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March 6, 2014

State-relateds plead funding case in Harrisburg

Tuition increases, layoffs and loss of top faculty are among the effects of declining state support, leaders from Pennsylvania’s four state-related universities told legislators last week.

Chancellor Mark A. Nordenberg, Penn State President Rodney A. Erickson, Temple President Neil D. Theobald and Lincoln President Robert R. Jennings testified in a pair of budget hearings Feb. 25 before the state House of Representatives and Senate appropriations committees in Harrisburg as part of the annual state budget process.

Pitt, Penn State, Temple and Lincoln universities all are facing flat funding under Gov. Tom Corbett’s proposed budget for fiscal year 2015, which begins July 1.

Pitt requested a 5 percent increase in its state appropriation to $155.19 million (made up of almost $143.11 million for general support and $12.08 million in academic medical center funding) for the coming fiscal year, at which level it would hold tuition increases to 3 percent and increase the compensation pool 2.5 percent. (See Oct. 10 University Times.)

However, Corbett in his Feb. 6 budget message proposed flat funding not only for Pitt and its fellow state-related universities, but for State System of Higher Education schools and community colleges as well, as part of his $29.4 billion spending plan for FY15.

Nordenberg declined to say how much tuition could increase if funding for Pitt is not increased. “Our goal, as stated in our proposal, is to stay in range of 3 percent if we receive the funding we had requested,” he told the Senate committee. If not, “there will be some kind of a tuition increase beyond that,” he said.

Temple’s Theobald told the Senate committee, “Faculty members are being recruited away. We are doing our best to keep those we really want to keep.”

Jennings, who heads one of Pennsylvania’s historically black institutions of higher education, told senators that Lincoln’s board has approved a 2 percent tuition increase for the coming year, even though such an increase typically means 4-6 percent of its students will not be able to afford to return. “We really need to be increasing tuition by about 5.5 percent but we know we can’t afford to do that,” he said.

Nordenberg cited a recent study that showed Pennsylvania ranks 47th of the 50 states in investing in higher education and that it was among only 10 states that, with the economy showing signs of recovery, had not begun to reinvest in higher education.

“It does put us in a corner in terms of delivering to our students and delivering at an affordable cost,” he told the Senate committee.

The chancellor reiterated to the Senate committee the findings of Gov. Corbett’s Advisory Commission on Post Secondary Education, which included both business and education leaders. Nordenberg, Erickson and Jennings were part of the 31-member panel, established in 2012 to make recommendations on Pennsylvania’s postsecondary education system. (See Nov. 21, 2012, University Times.)

As part of its recommendations in a November 2012 report (posted at, the commission cited a lack of predictability in higher education funding that “makes it difficult for institutions to plan effectively and optimize performance.” The commission called for the state to commit to a minimum base level of funding equal to its $1.67 billion FY13 appropriation to the Department of Education and to the Pennsylvania Higher Education Assistance Agency, coupled with additional outcome-based performance funds. The commission recommended establishing a $256 million performance fund that could be earned over the two-year FY15- FY16 period. At that level, FY16 funding would be returned to the average funding level (in nominal dollars) of fiscal years 2002-11, the commission stated.

Nordenberg told the Senate committee that the commission’s report stated “funding for higher education in Pennsylvania had reached rock bottom. If we did not want to do damage, that it was going to be increasingly hard to keep higher education affordable for families and to maintain the quality that those families expect. And this was the year targeted by that group for increases in funding. So flat funding keeps us behind that plan, and obviously the value of what we’re receiving is eroded by the impact of inflation.”

He told the committees that the lack of state funding for public higher education has raised tensions in terms of maintaining quality and affordability.

“We have felt both those types of pressures,” the chancellor told the Senate committee. “We compete in a national and international market. If we’re not funded at competitive levels, that is a disadvantage for us but it’s a disadvantage for the commonwealth in the end as well.”

Nordenberg told the House committee that he knew of no action that had been taken in response to the commission’s report. “There was some discussion for a period of weeks after the report was first released. But if more has been done I’m unaware of it.”

Jennings added, “We spent a lot of time on that commission working through the issues and I think what we came forward with was a realistic plan.

“There were people who felt that we had to take under consideration the constraints under which the commonwealth and the whole nation had been operating. What I think we came forward with was a realistic plan. I was certainly hopeful of the fact — and I am still hopeful of the fact — that this is going to be the year that we start to implement what we recommended, which was accepted by the governor, who came out to hear the final report and thanked the committee for its work.”

Erickson agreed. “We know we’ve been in a great recession and the commonwealth has been relatively slow in coming out of that,” he said.

As a member of the governor’s commission, Erickson said, “I thought we put together a good path, a good map for how year by year we increase (funding), so at the baseline we get up to the average of where we were before things really began to decline in the early part of the past decade. I thought it was a very realistic kind of approach.

“I seriously doubt that the General Assembly is going to have the resources to change what has been decades in the making. But I think what we need is to follow a plan where we’re saying, ‘Look, we’re going to make an investment on the part of the people of Pennsylvania and we’re going to stick with that until we at least get back to some area where we need to be,’ so that we can keep our tuition increases very moderate in the future — inflationary kinds of increases; keep the doors of opportunity open, be affordable. That will pay, in the long run, will pay big dividends for the commonwealth. I think it needs a long-term commitment now to really recover from basically 40 years of underinvestment.”

Nordenberg agreed that the funding issue has been years in the making, “but the last few years have been particularly difficult,” he said. “We are now back to mid-’90s levels of funding, in absolute dollars unadjusted for inflation. If there are inflationary adjustments made, we now are funded at a lower level than any level since we became state-related.”

Theobald, who took the helm at Temple in January 2013 and was not part of the governor’s commission, told the House committee that he has observed during travel in Asia that the Chinese government is making large investments in education that could undermine American universities’ leadership in higher education.

As Pennsylvania is flat funding education, “our competitors abroad are investing vast sums of money in higher education and we really need to be alert to that, that they don’t pass us in this area,” he said.

In response to questioning by Rep. Jake Wheatley (D-19) on whether the state’s funding system is adequate and based on rational criteria by which the state-related schools can understand how they are funded and know what’s expected in return, Nordenberg said, “It’s a system that has worked reasonably well over the course of some periods of time but I don’t think it is a system that has the kind of rational framework of inputs and expectations that you were describing.”

Noting that the system predates his 19-year history at the University’s helm, the chancellor said, “Each year we’re building, or attempting to build, or attempting to protect a base that most of us didn’t have a particular role in creating.”

Nordenberg said: “If you look at the overall system of higher education in Pennsylvania, if there is one part of it that really does make sense it is the state-relateds. And that too may be just the product of history.

“But when you look at the four institutions … Lincoln has an historic and very special mission. Temple is in the southeast, Penn State is in the middle of the commonwealth, Pitt is in the southwest, and we actually are quite distinctive in our academic strengths. And so you don’t see a lot of duplication; you don’t see a lot of wasteful competition.

“And I think when you look at our successes, whether measured in the marketplace of attracting students, whether you look at our successes on the national stage in attracting research support, this is a part of the system that works.

“My hope always had been that there would be some reasoned attempt to invest in quality and to invest in returns. And I think if we were given the opportunity to make that kind of case, we could make a very compelling case that we are a very worthwhile investment for the commonwealth and its people.”

— Kimberly K. Barlow