APSCUF live-tweeted February’s State System budget-appropriations hearings before the Senate and House of Representatives. Watch both sessions in their entirety on our YouTube channel. Together, the hearings last more than four hours, so we’ve compiled the segments we thought were of most interest to APSCUF members. Here’s what stood out to us in the Senate hearing, in photo.
Some background: Pennsylvania’s State System of Higher Education’s Board of Governors requested a 2018–19 appropriation of $526.2 million, an increase of $73.1 million over current funding. In his address in February, Gov. Tom Wolf announced $15 million more for our 14 universities in his budget proposal.
Interim Chancellor Karen Whitney, Shippensburg University President Laurie A. Carter, and Brian Swatt, Board of Governors student member and Indiana University of Pennsylvania student, responded to legislators’ questions. Also in attendance were students from throughout the system who would attend a State System funding rally that afternoon.
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Sen. Andy Dinniman kicked off the hearing by discussing ways the State System could save a “considerable amounts of money” through bill revisions and consortiums. He is proposing legislation that would give State System universities control of money that is not part of state appropriations, he said. He praised Whitney’s work as interim chancellor.
“You’ve done an excellent job, and I want to thank you for changing the perspective,” he said. “It used to be the individual campuses existed for the system. Under your leadership, the system exists for the individual campuses.”
Whitney acknowledged the inverse in funding for state-owned universities, compared with how much Pennsylvania appropriated at the dawn of the system. She proposed the state “at least meet the students 50-50,” a process she said would take years. The system should continue to ask how it can make its dollars go farther, she said.
The interim chancellor brought up the National Center For Higher Education Management Systems report and described changes State System leadership has made or is considering to reduce bureaucracy and increase flexibility and responsiveness. Two of those are phased retirements and changing legislation to allow for buyouts, Whitney said. (All links and embedded videos are cued to intended starting points.)
“We have a task group with APSCUF and management working on these two points,” she said. “ … They will affect all employees, not just our faculty, but this idea of, as we’re trying to move a workforce — and let me just talk about our workforce. We have incredibly dedicated men and women who are faculty and staff, and many, many of them their life’s work are at these universities. And we have to respect them and appreciate them and at the same time know that things are rapidly changing in our society, that credentials in learning and the workforce needs of this state aren’t what they used to be. … So we’re shifting and changing, as you know, more rapidly — it seems like every day, every year — but our workforce can’t. And so we’ve got to look at how we can work respectfully with our existing workforce, move it to where we need to be, and keep adding to be relevant for the future.”
Dinniman agreed: “You also have to have authority to rapidly change the curriculum as the needs exist. … We have to give you and individual campuses that ability.”
He also suggested Whitney “apply to be the permanent chancellor.”
Sen. John Eichelberger immediately blamed APSCUF’s collective bargaining agreement for some of the system’s problems.
“I’ve got to start by saying I’m not as enthusiastic as my good friend Andy Dinniman about the future of PASSHE,” he said. “I think that we have a lot of problems there, and a lot of it isn’t of our doing in the legislature. A lot of it is related to the management of the system and the collective bargaining agreement that you’re stuck with, that stops a lot of change and progress. It would be nice to make a lot of these changes, but, as I see it, you’re not permitted to make a lot of these changes, at least from an administrative level without getting permission, so some of these things don’t happen.”
Eichelberger asked about the State System’s four-year graduation rate. Whitney shared four- and six-year rates (41 percent and 59 percent, respectively), both of which are higher than national averages (28 percent and 49 percent). He followed by asking which of the 14 State System universities had the lowest graduation rate, information that Whitney did not have broken down by campus.
He asked for the average base salary of a professor.
“There’s a couple numbers that we can work off of,” Whitney said. “What I really like to do is cut to the chase and do total gross earnings because different people in different ways earn money. For example, administrators, there’s basically one salary. You don’t get overtime.”
Eichelberger broke in to repeat that he wanted to know about professors.
“I’m going to talk to you about all our employees because I value all of them,” Whitney continued. “I will answer your question. Faculty have very clearly outlined in the collective agreement various ways in which … ”
Chair Sen. Patrick M. Browne intervened, reminding Whitney of the hearing’s limited time and asking her to answer Eichelberger’s question directly.
Her answer: $117,261.
“OK, and what are the work hours that are required by the CBA?” Eichelberger asked.
Whitney said she did not know the exact number in the agreement but estimated faculty work a minimum of 45 hours per week with their required classes taught, preparation, advising, research, and service. She pointed out that most faculty work year-round with writing and research in the summer.
“Well, that didn’t answer my question,” Eichelberger said. “But I think, so, it’s 12 hours classroom, and then you have some prescribed office time, I understand.”
Whitney confirmed the CBA’s required five hours of office time.
“So it’s 12 and five, OK,” Eichelberger said. (Two years ago at the State System’s Senate budget-appropriations hearing, Eichelberger latched onto these numbers, saying, “At 97 grand, these are the people that are working 17 hours a week. Wow. Can I get a signup list here, going in the Senate?”)
He then asked a series of yes-or-no questions:
“Can you have a professor share time in another department without faculty approval?” (Whitney answered “no.”)
“Can a tenured faculty member make a permanent move to another school?” (Yes.)
“Can a tenured faculty member visit another school — what you term visit, temporary — without the faculty in both schools voting to approve that faculty member?” (Whitney wasn’t sure whether it was both schools. Eichelberger said it was.)
“Can a school hire someone without faculty approval?” (No.)
“If the school is involved in layoffs, or what the CBA refers to as retrenchment, can you keep highly rated faculty over more senior faculty?” (No.)
“Can a school hire temporary and part-time faculty whose total time equals more than 25 percent of the full time equivalent without faculty approval?” (No.)
“Can you downsize a department as a result of increased distance-education offerings?” (No.)
“Can you require a faculty member to work on distance learning that didn’t have that specific charge specified in his or her letter of appointment?” (No.)
“Well, the way the way I see things is we have a system that we’re having a very difficult time affording these days, and we have a system that you can’t manage,” Eichelberger said. “So you’re back looking this year for a considerable amount of additional money, and I think it’s something that we should be taking a very hard look at to see if this system can survive as a system.”
