October 08, 2015
State System Board of Governors approves 2016-17 appropriation request
Contact: Kevin Hensil, khensil@passhe.edu
Harrisburg – The Board of Governors of Pennsylvania’s State System of Higher Education—seeking
the restoration of deep funding cuts made five years ago and new investment to support
operational enhancements at the state’s 14 public universities—today agreed to ask
the state for an appropriation of $521.2 million next year.
The System’s annual appropriation was cut by more than $90 million in 2011-12 as the
Commonwealth struggled through the throes of recession. Since then, the System has
been funded at the reduced level for four consecutive years. It has not received an
increase in state funding in seven years, and last year received essentially the same
amount as in 1997-98—17 years ago.
“This is not a typical budget request,” said Ronald G. Henry, chair of the Board’s
Finance, Administration and Facilities Committee. “We have the chance to fundamentally
change the way we approach this issue, and this is the first step.”
Even though the State System has not yet received its current fiscal year appropriation
because of the absence of a 2015-16 state budget, it is required to submit next year’s
appropriation request to the Governor’s Budget Office by the end of this month. The
submission is the first step in what usually is a nearly year-long budget process.
The Governor presents his budget proposal, which includes his recommendation for funding
for the State System, to the Legislature in February.
As a result of the flat or reduced state support combined with declining enrollments—largely
the result of a smaller number of high school graduates in the state—the State System
universities are facing severe fiscal challenges. The universities rely almost solely
on student tuition and fees along with the state appropriation to fund their operations.
While revenues have been stagnant, many of the System’s costs continue to rise, despite
the universities’ significant efforts to become more efficient, which has resulted
in nearly $300 million in expenses being trimmed from their combined budgets over
the last decade. Healthcare and pension costs continue to rise faster than the rate
of inflation and are expected to go up again next year by a combined $22.5 million.
Pension contributions alone, which are mandated by the state and for which—unlike
K-12 school districts—the System receives no additional funding, are projected to
increase by 21 percent.
Assuming the State System receives a $433 million appropriation this year, the funding
total still would be about $70 million less than what was received in 2010-11. Projected
mandatory cost increases for next year would add another $37.2 million to the budget
shortfall, without factoring in any salary increases for any State System employees.
All seven of the System’s labor contracts—which, combined, cover about 87 percent
of its employees—are either expired or will expire by June 30, 2016. If any of their
successors include wage or salary increases, the System’s projected deficit would
grow even higher.
The appropriation request approved by the Board today includes additional funds to
support both operational enhancements at the universities as well as potential changes
in employee compensation.
Board approves four new flexible pricing pilots
The Board approved new flexible pricing pilots proposed by Mansfield, Shippensburg,
California and Edinboro universities.
Under its pilot program, Mansfield University of Pennsylvania will offer all incoming
undergraduate students a guarantee their tuition will not increase for four years
or eight semesters. Tuition will be charged on a per-credit basis rather than the
current flat rate. The tuition guarantee represents a “new approach” in the State
System,” according to Henry.
“This is an ambitious program,” he said. “It is linked inextricably with a very aggressive
enrollment management effort. This is very different from anything else we have seen
before.”
Shippensburg University of Pennsylvania will switch from a flat rate to a per-credit
charge for in-state, undergraduate tuition. Both universities will provide need-based
financial assistance to students who might see their tuition costs increase as a result
of the pilots, both of which will begin in fall 2016.
The Board also approved separate proposals submitted by California and Edinboro universities
to revise certain student fees. Cal U will switch to a per-credit charge for its academic
support fee, which is now levied at a flat rate for full-time students, and Edinboro
will charge a new course-specific instructional fee for students enrolled in certain
high-cost, high-demand science, technology, engineering, mathematics and health courses.
The Board began approving the flexible pricing pilots in January 2014. They are proposed
by the universities on a two- or three-year trial basis. The pilots will be evaluated
during that time to determine their effectiveness. If successful, the pilots could
be continued, and even duplicated at other universities. If not, they could be redesigned
or discontinued.
Board recognizes Kutztown University’s 150th anniversary
The Board unanimously adopted a resolution recognizing the 150th anniversary celebration
of Kutztown University of Pennsylvania. The school was founded in 1866 as the Keystone
Normal School, established by the residents of the East Penn Valley to train teachers.
It became Kutztown State Teachers College in 1928 and Kutztown State College in 1960.
In 1983, with the founding of Pennsylvania’s State System of Higher Education, it
became Kutztown University of Pennsylvania. KU today is a comprehensive university,
comprising four colleges—Business, Education, Liberal Arts and Sciences, and Visual
and Performing Arts—offering undergraduate and graduate programs to 9,000 students
in a wide range of studies, including a new Doctorate of Social Work.
Pennsylvania’s State System of Higher Education is the largest provider of higher
education in the Commonwealth, with about 107,000 degree-seeking students and thousands
more who are enrolled in certificate and other career-development programs. Collectively,
the 14 universities that comprise the State System offer more than 2,300 degree and
certificate programs in more than 530 academic areas. Nearly 520,000 State System
university alumni live in Pennsylvania.
The State System universities are Bloomsburg, California, Cheyney, Clarion, East Stroudsburg,
Edinboro, Indiana, Kutztown, Lock Haven, Mansfield, Millersville, Shippensburg, Slippery
Rock and West Chester Universities of Pennsylvania. The universities also operate
branch campuses in Oil City (Clarion), Freeport and Punxsutawney (IUP), and Clearfield
(Lock Haven), and offer classes and programs at several regional centers, including
the Dixon University Center in Harrisburg and in Center City in Philadelphia.