COMMONWEALTH OF PENNSYLVANIA
HOUSE OF REPRESENTATIVES COMMITTEE ON APPROPRIATIONS
In re: 1998-1999 Appropriations Hearings Penn State University
* * *
Stenographic report of hearing held in Majority Caucus Room, Main Capitol Harrisburg, Pennsylvania Tuesday March 3, 1998 1.2:50 p.m.
HON JOHN E. BARLEY, CHAIRMAN Hon. Gene DiGirolamo, Secretary Hon. Patrick E. Fleagle, Subcommittee on Education Hon. George Kenney, Jr., Subcommittee on Health & WeLfare Hon. James C. Lynch, Subcommittee on Capital Budget Hon. Dwight Evans, Minority Chairman
MEMBERS OF APPROPRIATION COMMITTEE
Hon. William F. Adolph Hon. Joseph Preston, Jr. Hon. Matthew E. Baker Hon. Ron C. Raymond Hon. Teresa E. Brown Hon. James R. Roebuck, Jr. Hon. Lita I. Cohen Hon. Samuel E. Rohrer Hon. Anthony DeLuca Hon. Stanley E. Saylor Hon. Stanley J. Jarolin Hon. Jere W. Schuler Hon. Babette Josephs Hon. Paul W. Semmel Hon. Frank LaGrotta Hon. Jerry A. Stern Hon. John A. Lawless Hon. Stephen H. Stetler Hon. Keith R. McCall Hon. Jere L. Strittmatter Hon. Phyllis Mundy Hon. Thomas Tangretti Hon. Steven R. Nickol Hon. Leo J. Trich, Jr. Hon. Jane C. One Hon. Peter J. Zug
ALSO PRESENT:
Michael B. Rosenstem, Executive Director Mary Soderberg, Minority Executive Director Hon. Lynn B. Herman
Reported by: Nancy J. Grega, RPR 2 INDEX TO WITNESSES
Witnesses: Page
Dr. Graham Spanier, President 3
Dr. Steve McCollister Evarts, 63 Senior Vice-President for Health Affairs, Dean, and Chief. Academic Office of Penn State - Geismger 3 CHAIRMAN BARLEY: I'd like to reconvene the hearing. We have before us the budget presentation of Penn State University. We have the President of the University, Dr. Spanier, welcome, and we will now give you an opportunity to have a very brief opening statement. If you have something formal you would like to present for the record, that's fine and you now have the floor. DR. SPANIER: I'm joined by a number of my colleagues and we appreciate the opportunity to discuss our 98-99 budget request with you. As the Commonwealth's Land Grant University and Pennsylvania's largest university, Penn State reaches all of the 67 counties in the state that is not only large and diverse but also very influential in our nation's progress. Pennsylvania has a continuing responsibility to be a leader among the states. An important part of such leadership is a nationally competitive public higher education system. Recognizing this, Penn State joined this year with Pennsylvania's other colleges and universities to work together in an effort to allow us to become more competitive nationally and also to meet the increasing demand for qual ity education in Pennsylvania. We are eager to work together to develop an increasingly educated and able 4 populous; research necessary to develop a new knowledge across a wide and increasing range of areas, with a special focus on business and industry; and a network of services designed to make life better for people who live in Pennsylvania. Our appropriation request consists of two parts. The first is for funds to meet basic needs such as increases in fuel and utilities, employee benefits, and salary adjustments. These funds will help protect our collective investment in Penn State. The second part of our request seeks additional funds to make us more competitive nationally at Penn State such as additional funds would be invested in new faculty positions to reduce class size; information technology and libraries; the life sciences and other critical academic program priorities including children, youth and families, materials science and environmental studies, deferred maintenance, agricultural research and cooperative extension and the Pennsylvania College of Technology.
As many of you recognize, today's work force requires employees who are skilled at problem solving, critical thinking, team work, communications and the ability to learn continuously. We develop these skills through educational programs ranging from the associate 5 degree level to the Ph.D. and first professional degrees. Our students do well in the workplace. Penn State works hard to eliminate financial, geographic and programmatic barriers to quality higher education. Yet we must all have a strong partnership with the Commonwealth to continue the tradition of excellence and to assure access to higher education for the people of Pennsylvania. An increased investment in Penn State by the Commonwealth will return far more value than the dollars involved. In this era of attention to the important role of our nation's research universities and economic development, there is the disturbing possibility of forgetting that places 1Lke Penn State exist as well to foster much that cannot be measured in dollars and cents. I pledge that the members of this academic community will be good stewards of the funding our University receives, and that every part of the Penn State community will work to assure a substantial return on this investment. Thank you.
CHAIRMAN BARLEY: Before we continue WLth recognition of members on the panel, I would just 1Lke to note the presence and the attendance of Representative Herman who is the legislator — that his legislative district is where Penn State is located. Representative Herman, weLcome. 6
I now recognize Representative Evans for the opportunity to ask questions or make comments.
BY CHAIRMAN EVANS:
Q I'd like to just welcome you, Mr. President.
A Thank you.
Q One question I would like to ask. I see this article that you have on Penn State focusing on high tech workers. Is that something that you also are doing in the area of manufacturing; in terms of Penn State, any type of focus in terms of manufacturing?
A Both educating workers in the information technology area that you refer to and educating future workers in manufacturing and other areas all continue to be very high priorities for Penn State. The manufacturing area is not growing as rapidly but certainly we are producing quite a number of our graduates in our College of Engineering, in particular at the Pennsylvania College of Technology, at both the associate and baccalaureate level and in the associate degree programs where we have 7,000 students enrolled in the technical areas at many of our other campuses that continue to be a high priority for us. We are very heavily involved in that area and our research programs as well. We operate PENNTAP/the Pennsylvania Technology Assistance Program. We are involved in the Ben Franklin 7
Research and Technology transfer and have a number of programs that are related to manufacturing in the state.
The article that you referred to points most directly to information technology where there are about 345,000 vacant positions in the United States right now and quite a good number of those are in Pennsylvania. It also is a very great potential growth area for
Pennsylvania and we have a study underway to see if we can be helpful by increasing educational opportunit Les in that area. Just to make one final comment about our efforts in producing future workers in manufacturing, information technology and other areas, I might point to this publication that I brought along with me just hot off the press and it's on its way to all the members of this Committee and your other colleagues in the
Legislature. It's called Integrated Impact. It's a summary of our efforts in this area of technology transfer and how Penn State, through its teaching is assisting business and industry in the state, ma;ior employers, to help them move along and it's really a very impressive summary of some of those activities and we'd be happy to share that with you.
Q Thank you, Mr. Chairman.
CHAIRMAN BARLEY: I now recognize
Representative Lawless. 8
BY REPRESENTATIVE LAWLESS:
Q Thank you, Mr. Chairman. Welcome, President
Spanier.
A Thank you.
Q As I said last year and I'll continue to say,
I'm concerned about the growth of Penn State. While it's a fine academic university and I would be the first one to support the academic part of that university, the learning part, the teaching part of that university, and
I'm not so sold on the research, but there is probably some money that should be put for certain research projects. I have great concern this year as we continue to expand Penn State and what I believe is a monopoly of
Penn State, a monopoly to Central Pennsylvania and a monopoly to this state. Pennsylvania is a land grant institution with a charter. If you could briefly state to me what its mission statement says about getting into the other areas, please explain to me why Penn State
University, a publicly funded university receiving hundreds of millions of dollars, the taxpayer's dollars, taxpayers who own businesses and pay taxes, is getting into selling clothes, tennis shoes, lamps, books, restaurants, hotel businesses, expanding their medical ventures, buying medical practices, getting into the retirement homes, retirement villages, daycare, 9 catering, health clubs, spas; enough is enough. You are directly competing in my opinion against the taxpayers of this Commonwealth and you are subsidized by these taxpayers while you are putting these taxpayers out of jobs. Would you please respond'
A Addressing the first part of your question,
Penn State was founded in 1855 and since that time and since our designation as a land grant institution, our mission has been to serve the people of Pennsylvania, to provide educational services in the areas relating to three principal functions: teaching, research and service. Our goal for Penn State is to be the top institution in the United States in the integration of teaching, research and service and we think we do a pretty good job of it. In order to carry out those functions, we do end up providing a broad range of services to our students and our constituents.
We are concerned about the growth of Penn
State as well because we can't be all things to all people as much as we try to be and the problem that we are facing at Penn State in that regard right now is that we have become the most popular university in the
United States. We have more students applying to Penn
State than any other university in America. We will this year have somewhere in the neighborhood of about 10 75,000 applications to the University. So, we are actually trying to control our growth, maintain the quality of what we are doing, operate efficiently and keep the growth to a level that we can manage. The last area that you mentioned is a concern that we appreciate and that is developing the right balance between the services that we need to provide our self and the services that are rightly provided by others. Now, some of those areas that you mentioned we are not involved with. We don't run some of the types of businesses that you mentioned. We receive a royalty on clothing that, for example, has the Penn State name on it but we don't ourselves sell clothing. We don't ourselves — Q You don't sell clothing at the Penn State Bookstore'' A We don't operate the Penn State Bookstore. That's operated by the private sector on a competitively bid contract. That contract right now is held by Barnes and Noble but, for exampLe, if they sell a sweatshirt that has Penn State written on it, we would receive an eight percent royalty on that and we put that back into scholarships at the University and the operation of some of our self-support.
Q Let's limit ourseLf to some of the things you 11 are involved in because I know our time is limited and we are way behind. Do you have a restaurant? Do you have a hotel? Do you have medical ventures?
