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March 31, 2011

House appropriations hearing: More support but criticism too

In state budget hearings this week, some House appropriations committee members echoed their Senate counterparts in expressing willingness to collaborate with higher education leaders to find ways to avoid massive cuts in state support proposed by Gov. Tom Corbett.

In his March 8 budget proposal, the governor unveiled a $27.3 billion state budget that would cut appropriations for higher education, including reductions of more than 50 percent for Pitt and its fellow state-related schools.

However, in an interview with the University Times, Chancellor Mark A. Nordenberg said he felt a distinct difference between the March 16 Senate appropriations committee hearing and a House hearing earlier this week. “The Senate hearing did involve expressions of support from literally every participating committee member from either political party,” Nordenberg said. In contrast, while most members of the House committee were supportive, “there were some … who were not sympathetic to our position and whose views were reflected in their questions, their statements and the tone of their presentations to some extent,” the chancellor said.

“It was for me a reminder that not everyone accepts our position, that there still is a lot of work to be done and that the road to some substantial measure of restoration is not going to be an easy road to travel,” the chancellor said.

In opening the March 28 House hearing, appropriations committee chair William Adolph (R-Delaware) acknowledged the importance of education and said he wanted to work with university leaders, students and parents “to work this out.” He told leaders from the four schools, “I don’t want folks to walk away from this hearing thinking this administration, this General Assembly, doesn’t care about higher education.”

Thomas H. Killion (R-Chester/Delaware), subcommittee chair on economic impact and infrastructure, said, “We need to work together — “$27.3 billion is the spend number,” adding that legislators need to look at the priorities within that framework.

In testimony that in many places overlapped presentations the four made during a March 16 Senate appropriations committee hearing (see March 17 University Times), Nordenberg and university presidents Graham Spanier of Penn State, Ann Weaver Hart of Temple and Ivory Nelson of Lincoln admitted surprise over the depth of the proposed cuts and emphasized their responsible fiscal management, their schools’ mission to educate Pennsylvanians, their contributions to their communities and their broader impact on the state’s economy.

Nordenberg said the schools expected to do their part in closing the deficit. “Our appropriations have in fact been cut six of the last 10 years. What we didn’t anticipate were proposed cuts that were so deep, that were so disproportionate and that were so potentially damaging not only to our institutions, not only to the students and families who depend upon the programs that we deliver, but also to the progress of the commonwealth and its economic strength.”

Noting that the overall decrease in the state general fund budget is approximately 3.5 percent, Spanier told legislators, “I think all of us would agree that proposed cuts of more than 50 percent of our appropriation would represent substantially more than a fair share by almost any definition.”

While some House committee members commended the universities for their work, others called the leaders to task for tuition increases that have raised costs for Pennsylvania students in spite of the state’s appropriation support.

Rep. Cherelle Parker (D-Philadelphia), subcommittee Democratic chair on health and welfare, compared tuition at state-related schools with much higher figures at private Pennsylvania institutions.

“We’re talking about a possible $20,000 to $40,000 range in difference in the cost to attend a state related or state institution versus a private institution.”

However, referring to Brown vs. Board of Education, the Supreme Court decision that ended public school segregation, Parker said, “Now, the issue of discrimination and/or the unequal distribution of funds is no longer between races … the issue now is between the haves and the have-nots.”

She told the leaders, “It doesn’t matter if you all are cut 50 percent. You’re going to increase the cost of tuition anyway. You’ve been doing it for the last 10 years. … It also doesn’t matter because those people who can afford to pay the cost at those private institutions, they can simply write a check. And even if they decide that they’re going to grace you all with their presence, they can write a check to attend your institutions too.”

Spanier responded, “We are not a school for rich kids. None of us are,” adding that stagnant levels of state and federal student aid add to the hardship.

Students can’t afford double-digit increases, Spanier said. “Tuition is already too high, even though it’s not as high as private universities. … One of the principal reasons we’re pleading with you to moderate the scope of this cut, or to not cut us at all, is because it closes the doors of access to opportunity at a time we’re trying to increase them.”

He noted that the appropriation cuts would affect disproportionately the schools’ education budgets, which are funded mainly through tuition revenues and state appropriations. “We can’t take funds meant for patient care or Medicaid or Medicare reimbursements and use them to hire an English professor. … We can’t use federal research funds to offset a cut in our educational budget,” he said, telling legislators over the course of the hearing that mid-year rescissions, increased health care costs, higher utility bills, post-9/11 insurance increases and prevailing wage requirements in capital construction projects all have played a part in higher expenses and tuition costs.

Spanier said, “We have to continue to be as frugal as possible but we need your support for that other significant variable in that equation, which is the appropriation.”

He said it would be difficult to expect that tuition increases would not be needed, given years of flat state appropriations. Students still need to be taught, “so we need support from all different directions for this. …

“As tuition goes up I spend more and more of my time on the road trying to raise money from donors for scholarships to go toward offsetting any tuition increase that we may have to make. It’s very painful for us when we have to raise tuition, potentially putting education out of reach for certain students.”

