in 1984.

"For the purpose of the right-to-know law, we have certain rights to privacy that have been affirmed," Garban said.

But the plaintiffs, rather than seeing a University with a legitimate dual role, see one with an illicit split personality.

"It's a blaring inconsistency," said Donn Wonderling, a senior and one of three students to file the suit in September. "When an (appellate) court judge sees it, I don't think there's any way he can uphold the decision."

Wonderling said he and the other two plaintiffs, Stephen Roy and former student John Orr, plan to appeal.

R. Mark Faulkner, a State College attorney who represented the University in the salaries suit, said the definition of a state agency is a situational one that can fluctuate from case to case.

"There's not any inconsistency when you recognize that you're applying different statutory definitions to what Penn State is," Faulkner said yesterday. "The ruling answers all of the issues we wanted it to."

Faulkner could not say whether the University's response would be different on an appellate level beyond the state judiciary.

The salary case, Roy et al vs. Penn State University, was merely the latest in a series of efforts by student leaders to pry open parts of Penn State's budget they consider closed.

In November 1988, members of the Undergraduate Student Government obtained a confidential survey revealing the salaries of top administrators, including University President Bryce Jordan.

Jordan, who reportedly made $145,000 in 1986-87, condemned the release of the figures, saying they were illegally obtained.

But other schools have moved in recent months to release salaries of their top employees. The University of Pittsburgh last September, in response to a newspaper's petition, publicized many administrative salaries.

Pitt President Wesley W. Posvar said new Internal Revenue Service laws required the release. But Penn State, which claims tax exemption differently from other schools, was not bound to such an action.

"Being a land-grant institution doesn't necessarily exempt us," said Bill Mahon, a University spokesman. "(But) we did not use the same IRS provision to claim exemption status."

The tax case, which became a legal skirmish when the University refused to be taxed on land it leases to a MidState Bank & Trust branch on campus, went through both Centre County and Commonwealth courts in favor of Penn State.

But Keith Bierly, one of Centre County's three commissioners, said the county's latest appeal to the Pennsylvania Supreme Court might clear up the issue better than Commonwealth Court.

"I think Penn State's dual status is a problem," he said. "That's why we're in court. The commissioners are looking to the state supreme court to reach the ultimate decision about what Penn State is."

Bierly emphasized, however, that county officials continue negotiations with the University in an attempt to settle the tax matter. He said last week's Commonwealth Court decision was just as ambiguous as the tax case.

"I haven't agreed with Commonwealth Court from the start, and I don't agree with this one," he said, emphasizing that the opinion was only his own. "(But) I don't think it'll affect our appeal."