WILKES-BARRE --The University's 1994-95 proposed operating budget, presented at its Board of Trustees meeting Friday, outlines a $10.5 million reduction as part of a three-year plan to cut $30 million.

As part of that plan, $7.9 million of the money cut will be reallocated to improve educational quality, with an emphasis on library improvement, said University President Joab Thomas.

The budget reduction plan outlined by the University Future Committee called for a 10 percent cutback for each budgetary unit during three years. Last year that required cutting about $9 million from the 1993-94 budget.

In addition to this year's cuts, $11 million will be cut from the 1995-96 budget, Thomas said.

"(The budget) shows that the future procession is shifting Penn State resources towards colleges and away from administrators," Thomas said.

The operating budget for this year stands at about $1.5 billion. Overall, there was a 3.8 percent increase in state funding for the coming year, and a 2.5 percent increase in the general funds budget. Total state appropriations total $259 million.

For every dollar the individual colleges lost in cuts, 88 cents will be reinvested.

For example, the College of the Liberal Arts had to cut some of its programs, including public administration and social work, but money will be reinvested to hire new faculty and increase the number of graduate assistanceships, said dean Susan Welch.

"Making the changes is going to benefit students. We've reinvested in faculty and improving undergraduate education," Welch said. Faculty will not be affected by the cutbacks because the college was not hit as hard by reductions as other colleges, she said.

Academic support and administration units will receive 79 cents and 44 cents for every dollar cut, respectively.

"No one dusts my office anymore," Thomas said jokingly, explaining some of the administrative reductions.

Although no new dollars were added to the University's base state appropriation, the University's $10 million tuition challenge grant will be folded into next year's state base appropriations, Thomas said.

This will mean that any additional money won through the grant next year will be added to the base appropriation. The tuition challenge grant awards $210 per full-time, in-state student if the University keeps its in-state tuition increases at 4.5 percent. Out-of-state students face a tuition increase of 5.5 percent or $554 this year.

"The recruitment problems of the Commonwealth Campuses may be because of the pricing structure," said Trustee Marian U. Coppersmith Fredman.

Increasing out-of-state tuition rates may be causing the out-of-state enrollment decreases at the Commonwealth Educational System, Coppersmith Fredman said.

Other changes in the budget for this year included modest salary progression and increases in student aid, Thomas said.

The reallocation funds for this year total $1.3 million and will be distributed among various student-aid programs including grants for especially needy, minority and graduate students.

The salary progressions in the budget for this year brought the University's Big Ten ranking for professor salaries from fifth to third this year.

Associate professor salaries moved up from third to second place, and assistant professor salaries went from seventh last year to fifth this year.

"It's very important to remain competitive in this dimension in order to maintain quality faculty," Thomas said.