HOUSE OF REPRESENTATIVES COMMITTEE ON APPROPRIATIONS 2001-2002 Appropriations Hearings Pennsylvania State University * * * * Stenographic report of hearing held in Majority Caucus Room, Main Capitol Harrisburg, Pennsylvania Tuesday February 27, 2001 11:30 a.m. JOHN E. BARLEY, CHAIRMAN Gene DiGirolamo, Secretary Patrick E. Fleagle, Subcommittee on Education Jim Lynch, Subcommittee on Capitol Budget John J. Taylor, Subcommitte/Health and Human Services Dwight Evans, Democratic Chairman MEMBERS OF APPROPRIATIONS COMMITTEE >n. William F. Adolph Hon. John Myers >n. Matthew E. Baker Hon. Steven R. Nickol m. Stephen Barrar Hon. Jane C. Orie >n. Lita I. Cohen Hon. William R. Robinson >n. Craig A. Dally Hon. Samuel E. Rohrer >n. Teresa E. Forcier Hon. Stanley E. Saylor m. Dan Frankel Hon. Curt Schroder in. Babette Josephs Hon. Edward G. Staback HI. Frank LaGrotta Hon. Jerry A. Stern HI. John Lawless Hon. Stephen H. Stetler HI. Kathy M. Manderino Hon. Jere L. Strittmatter HI. David J. Mayernik Hon. Leo J. Trich Jr. HI. Phyllis Mundy Hon. Peter J. Zug Present: ael Rosenstein, Executive Director Reported by: Soderberg, Democratic Executive Director Dorothy M..Malone.RPB Dorotks M. Malone l^tgifUraJ Prof«ftional Rtpo'tar 135 S- L»«J'« Str««t f-| wmmalftown. Ptnntijlvania 17036 resent: (Cont'd) Randolph, Budget Analyst Dofotki, M- M«lone RegirUrcd Profatrional Reporter 135 S- Lan«lic Str^i 17036 INDEX PAGE GRAHAM B. SPANIER, President, Pennsylvania 4 State University Also Present; Darrell Kirch, CEO, Milton S. Hershey Medical Center Dr. James Thomas, Dean, School of Information, Sciences and Technology CHAIRMAN BARLEY: I'd like to call the hearing to order. I have no intentions of tolerating anyone being out of order here today. We have security and they will be asked to remove any individual that is out of order in any way, shape or form. So, that is going to be the ground rules before we begin. That will include rude conversation, talking as is going on at the moment by some. I conduct hearings that are very fair. I conduct hearings that are courteous to those making presentations and to those that have questions to ask. I will conduct this hearing in that same fashion. So I do not expect conversations, private conversations to be taking place by anyone, guests or others. Thank you for your attention. Thank you very much. We are here for the annual budget hearing for Fenn State University, our land grant institution, one of the finest land grant universities in the country. As someone who has been actively involved in agriculture, I appreciate what Penn State has done for that community and what they have done in many other areas. That doesn't mean I agree always with some things that do take place there, but I certainly have appreciated what they have done for the Commonwealth and what they have done for many, many young people here in Pennsylvania. We have the President of Penn State with us today, President Spanier. Welcome. I appreciate you being here, and as always, we await your presentation and then I will entertain the opportunity for members to ask questions of you. So thank you very much for being here today. I will give you the opportunity to have your opening statement now. Welcome, President Spanier. PRESIDENT SPANIER: Thank you very much. As always it is a pleasure to be here. We are very apprecia­ tive of the support that Penn State University receives from the Commonwealth of Pennsylvania, the annual appropriation from the Legislature of Pennsylvania. I do have a written opening statement which has been distributed to you. So I will not read that, but simply allow you to have that in writing. There are two individuals who I would in particular like to introduce today because they are the chief executives associated with two of the initiatives for which we seek enhanced funding this year. First of all, I would like to introduce the new Chief Executive Officer of Milton S. Hershey Medical Center, he is the Senior Vice President for Health Affairs at Penn State and the Dean of our College of Medicine, Darrell Kirch. Darrell, would you stand up so they can see you? Darrell just joined us this year from the University of Georgia where he held a similar position. He is a distinguished neuroscientist and a psychiatrist, eminent researcher and scholar in his field, practitioner of considerable experience. And we are very, very pleased to have him as a part of the Penn State family now. I hope to have the opportunity during the course of the hearing to make reference to some visual aids and one of them will pertain to our College of Medicine. I would also like to introduce to you our relatively new Dean of the School of Information, Sciences and Technology. Dr. James Thomas was formerly the Senior Associate Dean