DiEugenio said he expects the state appropriation issue to be resolved by Christmas, and he is lobbying for a restoration of slashed state funds now that the economy has improved.

Penn State spokesman Bill Mahon said this is the longest Penn State has waited for an appropriation since he started working for the university 20 years ago.

"We are looking at the financial situation week by week and doing everything possible to avoid taking out loans," Mahon said.

DiEugenio is currently working with the University of Pittsburgh and Temple University to convince the state Senate to return money to the four state-related universities, which also include Lincoln University.

"The Commonwealth general revenue stream seems to be improving," he said. "We are using that as part of the argument that, if not all, they can put some money back into higher education."

In July, the state House approved an appropriations bill cutting university funding by 5 percent to $306.5 million for the 2003-04 academic year. The bill needs a two-thirds vote in the state Senate and Gov. Ed Rendell's signature before it can become a reality.

DiEugenio said he would like to see the General Assembly return the university's funding to last year's level, restoring the 5 percent cut.

But state Sen. Jake Corman, R-Bellefonte, said Penn State's appropriation has been decided and is not being negotiated.

He said the state Senate has made about $300 million worth of cuts so far to the appropriations bill, which provides funding for the four state-related schools, and plans to send the bill back to the state House in late November.

Corman said Penn State's appropriation is not affected by the Senate's cuts to the bill.

"The Democrat senators voted it down because they are using it as leverage, which is costing Penn State a little over $300,000 right now," Corman said. "They won't give us the votes until the entire appropriations is done."

In March, Rendell vetoed the entire basic education subsidy and proposed a plan to include additional reforms, such as a full-day kindergarten program and a property tax reduction for local school districts.

To obtain the additional revenue needed for these reforms, Rendell suggested a combination of personal income tax increase and gambling legislation to put slot machines at racetracks.

While the General Assembly continues to debate these issues, state-related universities and the state's 501 school districts are missing their basic education subsidies, DiEugenio said.

State Rep. Lynn Herman, R-Centre, said he has met with state Sen. Robert Thompson, chairman of the Senate appropriations committee, to discuss Penn State's financial concerns.

"I strongly impressed upon him the need to increase Penn State's state appropriation level," Herman said.

"I would like to see all the cuts restored that were made over the past two years, but considering the dire economic times facing Pennsylvania today, I would like to see Penn State funding restored to last year's level at least."