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July 9, 2009

State-relateds defend public status

Pennsylvania’s state-related universities have reacted strongly to Gov. Edward G. Rendell’s exclusion of Pitt, Penn State, Lincoln and Temple universities from the state’s application for federal economic stimulus funding.

In separate letters, Chancellor Mark A. Nordenberg and Penn State President Graham Spanier have asked U.S. Department of Education Secretary Arne Duncan to reject the state’s current request for state stabilization funds. Temple and Lincoln also have written Duncan to ask that the state-related universities be included in Pennsylvania’s share of the federal State Fiscal Stabilization Funds (SFSF).

University lawyers have outlined the precedents to back up the school administrators’ contention that they are indeed state institutes of higher education (IHEs) and faculty, staff, students, alumni and other supporters are being mobilized to lobby their state legislators to include the state-related schools in the federal funding.

University Senate President Michael Pinsky and Staff Association Council President Gwen Watkins told the University Times their groups support Pitt’s efforts to reverse the governor’s decision. “We agree with the chancellor as to the legal merits of our retaining public university status and the funds that would be derived from that status,” Pinsky said. “We also will aim to help as we can with related public support activities.”

Watkins said, “SAC is definitely in support. We totally stand behind the chancellor.”

According to federal Department of Education guidelines, states receiving funds under the American Recovery and Reinvestment Act’s (ARRA) SFSF program must maintain support for public IHEs in FY09, FY10 and FY11 “at least at the level of such support in FY 2006.” That requirement can be waived if a state can demonstrate that it has provided for the fiscal year “a percentage of the total revenues available to the state that is equal to or greater than the percentage provided for that purpose in the preceding fiscal year.”

The act also stipulates that governors use 81.8 percent of their federal allocation for the support of elementary, secondary and postsecondary education and to first use the funds to restore state support for such institutions “to the greater of the fiscal year 2008 or fiscal year 2009 level.”

Rendell indicated in March that a portion of Pennsylvania’s $1.9 billion share of federal stimulus dollars would be used to restore $42 million in cuts to the state-related universities’ commonwealth appropriations. An appropriations bill before the House appropriations committee includes $10.244 million in federal stimulus funding for Pitt.

However, the four state-related universities were not included in Rendell’s June 26 application for the federal funding. That application stated, “The commonwealth’s ‘state-related universities’ are excluded from all calculations for purposes of the State Fiscal Stabilization Fund. While these four institutions receive limited taxpayer support, they do so through a ‘non-preferred appropriation,’ which is defined as ‘an appropriation to any charitable or educational institution not under the absolute control of the commonwealth.’”

Other state schools, including community colleges and the 14 State System of Higher Education schools, receive their appropriations through the state’s general fund budget. Appropriations to non-preferred institutions are made in separate bills.

The implication that their schools somehow are not public institutions has stunned administrators both at Pitt and its fellow state-related universities.

The governor’s announcement “was a pretty big shock,” said Paul A. Supowitz, vice chancellor for Governmental Relations and associate general counsel. Noting that the University has “only one other source of discretionary income,” — tuition — he said the impact of the governor’s action on the University “would be dramatic.”

Supowitz said there is no question that Pitt is a public institution, citing the University’s lower tuition rate for in-state students as one indicator and Pitt’s less commonly used formal name, “University of Pittsburgh of the Commonwealth System of Higher Education,” as another.

In addition, 12 of the 36 voting members of Pitt’s Board of Trustees are commonwealth appointees, of whom the governor, the Senate president pro tempore and the speaker of the House each appoint four. The governor and the state secretary of education are ex officio members of the board.

Supowitz, who cited those points to Department of Education officials, said Pitt’s inclusion among the non-preferred appropriations is a function of Pennsylvania’s budget process and not a reflection on its public university status.

“Having the proposal out there to exclude us from the fiscal stabilization funds is not just wrong and inappropriate, having that rhetoric out there is harmful,” he told the University Times.

Nordenberg, in his July 1 letter to Secretary Duncan, pointed out that the four state-related schools serve some 123,000 Pennsylvania students in comparison to 101,000 enrolled in the 14 state-system schools. “The commonwealth’s recent attempt to exclude our four universities from the benefits of the State Fiscal Stabilization Fund program, then, would exclude the single largest block of public university students in Pennsylvania from the benefits of the ARRA.”

In a July 7 University Update to the campus community, Nordenberg stated, “We believe we have demonstrated in a series of submissions to the department [of Education] that the stunning declaration that Pennsylvania’s state-related universities are not public is contrary to well established law and is inconsistent both with earlier filings made by the commonwealth with the department and with other public statements by the commonwealth upon which our universities have relied.” He went on to note that the governor’s position “would undermine one of the key purposes of the American Recovery and Reinvestment Act — to ‘mitigate the need to raise tuition and fees for in-state students.’”

In his June 29 letter, Penn State’s Spanier cautioned Education Secretary Duncan that Rendell’s move attempts to set a dangerous precedent. “It is not in the governor’s power to arbitrarily redefine the legal status of institutions simply because he does not exercise ‘absolute control’ over them,” Spanier wrote. “If the department approves this application as it is written, it gives governors in every other state the ability to pick and choose which public institutions they may support with federal dollars.”

—Kimberly K. Barlow

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