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March 5, 2009

Stimulus funding could hike state appropriation

HARRISBURG—Following a last-minute financial reprieve from the governor, the top executives of Pennsylvania’s four state-related institutions acted a little like the doomed who had been spared the gallows at a hearing March 3 before the state House appropriations committee. But the four leaders and members of the committee agreed it was merely a temporary reprieve.

Chancellor Mark Nordenberg and his counterparts, Penn State’s Graham Spanier, Temple’s Ann Weaver Hart and Lincoln’s Ivory Nelson, testified before the appropriations committee for 90 minutes as part of the annual state budget-making process.

Earlier in the day, Gov. Edward G. Rendell announced he would direct $42 million of the state’s $1.9 billion share of federal economic stimulus funds to restore planned budget cuts to the state-related universities’ commonwealth appropriations for fiscal year 2010, which begins July 1.

Half of the $1.9 billion will be used in 2009-2010 and the remainder in 2010-2011, a governor’s press release stated.

The $42 million equals the combined cuts, ordered by the governor, that the state-relateds expect to absorb at the end of the current fiscal year.

Prior to passage of the federal stimulus package, Rendell, in his Feb. 4 budget message, had proposed a $160.5 million appropriation for Pitt — 6 percent less than the $170.73 million legislators approved last July. “Certainly, the stimulus bill does good for next year and the following year. But this looks to me like a stopgap measure,” said Dwight Evans (D-Philadelphia), committee chair. “It doesn’t solve your long-term problems,” he told the school leaders.

Rep. Bill Kortz (D-Allegheny Co.) added, “The stimulus goes away in a couple years and I’m afraid we’re just delaying the pain.”

While the chief executives all expressed gratitude, they agreed that Rendell’s measure does not do enough for institutions suffering from dwindling state support, especially in a depressed economy.

“We really are grateful that this additional revenue will be coming our way,” Nordenberg said. “What happens in the next two years is going to tell a good bit of the tale of what we’re able to do … down the road, because there is this cliff that we’re facing, and we need to find a way to climb out of the economic crisis and begin generating jobs and wealth and everything that goes into a strong economy.”

Spanier added, “Even with the governor’s announcement this morning that for 2009-2010 there would be no cut in our budget, but also no increase, it’s important for us to talk about what we’re going to do, because we do have inflationary forces operating. We already are having to make cuts across the whole university.” Penn State has announced more than 200 layoffs and frozen salaries and hiring.

Nordenberg announced this week that Pitt, which already had frozen most open position searches and limited travel and other expenses, is instituting a salary freeze for its employees. Temple and Lincoln also are taking belt-tightening measures, their respective leaders said.

The federal stimulus package provides some cause for optimism, Nordenberg said. “The president and the Congress have set a pretty clear direction. That stimulus bill provides for the biggest investment ever in research: $16 billion. That’s more than $10 billion to the National Institutes of Health, $3 billion to the National Science Foundation, $2 billion to the Department of Energy. The institutions before you are particularly well-suited to attract those dollars,” he said, noting that Pitt is No. 6 nationally in NIH funding and in the top 10 in science and engineering grants.

Pitt generates a return of $3.60 for every dollar of commonwealth appropriation, Nordenberg said. “It would be difficult to find anywhere a better leveraged investment.”

The four university leaders were less complimentary about the governor’s tuition relief plan, which would provide grants of up to $7,600 to some Pennsylvania college students, but not students from the state-related institutions.

Committee member Dan Frankel (D-Allegheny Co.), a Pitt trustee, commented, “It makes no sense to me whatsoever to be excluding the state-relateds in this situation. Tens of thousands of students are in the system and they are important.”

Nordenberg said that plan in effect causes in-fighting among Pennsylvania institutions.

“We ought to be in this together because we have enough battles to fight just dealing with the [economic] environment,” Nordenberg said. “I hope people understand, with respect to this tuition relief act that the governor has proposed, that when we fight about that, we’re really fighting for our students. Those are dollars that are going to be directed to Pennsylvania students and their families.”

For many of Pennsylvania’s most-talented students, the state-related institutions are the universities of first choice, he noted, a message he also shared with the Board of Trustees on Feb. 27.

“Why should they be left out? When you read the bill further and it says we need to prepare students for the jobs of the future, we’re strongest in the areas that are likely to be in demand in those jobs and, in fact, we’re generating many of those jobs through our research and technology transfer programs. We all want to be diplomatic and non-fighters, but we need to stick up for our students,” Nordenberg said.

—Peter Hart

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