Sen. Kim L. Ward asked a question she said she poses every year: whether the State System is or can coordinate and condense higher-cost programs such as nursing or engineering. The State System reviews graduates by degree and program enrollments, Whitney explained.
“We have over the years removed way more programs because of changing interest by our students and industry, and we’ve added programs in response to increased interest, and it’s a continuous effort,” Whitney said.
Ward asked whether any programs were only offered at some schools. Whitney confirmed there are.
“Every university is different,” Whitney said. “That’s one of the things in our reengineering of the system is one size doesn’t fit all. It doesn’t. The operating approaches have to be different at every university because the program array is different. The academics are different.”
Ward raised her concerns about Dinniman’s ideas of affording universities more power at the local level. Whitney pointed to the system’s research on workforce trends and how they have incorporated those findings into program offerings. The system’s top three areas are now STEM-H (science, technology, engineering, math, and health), business, and education, Whitney said. Ward closed by praising the State System’s graduation rates.
Sen. Art Haywood asked about employment of State System students’ parents. Whitney said she did not have the information disaggregated. The system does monitor average family incomes in Pennsylvania, Whitney said.
Haywood asked how Pennsylvania students came to have such high student-loan levels.
“The way we’ve gotten to that point is over the last 35 years the students are paying more, and the state’s paying less,” Whitney said. “I am not criticizing the state paying less. I’m telling you the relationship and the impact. I completely appreciate the challenges the state faces, but that’s how we’ve gotten here over almost a 40-year period.”
The average student debt in Pennsylvania is $35,759 and $34,000 for State System students, Whitney said.
“Obviously for many people that’s troubling, and that’s a challenge to put that kind of debt on people,” Whitney said. “One of the things we’ve done in our system is ensure that at every university there’s an emphasis on scholarships and grants, and there are programs and financial literacy both for family members and for the students, so that as they make strategic decisions they’ll commit to what I call smart debt and not unnecessary debt. Because given the lifetime earnings that college graduates still rightfully earn, it’s a smart investment. Now, there’s many ways to get there. That’s another reason why we have extensive agreements with community colleges. We’re expanding our online learning. We’re trying to re-engineer ourselves to be where more and more of the people in Pennsylvania need and want us to be — because for many people the cost is the factor.”
Haywood pointed out that funding for the State System is roughly equivalent to what it was in 2001–02. He asked if the State System has a strategy to increase enrollment to full capacity.
“Right now, each of the universities are working through strategic enrollment plans based on their mission and their academic strengths,” Whitney said. “I think the big shift that you’re seeing since the review of the system this last summer is trying to look at where are the creative, innovative ways that we can leverage our academic teaching and learning? I mean that’s our core focus is teaching and learning, so how do we leverage that across the system in ways we haven’t done before using distance delivery? Again, we are exploring in some very thoughtful ways discussions with our different labor agreements — 90 percent of our employees are in collective bargaining agreements — and we are looking at how can we come to mutual agreements on different ways of operating so we can maximize our capacity. Not to say that every university has to hit a certain enrollment, but we have a mission here, and there are so many populations and parts of this state that are undereducated in terms of post-secondary learning. It’s fulfilling that mission.”
Haywood asked Whitney about APSCUF’s CBA.
“From (Eichelberger’s) comments, I got the impression that these agreements might be significantly limiting the improvement of the system,” Haywood began. “Is that your opinion as well?”
Whitney prefaced her response with her perspective as interim chancellor for seven months and Clarion University’s president for seven years.
“I will always say I have the highest appreciation in regard for our own employees,” she said. “I will say there is a larger cultural issue here in the state of Pennsylvania — that is beyond this system of 14 universities — around collective bargaining. So I’m going to point out probably what you already know because you see people, system heads like me or agency heads, come and go all the time. There are larger issues here that the workforce needs — that’s needed in teaching and learning at these universities, and the probably the 60- or 70-year-old construct of collective bargaining — are out of whack. And that’s the challenge, so we’re working on it. We’re trying to make the best use of the mousetrap we’re working in right now, but I just want to point out the overall challenges of work rules and compensation and how it’s slowing us down and getting in our way of being the kind of operations that I think we all would like to see, the employees as well.
“My point is the way in which we contract, arrange contracts, union contracts, and the way we fund it is broken. There are multi-year obligations that are of huge expenses to the university because, rightfully so, universities are a majority labor. Our biggest costs are our people, and that’s the way it ought to be. That’s what we’re about. But there’s 90 percent are in labor agreements that have these multi-year obligations with no plan for funding, no connection to fund them at all, and then people are shocked when we might have to ask students to help pay for labor. That’s the broken model, but it’s larger, and it’s beyond us. But it certainly is one of our greatest challenges to ensuring a stable operation.”
Sen. Scott Martin continued the union discussion.
“I don’t know at what point, and I’m sure these collective bargaining agreements have morphed over time, which they typically do, and there’s a lot out of your hands if you weren’t here,” Martin began. “But I remember my days as a county commissioner. You often got into the discussion of what were 16, 20 management rights — things you couldn’t bargain away. And I’m just astounded at the personnel-related kind of things that, you know, we hire a president in order to do what’s right and run things efficiently and effectively, and he’s not the decision-maker in that? And to me that’s very troubling.”
Martin discussed looking into early-retirement planning and asked about performance funding, touching on costs as well.
“What drives the need for that revenue?” he said. “Spending, right? You’re asking from the taxpayers and from students what you need to run an institution. If an institution can’t control its costs, guess what? Those paying the bill, these students and what not, they’re going to feel that pinch, and certainly taxpayers are.”
He circled back, asking about standards for performance funding. He also asked about advising and career guidance.
“But when people walk in the door, and they’re assigned a student adviser, who’s looking at them in the face, and a young person says, you know, ‘I want to major in X,’ yet that adviser knows, you know, your chance of getting a job in that field and the amount of money you’re gonna spend here, you might want to think about one of these because this is what our economy really needs right now, and you can get into a job right away,” Martin said. “Are we having those conversations with our kids, pointing to them to majors that may lead to what really the biggest measure of performance is — getting that education, getting in a family-sustaining job? That is what’s most critical.”
