For the second time in two weeks, Penn State President Graham Spanier made the case in Harrisburg for saving the University's state appropriation from the devastating cuts that have been proposed.
"We have to continue to be frugal with our funds, but we also need your support," Spanier told the House Appropriations Committee during its hearing for state-related Universities. As was the case with the Senate hearing last week, Spanier was joined today (March 28) on the panel by Ivory V. Nelson, president of Lincoln University; Mark A. Nordenberg, chancellor of the University of Pittsburgh; and Ann Weaver Hart, president of Temple University.
The three-hour hearing included statements of support as well as some admonitions about accountability. However, many of the representatives wanted to know how the proposed cuts would affect the students, and the state in general.
"More than 80 percent of our students receive some sort of financial aid, with the percentages higher for our minority students. About 60 percent of our students have loans. We are not a school for rich kids. This cut begins to put higher education out of reach for them. We have all said, and repeated over and over, that we cannot put the burden of this cut primarily on the backs of our students. Tuition already is too high. One of the principal reasons we're pleading with you is because a cut of this magnitude closes the doors of access and opportunity at a time when we're trying to increase it," said Spanier.
Spanier explained that Penn State was founded to be the people's university of Pennsylvania, and for a long time it was the only public education option in the state. Going back more than 100 years, before the establishment of community colleges, the University began to develop its system of 24 campuses at the request of the state. "We were expected to meet the broad needs of the state of Pennsylvania," Spanier said.
To meet those needs, the University developed a number of majors that don't exist at other Pennsylvania institutions. "Some of those are programs we would have to look at for possible elimination, and if we did eliminate them, they'd go away in Pennsylvania. We don't want to do that," he said.
In terms of the economy, the combined impact of Penn State, Pitt, Temple and Lincoln is substantial. Although Lincoln is a small university enrolling approximately 2,000 students, Nelson said his university is the second-largest employer in southern Chester County, where the school is located. Temple's Hart quoted a $5.3 billion impact and emphasized the university's commitment to providing jobs for men and women who live in the region. "We recruit and hire from the immediate neighborhood, we contribute to the development of residential living and partner with neighborhood organizations," she said.
Nordenberg said that the medical centers and educational institutions such as the University of Pittsburgh Medical Center (UPMC) and the University of Pittsburgh were the largest employment sector in Pittsburgh, and the only ones that have added jobs every year for the past 15 years. "Our sector is widely credited with cushioning our region from the impacts of the Great Recession, and we support close to 27,000 jobs. We also generate $4 in research support for every $1 of state appropriation money we receive," he said.
Penn State is the largest of the state-related universities, and so as expected it has the largest economic impact. "An independent economic impact study conducted a few years ago showed that Penn State is the single greatest contributor to the state's economy, at $17 billion a year. Add up all the performing arts venues, museums, entertainment, airports, professional sports teams and other enterprises in the state, and they don't add up to our impact," Spanier said. "We write 47,000 paychecks a month, with a lot of that money coming from funds originating outside of Pennsylvania, such as federal research dollars. From almost any angle you look at it, Penn State returns $25 in economic impact for every $1 the state invests in us."
Rep. Brian L. Ellis (R-11) asked the panel to specify what Pennsylvania citizens are getting for their tax dollars that go to the universities as their state appropriations. Spanier pointed out that Pennsylvania is near the bottom among the 50 states in per-student appropriations for public higher education. "We're getting just over $3,000 per student per year toward what we think is an excellent education," Spanier said. "We seem to be in an era where we're talking about the budget in sound bites. In reality, it's not that simple. We are very careful with funds we get. We're graduating about 18,000 students a year, and have one of highest graduation rates in country. The Wall Street Journal recently released a study where they surveyed corporate recruiters around the country and asked them to rank whose graduates they most want to hire, and Penn State came in first. That's a clear indicator of the quality of our education, and an indicator of what we do."
In response to several similar questions related to the actual size of the proposed cuts, all four panelists explained that a university budget is complex, with a lot of restricted funding that can't be reallocated to cover cuts to other areas of the budget. "This is not a 4 percent cut as some are saying. This is a 52.4 percent cut in one of the state's critical resources," Spanier said. "Most of our overall budget has nothing to do with educational programs. It relates to nearly 1 million patients at Hershey, which operates on a self-support basis. We can't take Medicare funds intended for patient care at Hershey and instead use them to hire an English professor. We have $800 million in research funding, but we can't use federal research funds for our educational budget. Our educational budget has two sources of income – the appropriation and tuition," Spanier said.
In responding to a question by Jim Christiana (R-15) about why Penn State's tuition keeps increasing, Spanier explained that since the appropriation has been flat and expenses such as health insurance and utilities costs have increased dramatically, the University has had to raise tuition. "We've frozen salaries two of the last three years. We've had $200 million in internal budget cuts to try to close the gap. But we also have gained 14,000 additional students in the last decade. They're desperately eager for a Penn State education, and we're working to educate them without one additional dollar from our appropriation."
Rep. Scott Conklin (D-77) asked about the impact the proposed cuts would have on Cooperative Extension and agricultural research, services Conklin stressed were provided to the public free of charge.
Penn State operates Cooperative Extension offices in all 67 counties in Pennsylvania, and provides assistance for one out of every two households in the state in areas such as nutrition, agriculture, water resources and others. "We've held seminars for 50,000 landowners to help them learn how to negotiate leases with the natural gas companies who are working to extract the Marcellus Shale resources," Spanier said. In addition, 4-H is operated through Penn State Cooperative Extension. Penn State currently employs roughly 1,250 individuals in the college of Agricultural Sciences. "The total proposed cuts for those areas is $29 million. When you add in the college's share of the Education and General budget, the proposed cuts to the College of Agricultural Sciences is $35 million. Again, 75 percent of our budget is people. That figure represents about 440 employees in those two line-items, which is a reduction of 36 percent of that workforce."
To close the hearing, William F. Adolph Jr., Republican chair of the House Appropriations Committee reminded everyone that there still is a long way to go in the process. As the House and Senate committees continue to gather information through hearings with other recipients of state funding, they will work in the coming months to finalize the state budget.