The state continued whittling away at the money it allocated for Penn State this year, as Gov. Ed Rendell announced another 1 percent mid-year cut in funding to state-related universities yesterday.

The latest $3.2 million reduction comes two months after a spending freeze of the same size and brings Penn State's appropriation for 2002-03 down to $316.2 million.

"We certainly understand the difficult economic situation the state has been wrestling with recently and want to do our part," said Penn State spokesman Bill Mahon. "Nonetheless, a fourth cut and a mid-year cut are going to be particularly difficult to deal with."

Rendell ordered $120 million in across-the-board spending reductions yesterday, citing tax revenue collections that are still not living up to expectations. Former Gov. Mark Schweiker cut $270 million in December, just before leaving office.

"In order to avoid more drastic actions later this fiscal year, the state must act now to bring the revenue shortfall within its grasp," Rendell said yesterday. "Pennsylvania must face
the tough fiscal implications of a slumbering economy that has failed to wake up."

The state's appropriation for Penn State is now $15.7 million, or 5 percent, below where it was in 2000, during rosier economic times. Before then, Harrisburg had been steadily increasing the amount of funding it sent to University Park each year.

Penn State administrators will meet today to evaluate how to handle the cut, Mahon said. "We'll do whatever we can to make the impact not evident in the classroom," he added.

The university's extension and outreach programs were especially hurt by previous reductions, because they do not rely on tuition dollars for funding, Mahon said.

With states across the nation facing similar tax revenue shortfalls, universities in Maryland, Oregon and California have decided to impose mid-year tuition increases. Mahon said Penn State is unlikely to resort to similar fee hikes.

The process of allocating state funding begins anew in three weeks, when Rendell will introduce his plan for the 2003-04 budget. In his speech on March 4, the governor will address an unprecedented $2 billion deficit projected for next year, said Tom Hickey, the governor's press secretary.

When he makes his annual pair of trips to the state Legislature next month, Penn State President Graham Spanier will ask for an appropriation of $347.1 million for next year. That proposal, which included a planned 6.5 percent tuition hike, was approved by the Board of Trustees in September.

In the past several years, the state's contribution has fallen short of Penn State's requests, which led to even higher tuition increases.

The yearly appropriation from Harrisburg now represents 13 percent of the university's total budget, down from 17 percent in 1995.