October 09, 2014

State System Board of Governors approves 2015-16 appropriation request

Contact: Kevin Hensil, khensil@passhe.edu

“A year without a tuition increase would be really beneficial to students and their families,” Todd Garrett, a Board member and student at Clarion University of Pennsylvania, said during the discussion on the request.

The State System is receiving $412.8 million from the state this year, which will support about one-fourth of its 2014-15 operating budget—down from nearly two-thirds two decades ago. The percentage of the budget covered by the state appropriation has declined steadily as costs continue to rise. Major cost increases next year, as they have been in the past, will be in the areas of healthcare and pensions, which combined will total about $30 million. Pension contributions are mandated by the state, for which the System receives no additional funding.

Combined with other anticipated cost increases and revenue reductions, the System’s overall operating budget will rise by almost $50 million next year, perhaps more. That is the amount the Board is seeking in increased funding from the state.

“This request is intended to begin the conversation with our partners in the executive and legislative branches on how we can reinvigorate higher education in the Commonwealth of Pennsylvania,” said Board of Governors Chairman Guido M. Pichini. “We look forward to working with them for the benefit of our students and the betterment of the State System.”

The State System has not received an increase in its state appropriation in seven years and is receiving essentially the same amount of funding this year as it did in 1997-98—17 years ago.

Despite level or reduced state funding over most of the last decade, the Board has limited annual tuition increases in order to assure the cost of attending any of the State System universities remains affordable. During that same time the universities reduced their costs through various measures by about $270 million.

“Our universities have made significant strides in becoming more efficient while making certain they are continuing to meet the needs of students and the Commonwealth,” said Chancellor Frank T. Brogan. “We look forward to continued conversations with our friends in the General Assembly and the Governor’s Office on the vital role our universities play in Pennsylvania and the appropriate level of support for the State System.”

The appropriations request approved by the Board is the first step in the annual budget process. It will be submitted to the Governor’s Budget Office later this month. The Commonwealth’s 2015-16 general fund budget, which include the State System’s appropriation, must be approved by June 30, 2015.

The Board approved a proposal submitted by Lock Haven University of Pennsylvania to allow its Council of Trustees to authorize a new per-credit fee to help support high-cost/high-demand courses the school’s Associate of Nursing program. The new fee of approximately $85 per credit would be phased in over two years beginning next fall.

Because of clinical supervision requirements, nursing courses feature a low student-to-faculty ratio, which increases their cost. The new fee would be applied to all nursing courses. Once implemented, it would be reviewed annually and adjusted as necessary.

The Board since January has approved 19 flexible pricing proposals submitted by various universities. The universities can submit proposals to adjust their tuition rates and/or certain fees charged to students under two-year pilots. The programs will be evaluated over the two-year period to determine their effectiveness. If successful, the programs could be continued, and even duplicated at other universities.

The Board endorsed three construction projects at Bloomsburg University of Pennsylvania, including the replacement of Waller Administration Building, with the new facility becoming a “one-stop” shop for students, housing both admissions and student services in addition to other administrative functions.

The university initially planned to renovate the building, but has since revised its plan to replace it entirely. The new building will be larger and will cost about $37.5 million. About $25 million in state capital funds were previously approved for the project. The university also plans to construct a $6.1 million addition to Andruss Library to house the police department as well as the campus communications center and alternate computer backup equipment.

The Board also agreed to provide bond financing to support the construction of a new 394-bed on-campus residence hall at Bloomsburg. The campus bookstore and a dining area will be located on the first floor of the proposed seven-story, $61.4 million facility. The university already has $7.2 million on hand for the project; the remainder of the project cost will be financed through the System-backed revenue bonds.

The Board approved a proposal by Slippery Rock University to reduce the scope of its new performing arts center project and apply the remaining funds to a new project.

The revised plan reduces the proposed size of the addition to Miller Auditorium and calls for the renovation of the East/West Gym to provide necessary theater and dance program space eliminated by downsizing the performing arts center addition. The changes will reduce the project cost by about $3.7 million. The savings are expected to be used to construct facilities to support the safety management program.

The 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 operates 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.