A We operate hospitality services which includes a conference center-hotel called the Penn Stater and the
Nittany Lion Inn. These hotels and the restaurants that are associated with them exist principally because of the very substantial conference and meeting activity that we have at the University. That's a case where we would feel that it's important for a university of our size and scope to provide services like that.
The Penn State-Geisinger Health System wh Lch is a separate employer operates health care services of the type that you described. Penn State Univers Lty operates a College of Medicine and, of course, there is a relationship in that our medical students and our residents associated with the College of Medicine have placements and have part of their instruction in clinical settings operated by the Penn State-Geisinger
Health System. The Penn State-Geisinger Health System receives no money whatsoever from the Commonwealth of
Pennsylvania. It operates completely on a self-support basis independent from Penn State. The College of
Medicine which is providing educational services to our medical students and to graduate students there does 12 receive a modest appropriation but it represents about five and a half percent of the total budget of the medical school.
CHAIRMAN BARLEY: I now recognize
Representative McCall.
BY REPRESENTATIVE McCALL:
Q Thank you, Mr. Chairman. Welcome, President
Spanier.
A Thank you.
Q A great deal of discussion on this Committee centers around belt tightening and that has been a subject with the state system of higher education as well as the state-related over the last five to ten years where we have really started to talk about belt tightening at the various institutions and I'm wondering if you can cite for this Committee what Penn State has done in that regard as far as what are you doing to operate more efficiently and can you cite some examp] es to the Committee?
A Yes. I mentioned the general theme in my opening remark and, of course, that only scratches the surface. For the last several years Penn State has been involved in a very comprehensive belt tightening process. In fact, we think it's something of a model.
We are not sure that there is any other university that 13 is doing as much of it right now as we have. It's resulted in the elimination and consolidation of some programs. At the same time, of course, we are addmg programs where we think the need exists within the Commonwealth. We have a University Planning Committee which is chaired by our Executive Vice President and Provost, John Brighton (phonetic), who is with us today. It has representatives from all sectors of the University and they monitor this belt tightening process overall. Each year they have budget hearings for all of the different units within the University. We also have a quality program, a Quality Management Office within the University whose function is to look for areas of savings, to put staff in different units through a process to see if they can operate more efficiently. This is something that has been a great success for us within the University.
Under the purview of our Senior Vice President for Finance and Business who is also here with us today we do a considerable amount of bench marking. We have comparisons on almost any variable you can mention wath other Big Ten Universities and we exchange a lot of data on these bench marking variables with 20 some members of AAU, the Association of American Universities, what we consider peer institutions, and in most of these 14 different arenas we feel we are doing quite a good job in the belt tightening area.
Q Just shifting gears, and I did read the article that was in the Philadelphia Enquirer the other day, Penn State focusing on the high tech workers and in the article it says you created a stir among government officials and business leaders in that you are considering creating a School of Information Science.
I also read that you graduated 144 students with bachelor's degrees in Computer Science and before they graduated, they had jobs.
A Yes.
Q That's an encouraging statistic. I'm wondering with the consLderation of the School of
Information Science, how does that compare with Computer
Sciences? Aren't we training students right now in that field, just to elaborate a little more''
A Yes, it's an excellent question. We are admitting each year about 165 students into our Computer
Science Department. The Computer Science and
Engineering is one department within the College of
Engineering that is in a general way related to information technology. We also have a minor in lifenagement Information Systems in our College of
Business Administration which is completely mobbed with 15 students in other majors. We have a lot of students at the Pennsylvania College of Technology who are working in this area and students in other majors at Penn State and our College of Communications and in other programs that are doing work related to information technology. What we are finding is that the typical graduate there is finding work well before they graduate. They have a job waiting for them when they finish. We are only scratching the surface. We, as I think the article mentioned / we brought into our campus 14 consultants from some of the major employers in America asking them to advise us what universities weren't doing and should be doing and what they needed for the future of their industries. We then followed that up with another meeting of strictly Pennsylvania-based companies of 12 to 14 representatives who came in and asked them similar questions. What we are finding is that we are only scratching the surface of the need. Higher education as a whole is not stepping up to the plate and meeting this demand. The industry itself is having to get into, you might say, starting their own universities which they don't want to do. They would prefer us to provide these services and we think it's our responsibility to do so and we are confident that the jobs out there will be waiting for graduates in this area. Many of those who 16 participated in that discussion have already followed up with us and told us they are willing financially to assist us in launching this school. They WLII contribute to it. They will work with us on internships, co-op, placements, summer employment. They will hire our graduates. They are very interested in working with us in the development of the curricuLum building it from the ground up. So, it's a very exciting prospect for us.
Q It's very encouraging and I wish you well and
I hope you do pursue it aggressively because it seems to me that it is fertile ground and that we certainly should be capitalizing on that.
A Thank you very much.
Q I thank you and my time is up as well.
A Thank you.
CHAIRMAN BARLEY: I now recognize
Representative Zug.
BY REPRESENTATIVE ZUG:
Q Thank you, Mr. Chairman. Welcome. I represent Lebanon County which is next door to
Geisinger-Hershey Medical Center today and I got contacted a couple weeks ago by two members of the maintenance group that works at Penn State-Geismger and they came to talk to me about, I guess, a sort of an 17 unusual situation. I'm a tenant in my District Office.
When my roof fell in at my District Office, I called my landlord and said, fix my roof. They told me that Penn
State still owns the Hershey Medical Center yet the maintenance employees who used to work for Penn State now no longer work for Penn State and this is a sort of unusual relationship with the maintenance operation there in that the employees are Geisinger employees rather than Penn State. Can you talk to me about that and comment why that's happened and have we violated the usual landlord trust agreements'
A I think the information /ou describe is correct. Penn State does own the Milton S. Hershey
Medical Center but we lease out the buildings to the
Penn State-Geisinger Health System that provides us a rental payment because they are in effect the operators of the facility. They provide the clinical services there and as providers of the clinical service, they are also responsible for the maintenance and upkeep of the facility including the custodians. I will say, however, that my understanding is that when the employment status transferred to the Penn State-Geisinger Health System through a very amicable agreement with the Teamsters
Union which employs those maintenance workers, the contracts were honored by the Penn State-Geisinger 18
Health System so that those individuals retained in their contract the same range of pay and benefits that they had before that change.
Q That actually brings me to the second portLon of my question. I was actually told that that reaLly wasn't the case. What happened with the contract, it turned out to be that there was a contract currently going on with the Teamsters. What happened was the
President of the Teamsters who is located up in State
College, agreed to change the contract without a general vote of the membership in Hershey and what happened is benefits such as the ability to transfer from Hershey-
Geismger to Penn State or another Commonwealth campus that the University maintains wasn't allowed to continue anymore. So, I was a little curious as to how a contract could be changed in mid-stream without a general vote which generaLly happens when it changes?
A I'm not familiar with what might have happened behind the scenes within the Teamsters organization but what you are summarizing certainly sounds very plausible and what I can do is ask someone from Penn State-
Geisinger or their governmental affairs person to be in touch with you and to summarize the current status of that situation. We'll certainly follow up with you.
Q Thank you very much. Mr. Chairman, could I 19 have a question on Round 2. I have a different area. CHAIRMAN BARLEY: You have a minute or more. REPRESENTATIVE ZUG: It•s a different sort of topic. CHAIRMAN BARLEY: I recognize Representative LaGrotta. BY REPRESENTATIVE LaGROTTA: Q Thank you, Mr. Chairman. Thank you, Mr. President, for being here. I'd like to ask you two questions and the first one focuses on what Mr. Lawless was talking about in his first round of questioning, the diversity of the interest that Penn State is involved with. Can you tell me what impact Penn State has on the economy of Central Pennsylvania in terms of the people it employs, the money it contributes to the community at large? A Well, it certainly is very substantial as Representative Herman can probably testify. We are, of course, the largest employer in Central Pennsylvania. So, for starters, we make very direct economic impact contributions through our employees' spending; they engage in the taxes; they provide housing and so on. In addition to that, there are a lot of other people whose livelihoods come about because of the existence of a major enterprise like Penn State in the region and the 20 third thing I would mention is that because of Penn
State's very substantial involvement in research, technology transfer and public service, we attract a lot of other industry, not only to Central Pennsylvania by the way but to other locations where we have Penn State campuses as well. They are companies that are locating at Penn State for that reason. The research part may be one of these entities that fall withan the purview of your question and Representative Lawless'. It is the
Penn State Research Park but what we do there is build facilities that are then paid for and leased by the tenants. We have a new building going up in the
Research Park right now that will be completely supported by start up companies and other companies who want to locate there because of the expertise at Penn
State that can be transferred to help their industry grow. So, I think the direction, the causality here is much more in the direction of Penn State's existence supporting business in pr Lvate industry than it is Penn
State competing with private industry and taking away opportunities that might more probably be in the private sector.
