Governor proposes 30 percent cut in Penn State appropriation

UNIVERSITY PARK, Pa. -- A challenging state budget outlook caused by a continued soft economic recovery and lagging revenue collections emerged from Harrisburg today (Feb. 7) as Pennsylvania Gov. Tom Corbett presented a new state spending plan for the 2012-13 fiscal year that includes a second year of broad cuts proposed for public higher education.

The governor proposed a 30 percent across the board cut in general support for the three major state-related universities -- Penn State, Temple and Pitt.

Specifically for Penn State the proposed 30 percent cut of $64 million drops Penn State’s general support line from $214 million to $150 million. Funding for the Pennsylvania College of Technology remains flat at $13.5 million for a total proposed appropriation of $163.5 million.

There were no proposed cuts to Penn State’s agricultural research and Cooperative Extension. However, the governor’s budget proposes shifting the responsibility for funding these programs to the Pennsylvania Race Horse Development Fund. The implications of this proposal are unclear at this time.

The governor's new budget proposal is based on a projected flat budget scenario for the Commonwealth.

This is the first step in the annual budget cycle.

Over the next several months the Board of Trustees and Penn State officials, in dialogue with the University’s various constituencies, will analyze the impact of the proposed cuts to determine how to respond. Last fiscal year Penn State’s funding from the Commonwealth was cut by 19.6 percent, or a $68 million decrease.

Penn State managed those cuts in state support by eliminating hundreds of jobs through layoffs and collapsing positions, cutting programs, merging academic departments and, for the second time in three years, held the line on salaries.

Last month, Penn State was also informed that an additional $11.4 million in state funding is being put in reserve based on the likelihood that additional cuts will be mandated in the current fiscal year due to continuing Commonwealth revenue shortfalls.

"In the months ahead we'll have an opportunity to make the legislature aware of the likely impacts of these cuts for Penn State programs and how they will affect students and their families," said Penn State President Rodney Erickson. "We fully appreciate the financial pressure on the Commonwealth in identifying resources, and trust the state understands the consequences of continuing cuts of this magnitude."

"We will do everything possible to not let state funding cuts impose an undue hardship on Penn State families," Erickson said. “We will do everything we can to continue to cut costs and improve the effectiveness and efficiency of delivering our broad range of instructional programs, the core of what makes Penn State a great academic institution."

With proposed Commonwealth support at the same level it was decades ago Penn State is today educating tens of thousands of additional students.

"In addition, our research enterprise topped $800 million last year and ranks among the top ten nationally, while our outreach programs are serving half of all the households of Pennsylvania."

"We leverage modest state support into billions of dollars of economic impact, tens of thousands of jobs for Pennsylvanians, and deep tuition discounts for state residents," he said. "Our tuition is one-third the price of comparable private research universities."

"We want to see that partnership with the state continue."

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Last Updated February 10, 2012