Penn State To Pay Half Of Certain Employees’ Salaries Through June 30, Cut All Budgets By 3%

After incurring more than $100 million in losses since March and preparing for an additional $160 million, Penn State is taking a series of steps to mitigate its losses due to the coronavirus pandemic, as announced in a letter from University President Eric Barron published on Thursday afternoon.

As part of the cuts, Penn State will reduce the salaries of employees unable to perform their job during the coronavirus pandemic by 50% from May 4 to June 30.

These employees will continue to receive their benefits based on their adjusted salaries and are expected to be eligible for unemployment and stimulus support. The university said there are too many uncertainties at the moment to make projections beyond June 30, but it will continue to assess circumstances. A university spokesperson said they estimate 2,000 employees, mainly within auxiliary units and Office of Physical Plant, would be impacted.

Barron said the university doesn’t plan on further furloughs or layoffs through at least June 30, but said similar actions may need to be taken in the future.

Last month, the university committed to paying all employees’ salaries until at least April 30.

Additionally, all education and general fund budgets across the university are being cut by 3% for the upcoming fiscal year. The university is leaving how these reductions are handled in the hands of deans, chancellors, vice presidents, and their leadership teams and made a point to clarify there may still be some related job impact.

Other announcements included a pause on several capital projects (which is estimated to save nearly $60 million), the intention to work with the Board of Trustees to freeze tuition, and plans to hold another town hall in the coming weeks. Barron has committed to donating 10% of his own monthly salary to the Employee Assistance or Student Assistance funds and is encouraging other senior leaders to make similar contributions.

A majority of the losses have come from a lack of funds generated by the Nittany Lion Inn, Penn Stater Hotel and Conference Center, campus events like concerts, and fees for room and board as well as reduced state appropriations. In addition to the full slate of financial cuts, Penn State is set to receive approximately $55 million from the federal Higher Education Emergency Relief Fund as part of $14 billion in support for postsecondary education students and institutions. 

“It pains me to have had to deliver such hard news, and I know you have many questions,” Barron said. “We must be realistic, yet optimistic. It is my hope that this crisis is a short-term shock to our economy and way of life, similar in some ways to a natural disaster. We are a world-class university, with diversified research and educational capabilities, and poised to thrive in our marketplace – both now and in the long-term.”

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About the Author

Anthony Colucci

Anthony Colucci was once Onward State’s managing editor and preferred walk-on honors student who majored in psychology and public relations. Despite being from the make-believe land of Central Jersey, he was never a Rutgers fan. If you ever want to know how good Saquon Barkley's ball security is, ask Anthony what happened when he tried to force a fumble at the Mifflin Streak. If you want to hear the story or are bored and want to share prequel memes, follow @_anthonycolucci on Twitter or email him at [email protected]. All other requests and complaints should be directed to Onward State media contact emeritus Steve Connelly.

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