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March 8, 2007

Tighten your belts, lawmakers tell university leaders

HARRISBURG — “Once you get yourself into a hole, it’s really hard to climb out,” Chancellor Mark A. Nordenberg told state House of Representatives appropriations committee members Feb. 27 as he testified about Pitt’s budget needs alongside fellow presidents of Pennsylvania’s three other state-related universities.

Later in the day Nordenberg reiterated the message to Senate appropriations committee members during hearings triggered by the release of Gov. Edward G. Rendell’s proposed budget.

The hearings are an annual part of the budget process, which begins with the University’s budget request in October, followed by the governor’s budget proposal in early February. Following appropriations committee hearings, the legislature hammers out a final budget — ideally before the fiscal year ends June 30, although political wrangling can drag a final vote well beyond the deadline.

Instead of the 8.5 percent increase in state support Pitt requested, Rendell’s proposal would give the University and its state-related counterparts increases of less than 2 percent — levels that Nordenberg said would affect compensation and tuition at Pitt.

Rendell’s proposal allocates nearly $687.5 million to the four state-related universities as part of a $27.3 billion general fund budget that shows an overall 3.6 percent increase.

Under Rendell’s plan, Pitt would receive $167.86 million, an increase of 1.96 percent over the current appropriation — $164.3 million in education and general (E&G) funding, $435,000 for student life initiatives, $442,000 for recruitment of the disadvantaged, $523,000 for the WPIC teen suicide center and $2.16 million for rural education outreach.

Pitt requested $198.54 million, including nearly $174.8 million in E&G funding for fiscal year 2008, which begins July 1, 2007.

Under the governor’s proposal, Penn State would receive $332.9 million, a 1.58 percent increase over current funding; Temple would get $172.9 million, a 1.99 percent increase, and Lincoln University would receive $13.8 million, a 2 percent increase. (See Feb. 8 University Times.)

In contrast to this year’s austere offering, Rendell got the budget ball rolling last year with a proposed 4 percent appropriation increase following Pitt’s request for 10 percent. The legislature boosted Rendell’s proposal to 4.7 percent in its budget, adopted July 2.

Citing budget cuts and freezes early in the decade, Nordenberg told the Senate committee that last year was the first time Pitt’s state appropriation returned to 2001 levels in absolute dollars. “Actually the purchasing power of our appropriation is about $18 million less than it was in 2001,” he said.

Noting that the 2 percent figure won’t equal the current rate of inflation, Nordenberg told the Senate committee the University will fall even further behind.

If additional state appropriations aren’t forthcoming, the chancellor said, Pitt could cut proposed new initiatives or pare existing ones. But, he added, “Obviously this has an impact on compensation pools no matter how deserving your people are.”

Nordenberg said appropriation levels would affect tuition, although he, like the heads of the other universities, avoided stating exact figures.

Legislators, who face a gaping budget hole and fear taxpayers’ ire, couldn’t promise to throw Nordenberg or his counterparts a rope.

In wrapping up the House hearing, appropriations committee chairman Dwight Evans (D-Philadelphia) said the committee hears the university leaders’ concerns and is sensitive to their needs. He pledged to “try to come up with a budget that somewhat strikes in the middle” of what’s been offered versus what’s been requested.

While not acrimonious, the Senate committee members were a bit less magnanimous.

“The squeeze is on,” said Sen. Mary Jo White (R-Franklin). “The public pressure out there for no increase in taxes is intense,” she said, adding that the proposed 2 percent increase should not be construed as an insult or a measure of legislators’ esteem of the universities. She indicated that she would be in favor of a higher appropriation if it were possible.

“We have conservatively a $1.5 billion gap in the budget and we’re talking a $27 billion budget,” said Senate committee chairman Gibson E. Armstrong (R-Lancaster). “That’s a big hole and there’s no one up here raising their hand to jump and raise taxes.”

Pitt-Johnstown alumnus Sen. John C. Rafferty Jr. (R-College-ville) suggested the universities pursue creative partnerships and scholarships with business to offset higher education costs. “You can’t keep coming to the state for more money, and you just can’t keep passing it on in tuition,” he said, adding that he fears the middle class is being priced out of the higher education market.

Sen. Patricia H. Vance (R-Camp Hill) said she supports higher education. But, she said, “We’re faced with a budget proposal with seven tax increases, fees and a lot more funding [requests]. We just cannot continue to do this.” Criticizing Penn State’s request for medical school funding that amounts to twice the 3.29 percent inflation rate, Vance said, “I think it’s terribly unfair for you then to say to your students and their parents from whom we hear, ‘Well, we’re going to raise your tuition because the state won’t give us any money.’ I think you need to step back and look at our position as well and not be unrealistic because we are really being clobbered by people who say, ‘Do not, do not increase our taxes.’ I think particularly the middle class has just about reached the saturation point that they can absolutely not afford any more.”

A first-timer to the proceedings, new Temple University President Ann Weaver Hart explained that higher education is a heavily personnel-based industry, with higher costs than other business sectors. “We have a combination of inflation pressures,” she noted. “We’re all working to cut overhead costs and do our business better.”

Senate committee vice chairman Robert M. Tomlinson (R-Levittown) told the administrators, “These are some very difficult budgets and we are trying to balance how much to raise taxes and how much do you have to raise tuition if we don’t give you the additional appropriation.”

Nordenberg replied that faculty members are feeling the same squeeze in federal budgets.

“To the extent that you have faculty who are expected to pay their own way at least in part through the grants that they procure, the competition is certainly far more intense because those revenue pools are not rising,” Nordenberg said. “It’s a tough time all the way around as we look at this next year.”

Emphasizing that the legislature harbors no animosity toward the universities, Sen. John N. Wozniak (D-Johnstown) told the administrators, “We know the challenges you face. We’re under budget crunches too. You’re probably doing the best you can, but just as we’re challenged to do more, I’m asking you and challenging you to tighten your belts.”

Following the hearings, Nordenberg reflected on the long day of testimony as “a sobering experience.”

“I do think that the people on these panels are being very genuine when they say they appreciate the quality and impact of Pitt and the other state-related universities,” the chancellor said.

“At the same time all of the signals we were receiving coming into these hearings indicated that this was going to be a very tough budget year. Certainly it would have been nice to get other signals today, but I think both from the House committee and from the Senate committee the consistent message was that we are going to be challenged to move beyond the recommendations made by the governor,” Nordenberg said.

“Obviously we’re going to work hard to add to the appropriation and of course these hearings are just the most public dimension of what really is a far more extended process. So now we’ve got weeks more of more private advocacy ahead of us.”

—Kimberly K. Barlow

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