Q My point, Mr. President, is I have parts of two of your extension campuses in my district, Penn
State Beaver County and Penn State Shenango Valley, and 21 the Chambers of Commerce and the private businesses, especially in Beaver County but also in Shenango Valley, are extremely supportive of keeping those extens Lon campuses there because of the fact that they spur the development of outside private businesses and I wondered if that was your experience as well. A It absolutely is and those campuses are very good examples where they are in areas that economically have had some ups and downs in recent years and, as> I visit those campuses and meet with the local Chambers of Business and Industry, they are very clear of the importance of those campuses to providing future workers, keeping their most talented young people in the area and spurring economic development. We are very interested in seeing that continue. In fact, at those campuses and many of our obhers, the largest growth area for Penn State is not undergraduate resident traditional age students. It's in the education of non-traditional students, students who are place bound, who are older than average, who already have jobs and families and might be working part-time and want to extend their educational opportunities. It's also in the area of continuing and distance education, people who are already employed and already had their education and want to move up to the next level. So, at those two 22 campuses and many of our other Commonwealth campuses, those activities are very important and I do appreciate your mentioning them. Thank you. Q Well, that will be my last question. Mr. President, will there be an increased emphasis on the extension campuses? Obviously, they are to me and the people I represent. Will we see increased utilization by the main campus of these extension campuses? Will that be part of your budgeting and planning for the future? A Yes. The largest areas of growth at Penn State, if I had to priorLtize them in terms of what I see down the road, at the top of the list I would put continuing and distance education. Next on the list I would put increases in the upper division, the upper division enrollments at the campuses that you cite. We do not expect to take any greater share than we currently do of the market of 18-year-olds coming out of high school. We think other colleges and universities, public and private in the state, are prepared to do that and have told us they want to do it. What we would 1Lke to do is provide opportunities for Penn State freshman and sophomores to continue their education as juniors and seniors at the Penn State campus of their choice and for place bound students in particular that is going to 23 be at those campuses. We do not expect to grow significantly at our University Park campus in State College. We are pretty much maxed out there and if there is going to be any growth in resident education, it really needs to be at our other campuses. Q Thank you, Mr. Chairman. Thank you, Mr. President. CHAIRMAN BARLEY: I now recognize Representative Semmel. BY REPRESENTATIVE SEMMEL: Q Thank you, Mr. Chairman and President. I have two or three questions and I think all of them will give you an opportunity for a brief response. I guess I'm going to pick up on the first one, extension branch campuses, and combining it with administrative units. Has this program moved along rather we LI and what would you care to mention on that particular issue?
A Yes. You're referring to the recent reorganization? Q That's correct. For example, Berks, Lehigh Valley campus and so forth? A Yes. I think it's gone extremely well. We have done precisely what we said we would do. We, on the one hand, wanted to control the growth at Penn State campuses. We said we would keep that growth to between 24 one and a half to two percent. It's burned out to be 1.7 percent. We said that we wanted to decrease the number of freshm On coming into those campuses and focus the growth in upper division programs so that a Penn State student could finish a Penn State degree at a campus of choice while preserving their complete flexibility if they so choose to come to the University Park campus and we have begun to develop those progrcims in areas of need for the communities where they cire located and that's been very successful and we have been doing that in partnership with the communities. It's also, therefore, helped and we think will help down the road to keep open spots for students who do want to start at the University Park campus of Penn State. Something must be working right, we think, because at this point, at yesterday's weekly statistics in our admissions cycle compared to the same time last year, it shows that we have 4,000 additional applications, 4,000 applications up from the point where we were last year yet we are delivering on our promise to keep the enrollments of those new freshm Q Very well. I did see in the Philadelphia Enquirer the article they were talking about a little earlier on information technology. Unfortunately, the hour was late and I didn't read it. I happen to serve on a Committee of Telecommunications and Information Technology. The question, I guess, I might ask you, are we going to combine the various disciplines and sites within the various departments and colleges when you create a new college and will you come before us with a specific request or are you going to try to meet those demands in house? A I have already spoken with the Governor about our plans in this area and he's been very encouraging. We would indeed like to come before the Legislature and receive a modest appropriation that wiLl help us launch this new school. However, we don't think it's realistic given all of the completing needs that exist within the Commonwealth right now to expect that this would be fully funded from legislative appropriation. So, we are anticipating from the beginning that like some of our other high cost programs, there might be a tuition differential that students coming into these new programs would be expected not only to pay the full going rate of tuition but perhaps even a little more and 26 we have launched this discussion from the beginning in partnership with private industry, saying to them that we think it' s only possible to do this if they are willing to help and, as I said, we have had a number of indications that they are willing to help. We think with some assistance from the state, some assistance from industry and the participation of the students, that we can launch some new programs. Now, what we are looking at right now, we expect to have a report by the end of this academic year is what the configuration of the new school would look like. Would we fold in all of our existing programs and then expand from there or would we keep computer science and engineering in the College of Engineering, for example, and focus the new initiative on an area that they are telling us all around the state and nationally is greatly missing and that's not so much for computer programmers per se. It's not so much for computer engineers. It's for the type of professional that understands something about both of those domains. It is actually mostly focused on the business enterprise, very strong in communications, how to deal with people, thinking about systems, thinking about how to apply these technologies to solving business needs. We do have in mind having this program be statewide in that it 27 would be deployed not just at our University Park campus but at all of our campuses because we have heard across the state and all of our communities that they need that in their community. It would have a strong distance and continuing education component and it would be at the associate degree level all the way up to the doctoral level as appropriate to meeting the needs of the state and beyond. Those are some of the features that are under discussion for this school right now. Q Do I have a moment for a final question? Over the last several years on requests for agricultural cooperative extension funds we begin to see agriculture drop and we see cooperative extension funds requested. Would you care to comment on that particular issue? A I can't overemphasize the importance of this Legislature continuing to understand how important agriculture is to the economy of Pennsylvania and as the Land Grant University, if we don't properly support the activities of our College of Agricultural Sciences, this state will not be able to maintain it's leadership in agriculture. We have clearly been through some ups and downs in that area. Now, as all of you know, we hcive two separate line items within the Penn State budget that are separately appropriated for agricultural research and the cooperative extension service. We hcive 28 not received any increase in those budgets for several years. The year before last we did receive an extraordinary 11.4 percent increase to make up in part for what had happened the previous six years and last year we were again back down to an inflationary type of increase which did not put us any further behind but did not help us make things up. To put that in very concrete terms, if you go back to 1990, beginning of this decade, between then and now we lost a total of L63 positions in agricultural research and cooperative extension. With that increase two years ago, we were able to recover 57 of those lost positions but we are still at a deficit from where we were at the beginning of the decade at more than 100 positions in our agricultural enterprise. We have three components. We have the instructional programs which are folded into the rest of Penn State's main budget. We have the cooperative extension service which we have reorganized and is going great guns right now and can do wonderful things for this Commonwealth if we properly support it and we have our agricultural research programs. We really need to pay attention to those two line items and I would ask you to see if you could find your way clear to meeting the reguests we have made in those two 1Lne items which is eight and a half percent this year rather 29 than the 3.25 percent that is currently on the table. It will help us take this second big step in recovering the lost ground and it will pay off, I'm quite sure, for what we are able to do within Pennsylvania. Q Thank you, Mr. President. Thank you, Mr. Chairman. BY CHAIRMAN BARLEY: Q Mr. President, I was intending to hold any comments I had until the end but the fact that Representative Semmel raised the issue, I did just want to make a note on the extension, the Ag research and Ag extension. That's very important to the county in the area that I represent and as someone who has a lifelong career in agriculture, I have gained a very spec Lai appreciation for what the extension service has provided across this country and I have said many times that the single, not the only, but it's the single greatest reason that we are the best fed nation on the earth is because of our land grant universities and extensions and by the way, we are today only 11 percent of our disposable income is now used to purchase food. That's an average across this nation. It's the lowest percentage of our disposable income that was ever needed for purchasing food. It's down from 19 percent of about 15 years ago. The point I want to make, however, that 30 was a little commercial, I guess, for the prosperity of agriculture and the efficiency and I have always felt the system, the land grant system, that does the research and it's very sound research and the extensLon service that provides the delivery mechanism to educate producers. It really fits very well together and has been very effective and I had this conversation WLth your new Director of Extension. Is it Ted Alder (phonetic)? A Yes. Q And I have a concern and I want to express that to you as well. As we're moving into the 21st century, agriculture is consolidating, it's changing, it's much larger than it was when it was the old McDonald's farm and you have sound research. It's in areas of biotechnology, it's gene splicing. I mean, you are doing things that are phenomenal and there are certain segments of our population that take issue with the size, the complexity and the science behind some of our modern agriculture. Penn State or, and our land grant universities, historically have prided themselves in the education component and they, I think, now view their role a continuing role, maybe a broader role of educating not just production agriculture but consumers and that is a component of it but they want to educate 31 consumers about some of the new technologies. I think we need to take that a step beyond and I would never want to see extension get into any area of being involved in law enforcement and environmental issues or in any other policing type work. I'm not advocating that. But where controversies will exist and as Pennsylvanians become somewhat more urbanized, there will be some conflicting uses, whether they are environmental, whether they are in the area of biotechnology, the whole discoveries that have made the production of food and fiber more efficient. I would just encourage the University through their extensLon service to consider being a bit more proactive and, yes, a bit more definitive, whether it is on behalf of modern agriculture at a township zoning meeting to say this is proven technology; we have spent five years, ten years through our research proving that this is, whether it's in the area of nutrient management, whether it's in the area of biotechnology or any other area, to maybe be a bit more affirmative or proactive in defining where the line is and, again, I'm just presenting this to you more as a point of view and a comment and something I'd like you to take back. I've already shared this with Ted and I think it's a new role for our extension service and part of it is because we are down — this is nationwide. 