Despite budget impasse, Penn admins confident state funding will remain steady

Today marks the 23rd day of a prolonged and frustrating political gridlock between Democratic Gov. Tom Wolf and the Republican controlled state legislature in Harrisburg. With no significant developments in the past three weeks, both parties seem far from an agreement on the Commonwealth’s budget for the new fiscal year.

On June 30, a day before the start of fiscal year 2016, Wolf vetoed the Republican lawmakers’ proposed state budget, the first time a Pennsylvania governor has vetoed a budget in over 40 years, according to the Philadelphia Inquirer. Without a budget deal, funding is on the line for local governments and many nonprofit organizations.

Although Commonwealth appropriations for Penn are at stake, the University isn’t immediately affected by the current budget impasse.

According to budget reports from the University’s Office of Budget and Management Analysis, Penn received $31.51 million in state funds in the 2015 fiscal year. This funding represented a meagre one percent of Penn’s $3.18 billion Academic Operating Budget this year.

The governor’s proposed state budget would allocate the same amount of funds to Penn as last year, according to BMA administrators. A majority of the state appropriations received by the University are designated for the School of Veterinary Medicine, which received $28.26 million out of the $31.51 million dispersed in fiscal year 2015. The rest of the appropriations are meant for Penn’s School of Dental Medicine and the Perelman School of Medicine.

Although it seems likely that state funding for the School of Veterinary will remain unchanged for this fiscal year, this hasn’t always been the case. According to BMA reports, Commonwealth funding for the Vet School has been reduced by $14.4 million or 34 percent since 2008. This decrease has been detrimental for Penn Vet’s budget, since state appropriations represent 22 percent of its budget.

“We have faith that they will receive [the appropriations] once the budget is adopted and appropriated. It’s not a cash-flow issue for us, but, obviously, the level of appropriations is important to us, especially for the Vet School,” said Dan Katzenberg, the Deputy Budget Director at BMA.

The University has played a key role in lobbying against reduced funding for Penn Vet, the only veterinary school in all of Pennsylvania.

“Penn works with the governor and the General Assembly to emphasize the value of the School of Veterinary Medicine’s contributions to education and research in the Commonwealth, to public health and to Pennsylvania’s largest industry: agriculture,” said Hugh Allen, Senior Director at Penn’s Office of Government and Community Affairs.

Because Penn doesn’t extensively rely on state funding, the University is not immediately threatened by Pennsylvania’s policy makers inability to agree on a budget deal. The same can’t be said for many other local nonprofits that rely almost entirely on state appropriations.

Jack Phillips, the director of legislative affairs at the Rehabilitation and Community Provider Association, told the Inquirer that most of his nonprofits and providers would start to feel the financial constraints by the end of July.

“When you talk about these nonprofits, they rely heavily on state funds, they may have trouble making payroll. We’re not going to have trouble making payroll because of this,” said Katzenberg.

Meanwhile, in Harrisburg, the Wolf administration is pushing for increased spending on public education, financed through a tax on natural gas drilling, which Republicans oppose. The governor is also looking to increase state income and sales taxes in order to initiate a property tax relief program, according to the Inquirer.

Republicans, on the other hand, have advocated against tax increases and support a smaller increase in education spending than what Wolf is proposing, while pushing for the privatization of state liquor stores, according to the Pittsburgh Post-Gazette.

While Democrats and Republicans continue to negotiate over a compromise, Penn officials are confident that a deal that respects the needs of the University will be struck soon.

“Like other colleges and universities that receive funding from the Commonwealth, we are hopeful for a swift resolution to the current impasse,” Allen said. “It is by no means the first time the Commonwealth has experienced a delayed budget.”

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