| DETAILS OF PENN STATE'S 2001-2002 BUDGET PLAN AND APPROPRIATION REQUEST |
| Details of the University's proposed budget plan
and appropriation request are discussed below. Table 1 summarizes the proposed
budget plan for the Educational and General Budget, Agricultural Research and
Cooperative Extension, the College of Medicine at the Milton S. Hershey Medical
Center, and the Pennsylvania College of Technology. Penn State's appropriation
request for 2001-2002 is summarized by line item in Table 2. EXPENSE CHANGES On the expense side, the University's budget plan for 2001-2002 reflects basic operating cost increases of $53,103,000 and $16,000,000 for special initiatives, including $4,000,000 for Information Sciences and Technology, $10,000,000 for the College of Medicine, and $2,000,000 for environmental compliance. |
Basic Operating Costs Internal Budget Reductions As part of the five-year strategic planning process implemented in 1997-98, the University will continue a program of internal budget reductions for 2001-2002. This will be the tenth consecutive year that an internal budget reduction and reallocation process has been in effect. Under this program, academic colleges and support units at University Park will reduce their budgets by 1.0 percent. These budget reductions will generate $3,444,000 for internal reallocation. Similar internal budget reductions and reallocations are included in the strategic plans of other campus locations. |
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Salary Adjustments In comparisons with other Big 10 universities and 22 public institutions participating in the American Association of Universities Data Exchange (AAUDE), Penn State's average faculty salaries have slipped substantially since 1995-96. Among Big 10 public universities, Penn State's rank for average salaries has dropped from second to fifth at the professor level, from second to sixth for associate professors, and from eighth to ninth at the assistant professor level. Compared with the 22 AAUDE universities, Penn State also has dropped at every professorial rank since 1995-96. Over the last five years, the compounded salary increase for Big 10 public universities was 24.5 percent, while Penn State's was only 20.1 percent. This ranks Penn State last in the Big 10, nearly |
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4.5 percentage points behind the average. Using this same
measure, Penn State also lags behind the AAUDE average and ranks 17th out of
the 22 universities in five-year compounded faculty salary increases. This is a
serious trend that undermines the University's ability to attract and retain
high-quality faculty members. The budget plan includes $34,352,000 for faculty and staff salary adjustments and related employee benefits. We are proposing to begin a multi-year effort to make Penn State's faculty and staff salaries more competitive, and to begin to close the gap with our peer institutions. For 2001-2002, the plan includes a basic increase in the salary pool of 3.5 percent, 1.0 percent for special merit, market, and equity considerations from the President's Excellence Fund, and an additional 1.0 percent from a special salary increase initiative funded from new tuition income. |
Employee Benefits Nationally, health care costs are projected to increase 12 percent to 15 percent in 2001-2002. Penn State is anticipating a 12.5 percent increase in the costs of health care for next year. In addition, there will be continued growth in the number of employees participating in the TIAA/CREF retirement program. In total, employee benefits costs are projected to increase by $9,127,000. New Facilities/Fuel and Utilities A total of $2,420,000 is projected for the maintenance and operation of new or newly renovated facilities and for modest fuel and utilities cost increases for 2001-2002. Included are funds for the new Career Services Building, renovations to Weaver and Patterson Buildings, and classroom and laboratory renovations at University Park. Maintenance and operating funds also are required for the new Classroom/Auditorium building at Penn State Great Valley and Technology Commons at Penn State Berks-Lehigh Valley. Deferred Maintenance |
The increasing maintenance needed by Penn State's aging physical plant is becoming a critical problem. Currently, Penn State has a backlog of deferred maintenance projects totaling more than $192 million. There are 1,274 buildings University-wide, and the average age of these buildings is 28 years. There is an industry benchmark which finds that buildings require major renovations and renewal after 35 years of use. A look at Penn State's distribution of building space by gross square feet and the decade in which buildings reached the 35-year benchmark highlights the problem. In the 1970s, about one million gross square feet of space reached the 35-year benchmark. By the 1980s, an additional 2 million gross square feet of space reached 35 years of use. During the |
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| 1990s, this doubled to 4 million. In the next 10-year period, an additional 5 million gross square feet will reach the
point where major renovation and renewal projects are required. Over the last several years, the University has provided additional funding for major maintenance. Since 1996-97, $4 million has been allocated, bringing the total permanent budget for major maintenance to approximately $10.5 million. More needs to be done, however, to address the major maintenance backlog. For 2001-2002, additional support of $1,000,000 is included for deferred maintenance. Capital Improvement Program Over the next decade, Penn State's progress will be linked significantly to the quality of the facilities that are available to carry out its educational programs. Increasing numbers of students and faculty, changing technology, more interdisciplinary programs, and a growing research program have led to a serious space problem for the University. Insufficient or inadequate space has become a serious impediment to a growing number of academic programs. The State capital funds already approved will not be sufficient to meet the University's most critical needs. As a result, the University has established an ongoing general funds budget, funded by a portion of the tuition rate increases, to support this program. Over a six-year period, this investment will allow the University to incur an additional $180 million of debt for capital construction and renovation projects over and above what might be received from the Commonwealth. It also will provide the |
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associated operating expenses for facilities that will
be built from these funds. A total of$4,418,000 is included in the budget plan for 2001-2002
as the third year of this program.
