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March 4, 2004

Legislators Doubtful About Higher Appropriation

HARRISBURG — Legislators praised Pitt and Pennsylvania’s three other state-related universities to the skies during Feb. 25 hearings of the House and Senate appropriations committees.

“I believe you represent some of the finest educational institutions in the country,” Sen. Edwin Erickson (R-Delaware Co.) told Chancellor Mark A. Nordenberg and his counterparts from Penn State, Temple and Lincoln. Sen. Joseph B. Scarnati (R-Jefferson Co.) said: “If you were all publicly traded companies, and if your earnings were your students and your dividends were what your students ultimately did for the commonwealth, I don’t think there would be anybody in this room who wouldn’t want to own stock in you.”

But lawmakers also said, regretfully, that there’s little they can do — short of dramatically hiking taxes, an especially unlikely move in an election year like 2004 — to provide substantially more money to the four universities than the 2.25 percent increases recommended by Gov. Ed Rendell for the fiscal year that begins July 1.

Acknowledging that 2.25 percent “is not going to get it done” in terms of meeting the schools’ financial needs, Sen. James Rhoades (R-Schuylkill Co.) called on university leaders to work with state lawmakers on a new, comprehensive strategy for funding higher education.

Given the soaring price increases that universities face each year for insurance, utilities and other costs, “we’re never going to be able to keep up with you” and provide sufficient money, said Sen. Jake Corman (R-Centre Co.). “But, it seems to me, we could be smarter about how we spend” higher education dollars.

The state’s current master plan for higher education “is so generic and broad, you can drive a truck through it,” complained Rhoades, who is majority chairperson of the Senate’s education committee. Other senators confessed that they didn’t even know Pennsylvania had a higher ed plan — generic, broad or otherwise — until Nordenberg mentioned it during the appropriations committee hearing.

University leaders welcomed the opportunity to help draft a new higher ed funding strategy, although Penn State President Graham B. Spanier urged that it not burden universities with new regulations or restrictions. “With the flexibility we currently enjoy [in allocating state monies] we can stretch our dollars further,” Spanier said.

Rhoades agreed. “If we weigh you down with more rules and regulations, it will only make things harder for you,” he said.

Pennsylvania lawmakers already require state-related universities to submit reams of reports each year that, university administrators suspect, never get read in Harrisburg, said Spanier. “It would be great if you would ask us to put our heads together, and then come back and report what things we think could be dropped from our paperwork and reporting requirements without lessening our accountability,” the Penn State president said. The staff time required to produce those reports is “considerable,” he added.

Testifying together for the third consecutive year before a General Assembly appropriations committee (last year it was the House’s committee, in 2002 it was the Senate’s), the university leaders again presented a united front.

Each argued forcefully for Harrisburg to restore his school’s state funding at least to the level originally approved for FY 2001-02 before lawmakers imposed a series of budget cuts.

Restoring Pitt’s state funding to 2001-02 levels would boost the University’s current $163.4 million appropriation to $178.5 million. In addition to that money, Pitt wants $6 million for lab renovations and upgrades for next year.

Should Pitt get what would amount to a state funding increase of 9 percent, the University has pledged to limit tuition increases next fall to 4 percent and to increase the pool of money for faculty and staff salaries by at least 4 percent.

Characteristically, Nordenberg did not say how much Pitt might raise tuition or salaries if the University gets only the 2.25 percent increase recommended by Rendell. But he and the other leaders emphasized that they want to avoid another year of double-digit increases if at all possible.

For that to happen, Harrisburg needs to do its part, they said. “All of us,” Nordenberg said, “are committed to providing a very high-quality educational experience. That is what is expected by the students who enroll in our universities, and that does come at some cost.”
All four university heads reported rising numbers of applicants at their schools, despite tuition increases well beyond cost-of-living inflation in recent years.

