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1 COMMONWEALTH OF PENNSYLVANIA HOUSE OF REPRESENTATIVES 2
3 APPROPRIATIONS COMMITTEE BUDGET HEARING 4 PENNSYLVANIA STATE SYSTEM OF HIGHER EDUCATION 5
6 STATE CAPITOL HARRISBURG, PENNSYLVANIA 7 ROOM 140, MAJORITY CAUCUS ROOM
8 TUESDAY, FEBRUARY 12, 2019 9 1:00 P.M.
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13 BEFORE:
14 HONORABLE STANLEY SAYLOR, MAJORITY CHAIRMAN HONORABLE MATT BRADFORD, MINORITY CHAIRMAN 15 HONORABLE ROSEMARY BROWN HONORABLE SHERYL DELOZIER 16 HONORABLE GEORGE DUNBAR HONORABLE JONATHAN FRITZ 17 HONORABLE MATT GABLER HONORABLE KEITH GREINER 18 HONORABLE MARCIA HAHN HONORABLE LEE JAMES 19 HONORABLE FRED KELLER HONORABLE JOHN LAWRENCE 20 HONORABLE JASON ORTITAY HONORABLE CLINT OWLETT 21 HONORABLE CHRIS QUINN HONORABLE GREG ROTHMAN 22 HONORABLE JAMES STRUZZI HONORABLE JESSE TOPPER 23 HONORABLE RYAN WARNER HONORABLE MARTINA WHITE 24 Pennsylvania House of Representatives 25 Commonwealth of Pennsylvania 2
1 HONORABLE DONNA BULLOCK HONORABLE MORGAN CEPHAS 2 HONORABLE MARIA DONATUCCI HONORABLE AUSTIN DAVIS 3 HONORABLE ELIZABETH FIEDLER HONORABLE MARTY FLYNN 4 HONORABLE EDWARD GAINEY HONORABLE PATTY KIM 5 HONORABLE STEPHEN KINSEY HONORABLE LEANNE KRUEGER 6 HONORABLE STEPHEN MCCARTER HONORABLE BENJAMIN SANCHEZ 7 HONORABLE PETER SCHWEYER
8 NON-COMMITTEE MEMBERS PRESENT:
9 HONORABLE CURT SONNEY HONORABLE TOM MURT 10 HONORABLE MARK LONGIETTI
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1 COMMITTEE STAFF PRESENT:
2 DAVID DONLEY REPUBLICAN EXECUTIVE DIRECTOR 3 RITCHIE LAFAVER REPUBLICAN DEPUTY EXECUTIVE DIRECTOR 4 MIRIAM FOX DEMOCRATIC EXECUTIVE DIRECTOR 5 TARA TREES DEMOCRATIC CHIEF COUNSEL 6
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1 I N D E X
2 TESTIFIERS
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4 NAME PAGE
5 CHANCELLOR DANIEL GREENSTEIN, PH.D...... 7 6
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9 (NO SUBMITTED WRITTEN TESTIMONY.)
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1 P R O C E E D I N G S
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3 MAJORITY CHAIRMAN SAYLOR: We'll call
4 the Appropriations Committee to order. Our
5 first hearing this morning, I should say
6 afternoon, of course, is our Chancellor, Daniel
7 Greenstein, who's a Doctor of Education. I
8 assume that's right.
9 CHANCELLOR GREENSTEIN: History.
10 MAJORITY CHAIRMAN SAYLOR: History.
11 Okay. You know, I'm learning there's different
12 degrees of Doctors in Education --
13 CHANCELLOR GREENSTEIN: Actually, it's
14 worse. It's Social Studies.
15 MAJORITY CHAIRMAN SAYLOR: Actually,
16 Chancellor, you just went up in my thoughts,
17 you know. I love history. So if I was going to
18 get a degree in that, it would be a degree in
19 that one, in that area; so you just went up
20 higher in my esteem.
21 CHANCELLOR GREENSTEIN: Thank you.
22 MAJORITY CHAIRMAN SAYLOR: The Chairman
23 agrees with me. Chairman Bradford agrees.
24 Chancellor, would you rise and raise
25 your right hand? 6
1 DANIEL GREENSTEIN, PH.D., was duly sworn
2 to give testimony as follows:
3
4 MAJORITY CHAIRMAN SAYLOR: Thank you.
5 We skipped the testimony by our individuals, so
6 we'll go directly to questions. Our first
7 question today, unless the -- Chairman Bradford,
8 do you have any?
9 MINORITY CHAIRMAN BRADFORD: I'm good.
10 MAJORITY CHAIRMAN SAYLOR: -- is from
11 Representative Topper.
12 REPRESENTATIVE TOPPER: Good morning, or
13 I guess we're afternoon now, since we're
14 starting after lunch. Dr. Greenstein, I
15 appreciate you being here today. I actually did
16 read this cover to cover.
17 CHANCELLOR GREENSTEIN: Wow.
18 REPRESENTATIVE TOPPER: So in case you
19 wondered if anybody did, somebody did anyway.
20 CHANCELLOR GREENSTEIN: Thank you.
21 REPRESENTATIVE TOPPER: And I do have a
22 couple questions. Specifically, when we talk
23 about this sharing system that you mentioned in
24 your State of the -- the State Address or the
25 State of the System Address, could you give me 7
1 specifics? I've read, kind of, the outline of
2 what you're looking to do.
3 But when you talk about aligning
4 budgets, are we talking specifically about
5 combining administrative costs? What are we
6 looking at? Are we talking about students that
7 can transfer between universities with credit?
8 If you could give me just a couple specifics
9 about what that might look like.
10 CHANCELLOR GREENSTEIN: Yeah. So let me
11 take it on the cost and revenue side. So on the
12 cost side, you're looking at sharing, you know,
13 back-office function, could be. We already do
14 payroll; but imagine extending that into, you
15 know, data centers, financial-aid packaging.
16 There's just a whole range.
17 And I'm not, sort of, necessarily saying
18 that we'll do those things. But, you know,
19 we'll be looking at sharing out those kinds of
20 back-office functions; and it's purely a matter
21 of cost saving. You know, we don't need to have
22 14 instantiations of every business service that
23 a university needs to operate. You can drive
24 your costs down in that way.
25 On the revenue side, there are 8
1 opportunities for doing shared programming. So
2 a couple of examples: We reckon there are about
3 a million-plus adults in Pennsylvania who have
4 some college but no degree, and they need to
5 continue to come back to higher education in
6 order to reskill and upskill and to improve
7 their opportunities in the labor market.
8 There are opportunities for us to work
9 together as a system to create a program that
10 individual campuses can deliver online to those
11 adults or on ground to those adults, but it
12 becomes a collaborative effort. We're actually
13 sharing in the academic programming. There's a
14 variety of options like that, as well.
15 REPRESENTATIVE TOPPER: And you
16 mentioned that you've -- one of the things that
17 you're taking a strong look at is making sure
18 the programs that you have, the degrees that are
19 offered, are actually fitting the workforce that
20 we need here in Pennsylvania.
21 I think at one point I read that you've
22 begun 32 additional academic programs, but that
23 you've cut something like 300.
24 CHANCELLOR GREENSTEIN: Correct.
25 REPRESENTATIVE TOPPER: Could you give 9
1 me some examples, not all 300, but a few of
2 those that you feel, you know, can go and then
3 maybe some of the ones that will help as we move
4 forward?
5 CHANCELLOR GREENSTEIN: Right. So the
6 programs that are listed there, there's 32
7 programs there that pretty much all
8 master's-level programs, graduate-level
9 programs; and they will be in areas of STEM,
10 business, etc., specific areas in particular.
11 Actually, just today, we had a
12 conversation about a doctorate in social work.
13 We had a conversation about physician
14 assistantships. These are high-need areas in
15 various different regions, so those are the kind
16 of new programs.
17 On the programs that have been retired,
18 you know, we've seen a decline, for example, in
19 education, demand for education; although, we
20 expect that to be an uptick coming forward, so
21 you're seeing some contraction there; and you're
22 seeing contraction in other areas, which are
23 just not high enrollment.
24 REPRESENTATIVE TOPPER: What other areas
25 might -- 10
1 CHANCELLOR GREENSTEIN: I'm going to
2 have to pass and get back to you, because that
3 list is not in my head.
4 REPRESENTATIVE TOPPER: Okay. All
5 right. Well, I guess what I'm trying to get to
6 is, do you believe that we will have the ability
7 to actually measure, when we're talking about
8 students graduating and, A, whether staying in
9 Pennsylvania; B, and if not, are able to
10 graduate, get jobs in their field at a certain
11 amount of money, you know, do you feel we can
12 set markers that we can hit when evaluating
13 whether we're doing the job or not, whether
14 we're actually getting the bang for our buck
15 when it comes to students graduating, getting
16 jobs in their field, and jobs, quite frankly,
17 that pay?
18 Because if you're getting a doctorate in
19 social work or something and then you're making
20 30,000 in that field, that's not really helping
21 in terms of that student's financial future.
22 CHANCELLOR GREENSTEIN: Yeah. So the
23 good news is, we can already do those
24 measurements, right? We have been doing that
25 for some years, and we're getting better. I 11
1 mean, one of the reasons, frankly, that I chose
2 to come to Pennsylvania to the State System was
3 because it actually has incredible data
4 resources, which enable us not to fly blind in a
5 very difficult and challenging higher-education
6 marketplace.
7 Our workforce and education alignment
8 data and our wage data are actually really good.
9 We do not yet have goals. That is one of the
10 things you'll begin to see emerging in the
11 course of this redesign, is that we will be
12 developing specific goals for student success, a
13 variety of indicators that get at the extent to
14 which our students are achieving the kind of
15 outcomes that we want to see them achieving, and
16 university success which really gets to the
17 financial health of our universities in our
18 system.
19 REPRESENTATIVE TOPPER: That student
20 success component --
21 CHANCELLOR GREENSTEIN: Yes.
22 REPRESENTATIVE TOPPER: -- is something
23 I'm very interested in; that when you develop
24 that, as we develop that together, or as the
25 Board, Governor looks at it, I really would like 12
1 to see those be measured. And to the point that
2 in some states, and I'll close with this,
3 they're moving to a system where they're
4 actually -- the funding from the Legislature is
5 affected based on that, so it's performance
6 based. So at the end of the year, we look at
7 the metrics and say, okay, you know, you've hit
8 your goals, so now you will get X amount of
9 dollars increase; and if you don't, then you
10 won't.
11 So it's something that I'm very
12 interested in. And I'm not sure if you're
13 interested in that part of it, but I think it
14 could be very helpful.
15 CHANCELLOR GREENSTEIN: Okay. Great.
16 REPRESENTATIVE TOPPER: Thank you.
17 Thank you, Mr. Chairman.
18 MAJORITY CHAIRMAN SAYLOR: Before we
19 proceed, I thought I'd give you a chance,
20 Chancellor, to introduce the university
21 presidents that are with you today. I forgot to
22 ask you to recognize those that are here.
23 Of course, I know the president of IUP,
24 the greatest one of the whole system.
25 CHANCELLOR GREENSTEIN: Fine. He's a 13
1 fine gentleman. That's correct. Do you want me
2 to just introduce by name as we go?
3 MAJORITY CHAIRMAN SAYLOR: Yes, if you
4 would.
5 CHANCELLOR GREENSTEIN: Immediately on
6 my right, we have Bill Berry, who's at Slippery
7 Rock. This is a test. We have Marsha Welch,
8 who's at East Stroudsburg. We have Jerry Jones,
9 who's at California -- don't tell me -- we have
10 Ken -- I know your name.
11 MAJORITY CHAIRMAN SAYLOR: I'm sorry,
12 Chancellor. I put you on the spot.
13 CHANCELLOR GREENSTEIN: Ken Huggins is
14 at -- I know; it's Kutztown. We have Peter
15 Fackler, who's interim President at Mansfield.
16 That guy over there, Mike Driscoll, I think,
17 from IUP. And in the back, we have Bashar
18 Hanna, who's at Bloom. We have Dale Pehrsson,
19 who is at -- I know it -- don't tell me --
20 Clarion. And we have Dr. Laurie Carter, who is
21 at Shippensburg.
22 MAJORITY CHAIRMAN SAYLOR: Very good.
23 CHANCELLOR GREENSTEIN: Whew.
24 (APPLAUSE.)
25 MAJORITY CHAIRMAN SAYLOR: You passed 14
1 the test. I mean, you were good, I'll tell you.
2 I'm sorry to put you on the spot.
3 CHANCELLOR GREENSTEIN: Oh, that's good.
4 I needed that.
5 MAJORITY CHAIRMAN SAYLOR: Also, I
6 wanted to recognize our Chairman of the House
7 Education Committee, Curt Sonney, who's here
8 with us, as well; and also Representative Tom
9 Murt is here, who's Chairman of our Aging
10 Committee.
11 With that, we'll move on to
12 Representative Donatucci.
13 REPRESENTATIVE DONATUCCI: Thank you,
14 Mr. Chairman; and welcome, Chancellor.
15 So whenever we have a change in
16 leadership, we have a chance to re-examine
17 things with a fresh perspective. In your
18 first months as chancellor, what is your view on
19 the greatest strength of the State Higher
20 Education System, and what do you think are
21 their weaknesses?
22 CHANCELLOR GREENSTEIN: So our great
23 strengths are really in the quality of the
24 education that we offer. It's really -- I've
25 defined it as -- or I talk about it in terms of 15
1 it's a very high-touch education, a great deal
2 of faculty and student engagement.
3 It's almost like the kind of education
4 you'd find in a liberal arts college, but it's
5 available at a public university price; and we
6 make that available to students for many of whom
7 would have no other options for a
8 higher-education pathway, so that's a really
9 kind of a cool and a beautiful thing actually
10 when you see it at the universities.
11 We are increasingly aligning our program
12 with workforce needs. We've been doing that for
13 a while, and I think that's also good; and our
14 campuses are very distinctive, so I see those as
15 three strengths.
16 Our greatest challenges, they are the
17 challenges of higher education across this
18 country. We are seeing increasing price to
19 students, cost to students, which is challenging
20 them. That's a tough thing to do. We're in a
21 very highly competitive market.
22 Pennsylvania has more higher education
23 than there are high school students to fill the
24 places; and we're seeing a contraction in the
25 high-school-leaving population, right? All 16
1 those things bode poorly for a system which was
2 built in a way to be available to a growing
3 market of students.
4 That causes an enormous amount of
5 financial pressure, and it puts pressure on the
6 nature of our instruction.
7 REPRESENTATIVE DONATUCCI: Okay. So
8 that brings me to the next part of the question,
9 which is that on Monday, the Independent Fiscal
10 Office talked about how demographics are
11 changing in the state; and, of course, higher
12 education is one of the areas where changing
13 demographics can really be seen. I mean,
14 there's 18 percent less students now than in
15 2010.
16 CHANCELLOR GREENSTEIN: Yeah.
17 REPRESENTATIVE DONATUCCI: One school
18 saw an increase; the other saw serious declines.
19 So what ideas hold the most promise for
20 stabilizing enrollment and what can we, the
21 General Assembly do, to help address this
22 problem?
23 CHANCELLOR GREENSTEIN: So couple
24 things: One of them is on page 10. You'll see
25 the demographic projections going forward. 17
1 There's a demographic challenge that's coming in
2 2025. That's nationally. This is
3 Pennsylvania's picture, where a
4 high-school-leaving population contracts even
5 further; so we're really trying not only to
6 address today's problems, but protect ourself
7 against that future.
8 And the question, again, was, What can
9 the Assembly do to help?
10 REPRESENTATIVE DONATUCCI: What can we
11 do to help?
12 CHANCELLOR GREENSTEIN: So I think
13 there's a couple things. I see this as a
14 partnership between the Pennsylvania State
15 System and the Legislature, and actually the
16 State Government.
17 I think right now, frankly, I think the
18 burden is on us. We have three things that we
19 need to do, and we know we need to do them. One
20 of them is control tuition, right? There is
21 evidence that, as tuition goes up, we're
22 beginning to become less available to students
23 that we're set up to actually serve.
24 MAJORITY CHAIRMAN SAYLOR: Chancellor,
25 if you would speak more into the mic. 18
1 CHANCELLOR GREENSTEIN: Oh, sorry. Yes,
2 of course.
3 MAJORITY CHAIRMAN SAYLOR: The TV might
4 not be able to pick up your voice.
5 CHANCELLOR GREENSTEIN: That was the
6 intention. Oh, sorry.
7 (LAUGHTER.)
8 CHANCELLOR GREENSTEIN: So getting
9 control of our costs. You know, our costs are
10 not aligned with our enrollment; and we have to
11 actually manage the low enrollment. We have a
12 number of low-enrolled universities. They are
13 particularly challenged, and we have to manage
14 that issue.
15 And I think we're on a track to do that.
16 I think you will see progress this year against
17 those things. We have to become more
18 accountable and transparent to the Assembly.
19 And we have to begin to become accountable
20 towards real outcomes and goals, and I think you
21 should hold us accountable for doing that.
22 At the same time, as we begin to make
23 progress in that direction, I think we would
24 love to be able to come back as part of this
25 partnership and have a number of conversations 19
1 with the Legislature.