Rep. Mark Mustio (R-Allegheny) pushed university leaders for specifics on the reduced budget scenarios their institutions have considered.

“We have not talked about any specific cuts,” Nordenberg said, drawing a sharp response. “That surprises me,” Mustio said. “You’ve had to have some discussions and some planning on these things.”

Spanier admitted that one of the scenarios Penn State had developed involved a theoretical 10 percent budget cut. “Never in my wildest imagination did I contemplate that we would be proposed for a cut of more than half of our appropriation.”

Mustio sympathized. “If you’re doing a business plan and you’re expecting something relatively close to what you’ve received in the past and this number hits you, it’s a shock,” he agreed. “We are struggling across the board to find revenues.”

In response to another legislator’s question, Spanier declined to specify what cuts might be under consideration. “If we say right now we’re closing that campus or these programs, you have basically killed them forever,” he said. “Students leave, faculty look for jobs elsewhere, nobody wants to enroll because they don’t think they will be able to stay there and finish.”

Rep. Paul Costa (D-Allegheny) inquired about the possibility of using endowment funds to fill schools’ budget gaps.

Nordenberg noted that those funds are restricted by agreements with the donors, who have given money in support of a specific area of interest, as well as by law, which limits the amount of endowment earnings that can be withdrawn in a given year.

He said, “So often it seems to me when you’re dealing with funding at the state level, success is not an appealing factor. So, you would say, ‘You have a big endowment, what do you need from us?’ On the private side, I think most investors … look for quality and impact. A lot of those people would say, ‘If you’ve been able to attract that kind of support from people who are knowledgeable of and committed to your mission, that’s got to be a sign of quality and impact and that gives us an opportunity to leverage those other dollars with our own investments.’”

He added that annual fundraising and campaigns to increase the University’s endowment are “a way of partnering with the commonwealth to increase other resources to be less dependent the state.”

The governor’s budget eliminates medical school funding for the state-related schools. Jim Christiana (R-Beaver) sought statistics on tuition and acceptance rates for in-state and out-of-state med school students. In a typical year, he said, state dollars are “subsidizing out-of-state kids to come to our medical school at a time when the need for doctors here in Pennsylvania is extreme, as you know. We need our students here in Pennsylvania,” he said.

“Even if we gave more money to the medical school, my concern is that there’s no oversight like other states have to make sure we’re accepting in-state students,” Christiana said. “Maybe this comes down to a bigger argument: Should our state-relateds be private institutions or public institutions because there is no accountability for the funds that we are giving. … There’s nothing anyone in this General Assembly can do to make sure that this money is going to tuition relief.”

Nordenberg later told the University Times that should the governor’s proposal to eliminate state funding for Pitt’s medical school be accepted, “That would, practically speaking, be a privatization of the medical school.”

In the House hearing, Nordenberg pointed out other differences between public and private institutions in discussing Pitt’s regional campuses, which are anchors in their communities and serve some regions in Pennsylvania where few options for higher education exist. “Branch campuses don’t tend to be part of private universities,” he said, noting that Pitt has campuses in Greensburg, Bradford, Johnstown and Titusville while private Carnegie Mellon has branches in California, Qatar, Portugal and Australia. “It’s an apples-and-oranges comparison,” he said.

Nordenberg told the University Times that although some other universities’ regional campuses are struggling to maintain enrollment levels, Pitt’s “are performing at high levels.” He said, “We have invested in ways that make them attractive homes for students who enroll there and we have worked hard to make more meaningful their connections to the University as a whole.”

In response to legislators’ criticism, Spanier said, “We have had a salary freeze two of the last three years,” adding that another freeze has been announced for the upcoming fiscal year. “Where else in state government or higher education or wherever has that been the case?” he asked, bristling at the implication “that we are somehow mismanaging or spending improperly.”

Spanier continued, “Yes, we raise tuition every year because we have to, but it’s a real struggle for us to keep tuition as low as we can. We are very mindful of the need to be good stewards of the resources we have, but I don’t see how cutting the budget dramatically — even if what people are thinking is true, that we got too much money in the past — why would cutting that in half be a remedy for it?

“Some of this talk that’s out there that you can be leaner and meaner and stronger if we cut you substantially, I don’t understand that,” Spanier said.

“You can cut your way to mediocrity, but not to excellence.”

“Some of us are listening to you,” said Rep. Ronald Waters (D-Philadelphia). “There are some things you can cut, some ways you could streamline, but we should prioritize education in this commonwealth.”

He noted that funding for education has been flatlined, but the proposed budget includes an increase for the Department of Corrections.

“How many more colleges or universities are we building? But I see we’re building more prisons,” he said. “Some of us believe there’s a better future for our children and how we prioritize is not going to be in how to create prisons. We want to invest in dormitories, we want to invest in quality education and quality teachers.”

Waters said that accountability is important, as is ensuring that Pennsylvanians benefit from in-state tuition differentials. “But if we want them to graduate and stay in-state, we must create a safer environment for them to work in. Building more prisons is telling me we’re only preparing for a more dangerous climate for them to work in because we’re preparing for more crime.”

—Kimberly K. Barlow

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