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February 4, 2016

Chancellor addresses lack of appropriation

As is typical this time of year in Harrisburg, the governor is preparing to deliver his annual budget address and appropriations hearings are being scheduled for the upcoming fiscal year.

Atypical, however, is that Gov. Tom Wolf is scheduled to make his fiscal year 2017 state budget proposal next Tuesday while the fiscal year 2016 budget has yet to be resolved. It’s now more than seven months overdue.

And, as leaders from Pitt and its fellow state-related universities prepare to testify March 24 in FY17 budget hearings before the House and Senate appropriations committees, Pitt, Penn State, Temple and Lincoln universities have yet to receive their expected appropriations for the fiscal year that began last July 1.

Appropriations bills for Pitt and the other state-related schools failed to receive the required two-thirds majority in votes in the House last month.

“I never thought I’d still be talking about this,” Chancellor Patrick Gallagher said in his Jan. 20 report to Senate Council.

“The reason we don’t have an appropriation isn’t really because they’re in disagreement about funding. In fact we continue to hear consistently that the support is there for the types of increases to our budget that we’re looking for,” Gallagher said.

“What is the case, however, is there’s widespread disagreement on other aspects of the main budget,” he said. “We are in some ways a pawn at this point.

“We remain in a very uncertain time with regard to when this is going to be resolved.”
For months, University leaders had delayed approval of Pitt’s own budget, but moved ahead in December with a budget based on last year’s funding levels.

Then in January, the administration approved the 2016 salary pool distribution. (See Jan. 21 University Times.)

“We were waiting on passing a University budget until we knew what was going to happen in Harrisburg. We decided that strategy no longer made sense.

“We were operating, in essence, without our own budget guidelines,” Gallagher said.

Pitt has asked for $168 million in general support from the state in the upcoming fiscal year 2017, which begins July 1. In addition, Pitt is seeking $8.12 million for the School of Medicine; $7.13 million for Western Psychiatric Institute and Clinic (WPIC); $955,000 for the dental clinic; and $370,000 for the Center for Public Health Practice, which is funded through the Department of Human Services budget, for a total of $184.56 million. (See Oct. 15, 2015, University Times.)

Overall, the University’s request represents an increase of nearly 10 percent over the $167.95 million in state support it is seeking for the current FY16. (See Oct. 9, 2014, University Times.)
Gallagher told Senate Council: “If you’re wondering how do we continue to operate without $140 million (to date) in appropriations, it’s really a testament to the fact that Pitt has been managed well. And in fact, we have cash reserves that were designed to absorb blows like this.”

He added: “What I don’t want people to misunderstand is that that’s the same thing as being able to not need it. What we are in fact doing is eroding our longterm financial health to cover this. In fact the goals that the state wants most — namely, affordability for in-state students and the University to play a key role in supporting the economic vitality of the commonwealth — are not things that we can do (with funding) popping up and down. So this loss of longterm financial support from the state actually has real consequences.”

Said Gallagher: “I still remain dumbfounded that we’re still talking about this but still optimistic that we’ll end up okay once this larger political discussion about the size of the state budget and the nature of it is resolved.”

—Kimberly K. Barlow

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