2 One of them is about investment in
3 public higher-education infrastructure, right?
4 Generally, but also in the Pennsylvania State
5 System; this shared system is not something we
6 can cut our way into. It is a capital
7 reinvestment. And then the second thing is a
8 conversation around legislative and regulatory
9 issues, which basically cost us money. And so I
10 look forward to coming back in October and
11 having a list of, Here are a number of
12 regulatory and legislative issues that we're
13 challenged by, and here's the ROI of their
14 relaxation; so that we can at least have a
15 conversation of where legislation and regulation
16 is costing us, and ultimately our students,
17 money.
18 So I see this very much as a
19 partnership. But right now, I'd like to think
20 the burden is on us.
21 REPRESENTATIVE DONATUCCI: Okay. I look
22 forward to working with you in the future.
23 Thank you.
24 CHANCELLOR GREENSTEIN: Thank you.
25 REPRESENTATIVE DONATUCCI: Thank you, 20
1 Mr. Chairman.
2 MAJORITY CHAIRMAN SAYLOR:
3 Representative Fritz.
4 REPRESENTATIVE FRITZ: Much appreciated,
5 Mr. Chairman. Chancellor, thank you for being
6 here this afternoon.
7 Chancellor, citing the System's Fast
8 Facts 2012 through 2016 document, shows that
9 during that same time, that snapshot in time,
10 2012 to 2016, nearly every System school, with
11 the exceptions of West Chester and Slippery
12 Rock, saw a decline in total enrollment.
13 So that naturally prompts a couple of
14 questions: The first being, What explains this
15 decline? And if that declining enrollment trend
16 continues, will the closure of a university be
17 inevitable?
18 CHANCELLOR GREENSTEIN: So let me go to
19 the causes of the decline. The actual
20 by-university-enrollment trends are available on
21 page 9 of the submission 2010 to 2018. Overall
22 it's 18 percent. That's larger than the decline
23 in the high-school-leaving population, and the
24 high-school-leaving population makes up 90
25 percent of our students; so it cannot be a 21
1 product of demographic change in and of itself.
2 I think there's, obviously, a number of
3 things going on. One of them is, we've been
4 through a period of economic strength. The
5 education industry is countercyclical. People
6 go into the workforce when the workforce -- when
7 there are jobs available, and they come back
8 into education when there's a recession. So I
9 think that's certainly part of it.
10 And, yeah, I think price will
11 increasingly play a role, not just in the
12 Pennsylvania State System, but elsewhere across
13 the state, as you begin to -- as it becomes more
14 expensive to pursue a higher education. I think
15 all those things are factored in.
16 REPRESENTATIVE FRITZ: So I'll just
17 drill into that a little bit further. If that
18 stark reality continues, would you foresee
19 possibly the closure of a school?
20 CHANCELLOR GREENSTEIN: So I -- we
21 looked at -- we took the RAND and actually the
22 NCHEMS report, but certainly the RAND report,
23 very seriously. We evaluated it through a task
24 group that we convened, from which this vision
25 of a sharing system emerged. 22
1 Closure does not make great economic
2 sense, for a number of reasons. If you put
3 aside the socioeconomic dislocation of the
4 region that's affected by the impact, I mean
5 remember, many of these universities are the
6 number 1, 2, 3, 4, 5 employers in their region;
7 and that data are presented also in the book.
8 If you put aside the socioeconomic
9 dislocation and the actual cost of running down
10 -- or the cost of closing a university is a
11 large one-time -- is a large, one-time amount;
12 and you're still left with the inherited debt
13 obligation, which is returned to the state, the
14 pension cost, etc., which would then be picked
15 up by the state. So economically, closure
16 doesn't make a lot of sense.
17 Educationally, again, with respect to
18 the communities that we serve, in many of the
19 communities where there are low-enrolled
20 schools, you know, you're looking at the most
21 reliable pathway into and beyond the middle
22 class as provided by that university.
23 So taking that educational pathway away
24 from those communities doesn't just have
25 economic impact; it has impact on the 23
1 surrounding population.
2 Having said that, the sharing system,
3 and there are other strategies that are being
4 looked at, are being designed in part to address
5 the needs of the low-enrolled schools. And I
6 cannot imagine a future where several of them
7 look very much like they do today, as they
8 sustain themselves in a valuable way in
9 contributing to the state.
10 But closure doesn't seem to me to be
11 either a cost-effective or an educational
12 option.
13 REPRESENTATIVE FRITZ: I appreciate your
14 fortitude.
15 Taking a step back and continuing that
16 theme, looking not just at the 14 State System
17 universities, but also the many Penn State
18 branch campuses and the other state-related
19 universities and even the numerous private
20 colleges and universities, do you feel as though
21 Pennsylvania has an overcapacity problem, given
22 our current demographic realities?
23 CHANCELLOR GREENSTEIN: Yes. There's an
24 overcapacity and alignment program, yeah.
25 REPRESENTATIVE FRITZ: Okay. Those are 24
1 my questions. Thank you.
2 MAJORITY CHAIRMAN SAYLOR:
3 Representative Kinsey.
4 REPRESENTATIVE KINSEY: Thank you, Mr.
5 Chairman.
6 Good afternoon, Mr. Chancellor. Mr.
7 Chancellor, thus far, you've talked about the
8 sharing concept; you also talked about the
9 strengths and weaknesses of the system. You
10 talked about declining enrollment. What is the
11 strategy to address the things that you've
12 talked about thus far? For instance, you know,
13 my colleague just mentioned the 14 state
14 universities, some are in closer proximity than
15 others; some are doing much better than others,
16 as well.
17 But the overall, I guess, the overall
18 scope, the overall vision, how do you foresee
19 this? I mean, even as we look at it at from a
20 recruitment standpoint, we know that Cheyney and
21 West Chester are close to Philadelphia, the
22 largest-populated county in the Commonwealth.
23 But what is the strategy to attract,
24 whether it be first-time students, whether it be
25 returning students, whether it would be the 25
1 older populations going back to school, what is
2 the goal and what is the vision; what is, you
3 know, or how are we -- the strategy to attract
4 learners to these institutions?
5 CHANCELLOR GREENSTEIN: Yeah. So we've
6 talked about shared services on the cost side.
7 Again, on the revenue side, there's two ways to
8 grow enrollment. One is to do better with the
9 students you have, right? We have a 60-percent
10 graduation rate, which means 40 percent of the
11 students that we're enrolling, first-time
12 freshman, are not graduating from our
13 universities.
14 Every student that stays, the university
15 retains their revenue; so we're investing
16 significantly in retention through better
17 advising, better counseling, better supports for
18 students, generally.
19 The sharing system idea, which is
20 outlined in the book, enables our universities
21 not to work individually on these very hard
22 problems where there is some real progress being
23 made nationally, but to work together with one
24 another and, in fact, accelerate and amplify
25 their time to impact around a handful of very 26
1 well-known retention strategies.
2 In terms of enrollment growth, the
3 growth is unlikely to be, in my view, in the
4 high-school-leaving population in the State of
5 Pennsylvania. The growth is going to be in
6 serving that adult population which requires
7 reskilling and upskilling in order to take
8 advantage of the changing nature of work in the
9 state.
10 Referred to our data before, we have
11 exceptionally good, not just we, the
12 Pennsylvania State System, but the entire state
13 of Pennsylvania because spent rates to the top
14 money very well, I think, has incredibly good
15 workforce data; so we can be pretty precise in
16 predicting where there's going to be high need
17 and orienting programs to serve those needs and
18 to serve those populations.
19 REPRESENTATIVE KINSEY: Thank you for
20 that. So my colleague just asked you directly
21 about the potential of closing universities, but
22 do I interpret your answer was that, you are
23 not looking to close any of the 14 state-related
24 universities; is that correct?
25 CHANCELLOR GREENSTEIN: I don't think 27
1 closure makes viable sense, economically or
2 educationally.
3 REPRESENTATIVE KINSEY: Who makes that
4 determination? Who makes that decision? I'm
5 sorry.
6 CHANCELLOR GREENSTEIN: Ultimately, it
7 would be the decision of the Legislature, as I
8 understand, Act 188.
9 REPRESENTATIVE KINSEY: This body.
10 CHANCELLOR GREENSTEIN: This body. A
11 board could -- I believe within its authority, a
12 board could agree to not continue to fund one of
13 its universities by allocating state
14 appropriation.
15 REPRESENTATIVE KINSEY: I'm sorry. You
16 said who could --
17 CHANCELLOR GREENSTEIN: I believe a
18 board could make an allocation -- an
19 appropriation allocation decision, which would,
20 in effect, not allocate funds to a single --
21 just in terms of technical options, I believe
22 that's an option.
23 REPRESENTATIVE KINSEY: Okay. But it's
24 your recommendation not to close?
25 CHANCELLOR GREENSTEIN: I think for 28
1 different reasons, if we go university by
2 university, yeah, that would be my
3 recommendation or opinion.
4 REPRESENTATIVE KINSEY: Okay. I think I
5 have a little bit more time. So you've been
6 Chancellor for, roughly, how long now?
7 CHANCELLOR GREENSTEIN: About five
8 months.
9 REPRESENTATIVE KINSEY: Five months?
10 (LAUGHTER.)
11 CHANCELLOR GREENSTEIN: There's not been
12 a huge amount of sleep in that time.
13 REPRESENTATIVE KINSEY: Okay. Five
14 months. Throughout that duration of time, what
15 is the -- in your opinion, you know, I know that
16 there are many issues because you have 14
17 individual universities.
18 But, in your opinion, what is the
19 toughest challenge that you see right now? And
20 I'm asking this question, because again, we know
21 that some of the universities are doing well.
22 CHANCELLOR GREENSTEIN: Yeah.
23 REPRESENTATIVE KINSEY: You know, I went
24 to West Chester; and West Chester's doing well,
25 not because I went there, but it's doing well. 29
1 But there are challenges, nonetheless,
2 throughout the system. So what do you see as --
3 CHANCELLOR GREENSTEIN: So I mentioned
4 three before. I'll add one. The three I
5 mentioned before is, we have to deal with
6 tuition. We just can't keep pulling tuition
7 levers as hard as we have been, and that's going
8 to impose significant constraint on our
9 universities and their ability to deliver
10 against their mission; so tuition is one.
11 We have to get our costs aligned with
12 our enrollments. That's going to require a
13 number of very difficult decisions, and we're
14 going to have to deal with some of our
15 low-enrolled school problems. I mean, those are
16 just -- those are --
17 REPRESENTATIVE KINSEY: I'm sorry. What
18 was that?
19 CHANCELLOR GREENSTEIN: Dealing with the
20 challenges of our low-enrolled schools.
21 REPRESENTATIVE KINSEY: Oh,
22 low-enrolled. Okay.
23 CHANCELLOR GREENSTEIN: To the questions
24 that you've been asking, I think one of the
25 biggest issues that we face is that, in effect, 30
1 we're looking at universities that are between
2 120 and 180 years old. And for the duration of
3 that period, they've operated very well
4 independently of one another.
5 In effect, as a state single-corporate
6 entity, they share a single bank account; and
7 that as weaker universities begin to get weaker
8 still, they tug on the corporate body, which
9 means that our universities are going to have to
10 work together in ways they never have.
11 I mean, we do work well in a variety of
12 ways now; so don't take that in an extreme form.
13 But we're going to have to work collaboratively
14 more than we have ever worked collaboratively
15 before; because the success of any one
16 university is tied directly financially to the
17 success of the others.
18 REPRESENTATIVE KINSEY: Great. Thank
19 you for your answers. I see my time is up, but
20 thank you.
21 Thank you, Mr. Chairman.
22 MAJORITY CHAIRMAN SAYLOR:
23 Representative DeLozier.
24 REPRESENTATIVE DELOZIER: Thank you, Mr.
25 Chairman. Thank you, Chancellor, for being 31
1 here. I'm going down a little bit of the same
2 path that we've kind of talked about already.
3 But within the State Sytem, we're very proud of
4 our State Sytem and the schools that we have
5 included in there.
6 We understand, as you used the word
7 partnership a lot, understand that partnership
8 between funding and their success and want our
9 students to be well educated and stay here.
10 So that being said, at this point in
11 time in looking at the numbers here, we have, as
12 has been mentioned, a falling number of
13 enrollments. We have an increased number of
14 state dollars going to the school for less
15 students.
16 So we have less students that we're
17 educating. We have more online classes, as
18 well, with distance learning. We have many more
19 students starting out in community colleges to
20 cut costs, which is a smart way to go. We have
21 a very strong community college system.
22 As we move through all of this -- and
23 we've also had the conversations and we'll have
24 that again this week with Labor & Industry, of
25 workforce development and options to college. 32
1 Not every student is cut out for college.
2 My question directly to you is the fact
3 that when we negotiate the budget and we have,
4 and we've gone up in a 5-percent increase,
5 3-percent increase, 2-percent increase, in the
6 last 4 years, one of the negotiation
7 conversations that's had is that the State Sytem
8 will hold equal to give the benefit of the doubt
9 and not raise tuition.
10 Because I hear in my district here in
11 Cumberland County, the fact that, well, you need
12 to give the State System an increase so that the
13 in-state tuition will stay the same and I can
14 get those benefits.
15 I'd like to have your perspective on the
16 fact that we, as the state, continue to give
17 funds. And then last year, overtop the 3
18 percent, you also increased tuition by 3 percent
19 on the parents in Pennsylvania.
20 CHANCELLOR GREENSTEIN: Yeah. So
21 there's a couple things. Can I maybe refer to
22 pages 24 and 25? Because, in effect, it
23 establishes context for a lot of the
24 conversation we're having; and please don't take
25 this the wrong way. I'm just presenting the 33
1 data.
2 So if you look at what we show on pages
3 19 and 20, are the relative balance of funds for
4 any student that's enrolled; and we're comparing
5 what's happening in Pennsylvania with what's
6 happening nationally.
7 And Pennsylvania chooses to invest 27
8 percent of -- a total cost of the student FTE
9 comes from the state, and the remainder is made
10 up in student tuition. The average across all
11 states is 54 percent.
12 Okay. And again, those are education
13 public policy choices; they're funding choices.
14 A lot of the things that we're talking about are
15 driven to a certain extent by the choices that
16 have been made.
17 A different graph shows the situation
18 specifically. That's Pennsylvania, as a whole
19 different graph with the same data, but the
20 Pennsylvania State System is available elsewhere
21 in the document; and I'll find it in a second,
22 but -- in Appendix B(2). They look very
23 similar. So that's background, and that's
24 context.
25 And so the tuition increases that are 34
1 happening are happening, in effect, in response
2 to that changing environment. There's other
3 things going on, obviously. But if you're
4 looking at the macro level and the biggest
5 driver of tuition increases, that's what it is.
6 REPRESENTATIVE DELOZIER: But in taking
7 a look at other states, and I recognize where
8 other states are as we've seen over the years,
9 Pennsylvania is where it has been for a number
10 of years; so that situation hasn't drastically
11 changed in the fact of how much funding is out
12 there and what our student body looks like and
13 what we are to expect.
14 I guess, I know the parents that came to
15 me were extremely frustrated with the fact,
16 because that's their argument when they come to
17 see us and say, please, you know, look at the
18 increase to the State System because we need to
19 keep our in-state tuition lower.
20 CHANCELLOR GREENSTEIN: Yeah.
21 REPRESENTATIVE DELOZIER: And then we
22 agree to that; we make the decision; and the
23 budget moves forward. Fine, on that pretense.
24 And then when the Board makes the decision, and
25 I recognize that it's the Board as a whole, 35
1 makes the decision to then on top of the 3
2 percent, do another 3 percent.
3 So that was extremely frustrating to
4 those of us that we thought the agreement had
5 been that it would be a level playing field and
6 level from last year and no tuition increase.
7 Do you see that need of a tuition
8 increase this-coming year?
9 CHANCELLOR GREENSTEIN: So I think we
10 need to be super careful, in two ways. First of
11 all, I think we don't have anywhere near the
12 head room we used to. Because again, if you
13 look at the data and --
14 REPRESENTATIVE DELOZIER: I'm sorry. We
15 don't have any more --
16 CHANCELLOR GREENSTEIN: Anywhere near
17 the kind of headroom we used to have with
18 tuition. If you look at the data in the book,
19 and I'll find the page in a second, where we
20 look at a decline in enrollments from families
21 in different income categories, the families
22 from incomes in our core group -- it's on page
23 29 -- the families who are earning less than
24 110,000 are leaving us more quickly than our
25 overall enrollment decline. So that suggests to 36
1 me that we're reaching the top.
2 Now, it plays out differently on
3 different campuses; but that suggests to me that
4 we're beginning to reach the top of where we can
5 go with tuition increases. So, ideally --
6 REPRESENTATIVE DELOZIER: So it's based
7 on those students' income that you're looking
8 at? Is that what you're saying; that depending
9 on how much the family makes, determines --
10 CHANCELLOR GREENSTEIN: If you're
11 looking at indicators of market sensitivity to
12 price, which is what this is about, then I would
13 look at data like these (indicating) to say, Oh,
14 my goodness, if we have student populations who
15 are leaving us more quickly than the overall
16 enrollment decline, that suggests that price may
17 be an issue.