32 I'm not certain what it is in Pennsylvania, slightly under two percent of our population actually live on farms. It's slightly less than two percent that are actually actively engaged in production of food and fiber. Now, 20 percent of our population in Pennsylvania is in the food related industry. So, there are people in my generation, many of them can at least say, yes, my grandfather had a farm. They understood what it was like to be out there. Now, there is a very very small percentage of our population that actually understand some of these side effects that accompany modern agriculture and that's where, again, the only thing I'm asking you is when you have that so Lid research, be willing to stand firm on behalf of agriculture and say, this is good, this is good technology. It's sound and we defend it. A I couldn't agree with you more on so many of the issues you have just put on the table. I'll just make a couple of comments. When the United States government passed the Smith-Lever Act creating the cooperative extension service nationally, we saw a wonderful model, a partnership of county government, state government and the federal government which has served this nation very well. I think the cooperative extension service is one of the most remarkable 33 inventions in American history and the Hatch Act which established the agricultural research service, the agricultural experiment stations as they are often known have really made, I don't think anyone would dispute, has made American agriculture what it is today. We do need to continue with that tradition and you're guite right in observing that Colleges of Agricultural Sciences are now broadening their scope to look at the entire food system. Certainly, production agriculture continues to be at the heart of it but it is so much more today. We are very concerned, for example, with nutrition issues. We're very concerned with children, youth and families and how families fit into this entire system and we do expect our extension agents in the future to be more responsive to the broader range of issues and to be more proactive forces in their communities. You may know that we — I know you are aware and let me say for the benefit of others here that we have in the past year reorganized our cooperative service to do a couple of things. One, while continuing to be rooted in the College of Agricultural Science, we have opened up a window of opportunity for our extension agents and our extension specialists to be involved with all of the colleges at the University. So, we have integrated our cooperative extension service into the 34 larger mission of outreach at the University. We hope that our extension agents will in the 67 counties where they are located be able to tap into a broader range of University resources and to use them for the benefit of their communities and I think this is what you are getting at and it's something that we would be very supportive of. We don't want them to be in a positLon of making policies for pushing a particular line of research but their job is to put the information on the table, to open up avenues of discussion, to deploy all of the University's resources at the local level in those counties. If they can do a better job of that and look for opportunities to get more involved in the activities of their communities, we would be very supportive of that. Q Thank you. I now recognize Representative DeLuca. BY REPRESENTATIVE DeLUCA: Q Thank you, Mr. Chairman. Mr. President, do you track the progress of your graduates as far as when they graduate and what part of them end up in careers that require college educations and what part of them fall into the other categories that don't require college educations? A Yes, we do. We have a very large and 35 effective Career Development Planning and Placement Office. Among the things that they do is to monitor data, monitor trends in different professions where employment opportunities are. When students are somewhat undecided about their career plans or their major, they have everything from computer programs to counselors that help the students make those decisions. They help them through an interview service get jobs and then after graduation, we do a post-graduation survey. We track our alumni shortly after graduation and then over time to see what their employment situation is. If I'm remembering the numbers right, in our immediate, our most recent immediate post-graduation survey, we found that 14 percent of our students were in graduate or professional school post-baccalaureate, three percent were unemployed and the rest were empLoyed. Now, you might get into different views depending upon how the survey is worded and how a student, a former student is answering this survey, the extent to which their major matched up with the job they were in; whether it was directly applicable or not but our employment rates are very very high and they are as high now, of course, as they have ever been because of the general state of the economy. So, we feel we have a pretty good tracking system and I'd like to say that we judged the quality of 36 our education and the success of our University more than anything else by the success of our alumni five, 10, 15, 20 years after they graduate. So, we think we are doing a pretty good 30b there and, of course, y°u also want as an educator, I want to strike the right balance between trying to properly advise the students and to channel them into jobs and occupations that match up well with their trammg but at the same time preserve the freedom that we think a student should have to choose a major that might not have a job right at the end of the line. If an English major wants to study literature but is going to end up in a business-related job, we think that's all right as long as they understand that that might be the marketplace they wall be in afterwards. Q Let me ask you one more question pertaining to your feelings. Do you believe we do enough education as far as our high schools pertaining to steering students to, instead of steering them to higher education, maybe looking at skilled labor because in the 21st century we are going to be short of skilled laborers where the jobs are going to be"5 Are we doing enough in the career advisement in our high schools to lead these individuals in the right direction or are we just strictly going into higher education and we haven't changed our ways in 37 society of thinking? A On the whole I would have to say that we are not doing a good enough 30b at the high school level in that regard. One indication of this is how many students we see coming to the University that reaLly don't know where they are headed and they are probably at the University for no reason than that was the next thing they were supposed to do. Pennsylvania, as you may know, ranks near the top nationally in the number of high school graduates that it sends on to colleges and universities, 70 percent, one of the highest in the country. Now, we do find, despite what I just saLd, that this is probably changing. I think increasingly students are coming to Penn State with a clearer impression of where they are headed and what they want to do. One of the reasons is that students are becoming more consumer oriented because tuition is high and the cost of a higher education is great and their family is having to make some sacrifice. They are thinking about this more seriously than they ever have. We have 8,300 students at Penn State who are in associate degree programs. I mentioned earlier that 7,000 of them are in technically oriented associate degree programs. We a]so this year passed 5,000 students at Penn College, at the Pennsylvania College of Technology, where a 100 percent 38 of the students have employment waiting for them when they graduate and where most of those students are coming there, still about 85 percent of the students at Penn College for a two-year degree that is very applied. So, within the Penn State system, it's happening quite a bit. There still are students coming from high school who aren't sure where they are headed. That's not all bad because some students need the college experience to find their way and by the time they are done, they have found it. So, I think we are not doing as good a 30b as we can in high school, letting the students know what the options are that are out there. We can do a better 30b. It is getting better but we have a ways to go. Q Thank you, Mr. President. Glad to hear what you just said. Thank you, Mr. Chairman. CHAIRMAN BARLEY: I now recogmze Representative Adolph. BY REPRESENTATIVE ADOLPH: Q Thank you, Mr. Chairman. Good afternoon, Mr. President. A Good afternoon. Q Your budget materials indicate that Penn State will have over 300 million dollars in research expenditures. I'm not quite sure how I could explciin that to my constituents, whether this is a good thing or 39 a bad thing or does this take away from undergraduate programs? How much revenue does this research program bring in? Could you expand on that? A Yes. Well, here's how I would explain it to your constituents. I would say, it's a wonderful thing. They should be very pleased that this is happening at Penn State. Let me explain why. This year our expenditures for research were approximately 353 millLon dollars, the past year, which ranked us about 10th in the United States. We were second in the United States in industry sponsored research, first among pub Lie universities. What's important to know, first of a LI, is that the lion's share of those funds are from competitive grants and contracts that we attract to the University, most of it, the largest share of it, from the Federal Government. So, a very very small portLon of it actually comes from legislative appropriation or from funds that come out of the general funds of the University. They are funds that we attract to the University from outside, mostly from Federal government and industry. That would make up the largest share. This brings money into Pennsylvania that would go to some other state if we did not have such a nationaLly competitive research university. It also creates thousands of jobs in Pennsylvania, both the people who 40 are employed directly and the spinoff companies at bhe Research Park and others who are attracted here because of it. It provides a very important social function; whether it's the 70 million dollars that comes, most of it from the Department of Navy for our applied research laboratory helping the national defense to the things we do in children, youth, families, developing a new research and materials in microcomputers, in many areas of supporting manufacturing and so on. The last thing I would say which I think is maybe a little less tangible but it's extremely important is what sets aside Penn State from the 3,7 00 other institutions of higher education in the United States, there are only a hundred or so universities 1Lke ours which are at the same time involved in undergraduate education heavily involved in research and what our undergraduate students have is the opportun Lty to be in the classroom with people who are the creators of knowledge, not just the disseminators of knowledge. I believe that this provides a superior educational experience even for our undergraduates who are not paying much of their tuition for the research enterprise. It really is a significant added benefit and you can see this in the large number of our students who are working side by side with faculty members in the 41 laboratories and students who are in our University Honors Program, many of whom will end up publishing research articles themselves and for those students who want to go on to graduate school which I mentioned is something like 14 percent of our graduates immediately go on to graduate school and a much larger portion eventually go on to graduate school, having had those experiences with research faculty is very positive for them. Q Thank you. Mr. Chairman, I have a couple more minutes? CHAIRMAN BARLEY: Forty-three seconds. BY REPRESENTATIVE ADOLPH: Q We have to sum this up in 43 seconds. I know you were very vocal regarding the sports agents, professional sports agents, in the fall. How do you think the State Legislature, the bill that was passed here in Harrisburg, handled that situation? A I was very impressed with the level of support that we received from the Legislature in handling that situation. So, let me take this opportunity to thank you and your colleagues for your responsiveness. I serve on the Board of Directors of the NCAA. This is a national issue and because I * m on the Board and because I'm the President of one of the premier athletic 42 institutions in the United States, I want Penn State to be, and the Commonwealth of Pennsylvania, to be out in the lead in sending a very strong message to sports agents and anyone else who would mess around, who would interfere with the integrity of