| PENN STATE'S 2002-03 BUDGET PRIORITIES |
| Penn State's budget priorities for 2002-03 reflect anticipated increases in the University's basic operating costs, plus four high priorities for potential progam investment. Details of these priorities are presented below: |
| BASIC
OPERATING COSTS Salary Adjustments Comparisons with other Big Ten universities and 22 public universities participating in the American Association of Universities Data Exchange (AAUDE) show that Penn State's average faculty |
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| salaries have slipped substantially
since 1995-96. Because of continued concerns about the competitiveness of Penn
State's salaries, the University has adopted a multi-year plan to reduce the
gap which currently exists between Penn State's faculty salaries and those at
peer institutions. The budget plan for 2002-03 will need to include salary
adjustments in the 4 to 5 percent range in order for Penn State to avoid losing
even further ground in its faculty salary rankings. Employee Benefits Nationally, health care costs are projected to increase 15 to 20 percent in 2002-03. Penn |
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| State is anticipating a 15 percent increase in the costs of health care for next year. In addition, continued growth is anticipated in the number of employees participating in the TIAA/CREF retirement program. | |
| Graduate Assistants and Fellows
Health Insurance Over the past several years, Penn State has made a number of improvements to the support provided to graduate assistants and fellows. Beginning in 2002-03, the University will increase the health care coverage for graduate assistants, graduate fellows, and their spouses and families to provide equivalent coverage to that currently offered to full-time faculty and staff. Increasing health care coverage to graduate assistants and fellows is necessary if the University is to continue to attract the best graduate students. |
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New Facilities/Fuel/Utilities Additional funds must be budgeted for the maintenance and operation of new or newly renovated facilities and for modest fuel and utilities cost increases for 2002-03. Included are the new Career Services Building, the Pasquerilla Spiritual Center, and classroom and laboratory renovations at University Park. Maintenance and operating funds also will need to be provided for the Franco Building addition at Penn State Berks, the addition to the Multi-Purpose Building at Penn State Delaware, the Administration Building at Penn State |
| Beaver, and the Student Union Building at Penn State McKeesport. |
| Deferred Maintenance The increasing maintenance needed by Penn State's aging physical plant is a critical problem. Currently, the University has a backlog of deferred maintenance projects totaling approximately $200 million. Penn State has 1,274 buildings at all campus locations, 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 1970's, about one million gross square feet of space reached the 35-year benchmark. By the 1980's, an additional 2 million gross square feet of space reached 35 years of use. During the 1990's, 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, $5 million has been allocated, bringing the total permanent budget for major maintenance to approximately $12.0 million. More needs to be done, however, to address the major maintenance backlog. |
| 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. Lack of space to accommodate students and faculty, changing technology, more interdisciplinary programs, and a growing research program has led to a serious problem for the University. Insufficient or inadequate space has become |
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| 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 associated
operating expenses for facilities that will be built from these funds. Fiscal
year 2002-03 will be the fourth year of this program. |
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| Libraries, Computing and Telecommunications A proposed increase in the student information technology fee will provide needed funds 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. |
| Internal Budget Reductions and Reallocations As part of the new three-year strategic planning process, the University will continue a program of internal budget reductions and reallocations for 2002-03. This will be the eleventh consecutive year that an internal budget reduction and reallocation process has been in effect. The academic colleges and support units at all locations will be required to reduce their operating budgets by a minimum of one percent in each of the next three years. For 2002-03, the budget reductions will generate $7,640,000, with $5,640,000 available for reallocation within the individual units to areas of high priority need. The additional $2,000,000 will be used to help cover basic operating cost increases university-wide. |
| Academic Initiatives and Other Program Needs The University plans to continue its multi-year commitment to fund four academic initiatives of strategic importance to the Commonwealth and the University B the Life Sciences, Materials Science, Environmental Studies, and Children, Youth and Families. In addition, a modest amount of new funding will need to be provided for other high priority program needs of academic and support units. |
| Student Activities An estimated $126,000 will be generated from a $1 per semester increase in the student activities fee at participating campuses. These funds will be made available to each campus for allocation by its campus student activities fee committee. |
| PROGRAM INVESTMENT PRIORITIES |
| Information Sciences and Technology Penn State's School of Information Sciences and Technology (IST) opened its doors to its first class of nearly 500 students in 1999-2000. Since then, the development of the School has been nothing less than remarkable. For the Fall Semester 2000, over 1,200 students were enrolled in IST baccalaureate and associate degree programs at University Park and 18 other campuses. This fall, IST enrollment is at nearly 2,200 students, with 82 faculty members across 20 campuses. Approximately 1,000 Pennsylvanians are enrolled in the School's certificate programs, 350 students have served as interns in Pennsylvania companies and over 400 instructors and faculty from Commonwealth schools (K-12) have been trained in the use of technology for teaching and learning through the School's very successful "Faculty Academy." |
| Additionally, the School also has an impressive portfolio of partnerships and agreements with other Commonwealth higher education institutions. The IST Solutions Institute has been developed within the School to be the driver of that higher education institutional cooperation around the Commonwealth. The Institute provides IST with the ability to focus on on-line learning, knowledge transfer, business solutions, and executive education program development and delivery. |
| Penn State received $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. In 2000-01, these funds were included as a line item in Penn State's appropriation, and supplemented by $812,000 in 2001-02. |  |
| With student interest greatly exceeding expectations and the growing opportunities to serve business, industry and governments, additional support is needed to enable the School of Information Sciences and Technology to meet its tremendous potential to serve all | |
| Pennsylvanians. New funds would be used to support a wide array of initiatives, such as: the addition of faculty, staff, and infrastructure to provide educational opportunities for students across the Commonwealth; the development and delivery of IST courses on the web, including a new Executive Masters Program for Pennsylvania executives who cannot leave the workplace; and partnerships with Pennsylvania businesses, State government, and non-profit organizations to bring together information technology-related problems and IST-based solutions. |
