UPPER BURRELL, Pa. -- With two different state budget proposals on the table, Penn State President Graham Spanier has pitched two distinct university budgets, with one that he says places more of the burden on students.
"This is a very difficult year for us and a very tough time to be a trustee," Spanier said. "These conditions force us to set a tuition increase that will be painful to us and our students."
Penn State's Board of Trustees met Friday at the Penn State New Kensington campus to discuss the university's operating budget for the 2009-10 year. The board agreed on two different plans --Scenario one and Scenario two -- reflecting two different state budget proposals made by Gov. Ed Rendell, one in March and one in June.
Under Scenario one, based on Rendell's March 3 proposal, Penn State will receive $318.1 million in state appropriations -- a $20.3 million cut from last year's $338.4 million appropriations -- bringing the 2009-10 university budget to almost $3.8 billion.
If Rendell's June 26 proposal is approved, Penn State's 2009-10 appropriations will be $277.5 million, a $60.9 million decrease from last year. Under this scenario, the 2009-10 Penn State budget will be more than $3.7 billion.
Spanier said Scenario two would set the university back to 1997 appropriation levels and force the university to "shift more of the burden on students and parents." Spanier said Penn State has never had to plan two budgets in its history.
"If the appropriation comes late, we will have to set fall tuition at Scenario two, but we will lower the spring tuition," Spanier said. "If we use Scenario two, then things have gone very bad in Harrisburg."
University Park Undergraduate Association (UPUA) President Gavin Keirans said he's hoping Scenario one gets the green light and he said the governor's proposals have pressured the university to create new methods for the 2009-10 budget.
"Obviously we prefer Scenario one," Keirans said. "I hope a remedy can be made to get us closer to the 4.5 percentage for tuition," he said of the possible 4.5 percent tuition hike in Scenario one.
Spanier said the university asked the commonwealth for a 6.9 percent, or $24.5 million increase, in state appropriation for the 2009-10 year.
With state funding in question, the university is taking other measures to cut costs.
All Penn State's faculty members will receive a "salary freeze" in 2009-10, and the university will reduce internal expenses to cut costs.
"We are trying to keep tuition as low as possible" Spanier said. "The faculty is making a major sacrifice."
The university must set fall tuition by July 17, and if the state budget isn't finalized, then the university will put Scenario two in effect.
But, if the state budget is approved and Penn State only receives the 6 percent cut, which will be offset if the university is approved stimulus funds, then Scenario one will take effect.
U.S Representatives Glenn Thompson, R-Pa., and Tim Holden, D-Pa., sent a letter signed by 14 of 19 members of the Pennsylvania Congressional delegation on Friday to U.S. Secretary of Education Arne Duncan asking the department to reconsider Pennsylvania's application for federal stimulus funds.
Rendell denied Pennsylvania's four state-related universities -- including Penn State -- stimulus funds, which could offset the 6 percent decrease in funding cut by the governor in March.
Also, more than 2,800 Penn State alumni drafted letters regarding the state budget and its effect on Penn State to Pennsylvania legislators. Spanier said he's never before received an alumni response that large on any issue.
In other activity at the meeting, the board approved the $2.5 million purchase of the Craig and Kathleen Kissel property, located at the intersection of West College Avenue and Butz Street in Ferguson Township, for additional growth of the campus. The board also heard a presentation on the status of the $215 million dollar Millennium Science Complex, located on Bigler and Pollock Roads. It is expected to be completed by the summer of 2011.
