COMMONWEALTH OF PENNSYLVANIA HOUSE OF REPRESENTATIVES APPROPRIATIONS COMMITTEE HEARING BUDGET HEARING
STATE CAPITOL MAJORITY CAUCUS ROOM HARRISBURG, PENNSYLVANIA
TUESDAY, FEBRUARY 27, 2007, 9:00 A.M.
VOLUME I OF V
PRESENTATION BY STATE-RELATED UNIVERSITIES
BEFORE: HONORABLE DWIGHT EVANS, CHAIRMAN HONORABLE MARIO J. CIVERA, JR., CHAIRMAN HONORABLE STEPHEN E. BARRAR HONORABLE STEVEN W. CAPPELLI HONORABLE H. SCOTT CONKLIN HONORABLE CRAIG A. DALLY HONORABLE GORDON R. DENLINGER HONORABLE BRIAN L. ELLIS HONORABLE DAN B. FRANKEL HONORABLE WILLIAM F. KELLER HONORABLE THADDEUS KIRKLAND HONORABLE BRYAN R. LENTZ HONORABLE TIM MAHONEY HONORABLE KATHY M. MANDERINO HONORABLE MICHAEL P. McGEEHAN HONORABLE FRED McILHATTAN HONORABLE DAVID R. MILLARD HONORABLE RON MILLER HONORABLE JOHN MYERS HONORABLE CHERELLE L. PARKER HONORABLE JOSEPH A. PETRARCA HONORABLE SCOTT A. PETRI HONORABLE SEAN M. RAMALEY
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1 BEFORE: (cont'd.) HONORABLE DAVE REED 2 HONORABLE DANTE SANTONI, JR. HONORABLE MARIO M. SCAVELLO 3 HONORABLE JOSHUA D. SHAPIRO HONORABLE JOHN J. SIPTROTH 4 HONORABLE KATIE TRUE HONORABLE GREGORY S. VITALI 5 HONORABLE JAKE WHEATLEY, JR.
6 ALSO PRESENT: 7 MIRIAM FOX EDWARD NOLAN 8
9 JEAN M. DAVIS, REPORTER NOTARY PUBLIC 10
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1 I N D E X
2 TESTIFIERS
3 NAME PAGE
4 DR. IVORY V. NELSON 5
5 DR. MARK NORDENBERG 6
6 DR. GRAHAM SPANIER 7
7 DR. ANN WEAVER HART 9
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1 CHAIRMAN EVANS: Good morning. The hour of 9
2 o'clock having arrived, we will begin. The House
3 Appropriations Committee will now reconvene with the
4 State-relateds all together.
5 So basically, the general rule is that we
6 want to get members to the questions right away, so no
7 presentations will be given. But I am going to start
8 off with the Republican Chairman of the Appropriations
9 Committee, Representative Mario Civera.
10 REPRESENTATIVE CIVERA: Thank you, Mr.
11 Chairman.
12 Welcome, everybody. At least we are here the
13 next day, and no snow today.
14 I just want to be brief with the questions, I
15 mean, nothing in-depth. What I could see and over the
16 years the State-related universities have done a very
17 good job, and the moneys that you request from the
18 State are not always given there, and the levels that
19 you request are not there either, even that. So
20 explain to us and to the committee how you are able to
21 keep the tuitions to a point where they are so people
22 can afford them and what you are basically doing
23 overall as far as keeping your costs down so that it
24 is not passed on to the student with high tuition
25 costs and that type of thing. So if you could just
5
1 give us an over brief of that.
2 DR. NELSON: Good morning. Ivory Nelson,
3 Lincoln University.
4 Well, what we do primarily is to take a look
5 at what our priorities are. We all probably do a
6 strategic plan of some sort. We identify what it is
7 that we need to do, and we practice good business
8 practices in terms of how we operate the university.
9 So we make our choices and our decisions such that we
10 line up what it is we need, and those things that we
11 can't afford in a particular year, we don't do it, and
12 so that is kind of a general way we do it.
13 In my particular case, I have to be
14 especially careful in the fact that my populous that I
15 serve comes from homes less than $50,000. So I always
16 have to think about, where is my price point in terms
17 of charging these young people in order for them to
18 get a quality education, but yet allowing them the
19 opportunity so that they can participate in the
20 American dream. So I have a special situation in
21 trying to keep my tuition at a point at which I can
22 operate, take care of all of the other things that I
23 need to do, and then attract them to our university.
24 So there is no big secret about how we do
25 this; it is just simply we prioritize. We do
6
1 everything that we possibly can to do cost
2 containments, and we operate that way.
3 CHAIRMAN CIVERA: Thank you.
4 DR. NORDENBERG: In some ways this question
5 is like a trip down memory lane for me. When I moved
6 into the Pitt Chancellor's office in 1995, the first
7 thing that we did at the request of our board was to
8 bring in a consultant from what was then one of the
9 Big Five accounting firms, I think, to take a look at
10 all of our operations to see whether there were ways
11 in which we could improve. The answer to that
12 question, of course, was yes, but I really remember
13 his general reaction when he said, boy, there isn't
14 much low-hanging fruit here compared to what you find
15 in other institutions.
16 We have over time really moved forward with a
17 broad range of cost-cutting initiatives. Some of them
18 are detailed, beginning on page 14 in our budget
19 request, and include things now like channeled
20 spending programs, Internet procurement, targeted
21 outsourcing. But I think it is true of all of the
22 institutions here at the table that we do struggle,
23 and we really struggle in terms of the two things that
24 you identified in your question. That is, there is an
25 expectation that we are going to provide high levels
7
1 of quality, and there also is an expectation that we
2 will advance the accessibility mission by keeping
3 tuition rates under control. That is a challenge when
4 State funding isn't what, not only what we might
5 expect but is not up to the levels that are received
6 by competitor universities, because we do operate in a
7 competitive environment ourselves.
8 I know that at Pitt, and I think the same is
9 true for Penn State and I presume for Temple and
10 Lincoln as well, the percentage of our total budget
11 represented by the Commonwealth appropriation has
12 decreased dramatically over time. It was about a
13 third when I joined the Pitt faculty in the
14 mid-seventies. It was 19 percent when I became the
15 interim Chancellor in 1995, and it is about 11 percent
16 today, and when you look at the universities with
17 which we are competing, that number would typically be
18 two or three times that large. So it is a challenge,
19 but we work hard to meet that challenge for our
20 students and for the Commonwealth.
21 DR. SPANIER: I'll just add that I think it's
22 true for all of us that we have two principal sources
23 of income for our educational programs, tuition and
24 legislative appropriation, with tuition being the
25 greater source of income for us now.
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1 So putting the budget together requires us to
2 create a balance between the relative contributions of
3 the tuition and the appropriation. When the
4 appropriation is on the low end, as was proposed by
5 the Governor this year at 2 percent on our education
6 in general lines, it puts more pressure on the tuition
7 side, and for all of us right now, we are very
8 sensitive to the high cost of tuition for our students
9 in Pennsylvania.
10 Eighty percent of our students at Penn State
11 receive some form of financial assistance, and this
12 creates a scenario where the average debt at
13 graduation this past year was $23,500. Now, for some
14 people graduating in certain areas where they will
15 start in a high-paying job, that may not seem
16 burdensome, but for other people, it can scare them
17 away a little bit, and that is just an average. Some
18 people, half of the people, are above that amount. So
19 we do worry about the increase in the cost of tuition,
20 and we try very hard to keep it down.
21 The third variable in the formula is internal
22 reallocation, where we go through a process of finding
23 ways to trim our budgets to be efficient. Every year
24 we recycle a certain portion of our budget to deal
25 with salary increases, rising costs of health care,
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1 our utilities, insurance, and other things that we
2 simply must attend to.
3 DR. HART: Being the last--- Oh, I am sorry.
4 CHAIRMAN EVANS: I just want to make sure
5 that for the first time, members, we have a brand new
6 President. This is your first time coming.
7 DR. HART: It is. Thank you.
8 CHAIRMAN EVANS: So I want to officially
9 welcome you.
10 DR. HART: Thank you, Representative.
11 CHAIRMAN EVANS: The gentlemen know us
12 already, and they like us. And I don't mean to take
13 them for granted, but I sincerely want to welcome you.
14 DR. HART: Thank you so much. It is my
15 pleasure to be here.
16 Well, I deliberately waited to be last so
17 that all the general issues could be on the table
18 already and to say that Temple is in much the same
19 position as our sister institutions, except that we
20 serve, as does Lincoln, a quite different population
21 and have a very special place, I think, in higher
22 education in the Commonwealth.
23 We do all of the things that our sister
24 institutions do and we do it within the pursuit of
25 excellence with frugality, and it is kind of a theme
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1 that dominates everything we do. So in addition to
2 what you have already heard, let me tell you about
3 some of the specifics that many of us are pursuing
4 internally, such as very targeted outsourcing to make
5 sure that we are more effective in doing what we do
6 best and letting others do what they do best in
7 helping us to achieve efficiencies. We go after ways
8 to save on the rising cost of energy. Right now,
9 Temple is working to add four new boilers to our
10 heating system that will cut our greenhouse gas
11 emissions by 20 percent and be 15 percent more
12 efficient, so that we can be not only less dependent
13 on the grid but also more responsible citizens. We
14 work very, very hard with our private providers, such
15 as Verizon and in other areas, to make sure that we
16 have the most effective contracts that we can have.
17 We operate like a business. We, you know,
18 act like a public and think like a private, and it is
19 a theme that dominates what we do while we think about
20 our students all the time.
21 CHAIRMAN CIVERA: Thank you.
22 CHAIRMAN EVANS: Representative Ramaley.
23 REPRESENTATIVE RAMALEY: Thank you, Mr.
24 Chairman. Thank you.
25 To follow up on Chairman Civera's questions,
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1 I basically just have two fairly simple, I hope,
2 statistical questions for your students. The first
3 is, what is the tuition including room and board at
4 each of your institutions, and the second question is,
5 we had a discussion last week with the State System of
6 Higher Education and they talked about their
7 graduation rates. What is the percentage of your
8 students who graduate in 4 years, 5 years, 6 years?
9 If you could each tell me those figures for your
10 institutions.
11 DR. NELSON: Okay; I'll go first.
12 At Lincoln, the in-State undergraduate
13 tuition and fees, $7,892. However, when I'm generally
14 asked that question, most people want to know what it
15 is it costs to go to Lincoln, and we are talking about
16 $13,000 a year for an in-State student and about
17 $18,000 a year for out-of-State students.
18 In terms of my graduation rate, over a 6-year
19 period we are graduating at 40 percent, and that is
20 high among typical HBCUs. Our graduation rate is
21 about 35 percent over the 4-year period. And I have
22 to caution everyone when that question is asked, and
23 they say, well, why is it so low at the fourth year,
24 and that is because most of our young people are
25 taking only 12 credits primarily. A lot of them work
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1 and are trying to find other ways in which to earn a
2 living and go to college, and so they are not taking
3 the load like we would take, that when we were in
4 college, like 17 and 18 to graduate in a 4-year
5 period. So those are the statistics that we have.
6 DR. HART: We have the same situation with
7 our cost of attendance. In-State tuition is just over
8 $10,000, out-of-State tuition is just over $14,000.
9 Pitt, Penn State, and Temple are among the highest
10 public institution tuitions in the country, a little
11 bit below where I just came from in New Hampshire, but
12 also there, it is because of that level of support.
13 Room and board, if you choose not to live at home, and
14 10,000 of our students now do live around campus, can
15 add up to several thousands of dollars more than that.