| In addition, planning has begun to build an eGovernment Research and Education Center focused on information and information technology issues faced by governments at all levels in the 21st century. This will be an inter-disciplinary and intercollege effort that will provide support for research on governing in a digital-based, global economy. It also will be a focal point for providing education and training to State and local governments in Pennsylvania on the technology and management challenges of an eWorld. |
| Agricultural Research and Cooperative Extension For Agricultural Research and Cooperative Extension, additional support is needed to restore lost programming capacity and to provide support for areas of high priority for Pennsylvania=s agricultural community. High priority areas include the following: |
| Enhancing Profitability in Animal Agriculture - Animal-based agriculture, the most significant segment of Pennsylvania agriculture, is a major segment of the State=s economy. Increased funding will support critical research and extension programs in areas such as nutrient management, animal nutrition, cropping systems, and enterprise and labor management. |
| Protecting Water Resources - Fresh water is acknowledged as the fundamental resource issue | |
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that will affect all people and communities in the future. An increase in base support will maintain and enhance research and educational programs in watershed stewardship, wetlands management, groundwater chemistry, hydrology, nutrient management, and stream water quality. |
| Improving Forest Management and Use of Wood Products - An increase in base support will ensure the University's ability to provide | |
| research and extension programs addressing the value-added processing and marketing capabilities of Pennsylvania's forest-based businesses, to provide service to private landowners for improved forest management, and to develop practical solutions for improved forest health and regeneration. |
| Guarding Against Invasive Species - West Nile encephalitis, plum pox virus, Asian long-horned beetle, foot and mouth disease and mad cow disease are names that have been in the news lately. A common feature of all five is that they are not native to Pennsylvania or the United States. Pennsylvania agriculture is a global business, and the world continues to shrink through increased opportunities for international travel. Therefore, the Commonwealth faces increasing risks due to invasive pest species. Invading species target production agriculture, such as plum pox, avian influenza, mites decimating honey bee populations, and a variety of weed species. More and more invasive pests affect human health and environmental quality: West Nile, Asian long-horned beetle attacking urban trees, pathogenic microorganism strains in food supplies, and zebra mussels in the Great Lakes and their tributaries are prime examples. The University has responded quickly in the past year with effective research and extension programs on several of these invasive species issues. An increase in base funding is greatly needed to maintain these programs and enhance capacity to respond to new, unforeseen threats. |
| All of the above program priority areas will include 4-H and Youth programming opportunities. The well-being of children, youth, and families is essential to the well- being of our society, now and in | |
| the future. Resilient families and capable youth provide for a strong workforce and vital community. Additional support will help maintain the capacity of the University and the College of Agricultural Sciences to support 4-H and Youth programs. |  |
| Program, operational, and infrastructure support will be a priority use of these funds. Also, funds will be used for selected hires to refill key | |
| positions. Increased state appropriations have a substantial leveraging effect on the University's ability to continue to attract federal grants and other funds that bring dollars back to Pennsylvania to support its agricultural and natural resource economy. | |
| College of Medicine 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 nearly 6,000 applications for an entering class of 120. It is recognized by U.S. News and World Report (March, 1999) as one of the top medical 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 a urban area, and the only one between Pittsburgh and Philadelphia. The Milton S. 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. |
| The College of Medicine has been the provider for the statewide Area Health Education Centers (AHEC) program since its inception in 1994. Penn State coordinates eight regional groups around the state to facilitate the recruitment and retention of primary care providers in under-served communities. These efforts demonstrate Penn State's unique commitment to build education programs in the health professions, including medicine, nursing, and allied health in every corner of the state. In addition, the College of Medicine produces the largest number of practicing primary care physicians of any medical school in the Commonwealth. The College is aided in this effort by a grant from the Robert Wood Johnson Foundation. |
| Historically, the College of Medicine has received a much smaller share of its operating budget from Commonwealth appropriations than have similar University medical centers in other states. | |
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Penn State's appropriation for medical education ranks 75th out of 75 public medical schools in the United States. The average appropriation for the other medical schools in this group is more than $40,000,000. As a result, Penn State's College of Medicine has had to rely on support from hospital clinical operations to provide support for medical education. |
| Nationally, academic health centers are facing severe fiscal constraints brought about by the Balanced Budget Act of 1997, which resulted in declining | |
| reimbursements from Medicare and Medicaid, and from changes in managed care. At The Milton S. Hershey Medical Center, as at other academic health centers, the teaching hospital can no longer support the College of Medicine from clinical revenues. Penn State is asking that the Commonwealth recognize this crisis in medical education and provide significant increases in operating support for the College of Medicine over a period of years. | |
| Workforce Development - Pennsylvania College of
Technology Additional support is needed for the Pennsylvania College of Technology to assist in providing educational and training programs that reflect the latest available technology. This would enable students to develop their skills in a learning environment reflective of that in the contemporary workplace. It also would facilitate a much needed updating and expansion of certain College programs, equipment, and facilities. Some of the programs which would benefit from additional funding are Civil Engineering Technology, Surveying Technology, Plastics and Polymer Technologies, and Collision Repair and Automotive Technology. |
| The Pennsylvania College of Technology continues to demonstrate its leadership in the area of hands-on technical education, especially in new and emerging fields. Additional funding would enable the College to upgrade its academic offerings in technical fields that provide both associate and bachelor's degree programs, and continue to ensure the College's place as a leader in training the workforce for Pennsylvania's future. |
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| Inside and Back Cover Pictures |
| Summary of 2002-03 State Appropriation Requst |
| Return to Table of Contents |