Key Points from Senate Budget Hearings with PA State System of Higher Education, Department of Community and Economic Development

HARRISBURG – No new details were made available regarding Governor Shapiro’s plans to merge the Pennsylvania State System of Higher Education (PASSHE) with the community college system and reduce tuition for some students during a Senate Appropriations Committee budget hearing with PASSHE Chancellor Dan Greenstein today.

PA State System of Higher Education

Committee members sought details about how the new governance model for PASSHE and community colleges would be structured and when the transition would take place but received little information. The Shapiro Administration did not ask Chancellor Greenstein to participate in the work group that is planning the merger, which raised numerous concerns from Democrats and Republicans alike.

Regarding the governor’s proposal to limit tuition to $1,000 for students from families making under $70,000, Chancellor Greenstein said he could not provide details about how many students would benefit or what the cost would be to other students or taxpayers.

Total enrollment in the state higher education system is down 30.8% from 2010, with another 2.2% drop this fall, and committee members discussed what PASSHE is doing to reverse enrollment decline.

Full Hearing

Senator Martin on the importance of workforce development, improving pathways to careers, attracting more students to Pennsylvania, keeping young people in Pennsylvania after graduation, and more

Video Highlights

PASSHE confirmed there was a lack of communication between the state system and the administration regarding the governor’s plans.

PASSHE could not answer detailed questions about the new governance model for the proposed merger with community colleges, nor what would happen with existing endowments and local funding streams.

PASSHE did not have details to share about the governor’s plan to reduce tuition for families making below the state median income.

PASSHE could not answer whether collective bargaining agreements and project labor agreements would be maintained after the governor’s proposed merger.

PASSHE could not quantify the savings realized since six system schools were consolidated into two institutions more than a year ago. Enrollment at the consolidated schools has continued to decline.

Tuition freezes championed by Senate Republicans over the past six years have helped to boost enrollment systemwide.

Closer alignment of higher education programs with workforce needs was suggested as a priority for PASSHE going forward.

Department of Community and Economic Development

Committee members questioned Secretary Rick Siger about the negative impacts of Pennsylvania’s burdensome permit process and tax penalties on startup businesses that don’t turn an immediate profit. These issues are not addressed in the governor’s budget proposal.

Members also noted Gov. Shapiro wants to fund his proposed Main Street Matters program at more than four times the amount of a similar program that already exists and sought justification for the redundancy.

In addition, the secretary was questioned about the administration’s proposal to use $500 million in bond proceeds for the PA Sites program, which will cost taxpayers a total of $900 million.

Full Hearing

Senator Martin on growing our economy, competing with other states, meeting workforce needs, creating new job opportunities, supporting affordable housing, and more

Video Highlights

Other states continue to reap the rewards of investing more and investing strategically in economic development, while Gov. Shapiro’s budget proposes to cut funding for these programs.

The governor’s economic development plan does not appear to include solutions to permitting delays that consistently chase away jobs and investment.

DCED plans to spend up to $300 million of the $500 million from its site development initiative in the first year. The secretary declined to list sites under consideration.

Additional accountability measures were suggested to ensure tax dollars are not wasted on programs that do not provide a return on investment.

Tourism is a key industry in Pennsylvania and continued investment should keep pace with marketing in sister states. Concerns were raised about smaller organizations not receiving timely funding from DCED for tourism projects.

Gov. Shapiro’s budget calls for continued funding for historically disadvantaged businesses, but funding allocated in the current year’s budget has not been sent out. Questions were raised about why veteran-owned businesses are not eligible.

Supporting advanced manufacturing remains a priority for both the General Assembly and the Shapiro administration.

Questions were raised regarding the rationale for the governor’s plan to replace the successful Keystone Communities program with a new initiative.

DCED was temporarily affected by the data loss that impacted the Office of Administration.

You can find recaps and video from every Senate budget hearing at

CONTACT: Jason Thompson

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