COMMONWEALTH OF PENNSYLVANIA HOUSE OF REPRESENTATIVES COMMITTEE ON APPROPRIATIONS
In re: 2001-2002 Appropriations Hearings University of Pittsburgh
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Stenographic report of hearing held in Majority Caucus Room, Main Capitol Harrisburg, Pennsylvania, Wednesday February 28, 2001 9:00 A.M. HON. JOHN E. BARLEY, CHAIRMAN Hon. Gene DiGirolamo, Secretary Hon. Patrick E. Fleagle, Subcommittee on Education Hon. Jim Lynch, Subcommittee on Capitol Budget Hon. John J. Taylor, Subcommittee/Health and Human Services Hon. Dwight Evans, Democratic Chairman MEMBERS OF APPROPRIATIONS COMMITTEE Hon. William F. Adolph Hon. Steven R. Nickol Hon. Matthew E. Baker Hon. Jane C. Orie Hon. Stephen Barrar Hon. William R. Robinson Hon. Lita I. Cohen Hon. Samuel E. Rohrer Hon. Craig A. Dally Hon. Stanley E. Saylor Hon. Teresa E. Forcier Hon. Curt Schroder Hon. Dan Frankel Hon. Edward G. Staback Hon. Babette Josephs Hon. Jerry A. Stern Hon. John A. Lawless Hon. Stephen H. Stetler Hon. Kathy M. Manderino Hon. Jere L. Strittmatter Hon. David J. Mayernik Hon. Leo J. Trich, Jr. Hon. Phyllis Mundy Hon. Peter J. Zug Hon. John Myers Also Present: Michael Rosenstein, Executive Director Mary Soderberg, Democratic Executive Director Reported by: Nancy J. Grega, RPR ADELMAN REPORTERS 231 Timothy Road Gibsonia, Pennsylvania 15044 724-625-9101 INDEX
Witnesses; Page
Dr. Mark A. Nordenberg, Chancellor 4 Dr. James V. Maher, Provost and Senior Vice Chancellor
Dr. Arthur A. Levin 26 CHAIRMAN BARLEY: This is day three of the first week of our hearings. We have before us today the University of Pittsburgh but as we have been doing customarily at this point, I will provide the members that are with us an opportunity to make brief introductions of themselves for the benefit of the audience.
CHAIRMAN EVANS: DwightTEvans, Philadelphia.
REPRESENTATIVE STABACK: Ed Staback, Lackawanna and Wayne.
REPRESENTATIVE MANDERINO: Kathy Manderino,
Philadelphia.
REPRESENTATIVE JOSEPHS: Babette Josephs,
Philadelphia.
REPRESENTATIVE LaGROTTA: Frank LaGrotta, Beaver,
Lawrence and Butler.
REPRESENTATIVE FRANKEL: Dan Frankel, Allegheny
County and home district of the University of Pittsburgh.
REPRESENTATIVE COHEN: Lita Cohen, Montgomery.
REPRESENTATIVE FLEAGLE: Pat Fleagle, Franklin County.
REPRESENTATIVE STERN: Jerry Stern from Blair and
Bedford Counties.
REPRESENTATIVE STRITTMATTER: Jere Strittmatter from
Lancaster County.
REPRESENTATIVE ROHRER: Sam Rohrer from Berks County.
REPRESENTATIVE ADOLPH: Bill Adolph, Delaware County. 4 CHAIRMAN BARLEY: and I'm Join Barley, Chairman of the committee/ and I'm from Lancaster County. Mike Rosenstein to my left and he is my Executive Director; Mary Soderberg,
Executive Director for Representative Evans. Welcome, Chancellor Nordenberg. We're very pleased to have you here today and we will give you an opportunity to have an opening statement and then, I'm sure, there will be some questions from the members of the committee. You have the floor.
CHANCELLOR NORDENBERG: Thank you, Mr. Chairman. It is a privilege for me to meet with you again today and it's fitting that this hearing occur on February 28th. On this very day in 1787 the Pennsylvania legislature passed the act authorizing the creation of the Pennsylvania Academy which, over time, became the University of Pittsburgh. Later today we will celebrate our 214th anniversary. We will do so at our annual honors convocation as we celebrate the achievements of students, faculty, alumni and staff. That convocation will feature remarks from Frances Hesselbein. She served as the
Chief Executive Officer of the Girl Scouts for many years, is a recipient of the Presidential Medal of Freedom and currently chairs the board of the Peter Drucker Foundation. Most note worthy, in terms of the themes of the day, she began her own remarkable career when she enrolled as a student at our
Johnstown campus now decades ago. At the preamble to that act of February 28th, 1787, forcefully declared that the education of youth ought to be a primary object with every government. The significance of that object can be seen in the contributions of those, like
Mrs. Hesselbein, who have built upon their education to serve the common good. And its promise is reflected in the ambitions of a new generation of students, who recognize that a high quality higher education is central to the effective pursuit of their life goals and are looking to Pitt in record numbers.
From the fall of 1995 to the fall of 2000, under graduate applications to the University's Pittsburgh campus increased by well over 70 percent. Applications for next fall are running more than 15 percent ahead of last year's record"setting pace and I probably should note that applications from African-Americans are rising even more rapidly, 39 percent ahead of last year's pace.
