Penn State is bracing for budget shortfalls in the upcoming years and looking at options for managing them, as health care and other costs continue to climb and some enrollments flatten.
“We're seeing declines in Commonwealth campus enrollments, declines in graduate, declines in international. It's just coming at us from all different angles,” said CFO Sara Thorndike. Her comments came during the university administration’s annual “State of State” address.
She said the university has already made efforts to be more efficient, including centralizing some services and divesting of others that aren't central to Penn State's academic mission, among them the State College Regional Airport and WPSU.
The rising cost of health care and annual raises for employees are other factors.
Thorndike said all of that will add up to a budget shortfall of $200 million by 2030.
When you think about the cost of the annual salary increase at 3% and maintaining our current benefits and those rising costs, we're going to see more than a $200million reoccurring deficit just for personnel by fiscal year 30," she said.
Thorndike said the university will look to save money in areas like technology and software, travel and buildings.
“It's a tradeoff, but it's a really important tradeoff so that we can continue to keep our students here with great faculty and staff," she said.
Thorndike said about 70% of Penn State’s costs are personnel.
