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Tuesday, July 14, 2009

Will "State-Related" Universities Get Stimulus Funding, No Stimulus Funding, or No Funding at All?

On June 26th the Governor submitted his application for federal stabilization funds, including the following phrase:“The Commonwealth’s “state-related universities” are excluded from all calculations for purposes of the State Fiscal Stabilization Fund." While these four institutions (Penn State, University of Pittsburgh, Temple and Lincoln University) 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”.

On July 7th, Rendell told (1:10:50) the US House Republican Committee on Oversight and Reform,"Understand, the four state-related schools, Penn State, Pitt, Temple, etc., are getting stabilization money. The cuts that they are receiving would be much worse without the stimulus. Much worse."

Confused? So are we.

In reality, an 18% cut in state subsidies should not dictate a necessary increase in tuition given that the subsidies make up a small part of the universities' overall budgets, and as we note in our policy brief on higher education - increased government subsidies are partly to blame for tuition increases.

Yesterday the House Democrats threw another monkey wrench into this, when they tweaked the Governor's budget proposal to take higher education out of the state budget entirely, until a new revenue source is found.


Anonymous said...

State appropriations at Pitt has not gone up since 2001. This is the direct reason tuition has risen so fast there, not the other way around as you guys imply. Sorry, but you are wrong on this one.

Nathan Benefield said...

Federal Pell Grants, Federally Subsidized Student Loans, and taxpayer-funded PHEAA grants have all dramatically increased.

And more importantly, all give recipients more funding if they attend universities with higher tuition.

Gee...is there a perverse incentive there?