In Pennsylvania's master plan for higher education,
Pitt is classified as a Commonwealth Unidersity. in addition to offering a broad range of educational programs, then, we are expected to make other contributions as a major research university. In fact, the first responsibility assigned to us is to enlarge the reservoir of essential knowledge. In advancing that mission in the last 12 months, we have attracted more than $350 million in sponsored projects support and our research funding in the current fiscal year almost certainly will double our state appropriation! reflecting the fact that we are one of the most effectively leveraged public universities in America. We are first nationally in funding from the National Institute of Mental Health. We are in the top ten in funding in the national Institutes of Health, and we typically rank in the top 20 American universities in total science and engineering support. We are, in short, a major driver in the Commonwealth's ongoing transition to a position of leadership in the new knowledge economy.
As I have gratfully acknowledged on many past occasions, the University of Pittsburgh never could have achieved these high levels of performance without Commonwealth support but neither will we be able to sustain our current momentum without a partnership that is strong and forward looking.
The budget proposed for the next fiscal year recommends a four percent increase to the base budget of the state system of higher education which actually is low by national standards. That same proposal, however, recommends only a three percent increase for state-related universities, a full percent lower than that recommended for the state system and lower than the 3.25 percent base budget increase that Pitt received last year. In addition, our last two appropriations as well as 7 thoae of the state system and the other state-related
universities have included funding for well targeted line item initiatives. Pitt has used these funds to modernize the
laboratories, to purchase state of the art equipment, and up
grade our information technology network. Initiatives of this
type were eliminated from the proposed budget. When their deletion is factored in, that proposal actually triggers a budget reduction for the University of Pittsburgh and we do hope that they can be restored.
More generally as you press forward with your own budget deliberations, we respectfully ask that you think both about past returns on your investments in Pitt and about the assets that are most critical to the Commonwealth's own future. When you do, we hope you will conclude that
Pennsylvania's public research universities, including in particular the University of Pittsburgh, continue to be deserving of your support and emerges appropriations priorities for the coming year. Thank you very much.
CHAIRMAN BARLEY: Thank you, Chancellor. I know you brought attention to the actual reduction in the Governor's proposed budget for your institution, for Pitt. Could you tell the committee what the actual reduction will be? Do you have that number? Do you know what the actual dollar amount? In other words, I understand it's — he's proposing a three percent in the line but when you factor the reductions of programs that both the General Assembly supported and the administration supported in the past, as you have indicated, you end up with a net loss in revenue. Do you know what that number is?
CHANCELLOR N0RDENBER6: Yes. The net reduction would be just over $4 million in terms of the support that we received last year and the support that has been proposed for this year.
BY CHAIRMAN BARLEY:
Q So, a proposed budget that indicates a three percent uncrease in your base line, in reality is a $4 million reduction in revenue for this year?
A Yes. With the loss of a line item support that we did enjoy and did appropriately invest during the course of the past year, the total support actually decreases by over
$4 million.
Q I'm certain that was an oversight. A I'd like to think that was the case, Mr. Chairman.
Q A miscalculation. I'm certain that was not intentiona! and you have my commitment as Chairman of this committee to
rork with you in whatever way we can to see that that oversight
:an be remedied. I have had opportunities to visit your campus.
\s a matter of fact, we had a hearing there on one occasion and : am very appreciative of the work that you are doing and I
enow you have Art Levin with you today. I was so impressed 9 with some of the work the good doctor is doing there and some of the research in other areas. Again, I think it's important for the committee to understand that you are not really receiving a three percent increase. You are receiving a $4 million reduction.
A I'm deeply grateful for that expression of support as well as for your acknowledgement that we are doing and trying to do many good things at the University of Pittsburgh.
CHAIRMAN BARLEY: Representative Evans?
BY CHAIRMAN EVANS:
Q Thank you, Mr. Chairman. Good morning. Chancellor.
A Good morning.
Q I just want to follow up a little bit on what the
Chairman was expressing to you right now. What exactly will that $4 million reduction mean in terms of the issue around tuition? Come September, what will that mean in terms of what type of decision you have to make on tuition which in turn affects the students?
A As you know, we do everything we can every year to control our tuition increases. As you also know that in any university there are two principle revenue streams from which we can support our general education programs. They are the state appropriation and tuition dollars. So, to the extent that the appropriation is lower, then inevidably a larger share of the expenses that are required to provide the program quality that our students seek does come through their
tuition payments.
Q What is the current tuition at the University of
Pittsburgh at this point? A The current tuition for the University of Pittsburgh
for an in-state resident student would be about $6,400.
Q Six thousand. So, in other words, what you are
saying to me, talking ballpark figures, and I don't know if
you are in a position to talk at this point, but obviously there would be some sort of increase depending on what
happens with the state appropriations? A That's true.
Q My next question is you have new initiatives. Can you expand a little on the new initiatives, information
technology, laboratory investment fund and the biotech investment fund, are any of them potentially connected with what the Governor is trying to recommend with this idea about greenhouses in any way? Are you positioning yourself to advance that?
A Yes. Many of our investments actually do tie into that initiative specifically and more generally into initiatives that are designed to move Pennsylvania into the new knowledge economy, both for purposes of high quality education and for regional economic growth. I was so thrilled with the line item appropriation that we first received two budget cycles ago that permitted us to invest in laboratories and equipment that I wrote to Chairman Barley and I think I wrote to you as well, and I couldn't restrain myself. It ended up being a nine-page letter which means none of you probably read it.
CHAIRMAN BARLEY: Staff did.
