The Pennsylvania State System of Higher Education (PASSHE) would receive a record $483 million in state funding next year under Gov. Edward G. Rendell’s proposed 2006-07 budget.

The governor’s proposed spending plan, introduced today, includes the largest base appropriation in PASSHE’s history -- $465.4 million – an increase of $20 million, or 4.5 percent, over the current funding level. It also would represent the largest percentage increase for PASSHE in nearly a decade.

“The governor’s budget recognizes the vital role PASSHE and our 14 Universities play in the Commonwealth,” said PASSHE Board of Governors Chairman Kenneth M. Jarin. “We are grateful for the governor’s support and will work with the Administration and General Assembly throughout the budget process to help ensure the highest possible level of investment in PASSHE on behalf of our students and for the benefit of all Pennsylvanians.”

PASSHE’s Board of Governors in October submitted to the Governor’s Budget Office an appropriations request of $472 million to support its Fiscal Year 2006-07 base operating budget, an increase of $26.7 million, or 6 percent. The request would support an overall proposed operating budget of $1.24 billion. The annual state appropriation provides about one-third of the funds needed to operate PASSHE Universities. Student tuition and fees cover most of the rest.

PASSHE projects its overall costs to increase next year by about $57 million. The largest increases will be in the areas of salaries and wages and employee benefits. On average, union contracts that cover a majority of PASSHE employees will require an increase in salaries and wages of 5.9 percent next year, while the cost of providing employee benefits is expected to increase by more than 8 percent.

Growing enrollment also has added to the cost pressures facing PASSHE. Since 2000-01, enrollment at PASSHE Universities has increased by nearly 12 percent, with seven Universities reporting record enrollments in Fall 2005. Over that same time, PASSHE’s state appropriation actually has declined. The System will receive about $5.4 million less from the state this year than it did five years ago. Under Gov. Rendell’s proposed budget, the state funding level would reach an all-time high in 2006-07.

In order to balance their budgets through these challenging times, PASSHE Universities have become much more efficient, limiting expenditures and improving productivity levels to enable them to reallocate $163 million in cost “savings” to key program areas. Cost saving initiatives have included consolidating operations in areas such as administrative computing, employee benefits management, construction services and distance education; developing collaborative academic programs in nursing, urban education, math and science education, athletic training and foreign languages; and streamlining academic offerings and graduation requirements. Most recently, PASSHE began entering into strategic sourcing initiatives that are expected to save about $8 million over the next two years.

“Our Universities have worked extremely hard to maintain an affordable, high quality education for our students,” said PASSHE Chancellor Dr. Judy G. Hample. “We appreciate the support we receive from Governor Rendell and the Legislature to help enable us to achieve this important mission for the Commonwealth.”

In addition to the base appropriation request, PASSHE also is seeking separate funding requests totaling about $32 million to support a variety of initiatives, including performance funding, teacher education programs and diversity and equal opportunity efforts. Gov. Rendell’s budget proposes about $17.8 million to help fund those initiatives.

Dr. Hample will appear later this month and early next month before both the House and Senate Appropriations Committees to further discuss PASSHE’s appropriations request. At the conclusion of the hearings with PASSHE and other state agencies, the Administration and General Assembly will develop the final state budget, which must be approved by June 30, 2006 in order to take effect July 1.

With more than 107,000 students, the Pennsylvania State System of Higher Education is the largest provider of higher education in the Commonwealth. The 14 PASSHE universities offer more than 250 degree and certificate programs in more than 120 areas of study. More than 405,000 PASSHE alumni live and work in Pennsylvania.

The state-owned universities are Bloomsburg, California, Cheyney, Clarion, East Stroudsburg, Edinboro, Indiana, Kutztown, Lock Haven, Mansfield, Millersville, Shippensburg, Slippery Rock, and West Chester Universities of Pennsylvania. PASSHE also operates branch campuses in Clearfield, Kittanning, Oil City and Punxsutawney and several regional centers, including the Dixon University Center in Harrisburg.