16 Books, as you know, are another important cost.
17 Temple, on the other hand, has, I think, an
18 exemplary 6-year graduation rate for a major urban
19 university, and a number of you may have seen the
20 article in the New York Times some months ago naming
21 Temple as one of the exemplars of major urban
22 universities in graduation rate. Our 6-year
23 graduation rate is about 59 percent, and our transfer
24 students, and 45 percent of our students come to
25 Temple with some transfer credits, graduate at the
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1 same rate as our first-time, first-year students, and
2 we are very proud of that. It makes it possible for
3 Temple to continually seek increased excellence and
4 quality and also maintain multiple points of access
5 through our articulation agreements and dual admission
6 agreements that make Temple a great place for young
7 people to go to school.
8 DR. NORDENBERG: Pitt's in-State tuition for
9 an undergraduate student enrolled in the arts and
10 sciences would be $11,368; out-of-State tuition for
11 that same student would be $20,686. Our 4-year
12 graduation rate is 57 percent; our 6-year graduation
13 rate is about 73 percent.
14 DR. SPANIER: Penn State's tuition would
15 probably be the highest in the group by a little
16 amount, our room and board on the low end. Our
17 tuition varies from campus to campus -- lower
18 division, upper division -- and by differences in
19 degree programs. But it starts at about $11,000 a
20 year, which would be the tuition, the in-State
21 tuition, on our Commonwealth campuses. It would be
22 about a thousand dollars higher at the University Park
23 campus for our lower-division students.
24 The average length of time at the University
25 Park campus from matriculation to graduation is now
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1 4.2 years. Now, there has been a decline over the
2 last several years. The overall graduation rate at
3 the University Park campus is 85 percent now, and if
4 you factor in the Commonwealth campuses, the overall
5 graduation rate for Penn State would be about 67
6 percent.
7 REPRESENTATIVE RAMALEY: Thank you all for
8 that. Thank you, Mr. Chairman.
9 CHAIRMAN EVANS: Representative McIlhattan.
10 REPRESENTATIVE McILHATTAN: Thank you, Mr.
11 Chairman.
12 I would like to direct a question to
13 President Spanier. I would like to begin by saying
14 that I certainly have great respect for Penn State and
15 the work that you do. With that being said, I have an
16 area of concern that I would like to bring up to you
17 and enlighten you on, and maybe we can discuss a
18 little bit here and maybe we can meet afterwards and
19 have a little bit more discussion about it.
20 As you know, my legislative district includes
21 Clarion and Armstrong Counties, and in the Armstrong
22 portion of my district, Penn State has a facility
23 called the Penn State Electro-Optics Center. It is
24 located in Freeport, and it's my understanding that
25 since 1999, $225 million has been funneled through
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1 that center. It's been our hope and dream that that
2 would be an economic engine that would certainly drive
3 the economy in that region. And a lot of respectable,
4 concerned citizens in that area have come to me
5 recently with some real concerns about the operation
6 of that center, and I realize concerns aren't always
7 facts and I think we have to take a serious look and
8 see whether these things are true, but I do have some
9 concerns about those, and I would like to call your
10 attention to those.
11 I tried to break them down into just quick
12 topics instead of going into great detail, and there
13 are basically four: lack of mission, no transparency,
14 no accountability, and little or no oversight from
15 Penn State as far as the operation of the Optics
16 Center there in Freeport in Armstrong County. So I
17 would like to just raise that issue with you and let
18 you know there are concerns in that area and would
19 like a commitment from you, if I could have one, that
20 if myself and some of the leaders in that area would
21 be able to meet either with you or Dr. Eva Pell, who
22 is the vice president of research, to really get our
23 arms around this and see where we are and where we are
24 going and see if we can't get some of these things
25 worked out. Do you have any comment on that at all,
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1 or---
2 DR. SPANIER: Well, this is the first I've
3 heard that there were any concerns there, and of
4 course we will want to meet with you to learn more
5 about what your concerns are, and I will ask Dr. Pell
6 to put an appropriate group together to follow up with
7 you.
8 For the benefit of the rest of the committee,
9 the Electro-Optics Center is a very important research
10 enterprise within Penn State that is associated with
11 our Applied Research Laboratory. I think all of you
12 know that Penn State ranks second in the United States
13 in defense-related research, and the work going on at
14 the Electro-Optics Center is a very important
15 mission-based research unit that supports
16 defense-related research and other industrial
17 applications as well.
18 I have to this point only heard very positive
19 things about what is happening at the Electro-Optics
20 Center and how pleased government officials and
21 officials in the defense industry and the leaders of
22 our Applied Research Laboratory are with what happens
23 there. I know very little, however, about how people
24 in the community might feel about the research there,
25 and that is something that will be important for us to
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1 learn more about. So we will certainly follow up with
2 you on that.
3 REPRESENTATIVE McILHATTAN: Okay, and I
4 appreciate that. And as I said, concerns aren't
5 always facts, but let us take a look at it. Thank
6 you.
7 DR. NORDENBERG: Could I add one thing, Mr.
8 Chairman?
9 CHAIRMAN EVANS: Yes.
10 DR. NORDENBERG: I do co-chair the technology
11 collaborative, which is a regional economic
12 development organization headquartered in Pittsburgh
13 but with a broader geographic charge, and given the
14 nature of the work that is done at this Penn State
15 center, we do on a pretty regular basis take a look at
16 some of the grants and projects that are going through
17 it. I always have viewed it as an initiative that
18 really does have quite a well understood and focused
19 mission, always have wished, actually, that it was a
20 part of Pitt as opposed to Penn State, and have
21 thought that it was quite unusual to have a major
22 research center like that located in what I will call
23 our southwestern Pennsylvania region.
24 So in terms of perceptions and fact, all I
25 can offer are perceptions, too, but they are very
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1 positive perceptions of that center, the funding it
2 attracts and the work that it does.
3 REPRESENTATIVE McILHATTAN: Thank you.
4 CHAIRMAN EVANS: I am just wondering if there
5 is a uniform for western Pennsylvania? I notice you
6 have the same tie on, I notice Representative Frankel
7 has the same tie on, and I'm going to introduce
8 Representative Wheatley, but he does not have a tie
9 on, so he must be out of uniform. But they sure have
10 those outfits on. Is that a part of it?
11 Representative Wheatley.
12 REPRESENTATIVE WHEATLEY: Thank you, Mr.
13 Chairman.
14 Good morning to all of you, and I appreciate
15 you all being here at one time. It's going to be kind
16 of challenging for me to get all of my questions in,
17 so I am going to ask the Chairman to give me a little
18 bit of leeway in this.
19 CHAIRMAN EVANS: You are out of uniform, so I
20 don't know if I can give you some. But you got some
21 time today, Mr. Wheatley. I mean, since it was a snow
22 day yesterday, you have a little time.
23 REPRESENTATIVE WHEATLEY: Thank you.
24 Let me go first and say this: I know in
25 proper etiquette I would direct this to one particular
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1 person, but any one of you could answer this question:
2 What do you think the primary purpose of higher
3 education is in the Commonwealth?
4 DR. NELSON: I would say to make sure that
5 the young persons that we educate are participating in
6 the American dream and be able to sustain him or
7 herself, be able to advance the economic well-being of
8 the State, live a happy life, and all of those things
9 that we all desire to do, and primarily to foster the
10 American way of living. So it is very, very important
11 that higher education become and is an essential part
12 of everyone's life, and I always like to liken the
13 fact that if you go back and just look at what
14 happened to higher education after the GI bill when
15 all of us came out of World War II, which we all
16 happen to be recipients of it, that this is when this
17 country really grew and really took off and really
18 took a leadership role in the world. And so without
19 an adequate higher education, I don't think that any
20 individual would be able to succeed in the American
21 way of life.
22 DR. NORDENBERG: You know, on February 28,
23 1787, this legislature enacted the law that issued the
24 charter for the institution that became the University
25 of Pittsburgh. The preamble to that act said that a
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1 primary object of every government should be the
2 education of youth, and I think 220 years later most
3 of us do believe that, that the education of youth is
4 a key to any individual's pursuit of the American
5 dream and that the collective education of youth is
6 critical to the strength of the society in which we
7 live. And so I think all of us are engaged most
8 fundamentally in the work of providing our students
9 with an education that is going to permit them to lead
10 rich, productive lives that also contribute to the
11 general good.
12 Within this group, some of the institutions
13 have been assigned responsibilities, both to provide
14 high quality undergraduate education and also to be
15 the centers of public graduate and professional
16 education within the Commonwealth which adds to our
17 mission, but that is one of the things that makes our
18 institutions both exciting places to work and special
19 contributors to the Commonwealth.
20 DR. SPANIER: I am just going to add briefly
21 that as State-related institutions, I think all of us
22 feel a special mission in serving the people of the
23 Commonwealth. If you go back to the Morrill
24 Land-Grant Act in 1862 that Abraham Lincoln signed,
25 that was kind of a milestone in American history.
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1 Before that time, if you go back way before that time,
2 higher education in this country was really for the
3 elite, and around the time of that Land-Grant Act, the
4 U.S. Congress decided in cooperation with the States
5 that higher education should be for everyone, and we
6 all became the people's universities, reaching out
7 broadly to provide education for anyone who was
8 inclined, and that is really what in large part has
9 made this country great, and what we all do is open up
10 the doors of opportunity for people through education.
11 REPRESENTATIVE WHEATLEY: And I'm going, just
12 because I'm short on time and I know I'm going to be
13 pulled pretty soon--- I'm sorry; I will let you, the
14 newest president.
15 DR. HART: Ditto.
16 REPRESENTATIVE WHEATLEY: So I'm glad to hear
17 you all say what you are saying, because it leads into
18 a thing that I have been playing out throughout these
19 hearings, and it is the equal opportunity for all
20 citizens in the Commonwealth of Pennsylvania. And I
21 heard Representative Ramaley ask a question about
22 graduation rates and tuition costs. Just so I'm
23 clear, your 85 percent that you talked about from Penn
24 State, that is a 4-year average or is that a 6-year
25 average, 85 percent?
22
1 DR. SPANIER: That 85 percent number is the
2 6-year number that the U.S. Department of Education
3 and the NCAA use.
4 REPRESENTATIVE WHEATLEY: What is your 4-year
5 number?
6 DR. SPANIER: Well, the 4-year number would
7 be lower than that. I don't have the exact number,
8 but it is still near the top among public universities
9 in the country.
10 REPRESENTATIVE WHEATLEY: And I am going to
11 ask this question specifically to, well, I will ask it
12 to all of you: How many of you know the percentage of
13 your student body population specifically that comes
14 from your immediate surrounding areas? Ms. Hart, you
15 don't?
16 DR. HART: Yes, I do. From Philadelphia
17 County, the immediately surrounding region, and in
18 Pennsylvania, we are 70 percent from the Commonwealth,
19 and the rest of our students are either nonresident
20 aliens or come from the rest of the country and around
21 the world.
22 REPRESENTATIVE WHEATLEY: Well, how many
23 actually come from Philadelphia?
24 DR. HART: From Philadelphia, it's about 19
25 percent. Is it--- I am sorry; it is 23 percent. I
23
1 am getting corrected from my helpers. But I think it
2 is also important to know about Temple University that
3 a third of our students identify themselves as people
4 of color, and we are recognized around the country as
5 one of the most diverse universities in the United
6 States. In actual first-professional degrees and
7 bachelor's degrees, we trail behind only Georgia State
8 and four historically black colleges and universities
9 in graduating African-Americans from outstanding
10 higher education programs, and it is a core part of
11 Temple's mission to serve the Philadelphia County
12 area, the region immediately around Philadelphia, but
13 also people from all backgrounds to provide
14 opportunity, and it is a core part of the Temple
15 mission that we very, very proudly pursue.
