Don’t blame state budget cuts for rising tuition at public universities

[Gator88NE]

All it takes is a visit to Penn State’s website, to see that they label themselves “Penn State-A Public Research University Serving Pennsylvania and the Global Community”.
http://www.psu.edu/

For the purposes of this thread (State funding of public universities), I would think that’s good enough.

The university is considered “state-related” because it gets about 6 percent of its $4.1 billion budget from the state, but operates independently.

When Universities want to increase tuition or gain more independence from the state legislature, they love to down play the contribution from the state, by comparing the appropriations to the overall budget. However, that overall budget includes revenue from hospitals, other services, research, etc., that play no role in funding undergraduate education.

When looking at state appropriations, it’s useful to compare it to tuition revenue. Those two items make up the largest portion of an university “Operating budget” which is used to fund education, salaries, etc. Note that the following tuition revenue numbers include all sources, including grad and professional schools.

The PSU system, Tuition revenue is $1.5B, while the state appropriations are $225M.

At PIT, Tuition revenue is $765M, while the state appropriations are $154 (FY16)

At Alabama, Tuition revenue is $477M, while state appropriations are $148M. (FY16)

At OSU, Tuition revenue is about $867M, while state appropriations are $359 million

https://budget.psu.edu/BOTJuly/BoardDocuments%2016-17/2016-17%20Proposed%20Operating%20Budget.pdf

http://www.rpia.ohio-state.edu/cfb/docs/FY16%20Operating%20Budget.pdf

While state appropriations make up a smaller % of the operating budgets at PSU and PIT, it’s still significant.

And northwesty makes a good point about pensions. If Penn State faculty and staff aren’t state employees, how is it that they participate in Pennsylvania’s State Employees Retirement System (SERS)? States don’t normally open up their state employee pension systems to “private” entities.

This is another source of state funding (funding of retirement benefits) that doesn’t show up in the university operating budget. However, it’s substantial. For example, in Illinois:

Illinois has the worst-funded pension systems in the nation, with a shortfall at $111 billion and counting. More than half the $4 billion in state higher-education appropriations go toward the pension and retirement costs of university and college workers, the Illinois Policy Institute says.