Appropriations committee hearing focuses on proposed cuts

From Penn State Newswire:

In the face of a proposed state budget that would see funding for Pennsylvania's public universities cut by more than 50 percent, Penn State President Graham Spanier, along with the leaders of Temple University, Lincoln University and the University of Pittsburgh, appeared before the state Senate Appropriations Committee March 16 to make the case for continued state support for the commonwealth's state-related institutions.

Sen. Jake Corman, chairman of the state Senate Appropriations Committee, asked the university leaders about the effects such a broad cut would have on their institutions. Overall, Pennsylvania Gov. Tom Corbett's budget proposes more than $660 million in cuts to institutions of higher education. The cuts proposed for Penn State alone represent a decrease of $182 million, or 52.4 percent, in state funding.

The proposed appropriation cut would represent a decrease of about 17 percent of Penn State's overall instructional budget; the money is largely used to help offset to cost of tuition for Pennsylvania residents. Spanier reminded the committee that state-related universities have not contributed to the current budget deficit, since state appropriations have remained stagnant for the past decade even as other areas of Commonwealth of Pennsylvania spending continued to rise.

"We're all very mindful of the state's current budget situation, and we do expect to be part of the solution," Spanier said. "I'm not sure it's fair to say, however, that we are part of the problem in this respect: our appropriations in actual dollars have been flat over the last decade. We have not contributed to the state's deficit because our appropriation has not increased since 2000."

The presidents all said that they would not turn to tuition increases to primarily deal with appropriation cuts, yet the reductions would result in some level of higher tuition for in-state students, potentially pushing the cost of education at Pennsylvania's state-related universities out of reach for some students and families already stressed by student-loan debt. At Penn State, Spanier said the proposed cut would result in program cuts, layoffs, salary freezes and other measures.

"It is not true that any of us would unduly raise tuition, even under the most dire circumstances, as the principal way of remedying a shortfall in our appropriation," Spanier said. "Of course tuition would need to increase, but we could not put that great a burden on the backs of our current and prospective students."

Mark Nordenberg, chancellor of the University of Pittsburgh, called the scope of the proposed cuts "stunning."

"The proposed cuts are deep, they are disproportionate, and they are damaging to some of the most productive institutions in the commonwealth of Pennsylvania," he said. "I do think that this proposal ought to be a concern for everybody who cares about the next generation of Pennsylvanians and for everybody who cares about the shape of Pennsylvania's economy as we move into an increasingly competitive century."

Spanier said Penn State agricultural research and Cooperative Extension would be particularly hard-hit by a $29 million cut to their appropriation. In agriculture alone, he said, the workforce would be cut by about 440 positions, or 50 percent. That would surely mean a severe cutback in the breadth of services currently provided by Cooperative Extension to the state's agriculture industry.

"These are not made-up numbers, these are not numbers designed to shock people; these are actual projections. We've had to get very specific in the last few days because if this budget goes forward as it is now on July 1, we have to operate with a balanced budget just as the commonwealth does, and the numbers are very dramatic. Agriculture is just in one of the colleges of our University. There are ripple effects that would go out across the entire institution with appropriation reductions of the sort that we are looking at."

"We are prepared to do our fair share. We have never said differently. But I don't believe that a decrease in our appropriation at this level would constitute anyone's idea of what is a fair share for some of the state's greatest resources -- our public institutions of higher education."

Sen. John Rafferty Jr. asked about the impact on the state's economy if the proposed cuts were to stand. Penn State alone generates about $17 billion in direct and indirect economic activity in Pennsylvania every year. Spanier said the cuts would affect the University's ability to continue that output. Penn State brings in about $800 million in research funding annually, much of which comes from outside of the state, through grants.

"Each $1 million of research funding creates about 30 jobs within Pennsylvania," he said. "From an economic development standpoint, we make significant contributions."

In addition to jobs created by the influx of research funding, the majority of Penn State's graduates, and the graduates of the other state-related institutions, work in Pennsylvania when they graduate, and many who leave eventually return, contributing further to the state's economic well being.

"On the programmatic side, we are the principal producers of college graduates -- 18,000 graduates a year from Penn State, the majority of them taking jobs in Pennsylvania. Our contribution to the tax base, our contribution to economic development, our research activity with 750 different companies throughout the commonwealth -- these are all things that could be affected and could really erode the investment that the state has made in Penn State and in all of our public institutions historically."

Between the four state-related institutions about 150,000 students are educated each year.

Sen. Lisa Boscola said that while she supports many of the cuts proposed by the governor's budget, the reductions proposed for higher education are unfair and disproportionate. Boscola asked the panel about the percentage of students who stay in Pennsylvania after graduating from a state-related institution. Boscola said it is her hope that the final budget will find ways to keep more graduates in Pennsylvania.

Spanier said more students would stay if employment opportunities were available. He also said many return later in life. "Many of the students who at age 22 leave Pennsylvania to work elsewhere do ultimately come back after they've gotten some experience. That number is almost completely dependent on what job opportunities are out there for them. To the extent that the Universities can contribute to the economic strength of the commonwealth of Pennsylvania, we will keep even more of those graduates," he said.

Corman said the March 16 hearing represents a beginning to the Senate Appropriation Committee's budget discussions. He said he expects to stay in contact with the leaders of the commonwealth's state-related universities as the June 30 budget deadline approaches.

"It isn't new for higher education to take the brunt of budgetary problems. I don't know another line item in the budget that has (remained stagnant) over the last 8 years," Corman said. "This proposal has sort of shocked the commonwealth in a lot of ways ... I think by finally elevating higher education to this level, now the public is going to get engaged and hopefully put higher education at a higher level of priority for our budget."

The legislature will continue its hearings with other recipients of state funding and will work in the coming months to finalize the state budget.