16 DR. NORDENBERG: Eighty percent of our
17 students come from Pennsylvania, but I cannot tell you
18 this morning how many of them come from the Greater
19 Pittsburgh area. We do seem to be attracting larger
20 and larger numbers of students who have come to
21 realize there is life and a quality education west of
22 the Alleghenies, but I can get you that number.
23 REPRESENTATIVE WHEATLEY: Sir, thank you.
24 DR. SPANIER: For us, 78 percent of our
25 students are from Pennsylvania, but in terms of the
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1 immediate area, that is a little harder to answer
2 because we have 24 campuses, and it---
3 REPRESENTATIVE WHEATLEY: The main campus.
4 DR. SPANIER: Well, if you are talking about
5 the immediate area being within and how far of central
6 Pennsylvania, or---
7 REPRESENTATIVE WHEATLEY: Well, you can tell
8 me that number. How many come from central---
9 DR. SPANIER: Yeah; it would be rather small.
10 The largest area from which our students come is
11 Philadelphia, second would be Pittsburgh, so the
12 immediate area would be much smaller. But within
13 commuting distance of our other campuses, the majority
14 of students come from within a small commute of the
15 campus. Half of our campuses are commuter campuses,
16 so by definition, they would live rather close.
17 REPRESENTATIVE WHEATLEY: Okay.
18 DR. NELSON: Approximately 60 percent of our
19 students come from in-State, but our biggest draw
20 area, of course, is Philadelphia. A third of our
21 entering freshmen every year come out of Philadelphia.
22 REPRESENTATIVE WHEATLEY: And just to go back
23 to your graduation rate numbers, and I shouldn't say
24 this, it is kind of unfair what I have been asking,
25 because for some reason I think students should get
25
1 out of school in 4 years and everyone else thinks it
2 should take 6 years. And just on my own personal
3 experience so I can be clear, I came out, I went to
4 undergrad at North Carolina A&T State University,
5 which is an HBCU, and I finished it with 4 years, and
6 that is after being tested into A&T with some
7 remediation history, meaning I had to go through
8 remedial courses before I could even get into my
9 regular courses. So I do know that it is possible,
10 even with the demands of working full time, which I
11 did, as well as taking additional courses, which I
12 did, I was still able to get out in 4 years, but it
13 was only because the institution had a support
14 mechanism for me to get me through there. So when I
15 count these numbers in 4 years, I am saying it because
16 I believe it has real value, it has real financial
17 implications to students who stay longer than 4 years,
18 even when they themselves make some of the choices to
19 keep them there.
20 So you all, and I am going to say this, too,
21 Penn State, all the national reports commend you for
22 what you do year-in, year-out. You are constantly in
23 the 80 percentile in your 6-year graduation rates, and
24 even in your 4-year graduation rates, you are still
25 somewhere close to 70 percent, I think is the number,
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1 if I can remember. Temple, I know that you have been
2 cited, and I do know that Pitt, you have consistently
3 improved your number over a period of years, and
4 Lincoln the same. But here is where I'm going to
5 focus in today.
6 Because we all know that higher education is
7 the key to our future opportunities, and that is the
8 thing that unlocks all the doors for many of our
9 children in this Commonwealth, and we know from Global
10 Insights that most of our movement as a Commonwealth
11 is to higher levels of fields of work, where what we
12 are doing the best in this Commonwealth is attracting
13 these higher sciences opportunities and employment,
14 some type of nuclear engineers or something to deal
15 with life sciences, biotech. These are higher
16 professional positions that require higher levels of
17 education, and we have large segments of our
18 population, primarily black and brown children, who
19 have, in my opinion, been failed. When I look at
20 graduation rates, and these people who come onto your
21 college campuses, they are presumably our best and
22 brightest. So let's just start with Penn State, who,
23 like I said, has done a great job. Your 4-year rate
24 of graduation for African-Americans is somewhere close
25 to 25 -- 33 percent, 33.8. That is compared to your
27
1 54-percent overall rate, which is a gap there, you
2 know. Your 6-year number of graduating
3 African-Americans is 59 -- I'm sorry, 66, compared to
4 your 84 of your overall campus.
5 Lincoln, which primarily you are mostly
6 African-American, your 4-year rate on your total
7 campus is 28 percent. Your 4-year rate for
8 African-Americans is basically 26.6 percent. Your
9 6-year rate, as you identified it, was 40 percent, and
10 for African-Americans, of course, it is 39.4.
11 Statistically insignificant; it is the same rate.
12 Pitt, 4-year rate; again, these are our best
13 and brightest presumably. Your overall rate for 4
14 years is 69.6; for African-Americans, it is 57.8.
15 That is 6 years, I'm sorry, 6 years. Your 4-year is
16 43.6 for all students, and for African-Americans, it
17 is 31.4 -- 4 years.
18 Temple: Your 6-year rate for all your
19 students is 57.3; for African-Americans, it is very
20 close to 56 percent. Four year: Your rate for all
21 students is 27.5, and for African-Americans it is
22 25.9. So typically you do the same regardless of the
23 color of the student. Now, you can say if you do it
24 well or you do it poorly, but you do it the same.
25 DR. HART: Is there time for me to respond?
28
1 REPRESENTATIVE WHEATLEY: But the point that
2 I'm making, and then I heard several of you mention
3 earlier that it is primarily the type of students you
4 get, and that when you compare to the national
5 averages, you do well, and I have this, and I'm not
6 going to go through the committee but I have this, and
7 I will say it depends on what you are comparing it to,
8 because when I went online to compare your
9 institutions, they pulled down the 15 most comparable
10 institutions of your size, of your cost, of the type
11 of students you get into your doors, and typically
12 speaking, your institutions, although do well, and I
13 want to say this again, especially in the 6-year
14 number you do well, but in the 4-year numbers,
15 typically you drop off significantly. And then when
16 you compare HBCUs, the highest ones that are doing it
17 in your category, some of them are graduating their
18 kids in 4 years in the 70 percentile.
19 When you talk about some of your more
20 affluent, highly driven research institutions that
21 compare to Penn State, and again, Penn State leads
22 this category in 6 years, but in the 4-year and the
23 gaps between African-American students and the gaps
24 between what you do, there are institutions who are
25 doing something better. I don't know what it is, but
29
1 they are doing something better to get their students
2 out in higher numbers.
3 So I guess I went through that long winded
4 kind of layout and picture to ask, what are you
5 doing--- One, do you have a plan, do you recognize
6 this as a problem, and do you have a plan to correct
7 that? Do you have something going on on your campuses
8 that says to students when they get to your doors,
9 know matter what their issues are, your commitment is
10 to get them off your campuses in 4 years so they can
11 get on with their life, and do you have something like
12 that that works, and what is that something that is
13 working?
14 DR. NELSON: Yes, we do; we have a plan.
15 Just this past year, for example, we went through a
16 total analysis of our curriculum, and we cut our
17 number of courses down to 120 to 124 credits to
18 actually statistically place it such that if you take
19 16 credits per year, you can graduate in 4 years. So
20 we took a look at everything that we were doing in
21 terms of our curriculum offerings for young people,
22 because one of the things that we recognize is the
23 financial drain on our kids, especially in terms of
24 staying 6 years. Most of our kids are graduating with
25 $30,000 and $35,000 worth of debt because 95 percent
30
1 of our kids are on some sort of financial aid, and
2 they are the poorest of the poor in terms of a lot of
3 kids going to college. So yes, we recognized it, so
4 we did curricular design and put together also the
5 fact that we, including the remediation and all the
6 other things that we do, to try to make sure that
7 these young people can graduate in 4 years.
8 DR. HART: Representative Wheatley, we also
9 are concerned about graduation, and we are doing a
10 number of things to help our students graduate. We
11 are now in the process of reorganizing our general
12 education program to make it more consistent across
13 the board and to give our students a more global and
14 international perspective for their general education,
15 and one of the major points of debate among our
16 faculty was the importance of making sure that the
17 curriculum did not expand in a way that would make it
18 difficult to graduate in 4 years. And for special
19 programs such as nursing, which have huge demand but
20 also have difficulty in meeting their accreditation
21 requirements and a 4-year curriculum, very explicitly
22 are aligning all of our programs so that it is very
23 clear that we can say to students that if they follow
24 the curriculum that is laid out and are able to pursue
25 their degrees, they will be able to complete them in 4
31
1 years, and it is a part of trying very hard when the
2 few programs that do sometimes drift into a fifth year
3 by plan, the students know that before they begin
4 their areas of study in those particular disciplines.
5 We also have to be very careful when we are
6 planning curriculum, because of the accreditation
7 requirements of ABET engineering, many of the
8 professional programs that are at the undergraduate
9 level, to make sure that we provide a well-rounded
10 undergraduate education and also make it possible for
11 them to have an articulation between their general
12 courses and their professional programs.
13 DR. NORDENBERG: Let me begin by saying that
14 I think all of the issues that you have raised are
15 very important. I think some of the numbers have
16 changed, perhaps. Certainly retention time to
17 graduation have been very important for us, and we do
18 benchmark against other fine universities, and so is
19 the challenge of closing that gap between
20 African-American students and others. I mean, we
21 really do believe that when we bring a student onto
22 our campus, he or she ought to have the best
23 opportunity to achieve at high levels, to advance his
24 or her goals, and to benefit from the experience as
25 fully as possible.
32
1 I think there is nothing more important than
2 early intervention in a student's own planning. It is
3 important to get the students from the start to think
4 about what they want out of an education, what it is
5 they want to get along the way, what it is they hope
6 to leave with, and what is the timetable that they are
7 going to need to follow to achieve their goals. And
8 so we do have something called the Pitt Pathway
9 Program, which does intervene with students early. It
10 provides them with support, really at every step along
11 the way in making these decisions.
12 And I do think, too, that a goal of 4 years
13 to graduation is an appropriate goal for most
14 students. I do want to say, though, that there are
15 many students today who make other decisions, and they
16 are conscious decisions, so you do find engineering
17 students who also want to earn a degree in political
18 science or something like that, and I think as long as
19 it is their decision and it is well informed and they
20 are saying, 5 years is the best route for me as
21 opposed to 4, then that is reasonable. It is only
22 when you have people spinning their wheels and not
23 making the right decisions along the way that you have
24 got a problem.
25 DR. SPANIER: I will just add that these are
33
1 very important matters to us at Penn State, and we
2 devote considerable resources and attention to it.
3 At the University Park campus, there is a
4 gap, as you pointed out, between African-American and
5 total enrollments. At 4 years it is 18 percent, but
6 at 6 years, and not that many actually need 6 years
7 fortunately, that gap is just 13 percent, which is the
8 lowest among our peer groups where we benchmark. We
9 would like to see the gap disappear entirely.
10 The somewhat lower number that you cited for
11 us at the beginning, however, relates to our
12 Commonwealth campuses, and again what is important to
13 point out there is that those data can be misleading,
14 because many of the students who spend some time in
15 our Commonwealth campuses actually transfer to another
16 institution because they want to stay near their home,
17 they are place bound for work or family reasons, and
18 so that would show up as an attrition rate, part of
19 our attrition at the university for those campuses,
20 but actually they are very successful in the sense
21 that they go to another more regional institution and
22 complete their work. So overall, we feel pretty good
23 about the data at Penn State and the progress that we
24 have made, but there is still that gap.
