In response to a $12.6 million cut in state appropriations, the University will adopt a temporary hiring freeze, defer maintenance projects and cut unnecessary expenses, University President Joab Thomas announced at Saturday's Board of Trustees meeting. The cut in appropriations amounts to 5 percent of the University's state funding.

"In a university as lean as Penn State, in one that has lived with years of underfunding, a cut of this magnitude is very severe," Thomas said. "It is even more difficult to face such a cut seven months into the fiscal year when so much of the budget has been spent or committed."

Seeking to alleviate a nearly $1 billion budget deficit, Gov. Robert P. Casey plans to lay-off 2,000 state workers, close four state hospitals, defer state employees' paychecks and cut higher education funds by 3.5 percent.

Casey aims to shrink the deficit by $731 million by June 30, the end of the fiscal year.

Thomas identified his chief objectives as protecting the University's academic quality and avoiding a tuition increase for this semester.

While Thomas declared a tuition raise for this semester is unlikely, he would not predict future tuition hikes that may result from the state's funding cut, saying only that the University's plans for handling the cuts have not yet been fully developed.

However, the potential for an increase beyond the University's expected 6 percent tuition hike served as conversation for many trustees and administrators.

Unless Casey can find a way to enhance state revenue, the University will experience a tuition hike "certainly beyond what we've seen in recent years," said William Asbury, vice president for student services.

Newly elected board President Mimi Coppersmith Fredman refused to speculate on possible tuition increases, saying only, "Next year is a totally different issue, so I can't really say."

To keep his objectives in view, Thomas said he will invoke a temporary hiring freeze. Appointments made after this fiscal year nor any made by the University's financially self-supporting units will be affected by the freeze, he said. Instead, only appointments made for the current fiscal year from general funds apply.

"We don't anticipate reducing salaries or firing or eliminating anybody at this stage," Thomas said.

In addition, the University will postpone maintenance work and some proposed or planned construction projects until funding is more secure, Thomas said.

Currently the University has more than $200 million worth of planned and approved construction projects, but the lack of funding may defer such projects indefinitely, he said.

Thomas will also ask department heads to recycle their operating budgets, cutting funds where they deem appropriate. Restrictions will be placed on travel expenditures, long-distance telephoning and the purchase of new equipment. Departments that conserve enough money may have their hiring freezes lifted, he said.

The University will lose $8.5 million in operating funds and $4.1 million in Tuition Challenge Grant monies, which the state allots to state-related universities that keep tuition hikes under 6 percent.

Thomas said he did not know if the University will participate in the tuition challenge program next year.

Comparing Penn State to other state universities, Thomas pointed out that Pennsylvania's higher education cuts were lower than many other debt-ridden states. He said he will not protest Casey's cuts, which place the University's state funding slightly below the amount received for the 1989-90 school year.

Only three states give less to higher education than Pennsylvania.

Many of the trustees and administrators at the meeting expressed support for Thomas' plan and agreed that the state's financial crisis posed a problem for the president.

"I feel very good about the fact that we are conservative by nature in our budgeting," Coppersmith Fredman said.

Coppersmith Fredman suggested that the University will be able to draw funds from sources the University estimated conservatively, such as enrollment figures.

"I don't think in the short term students will notice a difference in those services delivered," Asbury said, adding that he expected the cuts to be felt most heavily in delays instead of curtailment of projects and services.

"With the possibility of war added to the downturn in the economy, who knows what's going to happen?" Asbury said.