CHANCELLOR NORDENBERG: But I did think that the investment was so important and the ways in which we had used it were so appropriate that basic standards of accountability required me to respond. And I will provide you with another copy of that letter if you would like but I would say we invested in programs across most of the schools of the Oakland campus as well as the regional campuses. We focused on areas where we could advance both our teaching mission and our research initiatives through laboratory renovations and equipment purchases and all of that really does tie into things like the Pittsburgh digital greenhouse which is already up and running and which, I think, though I should confess,
I?m Chairman of its board, is doing a good job in advancing information technology as a base for the new western
Pennsylvania economy and also for the life sciences greenhouse which has been proposed and which, of course, does tie into particular strengths at the University of Pittsburgh with our great traditions in medicine and health sciences.
BY CHAIRMAN EVANS: Q So, in other words, these new initiatives you 12 describe again could continue to help position you relating to what the Governor is talking about in terms of the green house which, my understanding is, he did give to Pittsburgh?
A Yes. Let me give you one example from this letter.
The first investment that I talk about in cataloging. Every thing we did with the money in that line item is a state of the art liquid chromotography nuclear magnetic spectrometer.
Q The Chairman has one of those.
A Dr. Levin and Provost Maher may be the only ones in the room who really do understand what a piece of equipment like that is used for but it will support more than 20 different research programs involving more than 90 researchers in areas like synthetic organic chemistry, bio-organic chemistry, drug design and natural product chemistry, all of which tie into both of these scientific and the economic development ambitions of initiatives like the life sciences greenhouse because it is upon those basic science strengths that the ideas that can be commercializable will be built and that's what we are all looking to do.
Q In your brochure on the booklet that you put out, someone from my staff brought it to my attention, you are doing something related to neighborhood development. You got a$*00,000 grant from HUD and I think you are doing something in the Oakland community, not that Representative Robinson said anything but I made note of the Oakland community. Tell 13 me a little bit about this $400,000 and the neighborhood development and exactly what you are doing?
A Well, of course, Representative Robinson is one of our best neighbors and has been one of our best friends over time and he would say, I think, that over time the university has been involved in a broad range of ways in attempting to strengthen the neighborhoods that surround our principle campus. What this federal grant does for us and receiving that grant requires that we come up with matching institutional resources, is really to pull together a range of programs that should benefit not only Oakland but the Hill District and
Hazelwood, areas that abut the campus and that do face some problems and what we will be doing ranges from initiatives to improve the housing stock, to initiatives to improving the educational programs, to initiatives that should provide for the better delivery of social services. Q I would be interested and you can certainly send any more information to the Chairman's Office that you have elaborating on that. I saw the write-up in your booklet and
I'm interested in more detail. This is an issue I was raising with Temple University yesterday and, obviously, we don't need to recreate the wheel. We can watch from Pittsburgh, aj. least get something from Pittsburgh. We certainly would be more than glad to look at that. I;m anxious to see that. Provide it to the Chair. My last question, Chancellor, I want to thank you, working along with Majority Leader Prazel (phonetic) and
Chairman Barley and I on the education issue. The question I have been asking all of the various universities and colleges is the element of teacher education and teacher preparation.
I always have some feeling, and I could be wrong, that there seems to be a disconnect between higher ed and primary- secondary ed; that for some reason some people don't understand that young people come from primary and secondary and go to higher and in my view it's a marketing tool to fill that niche. My question to you is one related to the issue or preparation for individuals to teach. As you may know, we have certain shortages. I don't know if Pittsburgh has a shortage in the area of teaching science, math, foreign language and special education, and it is a 'problem and depending on what section of the Commonwealth you come from, that is an issue because you need to have good quality teachers in the classroom. There is no way to raise the standards and then in turn not have the teachers being able to teach the subject matter. Give me some of your thoughts in terms of Pitt's position to do things to upgrade teachers, to position them — the Governor talked about the brain drain, trying to convince them to stay. I understand we can't make them stay here in Pennsylvania but obviously we could try to make it an environment that they would like to be in. I would he interested In your thoughts. Does Pitt have any particular strategy around the future?
A Well, first of all, we made the move years ago to require that people entering our quote teacher training program have developed their substantive specialties before they went onto the courses that were more clearly designed to develop their pedagogical skills and that, I think, has been a continuing philosophical issue in terms of the structuring of these programs that we believe was the right direction to go. It is ironic that we sit here today talking about potential teacher shortages when in past years we have been talking about teacher gluts but I think you framed the issue properly. As we see it, there are potential shortages in particular areas, math and science and computer science, not across the board. We actually have been working very closely with the Pittsburgh Public Schools, both to make certain that their teachers in those areas are trained in all of the most uptodate techniques so that the people already on board as a part of continuing education continue to develop in the ways in which they can contribute and beyond that, we have been adjust ing our own hiring and programatic initiatives within our school of education to make certain that we can respond to this market need. Beyond that, I would say that our learning research and development center is probably the finest center of its type in the world in terms of studies of how it is that people learn and they have a particular reputation in terms
of math and science learning and we have been able, particularly
with the arrival of a new superintendent in Pittsburgh, to
forge partnerships that should have existed in the past. We
have been in the New York schools. We have been in the San
Diego schools in more dramatic ways rather than right in our
own backyard but that is all changing.
Q Thank you, Mr. Chairman. Thank you, Chancellor. CHAIRMAN BARLEY: I now recognize Representative
Cohen.
BY REPRESENTATIVE COHEN:
Q Thank you, Mr. Chairman. Good norning, Chancellor. A Good morning.
Q As the daughter of a Pitt person who smoked for
40 some odd years and died of lung cancer, I want to ask and talk to you about the Pitt Cancer Institute. I know that you folks have been very active along with our cancer centers in advocating the sizeable portion of the tobacco funds that we
receive be dedicated to cancer research. Can you tell us how
it will benefit the citizens of the Commonwealth to invest
these precious dollars in research and what you folks will do
bo participate in that?