our institutions whether it's athletics, academics or anything else. I don't think we should permit anyone to come in here and do what that agent did. So, I'm very supportive of that legislation and all I would add is that the NCAA is supporting morally and financially a uniform national code which will create national legislation state by state that will strengthen the laws relating to sports agents and I hope when that uniform legislation process is completed in a couple of years, that we can come back to the Legislature and take our legislation here one step further. Q I think it's been a long time in coming. Thank you, Mr. President. A Thank you very much. CHAIRMAN BARLEY: I now recognize Representative Jarolin. BY REPRESENTATIVE JAROLIN: Q Thank you, Mr. Chairman. Thank you for coming here. It's a pleasure to see you. Now, what ] 'm referring to is when they request information about jobs 43 after the students graduate, I can verify how hard you people work. You put my son in an unbelievable position. He now works for the Federal Government cind every so often he gets a phone call from Penn State and wants to know how he is doing. That's one of the top priorities. Going on to one other issue, of all of your extensive or extension universities, are they four years, any of them? Like the Wilkes-Barre campus, could that be a four year? A Yes. The majority of enrollments at our Commonwealth campuses are concentrated at the freshman and sophomore level. At the moment of the three of our campuses, however — no, I think it's fair to say that all but two of our campuses have some level of programming at the upper division baccalaureate level. What we hope to do is expand the baccalaureate opportunities, the upper division opportunities of all of those campuses including the two that do not now have that authorization. That's something we are working on. That is currently pending with the Secretary of Education. We think that's important because there is a need for our students at those campuses to complete their degrees. Many of them are in their 20's or 30's or 40's or beyond and can't pack up their bags and move 44 to a dormitory at the University Park campus. Just to illustrate the contrast, 80 percent of our students who start at the University Park campus end up completing their degree there, one of the highest completion rates of any university in the country. It's 50 percent for students starting at the Commonwealth campuses and one of the reasons is that a very large number of them are place bound and even though they might be able to travel 50 or 100 miles and conceivably commute to an institution to finish their baccalaureate degree, many of them are really not in a position to do that with their jobs or family and we pride ourselves in the fact that well over 90 percent of Pennsylvania's population is within a 30-mile commute of one of our campuses. What we'd like to do is provide the opportunity for any place bound Pennsylvania resident who is already a Penn State student to complete their degree at a Penn State campus. Q Going back several years, I believe there was some sort of friction between several of the colleges up in my area where the presumption was that you were going to be four year institutions on the part of Penn State. That created a lot of turmoil. Has that turmoil ever settled down? A I hope so. It's something we continue to be 45 very sensitive to because we are trying very hard to deliver on our promise not to take away a single student from any other college or university, not that that would be unheard of in higher education. It is as competitive an environment as any other enterprise would be but that's not been our goal from the beginning. We don't singlehandedly want to do that. There was some anxiety throughout the state. I think anyone who looks at what we have done will see that we have delivered on our programs. In fact, we have fewer freshmen this year at our Commonwealth campuses than we had last year at our Commonwealth campuses but we have had some modest growth at the upper division level. So, anyone — we think it's settled down somewhat now because people can see how the data have played out and we'll continue to do exactly what we said we would do. Q I'm sort of a Little bit confused on one of these other situations here about you people cutting corners and everything related to — a little bit happier appropriation schedule, such a thing as Penn State has reallocated over 72 million since 1992-93 from University Park and other campuses and 23 million from Hershey. If you reallocated, where did it go? A Well, several places. Q All right. 46 A I can give you a few examples if that would help. Q One example would be sufficient. A We have reallocated each year since I have been President approximately a mil Lion dollars to deferred maintenance. We have taken the money from our reallocation system and each year tried to put an additional million dollars of continuing permanent money the way we budget into deferred maintenance. We have on our 24 campuses 1,300 buildings. Penn State goes back, you know, 143 years and many of those buildings are decades old and they are in need of major attention and I don't want to be remembered as the President who was here for several years and at the end of my term, more buildings were falling than prior to when I came in. So, one example is that we reallocate funds to deferred maintenance. A second example which is something that we did last year and we said we were going to do even without any support from the Legislature was to reallocate funds from administration to faculty positions, to put just from that initiative 25 additional faculty members into the classroom to bring down class size and relieve some of the workload in the high workload areas. This year's budget request to you 47 includes a reallocation target, if I remember the number right, of about 3.5 million dollars. So, we are saying under any scenario, the process is already in plcice through our University Planning Council that I mentioned earlier to internally take another three and a half million dollars, pull it out of areas of lesser pnoraty and reallocate it to some of these new initiativess, examples like I gave you. Q Another question — ACTING CHAIRMAN FLEAGLE: Can I ask you to divert to the second round please? REPRESENTATIVE JAROLIN: I didn't know my tame was up. I didn't hear it. ACTING CHAIRMAN FLEAGLE: Representative Baker. BY REPRESENTATIVE BAKER: Q Thank you, Chairman pro tern. I certainly would like to echo the sentiments of Chairman Barley as he indicated earlier, the great support that we in the rural areas have for cooperative extension and agricultural research. I think you folks are doing a fantastic 30b, an excellent Dob, and it's my understanding that there will have been an 18 percent collective increase in Ag extension over the four-year period and I'm delighted that we can provide those additional augmentations to you. It's very important to 48 our rural areas. My question deals with vocational education and 30b training functions and the important role that Penn State plays in that area. I understand that you testified recently in Williamsport with respect to House Bill 1800 and the concerns and reservations that you may have concerning that bill and I agree that there does need to be some changes with respect to that legislation. Overall though, what is your assessment of the function Penn State plays with respect to vocational education and job training and how critical is that to our economy and to our students throughout the Commonwealth of Pennsylvania? A I think it's a very important part of our function. I think House Bill 1800 is important legislation. I realize bhere will be some additional fine tuning of it and we see that as a very important part of Penn State's mission and we think a growing part of Penn State's mission, in part because it's becoming increasingly important to the Commonwealth. So many of the existing jobs that are out there and the new jobs that are being created require a level of technical proficiency that goes beyond what we have typically seen. So, we are not thinking that we necessarily have to completely change what we do at the baccalaureate 49 level at the University. It doesn't require us to totally change our approach to undergraduate education but we do need to look for opportunities to be more sensitive to the fact that our students want real jobs at the end of the line and we have to better prepare them for those jobs. One of the most interesting things that came out of these discussions we had with the information technology industry is they are saying, we will hire all of your graduates and T asked them the question, well, that's great and when you hire our graduates, are they ready to start work and the answer was, well, no, we have to put them through another year or two of training at our company to get them up to speed to where they need to be and we have evolved this concept for this new school that we are talking about. We want our graduates to be able to start work at those companies day one by working with them and developing a curriculum that is still sensitive to the needs of our general education curriculum, still gives them this broad based preparation for life but on the technical side really relates very directly to what we need to do in the work force. So, we think Penn State can be very much a part of the solution. The most important part of the solution, however, is not in the area of resident instruction. 50 It's in continuing and distance education. After our students graduate, we expect them to have a lifelong attachment to the University, not just to send us money for contributions which of course we're glad to have but to be a customer of ours in these continuing education services. We want to prepare them to learn and then have them with this higher level of technical training along the way. So, in the whole spectrum of work force development, we think we can and should do more and we are delighted to be able to work with you and others on those initiatives. Q Do you recall the actual amount of money that is invested in Penn College, technology in Williamsport with the Penn State partnership? A I think Penn College, as you know, is considered a wholly owned subsidiary of Penn State. We consider them a very important part of our family but they have a separate governing Board that I do have some responsibility for appointing. The Penn College budgest, as I recall it, is about 45 million dollars a year and if I can take this opportunity to point out one thing about the Penn College budget, they are the best example of growth within the University that is meeting real life day to day needs within the Commonwealth of Pennsylvania, yet they are the least adequately funded 51 component of the higher education system in Pennsylvania. It's a separate line item. I mentioned the two that we have for cooperative extension. We have a separate line item at Hershey as well and we have a separate line item for Penn College. The per capita appropriation — by per capita, I mean per student appropriation, the State contribution per student at Penn College is just a small fraction of what it is for the other state-related institutions and it is less even than the modest $3,260 per student contribution that the Commonwealth makes for a Penn State student. Therefore, Penn College tuition is the highest of any state or state-related institution in Pennsylvania. Now, maybe you would say that's all right because they are all getting jobs, pretty good jobs at the end of their time there but they are also graduating with a very substantial level of debt. We have asked repeatedly for some special consideration for funding to remedy this inequity for Penn College and that is another one of those special requests that we would like to leave on the table with you. Q Thank you, Dr. Spanier. I appreciate your comments and I'm certainly appreciative of the good work Penn College is doing in our region and in my legislative district and ] note my time is up. Perhaps 52 we can talk about that issue later. Thank you. ACTING CHAIRMAN FLEAGLE: To start Round 2, Representative John Lawless. BY REPRESENTATIVE LAWLESS: Q Thank you. Dr. Spanier, you made a statement a little while ago about you thought, and I don't know what the percentage was, 3 0 percent and I'm sorry, a certain percentage of your students were within 30 miles of a Penn State campus of some type? A Yes. Q Is that everyone in the state? A Yes, over 90 percent of Pennsylvania's population is within 30 miles of a Penn State campus. Q I noticed you were able to ;join us a little earlier today. Actually, you were probably on time and we were very late, in listening to some of the State College dialogue that went on with regard to Mansfield University and the concern the Chancellor had was that those students have nowhere else to go. Do you have something in the Mansfield area that is within 30 miles of those students? A Well, actually, the few percent of the state that we don't cover is in the north, very northern central part of the University. We have Penn State area, Penn State DuBois, of course, University Park 53 campus in the middle of the state and then you head over towards Scranton and Wilkes-Barre. So, there is a part of the state there that we don't cover. Penn College is in Williamsport but they have a more specialized