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PA Budget Update

2016-17

The Senate voted 47-3 to pass the General Fund spending bill (SB 1073) on June 29, and the House on June 30 approved the bill with a vote of 144-54.  The budget passed the House with a coalition of Democrats and moderate Republicans.  This state budget spends $31.6 billion--$1.4 billion over the past fiscal year. Higher education received a 2.2% or $37.9 million increase.  Governor Wolf indicated he will sign the bill once a revenue package has passed the Assembly.  Media reports indicate that this tax package will increase tobacco and a few other minor taxes with possible reliance on new gambling taxes.  The legislature and the Governor appear united about not increasing personal income or sales taxes this year.     

 As the chart below reveals, nearly all higher education appropriations received a 2.5% increase.  PHEAA grants received a 2.5% increase or an additional $6.6 million.  At its June 2016 Board meeting, the PHEAA Board committed to provide a supplement to the grant program from agency earnings in the amount of $125 million.  If that occurs, we expect that the PHEAA formula will be funded at 100% for the first time since the 2006-07 recession.  Under full funding, the maximum grant will reach the level of $4,700 per student.  Ready to Succeed Scholarships (RTSS) were held at $5.0 million, but the IAGs received a 2.5% increase of $628,000.  An item not on the attached chart, the Mobile Science and Math Education program received level funding at $2.214 million.  Several AICUP members serve school districts through this program.   

 If you have questions, contact Mary Young at young@aicup.org.

 

2015-16

After an apparent bi-partisan budget agreement failed in the House, the Senate and House on December 23, 2015 passed a House Republican budget (HB 1460) over strenuous objections from the Democrats in both the House and Senate. The Governor expressed his disappointment in the Republican budget in a press conference and demonstrated that disappointment by using his line item veto power to radically reduce or eliminate line items on December 29. 

The 2015-16 budget impasse lasted almost six months and left many issues unresolved.  With only half of a year’s funding included for public school districts, this budget (Act 10A) should require additional negotiation and supplemental funding.  Act 10A provides total state spending in the General Fund budget for 2015-16 of $23.4 billion, which is $7.4 billion less than a prior negotiated Senate/Governor proposal.

   

 

In higher education, Act 10A provides a decrease of $563.1 million.  The majority of this decrease exists because the appropriation bills for PSU, Pitt, Temple, and Lincoln did not pass the General Assembly, so the budget provides no 2015-16 funding for these institutions at this time. Each of these four bills must pass the General Assembly with a 2/3 vote in each chamber and be signed by the Governor. Governor Wolf also took his line item veto to the PHEAA Grant Program, cutting $56.9 million from the Republican-approved budget.  The cut from FY 2014-15 is less severe ($39.7 million) but still an 11% decrease.  AICUP and its member presidents will need to work to ensure that restoration of PHEAA Grants are included in the FY 2015-16 final budget.  The Ready to Succeed Scholarship (RTSS) program received the current $5.0 million in Act 10 A. Institutional Assistance Grants (IAGS) were returned to the 2014-15 level of $24.4 million (a slight reduction of $1.2 million from the Republican-passed budget).  Governor Wolf also reduced the State System of Higher Education and the Community Colleges to their 2014-15 funding levels.

  

The General Assembly also stills needs to pass the Education Code bill (HB 530), which includes the state authorization reciprocity agreement language of interest to many AICUP members.

AICUP requested additional information regarding the level at which PHEAA will disperse funds.  In the summer, students were promised awards of a maximum of $4,340 based on level state funding of $344.9 million (proposed by Governor Wolf in February) and a PHEAA supplement of $75.0 million.  Keith New, spokesperson for the PHEAA agency, indicated in a recent Pittsburgh Tribune article that “his agency has yet to calculate how the funding reduction will affect individual awards.” He also stated that “if resources do not change and the eligible recipient pool does not change, it is likely awards would go down.”  No decision on the grant level is available yet from PHEAA.  The PHEAA administration and board are in discussion regarding how to provide funding in the current year and will meet on January 21, 2016. We have been told that PHEAA will disburse funds in February, and we will provide any further information as soon as it is available.

 

In the chart below Act 10A is the Governor’s veto numbers compared to the available year of 2014-15.

 

 If you have questions, contact  Mary Young at young@aicup.org.

 


 

 



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