18 Thing one, we've got to be super careful
19 about tuition increases. Thing two, I don't
20 think you want us to be leaving money on the
21 table. There may be high-demand programs; there
22 may be high-earning populations who have some
23 headroom and some ability to pay more, so I
24 think we need to be super careful in our tuition
25 setting, which is why as part of the sharing 37
1 system, we're looking at more flexible
2 approaches to tuition setting and tuition
3 discounting, which are widely available in the
4 industry but not available to the Pennsylvania
5 State System.
6 REPRESENTATIVE DELOZIER: Do you see the
7 need for a tuition increase on top of any
8 dollars coming from the state this year?
9 CHANCELLOR GREENSTEIN: I would advise
10 the Board, because it would be in the Board's
11 decision in the way that I've just described to
12 you, to be extremely careful with tuition
13 setting because we don't have anything like the
14 headroom that we've had in the past.
15 And I would also advise the Board to be
16 very careful not to leave dollars on the table
17 from particular target populations.
18 REPRESENTATIVE DELOZIER: Is that a yes?
19 (LAUGHTER) Just kidding. Thank you, Mr.
20 Chancellor.
21 MAJORITY CHAIRMAN SAYLOR:
22 Representative Gainey.
23 REPRESENTATIVE GAINEY: Good afternoon.
24 Thank you for being here.
25 I just have a couple questions. One is 38
1 on affordability. One of the problems that
2 we've had, particularly in areas like -- I'm
3 from the City of Pittsburgh -- is the fact that
4 you have a lot of kids, particularly when you
5 look at the decrease in enrollment, you have a
6 lot of kids that would like to go to school but
7 they don't want to take on the heavy debt load.
8 And secondly, the affordability is
9 already -- is there a strategy over the next
10 10-year period to talk about how we make
11 college, particularly from our State Systems,
12 affordable for people that may have a difficult
13 time getting into them?
14 CHANCELLOR GREENSTEIN: Yeah. So, I
15 mean, I think there's a number of things. One
16 of them is -- obviously, getting control of our
17 costs is going to be critical. I think the
18 partnership we just talked about a moment ago
19 with the state is going to be absolutely
20 critical.
21 I think there's greater flexibility in
22 the use of tuition and tuition discounting,
23 which is so widespread elsewhere in the
24 industry, and is going to be absolutely
25 critical, so we can give help to the students 39
1 that need that help.
2 If you look at -- again in the book, if
3 you look under the section on affordability, we
4 show a line which identifies the rising cost to
5 students of university education against the
6 available aid from both federal and state
7 sources, Pell and PHEAA.
8 And Pell and PHEAA aren't actually
9 increasing at a rate which is as quick as the
10 rate of the total cost to student. So being
11 able to support those students with
12 institutional aid, i.e., taking money out of
13 your operating revenues and then targeting it to
14 individuals who are in need is a very important,
15 significant strategy across higher education and
16 not adequately available to us, because we've
17 been limited in that flexibility.
18 REPRESENTATIVE GAINEY: That should be a
19 strong strategy going forward of how we really
20 begin the conversation of how we make college
21 more affordable.
22 Again, I'm very happy with the State
23 System. My daughter graduated from Cal U. I
24 know Dr. Jones, and he's done a fantastic job
25 with my daughter; so I'm very happy. 40
1 But in regards to when we talk about
2 increasing tuition into our State Systems, the
3 second question is in marketing. How do we do a
4 better job from the state perspective in
5 marketing our State System?
6 Not only marketing, meaning internal to
7 the State of Pennsylvania, but also external.
8 It seems to me, wherever you market your brand,
9 your brand becomes receptive to people coming to
10 your university.
11 And one of the things that I've always
12 wondered is, what is the strategy we have for
13 really marketing our systems of higher learning
14 so that the people around the state and outside
15 the state know what great institutions we have
16 inside the State of Pennsylvania.
17 CHANCELLOR GREENSTEIN: Yeah. And I
18 think, you know, there is a great product out
19 there. I was actually blessed to be able to
20 visit each of our universities in my first
21 couple of months here, and I've now been to
22 several of them several times.
23 It is a remarkable education that's on
24 offer. It's not unique, but it's rare in the
25 public sector. And it is extremely -- it's a 41
1 jewel in the crown. So one way to market them,
2 obviously, is to promote that better as a
3 collective; and our universities do a great job
4 in marketing themselves.
5 Another way, and this is an ask in terms
6 of partnership, conversation about closures and
7 consolidations isn't helping. It's just -- it
8 is a pervasive meme.
9 The narrative around the Pennsylvania
10 State System, the things that were so remarkable
11 to me in my visits, was that they kept sort of
12 -- I was experiencing stuff which did not accord
13 with the narrative I had been hearing, that our
14 work is not workforce aligned. That's not the
15 case.
16 I mean, experientially, it's not the
17 case, that our universities are all the same.
18 That's, experientially, also not the case; that
19 the education that we're offering is somehow not
20 a high-quality education, also experientially
21 and data driven, not the case.
22 So, you know, I think focusing on those
23 aspects of this vital component part of public
24 higher education, the challenges are here; and
25 we can talk about those all day. They are real. 42
1 They are present. But we have those. We will
2 manage our way through them, in partnership
3 obviously, with the state.
4 But changing that narrative about who we
5 are and what we do, which I see as a
6 collaborative opportunity, is something that we
7 need to work on together.
8 REPRESENTATIVE GAINEY: What is the
9 (inaudible) narrative is important. And that's
10 why I asked about how do we market our great
11 product inside and outside the State of
12 Pennsylvania?
13 Second, the last thing I just wanted to
14 comment on was, I'm so glad to hear you talking
15 about not closing universities; because the
16 reality is, we have a great education product
17 and there's no question about that.
18 But, secondly, that's just as important,
19 to close some of these universities in some of
20 those municipalities would be destructive to
21 that municipality. The jobs that they create,
22 the service providers that they create, the
23 contracts that come from them, if we close some
24 of these schools in some of these
25 municipalities, we would damage the State of 43
1 Pennsylvania.
2 So I agree, in terms of a partnership,
3 but what we have to do is find the narrative of
4 how we market these universities and not how we
5 try to tear them down for the overall good of
6 the Commonwealth.
7 MAJORITY CHAIRMAN SAYLOR:
8 Representative Dunbar.
9 REPRESENTATIVE DUNBAR: Thank you, Mr.
10 Chairman. And not to one-up my good friend,
11 Representative Gainey and his one daughter, I
12 have two daughters that have graduated from
13 Slippery Rock, one just recently in December, so
14 -- and is gainfully employed, so she's off my
15 payroll. Thank you for that.
16 And, also, following up with
17 Representative Gainey talking about
18 affordability, and that is a big deal. As a
19 parent who's written the checks for the last
20 several years, affordability is a big deal.
21 And some of your comments earlier,
22 Chancellor, I wanted to follow up on, in
23 response to Representative Fritz about closures,
24 and since Representative Gainey had brought that
25 up as well. 44
1 You had mentioned about something that
2 maybe prohibited closures may have been debt.
3 And help me, because I really don't know the
4 answer. Is the State System's debt the System's
5 debt or the individual college's debt or the
6 Commonwealth's debt? Because I'm not exactly
7 sure of that. I know we have $5 billion on our
8 books.
9 CHANCELLOR GREENSTEIN: So my
10 understanding is that the obligations of the
11 System are first and foremost the System's
12 obligation. But if we go out of business, I
13 think we hand some of that debt off to you.
14 REPRESENTATIVE DUNBAR: And I appreciate
15 that. But at the same time, and I'm not
16 advocating for closures, but just the accountant
17 in me always wants to see things. Have we ever
18 analyzed closures to the point of, yes, it's
19 going to cost some money? We understand it's
20 going to cost some money. There's no doubt
21 about that.
22 CHANCELLOR GREENSTEIN: Yeah.
23 REPRESENTATIVE DUNBAR: But the
24 continual bleed that may be happening by some of
25 these colleges or universities, have we ever 45
1 done that comparison?
2 CHANCELLOR GREENSTEIN: So the answer
3 is, yes, we have analyzed the cost of closure;
4 and I'm happy to share those data.
5 REPRESENTATIVE DUNBAR: I would
6 appreciate that.
7 CHANCELLOR GREENSTEIN: And I think I
8 said earlier that, you know, some of our small
9 schools, while I do not believe closure is the
10 viable thing to do, either educationally,
11 financially, or frankly, politically, I also
12 said that some of our universities are going to
13 have to change transformatively, fundamentally.
14 I think I said they cannot look in four or five
15 years anything like they look today, in order to
16 address the issue that you just raised.
17 REPRESENTATIVE DUNBAR: And I would
18 appreciate if you could share that information.
19 Moving on to another question that
20 Representative Fritz had asked you about
21 capacity, I appreciate your answer that we have
22 a capacity issue in the Commonwealth.
23 And the issue I'd like you to comment on
24 is because not only do we fund the State System
25 schools, we also fund the state-related schools. 46
1 CHANCELLOR GREENSTEIN: Yeah.
2 REPRESENTATIVE DUNBAR: And now it seems
3 like we've gone from a transition of serving
4 different potential clientele to competing with
5 each other.
6 CHANCELLOR GREENSTEIN: Yep.
7 REPRESENTATIVE DUNBAR: When you talk
8 about a shared system amongst yourself, has
9 there ever been any discussion about a shared
10 system, since we're funding both? And I almost
11 feel bad that I'm funding my own -- people
12 competing against each other and driving up the
13 cost.
14 CHANCELLOR GREENSTEIN: Yeah. So this
15 is a major education public policy issue. I
16 know there are members of the House and the
17 Senate who are interested in taking it up.
18 Maybe it can be addressed through education
19 finance. It can be addressed through education
20 public policy, rationalization, stuff they did
21 in California in the 1960s.
22 I think it needs to be done in the State
23 of Pennsylvania. I say that as a newcomer and
24 as an education public policy guy. And I think
25 you'll find that leaders in the sectors are 47
1 willing to engage in that conversation. I think
2 it's a very important one to all of us.
3 I would just add into the mix that it
4 isn't just through appropriations that you're
5 supporting a variety of different institutions.
6 It's also through the use of PHEAA dollars;
7 because they're spread across, as you know, all
8 sectors. Yeah.
9 REPRESENTATIVE DUNBAR: Yeah. And is
10 that the legislative issues you were referring
11 to earlier, legislative changes you would need
12 to see or --
13 CHANCELLOR GREENSTEIN: So, no, the
14 legislative changes that I was referring to
15 earlier are the ones that would specifically
16 affect the Pennsylvania State System.
17 REPRESENTATIVE DUNBAR: Okay.
18 CHANCELLOR GREENSTEIN: There are others
19 that -- you know, there are two different
20 conversations. One of them has to do with what
21 I would call master planning for state of higher
22 education workforce alignment, which is a
23 multisector, cross-sector activity which is
24 designed, in effect, to align education supply
25 with workforce demand and demographic need. 48
1 On the other hand, there's a bunch of
2 legislative and regulatory issues that affect
3 the efficient operation of the State System and
4 its universities and those were the issues -- it
5 was those legislative and regulatory issues that
6 I was addressing previously.
7 REPRESENTATIVE DUNBAR: Well, I hope
8 going forward that there can be a robust
9 discussion in regards to that. It just seems
10 like we're competing with ourselves at times and
11 driving up the cost of education for all.
12 So I wish you luck.
13 CHANCELLOR GREENSTEIN: Thank you.
14 MAJORITY CHAIRMAN SAYLOR:
15 Representative Fiedler.
16 REPRESENTATIVE FIEDLER: Thank you, and
17 thank you for being here.
18 The benefits of our State System
19 obviously extend even beyond the benefits to
20 individual students and their families and the
21 communities. I understand it generates about
22 $11 in economic activity for every dollar that's
23 received through the annual appropriation.
24 Can you talk about that economic and
25 employment impact for the Commonwealth? 49
1 CHANCELLOR GREENSTEIN: Yeah, sure. It
2 rolls up to $6.7 billion. That's the number
3 that's swirling around in my head, and I hope
4 some of these numbers begin to leak out of my
5 head eventually so they're not so crowded in
6 there.
7 But, you know, which is a huge benefit.
8 Look, the challenge of workforce development, as
9 I understand it, from the data on Pennsylvania,
10 is not actually a challenge of having enough
11 people educated to a postsecondary level.
12 As this gentleman raised, it's an issue
13 of alignment. The graduates that we're
14 producing don't have the skills they need in the
15 high-demand areas; and, of course, the work is
16 changing. And so tightening up that alignment
17 is super important.
18 There's other benefits though that come
19 out of higher education, as you know. People in
20 higher education have an 84-percent wage premium
21 over those -- people with a BA degree, earn 84
22 percent more over the course of their life than
23 someone with a high school degree; so it has
24 salary implications; it has health outcomes
25 tracked directly with higher education, 50
1 participation in civic events, exposure to
2 unemployment.
3 All those things track directly with
4 educational attainment levels, so there's a
5 variety of benefits.
6 REPRESENTATIVE FIEDLER: Thank you. I
7 appreciate all those benefits. And I want to
8 also ask you one other thing. Yesterday, in
9 this Committee, we heard testimony about a
10 possible recession that we could face in the
11 coming years.
12 I think it's troubling to contemplate
13 that; but I think on behalf of our constituents,
14 we need to think about that possibility. And I
15 wondered, based on your past experience and in
16 best practices elsewhere, if you have any
17 thoughts on what we can do as a legislative body
18 to ensure that our State System is prepared to
19 face a possible economic downturn?
20 CHANCELLOR GREENSTEIN: So this exercise
21 is -- I've said it publicly elsewhere, so I'll
22 say it again. Look, we're not tweaking this
23 system. We are fundamentally transforming it.
24 That's where we are. We're not just doing that
25 because we need to in order to address our 51
1 current circumstances. We're doing that to
2 future-proof the system. Not because it's about
3 the System and its universities, but it's about
4 the people of Pennsylvania.
5 It is about continuing to meet the
6 workforce need of the state in an ongoing way,
7 recognizing that the demographics of the state
8 and the needs of its employers are changing
9 rapidly.
10 You know, I've said it publicly
11 elsewhere; I'll say it again: We really need to
12 be engaged in operation, which is fundamentally
13 changing everything we do in order that we can
14 continue to pursue that same historic mission in
15 a way that's relevant to the 21st century.
16 REPRESENTATIVE FIEDLER: Thank you.
17 CHANCELLOR GREENSTEIN: Thank you.
18 MAJORITY CHAIRMAN SAYLOR:
19 Representative Brown.
20 REPRESENTATIVE BROWN: Thank you, Mr.
21 Chairman; and thank you, Chancellor. So, in
22 government, we have funding formulas,
23 transportation funding formulas, K through 12
24 formulas, formulas for our higher education.
25 And so, last year, the appropriation of 52
1 15 million was a 3-percent increase for PASSHE.
2 But with that, there's the assumption, I think,
3 that every school is going to increase by 3
4 percent in their funding, which is not really
5 the case.
6 The Board of Governors, as you mentioned
7 a little bit earlier, has the ability for
8 appropriations among each of the 14
9 universities.
10 CHANCELLOR GREENSTEIN: Yeah.
11 REPRESENTATIVE BROWN: My concern there
12 is, I have seen vast inequities as far as that
13 funding formula among our universities. And
14 with the good work I know you are trying to do
15 in coming in and basically overhauling and
16 trying to really improve our system, I'd like to
17 know what you think about that formula, maybe
18 the facets that create that formula, and also
19 what changes you may be looking at --
20 CHANCELLOR GREENSTEIN: Yeah.
21 REPRESENTATIVE BROWN: -- with that
22 formula, that I would hope would ensure that
23 there is equality among these different
24 universities.
25 CHANCELLOR GREENSTEIN: Yeah. So it's 53
1 interesting, presidents are obviously meeting
2 over the last couple of days for apparently
3 annual winter retreat; and this is a big issue.
4 It's part of our System redesign. And it is
5 really -- we're basically rebuilding.
6 We will be back here next year. It
7 won't be perfect next year, but it will be
8 better. We will be back here next year, having
9 gone through a very different internal budgeting
10 process.
11 I'll get to the allocation in a second.
12 It's a budgeting process which is designed to
13 enable us to say, for these amount of dollars,
14 we will expect the following kinds of outcomes
15 and we will also expect to hold ourselves and
16 have you hold us accountable to those outcomes
17 at that cost.
18 On the allocation specifically, I think
19 the allocation is imperfect. I think my
20 colleagues would agree that it's imperfect. I
21 think it is not designed for a system of
22 universities which have to work collaboratively
23 together, in which every university's success is
24 reliant upon the success of the others.
25 We are going to have to invent, and we 54
1 haven't done it yet, a fiscal policy, very much
2 like a fiscal policy that you might see in, you
3 know, tax or other public sectors, which
4 incentivizes growth amongst those who are
5 wealthy and able to grow and allows us also to
6 support those that are in weaker circumstances
7 so they can get stronger for the good of the
8 whole.