Nordenberg pointed out that in the mid-1990s Pennsylvania’s two premiere private universities, Carnegie Mellon and Penn, charged about $13,000 more for tuition per year than Pitt, Penn State and Temple. “This year, that tuition differential is about $20,000,”
Nordenberg said, “so in a sense we have become more affordable, looking at the market — although I know that’s small consolation to the students and parents who actually have to write the checks.”

During the Feb. 25 Senate hearing and individual hearings held for each school earlier that day by the House appropriations committee, the university heads cited cost cuts and improved efficiencies at their schools. “We have, over time, reduced staffing in many administrative areas,” Nordenberg told the House committee. “We are just now completing the largest period of campus construction in our history, and we’re doing that with a Facilities Management division that is of reduced size.”

From 1995 to 2003, Pitt’s research support increased from $230 million to $513 million, a 123 percent jump. Yet, while the number of research grants Pitt has received, and their dollar value, have increased dramatically, the University’s Office of Research hasn’t added staff, the chancellor said.

He also noted that Pitt is well on its way to meeting its $1 billion capital campaign goal.

Spanier said a Penn State task force identified more than $14 million in permanent cuts and income enhancements last year. The savings from the task force’s work translated into a tuition savings of $200 per Penn State student for the current academic year, he said.

“But we can’t cut our way to greatness,” Spanier told both the House and Senate committees.

Ivory Nelson, president of historically black Lincoln University, told senators: “We cut fat, and then muscle. A lot of us are into the bone now.”

In other testimony during the House and Senate hearings:

• Nordenberg told lawmakers that Don Smith, who directs the economic development activities of both Pitt and Carnegie Mellon, is leading the two universities’ efforts to participate in Pennsylvania’s new “Keystone Innovation Zones” (KIZ) program. The program grants tax breaks to start-up and out-of-state companies that set up shop in designated KIZ zones near colleges and universities. It’s intended to create jobs and keep university graduates from leaving Pennsylvania.

• Questioned about relations between Pitt and its home city, Nordenberg told the House committee: “The University of Pittsburgh needs a strong City of Pittsburgh. It is our main home and to a considerable extent our ability to achieve our aspirations is tied to having a healthy, safe, vibrant city. Similarly…the City of Pittsburgh needs a strong University of Pittsburgh because we are at the center of so much that makes the city strong today — and that role is likely to increase over time.” Nordenberg did not mention city proposals to begin taxing, or demand larger payments-in-lieu-of-taxes from, non-profit institutions such as Pitt. But the chancellor said he felt hopeful that, with Harrisburg’s appointment of a committee to straighten out Pittsburgh’s finances, “we’ll be able to move forward and develop a coherent plan.”

• University leaders deplored college athletics scandals such as the recent allegations of rape and sex parties at the University of Colorado. Nordenberg voiced pride in Pitt athletic department personnel and student-athletes. “We believe an athlete should be involved in the broader experiences of undergraduate life,” he told the Senate committee. “And we believe that they ought to be held to the same standards of conduct that we apply to other students.” Spanier, a former NCAA board chairperson, said: “I think it’s time for university presidents to stand up together and say that we can’t have this going on.” Spanier told senators that he meets with Penn State coaches at the beginning of each academic year, making it “very clear that a coach will be fired if they do not keep up the integrity that we expect at Penn State.”

• Spanier bristled at Gov. Rendell’s proposal to increase funding for the four state-related schools by a lower percentage than the 3 percent proposed for Pennsylvania’s 14 state-owned universities and 5 percent for community colleges. “Frankly,” Spanier told the Senate committee, “I don’t understand why we would not be treated the same as the community colleges or the State System of Higher Education. It’s hard for me to believe that our institutions would be valued less in terms of the need to keep tuition down and provide quality education, less than any of our partners in the higher education community.”

• Nordenberg and Arthur S. Levine, Pitt senior vice chancellor for Health Sciences and dean of the School of Medicine, testified at length about Pennsylvania’s soaring medical malpractice insurance costs, the state’s comparatively low funding of medical and dental education, and the problem of Pitt-trained physicians leaving the state. See accompanying story.

—Bruce Steele

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