Penn State President Graham Spanier said during yesterday's University Faculty Senate meeting that Penn State is moving toward becoming a private institution because of recent cuts in state funding.

"We must face up to the fact that we're becoming more private," he said.

His presentation, entitled "The Privatization of American Public Higher Education," highlighted the decreasing amount of public support received by Penn State and the increasing amount received by private colleges.

"We are indeed at a juncture in our history where maintaining our public mission and remaining a quality institution will require all of us to be more entrepreneurial and more judicious in our use of resources," he said.

He said Penn State's public funding has been decreasing since before he became president, and it may continue to fall below 10 percent of total funding for the university. In July, Spanier said that percentage is comparable to the level of public funding many private institutions receive through grants from federal and state governments.

"We will continue to make the best case we can in Harrisburg and tell our story to elected officials and the public," Spanier said. "If we are unable to fund us at the level we need to be funded, we will have to trim back our services. What we will not do, however, is sacrifice quality."

Spanier advocated "explor[ing] different financial models that rely less on state dollars" and said Penn State "need[s] to continue forming partnerships with the private sector."

With 31 percent of funding coming from public sources, Penn State is the second lowest publicly funded university in the Big Ten, which averages only 42 percent of its funding from state and federal sources, according to Spanier's report.

"This certainly prompts us to ask what it means in 2004 to be called a public university," he said.

Penn State would continue to fundraise, seek philanthropic donations, develop more scholarships and recruit out-of-state and international students, he said.

"We have developed a number of innovative approaches that have helped us overcome some financial hardships and also strengthened our core missions of teaching, researching and service," he said. "We will remain competitive, maintain our leadership program, and we will thrive."

Spanier also stressed Penn State's continuing monetary struggles.

"At Penn State, we've always been expected to do more with less," he said. "And we have been extraordinarily successful in our endeavors."

Gordon De Jong, a liberal arts faculty senator, asked Spanier when the university would become completely private. Spanier said he did not think it would ever reach that point, although it is a possibility.

Spanier said tuition would continue to rise because states are continuing to back away from providing sufficient educational funding to their public universities.

He said the university would look at current tuition rates and evaluate whether out-of-state students are paying too much in proportion to in-state students.

"I'm willing to spend a lot of my time and take a lot of grief if that's necessary, dealing with whatever I'm told in Harrisburg," he said. "I'd hate to have to replace that $314 million [of state funding] with tuition."