25 I would like to point one thing out, and it
34
1 does not relate just to African-Americans or other
2 students of color but for all of our students. Some
3 of the students at a large public university like
4 ours, particularly at our campuses, have work and
5 family obligations where it is their plan to take more
6 than 4 years. They may take lighter loads because of
7 their own personal circumstances, while at the
8 University Park campus, a huge, the preponderance of
9 our students are traditional college-age students. At
10 some of our campuses as many as half, and at two of
11 our campuses the majority of students, are
12 nontraditional students. They are older students with
13 families, already have careers in place, and so by
14 design, their college work is being spread over a
15 longer period of time. For an 18- or 19-year-old that
16 is going full time and is focusing on their education,
17 then of course we want to do everything we can to
18 facilitate them graduating within a 4-year period or
19 some short interval after that.
20 REPRESENTATIVE WHEATLEY: While I appreciate
21 all of your responses, and I'm not going to take up
22 much more of the committee's time, and I would just
23 ask, because the last question probably will be more
24 detailed, if in fact I can get numbers from your
25 institutions submitted to the committee about your
35
1 tenure-track professors, how many of them are of
2 African-American descent or Latino or Asian versus
3 your whites and where they are and what your policies
4 are as it relates to a promotion and to a
5 professorship in tenure tracks.
6 Thank you, Mr. Chairman.
7 CHAIRMAN EVANS: Representative Scavello.
8 REPRESENTATIVE SCAVELLO: Thank you, Mr.
9 Chairman, and good morning.
10 Approximately 2 years ago the administration
11 proposed and we approved a change in how we support
12 medical education. Can you give us an update and an
13 impact of the change on your medical programs?
14 DR. SPANIER: Well, I'm pleased to say that
15 fortunately this change, which I'm going to
16 oversimplify it but I think you know, routed the funds
17 through the Department of Public Welfare, has lived up
18 to its promise in the sense that the funds have
19 arrived. There was some doubt at the time whether
20 that program was the most workable program. We still
21 worry a little bit down the road and in the future
22 whether those funds could be at risk, but so far they
23 have been delivered as promised and the program is
24 working. This doesn't mask the fact that our three
25 institutions are still near the bottom nationally in
36
1 terms of support for medical schools and public
2 universities. I know the Governor through this
3 program was making an effort to help us all, and we do
4 appreciate that, but the larger issue for us is the
5 overall support for medical education. There is a
6 critical and of course growing need for more
7 physicians now. We are increasing the size of our
8 medical school class to help meet this need and to
9 help Pennsylvania in that regard. But medical
10 education is very costly, and we would appreciate any
11 attention from the Legislature to helping us out,
12 whether the funds come to us as a direct appropriation
13 or through the Department of Public Welfare.
14 REPRESENTATIVE SCAVELLO: Thank you.
15 DR. NORDENBERG: Let me pick up on the first
16 point that you raised, and that is to echo what
17 President Spanier has said to say that the system has
18 worked well, but he also did say that there is a
19 lingering concern that the day may come that the
20 Federal government will say, this particular form of
21 routing and rerouting dollars cannot continue. When
22 the amended plan was first put into place, the
23 language of the legislation did include a
24 hold-harmless clause indicating that if the Federal
25 government were to take that position at some point in
37
1 the future, the Commonwealth would recognize its
2 obligation to make up those dollars. I'm not sure how
3 it happened, but that language was not in the bill
4 that was passed last year, which does heighten that
5 lingering concern.
6 In terms of President Spanier's broader
7 observation about the low comparative levels of
8 funding for medical education, let me just say that in
9 three of our institutions, medical education is
10 extraordinarily important, not just to our
11 institutions but to the cause of human health in which
12 we all have an interest, and that interest seems to
13 increase over time, but also in terms of the extent to
14 which those schools really sit at the heart of
15 economic development in our home regions and in the
16 Commonwealth. So again, this is an area in which we
17 struggle and in which additional support in whatever
18 form it might take would not only be welcome by us but
19 would be good for the Commonwealth.
20 DR. HART: I would agree. I would add that
21 there has been a bit of a bureaucratic burden with the
22 funneling system through Temple because of our
23 appropriately independent health sciences system, the
24 Temple University Health System. We do also
25 experience a delay because of that process and
38
1 experience the same concerns that have already been
2 expressed by my colleagues, that this not be a
3 collapse in funding with no hold harmless to follow,
4 even though it appeared to be a great idea at the
5 time.
6 REPRESENTATIVE SCAVELLO: All right. Another
7 question.
8 Medical malpractice costs, insurance costs,
9 how have you been faring the last couple of years?
10 Can you tell me, since the Legislature has made some
11 changes in the law, can you explain how your costs
12 have been holding out? Have they been increasing
13 or---
14 DR. NORDENBERG: Well, I would say at Pitt,
15 that the Mcare abatement program---
16 REPRESENTATIVE SCAVELLO: Yes.
17 DR. NORDENBERG: ---has been a help to us,
18 and it has relieved some of the burdens associated
19 with medical malpractice insurance expenses. On the
20 other hand, that, as I understand it, is not a
21 permanent solution to the problem, and so we do worry
22 about what will come next.
23 DR. SPANIER: At Penn State we went through a
24 phenomenal increase in medical malpractice costs. It
25 was probably the single greatest inflationary factor
39
1 and the biggest financial challenge on a proportional
2 basis that affected the budgets of our academic health
3 center. The last couple of years those have
4 stabilized, and so the situation is better. The
5 principal reason for that, I think, are the actuarial
6 adjustments that have been made by our insurers
7 because of quality control programs that we put in
8 place and improvements that we have made within the
9 medical center to make sure that we had as little
10 malpractice as possible. So that, I would say, has
11 been the principal driving force. But yes, the
12 situation has gotten better, but we are still burdened
13 with relatively high malpractice costs from that big
14 run-up that we had from the mid-1990s through a year
15 or two ago.
16 REPRESENTATIVE SCAVELLO: Thank you.
17 DR. HART: At Temple, ours remain high, and
18 while our actuarials have adjusted our malpractice
19 rates a quarter at a time, they have yet to
20 permanently adjust those rates, and so we still have
21 to budget and assume the higher rates of malpractice,
22 partly because of the populations we serve, having a
23 high malpractice litigation rate, but also because of
24 Philadelphia in particular.
25 REPRESENTATIVE SCAVELLO: Thank you very
40
1 much.
2 CHAIRMAN EVANS: Representative Dan Frankel.
3 REPRESENTATIVE FRANKEL: Thank you, Mr.
4 Chairman, and welcome.
5 I'm wearing my Pitt colors today as I do
6 almost every day when I'm here in the State
7 Legislature. But I want you to know that, you know,
8 while I'm proud to represent the University of
9 Pittsburgh in my district and a trustee, I'm proud of
10 all the State-related universities. We have a great
11 system here, and each one of you is the President of a
12 great institution that we can all be proud of.
13 I wanted to get to an issue that I think is
14 still kind of out there. It's something that I think
15 probably Penn State, Pitt, and Temple, but Dr. Nelson,
16 you are welcome to comment as well on. We are looking
17 again this year at a proposal from the Governor with
18 respect to biomedical research and a proposal to
19 securitize a portion of the tobacco settlement funds
20 to establish the Jonas Salk Research Fund, which would
21 invest in bricks and mortar, equipment, facilities for
22 biomedical research, and I know certainly Pitt, Penn
23 State, and Temple have significant investments and
24 have been enormous engines attracting Federal research
25 dollars at the top levels in this country. I mean, it
41
1 really has been very impressive. But there have been
2 some concerns with respect to diverting some of the
3 dollars that currently are appropriated through the
4 CURE funds of the tobacco settlement for research into
5 the physical aspects of this. And I know we haven't
6 seen the language exactly and there are varying levels
7 of support and concern, but I am wondering if each of
8 you could maybe talk about some of your concerns and
9 what you might like to see included in the ultimate
10 legislation.
11 DR. SPANIER: Well, let me just say first
12 that if according to your new rules you were allowed
13 to accept gifts, I would be happy to give you a Penn
14 State tie so we could break this cycle. But in
15 response to your specific question, we at Penn State
16 are supportive of the approach that the Governor has
17 identified in the Jonas Salk Fund, and the reason in
18 our case is that our most critical needs right now do
19 relate to bricks and mortar. They do relate to
20 facilities because of important initiatives that we
21 have under way in cancer, in the Cancer Center at
22 Children's Hospital, and in the materials and life
23 sciences area, where we have projects on the drawing
24 boards that are in critical need of financial support.
25 We believe that this up-front investment in facilities
42
1 will give us the opportunity attract to the university
2 top-notch scientists in areas where we already have
3 some strength and will significantly help university
4 research, which will have important benefits in life
5 sciences and in the allied disciplines, and will help
6 economic development to the State, because out of the
7 advances that can come from these projects, there
8 would be some spinoff companies; there would be new
9 research dollars coming in from industry and from the
10 Federal government that would create new jobs. So for
11 us, this is an approach that we would support,
12 knowing, of course, that there are tradeoffs in that
13 we would have to give up some funds that otherwise had
14 been promised in the future for research activities.
15 DR. NORDENBERG: Well, responding to your
16 question, Representative Frankel, is awkward for me in
17 three different respects. One is, I hate to disagree
18 with President Spanier. The second is that my
19 university does, of course, claim Jonas Salk. In
20 fact, last week, I was reminded by Friday's New York
21 Times, was the date of the first mass inoculation of
22 people with the Salk vaccine in Pittsburgh. And
23 third, because I do want to be supportive of the
24 general proposition being advanced by the
25 administration, and that is, accelerating investments
43
1 in biomedical research could be a good thing. Our
2 circumstances institutionally may be different than
3 Penn State's because we have just invested heavily in
4 a major research facility that earlier this week was
5 named the top lab facility by Research & Development
6 Magazine, and so we are very concerned about the flow
7 of funds that would support the researchers that we
8 are going to bring into that building.
9 The tobacco settlement legislation as
10 initially crafted was, it seemed to me, a pretty
11 exemplary piece of legislation. It did commit those
12 dollars to health-related projects. In terms of
13 research, it committed a flow of dollars to
14 institutions based on how successful they were in
15 winning peer-reviewed NIH grants and bringing those
16 dollars into Pennsylvania. So that if you are
17 successful with NIH funding and you are bringing
18 dollars into Pennsylvania, and we attract about $600
19 million of grant support every year, then you are
20 going to benefit from this fund. If you stumble and
21 you are not as successful, your percentage is going to
22 go down.
23 So we have been a supporter of the original
24 legislation. We understand that there is a revised
25 version of the proposed Salk Legacy Fund Act that soon
44
1 will be available for review. We are hopeful that it
2 will come back to us in a form that we can support,
3 but we won't know that until we see it.
4 DR. HART: It's nice to be right in the
5 middle of my two colleagues, even as I'm sitting at
6 the end of the table. Temple University has spent a
7 lot of time in thinking about this in the last few
8 months, and as many of you know, last year we were
9 cautious but not supportive. As we have looked deeper
10 into the proposal that we hear is coming forward from
11 the administration, this time, however, we are leaning
12 toward supporting the Jonas Salk Fund for these
13 reasons. The formula fund that is so great for Pitt
14 is actually not good for an institution that is on the
15 rise rapidly, because those formulas are slow to be
16 adjusted, and we believe that Temple scientists and
17 research physicians are going to be very, very
18 competitive for competitive grant funding, and at the
19 same time Temple is in a position now with our new
20 medical school and with a brand new dean in our
21 College of Science and Technology and with some very,
22 very important searches underway to see infrastructure
23 as the key to making sure that we can be catapulted
24 more quickly into a more competitive place nationally.
25 And I do believe that with the investments that are
45
1 being made in other States, that the Commonwealth
2 could in fact fall behind if we don't pay attention to
3 the research infrastructure while maintaining some
4 funding directly for the research itself.
5 DR. NORDENBERG: But I do think that it is
6 important to make one point when other States are
7 brought up. In many other States, there are new
8 dollars being found to invest in biomedical research.
