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A plan to phase out funding for The Daily Collegian over the next two years is part of a broader financial belt-tightening to address deficit spending at Penn State and its branch campuses.
“As an institution, we have been spending more money each year than we bring in, which has put us in a vulnerable state,” Penn State President Neeli Bendapudi wrote in a campus memo. “Let me be very clear: At this moment, while the overall institution is not in a financial crisis, I do understand these changes will have a significant impact for some units.”
Penn State had projected a $140 million deficit in its $3 billion education and general funds budget for the fiscal year ended June 30.
As of July, that deficit had been pared to $63 million, university officials reported.
Penn State said it realized $27 million in savings from a universitywide hiring freeze, along with $17 million in health care savings. It also saw a $22 million increase in investment income and received a $12.1 million covid-19 relief grant from the state.
The university said it is in the process of closing the books for last fiscal year and will announce its final results in the fall.
Penn State is projecting deficits of $44.5 million this fiscal year and $34.1 million in 2024-2025.
“As units across the university work to balance their
budgets, they are considering delaying program launches, deferring purchases or improvements, eliminating programs, measuring attrition and unfilled positions, and restructuring, as well as considering new ventures to increase revenues. There are no plans for mass layoffs,” Penn State spokesman Wyatt DuBois said.
Despite the deficits and cost-cutting plans, Penn State is moving forward with some projects with hefty price tags.
Penn State’s president and others look to perform a $700 million renovation on Beaver Stadium, the longtime home of the Nittany Lions football team. Officials said the athletic department will pay for the project, which is expected to start in early 2025 and be completed over four years. No educational budget funds will be used, officials said.
This week, Penn State announced that the final steel beam had been placed on its $127.7 million Susan Welch Liberal Arts Building, which is scheduled to open in fall 2024. Most of the funding for the project is coming from the state, borrowing and capital reserves.
The new Palmer Museum of Art is set to open in spring 2024. Penn State conducted fundraising for the $85 million project.
Some Republican lawmakers have been critical of Penn State and other state-related universities such as Pitt and Temple for what they see as a lack of transparency and unwillingness to freeze tuition.
One of those lawmakers, state Rep. Eric Nelson, R-Hempfield, said Wednesday he at least lauds the university for trying to rein in costs.
“I don’t know all the details on specifics of where those cuts are impacting, but I do give Penn State and their new president credit for making some hard decisions that haven’t been made in a lot of university settings for years,” said Nelson, who has children attending Penn State.
University officials said Wednesday that efforts to meet budget targets are continuing.
“All units are continuing to work on balancing their budgets for the next two fiscal years,” DuBois said.
He said Penn State’s budget allocations will restrict spending cuts in the university’s units to 4% and spending increases to 4.6%.
Tuition for in-state undergraduate students is going up by 2% on Penn State’s main campus in each of the next two years but will be frozen for in-state students on branch campuses. That will increase the base in-state tuition on the main campus to $19,672 for undergrads.
Bendapudi has also made a case for what Penn State spends for legal education.
Under a university recommendation from the president last fall, Penn State’s two separately accredited law schools, Penn State Dickinson Law in Carlisle and Penn State Law at University Park, would be combined.
She and other leaders cited an “extremely competitive legal education marketplace” and a desire to better focus resources.
A statement endorsed by 42 of Penn State Law’s 51 full-time faculty members in the fall argued for continuing two locations.
“We recognize that there is a cost to having law schools in two locations, but given the development of Penn State’s two law schools, it has been proven that both have added value,” read a statement from the faculty.
It stopped short of asking the president to drop plans to bring the two separately accredited schools back together.
Meanwhile, the university’s board of trustees voted to stop providing money from the university’s general fund for The Daily Collegian by 2024-25. Funding will be cut to $200,000 this year, a 53% cut, and eliminated altogether the next year.
The move resulted in backlash, particularly from those who formerly worked at the 136-year-old publication that has produced a number of leading journalists.
Lisa Powers, a Penn State spokeswoman, said administrators and students are discussing the possibility of forming a news consortium with The Collegian and several other media outlets, including The Lion 90.7 FM and CommRadio, to create a more sustainable funding model.
She said the university has and will continue to support The Collegian, noting it placed the publication in a state-of-the-art newsroom inside the Donald Bellisario College of Communications. She said Penn State gave the publication ample time to adjust to the funding cut.
Bill Schackner is a Tribune-Review staff writer. You can contact Bill by email at bschackner@triblive.com or via Twitter .
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