Don Heller, an education professor, said that at other state schools, such as the University of Virginia and University of Michigan, discussions of "going private" have been taking place for some time. But he does not believe it is a reality for Penn State or similar schools just yet.

"I think those discussions are very theoretical at this point," he said. "At this point, it's probably more expensive to give up the state funding and go entirely private."

Heller said he does not think the idea of Penn State becoming a private school alone would turn off prospective students, but students do weigh the costs of such schools. He said that even though public funding is being cut, tuition at public universities is still less than at private schools.

"I think everyone here now values our public tradition and history, and thinks we play a valuable role and wants to keep that tradition," Penn State spokesman Bill Mahon said. "We're the only school in Pennsylvania with an office in each of the 67 counties. Penn State has a very unique role as a public institution and I don't know anyone who wants to see that change."

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In February, the university will continue to examine the problem of decreasing state funds as a nationwide phenomenon when it hosts an academic symposium on the "Future of the American Public Research University."

The event will be sponsored by the Penn State Alumni Association and the university's Center for the Study of Higher Education.

"The basic idea was to have something in conjecture with the sesquicentennial that was of an academic nature," said Christian Anderson of the Hintz Family Alumni Center. "It's a national symposium, but it's being held here at Penn State."

The two-day event will feature speakers and presentations from universities all over the country in an effort to discuss the implications of losing public funding for schools.

"Public research universities are at an important juncture in their history, especially as public support seems to be declining," Anderson said. "All the things research universities do are of great importance to the public; their role in educating future leaders, future businessmen. ... It seemed like a good time to address the issue."

Mahon said the university currently receives about 11 percent of its funding from the state, but the rate has been dropping steadily at about 1 percentage point a year.

"If that's going down, what happens in 10 years?" Mahon said. "Is it possible that Penn State will someday have no state funding? As hard as it is to believe, it is heading in that direction. And of course, that raises the question, at what point are you still a 'state' school? Have we already passed that point?"

This year, the figure did increase slightly, giving the university its first percentage increase in state appropriations in several years. But some say this increase is only because there is more money to go to everyone.

Heller said the increase probably comes as a result of fiscal changes across Pennsylvania -- not anything specific to Penn State.

"All higher education has seen more funds -- not just Penn State," Heller said. "I was at the [Appropriations Committee] meeting and they gave President Spanier the same grilling they always give him, so I think it's more of an indication of a better fiscal year in the state."

Rep. Kerry Benninghoff, R-Centre, agreed that the changes are indicative of economic factors outside of the university's power.

"Our increases or decreases are based on what our economy is doing," he said. "We were able to use our lobbying to increase over what [Penn State] proposed."

Mahon said the cuts, including those to the medical school, are the result of a number of economic factors.

"We've seen four budget cuts in the last five years, and they weren't under one governor or an all-Democrat or -Republican government," he said. "These budget cuts are coming at a time when tuition is increasing. That's just the direction the state has been heading in."

Some private schools are currently receiving more money in certain areas than public universities such as Penn State.

Mahon said The University of Pennsylvania's School of Veterinary Medicine receives more Pennsylvania tax-dollar funding than Hershey Medical Center.

The Penn veterinary school received about $37 million last year, when the Penn State medical school was allocated about $4.5 million.

Paul Cribbins, the University of Pennsylvania's assistant vice president of commonwealth relations, confirmed the difference, but said the universities have been working together to combat the problem.

"I think all medical schools have been receiving less recently," he said. "We believe all state medical schools are under-funded, and we have been working together to make the state aware of that."

Benninghoff said he sees the increased funding going toward private schools as a problem.

"I've always felt that our privately owned schools should be the last to receive funding from the state, and this is something I have been fighting for," Benninghoff said. "It's all about priorities. It's those days that I wish I could cast 20 or so votes instead of just one."

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Changes in funding for public and private schools are bringing together the once-separate financial histories of these two types of institutions.

Penn State has always been a public institution since it was founded in 1855. Board of Trustees member Paula Ammerman said the idea of working together with the state has been important to the school's history.

"It goes back to our land-grant heritage," she said. "We have always been a public school or considered state-related. Our mission is tied to that -- to provide education to the middle class."

The process through which a public school requests state funding can be long and arduous. At a meeting in September, the Board of Trustees outlines its budget for the year and then submits it to the state Department of Education. Early in the next year, the governor outlines his recommendation for allocation of those funds, Mahon said.

Some time around February or March, Spanier is invited to meet with the Appropriations Committee, where he makes a case for the university's monetary needs to the legislative officials.

Mahon said that meeting is then followed by another quiet phase, sometimes lasting until July or later, when the next year's budget finally passes and the school is given a certain amount of money from the state.