More than 40 percent of State System students are first-generation college students, Whitney said.
“And that’s a proud tradition of our state universities and how they’re working in terms of the fastest way for upward mobility through higher learning,” she said.
She described dual enrollment and programs targeting middle and high school students for financial and academic planning. She discussed the growth of STEM-H and business programs.
“Our job, I think, throughout the system, A, is to act like a system, to be aware of what the Commonwealth’s needs are going forward in the future, not today but four years from now or to 2026, and where are those jobs, and how do we have credentials at different levels — from associate, bachelor, master, or certificates to prepare those people,” Whitney said. “And that’s going on at every university.”
Martin talked about the state’s diverse regional workforce needs.
“To be able to adjust your programs and personnel to match what the needs of the current environment are, I think, is critical, and also in terms of maintaining costs,” he said.
He also lauded training programs.
“If we’re to admit where’s the No. 1 demand for jobs right now?” he said. “In the skilled trades and career and technology, and the more that schools are looking even to partner with them and work towards kind of following their students all in the same direction of what’s gonna be the best recipe for success for them, to me is better for all of us and will be less expensive in the end and less debt.”
Whitney offered to provide information about the system’s diverse program array.
Sen. Lisa Baker continued the workforce-development conversation.
“(Workforce development is) probably one of the largest complaints I hear from employers — that positions are in high-demand fields are left open, and we’re not getting the skilled workforce,” Baker said. “And one of the complaints about the system is the lack of innovation and flexibility in trying to meet those needs. I’ve heard some of that. You’re mentioning that you’re moving in that direction. Do you do you truly believe you need other steps to be more innovative, to respond, to be agile and flexible, or are there things that you feel we can help you with to do that?”
Whitney referenced the system’s database of workforce information that looks at needs years ahead.
“If a university came to you and said, ‘I’d like to introduce this program by next fall,’ do they have the flexibility to get that done?” Baker asked.
Whitney affirmed it was possible after changes made at January’s Board of Governors meeting.
Baker asked Swatt how he valued internship opportunities. He lauded the “experiential learning component” and said all students ought to have internship experiences.
Baker’s final question dealt with campus safety.
Sen. Sharif Street asked what the State System is doing to ensure its curriculum is aligned with future economic needs of Pennsylvania’s economy.
Whitney referred again to the State System’s labor-force data and said the State System continually works with industry leaders.
Street asked Swatt for his recommendations to improve the State System.
“We ought to do everything within our power as a system to ensure that tuition and fees are remaining at the lowest possible cost for students while ensuring that we’re also providing and maintaining the highest quality of education,” Swatt said. “So in any way possible the management can do that.”
Swatt reiterated the importance of internships combined with classroom experiences.
Sen. Mario M. Scavello, on the council trustees at East Stroudsburg University, referenced the university’s newly enacted Warrior Promise, suggesting it as an option for the rest of the system.
Whitney described alternate tuition programs at other State System universities.
“I will tell you what you’re going to be seeing over time is each of the universities — again, less bureaucratic, less clunky, less one-size-fits-all,” She said. “One size does not fit all. … So we’re in a state of disruption, which I think is quite appropriate, to looking at pricing that fits the mission of each university, that gets back to it.”
She discussed the Pennsylvania Higher Education Assistance Agency:
“I think PHEAA is rewarding the higher-cost institutions and ignoring the higher-value institutions,” she said. “Again, where we’re driving the lowest possible price we can, but at the same time trying to pursue access and quality and graduation. Those are all cost factors. So I am respectfully going to be chatting with PHEAA about are there some ways they might reconsider some practices.”
Scavello changed the topic to Cheyney University.
“Three years ago, you were at 711 (students), and I made some comments,” Scavello said in reference to the State System’s 2016 Senate budget-appropriations hearing, at which he mentioned his background in supermarkets, saying that if a supermarket is doing poorly, he must raise prices at others to offset the loss, resulting in lost sales for the well-performing markets. He drew a parallel to the State System. “One of the students lives in my district that attended Cheyney, and I went out to visit the campus … and I said to him, I said, ‘Look, you guys can make the corrections here. If each one of the students went back home and brought one student back to Cheyney and say why you should be here. And your numbers, the next two years, (were) 746, 755. Someone’s doing it. I challenge all of you guys out there to preach that on the campus. You want to go back home and say why you attend Cheyney. Try to bring, if every two students at Cheyney gets together and brings one student to school, you’re gonna solve your own problems. And I know you have a new president, and that’s where it starts. So, do I have a commitment from you guys? You’re gonna do that, students?”
Cheyney’s enrollment-building efforts and ideas do include student recruiters, Whitney said.
“And the advantage for your students would be the more you bring, the less the tuition you can, you know, it’ll help you with your tuition,” Scavello continued.
Sen. David Argall commented on the number of open parking spaces he saw when visiting Kutztown University the previous week.
“Now perhaps Kutztown has done an amazing job of planning for the future, so they have too much parking, or maybe it’s because of declining enrollment and that’s my fear,” Argall said. He then brought up the RAND study, which he called “unbiased” and “independent.” He said those results should be available in the next few months.
“One of the key issues, as I’d indicated, is the numbers, your number of students,” he said. “You have some some campuses that have really lost a fair number of students.”
He mentioned changing demographics and a drop in number of high school students in Pennsylvania and asked “what’s really driving this incredibly difficult enrollment issue at many of your universities?”
Whitney said the universities historically had a pipeline of high school students and did not change fast enough when the flow ebbed. The State System is addressing the issue now, she said, by enrolling transfer students, for example.
“You may have missed the cars because they were transiting,” she offered, adding that part-time and online students or students working in the community also might account for empty parking spaces. The State System also wants to serve the 1.4 million people in Pennsylvania who attended some college but do not have a degree, Whitney said.
Whitney then brought up unions.