9 That kind of collaboration, that's not
10 just collaboration, that's fiscal policy; and
11 that is ultimately going to affect the way we
12 allocate funding. It has to. I'm just now
13 going to manage expectations, having raised
14 them.
15 We will not -- we will use, I think we
16 decided, we will recommend to the Board that it
17 uses the current allocation formula this year
18 for one last time.
19 And the rationale is predictability on
20 the part of the universities in terms of their
21 funding and give us time to actually work out
22 what will ultimately be a much more complicated
23 allocation procedure, yeah.
24 REPRESENTATIVE BROWN: Yeah. I think
25 those details are very important. I've watched 55
1 funding formulas really cause major havoc --
2 CHANCELLOR GREENSTEIN: Yeah.
3 REPRESENTATIVE BROWN: -- among our
4 education system and other issues:
5 transportation, and trying to get ahead of them
6 and make sure that we don't have any further
7 problems; but I would love to see what that
8 formula is.
9 CHANCELLOR GREENSTEIN: Me, too. Do you
10 have one?
11 REPRESENTATIVE BROWN: No. Can I --
12 oftentimes, it's very hard with formulas for
13 everyone to know the details; but I would like
14 to see that. I would like to know what that
15 current formula is, if possible, to get that
16 from you, that we will be relying on this year.
17 CHANCELLOR GREENSTEIN: Yeah.
18 REPRESENTATIVE BROWN: And then be
19 looking at what maybe some of those changes
20 would be for the future to ensure that we're not
21 creating winners and losers and fighting, again,
22 within ourself the incorrect way.
23 CHANCELLOR GREENSTEIN: Yeah.
24 REPRESENTATIVE BROWN: I do have one
25 other question, and we'll see how we do with 56
1 time.
2 At last year's hearing, your predecessor
3 spoke of a disconnect between the negotiation of
4 labor contracts and finding the money to pay for
5 them. The current faculty contract expires on
6 June 30th; so you are currently negotiating a
7 contract for at least the next fiscal year,
8 correct?
9 CHANCELLOR GREENSTEIN: Correct.
10 REPRESENTATIVE BROWN: Okay. Are there
11 any other changes besides salary that you will
12 be seeking in this contract and any changes that
13 will help this system hold down expenses maybe
14 and operate more efficiently and effectively?
15 If so, what would be those changes?
16 CHANCELLOR GREENSTEIN: The great beauty
17 of system redesign is that there's nothing we're
18 not trying to change, but certainly the
19 relationships with the faculty union in
20 particular is something that we know we need to
21 change; and we're working very closely with
22 leadership of that union in order to take a more
23 collaborative approach to the success of this
24 system and its universities and ultimately our
25 students. 57
1 As part of that, we've made a number of
2 steps, sharing in the exploration of our data;
3 so we can come to some shared understanding of
4 what our fiscal condition is and what the
5 condition of our students is.
6 We are taking an interest-based
7 bargaining approach, which is different than the
8 normal positional bargaining. Positional
9 bargaining, parties come to the table, each has
10 a position, they throw the positions down --
11 tell me if I'm getting this wrong -- and then
12 they negotiate.
13 In an interest-based bargaining, the
14 parties get together and they agree together
15 what are the issues they want to work on
16 together in the interest of the common good. So
17 that's the approach we're taking.
18 It's early days, but I'm optimistic.
19 REPRESENTATIVE BROWN: Okay. More to
20 come. Thank you, Mr. Chairman.
21 MAJORITY CHAIRMAN SAYLOR:
22 Representative Bullock.
23 REPRESENTATIVE BULLOCK: Thank you,
24 Chairman. Good afternoon, Chancellor. How are
25 you? 58
1 CHANCELLOR GREENSTEIN: I'm good,
2 thanks. Thank you.
3 REPRESENTATIVE BULLOCK: Great. Welcome
4 to the State System. I had a few questions for
5 you. I would just like you to paint a picture
6 of what our State System looks like.
7 Can you share with me -- first, I
8 understand that the State System employs about
9 12,000, a little bit over 12,000 faculty and
10 staff across this Commonwealth. It's one of the
11 biggest employers in our state.
12 Can you share what that staff looks
13 like? How many minorities do we hire; women;
14 what is the comparison to last year?
15 And I'm going to ask you a little
16 further question, because I really do appreciate
17 the work of our staff. Can you give me any
18 other demographics?
19 What is the average time that a faculty
20 person has spent with the university, if you
21 have any of those kinds of details?
22 CHANCELLOR GREENSTEIN: Yeah. I'm going
23 to have to get back to you on the -- I can give
24 you a breakdown of the types of staff, the
25 number of faculty, number of staff. I'm going 59
1 to have to get back to you on the demographic
2 breakdown.
3 REPRESENTATIVE BULLOCK: Great.
4 CHANCELLOR GREENSTEIN: Two data
5 sources, which will definitely be in front of me
6 next time, but I can also get that information
7 to you. And can you remind me of the other
8 aspect of your question?
9 REPRESENTATIVE BULLOCK: The first part
10 with regards to minorities versus women or with
11 regards to --
12 CHANCELLOR GREENSTEIN: Yeah, I don't
13 have the demographic data on that one with me.
14 REPRESENTATIVE BULLOCK: So my other
15 question is understanding the dedication that
16 our faculty and staff have to our State System.
17 CHANCELLOR GREENSTEIN: Yeah.
18 REPRESENTATIVE BULLOCK: Any
19 demographics around time that they have been
20 with our system or, you know, what is the
21 average tenure for faculty and staff --
22 CHANCELLOR GREENSTEIN: Yeah.
23 REPRESENTATIVE BULLOCK: -- anything on
24 that?
25 CHANCELLOR GREENSTEIN: Let me reflect 60
1 on my experience. So at each one of our
2 universities at each one of my visits, I would
3 do a focus group with faculty and staff, and I
4 would meet with different groups in different
5 combinations.
6 And I would always go around the room
7 asking people, you know, tell me your name.
8 What do you do? How long you've been here. And
9 then we always did an icebreaker, like, if you
10 could be an expert instantly in something, what
11 would it be and why, you know, just to kind of
12 clear the air.
13 And I was -- it was remarkable about the
14 longevity of the tenure and the duration of
15 employment. I mean, these are -- I mean, it's
16 one of the unique aspects of -- these are
17 communities.
18 They are communities of dedicated people
19 who have often been in those communities and
20 like many of you, have had relatives and sons
21 and daughters and aunts and uncles and parents
22 who have also been to that university. It is a
23 unique feeling.
24 REPRESENTATIVE BULLOCK: It's a family.
25 CHANCELLOR GREENSTEIN: That it's a 61
1 little bit out of the Andy Griffith Show, but in
2 a good way, if I'm giving away my age. And that
3 shows up in the longevity of employment, in the
4 relative dearth of -- you know, there's
5 turnover, but absence of turnover and long
6 service and long standing. It is remarkable.
7 And it shows up, in particular, in the students.
8 When the students -- yes, everybody had
9 a bad experience with somebody; but they don't
10 lead with that. In fact, you have to dig for
11 that.
12 They will lead with the overall
13 experience that they're getting from their
14 faculty, from their advisors, from the resident
15 hall assistants, from the people who are working
16 with them in student supports from the
17 administrative staff.
18 It is a community, great tight-knit; and
19 it's under pressure, and that shows up, as well,
20 in ways which are both, in some ways, profound
21 and sad.
22 REPRESENTATIVE BULLOCK: Yeah, I think
23 that's what I was getting at, is that we
24 understand that our faculty, staff, our
25 administrators are all partners in our State 62
1 System and that they're dedicated; and I want to
2 thank all of them that are here with you today,
3 that they're dedicated to serving our students,
4 serving the system, and making sure that we get
5 through this sort of hurdle that we're in at
6 this point. And I want to thank them for their
7 service and for their years working with our
8 students.
9 Can you also paint a picture of what our
10 students look like, you know, any demographics
11 you have around, who are the students that are
12 using the State System?
13 How many are first-generation college
14 attendees? How many are from Pennsylvania,
15 immediate neighborhoods, any of those things,
16 average age?
17 CHANCELLOR GREENSTEIN: Yeah. So the
18 majority of our students are obviously
19 undergraduate, 85 percent; 59 percent of them
20 are women. The vast majority are from
21 Pennsylvania, 88 percent.
22 According to our alumni survey, the vast
23 majority of them stay in Pennsylvania. About
24 three-quarters of those that are employed are
25 here in Pennsylvania. 63
1 The vast majority are full-time, come to
2 us directly out of high school. Twenty-five
3 percent of our students are from minority
4 populations.
5 That's almost reflecting the
6 demographics of the State of Pennsylvania. And
7 there is particular growth, as you'd almost
8 anticipate, in the Hispanic population. We
9 expect that to continue.
10 The vast majority of our students come
11 to us as new freshman, about 17,000; but we get
12 6,000 every year in transfers mostly from the
13 community colleges but also from other sources,
14 and I could go on.
15 In terms of Pell students, it's about a
16 third. First generation is going to be close to
17 that, as well.
18 REPRESENTATIVE BULLOCK: Thank you.
19 Do you have any numbers on the number of
20 students who are parents?
21 CHANCELLOR GREENSTEIN: I do not. Ten
22 percent of -- it doesn't matter -- but ten
23 percent of our students are -- ours is a
24 traditionally high-school-leaving population.
25 Ten percent of our students are in the adult 64
1 population. I can get you -- can I get those
2 numbers? We can try to get you those numbers.
3 REPRESENTATIVE BULLOCK: I appreciate
4 that. Last -- my time is up.
5 Thank you, Chancellor.
6 MAJORITY CHAIRMAN SAYLOR: Next, is
7 Representative Owlett.
8 REPRESENTATIVE OWLETT: Over here.
9 Thank you, Chancellor, for coming out today; and
10 I thank you so much for being involved in the
11 process of change.
12 I love your quote in here of not looking
13 to tweak the system, but really fix it and take
14 it on. Thank you for being engaged in our
15 business community in our area as to what
16 Mansfield can do and offer students in our area.
17 I really appreciate that.
18 I just want to ask you a question on the
19 sharing system. What specifically is holding us
20 back or maybe from making that change right
21 today?
22 CHANCELLOR GREENSTEIN: Oh, my goodness.
23 REPRESENTATIVE OWLETT: Sorry.
24 CHANCELLOR GREENSTEIN: So let me talk
25 about the things that I expect to deliver -- to 65
1 come here and talk to you about the next time
2 over the course of -- and they are things that
3 are not yet in place, but need to be in place.
4 We already talked about having goals for
5 the system, but also for the individual
6 universities and how the universities contribute
7 to those goals. We will have those goals this
8 time next year.
9 We do not have an internal budget
10 process. Sorry. We need strategies at the
11 university level and at the system level for
12 achieving those goals.
13 We need budgets that align with those
14 strategies, right? We will begin to have those
15 conversations with you. We will begin to show
16 results around that this time next year.
17 We do not have an accountability
18 framework where we cannot only hold ourselves
19 accountable by reporting information -- I think
20 we do routinely -- but that we can hold
21 ourselves accountable for the actions and
22 inactions that we're taking in pursuit of those
23 goals, right?
24 What does it mean for us as a system to
25 recognize an institution in a weaker state to 66
1 make an investment in that institution? When do
2 we know to double-down, because it's going well,
3 or it could be a stronger university; or when do
4 we know -- what does a stop-loss look like?
5 Those are -- that's accountability.
6 It's accountability, not just to the
7 Board and to the Legislature; it's
8 accountability to universities to one another in
9 a system where the success of one relies on the
10 success -- we'll begin to have those
11 conversations with you, and we will have that
12 structure in place.
13 We need a budget system that supports
14 that, where all of our universities are
15 developing budgets in a way that's comparable;
16 so we can talk about apples and oranges when
17 we're talking about money.
18 We will begin to have that -- we will
19 have that budget not -- I'm sorry; not by
20 October, but hopefully by February, and then the
21 allocation formula that drives it.
22 So there's a lot of pieces that need to
23 be put in place, basic enterprise management
24 tools that you would expect to see in a $2.3
25 billion enterprise, which simply aren't yet in 67
1 place. And then as we're doing that, we can go
2 deep and build out the infrastructure that's
3 necessary to support the sharing system.
4 REPRESENTATIVE OWLETT: Great. I really
5 love the idea, and look to talk more about it.
6 In that system, in this sharing system,
7 I'm just curious, would a student -- say, a
8 student at Mansfield University, what percentage
9 would that student take in classroom versus
10 potentially online?
11 Would it be -- could we see these
12 students taking more than 50 percent of their
13 classes online --
14 CHANCELLOR GREENSTEIN: Yeah.
15 REPRESENTATIVE OWLETT: -- and less than
16 50 percent in classroom?
17 CHANCELLOR GREENSTEIN: Yeah. So it's
18 really interesting. So first thing, is that
19 about 47 percent of our students currently take
20 at least one course online, which is actually
21 high.
22 The national average is about a third.
23 So we're already creeping up. And that's good.
24 I mean, it gives students more options. It
25 makes us more available to working students and 68
1 working adults.
2 But having said that, students aren't
3 all the same, right? An adult student who's
4 returning to college to get a short-course
5 certificate that allows them to do better in the
6 extraction industry is fundamentally different
7 from a kid from the inner city of Pittsburgh who
8 comes to a university and needs a different kind
9 of experience directly out of high school,
10 right?
11 And the use of online should be, and is,
12 different for those different kinds of students.
13 It's more appropriate with some populations in
14 some cases than it is for other populations, for
15 different objectives.
16 REPRESENTATIVE OWLETT: Great.
17 CHANCELLOR GREENSTEIN: And we need to
18 be that refined in our thinking.
19 REPRESENTATIVE OWLETT: Great.
20 Totally different subject. With the
21 general appropriations in the educational, about
22 $65 million per year is in capital funding from
23 the Commonwealth.
24 How do you prioritize projects with that
25 money? And can you walk us through the process 69
1 of how that goes and help us understand that a
2 little bit?
3 CHANCELLOR GREENSTEIN: I can. And the
4 number has gone up to 70, I think, annually. So
5 thank you very much for that increment.
6 The process is one where, you know, need
7 is taken in from all of the universities and
8 then funds are allocated on the basis of -- it's
9 kind of a mix of need and urgency and also
10 probably an element of, you know, who's next.
11 This is something, again, as part of the
12 allocation formula that we will need to address.
13 How do we strategically allocate capital and
14 other kinds of dollars in order to achieve
15 system objectives?
16 It may be for a period of time more
17 appropriate to funnel more money into
18 universities X, Y, and Z, in order to achieve
19 critical systemwide objectives which may have to
20 do with student success or university financial
21 health and to dial back in other places.
22 So again, this strategic use of funding
23 which is outcomes driven and there's
24 accountability put in place in order to report
25 and react accordingly, is going to be a part of 70
1 our future.
2 REPRESENTATIVE OWLETT: And I realize
3 I'm out of time, but I have one real quick
4 question for you: Besides Mansfield, which
5 school has the best food? Second to Mansfield,
6 who has the best food?
7 CHANCELLOR GREENSTEIN: The best food?
8 You know, it's so funny; because every time I've
9 eaten on a university campus, it is
10 exceptionally good at every single one.
11 REPRESENTATIVE OWLETT: That was safe.
12 CHANCELLOR GREENSTEIN: It's remarkable.
13 (LAUGHTER AND APPLAUSE.)
14 REPRESENTATIVE OWLETT: Thank you.
15 MAJORITY CHAIRMAN SAYLOR:
16 Representative, I'll answer that for you: IUP.
17 Anyway, the next questioner is
18 Representative Schweyer.
19 REPRESENTATIVE SCHWEYER: Thank you, Mr.
20 Chairman. Chancellor, welcome.
21 One of the benefits to serving on the
22 Appropriations Committee for more than one year
23 is having a little bit of history. And for the
24 last three or four years during these
25 Appropriations Hearings, I've asked you and your 71
1 two predecessors sort of the same question about
2 what are you doing to try to attract and retain
3 urban kids, particularly those urban kids that
4 don't necessarily look like me?
5 And sort of famously, okay, famously, in
6 the perspective of people who sit and watch
7 Pennsylvania House Budget Hearings, there was an
8 announcement last year or two years ago -- they
9 all sort of blend together -- about a $1.5
10 million initiative from one of your
11 universities, specifically, to target Hispanic
12 and Latino kids.
13 The reward for that $1.5 million
14 announcement or whatever the dollar figure was,
15 is that your total enrollment of new kids
16 joining your system who are Latino, has dropped
17 from 1130, which is pathetically low on your
18 best year, to 985 kids in the entire
19 Commonwealth of Pennsylvania who said as your
20 lineage here as Latino or Hispanic in your
21 entire system.
22 CHANCELLOR GREENSTEIN: Yeah.
23 REPRESENTATIVE SCHWEYER: Whatever
24 you're doing, it is woefully inadequate. It is
25 shameful, and it needs to improve. 72
1 Now, our African American kids, by your
2 own numbers, you had 1865 across the entire
3 Commonwealth and that includes one of your 14
4 universities being a historically black college;
5 so, Huh?
