This week's Governmental Relations Update is titled "It could have been worse." No, this is not the beginning of a trend; I promise I will not have a title for every Update in the future.

But the truth is, it could have been worse. The education budget that passed the House and Senate and now sits on the Governor's desk for his signature has changed very little since first introduced. It cuts all segments of education approximately 2.93 percent. USA's state appropriation for fiscal year 2010 will be $108.9 million.

Normally, no one would think a 2.93 percent cut was a good thing. However, as demonstrated by disproportionate cuts to universities in fiscal year 2009, higher education normally does not receive fair treatment when state revenue declines. The fact that all segments of education were cut equally for fiscal year 2010 was a victory for higher education.

Unfortunately, this is not a change in philosophy towards higher education. Regulations in the federal stimulus legislation require states to reduce cuts to all segments of education equally or risk losing millions in federal funding. These regulations should protect higher education for the next two years, but look out in 2012.

Now that the Legislature has passed the budget, it appears it will address the funding shortfall in the Prepaid Affordable College Tuition (PACT) program. While I hope a solution can be identified to protect the investment in education made through the PACT program by many parents and grandparents, I think the legislature should wait to get a better picture of the problem. This could also give the fund time to regain some of its value as the stock market appears to be improving. Unfortunately, the Legislature believes the issue must be addressed now. Senator Roger Bedford has introduced a bill that could ultimately cause an extreme financial burden on the state's public universities. It proposes to freeze tuition on PACT students and has wording that would probably result in reducing the funding for higher education in fiscal year 2010 in order to fund the PACT shortfall. I expect a Senate floor fight on the Bedford bill next week.