State House Sound Bites

Capitol reporter Katie Meyer covers Pennsylvania politics and issues at the Pennsylvania state capitol.

Low enrollment, pension costs keeping PASSHE in the red

Written by Katie Meyer, Capitol Bureau Chief | Jan 27, 2017 5:38 PM
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The school system includes 14 state-run colleges and universities, including Shippensburg. All are experiencing low enrollment and are having trouble making ends meet. (Photo by AP)

(Harrisburg) -- With funding still tens of millions of dollars below pre-recession levels, Pennsylvania's state university system is taking a hard look at its operations, and potentially making some cuts down the line.

So why is the financial situation so bad?

There are a number of factors, but the commonwealth's ballooning unfunded pension liabilities have a lot to do with it.

In the years right after the 2008 housing market crash, the state's higher ed system was hit with a quick succession of major state funding cuts. Despite some increases in the last two budget cycles, the system is still $60 million below its levels ten years ago.

There's also historically low enrollment across the system's 14 schools, and that's all made even worse by the state's ever-expanding public pension debts.

Unfunded pension liabilities now stretch well past $50 billion. As a result, required contributions jumped by $14 million dollars last year, according to school system spokesman Kenn Marshall. They'll go up another $8 million this year.

"We really have no control over the pension costs," Marshall said. "Those are determined by the two state pension boards, and we have to adhere to whatever they set as the contribution rate."

In his annual budget address, School System Chancellor Frank Brogan called current operations unsustainable. While there aren't concrete plans for changes yet, the system is bringing in outside analysts to assess the situation.

Brogan mentioned that, conceivably, schools might need to be shut down. There are currently no plans to do so, however.

That's put some people on edge. A representative for the union that represents most school system workers said they plan to lobby the state aggressively for more funding, as well as work to get enrollment back up.

Published in News, State House Sound Bites

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