“I have to be honest with you: Institutions aren’t usually prone to really want to change,” Whitney said. “You might see that in some other areas of your life. And I’m being honest about that. And that is not just because we have unions. Now that’s our particular concoction of why we don’t change. There’s a history and ritual and culture we’re working through. But institutions have to be pushed, prodded, and almost put into a state of high alert to change. And that’s where we are right now. I think the breaking point here is we recognize that, and as I mentioned earlier internally — and we’ll be working with you all externally — on affecting those changes structurally.”
Sen. Bob Mensch began by addressing costs at State System universities.
“Education is becoming increasingly expensive, and there are some reasons why it should be,” he said. “There are some artificial reasons or other contributing factors that are making it expensive as well.
“But the State System does the same thing a legislature does: You put things in silos as you view them, OK? And you’re trying to address each of the 14 universities uniquely without the synergy that they all contribute to each other, and yet you’re a system, OK? So there are some real operational conflicts there. We have the same thing with 14 community colleges. We have the state relateds. And then those, by the way, are the three separate groups that we fund, the state legislature through the budget. We are funding you to make you compete with Penn State, who we are funding to compete with you. If you think about it, OK, we make this dollar very inefficient.”
Mensch asked if the State System is having conversations with community colleges or state-related universities and whether the State System is “beginning to think about an educational continuum that helps these young people get better prepared for the marketplace.”
“Someone said earlier that not every job requires a four-year degree; some require advanced degrees,” he said. “Likewise, some need a certificate or a two-year degree. So are you having those conversations?”
Whitney discussed the State System’s preferred relationship with the community colleges, calling them valued partners. She said the system is looking at ways to improve access and break down silos.
“My general observation — and being the chancellor for seven months — is while we’ve had a system for 35 years, I think only now are we acting like a system,” Whitney said. “Previously, we were kind of 14 universities that generally liked each other.”
Whitney referenced her desire to build an “academic marketplace” across universities.
Mensch mentioned a friend who had three daughters, each attending a different State System university.
“Very often there is not a geographic interest to stay local,” he said. “They’re going to another school for, you know, the aesthetics that they saw when they toured or perhaps an academic offering that is available. So I’m not sure that there’s a geographic differentiation so much as there is, say, with the legislature.”
He asked for Whitney’s comment on his statement and “what would happen if there wasn’t a system, and you had 14 universities that worked independent.”
There’d be more meetings, more silos, and possibly more competition versus collaboration, Whitney replied.
“While I don’t believe everybody has to have a bachelor’s degree to have a great life or livelihood, they do need a post-secondary credential of some type, something after high school,” Whitney added. “I think we lack a coordinating entity across … It’s not nearly as integrated or coordinated as I’ve seen in other states, and this is my fourth state in my almost-40-year career. So that is a lost opportunity for collaboration and for particularly — let me point out something that isn’t talked about here day — is how are we a solution to what challenges the state. I mean, and that’s what you should expect, I think, particularly from public higher ed, but why not all of higher ed? How are we solutions to your greatest challenges? And that isn’t talked about, and then where’s the investment to that?”
Whitney talked about STEM-H graduates and said the State System provides great value.
Mensch closed by mentioning the lack of public higher-education opportunities about Interstate 80.
Sen. Thomas H. Killion, who lives near Cheyney University, said he sees opportunities at the school in its location. He asked about Gov. Tom Wolf’s proposed line item specifically for Cheyney University, on which Whitney said she could not elaborate. Killion also asked what the State System was doing to bring Cheyney back to where it needs to be.
Whitney praised Cheyney President Aaron Walton’s “entrepreneurial perspective” and “beautiful lens.”
“I give a real credit to the employees of Cheyney and the alumni of Cheyney because they’re putting their love of loyalty to the university greater than personal interests,” she said. “I mean, the employees are really being very flexible. They’re doing their best to work with the president because they know at this point it has to have a turnaround. He is committed to reducing the budget, to stabilizing and increasing enrollment and meeting and exceeding all accreditation responsibilities, and he’s on a track to do that.”
She pointed out that Cheyney is not the smallest of bachelor’s-degrees granting schools in Pennsylvania and that several other State System universities fall in the Top 25.
“But the point is we are a large system,” she said. “We have game. We have large enrollments. And we need to look at these issues of quality and value in a holistic manner, or we’re not talking about the right things. But I’m very optimistic about Cheyney. It’s a lot of hard work, and we will continue to report on success I will tell you, though, so you’re not surprised: It is possible, despite best efforts and hard work, that Cheyney may post a smaller enrollment this fall. But what you need to ask at that point is are they a more qualified enrollment. Are they more prepared to graduate — because it’s not simply the number of students we recruit, it’s what’s our graduation rates.”
Sen. Elder A. Vogel Jr. asked Whitney to discuss collaborations with community colleges.
Whitney discussed policies in place and predicted transfer rates would continue to increase.
Vogel commented on State System universities’ television ads he’s seen in the Pittsburgh media market.
“I’m sure they’re very expensive,” he said. “And it’s very expensive to advertise on the 6 o’clock news in a Pittsburgh media market. … How does the advertising budget for universities work? Do they all have the same budget? … I see billboards and these, I just was always curious.”
Whitney explained that each university controls its own brand, reputation, and communication but that the State System is looking at consortium pricing for advertising.
“Do you have any kind of matrix, I guess, as well, to judge you spend X number of thousand dollars on a TV commercial and you get X return for it?” Vogel asked. “I mean, that’s what we’re always judging everything on up here.”
Universities do look at what marketing approaches will give them the most bang for their buck, Carter said. She shared her experiences with her marketing budget and resources at Shippensburg University.
“So it is a complicated puzzle, and each university has to do it differently based upon who their community is and who they’re trying to reach and how they’re trying to reach them,” Carter said.
Vogel asked whether each school had the same advertising budget.
Whitney reiterated that each university takes its own approach to advertising and said each had its own budget.
“One size doesn’t fit all,” she said. “(At) every university, the president does need the latitude on the best, most effective way, because I can tell you right now it’s about your mission and your target population. … We are united on the three priorities the board has set for us, but the way we achieve those are going to be distinctive to each university.”
Whitney suggest looking at marketing analytics, and Vogel asked for that information.