6 CHANCELLOR GREENSTEIN: So couple
7 things: Let me take your first question, which
8 had to do with what are we doing? So,
9 obviously, reaching into schools, into community
10 colleges, into communities, doing all the normal
11 things, putting in place and strengthening the
12 obvious pipelines, working deeply within
13 communities, whether it's through churches or
14 neighborhoods or whatever.
15 But then I want to step back and I want
16 to say, Look, this is a national issue. I
17 spent, in my previous life, I administrated a
18 large scholarship program, a $1.8 billion
19 scholarship program. It was the Gates Millenium
20 Scholarship Program.
21 And it was in service to
22 African-Americans, Hispanics, Native Americans,
23 and I knew I was going to screw this up, Asian
24 Pacific Islanders. And in these communities
25 you're talking often about college-going 73
1 culture, which doesn't exist, right? It is --
2 and I agree with you, it is a national problem;
3 you could even argue it's a disgrace. Frankly,
4 it's an economic problem; because if we do not
5 do better with those students, we will not meet
6 our workforce development needs either in this
7 state or in this nation.
8 So it has urgency whether you're
9 interested from an equity point of view or from
10 a workforce development point of view. But it's
11 not like you can just turn a switch and create a
12 college-going culture where one doesn't exist.
13 Right?
14 So it's a partnership between
15 universities, between schools, between
16 communities, and with the Legislature and other
17 constituencies. So I agree with you. This is a
18 challenge.
19 I, frankly, don't agree; and one of the
20 reasons I came here, our data are shameful. Our
21 data are actually pretty good. If you look at
22 the attainment gaps that we've registered -- and
23 we're registering the closure and attainment
24 gaps that we've achieved with minority
25 populations over the worst ten years that are 74
1 known in higher education, I would ask the
2 question differently which is, How can you guys
3 actually continue to return those results in an
4 era of such financial hardship?
5 So I don't disagree with you that
6 there's a great deal more to do on the equity
7 front. There's a great deal more to do on the
8 equity front, but we're talking about major
9 structural difficulties that the state and the
10 nation are facing and those difficulties are not
11 uniquely or exclusively going to be handled by
12 any university or higher education.
13 So I would argue we're doing pretty
14 well. There's a lot more that we can and should
15 do.
16 REPRESENTATIVE SCHWEYER: 985 kids that
17 are Hispanic across the Commonwealth of
18 Pennsylvania chose your 14 universities.
19 CHANCELLOR GREENSTEIN: I'm not --
20 REPRESENTATIVE SCHWEYER: I'm sorry. I
21 don't -- I just fundamentally disagree that that
22 is somehow a positive indicator for --
23 CHANCELLOR GREENSTEIN: 985 new
24 students?
25 REPRESENTATIVE SCHWEYER: In that 985, 75
1 according to Appendix A6 of your own chart that
2 you --
3 CHANCELLOR GREENSTEIN: Correct, those
4 are freshmen.
5 REPRESENTATIVE SCHWEYER: Freshmen,
6 that's correct. That's correct.
7 CHANCELLOR GREENSTEIN: Multiply by four
8 or five.
9 REPRESENTATIVE SCHWEYER: Okay. Still
10 not good enough.
11 CHANCELLOR GREENSTEIN: I do agree.
12 REPRESENTATIVE SCHWEYER: I represent a
13 school district of 17,000 kids. Ninety percent
14 of them are kids of color.
15 CHANCELLOR GREENSTEIN: And how many are
16 going to college?
17 REPRESENTATIVE SCHWEYER: A couple
18 thousand. Couple thousand. And I have, as a
19 member of the Appropriations Committee, as a
20 third-term member of the Legislature, one of 253
21 overall votes to fund your universities, and I'm
22 not seeing any investment in our -- in at least
23 my urban core -- the urban core I represent, in
24 terms of any kind of real outreach. And I've
25 been asking, begging, pleading for this for some 76
1 kind of effort from your 14 universities for the
2 last three years on this Committee.
3 Whatever your collective efforts are,
4 they are not good enough in our urban core and
5 our urban core of kids of color. And I'm
6 thrilled to hear that you're looking at the
7 entire system from a completely different
8 perspective.
9 Quite frankly, and I'm going to be
10 perfectly candid, this is the first time I'm
11 hearing anything from PASSHE. As a supporter of
12 higher education, this is the first time I'm
13 hearing from PASSHE an overall desire to change
14 the way you're doing things.
15 I'm going to beg and implore you, and I
16 will say my future votes for appropriations are
17 going to continue to be tied upon the fact that,
18 as part of your reforms, you're going to have to
19 do a better job in building real relationships
20 with our communities of color, our at-risk kids,
21 regardless of what urban core they're part of or
22 what area of the Commonwealth they are; because
23 what we are doing now is not working.
24 Thank you, Mr. Chairman.
25 CHANCELLOR GREENSTEIN: May I respond? 77
1 And you should expect no less from us. And just
2 to point out, that the goals we were talking
3 about before, the system and the
4 university-level goals we were talking about,
5 they will be -- the data and the goals
6 themselves will be disaggregated, which means
7 that you will be able to identify goals for
8 individual populations.
9 REPRESENTATIVE SCHWEYER: And I do
10 appreciate that. Thank you.
11 MAJORITY CHAIRMAN SAYLOR:
12 Representative Lawrence.
13 REPRESENTATIVE LAWRENCE: Thank you, Mr.
14 Chairman. And thank you, Dr. Greenstein, for
15 appearing before the Committee today. I greatly
16 appreciate it.
17 I realize you're new to your position,
18 having served for five months; but I wanted to
19 speak with you with regard to expenditures at
20 the California University of Pennsylvania over
21 the last several years, specifically.
22 And I realize many, if not all of these
23 things, were before your time. $59-million
24 convocation center built largely with borrowed
25 money that is not meeting expectations; $12 78
1 million new parking garage, six years old,
2 closed for the last three years due to
3 substandard construction; the loss of at least
4 half a million dollars in revenue to the
5 university; roof replacement of the Old Main
6 Building, approved at a cost of $500,000; later
7 required a 20-percent-increase change order;
8 $800,000 renovation of the president's home;
9 $750,000 softball field.
10 Fiscal year 2017-2018 required a
11 20-percent drawdown of the reserve fund, just to
12 make payroll. My understanding is, the most
13 recent fiscal year resulted in a $478,000
14 surplus.
15 But according to press releases, the
16 surplus is being used to fund new initiatives,
17 not to be used to pay any of these
18 previously-incurred expenses.
19 This is at a university where enrollment
20 has dropped 20 percent since 2010, and the
21 university that has over $150 million in total
22 debt, and serves less than 7500 students.
23 My question to you, Dr. Greenstein, is
24 do you believe this track record of expenditures
25 is problematic? 79
1 CHANCELLOR GREENSTEIN: So a couple
2 things. I believe the financial condition of
3 the university right now is something that needs
4 to be addressed, not as a matter of casual
5 inquiry but as a matter of some urgency and
6 haste.
7 Thing two, in a sharing system, where
8 universities, individually their success is
9 reliant on the success of one another, budgeting
10 practices and allocation practices and
11 tuition-setting policies that we're talking
12 about are done in camera with a group of
13 presidents and their leadership teams in advance
14 of even a Board action, looking at each other's
15 strategies and budgets on the one hand and their
16 dashboard of financial results and student
17 outcomes on the other and asking one another
18 tough questions, exactly the kind of questions
19 you're asking me.
20 That's the kind of accountability that
21 we need to exercise internally in order to
22 ensure the continued strengthening of our
23 universities.
24 Those are the kinds of practices that
25 we'll be putting in place. Those are the kind 80
1 of budgeting practices that we'll be able to
2 share with you that will be outcomes oriented,
3 so that you can ask exactly the kinds of
4 questions you're asking; but then follow on in
5 saying, And how does that help you, university,
6 or system, get to the specific goal that you've
7 outlined in your strategy?
8 So that's where we're going. I can't
9 speak to or own much of where we've come from.
10 I can tell you that the aggregate effect of
11 challenging decisions -- remember these are
12 decisions taken at different times when the
13 world looked different, right, and we're trying
14 to build in order to attract students.
15 That was the way to address enrollment
16 challenges, right? We're now actually dealing
17 with that legacy.
18 REPRESENTATIVE SCHWEYER: Let me ask you
19 this question: Do you believe additional
20 oversight of the California University of
21 Pennsylvania's Board is required?
22 CHANCELLOR GREENSTEIN: I believe that a
23 higher level of internal accountability is
24 required for the Pennsylvania State System and
25 its universities. 81
1 REPRESENTATIVE SCHWEYER: What form
2 would you suggest that takes?
3 CHANCELLOR GREENSTEIN: So aligning our
4 budget practices, so that they're goal oriented,
5 involving in a very transparent process
6 involving our university leadership so that they
7 can advise and support one another and advise
8 the Board in terms of how money is allocated and
9 tuition dollars spent, full transparency in
10 reporting to the state, not just in terms of
11 here's a cost-to-carry budget next year, which
12 is what we've typically done; but here's a
13 budget and here are the outcomes that you can
14 expect from it.
15 Those are the kind of changes. And I
16 expect to have them implemented within the next
17 12 to 15 months.
18 REPRESENTATIVE LAWRENCE: Very good.
19 I'll look forward to asking you next year, and
20 hopefully we can work between now and then.
21 CHANCELLOR GREENSTEIN: Very good.
22 REPRESENTATIVE LAWRENCE: Thank you, Mr.
23 Chairman.
24 MAJORITY CHAIRMAN SAYLOR:
25 Representative Cephas. 82
1 REPRESENTATIVE CEPHAS: Thanks, Mr.
2 Chairman. Thanks, Chancellor for coming to
3 testify today. I wanted to see if you can
4 expand on a topic that you just brought up, and
5 that's your experience at the Bill and Melinda
6 Gates Foundation.
7 I had an opportunity to work at a
8 nonprofit prior to me coming to the Legislature,
9 and I recognize the role of the philanthropic
10 community.
11 Oftentimes, they're able to take deeper
12 dives into public policy issues that we're
13 trying to tackle, similar to the issues that
14 Representative Schweyer just brought up; but
15 they're also able to help us achieve some goals
16 that you specifically outlined.
17 So how are you using, pretty much, the
18 work that you did at the Foundation to achieve
19 the goals that you are trying to reach within
20 this system?
21 CHANCELLOR GREENSTEIN: So I bring
22 perspective on, you know, education and public
23 policy strategy techniques. I can ring people
24 up; some people still call me back. Those are
25 all very valuable. What's really been very 83
1 interesting to me, quite honestly, is the
2 engaging with my colleagues here in something
3 that you don't see from the philanthropic world;
4 and that is the challenges of change management
5 are deeply cultural and they're deeply
6 emotional.
7 And the philanthropic world doesn't
8 really engage in that kind of change management
9 practice. They tend to be -- certainly at the
10 Gates Foundation, they're much more kind of
11 technocratically driven; so it's a great
12 opportunity to sort of integrate the stuff which
13 comes out of philanthropy with the stuff that
14 real change is made of.
15 REPRESENTATIVE CEPHAS: How are you
16 specifically leveraging your relationships with
17 the philanthropic community with improving the
18 system? You said some still call you back. So
19 if Bill is still calling you back, tell him we
20 need an investment.
21 CHANCELLOR GREENSTEIN: That is -- yeah,
22 he's got a lot of asks, I'm told, right? Yeah.
23 No, I appreciate that. You know, as with other
24 philanthropic work, it's really important to
25 stay -- to ensure that the work you're doing is 84
1 aligned with the work that the philanthropy
2 wants to move forward.
3 That alignment may or may not come with
4 the Bill and Melinda Gates Foundation,
5 specifically, but there are other foundations
6 that are very interested in the kinds of work
7 that we're doing here.
8 I mean, to be perfectly honest, and I
9 think I said it in my letter in the advance to
10 the book, look, the challenges that we're facing
11 here in Pennsylvania, they're not unique;
12 they're just superacute.
13 They're more acute than they really are
14 pretty much anywhere, so a lot of folks are
15 watching and there's a lot of interest in what
16 we're doing.
17 Because win, lose, or draw, there's
18 going to be a lot of lessons learned. And, you
19 know, that itself, I mean, it sounds a little
20 weird; but it's actually a leverageable asset,
21 and I expect to leverage that extensively.
22 REPRESENTATIVE CEPHAS: Great. My next
23 question is in reference to high-priority
24 occupations.
25 CHANCELLOR GREENSTEIN: Yeah. 85
1 REPRESENTATIVE CEPHAS: When you have an
2 uptick of older adults returning to our
3 postsecondary institutions into this system to
4 either skill up or get advanced certifications
5 so it makes them more marketable, how are you
6 -- have you begun to bring in programs that
7 offer certificate programs or two-year degrees
8 so individuals, if they are interested in,
9 again, getting more credentials, are able to use
10 that as an option versus getting a four-year
11 degree or --
12 CHANCELLOR GREENSTEIN: So we have some
13 of that. I think we offered last year -- we
14 produced 2000 AA degrees and 400 or 500
15 certificates. But certainly in the certificate
16 space, and maybe in the AA space, certificate
17 space certainly is a growth area.
18 And it requires us to work closely with
19 industry. You know, industry will often say,
20 you know, we need workers to show up. It's hard
21 to build an educational program around that, but
22 there are ways to work with industry to identify
23 the specific competencies that their employees
24 need, in particular, high-demand verticals. And
25 as you identify those competencies, then you can 86
1 really begin to build educational programs
2 around them, whether they're short course or
3 long course, degree form, or certificate.
4 And that's really the direction we're
5 pursuing. There's been a lot of traction with
6 that approach in, you know, Virginia, New York,
7 in Colorado and Texas; so we don't need to make
8 it up. We can borrow a lot of practice from
9 other places.
10 REPRESENTATIVE CEPHAS: Great. And I'm
11 assuming you're doing that regionally,
12 considering that there are different labor
13 demands based on the geography of where your
14 institutions are.
15 CHANCELLOR GREENSTEIN: So it's super
16 interesting. So I'm going to say yes and,
17 because obviously employment is local. But at
18 the same time, if you're building a pathway into
19 the financial services industry, that pathway is
20 unlikely to be different in Philadelphia,
21 Pittsburgh, or any other counties of
22 Pennsylvania.
23 And so there's an opportunity to develop
24 the competency map at the state level, but then
25 have them developed in the educational program 87
1 and delivered through the universities in a way
2 that meets their need.
3 REPRESENTATIVE CEPHAS: And I'll give
4 you my last question, since I see the lights.
5 In reference to subcontracting with
6 outside vendors, is that a part of your
7 sharing-cost strategy? And if it is, how so?
8 CHANCELLOR GREENSTEIN: So in terms of,
9 you know, shared-services infrastructure, I
10 mean, there's going to be serious questions; and
11 we will be here in October, November with a
12 portfolio of, here's a bunch of shared-services
13 options; here's what we believe the cost-benefit
14 analysis of each of those would be. And then as
15 we begin to prioritize what we're going to
16 actually do, you know, you typically get into a
17 kind of buy-build decision.
18 You know, in many areas, it may be more
19 effective to use third-party services than to
20 actually build internally. And it also -- so
21 let me leave it there.
22 REPRESENTATIVE CEPHAS: Thank you.
23 CHANCELLOR GREENSTEIN: Thanks.
24 MAJORITY CHAIRMAN SAYLOR:
25 Representative White. 88
1 REPRESENTATIVE WHITE: Hello. Thanks
2 for being here today. There are many students
3 across the Commonwealth who graduate from PASSHE
4 school and, unfortunately, they leave our
5 Commonwealth afterward. Is there anything that
6 you are doing to help address this issue?
7 CHANCELLOR GREENSTEIN: Yeah. So, first
8 of all, at least according to our alumni survey,
9 the most recent one, of our graduates at
10 20-percent response rate, 98 percent were, you
11 know, working or in graduate school or in the
12 military; 88 percent were working in the field
13 where they studied and almost three-quarters
14 were actually in the State of Pennsylvania. So
15 that's actually super high, and so I guess a
16 period paragraph.
17 I do think that as we begin to develop
18 some of those -- even more workforce aligned
19 short-course certificate programs, you'll see
20 that number tick up, yeah.
21 REPRESENTATIVE WHITE: So this is
22 probably going to be a little bit different than
23 some of the other line of questioning that
24 you've experienced today, and it's more going to
25 be along the lines of the management style that 89
1 you've taken; because I think it's important --
2 I'm curious to know if the various presidents of
3 these schools see themselves in competition with
4 one another, and does that make it more
5 challenging?
6 Because I think everyone in this room
7 wants to see improvements for our school
8 students across the Commonwealth; but
9 unfortunately, when you have that kind of an
10 environment, it makes your job more challenging.
11 So is there a way that you are
12 facilitating a culture of teammates and trying
13 to make sure everybody knows that they're
14 working on the same team for the betterment of
15 our students?
16 CHANCELLOR GREENSTEIN: So I think it's
17 probably one of the biggest challenges I have,
18 frankly, as a leader, is to set that table and
19 to invite that discussion.
20 My colleagues will tell you that I did
21 spare them my Henry V St. Crispin's Day speech,
22 gentleman of England, now a bad kind of thing.