Libraries, Computing, and Telecommunications The budget plan includes a total of $2,000,000 for libraries, computing and telecommunications. These funds will help to maintain library resources, which are essential to the quality of the University's academic programs, and help the University keep pace with rapidly expanding student computing and telecommunications needs. A proposed $15 per semester increase in the student information technology fee will provide the needed funds. |
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Academic Initiatives and Other Program Needs |
| enrolled in IST baccalaureate and associate degree programs at University Park and 18
other campuses. The School has been successful in attracting top scholars in
the information sciences. This past Fall, there were 14 IST faculty members at
the University Park campus and 58 full- and part-time faculty members at other
campus locations who are participating in the delivery of IST
programs. The IST Solutions Institute has been developed within the School to be the driver of higher education institutional cooperation around the Commonwealth. In addition, the Institute will focus on knowledge transfer, business solutions, and educational program development and delivery. The School's leadership has met with leaders of |
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| over 60 higher education institutions in Pennsylvania resulting in a portfolio of articulation
agreements, cosponsored events and statewide faculty development efforts led by Penn State.
Seven certificate programs in IST have been developed that are
accessible to all Pennsylvanians through the classroom and on the internet
through Penn State's World Campus. Internships have been developed with
companies in the Commonwealth and private fund-raising efforts are well under
way.
Penn State received a grant of $4.5 million in 1999-2000 for base support for the new School. These funds were provided through the Commonwealth's Higher Education Technology Program, which was administered through the Pennsylvania Department of Education. For 2000-2001, these funds have been included as a line item in Penn State's appropriation. With student interest greatly exceeding expectations and the growing opportunities to serve business, industry and governments, additional funds are needed to enable the School of |
| Information Sciences and Technology to meet its tremendous potential. For 2001-2002, the University is requesting that an additional base appropriation of $4,000,000 be provided for IST. These funds will be used to support a wide array of initiatives, such as the addition of faculty to provide educational opportunities for our students at both University Park and other campus locations; the development and delivery of IST courses on the Web; and, partnering with Pennsylvania businesses, State government, and non-profit organizations to bring information technology-related problems and IST solutions together. In addition, planning has begun to build an eGovernment Research Education Center focused on information and information technology issues faced by governments in the 21st century. This would be an inter-disciplinary effort that |
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would provide support for research on governing in a digital-based, global
economy. It also would be a focal point for providing education and training to
state and local governments in Pennsylvania on the challenges of an eWorld.
Penn State's College of Medicine and The Milton S. Hershey Medical Center are truly statewide resources. Since its first graduating class 29 years ago, more than 3,000 physicians and 500 scientists have graduated from the College. Student interest remains exceptionally strong, with 6,000 applications for an entering class of 100. It is recognized by U.S. News and World Report (March, 1999) as one of the top medical |
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schools in the country for primary care, which includes family practice, general internal medicine, and general pediatrics. The College of Medicine is the only academic health center
in Pennsylvania not located in an urban area, and the only one between
Pittsburgh and Philadelphia. The Hershey Medical Center has the only children's
hospital in central Pennsylvania, serving the needs of more than 3,000
critically ill children each year. It is the only level-one trauma center and
the only poison control center in the region. These services would not be
available to residents of a large part of the state without the expertise of
physicians associated with the College. |
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| Table 1 - Summary of 2001-2002 Budget Plan and State Appropriation Request |
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