Editor’s note: On July 21, the Penn State Board of Trustees voted to approve the University's operating budgets for both 2023-24 and 2024-25, as recommended by the Committee on Finance, Business and Capital Planning.
UNIVERSITY PARK, Pa. — During its meeting on July 20, the Penn State Board of Trustees Committee on Finance, Business and Capital Planning advanced operating budgets for the next two fiscal years that include 3% pools for merit-based general salary increases (GSI), as well as some initial funding to begin implementing the University’s compensation modernization initiative. The two-year fiscal plan will go to the full board for final consideration on July 21.
However, with the Pennsylvania General Assembly not yet approving 2023-24 appropriations for Penn State and the commonwealth’s other state-related institutions, the University in the short term will redirect funds from other sources to support the in-state tuition discount and maintain its commitment to Pennsylvania resident students and their families. As a result of this shift in resources, funding for general salary increases and the compensation modernization initiative will be temporarily placed on hold until Penn State’s appropriation is released.
The general support appropriation is used to provide a discounted in-state tuition rate that benefits more than 42,000 Pennsylvania resident students annually. Based on the University’s 2022-23 funding levels, the commonwealth provides approximately $5,750 per Pennsylvania resident undergraduate, an amount that Penn State significantly amplifies, providing each in-state undergraduate an average discount of $15,000 annually on tuition costs.
“We value our employees, and we are cognizant that this temporary delay in funding for GSI and the compensation modernization initiative is disappointing,” said Jennifer Wilkes, vice president for Human Resources. “I want to personally thank employees for their patience as the University navigates this challenge, which we hope will be short lived. As an institution of higher education and Pennsylvania’s flagship public university, supporting our in-state students is a priority and the right thing to do, but we also remain committed to supporting our employees and recognizing their hard work and dedication as soon as we possibly can.”
More information about GSI and funding for compensation modernization will be shared with employees after the state appropriations process concludes and the University’s state funding is known. At that time, new salary bands corresponding to the University’s updated job classifications will be shared with employees. General salary increases would be retroactive to July 1.
Additional details about the University’s operating budgets for the next two fiscal years, including details about GSI and compensation modernization, are available in this Penn State News story.
The compensation modernization initiative began in 2020 and has been a multi-year effort to modernize Penn State’s compensation and career structures related to staff positions. The project team and consulting partners have created a new compensation philosophy, updated job architecture, benchmarked staff salaries, developed comprehensive guidelines around pay, and implemented a communications and change management strategy.