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March 16, 1995

Governor's budget has smaller than expected hike for University

In his first budget address as governor, Tom Ridge on March 7 proposed what he called a "student-based" 3 percent funding increase for higher education in Pennsylvania.

But for Pitt and the other state-related and state system universities, increases would be less than 2 percent. And to receive that extra money, schools would have to meet the terms of Pennsylvania's Tuition Challenge Grants Program — that is, holding fall 1995 tuition hikes to 4.5 percent for full-time, in-state students.

Based on a formula of roughly $100 per full-time Pennsylvania student, Pitt's state appropriation would increase by $1.93 million, or 1.34 percent, if the University participates in the Tuition Challenge Grants Program.

Under Ridge's proposed budget, Pitt would receive no increase next year in its current appropriation of $144,360,000 if the University opts out of the challenge grants program. The current fiscal year ends June 30.

Pitt and the other state-funded universities would benefit indirectly if the state General Assembly approves Ridge's recommendation of a 17.3 percent increase in grants to students through the Pennsylvania Higher Education Assistance Agency. The PHEAA increase, the other major component of Ridge's 3 percent funding hike for higher education, is significantly higher than the 10 percent increases that were annually awarded under former Gov. Robert Casey.

Ridge said the PHEAA increase will allow the maximum student grant amount to grow by $100 to $2,700 per year and will enable 162,000 Pennsylvania students to obtain college scholarships, 10,000 more than this year.

Also in his budget proposal, Ridge recommended eliminating all institutional line items and awarding schools a lump sum appropriation. "For years," the governor said, "state government has funded state universities line item by line item and dictated each individual funding priority. Who in Harrisburg should make spending decisions for these institutions? In my mind, no one. Let the schools decide." Thus, Pitt's proposed $144,360,000 appropriation is equal to the sum of funds currently earmarked here for educational and general expenses, disadvantaged students, the medical school, the dental clinic, Western Psychiatric Institute and Clinic, Services for Teens at Risk, the Center for Public Health Practice, and Rural Education Outreach.

University administrators had assumed Pitt would get a 6 percent increase in state funding when they announced plans in October to limit tuition hikes to 3.5 percent this fall. Pitt could choose not to participate in the Tuition Challenge Grants Program and increase tuition by more than 4.5 percent — but that's unlikely, said Dennis McManus, director of Pitt's Office of Commonwealth Relations.

In Ridge's proposed budget, the pool of money set aside for the Tuition Challenge Grant Program has been cut by more than half, from $31.7 million in the current year to $15.2 million, McManus noted. "Even so, if one university opts out of the program the rest of the schools, presumably, would divide the pool of funds. So if you don't participate, you're probably doing the other universities a bigger favor than you're doing yourself.

"But the real reason it's not realistic to opt out of the program is that the Tuition Challenge Grants money gets carried over into your base budget for subsequent years. So it [choosing not to participate in the program] is not a decision that just affects a single year," McManus said.

Chancellor J. Dennis O'Connor and other Pitt senior administrators will testify in Harrisburg before the state Senate appropriations committee on March 28 at 10:30 a.m. in the Senate Majority Caucus Room in the state capitol building. The administrators also will plead Pitt's case before the House appropriations committee April 3 at 2 p.m. in the House Majority Caucus Room.

At both sessions, McManus said, Pitt officials will argue for an increase in the University's base budget and for a change in the Tuition Challenge Grants Program to include part-time students. Pitt enrolls a higher percentage of part-timers than most other state-funded universities do. The challenge grants program shortchanges Pitt by awarding money to schools based solely on the number of full-time students they enroll, McManus said.

— Bruce Steele

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