“The events of the last two weeks, spurred by Gov. Tom Corbett’s proposed reduction of Penn State’s appropriation by $182 million, or 52.4 percent, has created a great deal of uncertainty and anxiety. In my press conference on March 9, I indicated that the impact of any funding reduction to the University would not be inordinately borne by any particular stakeholder. Most importantly, I want to re-emphasize that the funding gap that a reduced appropriation would create will not be filled solely with an increase in tuition.
We continue to work with legislators to determine if a moderation of this cut can be achieved. However, the final outcome is most likely still several weeks away, and we must begin to make some budgetary decisions for the fiscal year that will begin on July 1. I regret to report that our first specific action is to cancel our plans for our normal program of salary increases for faculty and staff on July 1. This is the second time in three years that I’ve had to ask you to assist the University in meeting serious financial challenges.
In 2009, you stepped up with a firm commitment to Penn State and were gracious in your reaction to this news. While I wish that circumstances were different, I must ensure that we remain a financially sound institution that stewards its resources in a responsible manner. Your sacrifices over the past two years helped us to weather the worst downturn in United States economic history since the Great Depression. I’m convinced that working together, we will do what is necessary to once again help Penn State deal effectively with another significant fiscal challenge. We will, of course, honor existing commitments made prior to this date and for promotions.
This is one of several key decisions that we will need to make in preparing our operating budget for next fiscal year. Provost Erickson, Senior Vice President Horvath and I will continue to consult with the Deans, Campus Chancellors, Vice Presidents/Provosts and the Faculty Senate leadership to review alternatives and evaluate the implications of potential decisions. The work of the Core Council, led by Provost Erickson, will take on even greater importance in light of these potential state funding cuts. In consultation with the Trustees, we have halted the start of several important capital projects until there is greater certainty in our overall financial picture for the coming year. I will keep you posted as our thought process evolves and as other decisions are finalized.
As I stated on March 9, Penn State has been and continues to be ready to do its part to help the Commonwealth repair its substantial budget deficit. Let me thank you in advance for your help in allowing us to respond to this latest financial challenge, and for your support of Penn State in all that you do.”
