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May 12, 2011

State cuts may not be as deep

House Republicans in Harrisburg are proposing a fiscal year 2012 state budget that would restore some of the education funding cuts proposed by Gov. Tom Corbett.

The House GOP plan, announced May 10, would restore state funding to Pitt and its fellow state-related schools to 75 percent of current-year levels and bring state funding for the 14 State System of Higher Education schools to 85 percent of current-year levels.

Excluding medical school funding, Pitt’s current appropriation includes $160.49 million in state money.

Paul A. Supowitz, vice chancellor for Governmental Relations, called the GOP budget proposal an “encouraging step,” adding that the University would continue making its case for funding as the state budget process progresses.

Corbett’s $27.3 billion proposed budget, presented in March, would cut appropriations for the state-related and state system universities by more than half.

The governor’s proposal for FY12, which begins July 1, would cut Pitt’s general appropriation to $80.245 million and eliminate nearly $17 million in medical school funding (see March 17, University Times). Under the governor’s proposal, Pitt’s reduced appropriation, combined with the loss of $7.5 million in federal stimulus money that will not be part of the FY12 budget, would add up to a cut of more than $100 million in government support.

While the House GOP proposal remains within the $27.3 billion boundary set by the governor, it would restore $387 million for higher education, including $195 million for the state system schools and $184 million for the state-related schools.

Supowitz said the new proposal reportedly restores some funding for medical school line items, although that could not be confirmed by press time Wednesday.

To restore some education funding without exceeding Corbett’s $27.3 billion limit, the GOP proposal would cut Department of Public Welfare funding by $471 million. DPW program lines would be cut by 4 percent — the estimated rate of error in those programs, GOP leaders said. “We are looking at rooting out waste, fraud and abuse in welfare because we think it has to happen,” said House Majority Leader Mike Turzai (R-Allegheny).

In a prepared release, House Republican appropriations committee chair Bill Adolph (R-Delaware), stated, “More savings were identified within DPW by instituting co-pays for transportation programs and adjusting child care program co-pays, increased use of generic drugs and the implementation of new welfare reform legislation that will reduce fraud and abuse in medical assistance programs. Projected growth estimates in some DPW programs were also revaluated and adjusted.”

Adolph added, “All general administrative department lines were initially reduced by 10 percent to more equitably distribute the fiscal impact caused by the loss of federal stimulus dollars. The Republican budget proposal also eliminates additional unfilled vacancies across all departments.”

In addition, the House GOP proposal would cut the legislature’s funding by $15.3 million, or 5 percent.

“The goal is to have an on-time, no-tax-increase budget without reckless borrowing, and that prioritizes spending and does so within the four corners of the governor’s blueprint,” Turzai said, adding, “Our timeline is to have this bill passed out of the House well before the end of May.”

Pennsylvania’s budget process calls for a budget to be passed by the legislature before the July 1 start of the fiscal year. The governor’s proposal is one step in the budget cycle. After the governor proposes a budget, House and Senate appropriations committees hold public hearings before a budget bill is presented. That bill may be amended before a final version is passed.

The state has received some positive financial news in recent weeks. General fund revenue collections for April were $273.2 million, or 9 percent, above estimate, bringing the current fiscal year’s collections to $505.9 million, or 2.3 percent, above estimate.

However, even a brightening budget picture supplies fodder for disagreement. While the governor wants to use any surplus to rebuild the state’s rainy day fund or pay down debt rather than increase the proposed $27.3 billion budget, some lawmakers would prefer to use the found money to pare down some of Corbett’s proposed cuts.

In the wake of the deep cuts proposed for higher education, tuition increases are inevitable, although university leaders have indicated that students can’t shoulder the full impact alone.

Administrators at some state-related and state system universities have announced some new or additional belt-tightening plans:

• In mid-April, presidents of the 14 state system schools warned faculty of possible layoffs in the upcoming academic year.

• Penn State put on hold several construction, renovation and building upgrade projects and offered voluntary retirement incentives to some faculty and staff. President Graham Spanier also announced a pay freeze for the coming fiscal year, warning employees that layoffs would be necessary.

• Temple President Ann Weaver Hart announced salary and hiring freezes, travel restrictions and a review of employee benefits as the university plans its FY12 budget. Temple also will seek to consolidate administrative support positions and look for potential partnerships with other institutions to save costs, Hart told employees in an April 30 memo.

In a press conference following the governor’s budget proposal, Chancellor Mark A. Nordenberg said, “Obviously the prospect of cuts of this size almost means that everything has got to be on the table.”

However, the University has not specified in detail what new steps might be taken to fill the budget gap. Examples of Pitt’s cost-saving measures to date have been compiled at, but future plans remain under wraps.

Pitt Associate Director of News John Fedele told the University Times, “The University has been preparing scenarios involving various levels of the commonwealth’s appropriation. When the appropriation has been determined, relevant aspects of our plans will be announced.”

—Kimberly K. Barlow

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