Size of SSHE budget cut stuns university officials, legislators
Although Gov. Tom Corbett has been calling for budget cuts all along, few, if any, anticipated the whopper he delivered in his budget address Tuesday: about a 50 percent reduction in funding for the four state-related universities and the Pennsylvania State System of Higher Education, which includes IUP.
On the whole, Corbett is proposing to reduce state spending by about 3 percent. But his budget halves the state system's appropriation, reducing it to $232.6 million.
"It's unconscionable," said Francisco Alarcon, IUP's faculty union vice president.
The magnitude of the cut surprised some legislators, who said they were expecting to see the Republican governor's reductions applied more evenly across the board. The cut also surprised the state system, which apparently had been preparing for no more than a 15 percent reduction in its state subsidy.
And it troubles the state system's faculty union, which said Pennsylvania's 14 public universities won't be able to operate without significantly increasing tuition.
Nonetheless, as Corbett said in his address, tough times demand tough decisions.
"This fiscal crisis is a time to rethink state spending on higher education," he said. "Despite state subsidies over the past decades, tuition has continued to increase. If the intent was to keep tuition rates down, it failed. We need to find a new model."
Corbett also called on the state system's union members to accept sacrifice, asking them to agree to wage freezes and other concessions.
"I ask nothing more of our best-educated people than to face up to a hard economic reality. The system in which you have flourished is in trouble. We cannot save it by individual efforts. The sacrifice must be collective as will be the ultimate rewards."
Alarcon said the union members probably would be agreeable to pay freezes, but that freezes would not come close to covering the reduction. The only way the system can begin to make up the difference would be through pay cuts or faculty layoffs, he said.
Pay cuts, he said, are not acceptable because the state system already has become uncompetitive in terms of being able to attract bright, young faculty members. And, under the contract, the time for layoffs has passed. For those to have occurred next year, the faculty would have had to be notified last fall, he said.
The faculty union's contract expires June 30, and Alarcon said he believes Corbett isn't being sincere in proposing a 50 percent reduction. But if he is, it's a big problem for students and their families, who would shoulder the cuts in the form of increased tuition, Alarcon said.
In a statement, state system officials said they, too, are concerned about the impact the budget could have on students.
"We want to assure them that we will do everything possible to avoid disruptions in their education. We are most committed to our core missions of providing quality education at an affordable cost and to creating opportunities that will ensure our students success, both in their careers and in their lives," officials said.
IUP's interim president, Dr. David Werner, said he couldn't yet comment on Corbett's budget. He said he first needs to speak with the other state system presidents and the chancellor.
State system officials apparently were not anticipating this large of a reduction, at least not in August, before Corbett was elected. In memos to each of the universities, James Dillon, vice chancellor for administration and finance, instructed the universities to prepare budgets based on four scenarios, the best being an unchanged appropriation. The other three were cuts of 5, 10 and 15 percent.
Based on a level appropriation and other assumptions, IUP is projecting a $10 million deficit next year. The deficit increases to $18 million on a 15 percent reduction in the appropriation, according budget documents.
The state appropriation accounts for about 28 percent of IUP's revenue.
The area's legislative delegation said in general that while they agree with the budget in principle, the higher education cuts need to be reconsidered.
Sen. Don White, R-Indiana, for instance, said the budget reflects the sort of tough decisions working families must face every day. But he also said cutting funding in half would have a "huge" impact on students and their families.
"That reduction almost certainly would lead to a steep hike in tuition and a drastic reduction in operations. While I do believe higher education needs to reduce expenditures, I am concerned such a swift and dramatic reduction would be detrimental to our state-owned universities and their ability to offer a quality education at an affordable cost."
Rep. Dave Reed, R-Indiana, agreed.
He said that for the first time in eight years, Pennsylvania has a budget proposal that realistically balances spending and revenue, and one that doesn't employ accounting gimmicks. But he said priorities need to be re-evaluated, especially when Corbett proposes to cut higher education but increase spending on the welfare system.
"A better balance can be achieved," he said.
House Speaker Sam Smith, R-Punxsutawney, who also is a member of IUP's council of trustees, said some were surprised that higher education is being made to bear the brunt of budget reductions and that Corbett didn't do more to address what Smith said is waste and abuse in the welfare system.
Still, the budget is realistic, based on actual dollars, he said. Smith said he expects there will be some vigorous debate going forward on the higher education cuts.
"It's a starting point," he said. "Like it or not, that's where we're starting."