23 But it is very -- it is absolutely critical, and
24 it's a journey; because, you know, for decades,
25 we were engaged to compete. 90
1 We hired CEOs to build and compete and,
2 you know, the journey that we have taken with my
3 colleagues over the last several months where
4 we've gotten our arms around our financial
5 independence, has been an emotional one and it
6 is one which is going to require leadership
7 support at all levels.
8 REPRESENTATIVE WHITE: Can you just
9 share with us what -- how frequently you have
10 group conversations, meetings, that sort of
11 thing?
12 CHANCELLOR GREENSTEIN: We meet once a
13 month. I was delighted at the Board meeting
14 when the Commissioner of the Commission of
15 Presidents, it was the president from Indiana
16 University of Pennsylvania, a fine university,
17 as are they all, reported to the Board that the
18 presidents were eager to meet even more around
19 the system redesign. We check in pretty
20 regularly.
21 REPRESENTATIVE WHITE: And do you
22 discuss shared best practices, etc.?
23 CHANCELLOR GREENSTEIN: Yeah. I mean,
24 you know, again, moving towards a sharing system
25 is something which is going to have to happen 91
1 at speed deliberately and with intention; and
2 sharing best practices is a way to accelerate
3 and amplify timed impact.
4 REPRESENTATIVE WHITE: Of course. And
5 so like over the next year, you basically told
6 us that all of the goals that you're going to
7 come up with, I assume you're coming up with
8 them together?
9 CHANCELLOR GREENSTEIN: Yeah.
10 REPRESENTATIVE WHITE: And how you're
11 going to be able to implement them? What are
12 you doing over the course of this year to make
13 sure that there is still accountability amongst
14 all of these institutions?
15 CHANCELLOR GREENSTEIN: So we are
16 putting in place an accountability platform and
17 then we're realigning our performance management
18 systems to it.
19 In the meantime, we are working with the
20 goals that the university presidents have had.
21 It is a one year; we're in a transition year. I
22 have spoken with each of the presidents when I
23 got here, and then again in December.
24 And I'll do it again at the end of the
25 performance year, which is fiscal; so in May, 92
1 June. And we've agreed that -- they have seen
2 my goals, and we have linked up where their
3 goals that they had before I got here, that we
4 will use the systems that are now in place for
5 the current year and then we will make a shift
6 as we begin to develop concrete, measurable
7 outcomes.
8 Many of the goals that the presidents
9 will produce and certainly mine, will align to
10 those outcomes.
11 REPRESENTATIVE WHITE: Okay. And then
12 just as a final question: During your meetings,
13 are there certain things that you want to see
14 during those meetings, like a budget, you know,
15 cost -- or I would say, you know, how they're
16 improving efficiencies in their own institutions
17 as well as, you know, the improvement of student
18 outcomes --
19 CHANCELLOR GREENSTEIN: Yeah.
20 REPRESENTATIVE WHITE: Are those things
21 that you talk about every meeting, or what do
22 your meetings look like?
23 CHANCELLOR GREENSTEIN: Yeah. So we are
24 moving to an environment, where as I have
25 explained before, we will be routinely looking 93
1 at the strategies that universities are putting
2 in place in order to achieve the goals that they
3 have agreed with the State System.
4 We will look at the budgets that have
5 aligned with those strategies and we will look
6 at their dashboard reporting that shows how
7 they're doing, and we will have those
8 conversations in a 360-degree way; because their
9 accountability through the Board, through me,
10 super important.
11 But in an interdependent system where
12 the success of any one university relies upon
13 the success of each other, their accountability
14 to one another is as important.
15 REPRESENTATIVE WHITE: Very good. Thank
16 you very much.
17 MAJORITY CHAIRMAN SAYLOR:
18 Representative Krueger.
19 REPRESENTATIVE KRUEGER: Thank you, Mr.
20 Chairman. And thank you, Chancellor, for
21 joining us here today.
22 So I wanted to make sure that I heard
23 something correctly. You said earlier, when you
24 were talking about budget and state investment,
25 that Pennsylvania invests about 27 percent of 94
1 the cost of higher education; and the average,
2 when you look at other states is, 54 percent?
3 Did I hear that correctly?
4 CHANCELLOR GREENSTEIN: Yeah, you did.
5 REPRESENTATIVE KRUEGER: So compared to
6 the rest of the country, we're doing about half;
7 is that correct?
8 CHANCELLOR GREENSTEIN: You're doing
9 about half, and we are 48th nationally.
10 REPRESENTATIVE KRUEGER: Forty-eighth in
11 the country?
12 CHANCELLOR GREENSTEIN: Yeah.
13 REPRESENTATIVE KRUEGER: Okay. And,
14 unfortunately, this is not the only area of
15 education funding where Pennsylvania is at the
16 bottom of the list.
17 When you look at K-to-12 education
18 funding, we're also very lowly ranked when you
19 look at the rest of the country; and I believe
20 that budgets are a statement of priorities.
21 When we look at the budget proposals
22 that we're evaluating over the course of these
23 hearings and what we'll wind up voting on in
24 June, how we vote and where we put our money
25 shows what Pennsylvania believes should be the 95
1 highest priority. And I personally believe that
2 education, across the board, should be a
3 significant investment for Pennsylvania.
4 So I had another question for you. On
5 page 29, you referred us to a table earlier that
6 showed that the enrollment from
7 low-and-middle-income families is declining
8 faster than the overall enrollment.
9 And when you look at the list, basically
10 the higher the family income, the greater the
11 percentage of students who are enrolling in
12 these universities; and the lower the income,
13 the more it's declining. I mean, it's almost an
14 exact corollary on family income.
15 CHANCELLOR GREENSTEIN: Yeah.
16 REPRESENTATIVE KRUEGER: I know that you
17 joined us from working in California at their
18 State System of Higher Education or at the UC
19 Berkeley System.
20 What are other states doing to make sure
21 that low-and-middle-income families can access
22 the higher education they need to get themselves
23 on a good career path?
24 CHANCELLOR GREENSTEIN: Yeah. So, I
25 mean, there's a higher rate of funding in 96
1 California.
2 REPRESENTATIVE KRUEGER: But what
3 percentage is in California?
4 CHANCELLOR GREENSTEIN: Oh, wow. That's
5 a tough one. It's been -- I haven't been there
6 for 7 or 8 years, but I can get back to you on
7 that.
8 REPRESENTATIVE KRUEGER: Okay.
9 CHANCELLOR GREENSTEIN: I would compare
10 our university, with the exception of Indiana;
11 they're not doctorate-granting universities. So
12 the relevant comparator is Cal State University,
13 where the tuition is, I don't know, 5 or 6,000 a
14 year, is my guess; so it's substantially -- it's
15 going to be less.
16 You're going to see -- as a result of
17 that, you're going to see lower graduate debt
18 levels; you're going to see lower overall net
19 average price paid by students; you're just
20 going to see a variety of other factors.
21 And you're going to see the same kind of
22 graduation rates. They're traveling in the
23 50-plus to 60th percentile, as we are. They
24 have a state grant program, a Cal grant program,
25 which is not wholly different from our PHEAA 97
1 program, which is available to students.
2 They have integrated the pathways from
3 their community colleges through their master's
4 level of Cal State to their doctoral
5 universities, University of California.
6 The master's plan of 1960 is probably
7 the gold standard of education public policy
8 making, where you're trying to align your public
9 supply so that there's limited redundancy; so
10 they have a lot of advantages in that regard.
11 They also have a growing population.
12 They're not dealing with the decline in the
13 high-school-leaving population that we are, and
14 they're not likely to even after 2025.
15 REPRESENTATIVE KRUEGER: And is that
16 because of overall population demographic
17 changes?
18 CHANCELLOR GREENSTEIN: Just a different
19 -- it's one of the rare states that's not going
20 to be as impacted by the 2025 decline, yeah.
21 REPRESENTATIVE KRUEGER: Okay. Well,
22 48th in the country is not good enough for me.
23 I hope that's something we can work together to
24 change, and thanks so much for joining us here
25 today. 98
1 CHANCELLOR GREENSTEIN: I can't do Iowa,
2 just saying.
3 MAJORITY CHAIRMAN SAYLOR:
4 Representative Struzzi.
5 REPRESENTATIVE STRUZZI: Thank you, Mr.
6 Chairman. Good afternoon, Chancellor. And I
7 want to thank the various presidents from the
8 universities around the state who are here
9 today, particularly, Dr. Driscoll, from Indiana
10 University of Pennsylvania, which is in my
11 district; and I would be remiss if I didn't say,
12 One Go Hawks. There is competition, in a good
13 way, amongst the universities, I would add.
14 But as was mentioned earlier, you know,
15 the universities within our communities are
16 significant economic drivers. They are the top
17 employer for Indiana County, and we truly
18 appreciate that. I think we can all value that
19 and build upon that.
20 But my concern -- and you mentioned the
21 online courses; I know they were mentioned
22 earlier. My concern, as we see the shift to
23 millennial learners, the more on-screen
24 learners, what does that do, in your eyes,
25 Chancellor, to having students actually on 99
1 campus, using the facilities and, again,
2 contributing to our local economies?
3 I know that's not your business, but it
4 does concern me; because I see that transition
5 continuing and more and more students simply
6 learning from home.
7 I can understand how that would increase
8 enrollment. But, again, your view on that and
9 what we can do to, perhaps, balance online
10 learning with in-classroom learning.
11 CHANCELLOR GREENSTEIN: Yeah. I mean,
12 again, as I referred to it earlier, not all
13 students are the same, right? And some students
14 really need and benefit enormously from a very
15 high-touch, on-campus experience. Some students
16 can't.
17 I mean, if you're a working adult and
18 you've got a family and you're working a
19 full-time job, that option to attend university,
20 you know, 9 to 5 or even in the evening, is not
21 possible. You know, people who are living in
22 remote, rural communities, that's also not
23 possible.
24 So there's a variety of student groups
25 for whom online makes a huge difference, and 100
1 they're actually net new, largely. It's not
2 like you're going to cannibalize the
3 on-the-ground existing population.
4 And the data that I've seen from places
5 like Georgia Tech, where they're running online
6 and face-to-face programs side by side, if you
7 look at the enrollments and the distribution of
8 students through both, they're clearly not
9 cannibalizing. There's a very modest amount of
10 overlap.
11 Where you're talking about the on-campus
12 population, the availability of online courses
13 introduces a degree of flexibility to take
14 courses you might not otherwise have access to
15 or have time to take.
16 You can take them in the summer. You
17 can potentially get a 3-year degree much more
18 quickly, which saves you money; you know, so
19 there's a lot of affordances even for the
20 on-campus population.
21 But, frankly, I don't see, either here
22 or pretty much anywhere else in the country, how
23 online is going to encroach on the communitarian
24 nature of and the economy that's generated by
25 students living and being on campus. That would 101
1 be my professional opinion.
2 REPRESENTATIVE STRUZZI: Good. Thank
3 you. I also want to appreciate your visionary
4 leadership. I know that you came out to
5 Indiana, Pennsylvania and other communities and
6 shared your vision for the State System.
7 And I think what we've heard today is,
8 you know, we want to see the System succeed. We
9 want to see it strengthen. We want to make sure
10 that all the universities stay as they are, and
11 improve and grow.
12 But my question, and it was in both of
13 the reports that we've had the chance to review,
14 is that there are certain impediments, I think,
15 and I'm asking for your opinion on this, some
16 impediments that will prevent you from having
17 your vision realized.
18 And just to be specific, you know, it
19 mentioned the Board of Governors and the lack of
20 ability or agility to turn a ship this large or
21 the will to turn a ship this large. So, you
22 know, what's your view on the impediments? What
23 can we do as a Legislature to help you overcome
24 those impediments?
25 CHANCELLOR GREENSTEIN: So the biggest 102
1 challenge I think that the Board's going to face
2 -- look, Pennsylvania, as I said before, we're
3 facing an interesting array of challenges. They
4 didn't just happen overnight. This is years in
5 the making, decades really, in the making.
6 My theory of the case is that the reason
7 we are where we are is because of the political
8 nature of decision making, not just sort of the
9 Legislature, Board, etc., but it happens right
10 down to the -- tough decisions are hard to make,
11 right.
12 And they're hard to make, and they're
13 deeply felt emotionally; because, you know, you
14 serve the people of Indiana, you know, and those
15 surroundings.
16 And others have spoken for other
17 universities that are here, and those are deeply
18 emotional ties that are reflected in the
19 communitarian nature of the education that we
20 offer.
21 And yet, we're going to still have to
22 make those tough decisions, which means that
23 when those tough decisions happen, we're going
24 to have to collectively exercise the discipline
25 that we don't always exercise, picking up the 103
1 phone and changing the nature of the
2 conversation, making that decision impossible to
3 make; and we're facing a bunch, this year.
4 We're talking about tuition; we're
5 talking about low-enrollment schools, right?
6 We're talking about getting our costs
7 controlled.
8 That's going to require an enormous
9 amount of discipline, so that the Board can take
10 the actions that the Board needs to take, that
11 the leaders of the university can take the
12 actions that the leaders at the university can
13 take in order to begin to address the situation
14 that we're in. That's my -- yeah.
15 REPRESENTATIVE STRUZZI: Just to get to
16 the hard question, though, do you think there's
17 a need to change the structure of the Board of
18 Governors, to streamline, to minimize the amount
19 of authority that they have? I know that's a
20 tough question, but I think it needs to be
21 posed.
22 CHANCELLOR GREENSTEIN: You know, I
23 remember a provost of mine telling me it's never
24 the structure; it's never the organization; it's
25 the people in it. And I don't know, maybe 104
1 that's relevant. You know, what are our
2 expectations?
3 Do we have an expectation that leading
4 members of the community, political figures,
5 whoever they may be, should be able to have, you
6 know, direct access to a decision that the Board
7 needs to take and to try to -- you know, is that
8 -- the structure of the Board is fine, in my
9 view, as long as our expectations are that the
10 Board is given the autonomy that it needs to
11 make the hard decisions that it needs to make,
12 and itself is accountable to and by the state.
13 You know, if that's not possible,
14 obviously, there's different ways one can
15 address the structure. But my guess is, that's
16 probably pretty hard; and I'd rather sort of
17 rely -- we were talking a moment ago about
18 culture change, and I would rather rely on the
19 culture change. I think that's probably easier
20 than the legislatively-driven restructuring.
21 Just a guess.
22 REPRESENTATIVE STRUZZI: Okay. Thank
23 you.
24 MAJORITY CHAIRMAN SAYLOR:
25 Representative Kim. 105
1 REPRESENTATIVE KIM: Over here,
2 Chancellor. Thanks again for being here. Being
3 so late in the questioning process, most of my
4 questions have been answered. So just wanted to
5 maybe make more of a comment.
6 You know, I read those independent
7 reports, the consultant reports; and they were
8 dismal. I mean, the words dysfunctional were
9 used, cilos, competitive; so it's just so
10 refreshing to see your leadership and vision.
11 You know, you've only been here for five
12 months; but I'm excited to see what comes after.
13 In your letter to us, you were talking about a
14 timeline. And, you know, I see this as a
15 gushing chest wound; and I'm glad you're not
16 talking about tweaks but things that are
17 transformational, because that's what we need
18 from being a dinosaur.
19 Do you have that timeline? You said,
20 let's keep -- be accountable. Can we see the
21 plan? You've given us some snapshots of it.
22 And what is your timeline, in terms of trying to
23 right the ship?
24 CHANCELLOR GREENSTEIN: So, and again,
25 some of the things you can expect to see in this 106
1 year, some of the basic business apparatus put
2 in place, the outcomes, the strategies, the
3 goals, the budgets, right? You've got to have
4 that stuff.
5 Then you've got to have the
6 accountability framework and you've got to have
7 the budget mechanisms that allow you to operate
8 according to those strategies and get to those
9 goals.
10 We're going to have a list of the
11 shared-services opportunities and the cost
12 savings that are available from them, and the
13 costs of getting those savings will have early
14 indications of the kind of academic programming
15 that we can do together in order to shift the
16 needle.
17 So we'll have a lot of that material
18 already -- we already mentioned we'll have a
19 reasonable analysis of the legislative and
20 regulatory adjustments that would potentially
21 save us money.
22 I think we can expect all of those
23 things, you know, within this financial year
24 into the first calendar year into the first
25 quarter of the next one. You know, then you 107
1 move into a pretty aggressive execution. But,
2 honestly, you know, this is not like -- this is
3 not a year's exercise. This is like -- this is
4 the economic recovery of Pittsburgh. This is a
5 major public policy transformation. This has
6 not been done at this scale, to my knowledge, in
7 higher education in this country.
8 So we know what the piece part looked
9 like. I'm not sure anyone's tried to put them
10 all together and drive this quickly with this
11 much, you know, challenge that we're facing. So
12 we will have that timeline for you. I think
13 there's a graphic, I think it's in the book,
14 which shows kind of where we are now in the time
15 line. We're still in that plan,
16 what-does-that-implementation-look-like phase.
17 It's a frustrating phase.
18 By this time next year, you will have a
19 pretty detailed execution phase -- an execution
20 map and the kind of ROI that we would expect to
21 see from it.