Sen. Randy Vulakovich read from the NCHEMS review: “Their No. 1 recommendation from what I understand was ‘retain and ensure sustainability of State System’s capacity in every region to carry out its historic mission to serve students and communities.’”
He said students attend State System universities for different reasons, such as family history, location, and cost, “but I don’t know that it’s so much regional from that community-type picture. I was surprised that that was such a big recommendation of theirs to maintain that.”
He used Clarion University as an example, citing its enrollment decline.
“And, quite honestly, if that university would close, it would destroy that town up there,” he said.
We are now in “dollar crunch,” he said.
“I think our No. 1 priority with regards to education should be our state schools,” Vulakovich said. “Now, it doesn’t mean we continue to fund every one of them, if they’re just failing or their population keeps decreasing.”
He said community colleges have taken some of the State System’s students and asked Whitney whether the system has thought about studying the community colleges and their costs. He also asked about group purchases.
Whitney reiterated the State System’s consortium-procurement practices.
“Back to community colleges: Their biggest reason they can drive a lower price, let me be clear, is the traditional formula of one-third from the state, one-third from a district, and the student pays a third,” Whitney said. “Now, there’s been an erosion of that to some extent, but I don’t want to leave anybody with the impression that one sector is inherently superior in their ability to drive a lower price. There’s always a formula and an answer to the price that the students pay, and it’s some form of cost minus subsidy.”
Sen. Scott Wagner brought with him handouts that he gave to Lois Johnson, associate vice chancellor for administration and finance. He asked Swatt about his studies at IUP.
“We’re gonna walk through some stuff today which I’d like to share with you,” Wagner said. “So what I’ve done is I pulled up … this is the financial statement dated 6/30/17. Now, the chancellor told us that the average salary was $117,000. And I’m formally requesting, and if we have to, by subpoena, I would like a list of every employee in the State System, and I would like to know what their W-2 earnings were for last year … Mr. Chairman, I’m formally on the record.”
State System employees’ salaries already are public records the senator can obtain at his convenience.
Wagner read pension-liability numbers from a State System balance sheet.
“So I appreciate all the students here and faculty, but, you’re about ready to get a financial education because your system — and Sen. Eichelberger and I have had extensive conversations — your system is done in four years,” Wagner said. “You are out of runway. You are out of oxygen, and the taxpayers are not gonna continue to pump money into this system. So the reason I’m interested in the salaries of all the employees is because you may not know this or be aware of this, but there was a swim coach that retired at West Chester University … ”
Wagner talked about a now-retired West Chester University swim coach who brought millions of dollars into the university through camps he ran. At past hearings, Wagner had asked then-Chancellor Frank Brogan about what the coach’s pension would be based on his W-2 earnings, he said.
“The swim coach just retired in 2016, so we are actually looking right now to find out, you know, what the number is, but, you know, I can tell you what the number is,” Wagner said. “It’s two-thirds of what but his three-year salary is.”
Wagner brought up APSCUF.
“You are aware that the teachers and the faculty at the universities are unionized?” Wagner asked Swatt. “So the union has done a great job, and I think some of the professors and teachers, you know, have just been part of the system, but the union bosses have made sure that everybody has been highly taken care of, and they’re driving you into bankruptcy. So for those of you that think your schools are gonna be around four years from now, it isn’t gonna be around. And I could tell you something — that we are gonna stop pumping money into this system, and it’s ridiculous. And I don’t know what your student debts are, and I don’t know if anything I’m telling you alarms you or resonates that … there’s Code Red here. This is the problem, and we have been here — I’ve been here four years — and we haven’t accomplished anything. And it’s just, the monster continues to get bigger, and these numbers are just gonna get bigger. So we’re gonna be out of oxygen.”
Wagner asked Whitney how many union grievances the system had last year and what they spent in legal fees for those grievances. She said she did not have that data but guessed “a lot” and could gather the information.
Sen. Judith L. Schwank, a member of the State System’s Board of Governors, addressed the discussions thus far.
“In terms of a budget hearing, you would think that we always talk about numbers, but what you’re hearing more often is policy because policy drives funding, right?” Schwank said.
She addressed the NCHEMS report: “I’m not a big fan of reports, but, boy, I think that has driven some very, very positive change for us in terms of what we need to do to revitalize the system and constantly be changing because that’s what we have to do. Demographics will always change. The the fiscal outlook will always change, in terms of the economy. We’ve got to be nimble enough, and using this as leverage, I think, will be very helpful.”
She went on to defend faculty members:
“One thing that I would like to say, you know, in light of some other comments that have been made: Those three goals, none of them will happen without faculty,” she said. “None of them will happen without students in a community that’s engaged. None of them will happen without administrators, a system, you know, governance board that is really interested in making that change, too.”
She asked Swatt and Carter what changes they’ve seen as a result of the report.
Carter mentioned the expedited timeline for approving new academic programs and task forces that have been meeting to address State System problems.
Swatt, speaking as a Board of Governors member, called the change “optimistic and positive for our board and for the whole entire system,” and credited “the culture change of our leadership.”
From the student perspective, he said, many students are not completely familiar with the Board of Governors’ activities but he thinks they are realizing the shift in theme.
“A lot of more students are caring about the system, about what policies are going on, and, most importantly, their tuition rates and the fees at their universities, and a lot of student leaders are heavily invested in that,” he said.
Schwank asked Whitney to talk about a possible tuition increase for State System universities.
Whitney expressed her appreciation for proposed state funding
“And at the same time, I think it’s my job to provide great clarity on the current cost to operate, so that there’s nothing misleading or misunderstood,” Whitney said. “The board rightfully suggested, the system board in October, that to meet our costs of going forward next year, we would need an additional $73 million. There’s two ways we get money: It’s from the state or the student, and the other thing we can do, we’ve talked about, had good talk today, (is) increased efficiency of what we’re doing. We are no longer in a position to cut programs because much of the programs we’re talking about are the very ones that ensure student success. We are eliminating academic programs that aren’t meeting in student interests or industry interest; we talked about that.
