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June 28, 2007

State budget in limbo

As Pennsylvania’s fiscal year comes to an end, it remains uncertain whether legislators will agree on a state budget before Sunday’s start of the new fiscal year. That, in turn, means the amount of Pitt’s appropriation for the coming fiscal year likewise remains in limbo.

Gov. Edward G. Rendell, in a press conference earlier this week, expressed his desire to wrap up the budget on time. While progress is being made in Harrisburg, there is no guarantee that the governor will get his wish.

“There’s lots of work to do,” said Pitt Vice Chancellor for Governmental Relations Paul Supowitz, who added that the legislature is moving forward on budget-related issues. He said he remains optimistic that if all continues as it has recently, a budget deal could be hammered out within a few weeks. The state House approved Rendell’s budget in May; the Senate’s version pared $300 million from the governor’s proposal.

“They’re making some progress,” Supowitz said.

University officials keep a close watch on state budget proceedings and the related appropriation that sets the state’s portion of Pitt’s budget. Currently, Pitt’s state appropriation accounts for nearly $183 million of the University’s $1.55 billion budget.

Unlike last year, when Rendell proposed a 4 percent increase for the state-related institutions, but the legislature upped that amount to yield a 4.7 percent increase in the final budget, Supowitz said moving legislators much beyond the governor’s proposed increase in Pitt’s appropriation would be an “uphill battle.”

While there are some unexpected bright spots — including the emergence of a larger-than-anticipated state budget surplus of $500 million-$550 million due to the strong economy, many legislators, including the Senate’s majority Republicans as well as many freshman legislators from both sides of the aisle, and others, have been supportive of a budget with no tax increases. That bent could make it tougher to expect the purse strings in Harrisburg to be loosened much further this year, Supowitz said.

In the University’s annual operating budget request, submitted last September, University administrators asked for $198.54 million for FY08, an 8.5 percent increase in state support. The bulk of the request was for E&G (educational and general expenses) funding of nearly $174.8 million.

In response, Rendell, in his annual budget proposal, allocated $167.86 million, an increase just shy of 2 percent.

Under Rendell’s plan, Pitt would receive $164.3 million in 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.

Rendell’s overall budget, presented to the legislature Feb. 6, totaled $27.3 billion, a 3.6 percent increase over the current fiscal year budget.

In a related issue, the state House on Monday approved a plan to establish the Jonas Salk Legacy Fund. The program would leverage some of the state’s tobacco settlement dollars to float $500 million in bonds that would support biomedical research and commercialization. Research institutions within the state would have to match Salk money dollar for dollar when competing for the funds. The plan awaits action by the Senate.

Pitt initially had withheld its endorsement of the program, but earlier this month Chancellor Mark Nordenberg, along with Penn State President Graham Spanier, visited Harrisburg to urge legislators to support a new version of the plan.

Key to the University’s turnaround was the addition of a provision that would allow institutions currently receiving tobacco settlement money to opt in or out of the Salk funding.

“It was an important change to the University,” Supowitz said, noting that Pitt felt strongly that the existing tobacco settlement distribution was effective.

In a May 23 letter to the governor, the chancellor stated, “Those provisions are important in that they allow an institution to make an informed choice at the appropriate time regarding participation in this new program.”

Detailed information on the Salk plan is available on the state Department of Community and Economic Development’s web site at

—Kimberly K. Barlow

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