A Let me respond to that in a couple of ways, starting
ay saying that I really do applaud what seems to be the general
iirection which tobacco distribution discussions are going and 17
that is, they ought to be invested in ways that advance human
health which does relate to the way in which the dollars have come into the Commonwealth and I recognize that there are important initiatives that could be viewed as competitive.
At the same time, we believe that research really is the key to long term improvement in human health. I look back at the history of the University of Pittsburgh and I think today cancer is the disease that is on everybody's mind but back in the 1950's, it was polio; in 1952 there were 60,000
Americans either who died or were disabled by polio. Well, within three years, that disease was effectively conquered and the good news headlines came from the University of
Pittsburgh where Dr. Salk and his team had developed the vaccine that put an end to that disease. Cancer obviously is more complicated but we do think there are special strengths in the Commonwealth of Pennsylvania that vould lead one to predict we really can make a difference in attacking cancer and heart disease and many of the other modern afflictions. Beyond that, the most knowledgeable forecasters are saying that the century we have just entered is going to be century of biology or the century of bio-technology with the human genome project and the scientific insights it will provide. The developments in bio-technology are going to dwarf what has happened in information technology over the course of the last 20 years. So, these investments, as I see I it, are investments both in human health, and in the economic
health of the Commonwealth of Pennsylvania. We do see other
regions currently investing hundreds of millions of dollars to
build the kind of infrastructure upon which they believe
their economic future depends. You know, there is another
story, if I can take two minutes. Back in the 1960's there
was a young student at the University of Pittsburgh, Herbert
Boyer was his name. He left with his Pitt PhD in hand, went
to northern California, unlocked the secrets of DNA,
developed the gene splicing techniques that have become the
foundation for the modern bio-technology industry.
Entrepreneurial before his time, found the Gennetech of the
first American bio-technology company, a company that now
employs perhaps 5,000 people in northern California and that
really triggered everything that happened from San Francisco
to San Diego in terms of their bio-technology industry. We'd
like to make certain that the next Gennetech stays in
Pittsburgh.
Q Thank you. I was going to comment on that. That's the next issue we have to discuss, how we keep these good people in Pennsylvania. A And one of the things to note, I think, is that the bio-technology industry is more rooted than the information technology industry. You know, you can't start a bio-technolocy
firm in a garage. Once you got the idea, you can't put it in 13 your pocket and move to one coast or the other. People are tied to their labs and to their colleagues and it becomes
much more of an industry where you can have hopes of hanging onto it.
Q Thank you, Chancellor. Thank you, Mr. Chairman.
CHAIRMAN BARLEY: I apologize. I did not have my
timer. I think you were pretty good on the five minutes
though but I will now invoke the five minutes. Representative
Robinson.
BY REPRESENTATIVE ROBINSON:
Q Thank you, Mr. Chairman. Chancellor, on the heels
of the great victory, certainly a discussion has ensued about the prominence of cooperative into collegiate athletics in our state. Certainly, the capstan of that would be the return of the Pitt-Penn State rivalry but notwithstanding that,
I certainly encouraged Dr. Spanier yesterday to explore with
the other Commonwealth's presidents reaonable and appropriate
sports competition that adds to the efforts of the university
in dealing with reality; that there are other states who have
seen the light and have decided that competition among schools in their state is in the best interest of those states financially, academically and certainly, I think, you and I both appreciate the potential. So, I would encourage you to continue your attempts to not only continue a very intense and jockular rivalry but look at other possibilities and savor the great victory because, as you know, all good things come to an end.
A Well, you know, we did hope that that series would continue. We would be very much in favor of resuming it. We think it would be good for the two universities and we think frankly it would be good for Pennsylvania to keep that game and all of the money among other things it generates within our borders. On the other hand, the good things can't come to an end until we play again because until then, I've got the game ball memorializing that last shutout sitting in my office in a prominent location.
Q Thank you, Chancellor. My kind of guy.
Let me relate to something that you mentioned about the master plan, higher education master plan. I'm glad you are reading it. Hopefully, you are using it. Sometimes we think Chancellors don't pay attention to it but in light of the whole idea, let me get the exact words you used here, enlarge reservoir of essential knowledge. Let me relate that to the issue of the recruitment-retention of minority faculty and staff which is an issue that Pitt and other schools have struggled with. How is the university attempting to do that and how does that fit into this whole notion of making sure this central knowledge is afivelcped here in
Pennsylvania?
A Well, it fits in very directly and, as you know, we have long been committed to the aggressive recruitment of minority faculty members. Our successes have not always been what we would like. In fact, I would say our successes have almost never been what we would like and yet there are examples to point to that I would think that show you the way and also are inspirational. You, I'm sure, have met the new Director for our center for minority health, a very distinguished faculty member, senior when we recruited him, holds a chair in the graduate school of public health and in the school of social work and is going to make a tremendous difference in terms of generating the knowledge that is essential to closing the health disparities that currently exist not just in
Pittsburgh, but around the country. Dr.Levin has just recruited an African-American woman who will be the first African-
American and the first woman to chair a department in our school of medicine and she too will be positioned not only to make contributions herself but to lead others to make important contributions in this area. So, we do see it as important and we are working aggressively on it.
Q Dr. Stephen Thomas, the gentleman you mentioned, that leads up the center for health studies is a very fine gentleman. We are very fortunate at Pitt to have him and I think persons like Dr. Thomas and the other professor you mentioned need to be highlighted and need to become part of some comprehensive program. We need to be competitive not only on the sports field but in academia and being competitive in academia is first and foremost.
