In Pennsylvania, Campus Leaders Prepare to Trim Budgets as They Fight Governor's Proposed Cuts

Matt Rourke, AP Images

The budget Gov. Tom Corbett revealed to the Pennsylvania General Assembly on Tuesday would slash state spending on public campuses in half, a move that shocked higher-education leaders.
March 09, 2011

Pennsylvania became the latest state where higher-education leaders prepared to battle a new Republican governor, as campus leaders there tried on Wednesday to come to grips with a budget proposal announced the day before that would slash state spending on public campuses in half.

The proposal by Gov. Tom Corbett to cut appropriations by around 50 percent to the four state-related institutions, including Pennsylvania State University, as well as the 14-campus state-owned system, would be the biggest one-time percentage cut to state higher-education funds in history, according to the American Association of State Colleges and Universities.

In his budget address, Mr. Corbett called his spending plan, which attempts to plug a $4-billion deficit for the upcoming fiscal year, "a reality-based budget."

"I said we'd cut. I'm not asking you to read my lips. I'm asking you to read my budget," said Mr. Corbett, who ran on a platform of no new taxes, including on the state's burgeoning natural-gas industry. The state sits on Marcellus Shale, one of the largest natural-gas finds in the world.

"The Marcellus is a resource, a source of potential wealth, the foundation of a new economy," Mr. Corbett said in his speech on Tuesday. "Not just something new to tax."

The size of the cuts shocked most university leaders in the state, who were not given a preview of the governor's budget as they were by previous administrations. Because the governor just took office in January, the budget proposal was also released a month later than usual.

"I think the governor decided to send the message that we need to rethink how much we spend, and that should spark a good conversation among colleges about how that do that," Eugene W. Hickok, a former education secretary in the state, said in an interview. "There was no time to study how to save money in higher education and then announce the budget."

On Wednesday, even as campus leaders dissected the governor's budget to be sure they didn't miss any cuts tucked elsewhere, they each tried to put the wide scope of the cuts in historical context.

At Penn State, which faces a $182-million reduction, the state share of the university's budget would fall to just 4 percent from around 8 percent.

At the state system, the $211-million cut would result in its lowest appropriation ever by a few million dollars, although it enrolls 38,000 more students than it did in 1983, when it was created. The cuts come in addition to the loss of $38.2-million in federal stimulus funds in each of last two years for the state-owned colleges.

"If you personalize this down to the student level, the cut roughly equals $2,200 per student," said John C. Cavanaugh, chancellor of the Pennsylvania State System of Higher Education.

One provision buried in the portion of the budget dedicated to elementary and secondary education is sure to cause concern among public- and private-college officials in the state: Salary bumps for teachers with master's degrees would be eliminated. Many institutions in the state, particularly small private colleges, run profitable graduate programs full of teachers. Mr. Cavanaugh said such students make up 25 percent of his graduate programs.

Like other college chiefs in the state, Mr. Cavanaugh said he plans a two-pronged approach in response to the governor's cuts. He plans to mount a vigorous lobbying effort with the Republican-controlled General Assembly to restore some of the funds at the same time the system searches for ways to trim its budget and find new revenue sources.

"We've been in cut mode for years, so the usual suspects are long gone," Mr. Cavanaugh said in an interview.

Mr. Cavanaugh said the cuts won't simply be made up with tuition increases. In a news conference on Wednesday, Penn State's president, Graham B. Spanier, agreed, saying students can't bear the brunt of the cuts. Already, average public-college tuition in the state, after grants are subtracted, is $8,577, almost double the national average, according to the State Higher Education Executive Officers.

With the state providing such a small proportion of Penn State's budget, it has been suggested that the institution become private. But even with the governor's cut, Penn State would still receive $165-million from the state next year, an amount that is not "insignificant," said Donald E. Heller, director of the Center for the Study of Higher Education at Penn State.

"You would need to raise a $3.2-billion endowment to make up for that loss," noted Mr. Heller, who serves on a universitywide committee with a goal of finding $10-million in permanent savings. "That looks like a rounding error after the governor's announcement," he quipped.

One cut on the table for Penn State is also the most politically charged: campus closures. The university has nearly two dozen branch campuses throughout the state, some in proximity to each other. Closing some is "a distinct possibility," Mr. Spanier said on Wednesday.