22 REPRESENTATIVE KIM: Okay. And my last
23 question is, you know, obviously, education is
24 the core. You know, you guys have to -- that's
25 our expertise and that's our product. But as 108
1 you were talking about it, some of our campuses
2 are about a hundred years old; and now you're
3 competing -- like I have a university called HU,
4 Harrisburg University, that is, you know, urban
5 city; doesn't have a cafeteria. Other campuses
6 have climbing walls. Their dormitories probably
7 look better than my own room, you know. How do
8 we compete with that in getting students
9 enrolled in old campuses?
10 CHANCELLOR GREENSTEIN: So I think we
11 have to be clear about who we are and for whom.
12 Who are our students; what do they need; what
13 can we give them; how can we build on our core
14 competencies; and how can we stretch those core
15 competencies into new areas?
16 We've spent a lot of time today talking
17 about restructuring the organizational and
18 business practice of the universities and the
19 System. We haven't talked a lot about the
20 change in the nature of education and
21 educational delivery, which is going to be
22 required to meet the needs of the Gen Z or
23 whatever we are, student, and to meet the needs
24 of the next generation of employers in this
25 state. 109
1 That, itself, is another transformation
2 that happens more in the classroom and in the
3 student supports. We have to get the ship in
4 order as we're beginning to address those
5 aspects, as well.
6 REPRESENTATIVE KIM: Very good. Thank
7 you so much. Thank you, Chairman.
8 MAJORITY CHAIRMAN SAYLOR:
9 Representative James.
10 REPRESENTATIVE JAMES: Chancellor, good
11 afternoon. Thank you, Mr. Chairman. Welcome,
12 all the presidents from the various colleges. I
13 would like to acknowledge Dr. Dale Pehrsson,
14 Clarion University. Fly, Eagles, fly.
15 Chancellor, I've been talking to
16 different people explaining that your background
17 is one of the business world. You're accustomed
18 to success, and we should be excited that you're
19 here; because you're going to be bringing new
20 ideas. And I think the work that you and your
21 staff did preparatory to today's talk, begins to
22 show folks that. So thank you for that.
23 The System was formed in 1983, so it's
24 36 years old; and it's a different day. The
25 environment is quite different. And I think 110
1 that's what caused the request for a couple of
2 formal studies, the NCHEMS Study and the RAND
3 Study, at a rather stunning cost.
4 I got a couple of sentences here, not a
5 lot; but I'd like to read a couple quotes of the
6 findings from the NCHEMS statement; it's on
7 page 22. It says, Collective bargaining
8 agreements have also enshrined requirements that
9 handicap the ability of institutions to address
10 local issues and to swiftly respond to local
11 opportunities.
12 A salary schedule that is the same for
13 all disciplines and ignores differences across
14 Pennsylvania and prevailing wage and
15 cost-of-living constrains the development of
16 some programs.
17 And the other sentence is, The real
18 policy document under which the State System is
19 led and managed is the APSCUF collective
20 bargaining agreement.
21 When three out of every four of the
22 dollars that we send you go into salaries and
23 benefits, it's pretty easy to find a place to
24 begin working. And when you start your comments
25 today saying we're never going to close any of 111
1 our schools and then couple that with the
2 comments about the collective bargaining
3 agreement, it's very difficult to square those
4 two in conversation. Can you address this
5 concept and give us your thoughts on that?
6 CHANCELLOR GREENSTEIN: Yeah. I mean, I
7 think there's a couple things going on. So one
8 of them is, we're clearly going to have to align
9 our costs with enrollment levels. We haven't
10 done that. And there's a variety of ways to do
11 that.
12 And, you know, salaries and benefits is
13 certainly one. We cannot continue -- I think
14 the number in my head is that our enrollments
15 have declined 18 percent; our head count has
16 declined 8 percent. And so as you've seen in
17 the numbers, our costs per employee -- someone
18 mentioned it, our costs for employees are going
19 up.
20 I mean, it's not a sustainable modality,
21 unless we continue dramatically to grow our
22 enrollments. We're going to have to address
23 that. We're going to have to address our costs,
24 generally speaking, not just in salaries. I
25 think there's a second question about whether 112
1 the CBAs impede us from doing what we need to do
2 to be a cost-sharing system.
3 And I try to look at it, and have spent
4 quite a bit of time on it with presidents and
5 union leadership, asking that question, What is
6 it that we're trying to accomplish and where is
7 it, specifically, the collective bargaining
8 agreement stands in our way?
9 And where it appears to stand in our
10 way, are these issues of management, effective
11 implementation of the tools that we have, or are
12 they issues of impediment, i.e., collective
13 bargaining agreement, which actually does
14 prohibit us from moving forward.
15 I don't have answers to those questions.
16 I have hypotheses about them. I'd be happy to
17 share them with you; but that's where -- and I
18 mentioned the third point, and that's why I
19 mentioned earlier, I mean, these are issues that
20 we're going to have to work collaboratively with
21 APSCUF to address.
22 Our inability to work collaboratively
23 with APSCUF leadership, in particular, to
24 address these issues, will, in my view,
25 undermine our ability to succeed; that unless 113
1 we're able to change our relationship and change
2 the nature of our relationship and work together
3 to solve these problems, this is a fool's
4 errand.
5 I also believe that we've made enormous
6 progress, even in the time that I've been here,
7 in beginning to address those relational issues.
8 I think the interspace bargaining that we talked
9 about earlier is a major step in that direction.
10 Engaging with APSCUF leadership in
11 understanding together where we were financially
12 and how we are doing with our students, I think,
13 is a major advance in that direction. I think
14 the kind of information sharing that you've seen
15 in this budget book, that approach, that radical
16 transparency is what I'm attempting to do in all
17 aspects of my leadership and my office's
18 leadership of the System, with the Board, with
19 all of our constituents, including our faculty,
20 including our unions.
21 You know, these are collective problems.
22 We have to address them.
23 REPRESENTATIVE JAMES: The two studies
24 were pretty long on finding and enumerating our
25 problems, but very short on coming up with 114
1 solutions; and I was very sorry to see that.
2 One out of every six legislators in this
3 building is a product of your system, and we
4 want you to succeed.
5 CHANCELLOR GREENSTEIN: Yeah. Thank
6 you.
7 REPRESENTATIVE JAMES: Thank you, Mr.
8 Chairman.
9 MAJORITY CHAIRMAN SAYLOR: Before I move
10 on to the next questioner, I wanted to recognize
11 our Chief Clerk of the House of Representatives,
12 who is a graduate of Indiana University of
13 Pennsylvania, David Radcliffe. David.
14 The next representative is
15 Representative Gabler for comments.
16 REPRESENTATIVE GABLER: Thank you, Mr.
17 Chairman. And thank you, Mr. Chancellor. It
18 really is a pleasure to get to see you in this
19 context, and it was a pleasure meeting you a few
20 -- about a week ago, when we had the opportunity
21 to have a meet and greet; and I really thought
22 that that was very great of you to start showing
23 your style of leadership.
24 As was previously mentioned, your book
25 is very much unlike other materials we've 115
1 received; and I think it shows the diligence
2 that you're putting in. And I think we have
3 reasons to be optimistic about the future of
4 your leadership.
5 And starting out with quotes like, I
6 hear you, I agree with you, it's a really good
7 first step; so I think we have reasons to be
8 optimistic about where we're headed, but
9 certainly we have a structure here that, as
10 you've mentioned, brings great challenges.
11 So I wanted to dig a little bit deeper
12 into those challenges, especially with the
13 challenge that lies in front of us in this
14 Committee over the next few months with the
15 budgeting process.
16 So a little a note of history, and this
17 is from before your time, but the State's
18 appropriation for the PASSHE System for
19 2018-2019 was an increase of $15 million over
20 the prior year.
21 The union contract for that same time
22 frame included a pay raise that amounted to a
23 total cost increase of about $19 million. So
24 that means that for every dollar increase over
25 that time frame, it was met with a dollar and a 116
1 quarter in pay and benefits increases.
2 And the individual pay increases for
3 professors over that time ranged from 5 to
4 7-and-a-half percent, which is much out of step
5 with the parents paying tuition and the
6 taxpayers that are footing the bill for the
7 state appropriations.
8 As Representative Brown had previously
9 mentioned, your predecessor last year described
10 a disconnect between the negotiation of labor
11 contracts and the budgeting process that enables
12 those contracts to be funded.
13 Additionally, at 13 of the 14
14 institutions in the system, expenses exceeded
15 revenue. System-wide enrollment has declined by
16 over 21,000 students over the last several
17 years. That's a loss of nearly one-fifth of
18 enrollment since 2010.
19 So with the System's status quo facing
20 deficits, does a $15-million state increase
21 funding a $19 million pay raise make sense? And
22 what can be done to address this disconnect that
23 your predecessor mentioned?
24 CHANCELLOR GREENSTEIN: So a lot of
25 things are going on there, too. So let me start 117
1 with the obvious. We need to align our costs
2 with our enrollment. Forget enrollment. We
3 need to align our costs with our revenue.
4 Right? Wherever the source of that revenue
5 comes from. And that revenue is driven by
6 enrollment. And that's true all over the shop.
7 And, you know, there are any number of
8 expenditures you could point to over the last
9 year which would account for the 15 million; and
10 you'd maybe ask questions about how they were
11 spent, as well, and you probably should. So
12 that's something we need to get our arms around.
13 I think the second question -- the
14 second aspect we've touched on before, is that
15 our success is a collective responsibility.
16 It's our collective accountability. Right? I'm
17 happy to lead.
18 I require -- we've talked a lot about
19 presidents working together in new ways. It's
20 going to require our working with our union
21 leadership in wholly new ways.
22 And we're putting in place that kind of
23 collaborative infrastructure. And, you know,
24 there's only so many places to spend money. If
25 you put it somewhere, it's got to come out of 118
1 somewhere else; because of the reasons that
2 you've addressed.
3 REPRESENTATIVE GABLER: And I appreciate
4 that. So certainly aligning costs with
5 enrollment, I think, is a theme that we've heard
6 from this hearing; and I think it's something
7 that will certainly be a welcome conversation
8 going forward.
9 And that being said, the budget request
10 from PASSHE is for an 8.1-percent increase this
11 year. I believe the Governor's budget includes
12 a one-and-a-half percent increase, and so I
13 guess my question related to those proposals out
14 there.
15 If the budget this year authorizes an
16 increase of any sort, what sort of assurances
17 can you give us that the funds will be used to
18 strengthen the system, rather than creating
19 further structural imbalance?
20 And, furthermore, how can we square a
21 funding-increase request against declining
22 enrollment and the need to align those two?
23 CHANCELLOR GREENSTEIN: Yeah. So I
24 submitted that appropriations request in my
25 first month. 119
1 REPRESENTATIVE GABLER: Understood
2 that's a challenge.
3 CHANCELLOR GREENSTEIN: It was a
4 challenge. It's a cost to carry. It is not
5 outcomes oriented or goal driven. My intention
6 is to never submit another request like that.
7 I'm not going to make it for October,
8 but I will make it for the next October; and I
9 may be able to have a revision by February,
10 because of the work that I'm doing with my
11 colleagues and their staff. So I think that's a
12 modest step.
13 I'm sorry. I forgot the question.
14 REPRESENTATIVE GABLER: Just -- how can
15 we receive assurances that, going forward, the
16 funding increase will be aligned with
17 strengthening the system rather than --
18 CHANCELLOR GREENSTEIN: I'll be able to
19 submit with the October appropriations
20 process -- you will have a clear understanding
21 of what the execution path looks like for this
22 redesign and what the ROI is on that.
23 You will have a clear understanding of
24 what our accountability structure and
25 performance management systems are and what they 120
1 will look like; and you'll have a clear
2 understanding of what our shared-services
3 potential return on investment will look like.
4 You'll have a better understanding,
5 overall, of what our budget and our budget
6 tradeoff decisions have been; so that we can
7 have a reasonable conversation, not about the
8 overall budget and how it aligns with our
9 revenues, but about the overall budget and how
10 specific allocations suggested within it align
11 with and help us achieve specific goals.
12 Does that make sense?
13 REPRESENTATIVE GABLER: Yeah. I
14 appreciate that. I think this is a helpful
15 trajectory for us to get started. Obviously,
16 there's a lot of work to do. I commend you for
17 taking it on.
18 Thank you.
19 CHANCELLOR GREENSTEIN: Thanks so much.
20 MAJORITY CHAIRMAN SAYLOR:
21 Representative Greiner.
22 REPRESENTATIVE GREINER: Thank you, Mr.
23 Chairman. And thank you, Mr. Chancellor, for
24 being here today. And I guess I'll start off by
25 saying, I think we found out today the System 121
1 needs overhauled; and I'm glad you're willing to
2 delve into it and take a look at that.
3 And on background, I have worked with a
4 lot of businesses. I'll be quite honest, if we
5 had a number of businesses like this, we'd be
6 closing a couple down. I know education's not
7 necessarily the same as private industry; but,
8 you know, at least we're going to look at it
9 extensively.
10 I do want to follow up on my colleagues'
11 comments here. And we brought it up earlier;
12 you're kind of lucky you weren't here last year,
13 because the acting Chancellor got skewered over
14 these labor costs on tracks, and I do want to
15 follow up and maybe drill down -- I'm glad you
16 mentioned big picture about aligning costs with
17 goals and budgeting, and I think that's
18 critical; but let's just take a look at this
19 year's budget.
20 The Governor proposed a $7-million
21 increase in this budget. Is that going to cover
22 -- and maybe we don't know this yet -- but is
23 that going to cover the additional costs of a
24 labor contract that's coming due here in the
25 next few months? 122
1 CHANCELLOR GREENSTEIN: The answer is, I
2 don't know, because I don't know what the labor
3 contract looks like.
4 REPRESENTATIVE GREINER: Well, let me --
5 because we just -- we have to try and figure out
6 how to come up with a budget here, you know, as
7 a Legislature, if the state -- let me just bring
8 this up -- if the state appropriations for
9 '19-'20 happens not to cover these increases,
10 and I think there's a possibility it won't, will
11 that further increase tuition at our schools --
12 I mean, because these are going to have to be
13 decisions made immediately this year; and we're
14 going to be getting the phone calls in our
15 office.
16 Is there going to be increased tuition,
17 or are we going to be able to necessitate the
18 additional cuts necessary immediately to be able
19 to do that?
20 So, like I said, I appreciate we're
21 looking big picture; but we have some immediate
22 needs we need to look at right now.
23 CHANCELLOR GREENSTEIN: Yeah. So I will
24 be honest with you now and forever. Next year's
25 going to be tough. We're expecting a 2-percent 123
1 further decline in enrollment. I don't think
2 we're done. I don't think the state is done,
3 demographically. I mean, I don't think we've
4 hit bottom.
5 As I've said before, we have to be super
6 careful about tuition. Because all the data
7 that I see, suggests that we're maxed out with
8 key -- large parts, key market. So if I do that
9 math, that's not great math, right? It doesn't
10 have a good result.
11 And the ROI that we're looking for from
12 shared services, the enrollment growth that
13 we're looking for from retention efforts in new
14 enrollment, you're talking two, three years out,
15 right? So the next couple years are really
16 hard, and that's true with or without an
17 increase.
18 REPRESENTATIVE GREINER: And, like I
19 said, I think everybody has an interest in
20 funding education; but it gets frustrating
21 when -- as I think my predecessor before had
22 made a comment, what percentage goes to salaries
23 and benefits; and it really doesn't -- you know,
24 it's not going to the schools and to helping the
25 kids as much as maybe it should be. 124
1 And I just want to -- I guess he's kind
2 of laughing at me there now, but --
3 Representative James, I guess it was; but
4 anyway, nonetheless, I appreciate the
5 willingness to take a look at this; because I
6 think it needs to be overhauled.
7 I think there needs to be -- we have
8 systematic problems with the whole system and --
9 but, you know, so there's long-term; but then
10 there's the short-term decisions we have to
11 make.
12 So I appreciate your time.
13 CHANCELLOR GREENSTEIN: Thank you.
14 REPRESENTATIVE GREINER: Thanks, Mr.
15 Chairman.
16 MAJORITY CHAIRMAN SAYLOR: We have two
17 people who have asked for a follow-up question.
18 I have Representative Topper first.
19 REPRESENTATIVE TOPPER: Thank you, Mr.
20 Chairman. And I agree with Representative
21 GABLER, your performance here today has
22 certainly given me faith. I don't know if it's
23 given me $37.7 million worth of it yet.
24 But if I could summarize, I think what
25 you're asking is, that's the money that you 125
1 think will cover the past mistakes but that
2 going forward won't be necessary.
3 First of all, is that a fair assessment?
4 We're trying to -- you know, get us through to a
5 point that you think real transformational
6 change can take place. Because that's what we
7 -- we need to know when we're appropriating
8 money --
9 CHANCELLOR GREENSTEIN: I know.
10 REPRESENTATIVE TOPPER: -- that that is
11 the goal that we're getting to.
12 CHANCELLOR GREENSTEIN: So this is a
13 cost-to-carry budget. It is built on an
14 internal budgeting process, which is imperfect.
