Penn State President Graham Spanier sent out an email blast to all faculty and staff after a budget containing a 19% cut to the university’s appropriation was passed by the State legislature. The budget now only awaits signature by Gov. Tom Corbett.

Dear Colleagues:

I am writing to thank all of you for your support and patience these past few
months as we have waited for a decision about our appropriation for the fiscal
year that begins on Friday. Everything considered, I hope most of you will
feel some degree of relief about where we ended up, though we still have
challenges ahead.

Even in the midst of a cut in state support of this magnitude there must be
some thanks offered. First, we are very pleased to have a state budget and
Penn State appropriation completed on time. It has been almost a decade since
that last occurred in Pennsylvania. I want to thank the many legislators who
supported moderating the size of the cut originally proposed for Penn State.
The original $182 million proposed cut would have had more serious impacts on
our students and employees.

Most importantly, I want to thank the faculty, staff and all members of our
Penn State community for supporting efforts to keep Penn State strong and
moving forward. I have seen phenomenal cooperation from everyone at the
University across the Commonwealth. Together we have worked through
across-the-board and targeted cuts, and have worked jointly to implement the
initiatives to emerge from the Core Council process this past year.

Let me summarize where we stand. The House and Senate have enacted a new
budget for the Commonwealth of Pennsylvania, and Gov. Corbett is expected to
approve it.

In this new budget is a reduction of $68 million for Penn State, an overall
decrease of 19.6 percent. This cut is based on a 19 percent reduction in our
instructional, agricultural research and Cooperative Extension appropriations;
a 5 percent reduction for Penn College; and a 50 percent reduction in support
provided to the Penn State Hershey Medical Center. This is the largest cut in
state support for the University in our history and takes us back to what our
appropriation was in 1995, when our enrollment numbered 19,000 fewer students
than it does today. Adjusted for inflation, of course, the purchasing power of
our appropriation is only about half of what it was 16 years ago.

One of the promises we made immediately after the governor’s original 52.4
percent appropriation cut was proposed was that Penn State would not put the
loss of state support principally on the backs of our students and their
families. We intend to keep that promise. The Board of Trustees will meet on
July 15, and we will ask for their approval of a balanced budget for the new
fiscal year that includes modest tuition increases.

Over the past three months we have identified internal savings of nearly $30
million across the University. Other savings are being generated by the
implementation of our new health care benefits program. We have implemented
significant energy cost savings, cut funding for our capital improvement
program, identified savings for our property and liability insurance, and cut
back on funds for new programs. The elimination of our normal salary increase
this summer also generates significant savings.

I intend to look for ways to recognize employees during the year ahead for
your hard work and for your sacrifices. Additionally, our financial and human
resources staffs are working to re-structure employee contributions to health
care benefits so that many employees might see no increase or even a decrease
in their monthly premium contributions.

Despite our sacrifices and the environment of financial uncertainty, it
continues to be a very good time to be part of the Penn State family.
Applications to Penn State are higher than for any school in the nation. We
will have more than 120,000 applications this year. With almost $800 million
in research funding Penn State remains one of the nation’s key centers for
innovation. The rapid expansion in cutting edge health care and research
taking place at our Hershey Medical Center is saving lives. We educate more
returning adult students than any other institution in the state, many of whom
have jobs, spouses and families.

Our story of achievement is profound, and our stewardship of taxpayer and
tuition resources is commendable.

Penn State will continue to have a positive impact on the state and nation.
Thousands of employees like you are making life better for everyone. I feel
honored to work with so many talented, dedicated people. Please accept my
thanks for all that you do on behalf of this great University.

Graham B. Spanier