Today in Harrisburg, Governor Corbett revealed his proposal for the 2012-2013 budget. We wanted to provide a quick summary and high-level observations to members of the economic development community. The bottom line is that there is little to be excited about if you work in the economic development or related communities in Pennsylvania.
First, this budget continues and in some cases adds to the cuts that have been faced by almost all of the Department of Community and Economic Development programs. The chart below illustrates the impact over the past 12 budget cycles on the economic development initiatives in the Commonwealth.
Commonwealth of PA Economic Development Funding
Source: Fourth Economy Consulting
This year’s budget further reduces economic development spending by $3.6 million from 2012-2013 figures.
This is a total of $60.9 million from the end of the previous administration with several programs consolidated or eliminated in the past two years. The chart provided also breaks out Commonwealth Financing Debt service as this funding is going to pay off previous commitments rather than being available for new investments.
The larger cuts are in the areas of Pennsylvania First (decreased by $2.5 million) and the Marketing to Attract Tourists (decreased by $1 million).
Programs such as the Ben Franklin Technology Development Authority which supports the Ben Franklin Technology Partners ($14.5 million), the Life Science Greenhouses ($3 million), and the newer Discovered and Developed in PA program ($9.9 million) are level funded in the Governor’s proposal. It remains to be seen if the Corbett administration will continue to support the Keystone Innovation Zone program. Previously those funds were provided as part of the BFTDA funding but in the past year the appropriation went to support the regional Ben Franklin Technology Partners.
One major blow to the state’s colleges and research universities that are performing health research is a redirection of all funding for the Health Research Priorities otherwise known as the Commonwealth Universal Research Enhancement program (CURE). Last year the CURE program supported $55.8 million in research funding and if the Governor’s proposal passes they will received no funding.
The budget negotiation process begins today and the Governor has made his recommendations. We will keep you posted about the conversations. If you have any questions or information to share please feel free to ask and comment.
Rich,
I think the continued divestment in higher education is a disturbing trend. With last year’s combined 28% funding cuts to Pitt, and 2012′s proposed 30% cut, the University will receive roughly $90M, which comes out to be 5% of their budget.
If ONLY five percent of Pitt’s funding now comes from the state, how “state-related” is the University anymore?
Also, in 2011 Pitt and Penn State had the highest in-state tuition rates in the country. I’d expect this trend to get worse in 2012/13.
I’d like to see what results we’ve realized from the better investment years of ’05-’10.
Could it be that these cuts are because the ROI isn’t there?