9 In this particular case, we are talking about a
10 shifting of dollars that already are being invested in
11 biomedical research to deliver dollars in a different
12 form and in an earlier form, and that may be a good
13 thing in the end. I mean, we are all waiting to see
14 the legislation, but it isn't really the equivalent of
15 what we are seeing in many other States where they are
16 finding new dollars to invest in biomedical research,
17 believing that that is the wave of the future as
18 opposed to shifting dollars from one research category
19 to another.
20 REPRESENTATIVE FRANKEL: Now, I would agree
21 with you. It is a concern, and I have talked about
22 this over a period of years during these hearings.
23 When you take a look at what California is doing, $3
24 billion of new research dollars, other States -- New
25 Jersey, Illinois, Wisconsin -- doing that, that it is,
46
1 I would love to be able to identify a new source of
2 revenue. In fact, I had at one point looked at one of
3 the sources of revenue being looked at for the
4 health-care proposal, which would be taxing smokeless
5 tobacco products and cigars and securitizing that
6 money. But at the end of the day, that is probably
7 not going to happen at this time, and it is something
8 I think we need to be very careful about, because the
9 research dollars really help leverage ultimately the
10 enormous resources at the national level that make
11 what you folks are doing in your institutions so
12 successful I think for Pennsylvania.
13 So thank you very much, and I appreciate your
14 responses.
15 CHAIRMAN EVANS: Representative Scott Petri.
16 REPRESENTATIVE PETRI: Thank you, Mr.
17 Chairman, and welcome Presidents and Chancellor.
18 Congratulations on all your past successes and your
19 future successes.
20 I want to follow up a little bit on what
21 Representative Frankel was asking about. It's an area
22 that I have a lot of concern about, and I think
23 personally we are at a fork in the road, and I think
24 whatever decision we make will be judged 10, 15 years
25 from now as to whether we went the right way, so I
47
1 want to probe a little bit more.
2 I gather from what I have read in your
3 various documentation that for all three of your
4 institutions that are involved in receiving part of
5 the tobacco settlement funds, that that program has
6 been phenomenally successful for the Commonwealth
7 specifically and also for your institutions in a
8 dollar sense. I would like you to comment on that,
9 number one.
10 Number two, what is easier for a university
11 to obtain from outside a governmental source, money
12 for bricks and mortar or money for chairs and startup?
13 The reason I ask that, and I'll give you a little
14 background, when I was at Washington & Jefferson
15 College, it seemed like the President could build a
16 building every year, and there was always a group that
17 was willing to do matching funds and other things. So
18 my experience, what I observed as a student was that
19 the bricks and mortar were the much easier of the two,
20 but I would like your comment.
21 And the third thing is, if we cut the tobacco
22 settlement funds in any amount, what impact will that
23 have on your ability to continue to obtain NIH
24 funding, and two institutions in Pennsylvania have
25 been in the top seven in the country. And the final
48
1 point would be, what is the worldwide global
2 competitive market for this money and for research,
3 because it isn't us against California anymore; it is
4 us against the world.
5 DR. SPANIER: The tobacco settlement funding
6 that has been directed for our research activities has
7 been very effective and very welcome, so I certainly
8 would say that has been the case. And of course the
9 issue before all of you is this relative tradeoff
10 between bringing in the research money through these
11 funds or putting them into bricks and mortar, which is
12 more of an up-front kind of investment, and I think
13 you have heard some range of views on that, so it
14 depends a little bit where we each are in our
15 thinking.
16 To answer your second question -- this would
17 surprise some people -- it is actually very, very
18 difficult in this era to raise money for buildings.
19 First of all, buildings are very expensive. We are in
20 an escalating construction environment in
21 Pennsylvania, and in our last capital campaign, the
22 hardest thing that we raised money for was for bricks
23 and mortar. It was actually much easier to raise
24 money for endowed chairs and faculty endowments. So I
25 don't know if that would be the case at all
49
1 universities but it certainly has been at Penn State,
2 and in our next large capital campaign, which we are
3 just in the earlier stages of launching, we will have
4 virtually nothing in there for bricks and mortar
5 because of the considerable challenge of raising money
6 in that area. We will focus more on endowments,
7 mostly for scholarships for students, but secondarily
8 for faculty endowments as well.
9 The philosophy that we are bringing to this
10 discussion is that by making the investment in
11 facilities, that will provide us with the opportunity
12 to attract faculty who can be competitive in seeking
13 external funding. For us, that funding is not
14 necessarily so much from NIH, because Penn State's
15 contribution comes about at the junction between
16 disciplines where the life sciences meets information
17 sciences and technology, material sciences,
18 nano-technology, and we do have the top ranked program
19 in the country in material science, for example. So
20 an investment there for us we think will allow us to
21 bring the people in who can then compete for the
22 research funding that we hope would replace the
23 research dollars that we have previously looked to to
24 support the research programs from the tobacco
25 settlement funds. That is our philosophy that we are
50
1 bringing to this.
2 DR. NORDENBERG: The tobacco settlement
3 distribution to this point has worked extraordinarily
4 well for us. Part of that is that there is some
5 degree of flexibility in the spending, though there is
6 review of where you are going to put those dollars.
7 So the dollars can be invested up to some point in
8 physical projects if that is your priority, but
9 dollars also can be invested in people, in programs,
10 in equipment. And because maintaining the flow of
11 those dollars does depend upon continuing to achieve
12 high levels of success in attracting other research
13 dollars, it does tend to make you focused in your
14 thinking. There is a kind of discipline that is
15 imposed within the structure itself.
16 And a big benefit of the act as originally
17 constructed was there was to be some dependability in
18 the dollar flow, so that you could bring in a new
19 faculty member who was likely to attract support over
20 time but who needed to be brought up to a level of
21 competitiveness in terms of NIH funding and know, to
22 the extent that you can know anything in this life,
23 that those dollars were going to be there, not just
24 this year but next year and the year beyond.
25 That having been said, let me say again that
51
1 I do think the administration is sensitive to this
2 tradeoff. My sense in terms of the messages that have
3 come from Secretary Yablonsky in particular is that
4 they are trying to craft something that will be
5 sensitive to those needs. Again, I just haven't seen
6 the legislation.
7 DR. HART: And I would add that Temple's
8 mission is a bit different as well, because much of
9 the groundbreaking work that is going to be done in
10 the biomedical sciences is in the field of clinical
11 trials and translational research, and I believe that
12 we believe that NIH is not going to be the only
13 measure of that success and that we need to focus on
14 an infrastructure investment up front in order to be
15 able to attract those partners that are not
16 necessarily from the Federal government but also come
17 from very many other partners who can help us with
18 that very, very important research. And what is more,
19 the kind of research that comes out of clinical and
20 translational work may have a quicker impact on the
21 immediate economy and application to the good of the
22 whole, and we need to not lose track of the fact that
23 we are not just talking about NSF and NIH funds.
24 REPRESENTATIVE PETRI: Thank you.
25 CHAIRMAN EVANS: Representative Scott
52
1 Conklin.
2 REPRESENTATIVE CONKLIN: Hello. I would like
3 to thank you all for coming out today. Just a couple
4 of questions that I have for you. Some of them have
5 already been asked, but after Representative Frankel's
6 question, I'm glad to see the rivalry between Pitt and
7 Penn State lives on. And, Dr. Spanier, I apologize; I
8 tried to stay nonpartisan. That is why I didn't wear
9 my blue-and-white tie today. I do apologize for that.
10 But just some clarification, and this only
11 goes for those individuals in the room, that when we
12 talk about the economic impact and we talk about
13 Pennsylvania trying to become a leader among States
14 and among the world, just for myself, it is a two-part
15 question, because it may have been asked. One of them
16 is, especially starting with Penn State, can you tell
17 me approximately where you rank in this State for
18 employment, and for each university, just enlighten us
19 upon how many employees you really do employ. And
20 just a followup to it, we are talking about the
21 research-based universities and how much money it
22 takes to do research. Can you tell us how we can
23 think outside the box and bring a few more research
24 dollars in; and two, we talk about the private sector
25 marriaging with us, that I know recently Penn State
53
1 did its THON again, which raised millions of dollars
2 for Hershey. Hopefully Pitt might be able to raise
3 some money for us as well, you know, just to keep the
4 competition alive. But can you tell us in approximate
5 dollar figures, about how many dollars from the
6 private sector does come into your universities each
7 year?
8 DR. SPANIER: Well, Penn State this year will
9 have research expenditures of about $700 million. In
10 the national NSF rankings last year, of research
11 expenditures we were ninth in the United States. For
12 us, about -- a round number -- about $100 million of
13 that is in industry-sponsored research. We ranked
14 second in the country in industry-sponsored research,
15 and I mentioned that we are second in defense-related
16 research, and our research portfolio is very much
17 spread across a whole range of Federal agencies and
18 through industry.
19 We write approximately 40,000 paychecks a
20 month at Penn State, and depending upon which index
21 you are looking at, we are the first or second largest
22 employer in Pennsylvania. One ranking would have us
23 first and the other second, and the other competitor
24 for that top spot is Wal-Mart.
25 So our footprint is very large. We operate
54
1 at 138 different locations throughout Pennsylvania.
2 We have employees in every county, and of course we
3 have 24 campuses. So our impact on economic
4 development is very profound, and that adds a level of
5 responsibility that we think we have for the
6 Commonwealth.
7 How can the State help us to continue to
8 attract research dollars? Well, certainly I'll
9 mention a few ways. One we have already been talking
10 about in the other context -- facilities. When
11 Governor Ridge took office in 1995, he pledged a
12 particular amount for each of our institutions that he
13 would fund on a continuing basis. For Penn State,
14 that was $40 million. A couple of years later they
15 amended that $40 million to include the furnishings
16 and equipment and the rest of the infrastructure that
17 previously had been funded separately, so it
18 represented a step back in our overall support. That
19 $40 million has not changed 12 years later, and the
20 costs of construction have doubled in that same period
21 of time. So we are put in a position of having to
22 borrow more and more to keep up with our facilities.
23 We have phenomenal needs in deferred maintenance, and
24 we have many, many buildings that are aging. So
25 facilities is one area where the State could be very
55
1 helpful in increasing its level of commitment.
2 Secondly, there are other ways in which the
3 State, through any one of a number of agencies, could
4 be more helpful to universities in reaching out to us
5 for research needs -- through economic development,
6 through agriculture, and in other areas. This is a
7 function and part of the funding that you make
8 available to those agencies, but we have a lot of
9 expertise to contribute.
10 Also, there have been ongoing issues,
11 frankly, with the State and its ability to pay
12 indirect costs or overhead to the universities. So
13 much of the research that we do do for the State we
14 subsidize in large part on the backs of other parts of
15 the university budget, and if the State could see its
16 way clear to recognizing that there are overhead costs
17 to doing research, that could be helpful to us as
18 well. Thank you.
19 DR. NORDENBERG: Well, here I sit, much
20 smaller than Penn State. We have 12,000 employees at
21 the University of Pittsburgh, which is a 25-percent
22 boost since the mid-nineties, almost all of that a
23 direct result of the increased research funding that
24 we have attracted. Our total research expenditures
25 are a little over $600 million each year, which really
56
1 does make us a power, and really the Commonwealth is
2 fortunate to have a number of universities that can
3 fairly and properly claim that title.
4 The employment situation for us gets to be a
5 little bit more complicated, and I want to be careful
6 about how I say this, because the University of
7 Pittsburgh Medical Center is a legally distinct
8 entity, which has its own board and its own highly
9 effective management team, but we are linked at many
10 different levels. At the board, in terms of our
11 mission through our faculty, the UPMC today employs
12 about 45,000 people, I think, and so there must be
13 different listings as to who is one and who is two and
14 who is three. But the educational medical enterprise
15 in southwestern Pennsylvania certainly is a force and
16 is driving much of the economy.
