PTO Budget Problems

As I alluded to last week, the PTO is again facing a budget crisis.  Acting PTO Director Teresa Stanek Rea told employees last week that “immediate and significant” budget cuts were coming due to lower-than-expected fee revenue and the congressionally mandated budget cuts from the sequester.

Hiring, travel, training, and information technology modernization will be the focus of initial cuts, but it seems likely that significant cuts will be required across the board.  The agency will attempt to minimize impact on users, but that can only go so far.

Director Rea noted that fee revenue is “substantially below” PTO expectations set for in its FY2013 budget.  Sequestration cuts have been mandated at about 5% of PTO revenue or $148 million.  Since the PTO is a fee-based agency that is self-funded that shouldn’t be a problem, right?  They simply will take in less revenue and therefore have less to spend.

Unfortunately, it appears the agency is getting hit by a double whammy.  Not only is revenue down, but Congress is again instituting fee diversion.  The 5% cut will apparently come from fees the PTO has collected.  These will be shunted to other agencies within the Federal government.

I thought the America Invents Act was supposed to fix all of the PTO’s budget problems and issues of the past.  The PTO was granted rule-making authority to set its own fees so as not to be at the whim of Congress.  And Congress PROMISED this time that it would no longer divert PTO funds.  Of course, this promise came at the same time that the prohibition against the practice was stripped from the bill.

What did we think would happen?  Did we really think Congress would keep its word on fee diversion?  Seriously?

Patently-O and IPWatchdog have written about this issue as well.

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One Response to “PTO Budget Problems”

  1. PTO Should be Exempt From Sequestration | INVENTIVE STEP Says:

    […] As noted previously, the PTO is facing another budget crisis due to cuts in its funding from sequestration.  This is despite the fact that the PTO relies on no tax revenue, but is funded by user fees. […]

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