University readies for budget hearings

February 16, 2004

University Park, Pa. -- University President Graham B. Spanier will travel to Harrisburg next week with the hope that legislators will increase support to the University.

In his annual trek to the state's capital, Spanier will appear before the Legislature to explain the University's budget request for 2004-05. The president will appear before both the House and Senate on Feb. 25 for budget talks. As part of his presentation, Spanier will field questions from individual lawmakers, who each year ask dozens of questions on a broad range of topics.

The governor on Feb. 2 proposed an appropriation for Penn State of $314.77 million, which falls short of the University's request. After legislators review current budget requests from Penn State and other institutions next week, they will work in the coming months to develop a budget to pass on to the governor for his signature.

"We asked for more, but are happy that we are seeing the first proposed increase in several years instead of a cut. In that respect, this is positive news," Spanier said. "The governor's proposal is the first step in the process, and we take the next step with the hearings next week. In the end, we are hoping that a favorable budget is in place and approved by June 30."

In Penn State's 2004-05 appropriation request to the commonwealth, the University seeks to have its appropriation restored to the 2001-02 level. These funds will be used to help support basic operating cost increases, with special emphases on escalating health-care costs, deferred maintenance and facilities improvements, competitive faculty and staff salary adjustments, and high-priority academic program initiatives. If the commonwealth is able to restore Penn State's appropriation to the 2001-02 level, the University will be able to hold the basic tuition increase for Pennsylvania resident students to 4.0 percent.

In addition, the University once again is requesting special support for the College of Medicine.

"We focus on this single special request because the only academic medical center in Pennsylvania outside of Philadelphia and Pittsburgh is in jeopardy," said Spanier. "Penn State's College of Medicine has substantial economic, social and employment impacts on the commonwealth. Its importance as a training ground for future generations of health-care professionals, its reputation for quality health care and the life-saving advances that are routinely discovered at Hershey point to the urgency of additional support for our College of Medicine."

Penn State ranks dead last in state appropriations for public colleges of medicine in the United States. The average appropriation is just under $50 million, with some institutions -- such as UCLA and Texas -- receiving well over $100 million each from their respective states. This year Penn State received less than $5 million from the commonwealth for the College of Medicine. Not only do the other public medical schools in Pennsylvania receive more, some of the private medical schools within the state receive more from the commonwealth than does Hershey.

"With such an extraordinarily low level of state funding, we have historically supported the College of Medicine from clinical revenue generated by the medical center. But changes in Medicare reimbursements, managed care and operations have driven down the margin from the medical center to the point that it is impossible to support the college from these funds over the long term," Spanier said.

An investment in Penn State's College of Medicine is a critical one for the state. A recent economic impact report showed that Penn State Hershey generated 13,520 Pennsylvania jobs, both directly and indirectly, and had a positive economic impact that equaled $613 million. In addition to being the primary source of health care for central Pennsylvania, the college and the medical center are major economic drivers for the region.

Spanier said college-educated individuals also are paramount to the future success of the commonwealth, making a college education critical to more than just individual success.

"An increase in the number of individuals with greater problem-solving skills and technological knowledge can help advance the state in many ways," he said. "Returning to the level of support Penn State received two years ago and providing special support to the College of Medicine will not only help keep education accessible, it also will allow Penn State to continue its historic contribution to Pennsylvania."

Penn State's budget is available on the Web at http://www.budget.psu.edu/openbudget/

(Media Contacts)

Last Updated March 19, 2009