17 Let me make a comment that maybe will
18 supplement the specific suggestions made by President
19 Spanier, and I do agree with all of them. Just
20 remember, all of these things are being done from a
21 university corps, so that if you want economic
22 development, if you want research, if you want all of
23 the other good things that we are doing in and for our
24 communities, there has got to be a strong Lincoln and
25 a strong Temple and a strong Penn State and a strong
57
1 Pitt, and to the extent that we struggle in our basic
2 educational mission, that then also has an impact on
3 what it is we are doing in research, what it is that
4 we are doing in terms of community outreach. It
5 affects the many ways in which we elevate the economy
6 and the quality of life in our communities.
7 DR. NELSON: I always like to bring my
8 decimal point along. And for those of you who do not
9 understand, as I always talk with colleagues, you
10 know, I'm an afterthought and a decimal point in the
11 budget. But however, Lincoln -- and it is small; it
12 is 2,400 students -- we employ about 450 folks, and we
13 have about a million and a half with the research
14 going on in our institution.
15 DR. HART: I think Temple's role is so
16 central to Philadelphia that I would like to answer
17 your question specifically in terms of Philadelphia.
18 But first, we have about 7,800 full-time employees,
19 and that doesn't include our health system, as Pitt
20 has pointed out. That is a difference. We contribute
21 almost $3 billion a year to the Greater Philadelphia
22 area economy, and we serve 34,000 students. So we
23 are--- And our research is on a much smaller scale.
24 Our expenditures right now are at about just over $75
25 million. But our role overall in the economy of the
58
1 Greater Philadelphia area is critical, and what you
2 can do to help us is a very interesting question.
3 For Temple University, one of the major ways
4 that the Commonwealth can help us serve our unique
5 mission is by providing financial aid to our
6 undergraduate students who come with such high
7 financial need, and even with the investment that we
8 are making in need-based aid, we are right now able to
9 meet only about 64 percent of the need that our
10 students who come with real financial need bring to
11 the table as they try to do their work. Now, that is
12 quite different than investing in infrastructure for
13 research, but overall, we are a package, and as my
14 colleagues have pointed out, when 50 percent of our
15 buildings are over 25 years old, before we even get to
16 the point of talking about world-class research
17 facilities, we need to make sure that all of our
18 students and faculty work in an environment that
19 pushes them to the excellence that they deserve.
20 REPRESENTATIVE CONKLIN: Thank you.
21 CHAIRMAN EVANS: Representative Ron Miller.
22 REPRESENTATIVE MILLER: Thank you, Mr.
23 Chairman.
24 Dr. Spanier, well aware of the work that Penn
25 State does in the way of food security and working on
59
1 methods that we are going to deal with bioterrorism
2 and things like this, I noted in the budget request,
3 that you requested an increase for both agricultural
4 research and agricultural extension lines and that the
5 Governor has flat-lined those; there is no increase
6 included in his budget. What might that mean for the
7 future of agriculture in Pennsylvania?
8 DR. SPANIER: Well, it's not a good
9 development. To me, it is actually inexplicable. I
10 don't understand why these two units at Penn State,
11 our cooperative extension service and our agricultural
12 research programs, which support the single largest
13 sector of the State's economy, agriculture, are
14 recommended for no increase. This has been something
15 that has been reflected in the Governor's budget for
16 several years now, and fortunately the Legislature has
17 noted that and has made an adjustment, and last year
18 you made a very generous adjustment which put us in a
19 favorable situation where we did not have to incur
20 additional layoffs as we had in some previous years.
21 Penn State has the College of Agricultural
22 Sciences for the Commonwealth of Pennsylvania. We
23 have cooperative extension offices in all 67 counties
24 of the State and in areas ranging from nutrition to
25 production agriculture to economic development
60
1 outreach to human development, and in substantive
2 areas like water quality, food safety, bioterrorism,
3 and any one of a number of areas. We are the resource
4 that the Commonwealth relies on in these areas. So
5 it's important for us to receive an increase there
6 that allows us at the very least to continue our
7 current level of activities, and so an increase of a
8 few percent to keep up with inflation is minimally
9 what needs to happen. We have a proposal that would
10 ask for funding beyond that level to continue with
11 some of the initiatives that are in place. When there
12 is an outbreak of any kind in the State, when there
13 are concerns about West Nile virus or avian flu or a
14 bioterrorism incident, people will want to turn to
15 Penn State for a practical solution, for a research
16 solution, and if we keep cutting the number of
17 employees and scaling back on the programs, that kind
18 of response is diluted, and we don't want to see that
19 happen.
20 So I hope the motivation for your question is
21 to point out this error in the budget, and I would
22 hope you would join me in encouraging your colleagues
23 to remedy that as we go through the process this
24 spring.
25 REPRESENTATIVE MILLER: I appreciate your
61
1 answer, and that certainly is the intent, and I think
2 it is also important to note your response that ag
3 extension services extend into all 67 counties. They
4 don't all deal, every county does not deal with plum
5 pox or something like that, but, you know, the food
6 security and nutrition and things that like are very
7 important to all residents of Pennsylvania. So yes, I
8 definitely will work towards that goal, and thank you
9 for your answer.
10 Thank you, Mr. Chairman.
11 CHAIRMAN EVANS: Representative Bryan Lentz.
12 REPRESENTATIVE LENTZ: Thank you, Mr.
13 Chairman. Good morning.
14 I would like to follow up on a point that Dr.
15 Nelson made earlier referring back to the State
16 university systems educating our returning veterans
17 after World War II. As you know, we have a new
18 generation of veterans returning, and I'm curious what
19 your universities are doing to facilitate the
20 enrollment in education of returning veterans. And on
21 a related note, I would like to hear how your ROTC
22 programs are doing and how they are integrated into
23 your universities.
24 DR. HART: Well, ROTC is alive and well at
25 Temple, so I have not spoken first yet, so I'm going
62
1 to jump in here.
2 You will see in an article in just our Temple
3 alumni magazine that one of the articles is about one
4 of our young women in ROTC, and the title of it is
5 "Why I do ROTC." So I have learned yet another young
6 person's expression about the way that they spend
7 their time.
8 But in addition to ROTC being strong at
9 Temple, we are committed to making sure that we both
10 make it possible for our employees who are members of
11 the armed services who are called up are able to serve
12 and receive the support from Temple that they need in
13 order to return to their lives. And also overall on
14 the Temple campus, I think that because we have been a
15 place where people don't always necessarily come to
16 school when they are 18 years old, it is a very, very
17 welcoming place for people to enter the university at
18 multiple stages in their lives, and it is our absolute
19 intent to continue that tradition with our returning
20 veterans.
21 DR. SPANIER: Penn State operates one of the
22 largest ROTC programs in the United States and all
23 four of the services -- Army, Navy, Air Force, and
24 Marines. Very proud to say that last year our Air
25 Force ROTC program was named the top such program in
63
1 the United States, and it is very competitive,
2 actually, to get into those programs at Penn State
3 right now. We also welcome back quite a large number
4 of veterans at the university. We have a program for
5 that. We have an office that supports them. We have
6 student organizations that welcome veterans and help
7 them with that transition, and we do actually have
8 quite a number of employees who are deployed through
9 their National Guard units and through other
10 mechanisms, have been called up. We have very good
11 policies in place to support them.
12 One thing that I'm very proud of is that when
13 I became President, we began to include in our
14 graduation ceremonies special recognition of the
15 students who were in ROTC and were being commissioned.
16 They go to a special commissioning ceremony, but then
17 they go through our general commencement ceremonies
18 where we recognize them in front of the thousands of
19 other people who are there, and I think that has been
20 quite remarkable and very effective. No matter where
21 people stand on some issues today regarding our
22 military involvements, people are incredibly
23 supportive of the veterans who have returned to the
24 university and our students who are about to enter the
25 armed services.
64
1 DR. NORDENBERG: If I was as smart and quick
2 as my three colleagues, I probably wouldn't come to
3 work until the middle of the morning, but I'm not, so
4 I'm usually one of the first people on campus, and the
5 first people that I see most days are ROTC cadets
6 drilling in different ways, depending upon the season
7 and the weather. We have an Air Force and an Army
8 unit at Pitt. We are a principal provider of students
9 with the naval unit that actually is headquartered up
10 the street at Carnegie Mellon. These are some of the
11 most impressive young people that you could ever hope
12 to find anywhere, and so are those who have been
13 called from the employee ranks and from the student
14 body to serve.
15 You know, some of the saddest moments that we
16 probably all have faced in our universities in recent
17 years is receiving the news of members of our
18 community who were called to serve and who are not
19 coming back, and when you get that kind of message, it
20 makes you even more determined to welcome those who
21 are returning with open arms. We do have a very fine
22 office at the University of Pittsburgh that is
23 designed to professionally meet their needs, and my
24 sense from personal interactions with numbers of them
25 is that they are proud of what they have contributed
65
1 to the country and pleased to be back.
2 And I do think your question is an important
3 one, because too often we lose sight of all of the
4 different places from which our fellow citizens are
5 being asked to leave their lives and to go serve, and
6 so it does happen with employees, it happens with
7 students, and it happens with students at all levels.
8 I had a conversation earlier this year with a doctoral
9 candidate in our English department, and we had taken
10 to writing to each other while he was away, and he was
11 pleased to be back, but I have to say he had already
12 done two tours and was getting ready for more
13 probably.
14 DR. NELSON: We do not have an ROTC but we
15 have worked out a relationship where if our young
16 people are interested in the ROTC, we have a
17 relationship with the University of Delaware, and we
18 have some young people who are enrolled at Lincoln
19 University and participate in the ROTC program at the
20 University of Delaware. Fortunately, we have not had
21 the unfortunate aspect of having to deal with the
22 death of anyone in the previous conflict, and we do
23 provide opportunities for young people who are
24 returning from military conflict, and we also provide
25 opportunities for those who might decide that they
66
1 want to interrupt their education and move on and come
2 back to college.
3 REPRESENTATIVE LENTZ: Thank you.
4 CHAIRMAN EVANS: Representative Dally.
5 REPRESENTATIVE DALLY: Thank you, Mr.
6 Chairman, and good morning. Again, I also,
7 parenthetically, I guess I have a Lincoln University
8 tie on, Dr. Nelson.
9 DR. HART: I'll claim it for Temple, too.
10 REPRESENTATIVE DALLY: Those are Temple
11 colors, right?
12 Dr. Hart, I'm glad you brought the issue of
13 financial aid and financial need of our students. As
14 you are probably well aware, the Governor has proposed
15 in this year's budget level funding of the PHEAA grant
16 program, which I think has the potential for thousands
17 of students throughout the Commonwealth not receiving
18 the financial backing that is necessary for them to
19 matriculate at an institution of higher learning, and
20 I think all four of you mentioned that the vast
21 majority of your students are indeed Pennsylvania
22 residents. So what I would like to hear from each of
23 you is whether you have considered that proposal and
24 what impact it is going to have on your current and
25 future students enrolled in your institutions.
67
1 DR. HART: Well, at Temple we have thought
2 very directly about the proposal, and let me tell you
3 very specifically the part of the impact we think that
4 would occur were we not to increase the financial aid
5 available for Pennsylvania students.
