Leaders of Penn State's board of trustees told the Faculty Senate Tuesday that, despite a delay in state appropriations this year they expect that funding to come through, but that pay raises for employees have to wait until then in part because of the "optics" of the situation.
The university’s 2023-24 budget includes money for units to give merit-based employee pay raises totaling 3%. While the board of trustees voted in July to approve the budget, the university announced pay raises would be delayed until the state legislature approved funding for Penn State. The state passed an overall budget, but funding for the state-related universities has not been resolved.
Speaking to the Penn State Faculty Senate Tuesday, Matt Schuyler, chairman of the Penn State board of trustees, said the delay is in part because the appropriation budget process this year is more contentious "and wrapped up, to some degree, in politics."
“This delay in part is simply because the appropriation was uncertain, and still remains uncertain, has not been validated," Schuyler said. "The ideas is to stick with the commitment that has been made. And now it’s just a matter of appropriation timing relative to fulfilling that commitment and back dating to the commitment date.”
The fiscal year started July 1. "We're sensitive to the appropriation aspects of this budget process, and that's the hold up," he said.
Several faculty members expressed frustration about the ongoing delay in pay raises, and that they’re tied to state funding. One noted that state allocations only make up a small part of the university’s budget. The university has an Education and General budget that includes teaching and research of $3 billion, and an overall budget of $9.5 billion. The university is slated to get $259 million in general state support, a 7% increase from last year, if the General Assembly approves it. In particular, the state Senate has not signed off on funding the state-related universities.
Schuyler pointed to several factors including college tuition being under scrutiny, a politically divided state legislature and the impact of the COVID pandemic.
“The algorithm is can we keep tuition modest to zero at a time where the legislature is wondering how to allocate dollars to education, and what are they getting back for it," he said. "Probably the last thing you want to do, just, speaking plainly, is say, ‘And by the way, We don’t care. We’re going to do raises for everybody. We don’t care what you have to say about the allocation.’”
Schuyler said it isn’t so much about how much of a nearly $10 billion budget is for employees' pay.
“It’s the overarching optics that go into this algorithm," he said. "And, it doesn’t take much for the legislature, right now so divided, to be antagonized. That’s the calculus.”
Board Vice Chairman David Kleppinger said in response to a question that there is no Plan B right now because indications are that the university ultimately will receive state funding.
"All of our intelligence from our government relations team is that that will happen. So, we haven’t thought about Plan B," Kleppinger said. "If that never happens, then we’ll have to look at other sources within the university, whether we pull reserves or whatever. But we’ve not had discussion of a Plan B, and I hope we never get there.”