mission. So, I suspect it is the case that there is a portion of Pennsylvania that is uniquely served by the Mansfield University campus. Q The next point is in the Senate last week one of your colleagues, meaning someone else who is a President of a university in the state, was kind of chastised, and that's my word, for wanting to maybe reduce the number of remedial courses that are taught at our colleges and universities, saying it's an expense that should be done either at the Community College much cheaper or frankly, it should be done in high school where these people are supposed to be college ready when they come out. Do you believe it's an expense to Penn State to have the remedial courses and, point in fact, do you even offer them? A We do very little in the area of remedial education. If you look at the educational system sort of K through L, K through life, I mean, through the whole higher education spectrum and beyond, our focus, I would think, should be to have students in high school, in elementary, middle school and high school 54 being the places where these kinds of basic education issues are dealt with. I don't think there are any of us in higher education who would rather have the responsibility for what in the University you would call remedial education. So, we don't do very much of it and when we find ourselves in the position to do it, we don't give graduation credit for it. We would like to see that moved down into the high school level. Penn State, you might say — I don't know if I'm going to choose the words right — you might say has the luxury of not having to be too heavily involved in remedial education because the quality of the students who are applying to Penn State now, their overall high school grade point average, SAT scores and college preparatory work has edged up. It's gotten to be pretty high. So, if anything, that's a diminishing issue for us. I don't say that to minimize the level of issue it might be for higher education in general. Q Would you agree though philosophically WLth your colleague that it's something that you do not believe the expense should be on higher education, teaching remedial courses' A Yes, I do. Q Thank you. I need to go back to the idea of this Geisinger-Penn State merger and the idea of the 55 monopoly. How many of — well, before the merger, what percentage of the operating budget of Penn State University was directed at Hershey? A In terms of Penn State's total operation budget, a little over 400 million dollars of our 1.7 billion dollar budget was related to the medical school and clinical enterprises at Hershey. That 400 million dollar component which operated, the majority of it operated on a self-support basis is what is now part of the Penn State-Geisinger Health System. However, 100, and I'll use a round number, a 130 million dollar component of that is still part of the Penn State budget. That is the budget of the medical school. Q My time is up so, I have to come back for another round. ACTING CHAIRMAN FLEAGLE: Representative Zug. BY REPRESENTATIVE ZUG: Q Thank you, Chairman Fleagle. President Spanier, you have talked about the success of Penn College and the vocational training. I have had bhe opportunity to meet and talk with people from A&P and my vo-tech school about talking about how A&P can help train young people in the vo-tech and have a commitment and out of that meeting came a discussion of Penn State and its role through the Commonwealth colleges at your 56 Hamsburg, to give maybe a two year technical degree so that individuals who leave high school, have a skill, go to business working in a machine shop and have an opportunity to continue their career and become better workers. Is there a movement by Penn State to offer maybe a two-year technical degree in some of the Commonwealth colleges? A Two answers. We already do offer quite a substantial number of technically oriented associate degree programs throughout the state at many of our campuses. The most important answer is that we do indeed have a desire. I don't want to say we have plans. We have a desire as a goal of ours to deploy more of what Penn College does on a statewide basis, taking advantage of Penn State's campuses but keep in mind these are very high cost programs. They are very equipment intensive. The people that you need to hire to do those programs will have to be paid a decent salary and given the current level of state support for Penn College, it will be very hard for us to make that deployment in any extensive way without some additional support from you. We will continue to charge tuition at the level that we have and we will see inflationary type of increases in those tuition charges each year but we do have a desire to do that. The current leadership and 57 administration at Penn College which is absolutely fabulous is quite willing to do this. The Dean of our Commonwealth College is here with us today, Dr. Joe Strassel, who is formerly the campus executive officer for Penn State Dubois Campus. He is very visionary and oriented towards seeing this kind of deployment and integrating with the campus under his purview and other Penn State campuses are willing to participate in that as well. Q What you have, to classify your success at Penn College, I know Chairman Barley has talked about Steven Straight (phonetic) and how their toughest mission is to get kids back for the second year because businesses are trying to hire them away from school and our movement in Harrisburg has been, I think, to work fare. j think it's pleasant to hear the desire on behalf of the University to look at expanding the Penn College situation throughout the Commonwealth. Thank you. A I think so many — if I could make a final comment. I think so many people who themselves are college educated do have a notion that the only path to success is a college degree, a baccalaureate college degree. That has sort of become the path of least resistance and, of course, as an educator, President of 58 a major doctoral level university, I would never say that the majority of students should do otherwise but I do think we ignore that there is a wonderful career path with a real job at the end of the line for so many of our students who could pursue an associate degree or even pursue an associate degree initially and go on to a baccalaureate degree. On my last visit to the Mt. Alto campus where we have an associate degree in occupational therapy, the young woman, 19 years old, who was my host there, already had a job. She had more than a year of schooling left but she already had a job offer and a signing bonus. Now, that's not what she called it but, you know, I'm familiar with athletics and to me it sounded like a signing bonus. They were ready, willing to put money on the table to help her finish her education, to have an apartment and start to buy furniture because they were so desperately in need of her services at the point at which she would graduate. Wonderful jobs are out there for students who are interested in that kind of career path and we have to do a better job of letting people know about that. Q Since you brought that up and I don't know if my time has expired but we had a hearing, an appropriations hearing in Philadelphia and the Vice- President for Crown Cork and Seal came and his non- 59 traditional career path had been through vo-tech, their Community College, baccalaureate degree, and the message that we all need to spread is you can be successful doing some things that aren't high school, college, to work. I think it's something commendable that you are doing. Thank you. A Thank you. ACTING CHAIRMAN FLEAGLE: Representative Adolph. BY REPRESENTATIVE ADOLPH: Q Thank you, Mr. Chairman. Dr. Spanier, I have two questions. You can take them in whatever order you'd like. One of the concerns that parents have and students have when they look at Penn State is bhe professor to student ratio, okay, currently. A lot of people envision going to Penn State, but the classrooms are 500 students and one professor or no professor in the classroom. That's my first question. Can YOU explain what that ratio is today as compared say to 10 years ago? The second question is, I was looking at your Purchasing Card Program that has been implemented, okay, and the way that would save administrative costs, okay. I guess my first question to you regarding the Purchasing Card Program would be your checks and 60 balances in a system like that, using a credit card. A Yes. Well, on the Purchasing Card Program, that's been a great success so far and we think that that will become a model for many other universities. We have a very extensive system of checks and balances built in. I went through the whole training and briefing myself just to get a feel for how that would work and I was surprised to find out the things I didn't know before about credit cards. In this day and age of modern technology, you can have, visa or Master Card to program their computers that when a certain card comes up, it only allows certain purchases at certain types of vendors. Lots of things are not allowed. So, it's not whether a card is or is not allowed and whether it's reached its limit. You can actually identify certain kinds of expenditures that are and are not permitted. We also do have certain limits. They are reviewed by the Financial Officers which report to our University Controller. So, we expect that the program will be a great success. It's an example of something that's going to save us a lot of money, cut out a tremendous amount of paperwork and red tape and so far we are not aware of any misuse of it. It's very carefully audited by our internal auditors and what I will do is ask Rich Deoginio (phonetic) to give you a 61 copy of the manual and literature that is part of that program so you can see how it works. Q I can imagine just the savings as far as the writing of checks, the cutting of checks, if you can write one check a month instead of a hundred checks or a thousand checks. I have no idea how many checks. A A lot of purchases that you would make with that program are under a $100 and just the cost of sending the paperwork through the system to get a check written for $28 is quite great. So, it's something that we will be able to document that has saved us quite a bit of money. The important issue that you raised on faculty-student ratios is something that I will be pleased to address. In terms of the two standardized accounting schemes, the methodologies that are used in your joint State Government Commission Reports and in the National Higher Education Reporting System known as HEGIS, Penn State's official student-faculty ratio is 18.5 to one. Now, that would compare to 15 at Pitt, 16.5 at Temple, 15.4 at Lincoln and 17.8 at the state- owned institutions. So, ours is clearly on the high end as far as that goes. On the other metric of average class size at the undergraduate level, Penn States's average class size is 29. That would compare to 27 at 62 Pitt, 24 at Temple, 19 at Lincoln and 22 at the state- owned institutions. Again, ours is clearly high. Now, those averages are just averages and they don't reflect the reality that you just mentioned that while most of our classes are rather small, at the freshman level, at the University Park campus, we do have some very large classes which may have as many as several hundred students. Now, that's not unusual for a university like ours but it's not something that we would like to see in as many classes as it exists. There are many professors who are wonderful in a Large class format. We have support systems for them. Many students love those large classes but we know that in the end and on the whole, it would be better if we had fewer large classes. The only way to get from here to there is for us to continue the program I described earlier of internaLly reallocating funds to add additional faculty members to bring down class size and to bring additional fund mg into the University to meet what I have always said since I have been President is our number one priority, hiring more faculty members to bring down the class size. Penn State receives $3,260 per student on the average from the state. Temple is at $5,930, Pitt at $4,770 and the state-owned at $5,540. I don't think you should take one penny away from those institutions. All 63 I'm saying is be aware that Penn State has been operating very efficiently with less state funding than any of our counterparts would have per student in the Big Ten and in order to remedy this problem that you are addressing, we simply have to find a way to hire more faculty and that does mean some additional dollars into the budget. Q Thank you. CHAIRMAN BARLEY: I believe the last member that has indicated a desire for recognition in question is Representative Lawless. BY REPRESENTATIVE LAWLESS: Q Thank you, Mr. Chairman. President Spanier, back again, once again, to the Geisinger merger. How many primary care physicians are employed by the system? A I can' t give you a precise number but it' s undoubtedly several hundred. Q What do you think the percentage is? A Of primary care physicians, I could ask Mac Evarts. He may have those. DR. EVARTS: About 40 percent, 35 to 40 percent. BY REPRESENTATIVE LAWLESS: Q Thirty-five to 40 percent. How many others are controlled by the system such as the general health 64 practitioners referrals, PSU or Geismger, such as the employed specialists? A Want to