But the university's case is just one of several factors that go into the appropriation of funds.

"Every dollar we give out is taken from the pocket of a tax payer, so it's not like there's some huge amount we can use for anything," Benninghoff said. "Out of a $22 billion budget, we have about $2 billion that has any flexibility in how it can be utilized."

Benninghoff said there are other economic impacts upon the amount of public funding for school, such as post-Sept. 11 security issues, including overtime for state police, as well as unforeseen expenditures like floods. In addition, there is always an excessive amount of institutions lobbying for state money, and not everyone can be accommodated.

"Unfortunately, President Spanier is just one of many people asking the state for money," he said. "We always have more people asking than revenues available, and we have to make tough choices where the revenue ends up going."

Cribbins said he sees cost of tuition as the biggest difference between public and private universities.

The traditional balance has been tipped, however, as public funds have begun flowing to private universities.

Cribbins said there are two types of state funds a private school might receive. The first type is a direct appropriation, which, in the University of Pennsylvania's case, goes mostly to its School of Veterinary Medicine. He said schools receive this money because they usually have programs that provide clinical services to people in the state outside of the university.

"There are a handful of private universities that get direct appropriations," he said. "They tend to be specialized programs in medicine."

The other type of state funding is through institutional assistance grants (IAGs), which is a budget grant given to a private university in Pennsylvania based on the number of students at that school enrolled in the Pennsylvania Higher Education Assistance Agency (PHEAA) program.

Keith New, PHEAA vice president of communications, said the IAG is a need-based program that helps students of all levels of income attend potentially expensive schools that are not state-related.

"The program is designed to promote full access for schools from all sectors," he said, referring to students of all income levels.

Private universities can receive either direct appropriations or institutional assistance grants -- not both -- but almost every private school in the state receives one or the other, Cribbins said.

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Historically, legislators have invested in public schools because of their missions to give back to the state through both a cheaper education for citizens and outreach programs for residents not at the university.

"Because a place like Penn State is public, people expect that it will act in the interests of the commonwealth," Heller said. "For private schools, that expectation is less."

Benninghoff said the state hopes that public schools will provide educated citizens after graduation.

"Obviously, we're very dependent on the research development. We're dependent on providing quality education so that people can get good jobs after they graduate," he said. "It's our hope that they reside in Pennsylvania someday. One of the pitches that we give when we're lobbying for more funds is that Penn State is an investment for the state."

Mahon agreed that public schools are expected to give something back to the state, and he said he thinks Penn State does its job at a price that is still lower than that of a private university.

"Pennsylvania, as a state, has a lot of colleges," Mahon said. "It's different than most Big Ten states. Presumably, public education is for the public good. It developed the brainpower that helped get the country started, and it cost substantially less than the private universities. But I think that's still there."

Penn State gives back to its state through programs such as its agricultural extension services, which services communities outside of the school. Public universities are also expected to prepare students to become productive workers for the state and have an obligation to meet its needs, Heller said.

Public schools like Penn State also receive capital appropriations, which are not available to private schools and pay for the construction of new buildings. Benninghoff cited Penn State's new Chemistry Building, which received 50 percent of its funding from the state, he said.

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Administrative officials continue to plead their case and bring more light to the issue as state funds continue to fluctuate.

"We make a very compelling case about our funding," Mahon said. "There's not a lot you can say about being dead last out of 76 schools. I don't know how you can make that more dramatic."

In addition to Spanier's past presentations and February's symposium, Mahon said the university has a "very aggressive" fund-raising program, which became serious in the mid-1980s and has had a strong emphasis on student scholarships.

The problem with this fairly new system, Mahon added, is that many private schools have been pursuing scholarships for over a century and they tend to receive that money sooner than public schools.

Ammerman said the university has been making changes in the past few years to account for this loss of funding. "From an administrative standpoint, we take all the cost-saving measures we can," she said. "We're doing everything we can do to operate while providing the highest quality education possible."

One change has been the reports and advice of a Cost Savings Task Force, appointed in 2002, which has been working with the university in areas, such as purchasing and recycling funds to make sure it realizes the greatest possible savings, Ammerman said.

Heller said the task force has been cutting costs and saving the university millions of dollars. If funding continues to be cut at the same rate, other task forces like this would have to continue squeezing more and more money out of the school's budget to account for the loss. In addition, he said there would be continued pressure to increase tuition.

Benninghoff said there is no direct correlation between state budget cuts and increased tuition, however. "Regardless of the money we give, tuition continues to grow in double digits," he said. "This is something other legislators that have been here longer than me have expressed concern about. ... There doesn't seem to be a direct correlation between the amount of money a school receives through state appropriations and the cost of tuition."