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Government Affairs Update

September 6, 2011, Volume 58, No. 02

Penn’s Commonwealth Appropriation for FY 2011-2012

On June 30, 2011 the Pennsylvania House of Representatives (vote of 178-21) and Senate (49-0) approved Penn’s non-preferred Commonwealth appropriation bill (HB 1729) for FY 2011-2012. Governor Tom Corbett subsequently signed into law Act 12A of 2011. The bill provides a total of $28,137,000 in funding to the School of Veterinary Medicine for FY 2011-2012. This funding level represents a 6.2 percent decrease below last year’s amount. Administrative oversight for the appropriation has been transferred from the Department of Education to the Department of Agriculture.

Appropriations for other sectors of higher education were significantly reduced. Governor Corbett recommended reductions of 50 percent to The Pennsylvania State System of Higher Education and the four state-related institutions—Penn State, Pitt, Temple and Lincoln. The legislature restored much of their funding, but their final appropriations were reduced by almost 20 percent.

The General Assembly passed and the Governor also approved House Bill 1485, the FY 2011-2012 General Fund budget for the Commonwealth. HB 1485 includes approximately $3.2 million in funding in the Department of Public Welfare for Penn’s physician practice plan, money used to support Penn’s Perelman School of Medicine, Cardiovascular Studies and the Dental Clinics operated by the Dental School. While Governor Corbett initially proposed the complete elimination of this funding, the final appropriation represents a 50 percent cut in funds to this line item.

The final budget agreement retained full funding for the Tobacco Settlement health research program (CURE). The total amount available for CURE in FY 2011-2012 is $59.9 million, down slightly from $62.6 million in FY 2010-2011. Based on the applicable formula, Penn has historically received between $8 to $10 million per year in funds from this pool. The Governor had proposed moving the CURE program into the General Fund, but this change was rejected by the Legislature and all Tobacco Settlement programs will remain part of a separate fund.

The final “spend” in the approved Commonwealth budget is approximately four percent below last year’s level, with significant cuts to education, welfare and economic development programs. The budget also cut funding to the Pennsylvania Small Business Development Centers (SBDCs), a network of college and university based business assistance centers, including the Wharton SBDC. In accordance with Governor Corbett’s proposal, the final budget aggregates funding for the SBDCs, along with funding for the Industrial Resource Centers, Local Development Districts, and Industrial Development Corporations, into a new single line item called the Partnerships for Regional Economic Performance. The total funding for this program is $11.9 million, a 24 percent reduction for these programs.

Finally, the Pennsylvania Higher Education Assistance Agency (PHEAA) grant program providing financial aid to low-income Pennsylvania residents was cut by 1.9 percent to a total of $380.9 million. With a $50 million supplement to the program provided by PHEAA itself, however, the total funding for grants will actually rise to $430.9 million. This supplemental funding will increase the maximum PHEAA grant award available for eligible students for the coming academic year to $4,200, up from last year’s $3,500, an increase of $700.

—Jeffrey Cooper, Vice President, Government and Community Affairs

Almanac - September 6, 2011, Volume 58, No. 02