University Times

Chancellor Mark A. Nordenberg, at right, and Board of Trustees chair Stephen Tritch greet Pennsylvania Senate appropriations committee members from left, Jim Ferlo (D-34), John Pippy (R-37) and chair Jake Corman (R-34), back to the camera, before the Sept. 12 hearing on campus. The committee is visiting Pennsylvania’s four state-related institutions to hear testimony on the impact of cuts in state support.

Chancellor Mark A. Nordenberg touted Pitt’s accomplishments and spoke out against the idea of shifting state funding for higher education from institution-based appropriations to a student-based system as part of a Sept. 12 state Senate appropriations committee hearing on campus.

In the wake of deep cuts in state funding for higher education in Pennsylvania’s fiscal year 2012 budget, appropriations committee leaders said they are making the rounds of the four state-related universities, not only to get a closer look at how state appropriation dollars are spent but also to discuss ways of funding higher education in the future.

The legislators met last week at Penn State and are scheduled to hold similar hearings at Temple and Lincoln universities in October. Although university representatives testify in Harrisburg before the committee each spring as part of the annual budget process, committee chairman Jake Corman (R-34) said, “These hearings are meant to spend a little more time at each university and get an understanding of what the taxpayers’ investment is buying.”

Legislators finally settled on a budget that slashed the four schools’ appropriations by about 20 percent, significantly less than the 54 percent cut initially proposed by Gov. Tom Corbett, who also floated the idea of pinning state higher education funding to individual students rather than institutions. (See March 17 University Times.)

Still, state appropriations for the four schools have fallen to 1995 levels, said minority chair Vincent J. Hughes (D-7). “That is significant.”

The long decline in state support — most pronounced over the past decade during which Pitt’s appropriation was cut 10 times, Nordenberg said — has culminated in the most recent cut of 19 percent to Pitt’s general appropriation and 50 percent to academic medical center support. The overall 22 percent reduction left Pitt with a $70 million budget gap — $40 million of which was attributed to state cuts and $30 million tied to what Nordenberg called “unavoidable increases in the cost of doing business.”

The result has included an 8.5 percent tuition increase, reduced spending on deferred maintenance and cuts to academic and student life initiatives, library resources and seed money for research, Nordenberg said.

He noted that academic and administrative unit leaders have been assigned budget cuts, and pay increases for many employees have been delayed. In July, Pitt’s trustees increased the salary pool by 2 percent, but raises for employees who earn more than $40,000 are being deferred until Jan. 1. (See July 21 University Times.)

“A real concern, with other recent salary freezes and changes to some of our benefits plans, [is that] our competitive compensation position already is deteriorating. We do compete with the very best universities in the country — public and private — for faculty and staff,” Nordenberg told the legislators.

“This past budget, we were told, was driven by math. Put simply, there was a huge budget deficit to close. Time was short, those in charge essentially needed to make cuts wherever they could find the money. But this is a new budget-building year. Hopefully and consistent with this hearing, it can be a year in which more careful thought can be given to the long-term consequences in charting the path we will be traveling together.”

Chancellor Mark A. Nordenberg testified to the impact of state budget cuts to Pitt and other institutions of higher education at the Senate appropriations committee hearing on campus last week.

Nordenberg traced the University’s progress in the 45 years since it became a state-related institution.

What could not have been anticipated, he said, “is the extent to which the impact of its work would become so central to regional economic development.”

In that time, Nordenberg said, Pitt has awarded 287,000 degrees and faculty have attracted $10.5 billion in research grants. Research expenditures rose from less than $23 million 45 years ago to more than $800 million currently, Nordenberg said, adding that research expenditures support some 29,000 local jobs and that Pitt attracts more than $5.50 in research funding for every dollar of the state appropriation it receives.

In addition, education and health services is the Pittsburgh region’s largest industry sector, employing one in five local workers.

However, Nordenberg said, “Even extraordinary returns of this type don’t drive state investments. This is true whether those returns are measured arithmetically, by dollars generated that flow through the local economy, or in more human terms, by lives enhanced through the power of education or lives improved through the products of research or lives fulfilled by the opportunity to hold a job and engage in meaningful work.”

Nordenberg told the committee that the cuts the University has endured aren’t fair or appropriate, given the return on investment Pitt provides, nor are they good for the state’s future.

“It does seem as if everyone felt trapped by the numbers last year,” Nordenberg said, adding that the discussion needs to turn toward longer-term directions for restoring higher education funding.

