Pulled fed funding angers Spanier

Rendell says stimulus money just for state schools

By Anne Danahy

Pennsylvania's latest application for federal stimulus money doesn't include Penn State or the other state-related universities, a move President Graham Spanier wants the U.S. Department of Education to examine.

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“I strongly believe that if you follow the spirit and intent of the American Recovery and Reinvestment Act, you will reject this application and compel the commonwealth to use federal funds to maintain state support for every public institution of higher education in Pennsylvania, including the state-related universities,” Spanier says at the end of a June 29 letter to U.S. Education Secretary Arne Duncan.

Rendell has proposed cutting Penn State’s funding for the fiscal year by 13 percent, dropping it from the $318 million he’d originally proposed to $278 million.

Penn State officials had also hoped to receive $20 million in federal stimulus money, to bring funding up to $338 million. However, the application for federal stimulus money submitted by the Rendell administration does not include Penn State, University of Pittsburgh, Temple University and Lincoln University among institutions eligible for stimulus money.

Spanier argues that by classifying Penn State as “‘non-public,’ simply because we are not ‘under the absolute control of the commonwealth,’ the governor is setting a dangerous precedent that the Department of Education should address.”

Rendell spokesman Chuck Ardo said the governor did not include Penn State and the other state-related universities in the plan because he “had to make very difficult decisions about funding and has very little control over Penn State expenditures.”

Ardo said the money will be redistributed to institutions where the state has more control over the tuition and spending.

“The federal law clearly gives the governor the authority to make these decisions,” Ardo said.

The fiscal year in Pennsylvania began Wednesday. But in the face of a $3.2 billion budget deficit, Gov. Ed Rendell and the General Assembly have been unable to agree upon a 2009-10 budget. Rendell is seeking a combination of funding cuts and a 16 percent income tax increase to balance the budget; Republicans want to balance it solely with spending cuts and avoid a tax increase.

Rendell’s latest proposal for slashing another $500 million from his proposed budget maintains funding for community colleges and colleges in the State System of Higher Education.

A statement issued by Penn State says that if the commonwealth carries through with the cuts, there will be either “dramatic changes in the character of Penn State and the way it operates or a massive tuition increase for students.”

About 20 percent of Penn State’s $1.5 billion general budget comes from the state. An appropriation of $278 million would bring state funding to the level it was in 1996.

Senate Republicans earlier this year put forward a budget proposal that would have cut many state programs more deeply than Rendell’s budget, but would have allocated $334 million for Penn State.

Penn State trustees are scheduled to set tuition for the 2009-10 school year at their July 10 meeting. The university is still processing Rendell’s proposed funding cuts, so specifics on the potential impact weren’t available Wednesday. When they were anticipating $338 million in state funding, university officials said they would try to hold tuition increases to 4 or 5 percent.

Anne Danahy can be reached at 231-4648.