6 First of all, 70 percent of our students come
7 with demonstrated financial need, and so we have, and
8 that doesn't include the students whom we support
9 financially because of merit and other designated
10 fellowships through endowment and other sources. As I
11 mentioned earlier in my testimony, we are able,
12 through even with the current menu of financial aid,
13 only able to meet directly 64 percent of that
14 financial need, and that includes with institutional
15 aid. So the immediate impact would be, as my
16 colleagues have pointed out, an increase in debt from
17 more expensive sources, either from their parents or
18 other ways in which they can cobble together enough
19 money to go to school. And as you know, young men and
20 women whose parents have the least financial resources
21 of their own are those who are going to be least
22 likely to go to those higher interest rate loan
23 opportunities that might be able to make it possible
24 for their sons and daughters to stay in school.
25 It also would increase immediately the
68
1 financial burden on our own operating budgets, because
2 we will in fact try and consider ways in which we can
3 begin to fill part of that gap. So there will be an
4 immediate impact on the operating budget at the
5 university as we struggle with institutional-based
6 aid, and so it is a little bit like giving away a gift
7 with one hand and taking it back with the other as we
8 struggle to make our general and education budgets
9 work with the appropriations increases that we are
10 talking about in a core budget.
11 DR. NORDENBERG: I can't be totally objective
12 about this because I received a PHEAA grant as an
13 undergraduate, and that leaves a feeling in your
14 heart. But more than 30 percent of our students do
15 receive support from PHEAA, so if there is not an
16 appropriate adjustment, that will be a burden on them,
17 and as my colleague from Temple has said, ultimately a
18 burden that we will try to make up for in some way.
19 DR. SPANIER: Because of Penn State's size
20 and because of the financial circumstances relating to
21 our students, we are PHEAA's single largest customer.
22 Last year, 44,000 of our students applied for funding
23 from PHEAA; 19,000 students received awards. The
24 grant dollars awarded were $62 million. It is a great
25 concern that PHEAA has been recommended for no
69
1 increase, because this will put increased burdens on
2 students to take out a growing proportion of their
3 financial aid through loans. It would be ironic if
4 Pennsylvania did not provide at least a modest
5 increase in PHEAA funding at a time when the Federal
6 government finally, after years, has decided to at
7 least modestly increase the Pell grants. It would be
8 as if the Federal government took a small step forward
9 and we took a small step backward, thus putting our
10 students at further risk of being able to afford a
11 college education.
12 So I know that you face a large number of
13 requests and needs, but I think all of us would
14 certainly be supportive of providing some modest
15 additional increment in funding for PHEAA.
16 REPRESENTATIVE DALLY: Okay. Thank you.
17 DR. NELSON: Well, it is inevitable that
18 there is not another source of grant funding that our
19 young people are going to have to secure additional
20 loans, and if PHEAA is not provided any additional
21 support, I can guarantee you that our young people are
22 going to have to borrow that differential in a loan
23 and loans.
24 REPRESENTATIVE DALLY: Okay. Thank you very
25 much.
70
1 And just a final question for Dr. Spanier.
2 In your prepared comments, Dr. Spanier, you mentioned
3 you have 500,000 living alumni for Penn State, and you
4 did touch briefly on a future capital campaign, and
5 I'm curious as to what success the university has had
6 in growing your endowment and how are you using that
7 to leverage your other dollars from tuition and
8 government subsidies that you receive?
9 DR. SPANIER: Our endowment last year was at
10 about $1.4 billion at the end of the fiscal year, and
11 we are very proud of the progress that we made in
12 that, coming off the heels of a major capital
13 campaign, and it has encouraged us to go ahead and
14 begin a new capital campaign.
15 But one of the things that people may not
16 understand about fundraising and universities today,
17 the situation for us is very different than it might
18 be at Harvard, which has nearly a $30 billion
19 endowment, or Yale which is now crossing the $20
20 billion threshold. These are institutions that have
21 been around a very long time, and a significant
22 portion of their endowments are unrestricted.
23 Ninety-nine-point-nine percent of Penn State's
24 endowment is restricted. In other words, in modern
25 history, when donors give money, they tend to give it
71
1 for a very specific purpose. It might be for a
2 building -- as I said, that doesn't happen all that
3 often -- but it might be for an endowed chair for a
4 faculty member, or a very common one is to endow a
5 scholarship for a needy student. But we have never
6 had a gift since I have been President where someone
7 has donated money to help us offset the cost of
8 operating the university. Nobody has given us a gift
9 so we could pay down the utility bill or pay for the
10 custodians to clean the building or to deal with
11 deferred maintenance.
12 So in answer to your question, the
13 fundraising is very important now, even for public
14 universities, and it helps us make the universities
15 much better than they were. It really creates a
16 margin that allows us to be excellent by investing
17 selectively in certain areas of interest to the donor.
18 But it actually doesn't help us with the operation of
19 the university. That's where the appropriation comes
20 in.
21 So people expect the State, because we are
22 State-related institutions -- in our case, we are
23 called the Pennsylvania State University -- our donors
24 assume the State is taking care of us, and that is why
25 we make the pleas we do at these Appropriations
72
1 hearings, because if we can't keep up in operating the
2 university and in keeping tuition down, it actually is
3 harder to convince the donors, not easier, it is
4 harder to convince the donors to invest in a great
5 university because they see that other things aren't
6 being taken care of.
7 REPRESENTATIVE DALLY: I see. Thank you very
8 much. I thank each of you.
9 CHAIRMAN EVANS: Representative Steve
10 Cappelli.
11 REPRESENTATIVE CAPPELLI: Thank you, Mr.
12 Chairman, and good morning.
13 I would like to first just commend all four
14 of you. I think you are outstanding leaders of your
15 universities, and collectively you are invaluable
16 assets to this Commonwealth and the regions of the
17 State in which you serve.
18 I have a question which I would like to pose
19 to all four of you concerning your proposed budgets to
20 the Governor versus the Governor's proposed budget to
21 the Legislature and how that will impact tuition for
22 students next year. As a parent of a student at Penn
23 State's University Park campus, I have an acute
24 interest in that subject, for obvious reasons.
25 I notice that President Spanier and
73
1 Chancellor Nordenberg indicated specific percentages
2 that you anticipated seeing tuition increase by should
3 your proposed budget proposals to the Governor be
4 accepted, which they were not. Could you possibly
5 extrapolate and give us revised potential tuition
6 increases if we are unsuccessful in reaching those
7 budget benchmarks that you have been advocates for.
8 DR. SPANIER: Well, get your checkbook out,
9 dad, because one of the laws of nature is, tuition
10 always has to go up, but we are trying to keep the
11 increases as moderate as possible. For us, a
12 1-percent increase in tuition equates to a little over
13 $7 million, and a 1-percent increase in our
14 appropriation equates to about $2 1/2 million. So in
15 order to hold the tuition increase at projected levels
16 or moderate it really requires the State to step up.
17 That is the situation we are in, because a greater
18 share of our income comes from tuition than it does
19 from legislative appropriation.
20 So we would urge you to try to increase that
21 level of appropriation to something close to what we
22 proposed to the Governor. We will have to then make
23 up the gap through further budget cuts. But if it
24 remains at the level that the Governor has proposed
25 for us, which is a 2-percent increase on the E and G
74
1 line, the education and general line, which goes to
2 the academic programs, a 2-percent increase there is
3 proposed. For us, he has proposed no increase at Penn
4 College, which would be disastrous. We have about
5 6,700 students at the Pennsylvania College of
6 Technology. Their tuition would have to go up even
7 higher. If you add in the cooperative extension and
8 agricultural research, the total increase recommended
9 for Penn State is 1.58 percent. There simply is no
10 way to avoid putting that increased burden on the
11 tuition side.
12 As I said, we are so adverse to raising
13 tuition much beyond the projected levels that we would
14 go back and probably make some internal budget cuts
15 and reallocations to avoid making up for it entirely.
16 But it would have to go up somewhat, at least
17 modestly, if the appropriation were not increased.
18 DR. NORDENBERG: Maybe I can add to that and
19 respond first by putting our request in context.
20 You know, in the early years of this decade,
21 as I'm sure all of you will recall, we went through
22 some tough times together, and the State-related
23 universities were asked to really endure more than
24 many other institutions, where we had mid-year freezes
25 and we had cuts and we saw our appropriations going
75
1 down in absolute dollar terms. Once we hit bottom, we
2 began moving back toward what we thought was a point
3 of restoration. Last year actually was a good year in
4 the comparative sense in terms of the growth of our
5 appropriations, and at least for Pitt, we actually
6 reached and passed by a little bit the point that we
7 had been at with our 2001 appropriation measured in
8 absolute dollars. But of course the buying power of
9 that appropriation has diminished over time as
10 inflation has taken its natural toll.
11 So for Pitt, for example, we sit today with
12 an appropriation that has $14 million less in buying
13 power than the appropriation we had in 2001. So I
14 think that our requests for increases really were
15 geared in part to getting us back to where we were at
16 the beginning of the century. The mathematics at Pitt
17 vary a little bit from the calculations that President
18 Spanier was sharing with you but the basic message is
19 the same, that a decrease in the amount of the
20 appropriation inevitably is going to lead to some
21 increase in tuition charges, and of course, a
22 2-percent increase isn't going to keep up with
23 inflation this year, which means that we will be
24 falling even further behind, and if there is one
25 lesson I think we all have learned in the last few
76
1 years, it is once you get yourself into a hole, it is
2 really hard to climb out.
3 DR. NELSON: Well, the difficulty for me is
4 that because my number is so small and my
5 appropriation is so small, this percentage increase
6 for us is sometimes just laughable in the sense of
7 what it does for us. Take, for example, in fiscal
8 year 2000, we received $12.9 million in State
9 appropriations; in fiscal year '07, $13.5 million.
10 That is a total of $574,000 over a period of 7 years.
11 Now, the projected Governor's increase for us, 2
12 percent of our appropriation -- $270,000. Now, you
13 can imagine my fuel bill, it is not going to change,
14 my health-care costs are going to go up significantly,
15 and so all aspects of running the university as it
16 relates to operational costs are just going to go up,
17 and the only place that I have to go is to my tuition
18 line. Now, I don't want to go there, and we try very
19 hard not to go there because of the clientele that we
20 serve, but unfortunately, if we are to continue to do
21 the business that we have to do, then we will have to
22 go there. So it is quite a painful process for us in
23 order to meet the needs that we have to meet, and
24 somewhere along the way, and I know this is, you know,
25 when you get caught into a precedent of how you
77
1 develop budgets, somewhere along the way, when you
2 look at a place like Lincoln University with such a
3 small formula line, the percentage method just does
4 not work, and I would appreciate somewhere, some way
5 to finding that a little bit differently for us,
6 especially when that percentage yield is such a small
7 incremental funding for us as an institution.
8 DR. HART: Thank you. Our situation is much
9 the same, so I'm simply going to give you the numbers
10 for Temple. A 1-percent increase in our tuition will
11 yield about $3.4 million, whereas a 1-percent increase
12 in our appropriation would yield about $1.8 million.
13 So you can see the tradeoff is about two to one. If
14 the appropriation comes in at the Governor's level,
15 then our board of trustees will have to sit down and
16 set our priorities and think about where we want to go
17 into the future and calculate the necessary tuition
18 increase looking forward. Obviously we will always
19 look at ways to be better at lowering the cost of
20 doing business as an institution, and I don't want
21 this conversation to lose track of the fact that all
22 four of us at the table continue to work on business
23 practices and other ways of saving money. But clearly
24 there will be a tradeoff that we will have to make in
25 the tuition appropriation ratio.