15 It is imperfect, because -- for all the reasons
16 we've discussed. It doesn't have alignment with
17 goals. It's not done the way which allows for
18 complete transparency around tradeoff decisions,
19 etc.
20 So that's what we have in front of us.
21 It's a cost-to-carry budget which is -- and
22 factored into it, is a 2-percent enrollment
23 decline for in-state undergraduate students and
24 the thought that we really can't raise tuition
25 on students from families earning under 110,000, 126
1 which is where we're seeing the decline. So
2 that's what the budget we have looks like.
3 REPRESENTATIVE TOPPER: And we're doing
4 all of this -- when Representative Fritz asked
5 you the question, you gave him a very
6 straightforward answer: Is our market
7 oversaturated? Do we have too many colleges,
8 period, universities? You said, yes.
9 CHANCELLOR GREENSTEIN: Yes.
10 REPRESENTATIVE TOPPER: And, also,
11 you've said that it doesn't make sense to close
12 any of them. So my question would be is, Do you
13 agree with me, perhaps, we don't have too many;
14 perhaps, we have too many that are doing the
15 same thing? In other words, can we have some of
16 our universities, whether they be State System,
17 when we're talking about State System, we're
18 talking about PASSHE, that can be retooled so
19 that they can be functional and not doing the
20 exact same thing that everyone else is doing?
21 Because I think we do have an oversaturated
22 market.
23 CHANCELLOR GREENSTEIN: Yes, and the
24 infrastructure of a sharing system is agnostic
25 about who uses it and how. It drives down the 127
1 cost of use and delivery, right? So that you --
2 in a platform -- I think Amazon Web Services is
3 what's in my head when I think of the
4 infrastructure that a sharing system needs.
5 It has both back office and academic
6 programming functionality, and you can build a
7 university or a college or any amount of
8 educational program upon it, and you can -- and
9 it doesn't need only to be available to the
10 universities of a single system. It is a step
11 in that direction.
12 REPRESENTATIVE TOPPER: I appreciate
13 that. I know we have to move on. You and I
14 could maybe --
15 CHANCELLOR GREENSTEIN: I look forward
16 to it.
17 REPRESENTATIVE TOPPER: Or, look, Mr.
18 Chairman, maybe -- we keep talking about giving
19 more time. Perhaps, this fall we could have an
20 Appropriations Hearing somewhere specifically
21 focused on this. I think that would be helpful.
22 See how we're doing; make sure we can continue
23 that conversation.
24 Thank you.
25 CHANCELLOR GREENSTEIN: Thank you. 128
1 MAJORITY CHAIRMAN SAYLOR: We'll take
2 that under advisement, definitely. Maybe we'll
3 go to IUP.
4 (LAUGHTER.)
5 MAJORITY CHAIRMAN SAYLOR: Anyway,
6 Representative DeLozier.
7 REPRESENTATIVE DELOZIER: Thank you, Mr.
8 Chairman. I appreciate the opportunity to ask
9 another question. I know last time we were
10 focused on dollars. I'm going a little bit off
11 of that, the idea behind having safety on our
12 campuses.
13 One of the issues I asked your
14 predecessor and then I wanted to make sure I
15 asked you, as well, and drive home, I guess, the
16 importance of it and also get your feedback on,
17 is sexual assault on our college campuses and
18 the awareness of it and the environment.
19 I don't, by any means, mean to say that
20 our universities are responsible for the actions
21 of others, but we are responsible for the
22 environment that our students are in. And I
23 would ask, you know, as we well know, one in
24 five women on college campuses and one in
25 sixteen men are victims of sexual assault. Who 129
1 reports it and who does not makes it two
2 separate battles that we have to fight.
3 But many times what we have found, is
4 they will report knowing what they have seen go
5 before them. So that environment, their
6 receptiveness.
7 And, also, if you could speak to the
8 relationships with our university police and the
9 relationships they have with the municipal
10 police that surround them.
11 Because as you well know, a university
12 system is private. The municipal police is a
13 public and right-to-know, and I don't want high
14 numbers because high numbers certainly don't
15 indicate that there's high amounts.
16 It just means that campus actually might
17 take it more seriously, because they're willing
18 to identify the fact that they have an issue and
19 that we're dealing with it.
20 So numbers aren't my issue, just the
21 environment and our students. And having a
22 student that will be attending a state
23 university next year, I have heard it from other
24 parents; it's an issue that I'm very, very
25 passionate about as to protecting our students 130
1 with date rape and any other issues that go
2 along with that.
3 CHANCELLOR GREENSTEIN: Yeah. And, no,
4 obviously, to be that important, to be that
5 concerned; and safety is really paramount to all
6 of our universities. The safety, not only of
7 our students, but our employees.
8 I have been impressed, quite frankly,
9 with our university police. They are well
10 trained. First of all, they are professional.
11 Second of all, well trained in community
12 policing. My impression is that the
13 relationships with the community police are
14 good. They vary as everything else does across
15 campuses, but largely very strong.
16 Our policy environments seem to be to be
17 largely intact. The one thing I will report,
18 which I actually found quite remarkable, is that
19 the level of engagement among students on this
20 issue is high, in a very good way, and not just
21 on one or two universities; but it is a topic --
22 I did sessions with students at every
23 university. And really were led by them, topics
24 of their concern. I had a couple of STOP
25 questions. 131
1 It was interesting to me how often this
2 came up and how engaged students were. They
3 were typically in leadership positions, but how
4 engaged students were in communicating with
5 their faculty and their administration about
6 ways to improve and better align the various
7 services that exist at university levels.
8 REPRESENTATIVE DELOZIER: What were some
9 of those suggestions, if I may ask?
10 CHANCELLOR GREENSTEIN: A lot of it
11 focused on awareness-raising information, a lot
12 of support, victim support, as you'd expect.
13 REPRESENTATIVE DELOZIER: Well, knowing
14 where to go is paramount to being able to get
15 the resources that may be available and they may
16 not know about it. And many times, they feel
17 they're the only one, and they feel they won't
18 be believed.
19 But, you know, hopefully more and more
20 of that environment is shown that they will
21 stand behind and not hide behind numbers that
22 the university's willing to stand up for them.
23 I think that many times, you know, those
24 actions can be held accountable; but I would
25 just raise that issue. The buddy systems, the 132
1 training of RAs, and the ability for those
2 leaderships within the dorms, many times those
3 are where you find out what's happened. You
4 hear it, you talk about it, and somebody can get
5 some help.
6 So I would just raise that issue with
7 you. Thank you for asking those questions on
8 campus and having that dialogue, because the
9 more awareness we have out there -- also, are
10 the resources that are already in the community.
11 There are many, PCAR, and many of those
12 local, they're more than willing to help and
13 rather -- you know, not step on toes and the
14 university and its enclave and some -- if we can
15 work those partnerships, safety resources, as
16 well as get the services that are necessary.
17 So thank you very much.
18 CHANCELLOR GREENSTEIN: Thank you.
19 MAJORITY CHAIRMAN SAYLOR:
20 Representative Bradford.
21 REPRESENTATIVE BRADFORD: Chancellor, I
22 want to thank you again for the opportunity to
23 meet before the hearing. I was actually telling
24 my Committee members before the hearing,
25 actually, what an impressive job I think you've 133
1 done in a short amount of time, building trust
2 within the system and frankly with the labor
3 unions; and I think you should be credited,
4 frankly, for bringing a breath of fresh air.
5 And I think -- I'm glad to hear in a
6 bipartisan way, people recognizing the strides
7 you're making in being handed not the greatest
8 situation to deal with.
9 So I know everyone wishes you all the
10 best in dealing with the challenges,
11 demographic, tuition, student debt, labor
12 challenges, all that that's rolled into one big
13 sandwich for you.
14 I know I wish you well. The one thing I
15 want to say just in terms of bringing some
16 context. And, obviously, I think you have hit
17 the right chord about aligning costs and
18 revenue, and I think we should have a historic
19 talk about revenue, too; and maybe it should be
20 more than a footnote, but it's one that needs to
21 be added.
22 Obviously, revenues today, state support
23 is lower than it's been even a decade ago. So
24 when we talk about pressures on student debt and
25 we talk about pressures on unions and on the 134
1 workforce, I think we also need to look in the
2 mirror a little bit.
3 This Legislature has not an
4 insignificant amount of culpability in the
5 challenges we find ourselves in. Now, granted,
6 there are huge challenges in demographics that
7 is not unique to the State System, and they need
8 to be addressed.
9 And, again, I think you're the right man
10 for the job. But this Legislature needs to only
11 look at, I believe, page 22 in your book to get
12 a feel for what real cuts in higher education
13 look like and we need to have an honest
14 discussion with PHEAA coming in next about
15 student debt and what the role of pulling back
16 on higher-ed support looks like.
17 These challenges, again, would not
18 disappear if today we dropped a hundred million
19 dollars into the system and tried to hold the
20 system harmless in cuts that have been suffered
21 over many years, and we've obviously made some
22 progress in bringing revenue back into align
23 with the expenditures, as opposed to cutting
24 down to a number.
25 But give me an idea, in a very real way, 135
1 of what these cuts have looked like for PASSHE.
2 And I realize you've been here 5 months, but put
3 into context, when you look at -- at one point,
4 I guess, inflated in -- adjusted for inflated
5 dollars, at one point we looked like we were in
6 the ballpark range of about 700 million.
7 Today, we're almost -- well, I guess
8 we're at 468 million. You're talking severe
9 pullback in terms of revenue. What role does
10 that play in this?
11 We've talked about demographics, but
12 talk about state support and what that looks
13 like in other states, more progressive states,
14 what that looks like in terms of student debt
15 and the challenges you now face.
16 CHANCELLOR GREENSTEIN: Yeah. So, you
17 know, it shows up everywhere. Our student debt
18 load is high, significantly higher than the
19 national average.
20 It's significantly higher than that is
21 for our comparative -- if we compare ourselves
22 to the universities that teach to the master's
23 level, with one exception, being IUP, you know,
24 our students net average price is high.
25 The debt they graduate with -- I mean, 136
1 not just a little bit, significantly higher. At
2 the end of the day, these are policy choices;
3 and they will impact directly on the economy and
4 the workforce capability of the people of
5 Pennsylvania.
6 Those impacts will not be felt for 5 to
7 10 to 12 years. They will be felt -- my
8 hypothesis, they will be unfortunate and they
9 will be uncomfortable.
10 There are other hypotheses floating
11 around out there. We'll know in 10 to 12 years.
12 So, I mean, those are choices that will be made
13 in this building.
14 Let me, though, respond to this question
15 in a different way, having been to the
16 universities and actually seen what's actually
17 happening on the campuses. So you're really
18 talking about universities which have been doing
19 recession management for well over a decade,
20 right?
21 That means that I get my budget sometime
22 in July where I'm already into the fiscal year.
23 I don't know what my budget is, and I don't know
24 what my tuition is. That's part of our process
25 internally and just the way we work, 137
1 collectively.
2 And it means that I am now trying to
3 balance my budget because I'm required by law to
4 do that and I'm making the cuts necessary in a
5 very nonstrategic -- I'm not meaning our folks
6 are not doing great work, it's just that now
7 we're already in the financial year, it's hard
8 to -- so -- and that shows up on campuses. And
9 what really got to me was it shows up to
10 students.
11 Now, I have been -- I have lived through
12 the bottom falling out of market in 2008 to
13 whenever it was, the Great Recession in
14 California. And when the bottom fell out there,
15 it didn't just fall a little bit, it fell way
16 down and students never felt it, right, except,
17 obviously, in some increased tuition and
18 students didn't have places they would have
19 otherwise had because the state wasn't funding.
20 But the students who were fortunate to
21 be on a campus, they didn't know. They saw the
22 buildings, and they saw -- you know, with the
23 exception of their tuition incrementally
24 growing, which is a big deal, they didn't feel
25 the impacts. If you go to our campuses, it 138
1 comes out in every student session. And
2 students are transient. They're only there for
3 four or five or six years by design; and they're
4 picking up the impacts of these cuts, because
5 the food services aren't open as many hours as
6 they used to be. So if I'm an athlete, I can't
7 necessarily eat when I need to.
8 The trolley service that I rely upon to
9 move between different parts of the campus is
10 not available in the same way that it was,
11 because it has been cut. The student clubs
12 don't have anything like the kind of funding
13 they used to have, because enrollments are down
14 and these are student-fees driven.
15 They're noticing the deferred
16 maintenance. There's grass growing between, you
17 know, the steps up to the building, whatever.
18 That was, to me, unusual. I had never
19 experienced that.
20 And, obviously, our students have an
21 enormous amount of resiliency. Our faculty and
22 staff have an enormous amount of resilience, and
23 these are tight-knit communities and these are
24 tight-knit communities experiencing well over a
25 decade of what anybody else would assume in a 139
1 community is really the impacts of a prolonged
2 recession, right.
3 I mean, it's palpable when you visit a
4 campus. Visit a campus. Don't allow my
5 colleagues to take you to the best students or
6 the best faculty, just walk into the dining hall
7 and just open up a conversation and really try
8 to understand what is really beginning to
9 happen, whether with faculty or students, and
10 you will pick up some of these perspectives; and
11 that's what we're dealing with, yeah.
12 REPRESENTATIVE BRADFORD: Thank you,
13 Chancellor.
14 MAJORITY CHAIRMAN SAYLOR: Chancellor, I
15 think I want to follow up a little bit on
16 Representative DeLozier's comments. I do think
17 that in today's world, it's kind of scary to be
18 on a college campus from the point of sexual
19 assault today.
20 And I do think that it's a changing
21 world. As we know, let's be honest here,
22 there's a lot of drinking that goes on, on
23 college campuses, whether we like it, condone
24 it, it doesn't matter, it happens. Kids go away
25 from home and things happen. 140
1 But I do think that one of the
2 requirements maybe should be for all freshman is
3 to take, as we do here in the General Assembly,
4 not that that always solves the problem, is take
5 some kind of a training as part of the freshman
6 class to talk about sexual assault.
7 When people are drinking, they do stupid
8 things; and I would say that I think that maybe
9 it's not going to cure the problem on the
10 campuses, but I think it would go a long way to
11 make sure students understand responsibilities,
12 that stupid mistakes can be more dangerous to
13 you and where you end up in the end.
14 Enrollment, Chancellor, I believe your
15 system is the same as a lot of other systems.
16 In today's world, there's not as many children
17 out there, so I do believe that you're going to
18 see that enrollment decline maybe more, not just
19 because you're not a good system.
20 And you can see today, we all have great
21 pride in the schools that we go to, whether it's
22 Indiana University of Pennsylvania or it's
23 Mansfield or wherever. I do believe that the
24 General Assembly has lost faith in PASSHE
25 System. It's been coming for years. 141
1 That's the reason the funding hasn't
2 come forward. We've seen funding go elsewhere,
3 but we haven't seen it in the PASSHE System.
4 And until PASSHE restores its integrity with the
5 General Assembly, I think there will continue to
6 be struggles.
7 You know, it's not that we don't love
8 our schools where we came from. You know, when
9 I think about Millersville University having, I
10 think, one of the top three meteorology schools
11 in the country; Penn State teaching nuclear
12 engineers; one of the top nuclear engineering
13 schools in the country; and I can go on, to what
14 we're doing at a lot of our campuses, whether
15 it's IUP, Bloomsburg or Kutztown; and I've been
16 on a number of the campuses over the last couple
17 years. But it really comes down to
18 accountability.
19 And, for me, I was a poor kid. I went
20 to IUP, and that's what the State System was
21 created for: poor, low-income, middle-class
22 families. And it hasn't become that. In many
23 cases, you can go to other schools at a cheaper
24 cost than you can at our State PASSHE System.
25 And we have to get back to that if we 142
1 want the system to thrive. Or if I'm at West
2 Chester, and I'm not trying to put any ideas
3 into anybody's head at IUP or anywhere else, I
4 might say, Well, you know what, maybe I'm better
5 off by not being on the burden of the
6 universities that aren't doing as good.
7 And there's any number of reasons why
8 maybe they aren't doing good. And I'm not going
9 to go into that right now. But I do believe
10 that if we can get the PASSHE System, and I
11 believe that the faith in this General Assembly
12 earlier, is that the Board of Trustees has never
13 made the tough decisions; and we need that Board
14 to step up, make the tough decisions and put
15 this system back where it belongs, because it is
16 great a great system. It was created for the
17 right reasons, and it needs to continue for
18 those right reasons that is was originally
19 created for.
20 So I will leave it kind of there. I do
21 think that, as we move forward, we will continue
22 these discussions, as I think Representative
23 James or Representative Topper talked about, and
24 see what we can do together to work together as
25 a team. 143
1 Chancellor, I thank you and the
2 university presidents for their time being here
3 today, as well, and look forward to working with
4 you.
5 CHANCELLOR GREENSTEIN: Thanks so much.
6 Thank you.
7 (Whereupon, the hearing concluded.)
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1 C E R T I F I C A T E
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3 I hereby certify that the proceedings
4 are contained fully and accurately in the notes
5 taken by me on the within proceedings and that
6 this is a correct transcript of the same.
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9 ______Tracy L. Markle, Court Reporter 10 Notary Public
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