“We’d like to have a discussion on the appropriate path to restoration” as the state’s revenue picture becomes clearer, he said.

Higher ed vouchers?

Committee member Jay Costa (D-43) asked Nordenberg about the impact of moving to a student voucher-type system in funding for higher education.

The issue, Nordenberg said, “has a naturally divisive potential.” In arguing against the approach, Nordenberg clarified that he is not speaking against independent institutions of higher education nor against financial aid for students.

“Sometimes when you hear ‘dollars follow the students’, the language has such a superficial appeal that you almost sit back and become reluctant to criticize it, but I do think such an approach is fundamentally flawed for a range of reasons,” Nordenberg said.

“If this really is the higher education equivalent of the voucher systems that have been proposed in basic education, those systems almost always are grounded in the argument that they are designed to help students who are prisoners in low-performing school districts.

“Well, there are no prisoners in higher education and certainly there are not performance problems of that type within public higher education,” Nordenberg said. “America’s public research universities remain the envy of the world.”

The approach also ignores the contributions made by public universities and the scale that is needed to deliver on those contributions, the chancellor said. “Think about what it takes to attract $800 million in research support every year. You need a large, strong university. If you took the state support from the University of Pittsburgh that’s helped build us into an institution that can attract those kinds of funds and spread it out to 100 other universities, it’s not as if each of them would return 1/100th of that amount to the economy of western Pennsylvania or would make the kind of contributions to the future strength of society, when it comes to that part of our mission.”

It makes sense to concentrate investments in institutions that can deliver on their assigned goals, Nordenberg said, adding that the same likely is true for community colleges, which provide vocational programs or remedial education.

“I have never heard anyone explain how the math works,” Nordenberg said. In comparison to the tuition differential offered today, “No matter how you work the numbers, it almost always works to the disadvantage of the students.”

He also pointed out the recent “messes and controversies” in federal funding for higher education. Although there is an appeal to the idea that students be free to invest money for education wherever they wish, “What we have seen from the federal experience is that students, subjected to the right kinds of marketing, are often likely to invest those dollars in programs for which they may not be particularly suited, in institutions that do not have reputations for quality, and end up without having productive alternatives in life after having traveled down that path.”

Nordenberg said, “If you’re investing in Pitt students through your investments in the University of Pittsburgh, you really are helping high-quality students who already have demonstrated their commitment to work or they wouldn’t have built the records that got them admitted in the first place. And they’re earning degrees from an institution that is respected,” he said, an advantage that will give them a leg up on future opportunities as they embark on their careers.

State Senate appropriations committee members listen to testimony at a hearing that drew an audience of more than 100 people to the Connolly Ballroom in Alumni Hall.

Sen. Jim Ferlo (D-38), minority vice chair, asked whether a position paper on the issue was being developed, adding that he would find such information helpful.

Nordenberg said, “We are prepared to step forward and analyze as well as argue as that becomes appropriate.”

In comments later in the hearing, Carnegie Mellon University President Jared L. Cohon provided the committee with additional perspective on the issue. Noting that one of the arguments for vouchers is to promote competition among colleges and universities, “You have no idea how competitive we are,” he told the senators.

“Universities beat each other’s brains out all the time – not just on the football field … but in every other way: competing for students; for faculty; for research funding; for philanthropic dollars; for prizes; for notoriety; for prestige,” he said.

“It’s got to be the most competitive industry you can imagine. So the idea we need a new funding scheme to promote competition doesn’t ring true.”

Impact of ongoing appropriation reductions

In light of the fact that the state-related schools have been reduced to 1995-level appropriations, minority chair Hughes inquired about how that level of funding might cripple the University’s mission in the future.

“If we held to the status quo, it would be a lot better than another year of disproportionate cuts. But it still would put us in a position where we would be squeezed in very significant ways,” Nordenberg said.

In addition to maintaining the University’s employment base and keeping tuition levels “reasonable,” the chancellor said the University would like to be involved in the kinds of public outreach consistent with its tradition. “Those are things, too, that it’s very difficult to turn to students and say, ‘There are 1,000 special-needs patients in the dental clinic and we just lost the funding. Can we make that up through tuition increases?’ Clearly we can’t. It’s a package of pressures and a package of problems that will continue.”

—Kimberly K. Barlow

Editor’s note: Links to participants’ prepared comments can be found at www.progress.pitt.edu/.