“So there’s a $73 million request on the table — minus the 15 leaves a big gap. I will tell you that 50 of that 73 are solidly around compensation-and-benefit requirements — requirements, 90 percent of which are mandated by multi-year union agreements. I am not criticizing union agreements. People have done that today. I respect the different views. I’m letting you know where they’re coming from — because I have to make that distinction because sometimes I will call out the culture in Pennsylvania that to even speak about a union contract, some people think that somehow you’re criticizing it, so I have to do that extra preamble there. But there is an obligation here. It’s a multi-year obligation. It wasn’t made by the presidents. It was made by outside groups because of the way in which we do our contracting. And there is that obligation, and both you, senator, and Brian are gonna have a tough discussion. We’re gonna have that later in our cycle about how we meet these obligations, and it is difficult. It will be a combination of state and student. It always has been. It always will be.”
Committee Chair Sen. Patrick Browne announced a second round of questioning.
Dinniman praised West Chester’s bioengineering program.
“What we cannot forget is the key role that liberal arts and our core curriculum plays,” he said. “What we know is that we’re in the fastest period of change; the rapidity of change is the fastest in all of human history. And so we can train someone, but the major obligation we have is to train someone to be a continual and lifetime learner, and so, while technical education is vital, the role that our core curriculum liberal arts plays in helping someone reeducate themselves for their life is also important.”
He asked Whitney to speak to his point, and she discussed the “core, foundational experience” of general education. She addressed misunderstandings about liberal-arts majors, pointing out that they graduate and “get great jobs.”
Dinniman seconded the idea of a state-coordinating council on education and said he was prepared to work on such legislation. Whitney said she was an “enthusiastic supporter.”
Scavello expanded upon his earlier ideas for student recruitment.
“I was thinking while I’m sitting here … it shouldn’t just be one school,” he began. “You’ve got the best folks out … you don’t need a budget for advertising. You have ‘em right here. If all the students in every one of the schools went out and, you know, I’m looking at your numbers. In 2010, we were at 119,513. Today our population is 102,572, and remember now, almost 3,000 is one school, and that’s West Chester that it picked up the number. So, you know, it’s not impossible. Your ambassadors are right here in this room. It reduces costs. You can take that advertising budget at some point and put it to reducing costs even more and tuitions even more. So, to the alumnis, if you’re watching this, to the students back home: You want to reduce your education, the cost of your education, go back to your high schools where you graduated from. Take a day and speak to the students and say why you are there, and by them coming to that school what it would do for you. You can lobby us for more dollars, it works, in some case, if we have it. But sometimes we don’t. And there are tough times now.”
Vogel echoed Scavello’s marketing ideas.
“If you get a student to come into school, you get a tuition break — how’s that sound for a start upping enrollment?” he proposed. “Every student you bring, one student on board, you get X number of dollars in a tuition break.”
Whitney said universities are experimenting with alumni recruiters, for example.
Vogel next asked about graduation rates measured at four years and six years, which he called “disturbing.”
“Back in the day when I was — many, many days ago — if you didn’t graduate in four years, you were considered a bum or something,” he said. “And now today, I’m not knocking anybody. I know times have changed and things have changed, but why do our graduation rates, I mean, the amount of money it costs you to go to school for an extra year or two, from four years to six years, could be anywhere between 20 and 30, 40 thousand dollars of extra student debt. How come students aren’t graduating in four years?”
The State System’s population is now much more diverse, Whitney explained.
“You get people who make all kinds of decisions,” she said. “Sometimes people stop out for good reasons that I might value as a good. Some are are frivolous … I think the key here is driving more to the four-year completion — well, we’re gonna call timely completion — but I do have to respect for some of our students there are good solid reasons to take a break, to come back, to be more successful. Not so much with others. And we’re trying to work to that. That does require student-support programs and the engagement of our faculty and staff with the students because it is almost a one-on-one kind of excursion to sit there and keep them going so that we can get to that completion — because the most expensive college degree is the one you don’t get.”
Wagner began his second round by reminding Whitney of his request for salary and grievance information. He also asked for details about post-retirement benefits and pensions. He compared the State System with private sector and other state benefits.
“So our benefit costs are wildly out of control,” he said.
He asked whether State System retirees are getting healthcare benefits for the rest of their lives.
In general, yes, but the State System has made changes for new employees, Johnson explained. She pointed out about half of employees are in the pension plan, compared with (almost) all for retiree healthcare liability coverage.
“So, Brian, the education today is that this is a system that was set up years ago,” Wagner said. “It is doomed for failure. The numbers are gonna sink. Financially, there’s just no path out of this unless you just keep throwing more money in, and, you know, as I travel around the state, people are very upset about the school taxes on their homes, and then I also hear regularly — last year, I heard from a lot of students when the tuition increases went up, and that coincided with union contracts going up. And many of the students here today, and potentially you also, you know, have a lot of student debt. And I don’t know how you’re ever gonna pay this student debt. But it has been your student debt — what you’re gonna pay and what you are gonna be saddled with and your parents — your parents and whoever co-signed — they cannot file bankruptcy. So the system is gonna to track you down — and your parents and whoever — for the rest of your lives.
“And, honestly, there are some people that are retiring out of the system. It’s the system. But I’m just, I’m only the messenger here, and so I’m not pick — I’m just telling you the facts. That this system that was set up is at your expense, and you are gonna pay for it for a long period of time, and a lot of the young people here in this room — and I don’t know how you’re gonna go out into the real workplace, find a job, try to have a lifestyle, and in addition pay your student debts. … It doesn’t work. One thing that I am going to work on is, you know, potential opportunities for employers to hire students, you know, with student debt and figure some way that we can help you. … I’m only the messenger here, and I see these numbers, and it’s just like, ‘Holy cow.’”
Wagner did not stay for the rest of the hearing.
“Nobody’s done a bang-up job with anything, even including the General Assembly over a period of years,” Vulakovich said. “OK, we all own this. But there’s a realization here that we have to face, and it always comes down to, in the end, we have to decide what dollars we’re gonna give. But you have to consider your PASSHE debt that you have, looking at the big picture. Declining enrollment that you have. Lack of control and cost of salary benefits and in pension costs — and some of that, you know, we have responsibility for. You got about $1.8 billion dollars, I understand, on infrastructure costs that you have to do. Spending on advertisement — me, personally, if you go down and you prioritize, that’s the last place I’m going. Best advertising is word-of-mouth, and I know that I have five schools in my areas, as they they go up on that part of state. And I have kids coming up to me all the time, ‘Hey, I’m going to Slippery Rock! Hey, I’m going to Clarion!’ They know. So we don’t need to spend money on that.
