Layoffs, tuition increases on table at PSU

Anne Danahy

Layoffs and tuition increases are two places Penn State will have to look at to balance its budget for the upcoming year if a proposed 18 percent cut in state funding comes to pass.

But university trustees will meet today at Penn State New Kensington to approve a budget and set tuition for 2009-10 without knowing how deep the state funding cuts will be.

Gov. Ed Rendell and the General Assembly disagree about how to make up a multi-billion dollar deficit and haven’t approved a budget for the fiscal year that started July 1.

Penn State’s tuition bills have to be sent out by July 17, spokeswoman Lisa Powers said, so trustees can’t wait any longer to decide tuition rates. If the state doesn’t reach a budget agreement by today, she said, Penn State will “propose a contingency plan so that we can begin the fiscal year with a workable budget.”

Rendell has proposed cutting Penn State’s funding by about $60 million to $277 million. That’s 18 percent less than the $338 million the university had been slated to get in the past year.

“After tackling a decade of cuts in state appropriations, Penn State is running out of options,” Powers said in an e-mail. “Cuts in appropriations can only be made up with tuition increases.”

Penn State may also have to consider layoffs.

“Based on the economic forecast, state funding levels aren’t likely to improve in the foreseeable future and layoffs are possible,” Powers said. “That is the unfortunate reality of this current economic situation.”

College of Agricultural Sciences Dean Bruce Mc- Pheron said the college gets about $56 million from the state and would lose about 20 percent of that under Rendell’s proposal. He said that would be the equivalent of about 200 positions across the college.

“We don’t have enough money in operating expenses to even approach the magnitude of that cut,” McPheron said.

Rendell has taken Penn State and the other state-related universities out of the state’s application for federal stimulus funding, saying they aren’t public institutions. He has also proposed reducing the state appropriations for state-related universities by 13 percent.

McPheron said the idea that Penn State isn’t a public entity “cuts to the quick.” He pointed to the public outreach and extension work the college does in areas such as food production, forestry and the environment.

Jon Eich, chairman of the Centre County commissioners, said he is concerned about the effect cuts at Penn State could have on the county.

“I think that will have a ripple effect on our economy that will just increase as it spreads out to the university, from the university to other businesses in the community,” Eich said.

About 20 percent of the university’s $1.5 billion general budget came from the state in the past year. Tuition covered 72 percent of the budget.

A Rendell spokesman has said that the governor has to make difficult budget decisions, has little control over Penn State spending and tuition and wanted to distribute the federal money where the state has more control.

The trustees are also scheduled to vote on buying a property, on which sits several structures, near the corner of West College Avenue and Butz Street. It is next to the West campus and to the 4.66-acre O.W. Houts property Penn State bought for $3.4 million.

A university spokesman said there are no specific plans for either of the properties.

Anne Danahy can be reached at 231-4648.