Penn State employee salary increases delayed as state budget process remains unfinished

With the delayed state budget process in Harrisburg, Penn State employees expecting salary increases might have to wait a little longer than anticipated.

According to the university, because it cannot receive state funds until lawmakers finish their budget process, it will “temporarily” hold off on general salary increases and its compensation modernization initiative — which would change pay structures — so it can support in-state tuition discounts that state appropriations would otherwise fund. Any future general salary increases would still be retroactive to July 1.

Penn State’s full board of trustees approved a university operating budget Friday afternoon that includes 3% pools for general salary increases. State Rep. Seth Grove, R-York, the House Minority Appropriations chairman, said Thursday he doesn’t expect the state budget to move until October “at the earliest.”

Penn State officials acknowledged the move was “disappointing.”

“We value our employees, and we are cognizant that this temporary delay in funding for GSI and the compensation modernization initiative is disappointing,” Jennifer Wilkes, vice president for human resources, said in a written statement. “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.”

Once lawmakers conclude the state appropriations process, Penn State has said it will provide more information about salary increases and funding for compensation modernization, an effort that began in 2020. New salary bands with updated job classifications will then be shared with employees.

Under lawmakers’ latest proposal, Penn State would receive a general support appropriation — which helps lower the cost for in-state students — in the amount of $259.3 million, a 7.1% increase over the previous year. The land-grant university would also receive about $104 million in other appropriations. (Penn State’s operating expense budget for 2023-2024 is $9.5 billion.)

“We are in continued conversations with the legislature, and we remain hopeful that state leaders will pass our funding bill with the increase that Gov. (Josh) Shapiro has proposed, as this funding is vital to students and families across Pennsylvania,” Penn State President Neeli Bendapudi said. “Despite not knowing what our appropriation will be, university operations must be maintained, which is why we are moving forward with our budget as planned — with the caveat that some critical steps must wait so that we can meet our commitment to our Pennsylvania resident students.”