Let me follow that up with a concern for develop ment of graduate students. As you know, across the Commonwealth
from time to time there are programs designed to develop a pool of minority graduate students. Hopefully, most of them
stay in our Commonwealth. I was wondering about your thoughts about whether or not the University of Pittsburgh could become a focal point to develop that in the western part of the date?
A That too is very consistent with our strategies. We know that these are long-term issues that require a sustained effort and so we actually have looked from discipline to discipline to try to identify at what point in the pipeline we begin running into difficulties in terms of generating the candidates that we need to fill these positions and so your strategy is one that we embrace. Q Thank you, Mr. Chancellor. Thank you, gentlemen.
Thank you, Mr. Chairman.
CHAIRMAN BARLEY: I now recognize Representative
Stern.
BY REPRESENTATIVE STERN:
Q Good morning, Mr. Chancellor. A Good morning.
Q I appreciated the fact that the chairman alluded to earlier that he was looking to your budget proposal and 23 saw a lack of funds from last year, from last year's proposal, and I noticed where the university has requested a $4 million new line item that ould probably go a long way in bringing that
$4 million figure that we talked about or we heard mentioned previously, a new $4 million line item entitled Bio-
Technology Investment Fund, and I was wondering if you could share with the committee some of the work that Pitt is going to do in this area. I know you indicated previously about the pioneer, the DNA pioneer that left Pennsylvania and moved to California, started his own company, Gennetech, and I was wondering what this new appropriation, how the univexsLty plans on using this in hopefully retaining people and jobs here in
Pennsylvania.
A Well, our initiatives in that area first require infrastructure investment and by that I mean broadly building, outfitted labs, equipment. We're in an interesting time because of the federal committment to doubling the NIH budget and, as you may know, the University of Pittsburgh has been recognized as the institution that has been most successful in increasing its share of the NIH budget but to do that, you need people and before people can work effectively, they need space and equip ment and support and typically those people do require invest ments over a period of a couple of early, years before they attract the federal funding that then will sustain them and that hopefully will generate the ideas that will spawn some of 4*
the commercial benefits that we talked about earlier. So,
within that bio-technology initiative we would be talking
about building the foundation for the basic science strengths
that would permit us to more effectively compete for the
larger pool if NIH dollars and then to push to the next stage,
the stage of commercialization.
Q Where do you see that headed overall as far as overall funding, as far as appropriation and what you need to make that happen?
A Well, it really — these are not small ticket items.
If you're talking about making the kind of bold move that actually can transform the economy of a region, it requires significant investments and as we look at this area, we're hoping that there will be investments from the Commonwealth, whether they come through this budget, through the distribution of tobacco dollars, perhaps through grants from the department that is headed by Secretary McCullough, but we also marshalling our own resources. Internally, we are re-allocating. We are aggressively seeking outside support. Last year we received a $10 million grant from the Scaife Foundation to create a new center focusing at neurological diseases and we believe that the Pittsburgh foundation community also would be supportive if we are able to put together the right package and if we can construct that right package, then what I say is, look out because here comes Pittsburgh. 25
Q Thank you very much. Chancellor, for the fine job you do for the University of Pittsburgh and thank you, Mr. Chairman. A Thank you.
BY CHAIRMAN BARLEY: Q Chancellor, just a very brief follow-up. You did indicate that some of the money from the tobacco settlement could be helpful in the pursuit of this new initiative. We have nad some discussions. I'm not sure — I guess at some of the public hearings they were of a formal nature and I know that we have had other discussions informally. You mentioned the NIH funding and what that means. Could you just very briefly for the benefit of the committee maybe explain again how the tobacco settlement money, if we used the basis of the NIH funding, what is the significance of that and you may want Dr.Levin to participate in that because I know that is an area of his specialty, and I'm not looking for a long dissertation on it but if you could spend a moment or so, it may help the committee. A Well, let me say a word or two and then Dr. Levin, who came to us from the NIH, may have something to add.
Basically, we believe that these investments should be made where there is a proven record of production and of quality and within the world of science, there probably is no system that is more respected than the peer review system that exists 26 within the National Institute of Health. Grants are not made until they have been carefully reviewed by the top people in the area. So that if your project is funded, it really carries with it a judgment that this is important work, that the principle investigators are people of talent and that there is a real likelihood that something of value will be produced.
DR. LEVIN: Thank you. I would only add to that that science is nationally and, in fact, internationally competitive. So, it doesn't help to have a better rather than a worse scientist in western Pennsylvania. What we need are scientists in western Pennsylvania that are competitive with the best in the world and the NIH is the only institution in the history of work science in the position to make that judgment. It puts a floor under our excellence.
Let me also point out that to attract NIH funds, as the Chancellor has suggested, we first need to make a huge institutional investment. I allocate between one and
$3 million every time I bring a new young scientist to the
University of Pittsburgh. That has to be upfront from institutional money before that scientist can attract his first NIH grant and then even having a attracted that grant, at best it covers 77 cents on every dollar and continuing institutional funds have to make up the difference.
Q Thank you for that explanation. I now recognize
Representative LaGrotta. 27 BY REPRESENTATIVE LaGRCTTA: C Thank you, Mr. Chairman, and Chancellor. My question is relatively simple but its genesis is out of something that Dr. Spanier said yesterday in terms of the budget appropriation for Penn State and their medical school.
