For next year’s budget, Governor Josh Shapiro is proposing flat funding for state-related universities, including Penn State. But a new performance-based funding system could add to that, bringing more state dollars to those schools.
Shapiro is proposing $60 million for the new Performance-based Funding Council to distribute between Penn State, Temple University, and the University of Pittsburgh.
“We’ve finally started to fix the problem that I identified in my first budget address of universities competing against each other for limited dollars and ultimately driving up costs for students," Shapiro said during Tuesday's budget address to the General Assembly.
Penn State has received flat funding from the state since the 2019-20 fiscal year. Last year, Shapiro proposed a 5% increase for the state-relateds, but eventually agreed to flat funding for the 2024-25 fiscal year.
“And for the first time ever, we’re going to incentivize outcomes, paying our universities for their performance in meeting goals like graduating students with in-demand degrees and skills, graduating first generation college students, incentivizing universities when their graduates stay and work in Pennsylvania," Shapiro said.
The performance-based funding council has to present its recommendations for funding guidelines to the governor and legislature by April 30.
Shapiro is also proposing a $40.4 million increase to the Pennsylvania State System of Higher Education and its universities, and a $13 million increase for the state’s community colleges.
Several state Republicans are criticizing Shapiro's $51.5 billion budget proposal for the 2025-26 fiscal year, which is a 9% increase over last year's budget.
“To say I find the governor’s proposed spending amount alarming would be an understatement," said Rep. Martin Causer, who represents Cameron, McKean and Potter Counties. "If enacted, this plan would fully deplete the state’s surplus funds and would again dip into the Rainy Day Fund."
A final agreement on the state budget is due by July 30.
