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January 5, 2017

Cut in FY18 state appropriation possible

The University is planning for the possibility of a cut in its state appropriation in fiscal year 2018 in response to bleak budget news from Harrisburg.

“This is going to be a rough year,” Chancellor Patrick Gallagher cautioned in his Dec. 14 report to Senate Council.

The state revenue department’s November revenue report showed fiscal year 2016-17 collections were below the official estimate by $261.8 million, or 2.4 percent. And state budget secretary Randy Albright, in a mid-year budget briefing last month, projected a state budget deficit of nearly $603.8 million by the June 30 fiscal year-end.

Pennsylvania Budget and Policy Center director Marc Stier predicted even larger gaps.

“While the current year deficit is a problem for the state, unfortunately it is not the biggest budget problem we face. The Independent Fiscal Office is projecting a 2017-18 deficit of $1.7 billion, which does not include the ongoing costs of higher human service caseloads, which might add $300 million or more to the total,” Stier said in a Dec. 15 statement following Albright’s budget report.

“All told, between the current year and next year, the General Assembly may need to close a budget gap that approaches $3 billion by June 30. And, as mandated costs grow faster than revenues, budget deficits in future years will approach that number as well.”


In addition to the growing state budget deficit, the Republican-held state legislature now has veto-proof majorities in both houses, Gallagher pointed out.

“This is going to change the dynamic between the legislature and the governor,” he said. “Everything we’re hearing either points to a major breakthrough on this revenue balance or a very bad budget year.”

Gallagher said, “In the spirit of ‘plan for the worst and hope for the best’ we will be factoring some of this into the (University) planning and budgeting committee to be appropriately conservative this year as we look at our planning horizon. I think that a state cut is something we’re actually going to have to contemplate, and then at the same time working hard to make a case for why” funding for the University should be maintained.

“The flip side of the same coin is: The top priorities we’re hearing from lawmakers is grow the economy and education,” Gallagher said.

Gov. Tom Wolf is set to present his FY18 budget proposal on Feb. 7.

Pitt has requested a 5 percent increase in its appropriation for the fiscal year that begins July 1: $154.11 million in general support, an increase of $7.34 million over the current $146.77 million. (See Oct. 13 University Times.)

—Kimberly K. Barlow 



Filed under: Feature,Volume 49 Issue 9

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