U. may lose frozen funds

There is good news and there is bad news. The good news is, statewide tax collections, which may decide whether the University regains access to $200,000 in frozen state allocations, are currently on schedule. But unfortunately, the Pennsylvania Governor's office said yesterday that the money, which the state retained as a reserve, may still be used by the state to compensate for a drafting error in this year's tax law and shortfalls in the lottery fund. If the University loses the promised money, administrators may have to rework this year's budget, which was designed around receiving the full $37.6 million. In November, Gov. Robert Casey froze $130 million of state funds, including the $200,000 which was earmarked for the University's equipment budget. This money would be used to purchase any University equipment, including classroom supplies and research materials. The funds were stalled pending a report detailing how much money was collected in taxes. But even though tax collections are doing well, a $73 million error in the state's budget -- omitting a business tax on utility companies -- and insufficient money for Pennsylvania's lottery system, may force lawmakers to keep the frozen funds, said Sue Grimm, a spokesperson for Casey. Grimm also said that "critical times" for tax collection including Christmas sales have not yet been counted but said the ongoing national recession may keep tax returns down. "Tax collections so far are right on target," Grimm said. "But our national economic forecasts don't look too good." Executive Vice President Marna Whittington said last night that the University may prepare alternatives in case the funds are not released. "We will have to make contingency plans," Whittington said. "If the economy does not recover, you may see more [funding freezes] in the future." Besides the lottery and the budget error, the frozen money may be used supplement insufficient medical entitlements. "Our revenue is based on our tax package," Grimm said. "If money is needed, it is a definite possibility we will use those reserved dollars."

Please note All comments are eligible for publication in The Daily Pennsylvanian.