The Governor's budget proposal for the University of
Pittsburgh medical school, as it's listed right nov;, what impact would that have on your medical school and vhat recommendations would you make to this committee in terms of supplementing the Governor's recommendation?
A Well, the level of support received by our medical school does have a big impact on our competitiveness. If you break it sown, the support that we receive amounts to about
$11,000 per medical student. If you compare that to national averages, a typical medical school would be enjoying something between $45,000 and $50,000 in support for its school. The real issue that we have today is that great medical centers in the past were built largely on clinical revenue and anyone who follows what has been happening in the world of health care knows that that revenue simply is not available today.
This in turn places a real burden on our students who do leave with huge debts, debts that make them much less likely, for example, to go into family medicine as opposed to more lucra tive forms of practice. So, I'll say that I certainly agree with the assessment of the problem that was advanced by President Spanier.
Q Do you have any recommendations for us in terms of what we should be doing in this budget to assist your medical school?
A Well, if there is room in the budget to increase the support for our medical school and for the Penn State medical school, that would be a wonderful boost for us.
0 Just so myself and members of the committee under stand, Chancellor, the medical school and the UPMC Medical
Center are not affiliated in any way, correct?
A No. We are legally and financially distinct but we obviously are closely related because it's our faculty positions who lead many of the clinical and patient care initiatives within the health system and it also is true that the system has been supportive of academic initiatives within the university in the past but we are legally distinct entities.
Q I might conclude by saying, Chancellor, that I have had several surgical procedures at UPMC upon which I was practiced on by some of your students and all things being equal, they did quite well. After the first injection, I passed out and don't remember a thing. I'm assuming that they did quite well and I congratulate you.
A Well, I take it as a good sign both that you are here to report on it and that you said there were several 29 times. So, you kept going back.
CHAIRMAN BARLEY: I now recognize Representative Baker.
BY REPRESENTATIVE BAKER:
Q Thank you, Mr. Chairman, and good morning,
Chancellor.
A Good morning. Q I have two questions. The first one deals with the overall problems of primary health care and particularly in the critical need, critical access areas that have been identified throughout the Commonwealth. I know this has been a problem for several years and my particular district as well as perhaps some of the districts represented here on a bi partisan basis are impacted, both rural and urban, and I'm concerned about how we can encourage some of these physicians and dentists to take a look at serving these critical needs areas of the Commonwealth because this is a real problem that keeps being identified to me personally by the allied Health Care interests and it really is a human needs story and it needs to be addressed somehow and I'm wondering if your university has looked at that issue and what policies may be considered for implementation? Perhaps you have already done something in this area. I'm curious to know how you are looking at this particular issue in the Commonwealth.
A With the Chairman's permission, I'm going to ask 30 Dr. Levin to respond to that question.
DR. LEVIN: I think that that question links well with the Chancellor's comment about the debt that our medical students and to a lesser extent our dental school graduates experience. Last June, 80 percent of our medical school class was indebted on graduation. Their average debt was $112,000.
Twenty-five percent of the class had a debt in excess of
$150,000. The interest compounds on that debt and by the time our physicians are finished training and ready to go into practice in some part of the Commonwealth, they usually face a debt of a quarter of a million dollars and with that kind of a debt, it becomes almost impossible to think about serving in a rural part of the state or in an underserved part of the state. Those parts of the state need primary care physicians.
They need family practitioners, pediatricians, obstetricians and so forth and those practices simply will never compensate their practitioners in those parts of the state sufficiently to make up that loan. So, one revenue that is being considered elsewhere in the country is a loan forgiveness program that would be tied to mandatory service in the parts of the state and with the populations that are really in need.
That same logic could, of course, extend to dentists, nurses, pharmacists and so forth although the debts of the para- professionals, of course, don't approach the magnitude of the physicians. BY REPRESENTATIVE BAKER (To Dr. Levin):
Q It's my understanding that the federal government offers such a program for national — I'm not sure exactly the name of the program but they have had a national program for public service for forgiveness; is that correct?
A They do. There have been such programs in the past.
At the moment they are tiny and there just isn't enough federal money to do what we need to do.
Q You are suggesting that we look at a loan forgiveness program and expand that to allow more of these physicians to qualify and more dentists to qualify?
A The two critical needs that we have are primary care medicine in underserved parts of the state and also research physicians. I want to make sure that we don't lose sight of that because fewer and fewer physicians are embarking upon careers in research and for the very same reason. They just graduate with too much debt.
Q I know this is a problem concerning nursing as well and I look forward to looking for some solutions in that regard.
BY REPRESENTATIVE BAKEP (To Or. Nordenberg):
Q Ky last question deals with the medical center that was brought up a little earlier. It's my understanding that the center has undertaken a rapid expansion. However, it's also my understanding that under your own financial reports, they have indicated that without their investment income, it 32 may have suffered substantial losses in recent years. Should those losses continue, are the charitable assets and the annual
Commonwealth appropriation protected in order to further Pitt's higher educational mission? A Well, we do look forward to a comtinuing relationship with a very strong UPMC health system for a long period of time and actually the operating margins within the health system, I speak now not as its' CEO but one who is knowledgeable, have been positive and to the extent that your question is inquiring about the level of protection that exists with respect to university assets, we are legally and financially distinct.
So that we don't have some of the liability issues that have arisen in other places.
Q My time is up. Thank you. Chancellor.
A Thank you.
CHAIRMAN BARLEY: I now recognize Representative
Frankel.