join us up here? This is Steve McCollister Evarts who is the Dean of our College of Medicine, our Senior Vice-President for Health Affairs and the Chief Academic Officer of the Penn State- Geisinger. BY REPRESENTATIVE LAWLESS (to Dr. Evarts): Q How many others are basically controlled — I know we talked a little bit about percentage, 35 to 40 percent of the MD's. How many others are controlled by the system such as the referrals to specialists, laboratories, the diagnostic, whatever? I'm trying to get to the fact that it's my belief or concern — I shouldn't say my belief because I really don't understand. That's why I'm asking these questions. I mean that seriously. I'm concerned about a monopoly taking place within the health care system. You have at Penn State, you have a controlled amount of employees which happen to be a fabulous amount of people, fabulous number of people. You have that. You have the fact that you control the doctors because the doctors are now being bought out by Penn State. They are becoming Penn State employees. You also now with Geisinger, you control the health care. Now, you control the insurance 65 company for an individual. My question is, can anyone in private practice exist in Central Pennsylvania? A Absolutely. Let me back up ^ust a minute and try to work through a little of this. In the total Penn State-Geisinger Health System there are about 1,000 physicians and we have already talked about 3 5 percent of those being primary care physicians. Other than that, Penn State-Geisinger does not employ any other physicians. They don't own, they don't control their practices. They have an open — we have in the Penn State-Geisinger Health System an open relationship with other groups of providers saying to them, if you would like to participate in the Penn State-Geisinger Health Plan, we'd like for you to be a provider of services for that plan. So, that's a completely voluntary arrangement and throughout the 40 counties in the state of Pennsylvania there are another 1500 or so physicians who are in that category, not controlled, not owned by Penn State-Geisinger. Penn State itself owns no physicians and is not purchasing practices or anything else. Q But Penn State-Geisinger does. A Penn State-Geisinger is not in an acquisition mode at all. It's quite different than some of the other systems in the country and certainly some of the 66 other systems in the Commonwealth. Q What percentage of the population in Centre County, in a center region, you know, York, Bloomsburg, Pottsville, what percentage of patients are going to have an opportunity other than Geisinger at finding physicians that are not attached to Geisinger' A Actually, it's quite interesting. We do not — we, meaning Penn State-Geisinger really does not control the market in any of its regions with the exception of Montour County and that region only is the dominant health care system Penn State-Geisinger. In all the rest of the counties, it's the Blue Cross or Blue Shield system and in some counties it would represent Health America that really control the flow of patients and are the dominant health care plan in that region. Q What would happen if I was a patient and wanted to go outside the system? A Well, I think most employees throughout the Commonwealth are offered many choices of health plans. Q But if I'm a GeLsmger HMO — A There is no such thing as Geisinger HMO. It's Penn State-Geisinger. Q Right. A If you are a member of that particular plan, 67 then you would have the option of seeing anyone of these 1,000 or if you added together with the other 1500, 2 500 physicians scattered throughout, wherever you were. So, if you were from a northern county, you would have an option of whoever participates in that plan in the northern county. Q But isn't it true that there are other HMO's that might be out there that that individual could join with this choice that you are talking about, they are not government subsidized such that Penn State-Geisinger is government subsidized? A No, we are not government subsidized at a LI. Q See, that's what I don't understand as a legislator and I think most of the taxpayers in the state don't understand. You can get the Penn State emblem, and I'm sure there is one laying around here. They are on everything, okay. This little emblem (indicating) that we are all familiar with, Penn State, that's on Geisinger. That's on Dickinson Law School.i mean, I think there is an influence, an unfair influence with alumni, with people who think fondly of Penn State education, with the football team. I think this means something and when you say Geisinger is not really Penn State or — I think it confuses. You know, you talk about the Penn State family. How many branches are in 68 this family? DR. SPANIER: There are a lot but let me just be very clear. We are -very proud of our affiliation with Penn State-Geisinger Health System. They are the principal provider of funds now to support the educational programs at our College of Medicine but there are no state dollars, zero, not a single state dollar that in any way goes from state to Penn State to the Penn State-Geisinger Health System. They are a completely separate entity that is not funded in any way with state dollars nor are we using state dollars to compete fairly or unfairLy with anyone else. That's about as clear as I can say. BY REPRESENTATIVE LAWLESS: Q By using this Penn State symbol though, are you not using unfair competition over your competitors? I mean, you're cominglmg if you will, the use of the Penn State emblem. A The use of the Penn State name exists. Q How about the emblem? A By the use of the Penn State emblem. As I said, we are very proud of that affiliation. Keep in mind that the merger came about by bringing together two not-for-profit, two not-for-profit clinical enterprises neither of which received any support whatsoever from 69 the state with the goal being to enhance the quality of health care, to maintain that not-for-profit status and we hoped by providing the stronger partnership, keep entities outside the borders of Pennsylvania, for-profit entities, coming in here and taking over health care in this contiguous 40-county area. So, we think the extent to which we were able to lend Penn State's name and partnership to this is a very important step for Pennsylvania. It's really more that direction than the other way around. Q Why do you believe that the Attorney General has withheld sanctioning on two occasions on this merger? A Well, the merger has taken place. So, we need to also be clear about that. What the Attorney General has chosen to do is reserve the right to monitor this merger to make sure that we did not get ourselves into an anti-trust situation and our Penn State-Geismger partners and Dr. Evarts can talk more authoritatively about that than I can have indeed been negotiating with other providers to participate. So, we don't think in the end that there is or will be an issue. Q Well, aren't you concerned that the Attorney General again has twice brought reason to believe or at least concerned that there is anti-trust that exists? 70 I mean, the Attorney General of the state, he's an elected official by the taxpayers of this state and recognized as such. So, he is there to protect bhe taxpayers and yet it doesn't seem like you want to recognize the fact that there is a great concern with the Attorney General. DR. EVARTS: Actually, we do and we have followed very very carefully the suggestions from the Attorney General that we negotiate in good faith with other third party parties in this Commonwealth and we have taken that very seriously. This has been done by step by step negotiations and we're very close to consummating an arrangement with two other major third party parties that represent a lot of people in the State of Pennsylvania. So, we have indeed followed the mandate of the Attorney General' s office as best we can moving through this period of negotiation. One of the things that happens in this that even though you would think a negotiation should be consummated, it really takes months to work through the details, particularly when you are discussing health care services and their payment. BY REPRESENTATIVE LAWLESS (to Dr. Evarts): Q Is it true that Geisinger lost 10.4 million dollars in the last quarter? 71 A This again really represents an operating loss for the entire system. Now, the system, the new system, really involves four regions of the Commonwealth of Pennsylvania. One is called the northern region. That would be Danville; eastern represents Wilkes-Barre, western represents Centre Community and southern region represents the Hershey Medical Center. This system in operating losses did lose about 10 million dollars. That in comparison to other systems of like, namely, Let me cite two, the University of Pennsylvania system last year had a deficit of somewhere around 80 million. The Allegheny system had a deficit of around 85 millLon dollars. So, this is not unusual. What it is is a representation of what is happening nationally to the trends in health care services and environment and reimbursement. We are looking at correcting that deficit. We think that we will end the year on a positive note but this represented changes that occurred during our cost reduction, utilization of services, that simply impacted on the system in a negative way. BY REPRESENTATIVE LAWLESS: Q Dr. Spanier, are you a believer in Geisinger Health Care? A I'm not sure I understand. Q Do you support; do you believe that that's a 72 good health care system? A I was involved in the creation of the Penn State-Geisinger Health Care System. Q Do you believe — A I absolutely do believe that that merger was in the best interest of the Commonwealth of Pennsylvania, the former Geisinger Health System, Penn State University and I think it will continue to have great success and I will want to do everything I can to be supportive of that. Q And having said that, do you personally have Geisinger Health Care? A I'm a patient of the Penn State-Geisinger Health System. Q Do you have thear health care there or do YOU have your choice to go anywhere you want in health care? A Well, I'd like to understand what you are asking and why you are asking me the question. Q It's a difference between are all employees getting the opportunity of choice within their heaLth care system as you are? A Penn State has four options. We do not force all of our employees to receive their health care in any particular way. We do offer the Penn State-Geisinger health plan as a HMO option. We offer a Health AmerLea 73 HMO option and we have Health America indemnity kind of plan and yet we have a different plan. So, our employees have quite a bit of flexibility in the kind of health care that they receive. Q Okay. And just in closing here, I have to get back to one other point. It will be very fast for the Chairman and this continues to upset me about the diversity. I know you are very well involved in this at Penn State and the amount of money you spend on diversity enables you to secure all types of different students and they are accepted by all different types of students. I'm holding here (indicating) the Commission on Lesbian, Gay and Bisexual Equity out of Penn State. Ladies and gentlemen, this is your tax dollars at work. The last paragraph says, working towards the implementation of domestic partner benefits in all areas of university life at Penn State, especially with respect to health care, tuition reduction, benefits for partners and benefits for children. I have a real hard time dealing with this issue and my taxpayers paying for this type of nonsense in my opinion when I also read about diversity about a Christmas tree that cannot be at Penn State and was removed from Penn State because it would shatter the diversity. Now, if you are going to have diversity and spend taxpayers money on this type of 74 diversity, there are one heck of a lot of Christians in this world who don't happen to think a Christmas tree is a bad idea. Thank you. A Just clarify that Penn State does not have domestic partner benefits of the type that you describe. So, just for the record, it's important to clarify that. The brochure may have stated that as a goal of a particular group but it does not reflect institutional policy. The second thing I would say is that we do have Christmas trees at Penn State. They are very prevalent around holiday time and the article is in error. Thank you. Q Thank you. CHAIRMAN BARLEY: Thank you very much, Mr. President. Very good 30b, appreciated your diligence and your openness and your willingness to answer the array of guestions placed before you today and we as well continue to look forward to working WLth you in the upcoming fiscal year and as we get closer to the final adoption of the budget. We will now stand in recess for approximately 10 minutes. (The following was submitted for inclusion in the record:) Pennsylvania is prominent in the history 75 of our nation and exists today as a large, diverse, and influential state in the most successful nation in the world. With this rich heritage and the potential for an ever brighter future, Pennsylvania has a continuing responsibility to be a leader among the states. An important part of such leadership is a nationally competitive public higher education system. Recognizing this, the public colleges and universities across the Commonwealth have joined together this year in an effort to allow them to become more competitive nationally and also to meet the increasing demand for quality education in Pennsylvania. We are eager to work together to develop an increasingly educated and able populace; research necessary to develop new knowledge across a wide and increasing range of areas, with a special focus on business and industry; and a network of services designed to make life better for the Commonwealth's citizens. As the Commonwealth *s land-grant university and Pennsylvania's largest university, Penn State is strongly committed 76 to fulfilling its mission to help create a positive future for the people of Pennsylvania. Such a future must be characterized by a vibrant economy and also be rich in cultural and human development. Within the Commonwealth, Penn State is: - the institution of choice for the plurality of Pennsylvania's most talented students seeking admission to college; • a major contributor to workforce development, enrolling more students in occupational and technical programs than all but one other institution in bhe state; • the Commonwealth * s principal engine of research and technology transfer; and • Pennsylvania's source of services and educational activities from more than 100 different major programs whose mission is outreach. Penn State Contributions for Pennsylvania • Total enrollment of 78,956 students in programs ranging from associate degrees to doctoral study. 