“Control curriculum costs for the students. My daughter has more credits than she would ever need. Now, she didn’t go to a — she went to a state-related school. They kept changing all the time. ‘Well, now you need this to get to there, and this would be better for you.’ That’s not right. When these kids come in to school, they have an idea of where they’re going and what the school expects out of them. We can’t have — and if it’s professors, sorry if you take offense to this — quit changing what they need. That’s added cost for these kids, and they got to pay for it. Because what you’ve gotta take into consideration is the students’ parents, school personnel in general, the school as a whole by what you stand for, and state subsidy we have to give you.”
Vulakovich discussed new building and operational costs of existing buildings. He also suggested centralization for procurement and payroll, labor relations, legal services, construction support and information technology.
“There’s a lot of problems,” he said. “You don’t own them all by yourself. There’s a lot of people responsible for a lot of these things here. But in the end what I really care about is the kids, getting a good education in a good environment and getting a fair deal. And the debt that they’re coming out with, it’s staggering for a lot of these kids.”
He concluded with remarks directed at APSCUF.
“I’ve always thought teachers at every capacity are worth their weight in gold,” he said. “They have more influence on our kids all through their life than sometimes we do. And they may be worth their weight in gold, but we can’t afford to pay ’em their weight in gold. It’s a service. Just like in police work. I risked my life for 27 years. I was worth my weight in gold, too, but no one paid me that weight in gold. But they gave me a price. It’s all a matter of service. The kids come first, and everybody has to start thinking about that in the General Assembly and in your own system, too.”
Scavello tasked students with recruitment to eliminate problems at their universities.
“Regardless of what you guys heard here today, just remember one thing: You be the student ambassadors, and you bring student population to universities, and everything goes away,” he said. “We won’t be talking about dollars or anything else. We need your help. Visit your schools. Bring students to the universities. You’ll start to see investment within those universities, and you’ll start to see them grow, and it’s something to be proud of because you made it happen.”
Minority Chair Sen. Vincent Hughes, whose father helped create the State System and served on the Board of Governors, addressed the alarmist comments throughout the hearing.
“For all the students in the room, go on social media,” Hughes directed. “Tweet me right now. Pick up one of these; tweet me right now. The system is not going anywhere in four years. Your education is set. Your education is solid. Your education is going to be there. Tell your students. Tell your friends. Let them know right now. Text them right now. The universe, the State System of Higher Education, PASSHE, is not going anywhere, OK? Because when people make irresponsible statements, OK, ‘It’s gonna, it’s gonna die. It’s gonna fall apart!’ It’s not going to. That’s irresponsible. That is completely irresponsible. It sends the wrong message to you. You are here because you’re leaders in your respective universities, so your job is to communicate it back. The system’s not going anywhere. Does it need to be fixed? Does it need to be repaired? Does work need to be done to help make it right? Of course. But that’s life. That’s with everything, OK? You’ve always got to do some adjusting. Time is changing. Life has changed. You’ve always got to make some adjustments.
“ … One of the reasons why we have problems in higher education in Pennsylvania is because the state ranks 47th out of 50 of all states in the nation in what it contributes to all of higher education, OK? So you want a lesson? You want a message to send back — is make the state put more money into higher education. And, in fact, let’s talk about trying to figure out a way to make college free for all students in Pennsylvania. Let’s go down that path. That’s the message you need to send back, OK? We’re bad in this space because the state is one of the worst states in the nation in terms of what it contributes to colleges and for students to go to college.That’s why we have some of the crisis.”
Hughes then ran down the average costs of attending State System universities compared with state-relateds.
“So, if the question, then there is: What is the best bang for your buck? I just laid out the numbers, all right?” Hughes said. “This ain’t about applause. This ain’t about applause. It’s about sending a message around to everybody that this is the kind of investment that the Commonwealth needs to make to make college accessible to Pennsylvania students. If we can’t make it free, we darn sure need to be in the business of making it accessible, OK? There’s your lesson, OK? I don’t see you texting or tweeting, but I’m assuming everybody out here is doing this. And I’m doing this for a reason — because a lot of people throw around numbers, OK? But they throw around numbers to suit their own agenda item, all right?”
Hughes outlined higher-education appropriations increases across the U.S. and in Pennsylvania.
“Why do we have an environment where we have fewer dollars coming in?” Hughes asked. “Broadly, broadly, the question is who’s contributing to the state’s economy, OK. Who’s paying the freight? Who’s paying the taxes, who’s not? OK. And the other thing is where are our priorities? So that goes to everybody who’s involved in the system, the 102 or 103,000 students right now. OK, all right. All of the faculty, all of the employees, the alums, everybody like that. Everybody’s got to be all in to make sure that the system is going to be around. I know it will be, but we’ve got to fight for it because it is a better economic investment, all right, in terms of debt that has to be paid if you want to look it that way, all right, student debt, than the other options that I mentioned.”
Hughes summarized State System funding in Pennsylvania, which is appropriating state dollars at about the same rate as 20 years ago.
“Let’s be real clear about what has happened and what the impact has been and what it has meant for those communities where these universities reside, where they are the prime economic driver,” Hughes said. “It’s been tough, but even in all of that, we were the first, this system was the first to put in place accountability measures and … performance funding … before anyone else to have metrics, to have accountability, to have said, ‘This is where we want to go. This is what we want to achieve. This is how we’re gonna get there.’ OK? We don’t change around courses for students in the middle of the deal, all right. We manage that in an appropriate fashion, so we don’t negatively hurt the students and that we can plan accordingly. Is it perfect? No, it’s not perfect. … But let’s be honest about this: We’ve got to be clear about the numbers and the circumstance in this situation. Having a conversation where we make college and higher education and advanced degrees and advanced learning, as you talked about, and about whatever it may be, should be a goal and should be an agenda item for the state of Pennsylvania. Having college be free, like they’ve got in New York, OK, that we talked about with the PA Promise program, that’s a good thing to pursue because then we can unlock the skills and passion and talent in all of our student — more students — so we can solve some of the bigger problems that we got to solve that’s been intractable.”
