PA Must Reads: Budget Day in Pennsylvania

Cut Cut Cut! (photo: mag3737/flickr)
Cut Cut Cut! (photo: mag3737/flickr)

A blog post by Mark Price, originally published at Third and State.

The Philadelphia Inquirer this morning previews big cuts to state support for higher education in today’s budget proposal from Governor Corbett. Last year’s budget hit poor k-12 school districts hard. This year’s cuts to higher education, as the Inquirer story illustrates, are likely to result in rising tuition, which will only make it harder for low-income students to gain access to one of the most important institutions we have for reducing inequality.

Pennsylvania’s state universities would take another big funding cut under Gov. Corbett’s 2012-13 budget proposal to be released Tuesday morning, according to sources familiar with the plan.

The 14 universities in the Pennsylvania State System of Higher Education, including West Chester and Cheyney, would see their state funding cut 20 percent under Corbett’s proposed budget as of Monday, sources confirmed.

The four state-related universities — Temple, Penn State, Lincoln, and the University of Pittsburgh — would be cut 30 percent, sources said.

The proposed cuts follow a substantial decrease in funding to the state universities in the current year that led to tuition increases at all 18 schools, as well as a recently announced midyear, 5 percent retraction of funding…

Robert R. Jennings, president of Lincoln University, said that another cut would be “completely devastating” to the historically black institution.

Lincoln raised tuition 7.5 percent after a 19 percent funding reduction last year…

At Lincoln, newly appointed president Jennings said a 30 percent cut in funding would mean layoffs and another tuition increase. In-state students pay about $18,000 and out-of-state students about $23,000.

He said he hoped the state considers Lincoln apart from the other state-related schools, which have larger alumni bases and networks that could help them cover a large budget cut. Many Lincoln students are first-generation college students from single-parent homes, he noted.

My colleagues at the Pennsylvania Budget and Policy Center will be working hard over the next few days to examine today’s budget proposal.

The legislature is also moving forward on a natural gas drilling fee. As always, the devil is in the details:

The 15-year impact fee would rise and fall with the price of natural gas and inflation. Currently, the price of natural gas is about $2.30 per million British thermal units — a measurement used at major pipeline hubs. If the price is between $3 and $5, the total per-well fee would be $310,000 over 15 years, not counting inflation, according to a summary distributed to senators.

At the current price of gas, the 15-year fee total would be $240,000 per well, not counting inflation, according to a summary distributed to House Democrats. The maximum per-well fee a company would pay is $355,000, if gas stays above $6, while the minimum would be $190,000, if gas stays below $2.25, again not including inflation.

But the fee at any price would be well below the average lifetime per-well tax paid in other natural gas states, including $993,700 in West Virginia, $878,500 in Texas and $555,700 in Arkansas, according to the Harrisburg-based Pennsylvania Budget and Policy Center

Meanwhile, local school districts are reducing the quality of services they provide and transit agencies are still headed for big cuts in service.