On Tuesday, April 19, 2011, Zack Moore, Director of Federal Relations, and Mike DiRaimo, Director of Governmental Affairs, both in the Office of Governmental Affairs, talked with more than 100 attendees across multiple campuses about how changes at both the state and federal levels of government might impact higher education in general, and the operation of Penn State specifically. They provided an overview of how elections have changed the political landscape of Pennsylvania and how pressures to address ailing state and federal budgets may have negative consequences for the future funding of higher education.
Moore started the conversation by presenting an overview of the function and structure of the Office of Governmental Affairs. He explained that the party makeup at the federal level has changed over the past few years. In the House, Democrats had a majority from 2007 through 2010, grew in number throughout 2009, but Republicans gained the majority in 2011. During that time the Democrats maintained power in the Senate. Locally, recent elections in Pennsylvania led to the majority of the congressional districts being controlled by Republicans.
He explained that these changes have resulted in a strong push of the new Republican agenda, primarily focused on reducing spending, increasing oversight of changes made by the Obama administration, and creating new jobs. The Democratic agenda has remained focused on energy management, addressing climate change, health care reform, improving education, and creating new jobs.
Moore emphasized that while the parties disagreed in terms of prioritizing goals, both agreed that federal spending needs to be reduced as even the most optimistic revenue estimates demonstrate that funding will be consumed by major entitlements and payments on interest by 2025. Given that only one-third of federal spending is discretionary, with half of that allocated to defense, spending on education will most likely be a target in future budgeting decisions. In any case, a number of influential U.S. Senate and House members have stated that nothing is off the table in terms of being reviewed for potential cuts.
DiRaimo continued the discussion by demonstrating how the political environment in Pennsylvania has changed over the past few years. Simply put, the state government has become thoroughly Republican. Additionally, there have been large shifts in legislative leadership from the northeastern and southeastern region of the state to the central western region of the state. This has resulted in an agenda that is much like that of the Republicans at the federal level: reduce tax rates all around, rollback spending, and a shift in spending priorities affecting education and welfare. That’s why we’re fighting as hard as we are to hold onto the state appropriation; it defines the core of what we do.
Mike DiRaimoDiRaimo went on to explain that these agenda items reflect reactions to pressure to deal with significant financial problems. The state faces a 4 to 5 billion dollar deficit, the stimulus funds used to bolster previous budgets are exhausted, and the cost of the unemployment debt to the federal government is on the rise.
To address the issues, Governor Tom Corbett has proposed no new taxes in an effort to stimulate growth and a 50% cut to funding for state-related higher education institutions (Penn State, Pitt, Temple, and Lincoln), 50% for state institutions, and 10% for community colleges. For Penn State, while this represents a 4% reduction in overall budget, it represents a 17-18% reduction in general funds, the monies used to offset in-state tuition prices and pay for instruction at 24 campuses. Most of the other funds in the Penn State budget are not available for these uses. DiRaimo also noted what appears to be an increasing view in the legislature that education is more a private good than a public good, and the impact of this view on current and future budget proposals.
Moore and DiRaimo then responded to a large number of questions from the audience. Topics raised included the help received from State Senator Jake Corman, how employees can help make the case for Penn State to legislators and what they need to keep in mind regarding Penn State policies, and the changing Pennsylvania economy and what that might mean for the budget.
View the PowerPoint slides from the presentation.
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