BY REPRESENTATIVE FRANKEL: Q Thank you, Mr. Chairman, and welcome, Chancellor
Nordenberg. It's a pleasure to have you here today. First of all, I just want to say in response to some of the other comments today that the university has been a tremendous partner to the city. The investments the university is making throughout the city and particularly in Oakland, the capital investments there are transforming that neighborhood which is a part of both my district and Representative Robinson's
district and it's clearly changing the quality of life for
everybody who lives there and it's brought a great deal of sensitivity to the neighborhood as well. So, my congratulations
on that.
I also think it's important, you know, one of the
questions that has occurred to me that has been mentioned by
several people, when you look at the special line item
requests that have not been included in the Governor's budget,
for instance, the laboratory line item. You know, the questior
is why. It's an annual request, you know. What's the
rationale for what happened last year and prior years, why is
it recurring again this year. Again, in terms of the invest ments and to leverage to future investments from other
sources. Maybe you could comment on that. A Well, let me say, for example, that four years ago we completed a once in the institution's life in developing
a ten-year facilities plan. We thought that was complicated.
Then we tackled the task of developing an institution-wide
information technology plan where things change so much more rapidly but we did that and that plan was developed and completed during the course of the last year. Following
through on this plan is something that is essential to main
taining our position as a leading university. It does require
sustained budgetary committments that we have made but it also 34 requires three years of capital investments. Certainly, the line item support that we received last year gave us a big boost by permitting us to move forward agressively in the first year of implementing that plan and if we received the same kind of support this year, it would enable us to do what ve think we need to do.
Q Moving to another area, in your opening remarks you mentioned that applications are up about 75 percent. What do you attribute that to and also is there a qualitative difference in terms of those applications?
A Well, there is a marked qualitative difference as you would expect. The larger the pool, the better qualified the applicants, the more selective you become, the higher levels of performance that you see once the students are on campus. I give you two quick answers. One is I do think that the consumers of higher education are becoming much more sophisticated in making their choices and we in this committee for understandable reasons typically talk about what might marginal tuition increases be but if, in fact, you are talking about a tuition that is over $6,000, whether it's 6300 or
6400 or 6500, it's a big investment by the student and his or her family and they tend to be less concerned with that incremental cost than they are concerned that they are getting their dollar's worth in terms of the educational program that is provided. So, we have worked very hard to make certain that we have the right programs, to make certain that they
are being delivered in the right setting, that there is cutting edge technology available. We have worked on students life. We have worked on our advising and counseling systems.
We have worked on recreational facilities and today I think people get onto our campuses and they have a sense that there really is something pretty special being offered here and in the end it's that judgment that makes a difference. But the other thing, I think, ties into your earlier point, you know, when you and I were making our college decision and this may be reflected in the choices that we made, I think there was a general notion that maybe you want to go off someplace where you could be insulated from the world for those years.
Today I think more and more people are coming to realize that if you can find a good university in a good city setting, it might be the best place for learning and Pittsburgh certainly provides that.
Q Thank you, Chancellor, and thank you, Mr. Chairman.
CHAIRMAN BARLEY: I now recognize Representative
Strittmatter.
BY REPRESENTATIVE STRITTMATTER:
Q Thank you, Mr. Chairman. Thank you, Chancellor, and everyone. I want to follow up on sort of like the big basket of funding versus the program funding. I sort of like the idea of program funding because it then allows us to measure JO
results, it allows us to keep track, allows us to see, you
know, what we were doing with the state tax dollars that
were going. If you have the 187 million that you requested,
what would happen to some of the other programs or areas that
we have funded in the past? I'm thinking of like the super
computer center. When the federal government stopped that
good funding, wasted our tax dollars on other things in
Washington, didn't fund the good things and we had to pick
that up and we have stepped to the plate and we have done that.
If you can, and on that as well as the cancer center appropria
tion that I thought was through the Department of Health, it
was very important and it didn't show up here but the Health
Department's budget. What happens to that as well as the
artificial heart, you know, working on it in Pittsburgh along
with the bio-tech center and the medical school; if you can
comment on those?
A Yes. In many of those cases there are, I think,
separate line item appropriations and they do exist for a good
reason. The super computing center, for example, is a partner
ship between.Pitt, Carnegie Mellon and Westinghouse and I
think it has typically been funded as a regional asset rather
tha-n as a part of our university and, as you indicated, it
really was state funding that kept the center alive and it was state funding that positioned that center ultimately to
compete effectively for the big $45 million grant that it 37 won in the National Science Foundation's competition during
the course of the last year. The same has been true for things
like the manufacturing assistance center where we are working
with the traditional manufacturers, the tool and die manu
facturers in the region. I think the McGowan Center, in its
development of artificial organs, has been viewed more as a
regional economic development initiative than an academic
initiative, though there are times when those lines do blur.
Q And what about the cancer center? You know, for
each of the cancer centers across the state there was an
appropriation. Now, I understand they have been lumped
together. Will you be cut under the Governor's proposal?
A I will turn to my friend, the oncologist, Dr. Levin.
DR. LEVIN: Under the Governor's proposal, the regional cancer centers will lose about $1.5 million and those
cuts would be very difficult indeed. We have one of the 12
top cancer centers in the country. We are ready to open a
new building, as you may know, the Hohman (phonetic) Cancer
Center, next year. It is filled with hope and promise for
not only the citizens of western Pennsylvania but the nation
and every dollar we lose will slow the progress that we other wise could make.
BY REPRESENTATIVE STRITTMATTER (To Dr. Levin): C I understand there was a small contribution from
the state because we don't have that many dollars, tax dollars, 38 to do that but they are important dollars. What is the percentage decrease, you know, with the million and a half?
