Proposed budget leaves PSU out in cold

By ERIN STROUT
Collegian Staff Writer

The University might face more financial hardships next year if Gov. Tom Ridge's proposed budget passes as is -- not only will the state appropriation remain the same as last year, but the Tuition Challenge Grant will be cut in half.

Former Gov. Robert P. Casey started the grant during his tenure to help offset the rising cost of higher education, stipulating that if the University did not raise tuition above 4.5 percent for full-time, in-state students, the state would give the school an additional $210 per student. The grant totaled $9.9 million for this fiscal year, on top of its appropriation.

But Ridge's Tuition Challenge will cut the grant in half for the University next year -- giving only $100 per student, said Tim Reeves, Ridge's press secretary.

In Ridge's proposal added 3 percent to higher education but transferred half of the funds for the Tuition Challenge Grant to the Pennsylvania Higher Education Assistance Agency, Reeves said.

"That way, the money goes to the institutions the students choose, not to the schools the government chooses," he said.

But not everybody sees it the way the governor does -- including University President Joab Thomas. At the University Faculty Senate meeting yesterday, Thomas said in the past, 53 percent of PHEAA funds went to private universities and not to state-related schools like Penn State.

How much money an institution receives from the state determines if it will be state-owned, state-related or private.

Thomas said it is possible that the University could reject the Tuition Challenge Grant and raise tuition by more than 4.5 percent, but the decision is up to the University Board of Trustees.

"It's not something I would recommend," Thomas said.

The trustees would make the decision in July, after the Pennsylvania Legislature passes the budget. The board will also hear a report on the status of the appropriation request at its meeting this weekend at the University's Hershey Medical Center.

Rep. Lynn Herman, R-Centre, still supports the program, but said he disagrees with the cut per student.

"Gov. Ridge's program is a departure in providing a service to keep tuition under control," Herman said.

Ridge proposed to keep the University's appropriation at $259 million, with the additional $4.7 million from the Tuition Challenge Grant. If his budget is passed,

the University will have to use other ways to find funding. The trustees approved the state appropriation request for $292,191,000 in September -- $23 million more than Ridge's proposal.

Last year the University received about $10 million less than it requested.

"We can and will continue efforts at private fund raising," Thomas said. "The other option could be by reallocating internally."

The University Futures Committee undertook a three-year plan to reduce the budget by 10 percent in each unit. Thomas said although the committee will be finished with its work next year, the University could face more reallocations.

The University had hoped to enhance several areas through an increase in state appropriations. The first area targeted was salary increases -- academic programs were also targeted, but Thomas could not say which ones.

Herman said although he believes Gov. Tom Ridge made a good budget presentation to the state General Assembly, the governor "needs to be educated on the importance of investing (in Penn State).

". . . I am displeased and disappointed in Gov. Ridge's lack of concern for the justifiable need for increased support for Penn State," Herman said.

The Senate will hold budget hearings for the University on March 28 and the state House of Representatives will hold hearings on April 3. Thomas said he will deliver the message that legislators need to increase the appropriations and is encouraging anybody with an interest in the University to contact their local legislators.

In the meantime, Herman and other legislators have months of work ahead of them.

"Governor Ridge's proposal is only a proposal. It is a starting point for the General Assembly to pass a budget by June 30," Herman said. "At this time I believe there is room and opportunity for members of the General Assembly to increase the appropriation above Gov. Ridge's recommendation."