Government Affairs Update

State Appropriations

On July 2 the Pennsylvania House and Senate gave final approval to HB 2509, Penn’s FY 2006-07 non-preferred appropriation bill. The bill will now be sent to the Governor, where his signature is expected. HB 2509 provides a total of $49,429,000 to the University, an increase of 10.2% over the amount appropriated to Penn in the last fiscal year (see chart below). This percentage represents the largest single year increase in state funding to the University in twelve years. The following line items were increased by 3%—Veterinary Activities ($39,254,000); Medical Instruction ($4,037,000); Cardiovascular Studies ($1,601,000); and Dental Clinics ($1,083,000). In addition, a new $3.2 million Veterinary School line item was added—the Center for Infectious Disease. The addition of this new appropriation brings the total Veterinary School funding to $42,454,000. Finally, the Penn Museum line was increased by 10% to $254,000.

* Penn Museum budget request submitted in separate request to PHMC

The General Assembly also approved HB 2499, the Commonwealth’s General Fund Budget. The budget includes full restoration of several hospital supplemental payment items that the Governor had proposed to either eliminate (Medical Assistance (MA), medical education, and Community Access Fund) or substantially cut (50% reduction of inpatient disproportionate share). The estimated impact of these cuts on Penn’s hospitals would have been $15 million annually.

In addition, HB 2499 includes $600,000 in funding for Penn’s Cancer Center, the same amount of support as last fiscal year.

The final budget agreement did not include the approval of the Governor’s proposed restructuring of the Tobacco Settlement health research program. This program, entitled the Jonas Salk Legacy Fund, would have “securitized” half of the Tobacco Settlement funding currently allocated for research and used these funds to support biosciences infrastructure throughout the state in the next two years. Penn currently receives between $9 and $11 million annually in formula health research funds under the Tobacco Settlement allocation. The Salk Fund proposal could be revisited in the fall if the Governor is able to develop more legislative support for this program.

—Paul Cribbins, Assistant Vice President of Commonwealth Relations