Trustees approve budget for upcoming fiscal year

The University's expenditures will pass the $3 billion mark for the first time ever next year, as the University Trustees approved an operating budget of $3.048 billion for Fiscal Year 2000 at last week's annual summer meeting. The figure marks a 6.2 percent increase from last year's operating budget of $2.871 billion. Of that amount, $1.329 billion -- up from last year's $1.284 billion -- is allotted for the academic budget and will be divided among Penn's 12 schools. Still, the academic budget for the upcoming fiscal year -- which begins July 1, 1999 -- constitutes only 44 percent of the University's total operating budget. The Health System was allotted 56 percent, or $1.908 billion, of the University's budget. The operating budget is calculated separately from the University's capital budget which, with a total of $173.6 million, will help fund projects like the upcoming renovations to Gimbel Gymnasium and the construction of a new, state-of-the-art biology facility. Although undergraduate tuition and room and board charges will hit an all-time high of $31,592 in the upcoming fiscal year, the 3.7 percent increase in total student charges is the lowest to date, as the University continues to provide the least expensive education in the Ivy League. "The trend for us, like our peer institutions, is to restrain the rate of increase," University Budget Director Mike Masch told the members of the Budget and Finance Committee at last Thursday's meeting. According to Masch, the 6.2 percent increase in the operating budget is largely attributed to the "growth of research funding." Included in the list of organizations that provide funding for University research is the National Institute of Health and the National Science Foundation. The University is expecting research funding to account for 25 percent, or $332 million, of the academic budget's total revenue. An additional 35 percent of the entire academic budget will be provided by tuition and fees. The government will reimburse the University at a rate of 58.5 cents per research dollar granted, a small decrease from last year's rate of 59 percent. The rate was once as high as 65 percent in 1990, but Masch attributed its recent decline to increasingly stringent governmental regulations about which costs are reimbursable. Academically, 71 percent of the entire academic budget will be spent on the programs of the University's 12 schools. Another 11 percent of the budget will provide for other administrative service centers such as Human Resources, Public Safety and Computing. The Medical School will receive approximately $312 million, or 33 percent, of the $944 million allotted to the academic schools. The School of Arts and Sciences, meanwhile, will receive $208 million, or 22 percent, of that amount. And the capital budget, as always, has significantly more money set aside than the University actually plans to spend. According to Vice President for Finance Kathy Engebretson, the capital plan for the upcoming fiscal year includes $64 million for projects that are just now seeking approval and an approximate $230 million for projects that had been approved in previous year's plans. Only $212 million is likely to be spent this fiscal year on capital projects. The new biology facility -- which is expected to use $45 million of the capital budget -- is one such example of new projects that have not been factored into previous budget expenditures. An additional $20 million will be appropriated to the Gimbel Gymnasium renovations and another $12,950 will go to the renovation of the Johnson Pavilion. Engebretson attributed last year's significantly larger capital budget of $308 million to the "double-counting" of certain projects. She said that in the past, many individual proposals and developments were repeatedly accounted for in consecutive budgets.

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