Penn State president addresses House Appropriations Committee

February 22, 2012

HARRISBURG, Pa. -- Penn State President Rodney Erickson appeared before the Pennsylvania House Appropriations Committee today (Feb. 22) in Harrisburg, Pa., to discuss the University’s proposed appropriation for the 2012-13 fiscal year. In light of continued shortfalls in state revenue collections, Pennsylvania Gov. Tom Corbett has proposed a 30 percent across-the-board cut for Penn State, Temple and Pitt. Erickson, who was joined by leaders from Pennsylvania’s other state-related universities, said he is mindful of the state’s budget constraints, but stressed to lawmakers the impact such broad cuts would have on a university that educates more than 96,000 students a year.

"As the state’s Land-Grant University, Penn State has always had a very special and unique relationship to the commonwealth," Erickson said. "This proposed budget would take us back to a level of funding that is equal to what we had in the mid-1980s; in inflation-adjusted dollars, back into the 1960s. This is a very difficult situation for us that will clearly have long-term impacts on the relationship of your Land-Grant University to the commonwealth and on the kinds of education and services that we’re able to provide."

This year’s proposed $64 million cut would drop Penn State’s general support line to just under $150 million, and would come one year after a $68 million reduction. The state’s appropriation is largely used to help offset the cost of tuition for Pennsylvania residents. Erickson said the University would continue to do everything possible to minimize impact on Penn State families, but said continued cuts of the magnitude proposed would affect tuition.

"At the University Park campus, nonresident students pay about $27,000 in tuition, while resident students pay about $15,000 -- at Commonwealth Campuses, resident students pay between $12,000 and $13,000. So the appropriation is critically important for keeping the tuition rate for our in-state students as low as possible," Erickson said. "The students at our commonwealth campuses come from families whose median income is 10 percent lower than the statewide median. Almost 40 percent are eligible for federal Pell Grants, and 62 percent of them work at least 22 hours per week. These are the students that we’re going to lose as costs increase and as the appropriation goes down, and these are people who are absolutely critical to the future of the commonwealth."

In the past year, the University has eliminated hundreds of jobs through layoffs and attrition, held the line on salaries for the second time in three years, cut academic programs and merged academic departments, while managing to keep the most recent blended tuition increase to 3.8 percent. Tuition for Commonwealth Campus students increased by 2.9 percent, and tuition for resident students at University Park increased by 4.9 percent.

Erickson said the University will continue longstanding efforts to identify savings and efficiencies, and to pass on any reduction of the proposed cut as lower tuition to Penn State students.

"We will do our level-best to turn over every rock, to find cost savings where we can," he said. "We don’t want to lay the impact on students and families any more than we have to, but at some point, we can’t continue to do business-as-usual."

For nearly three hours, Erickson and the leaders of Pitt, Temple and Lincoln University testified before the House Appropriations Committee. In addition to tuition, the conversation touched on the proposed cut’s potential impact on student debt and the universities’ ability to compete with similar institutions in other states. More broadly, the conversation touched on the effect of cuts to primary and secondary education on student preparedness for college, and on the effect of continued cuts to higher education on Pennsylvania’s economy.

Rep. Michael O’Brien (D-Philadelphia County), democratic vice-chair of the House Appropriations Committee, asked the university leaders to describe the breadth of their schools’ impact across the commonwealth.

"Penn State has a huge impact from one end of the state to the other," Erickson said, referencing a 2008 economic impact study that showed the University generates more than $17 billion in economic impact each year. That impact includes research funding that topped $800 million last year, much of which comes from out-of-state in the form of grants. Erickson also emphasized the public-service component of Penn State’s mission, including the University’s agricultural outreach programs, contributions to community education and service in other areas such as public broadcasting.

"Penn State reaches one out of every two households in the commonwealth, in one form or another, through the courses that we provide, through the World Campus. All of these things contribute to the economic well-being of the commonwealth, and those kinds of things are going to become increasingly difficult to provide in a privatized kind of world," Erickson said.

At several points throughout the morning, University leaders touched on the potential for privatization at some time in the future if state appropriations continue to dwindle at recent rates.

"We’re being pushed in the direction of becoming private universities," said Mark Nordenberg, chancellor of the University of Pittsburgh. "If you look at the major differences between public and private research universities, the first thing that catches everyone’s attention is that tuition is about three times higher."

Nordenberg also drew legislators’ attention to the fact that private universities educate more out-of-state students than in-state students, and the result, he said, is lessened in-state economic impact. At both Pitt and Penn State, about 75 percent of undergraduate students are Pennsylvania residents.

"One only has to look around at private research universities to see differences in their mission and structure," Erickson said. "We’ve always been very strongly committed to our Land-Grant mission, to our role as a public research university, but it’s getting more and more difficult every year to see that model be sustained over the years ahead. We really need to have a better understanding of where we’re going."

Erickson said it is his hope that the relationship between Penn State and the commonwealth can be strengthened.

"I think it’s absolutely essential that the partnership that has grown up over the years between the commonwealth and our state related universities be strengthened. It’s important to our students, it’s important to the well-being of the economy. It really is in many ways important to the future of Pennsylvania."

House Appropriations Committee Chair Bill Adolph (R-Delaware County) thanked the university leaders for speaking with the committee.

"I want to remind everyone that every governor’s budget is a starting point; a blue print," Adolph said. "We will certainly do our best to make sure your appropriation is correct for this year."

The conversation will continue on Wednesday, Feb. 29, when leaders of the commonwealth’s state-related universities will appear before the Pennsylvania Senate Appropriations Committee. Erickson is scheduled to speak to the committee at 1 p.m.

Last Updated March 01, 2012