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February 15, 1996

Governor proposes almost no Pitt increase

Pitt would receive virtually no increase next year in its current state appropriation of $147,265,000, under Gov. Tom Ridge's proposed budget.

"It's almost a totally, totally flat budget," Pitt Governmental Relations director Ann Dykstra told the University Senate budget policies committee on Feb. 9, three days after Ridge outlined his proposed budget for the fiscal year that begins July 1.

Under Ridge's proposal, the only additional funding Pitt would receive next year would be an as-yet undetermined amount of money through a proposed new information technology program called the Pennsylvania Education Network. PEN is aimed at creating a network of voice, video and data communications that would link Pennsylvania's public K-12 schools, intermediate units, community colleges, public universities and public libraries.

Ridge proposes dividing $21 million in PEN funds during the next three years — $7 million per year — among Pennsylvania's four state-related universities (Pitt, Penn State, Temple and Lincoln), the 14 state-owned universities of the State System of Higher Education, and community colleges. The money would fund research and work on a strategic plan for PEN.

"Right now, we don't know what they [state officials] are planning to do with this program or how they plan to utilize the public universities," Dykstra said.

Except for the PEN money, state subsidies to higher education would be frozen next year except at Penn State, which would get $762,000 more for agricultural research and services. Penn State originally was to have received the money this year, but it was left out of the final 1995-96 budget.

A major change in Ridge's proposed budget for next year is the elimination of the Tuition Challenge Grants Program, under which state-owned and state-related universities have received extra funds as a reward for capping tuition hikes at a level designated by the state. This year, Pitt got an extra $3.25 million above its base appropriation in exchange for keeping tuition increases to 4.5 percent.

If the state House and Senate agree to eliminate the tuition cap plan, it would be "a sweet and sour victory" for Pitt, Dykstra said. Ever since then-Gov. Robert Casey introduced the plan in 1990 (it was suspended during FY 1991-92), University administrators have argued that the plan is unfair to research universities like Pitt that enroll large numbers of students who are not full-time, in-state undergraduates. Although the funding formula has changed over the years, the Tuition Challenge Grants Program has always failed to take into account that graduate and professional education costs more to provide than undergraduate programs, Pitt administrators say.

Without the tuition cap, Pitt would be free to hike tuition next fall as high as it wanted. But a major increase is unlikely at a time when Pennsylvania's state-funded universities already charge the second-highest tuition in the nation among state schools, and Pitt's Board of Trustees seems committed to minimizing tuition increases.

In its FY 1996-97 budget request, submitted to Harrisburg in September, Pitt announced that it intended to raise tuition next fall by 3.5 percent. But the 3.5 percent figure was based on two assumptions for next year: stable enrollment and a 6.8 percent increase in the University's current state appropriation.

Interim Chancellor Mark Nordenberg told the University Times: "Obviously, when one of the major parameters upon which planning is based [the state appropriation] has changed, you've got to go back and take a look at a combination factors, and what you may need to do to get where you want to be.

"I think it remains true that we would like to hold tuition increases to a modest level, if possible. It also is true that, with tuition levels already being high, the forces of the market themselves may limit what we can do." If Pitt raises tuition above 3.5 percent next fall, Nordenberg said, the decision will be made only after the administration has consulted with the same campus groups (the University Planning and Budgeting Committee, for example) that had input in setting Pitt's original budget goals last fall.

n How likely are the state House and Senate to endorse Ridge's recommendations for higher education? "At this stage, it's too early to project whether what we're looking at [Ridge's proposal] is the way things will stay," Dykstra said.

House and Senate Democrats have called the Republican governor's proposal "very austere" — even "mean-spirited," in reference to Ridge's proposed cuts in welfare and Medicaid. But Pitt's Harrisburg lobbyists have detected little support among legislators for significant funding increases for higher education, Dykstra said.

"The feeling is, this is a very tight budget year and there's very little flexibility" in distributing state money, she said. Because this is an election year, legislators are highly unlikely to increase state revenues by raising taxes, Dykstra pointed out.

Phil Wion, chairperson of the University Senate budget policies committee, noted that Ridge has proposed freezing funds for basic K-12 education as well as universities. "So if there is any increase for higher education, there would likely have to be an increase for basic education too," Wion said.