of the Smeal College of Business Administration. And he has provided the outstanding leadership for our new School of Information, Sciences and Technology which has truly become a great Pennsylvania asset in a relatively short period of time. I hope we will have the opportunity to talk about some of the work Dr. Thomas has initiated and how that is benefiting the Commonwealth. In addition, I would like to point out in the audience here are some members of the Penn State staff and some students from the university who are involved in student government and student organizations and we are very pleased to have them here as well. I would be pleased now to open it up for your questions. CHAIRMAN BARLEY: Thank you very much, Dr. Spanier. I will now recognize my counterpart, Representative Evans. I do not have any specific questions of you at the present time, Dr. Spanier. I will recognize Representative Evans for an opening statement. REPRESENTATIVE EVANS: Thank you, Mr. Chairman. Welcome, Mr. President. PRESIDENT SPANIER: Thank you. BY REPRESENTATIVE EVANS: Q Mr. President, obviously, probably the increase that the Governor has recommended to you is probably something that you don't think that you are particularly satisfied with. Exactly what would that mean to tuition for the students in September if you are not able to, the General Assembly decides not to increase what the Governor has recommended to you? A Penn State has two principal sources of income for our educational programs, legislative appropriation and student tuition. Right now they are in about a two to one balance with tuition providing two-thirds of the funding and the legislative appropriation one-third. We asked the Governor and now ask the Legislature for a 4.25 percent inflationary increase on Penn State's base budget appropriation. What the Governor has recommended, however, is to back out of our budget seven million dollars of funds that we received last year that we were anticipating would be folded into the base budget this year. They were programs that were designed in partnership with many individuals in Harrisburg to enhance economic development and to support workforce development. Two million dollars of those were at the Pennsylvania College of Technology for workforce development initiatives and the other five million dollars are at Pennsyl - vaniaState University elsewhere in the system to support initiatives such as the life sciences, information sciences and technology, material science, environmental science, children, youth and families, areas of great importance to the Commonwealth right now. The Governor then recommended a three percent increase on the remaining funds. The net impact of all of those pluses and minuses is that we have been recommended for a budget increase of 62/100 of one percent. Even with the budget that we have proposed, we were looking at a tuition increase of over six percent for reasons that I would be happy to explain if time permits. Q Can you translate that six percent, that six percent means what in terms of dollars? Exactly what would that mean? A That would be a six percent increase on a base lower division tuition, most typical tuition rate, which is now about $6,500 in round numbers. That would begin to move our tuition close to $7,000 a year. If we do not receive the appropriation that we have requested, it would put additional pressure on the tuition side despite cost-cutting and reallocation efforts that we are engaged in. I cannot say until all the numbers are in how much additional tuition increase that would mean, but surely it would go higher than is now proposed and we would certainly like to avoid that. Q The Chairman raised an issue about agri­ culture. Obviously, I have spent some time visiting Penn State and looking at your lab and some of your research. What type of dollars has the research element at Fenn State brought in in terms of the federal government or any other entity in terms of enhancing the program there? A This past year Penn State's research expenditures were $440 million. That was a $47 million increase over the previous year which I am very proud to say it is one of the largest single year increases in the history of American higher education. The single largest source of funding for those research expenditures is the federal government from agencies such as the Department of Defense, National Institutes of Health, National Science Foundation, Environmental Protection Agency, NASA and U.S. Department of Agriculture to name some of the key ones. Most of our research funding comes from sources outside the University and one of the areas would be our agricultural research appropriation which is a separate line item in Penn State's budget which comes from the Commonwealth.