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Government Affairs Update City and Community Relations updates will appear in next week's Almanac, along with an update on the Governor's proposed FY 2004-2005 budget. Federal Relations On January 23, 2004, the President signed the Fiscal Year 2004 Consolidated Appropriations bill, which included seven of the 13 annual appropriations bills that Congress must pass each fiscal year (Congress had passed the other six, earlier). Most importantly to Penn, the bill included funding for the National Institutes of Health (NIH) and for student financial aid. NIH received $27.9 billion (3 percent increase, compared with 12 percent in fiscal year 2003). The bill did not increase the maximum allowable Pell Grant, which remained at $4,050, and provided $3.1 billion combined for Perkins Loans, Supplemental Education Opportunity Grants, Work-Study, LEAP, TRIO, and GEAR UP (less than 1 percent increase). On February 2, 2004, the President released his proposed Fiscal Year 2005 Budget. The proposed budget calls for $818 billion in discretionary spending (4 percent increase), including $402 billion for defense (7 percent increase) and $30 billion for homeland security (10 percent increase). For non-defense/homeland security discretionary spending, the budget would increase by $2 billion, to $386 billion, a less than one percent increase. The budget proposes the following increases for research and development: Department of Defense, $4.37 billion (7 percent, but primarily in development); Department of Homeland Security, $163 million (15 percent, also primarily in development); National Science Foundation, $137 million (3 percent); National Institutes of Health, $764 million (2.6 percent); NASA, $415 million (4 percent); Department of Energy, $58 million (1 percent). The budget proposes no increase in the maximum Pell Grant, $2.97 billion combined for the other student aid programs listed above (-5.2 percent), and level funding for international education programs ($104 million). The budget proposes $162 million for the National Endowment for the Humanities (20 percent increase) and $139 million for the National Endowment for the Arts (16 percent increase). The President's budget is the first step in a process that will include House and Senate efforts first to pass their own budget resolutions and then the required annual appropriations bills. Therefore, the status of particular programs in the President's budget may well change by the time the budget and appropriations process is completed. Congress invariably adjusts the President's budget according to its own priorities. At the same time, it is important to note that the fiscal situation in Washington is extremely difficult. Also, in January, the Department of Homeland Security instituted the US-VISIT program, under which most visitors to the United States are digitally fingerprinted and photographed at their point of entry. Initial reports suggest that this program is not causing significant delays for visitors. OGCPA, in conjunction with the higher education community, continues to monitor closely the budget and appropriations process, immigration policy, and other issues of interest to Penn, and will update the Penn community on developments and work aggressively to advocate for Penn's interests. Commonwealth Relations On December 23, 2003 Governor Rendell signed into law HB 1379 (Act 15A of 2003), Penn's non-preferred Commonwealth appropriation bill for Fiscal Year 2003-2004. The bill had been previously approved by the Pennsylvania Senate on December 19 by a vote of 49-0 and on December 22 by the House by a vote of 161-39. HB 1379 provides a total of $42,946,000 in support of Penn programs, a reduction of 5% below the level authorized in the last fiscal year. The 5% reduction is consistent with the level originally proposed by Governor Rendell in February of last year and also with the finally approved funding levels for all other state-funded institutions of higher education. A chart showing the breakdown of funding for all five Penn line items (Veterinary School, Medical School, Cardiovascular Studies, Dental Clinics and University Museum) is below. The General Assembly also approved HB 1589, a General Fund budget bill restoring many of the cuts which had been made last March when the Legislature approved a "bare-bones" budget. The bill includes the total restoration of the Medical Assistance cuts (outpatient disproportionate share, medical education and Community Access Fund) to hospitals across the state for treatment of uninsured patients. The total impact of the cuts to Penn's three urban hospitals (HUP, Presbyterian and Pennsylvania) would have been $14 million annually. HB 1589 also included total restoration of funding to Penn's Cancer Center, which had been cut by 55% under the earlier budget. Finally, the Legislature gave final approval to MCARE abatement legislation (HB 44) which will be funded through an increase in the cigarette tax. MCARE is the state-run medical liability insurance program providing mandatory supplemental insurance coverage for physicians. Under HB 44 physicians in high risk categories (surgeons, neurosurgeons, obstetricians/gynecologists, orthopedic surgeons and emergency physicians at trauma centers) will receive 100% abatement of their MCARE premium for calendar years 2003 and 2004. All other physicians will receive 50% abatement. --Carol
R. Scheman, Vice President for Government, University Of Pennsylvania Commonwealth Of Pennsylvania
1 Includes $132,000
appropriated through
separate non-preferred appropriation.
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