Ridge also proposes no funding increase for grants to students through the Pennsylvania Higher Education Assistance Agency. Last year's budget provided a 17.3 percent increase for PHEAA.

Dykstra said she sees three positive signs in Ridge's budget: * Elimination of the tuition cap plan (although the governor and Legislature could always revive it in future years).

* Ridge's budget seems to be based on a worst-case scenario of sharp cuts in federal funding to Pennsylvania. Whatever budget ultimately is approved for next year, it probably won't be any worse for Pitt than the one Ridge has proposed.

* Ridge seems to give priority to public universities, rather than lumping state-supported schools together with private universities that receive state funds. In fact, Ridge is proposing a two-year phase-out of the $70 million the state appropriates annually to the University of Pennsylvania, Drexel and several other private universities. In his budget address, Ridge said: "When we are hard-pressed to fund state and state-related universities at the level we would like, it was simply not possible to defend a $70 million appropriation to a fraction of Pennsylvania's private universities." The bad news is that Ridge does not propose to reallocate the private schools' funds to state-supported schools, Dykstra said. It's uncertain even whether the governor would succeed in permanently cutting off state funding for the privates. Gov. Casey cut state appropriations to those schools by 50 percent in 1992, but heavy lobbying by the schools helped convince state lawmakers to restore nearly all of the funding within two years.

n Pitt and the other state-funded universities likewise plan to do some aggressive lobbying for higher appropriations, Dykstra said.

"It would be easy for us to throw up our hands at this point. But if anything, we need to work even harder to get the message out about the value of higher education to Pennsylvania," she said.

On Jan. 13 in Harrisburg, some 70 Pitt alumni pleaded the University's case during a breakfast meeting attended by an equal number of senators and representatives from their districts. Alumni had phoned their legislators to invite them to the meeting. Helping to organize the event were Pitt's offices of the Chancellor, Alumni Relations and Governmental Relations, and the Institutional Advancement division.

Interim Chancellor Nordenberg and other Pitt officials are scheduled to testify before the state House appropriations committee on Feb. 27 at 3 p.m., and the Senate appropriations committee on March 5 at 2 p.m. Both hearings will be held in the Majority Caucus Room, 140 Main Capitol Building.

On Feb. 2, four days before Ridge released his proposed budget, the governor met in Harrisburg with the heads of the state-related universities and the State System of Higher Education. Also attending were Penn-sylvania's secretaries of budget and education, and Ridge's chief of staff and principal policy adviser.

"The general messages emerging during that meeting were encouraging," Nordenberg told Pitt's Senate Council this week. According to Nordenberg, the state leaders said they believe higher education will play a vital role in Pennsylvania's future, and expressed satisfaction with the universities' responses to challenging times. The state officials also pledged to maintain a "continuing dialogue" with university leaders throughout the year rather than perpetuating the current practice of springing the governor's budget recommendations on them with little warning, Nordenberg said.

"The fact remains, however, that the [governor's proposed] budget is not particularly attractive" for higher education, Nordenberg said.

"He [Ridge] and the members of his administration have clearly indicated that they think they have done what they can for higher education this year," the interim chancellor said. "At the same time, they fully understand that those of us who are advocates for higher education will continue to push for more in discussions with them and in our dealings with the Legislature." In a written statement issued last week, Nordenberg pointed out that Pennsylvania's support for higher education has steadily declined during Pitt's 30 years as a state-related school. "In terms of per capital support, Pennsylvania now ranks near the very bottom of the 50 states. As a result, our public universities already operate at a distinct competitive disadvantage. Under the recently released funding proposal, that situation will only worsen," Nordenberg said.

"During this same period, Pennsylvania's universities have clearly and consistently demonstrated their value through their important contributions in teaching, research and service. Even in pure economic terms, the Commonwealth's investment has generated extremely good returns. The University of Pittsburgh, to give just one example, annually 'imports' sponsored research funds well in excess of its state appropriation.

"The University of Pittsburgh will continue to pursue every reasonable economy in its operations," Nordenberg continued. "At the same time — working with my colleagues at Lincoln, Penn State, Temple, and the State System of Higher Education — I also will continue to advance the case for increased support for higher education."

— Bruce Steele

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