He then defended West Chester University’s retired swimming coach.
“I’ve just got to say something about this poor … swimming coach, all right, because he gets thrown under the bus on a regular basis, OK,” Hughes began. “His salary, his base salary was $77,000, OK. The extra money that he got was for … a famous swimming program that he ran at the university, so he got extra dough as legally, appropriately, OK, based on the the camp program that he ran. So there’s a difference between the high-priced swimming coach whose real salary was $77,000.”
He compared the situation with Penn State’s football coach, who makes millions of dollars per year where student expenses are higher, Hughes said.
“If the message is that we need to create environments for our young people to realize their dreams, OK, and essentially to save the rest of us by unlocking that talent, we need to be in the business of investing in the State System, all right, not disinvesting in the State System, OK,” Hughes said. “If the message is creating a high-quality alternative or option … because we all like options, we all like choice, OK, then investing in these 14 universities should be the way to go. If you want to find people who are committed to your future and to your education and to your success, look inside the State System.”
Hughes then praised Walton’s service to Cheyney University.
“If you want college to be accessible, affordable, and high quality in the Commonwealth of Pennsylvania, your best investment is the Pennsylvania State System of Higher Education,” Hughes said. “That’s your best investment, and you better not walk away from that because then you’re doing a disservice to the constituents and the young people that you say you’re committed to. Talk is cheap around here, all right. Budgets show your commitment. Budgets show your priorities. Budgets are moral documents. They evidence what you committed to. So, again, for the students in the room, send a message back: The system is not going anywhere. We’re gonna have to do some work on it, absolutely; we gotta do work on everything. But you’re gonna have a university to graduate from when you graduate. You’re gonna have a university and a system to be proud of, to recommend … You’re gonna have a system to market to your colleagues, to your friends, to those who come after you in high school looking for a place to go. … But you have to fight for something that is proven to be extremely valuable for hundreds of thousands of young people who participate, and many, probably millions who participated in the system before you, and if you want to create something that is an opportunity and an option for young people after you, you’ve got to commit and invest in this system. But it ain’t going nowhere. It’s not going anywhere.”
Browne began his comments by lauding the Hughes family’s commitment to the State System.
“Your commitment to the future of our Commonwealth, which is what this is about — you know, students are here, that’s what we’re talking about, the future of our Commonwealth — is laudable, and we collectively want to be partners with you in that goal,” Browne said to State System representatives.
Browne asked what challenges the State System would face if it did not receive its full appropriations request of $73.1 million more than last year.
Leadership is discussing options, Whitney said.
“We’re obviously very aggressively looking at how to be most efficient with our cost side, as we’ve discussed very thoroughly here,” Whitney said. “Then it looks at the subsidy side. Given that, I’m being very clear: Of the $73 million, 50 is or around compensation and benefit requirements. Those are extremely — normally, they’re variable costs in most businesses, as you knows an accountant — but they’re rather fixed for us, so there are some real challenges here.”
She said the system hopes to conclude the process and set State System prices by midsummer.
“I wish I could tell them right now what their price is gonna be, but we’ll work through this,” Whitney said. “We’ve done this before. We’ll do this with the integrity that I think you’ve come to expect from us.”
A 3 percent increase would translate roughly to $125 more per semester, she said.
Whitney addressed Browne’s question about enrollment declines, to which she referred as shifts — and the effects on the State System’s workforce.
“We’ve been shifting away from certain areas of academic interest into other areas,” she said. “I mean, we can’t hire nursing faculty fast enough. So we’ve got growth areas in nursing, health, allied health, in technology and engineering, in business. And you can’t just simply ask somebody who has dedicated a life’s work in an experience content area A to teach in content area B. It doesn’t work like that … Every year, we have people retire and leave, so there’s a shifting of our workforce. Now, obviously, there are rules to that shifting that we’ve all agreed to, and so the shifting isn’t turning like the lightswitch on and off. It’s like an aircraft carrier moving. That’s why one of the things I mentioned earlier was to give us the tools on phased retirement and buyout so in a respectful and appropriate way we can accelerate the shifting.”
Browne underscored the importance of workforce competence in his closing comments.
“The most important asset this state has in relation to that is our tremendous portfolio of higher-education institutions here in Pennsylvania,” he said. “You know, states can compete with us in subsidies. They can compete with us in tax burdens and tax policy, but no one can touch our system of higher education. It Is the most diverse and the strongest in the nation. Our relationship with it is what’s going to determine whether our state is going to be competitive in the future or not and whether our current demographic challenges are gonna change. What you’ve heard today from a lot of our members is just concern about the future in relation to 10 years of fiscal stress, and the finances and circumstance of the State System of Higher Education are entwined in that. The highest-growing percentage of our population is in senior citizens, it isn’t in younger people, which is reflective in the student populations of our systems of higher education.
“Because of challenges financially, our commitments to our systems of higher education over the last 10 years have not kept up with the growth of costs. In fact, as Sen. Hughes then mentioned, we were at a high-water mark in terms of commitments to the system in 2010. … And while that’s happening, the amount of revenue per student is going up, and the cost per student is going up. It’s all a reflection of fundamentals that we’re concerned about. So we have to really consider as, hopefully, the state moves forward financially in a stronger position, where the Commonwealth is gonna be in relation to higher education going forward.
“ … We want to make sure that in our decisions, in relation to the future of our children and the systems that serve them in higher education, that there’s always an objective, always a goal, and always a purpose, and that’s the objective of this committee collectively, and it’s the objective of the majority of the members of the General Assembly — and I would say all the members of General Assembly — that is our goal. The inquiries today were part of a financial process to review as we look to evaluate the governor’s proposal, and we do have concerns going forward as far as where the finances of Pennsylvania and the finances of higher education are in that relation, but the goal is to continue to move things forward for the best interest of our students.”