77 • Undergraduate programs in 219 fields of study that have educated one of every eight Pennsylvanians holding a baccalaureate degree. • 157 graduate majors, including programs throughout the state targeted to meet regional needs. Yet the level of support Penn State receives from the Commonwealth is inadequate to allow us to keep up with basic operating costs, let alone become more competitive with our peers across the nation. Penn State's appropriation is declining in purchasing power. When adjusted for inflation, the appropriation is down 6.5 percent since 1991-92. Penn State also receives the lowest educational and general appropriation per full-time-equivalent student of all the Commonwealth's public universities. Penn State Contributions for Pennsylvania • Continuing and Distance EducatLon programs that serve 200,000 non- traditional students annually, and public television and radio stations that together reach more than L.2 78 million households. • Penn State Cooperative Extension, with offices in each of the Commonwealth' s 67 counties, providing programs that serve one in six Pennsylvania households annually. We are proposing a long-term solution to our historic funding pattern that will allow Penn State to emerge as the top university in the nation in the integration of teaching, research, and service. We seek annual appropriation increases for four consecutive years that will address both the need to stay even in terms of inflationary cost increases, and the need to invest in carefully targeted areas that will make Penn State and Pennsylvania more competitive nationally. New appropriations for inflationary cost increases will be used to address basic needs such as increases in fuel and utilities, employee benefits, and salary adjustments. The competitiveness funding, requested to be an additional appropriation increase of 5 percent per year for four consecutive years, would be invested this year at Penn State in 79 the following high priority areas: faculty positions; information technology and libraries; the life sciences; critical academic program priorities; deferred maintenance; and Agricultural Research and Cooperative Extension. In becoming more competitive with our sister land-grant universities across the nation, our continuing priority is ongoing funding for new faculty positions to improve the quality of our educational programs and to bring down class sizes. We made measured progress in this area during the 1997-98 academic year and must continue to do so each year. We also request a special allocation for information technology and libraries. Penn State is a national leader in these vital areas. Nowhere are the funding challenges more difficult, yet nowhere are the potential rewards as great for those universities that are able to embrace and promote the new opportunities emerging in our information age. The life sciences is an area, like information technology, that is changing 80 rapidly and is of great importance to the future of those universities that are able to compete successfully in this multi- disciplined academic area. Penn State has invested carefully in this area and needs to continue doing so. Success in life sciences would make our university and state more competitive with national peers. Penn State Contributions for Pennsylvania *• The largest university research program in the Commonwealth and one of the largest in the nation, spanning such areas as the life sciences, engineering, health and human development, the environment, agriculture, natural resources, education, medicine, transportation, children and families, and many others. • $52.8 million in industry-sponsored research in 1996, including investments from 379 Pennsylvania companies, ranking Penn State first among U.S. public universities. As we look to the future, we know already that certain fields will grow in importance to 81 our students and the society they will serve. We are studying four areas of compelling societal interest for special investment to draw on Penn State1 strengths across programs and to elevate the University's leadership for society. We hope in the next four years to launch such a new initiative every 12 to 24 months. The first of these four areas is children, youth and families. The future of our nation will be deeply influenced by the health and social well being of our children, youth and families, and no university in America is as well poised as Penn State to marshal the intellectual and applied resources to enhance the quality of life for the people of our communities. Our Colleges of Health and Human Development, Education, Medicine, Agricultural Sciences, Law, the Liberal Arts and others have much to contribute toward the prevention and solution of such problems as violence, drug abuse, teen pregnancy, malnutrition, and illiteracy. All this would be done in concert with Penn State's community-based outreach programs such as 82 Cooperative Extension and the newly formed Penn State Geisinger Health System. A second area with tremendous potential for the future is materials science. Advanced materials have an impact on virtually every facet of modern life, including computers and telecommunications, transportation, energy, and medicine, among others. Penn State currently has one of the Largest and most successful materials research efforts in the nation, involving more than 200 faculty from the Eberly College of Science, the College of Earth and Mineral Sciences, the College of Engineering, the College of Agricultural Sciences, and a number of Intercollege Research Programs, including the Materials Research Institute. An added investment will attract greater research funding from private industry and expand Penn State's contributions to technology transfer. Penn State Contributions for Pennsylvania •• PENNTAP, the Pennsylvania Technical Assistance Program, responding to more than 800 requests for assistance from Pennsylvania companies resulting in cost 83 savings, increased sales, and related capital investments worth $6.1 million last year. • The Penn State Geisinger Health System, a not-for-profit, physician-run, patient-oriented system, providing quality care for a contiguous 40-county region of Pennsylvania, and helping to contain the costs of health care in the state. Environmental studies represents a third area for special interdisciplinary investment. We have numerous strengths in the scientific, technological, policy, and business domains that relate to local, regional, and global environment concerns. These are tremendously complex issues that seriously challenge the quality of life now and for the generations who will follow. We have an opportunity to help define problems, develop solutions, and educate environmentally aware managers, policy makers, and citizens. Penn State already is leading the way through research efforts underway in our Intercollege Research Programs, and in Agricultural 84 Sciences, Earth and Mineral Sciences, Engineering, Business Administration, Law, the Liberal Arts, and other colleges. Penn State Contributions for Pennsylvania • A wide variety of educational partnerships and outreach programs with school districts and local organizations to support youth in the communities served by Penn State campuses across the Commonwealth. • The Penn State Educational Partnership Program (PEPP), a statewide collaborative effort that involves early intervention programming, parental academic empowerment, and teacher preparation and renewal. PEPP has reached 1,115 students since 1989. The fourth area is Information science and technology, a field that continues to revolutionize commerce, communications, and day-to-day living. The scientific, technological, and sociological dimensions of accessing, storing, retrieving, communicating, and using information are of great economic, cultural, and social importance. What better 85 university to lead progress Ln this area than Penn State, one of the nation's most technologically advanced universities, with comprehensive strengths in computer science and engineering, communications, management information sciences, and the social and behavioral sciences7 We will wish to make information science a more visible interdisciplinary focus for the University's future, both in our research endeavors and in our academic programs. These four new areas of special focus, in addition to the current one in life sciences, reflect special needs and opportunities in our society, as well as existing strengths within Penn State University. They also provide opportunities for the integration of undergraduate education, graduate education, research, technology transfer, and service. As a University that is 142 years old and has more than 1,000 buildings at 24 locations around the state, we also must look to the matter of deferred maintenance, our request addresses that critically important need. Finally we need to invest in Agricultural 86 Research and Cooperative Extension. Penn State and the agricultural community appreciate the additional funding the Commonwealth has given these areas in the last two years, following six years of flat budgets in state appropriations. We need both to continue to counter the losses experienced in earlier years and to invest further in these areas of importance to the University and the Commonwealth. Penn State Contributions for Pennsylvania • Art exhibits, dance productions, theatre, and concerts at all Penn State locations enrich the quality of life in their communities. • Penn State students volunteer more than 250,000 hours each year in community service activities. Penn State strives constantly to serve its students better. Other priorities include the University's honors program, which is being expanded to enable more academicaLly talented students to take the fullest advantage of the academic resources found at Penn State. In addition, the international 87 component of the undergraduate curricula is being strengthened to meet the needs of employers around the state and the nation. It is imperative that our graduates understand world geography, international politics, global economics, and foreign cultures so they are prepared to work in and compete with multinational corporations. We continue to give priority to the recruitment and retention of a diverse student body to contribute toward the Pennsylvania work force of the future. We also wish to make more widely available model workforce development programs from the Pennsylvania College of Technology in response to requests from communities across the state. Workforce development is a specLai challenge for all states in an economy where many new jobs will require some postsecondary education. Today's workplace requires employees who are skilled at problem solving, critical thinking, teamwork, communications, and the ability to learn continuously. Penn State works hard to eliminate financial, geographic, and programmatic barriers to quality higher education. Yet we 88 must also have a strong partnership with the Commonwealth to continue the tradition of excellence and to assure access to higher education for the people of Pennsylvania. An increased investment in Penn State by the Commonwealth will return far more value than the dollars involved. In this era of attention to the important role of our nation's research universities in economic development, there is the disturbing possibility of forgetting that places like Penn State exist as well to foster much that cannot be measured in dollars and cents. I pledge that the members of this academic community will be good stewards of the funding our University receives, and that every part of the Penn State community will work to ensure a substantial return on this investment. Graham B. Spanier (The hearing terminated at 2:42 p.m.) 89 I hereby certify that the proceedings and evidence taken by me in the above-entitled matter are fully and accurately indicated in my notes and that this is a true and correct transcript of same. Nartcv J. Grega',1 RPR/} Is/