Isn't it a very large percent decrease? A It would be at least a ten percent decrease which would be very significant.
0 Another area before I run out of time, I just ask if it would help the region-to make sure we do keep people here, that we don't lose them and how important that is. I know our retirement boards are working to make sure that the investment does stay here. I would ask you to work with all of your colleagues and all of the allied manufacturers and inventors and the students that would be making these inventiors and make them aware of the fact that we want to work with them through venture capital investments to make sure we do help
Pennsylvania and make sure we make Pennsylvania better by using the retirement funds widely. I would ask you to please redouble your efforts in making sure that the deals are coming to our retirement boards so that we can take advantage of those wins and develop Pennsylvania companies with the Pennsylvania retirement funds. Thank you.
CHANCELLOR NORDENBERG: Thank you.
CHAIRMAN BARLEY: I now recognize Representative
Josephs.
BY REPRESENTATVIE JOSEPHS: Q Thank you, Mr. Chairman. Welcome. I just want to 39 follow up a little bit with, I think, a theme that was sounded several times already in terms of minority and women employment and student body. I don't expect any verbal answer from you but I have seen some other institutions of higher learning a little chart, breaks down the student body by race and cultural background, talks about the numbers and percentage of people who apply, who were accepted, who enrollee, who graduated and a comparable kind of breakdown in terms of people on your faculty and other employees and where they stand in the salary range and the range of responsibility. I really would appreciate any kind of numbers you have along those lines, if you would forward them to the Chair of the committee, he will distribute those to the rest of us. I think that it's very important that we make sure our own institutions reflect the diversity, growing diversity, of this country and the state and I would welcome those kinds of statistics. Thank you.
A We'd be pleased to respond to that request.
CHAIRMAN BARLEY: I now recognize Representative
Trich.
BY REPRESENTATIVE TRICH:
Q Thank yo, Mr. Chairman. Good morning, Chancellor.
A Good morning.
Q Just by way of a comment, I certainly want to applaud the decision by the University of Pittsburgh and I 40
realize from sports tradition, sometimes it was not probably
an easy decision for the trustees to make and the official
family at the University of Pittsburgh to take part in the new stadium that the Steelers are building versus the university building their own new stadium as an example.
Certainly, on behalf of many of the taxpayers in the Common wealth and the Pittsburgh region, we believe that was a wise decision. I think it's going to make for a great partnership for many many years to come, both for the university and for the Pittsburgh Steelers and I applaud your decision to do that. Again, I ujderstand that was probably not an easy one.
A We think it was a wise decision but it certainly wasn't always popular. You are right. So, thanks for the reinforcement.
CHAIRMAN BARLEY: Are there any members who have not had an opportunity for the first round who would like an opportunity?
(No response.)
CHAIRMAN BARLEY: Representative Robinson has asked for a second oppotunity.
BY REPRESENTATIVE ROBINSON:
0 Thank you, Mr. Chairman. Just a quick response to
Representative LaGrotta's question and quote sort of put it in common terms. Two entities are no longer married but they are still dating. I want to find — A Pretty steadily. 0 I want to thank the Provost, Jim Maher, for his
very fine work at the university. Sometimes we don't really
fully appreciate what the Provost does at a university. That's
the person that is responsible for all of the academic programs
and the person who has to deal with faculty-staff issues but
really drives the university to academic excellence and I want
to thank Jim for all your fine work in cooperation along with
Mark and Dr. Levin and others. You have certainly helped
keep Pitt at the top of the heap. I just mentioned that the
pharmacy school has just moved up in the rankings. That's a
discussion for another time.
BY REPRESENTATIVE ROBINSON (To Or. Levin):
Q Or. Levin, you mentioned that the new academician.
It would be helpful to know her name and some of her back
ground .
A Her name is Or. Jeanette Southpaw (phonetic) and Dr. Southpaw is a graduate of our medical school. She is currently the Chairman of the Department of Family Medicine
at the uniformed services health sciences university in Sethesda and we have been able to lure her back to her home
Ln Pittsburgh. So, we feel quite confident that she'll help
is to repopulate the positions that do practice family
nedicine in Pennsylvania, especially in rural Pennsylvania.
Q Just one last comment. I mentioned to Dr. Spanier yesterday that because Penn State is so big, the expectation is high. I certainly have high expectations for them but I
i also have high expectations for the University of Pittsburgh to be a leader in the areas Representative Josephs talked about, the areas that Mr. Evans talked about and others. We have this great capacity of not only the largest employer, you are perhaps the largest economic generator in our region and a great responsibility falls upon the unversity to make sure that everybody means everybody, using all of your academic skills and all your job owning to see that others follow your leadership and to make sure that our region is respected works for everybody and I appreciate what you are doing and the expectations still are very high. Thank you gentlemen for being here today.
CHAIRMAN BARLEY: That concludes the list of members that have questions. Thank you. Chancellor. As always, you did a fine job. Thank you for the fine work that the University of Pittsburgh is doing, not only in educating young people but on behalf of western Pennsylvania. Thank you very much. We lool forward to continuing to work with you in restoring the funds that, I'm sure, were inadvertently omitted by the Governor's budget.
CHANCELLOR NORDENBERG: Thank you very much.
CHAIRMAN BARLEY: At this time the committee will stand in recess for ten minutes. We will reconvene at 10:25. 43
(The hearing terminated at 10:15 A.M.)
I hereby certify that the proceedings and evidence taken by me in the above-entitled matter are fully and accurately indicated in my notes and that this is a true and correct transcript of same.
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