78
1 REPRESENTATIVE CAPPELLI: I appreciate your
2 candor and for sharing with the members of this
3 committee the inescapable inevitability of even higher
4 tuition increases should the Governor's budget
5 proposal be adopted. I am thoroughly outraged, as you
6 are, President Spanier, with the leveled funding for
7 Penn College, an institution which happens to be in my
8 district, whose motto is "Degrees That Work." This is
9 a college that has grown from about 4,500 students a
10 few years ago to just under 7,000 today. I think they
11 have a placement rate of about 96 percent of both
12 associate and baccalaureate degree technology
13 students, and when the Governor is proposing to
14 support our community colleges by 3 percent and Penn
15 College zero, Penn State and Pitt under 2 percent, I
16 find that insulting, and I hope the Chairman of the
17 committee and his colleagues in the Senate will work
18 to remedy these wrongs.
19 Thank you very much, Mr. Chairman.
20 CHAIRMAN EVANS: Thank you.
21 Representative Katie True, please.
22 REPRESENTATIVE TRUE: Thank you very much.
23 Good morning, everyone. I have a comment and
24 then just a question, and I'll start with President
25 Spanier because we go back a few years, and I remember
79
1 when you came on board we talked a lot about alcohol
2 education on college campuses, and I know that you had
3 worked very hard on a plan to try to curb whatever
4 problem there might be. And when the Liquor Control
5 Board was here a few days ago, they were talking about
6 and we were asking about money, grants, if you will,
7 to help with education about alcohol on college
8 campuses, and first up, I understand that pretty much
9 the problem you are getting is from kids that already
10 had a problem in high school. I don't think everybody
11 realizes that, but I do think you inherit a lot of
12 problems on campus that were there before they showed
13 up on your campuses.
14 But I was just wondering if you care to
15 comment on funding. Are you getting these grants or
16 is it helpful? Is it working? Do we need to do more?
17 Theoretically, if we could get a handle on some of
18 that, perhaps we would have fewer people waiting 6
19 years to graduate, and I know that is not the whole
20 problem but it might be some of it. If you care to
21 comment on that, please.
22 DR. SPANIER: We have a very good working
23 relationship with the Pennsylvania Liquor Control
24 Board. They are very supportive of our efforts at the
25 university, and we work in partnership with them. We
80
1 have about 42,000 students at our University Park
2 campus and maybe 35,000 of them are undergraduates,
3 and it is a fairly traditional college-age population,
4 between the ages of 18 and 22, and one way of looking
5 at it is that we have thousands of students who are
6 really in a transition from adolescence to adulthood.
7 You are certainly correct in observing that for the
8 majority of our students who engage in excessive
9 consumption of alcohol, it is a behavior that began in
10 high school, and in many cases continues at the
11 university, and in many cases is exacerbated once they
12 arrive at the university. This is clearly one of the
13 major problems facing higher education today, and it
14 is something that I worry about a lot at the
15 university.
16 We have a lot of programs in place to deal
17 with it. Bill Mann, who was here representing the
18 university, co-chairs with the Mayor of State College,
19 a commission that is at work. We have a program on
20 campus that operates through student affairs that
21 creates interventions and educational programs and
22 counseling for students. Last night I had dinner at a
23 fraternity that actually has re-colonized itself, as
24 they say. They kind of started from scratch and
25 recruited a whole new array of 80 students with a
81
1 pledge to change their behavior, which is a very
2 positive sign. It is a part of something we have
3 called the Greek Pride Initiative.
4 So we have a lot of good ideas, a lot of
5 innovative programs in place, and in partnership with
6 the Pennsylvania Liquor Control Board and others it is
7 working pretty well, but the problem is still very
8 much present and will continue to be one of the
9 greatest challenges that we have at Penn State and in
10 higher education today.
11 REPRESENTATIVE TRUE: What about the funding?
12 You know, you are doing all right? Do I assume you
13 are doing all right as far as adequate funding to help
14 with it?
15 DR. SPANIER: Well, certainly more funding
16 would be welcome. We are very pleased to have been
17 the beneficiary of a major Federal grant that is going
18 to help us do some work in this area, but it is clear
19 that we could do more if we had additional funding.
20 So that is an honest answer to your question, but of
21 course the problems that we face are more than just
22 about the funding per se.
23 REPRESENTATIVE TRUE: I understand.
24 Yes, sir?
25 DR. NORDENBERG: A number of years ago when
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1 my own son was getting ready to leave for college, the
2 dean of our nursing school approached me. She had
3 just taken the unusual step of taking a sabbatical
4 while she was dean and going back to work in the
5 emergency room, and she said to me, Mark, if there's
6 one message I would love to deliver to your son, it is
7 don't drink to excess, that everyone these days
8 understands that drinking and driving don't mix. But
9 drinking doesn't really mix very well with anything in
10 a young person's life, and drinking to excess will
11 damage your health, it will damage your relationships,
12 and it will damage almost everything else that you
13 ought to be achieving during these years, and that is
14 a message now that I deliver every freshman
15 convocation. Whether anyone listens to me or not is
16 another matter, but we do have well developed programs
17 of education, of enforcement, and of providing
18 alternative ways of entertaining one's self.
19 And I do want to say that the Liquor Control
20 Board has been a very important partner for us in
21 this. They are enlightened partners in this
22 initiative, and the funding has been very well
23 invested.
24 DR. NELSON: We have programs on our campus
25 that address the issues, and we have, located where we
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1 are, we have somewhat of a difficulty. We have a
2 campus where there is no outlet for young people to
3 go. We are located in a place where we have no
4 off-campus place for students to congregate, and so we
5 have an especially difficult job in trying to educate
6 young people not to participate, and we have gone so
7 far as to counsel all parties on campus.
8 For example, right now my whole campus is on
9 a moratorium for a month and a half because of a
10 drinking incident and things like this. But
11 unfortunately, you have to find some way to provide
12 other activities for these young folks to engage
13 themselves in, and that is where sometimes the
14 difficulty lies, especially in a location like mine.
15 But suffice it to say that we are working
16 with the Liquor Control Board. We are providing
17 educational programs, and we do provide counseling and
18 all of those things that are necessary to try to work
19 at this issue.
20 DR. HART: Well, fortunately, Philadelphia
21 provides a lot of things for young people to do off
22 campus, but that doesn't mean that they don't want to
23 do things on campus, and so a lot of our colleagues,
24 we have our Gittis Student Center with movies and
25 games and activities into the wee hours of the
84
1 morning. We pay attention to their weekend --
2 alcohol-free activities. One of the things that I
3 think we all need to remember is that this problem
4 doesn't go away, that depending on whether it is a
5 4-year graduation rate or a 6-year graduation rate, we
6 have a brand new population of young people coming on
7 our campuses every year, and we can't assume that we
8 have ever solved this problem, because there are new
9 people joining us who come to this great place where
10 they have looked for all this freedom and they are
11 finally away from home, and all of the inhibitions
12 they were hoping to drop, along with the judgment of
13 the 18-year-old brain, don't come together in a good
14 mix.
15 So we have a lot of programs for student
16 affairs. Our vice president for student affairs,
17 Theresa Powell, has a large number of activities and
18 counseling and training. We have a wonderful sworn
19 police department, and our officers participate in
20 education about some of the terrible side effects in
21 addition to intoxication from high-risk alcohol use
22 that include unwanted sexual contact, and we talk
23 about it with our students a lot, about the things
24 that can happen to them that don't necessarily include
25 just being a little bit inebriated. And it is really
85
1 important for us to work with our students so that
2 they know that high-risk alcohol use is a multipronged
3 danger; it isn't just a matter of needing to get
4 someone to drive you home. Having just moved from
5 northern New England, I can say that it is nice not to
6 live in a climate where we have young men or women
7 walking home and freezing to death on the way home
8 from a party because they didn't drive, as we asked
9 them not to, but they didn't listen to the rest of the
10 message. But we have equal dangers that we face in
11 our communities here, and I think you can hear from
12 all four of us that we intend to be strong partners
13 with you moving forward.
14 REPRESENTATIVE TRUE: I thank you all. I
15 really do appreciate your interest and I know it is
16 there, and I think that message needs to be heard by
17 as many people that are listening.
18 I just have one other comment and I will
19 conclude. My children and my grandchildren never
20 would have been able to go to college had it not been
21 for PHEAA and the funding help that they got from the
22 schools that they attended, and I just want to lend my
23 voice to the fact of how we need to be very mindful of
24 that as we move forward in the budget process and
25 certainly hope we can be more supportive.
86
1 Thank you very much.
2 CHAIRMAN EVANS: I want to see if I can
3 re-colonize the General Assembly.
4 The Republican Chairman of the Education
5 Committee, Chairman Stairs.
6 REPRESENTATIVE STAIRS: Thank you, Chairman
7 Evans and Chairman Civera, for allowing me to come and
8 sit with you for a few moments.
9 This morning as the testimony and the
10 questions were raised, I was kind of sitting in the
11 back getting an overview. Sometimes it is good to be
12 in the back and you get to see the whole perspective.
13 You know, I must say, Pennsylvania is unique.
14 We have a system of State-relateds that really is a
15 public-private partnership at its best, as you see
16 today, we are beginning the public process and
17 appropriations, and of course that continues all
18 throughout the year obviously as we talk about funding
19 and helping the students, the traditional and
20 nontraditional students of Pennsylvania.
21 So, you know, there is always, in the biggest
22 and the largest of our activities, there are always
23 concerns, there are always problems, which a few were
24 raised today, and maybe it is because we have good
25 staff people with your institutions to be in
87
1 Harrisburg here most of the time and to meet with
2 legislators, and your government relations do a
3 yeoman's job of representing your institutions.
4 But I just want to say, as I serve on the
5 Education Committee, we work in basic education as
6 well as at higher education, and throughout the year
7 we are always very energetic and energized by the good
8 things that are happening in education, and
9 unfortunately, it is a job, but it is never done.
10 There is more to be done. Certainly, you know, as we
11 mentioned PHEAA, the shortcomings and the funding
12 there to help our students in the agricultural area,
13 which is of great interest to me, there are always
14 challenges and there are challenges throughout.
15 But, you know, I want to commend the
16 representatives this morning from our State-relateds
17 as they endeavor to provide education for
18 Pennsylvania, and we realize that our education today
19 is our future tomorrow. So I don't come with a lot of
20 problems; we work on those things through staff and so
21 forth, but I want to tell the counterparts on the
22 Appropriations Committee that we in the Education
23 Committee stand ready to serve and work with you,
24 because we know the bottom line is a better
25 Pennsylvania.
88
1 So again, thanks for letting me make a few
2 remarks, and, you know, there are always a few
3 negative things that happen out there, but, you know,
4 the positives overwhelmingly overshadow the things,
5 and we will certainly work, as a public partnership
6 work on the things that we need to do.
7 Thank you very much.
8 CHAIRMAN EVANS: Thank you, Chairman Stairs.
9 Representative Kathy Manderino.
10 REPRESENTATIVE MANDERINO: Thank you, Mr.
11 Chairman, and good morning, everyone.
12 As we have talked about the increased costs
13 of higher education and the impacts of this budget, a
14 number of you have mentioned among those things that
15 keeps increasing are your health-care costs, and one
16 of our members had asked me if I would ask you a
17 series of questions, and maybe I'll put them all out
18 there and we can go down the line.
19 But can you address with a little bit more
20 specificity on the health-care issue what has happened
21 to your costs in the last, you know, since 2000 or in
22 the last 5 or 6 years; what kinds of measures, if
23 anything, you have taken as institutions to try to get
24 a control on health-care costs; the kinds of plans you
25 have, whether you are insuring in the private market
89
1 or whether you are self-insuring or have considered
2 self-insuring. But just trying to get an idea of how
3 health-care costs are affecting our universities and
4 what measures or thought plans, if any, you have
5 undertaken to try to control that important line item
6 of your budget and how much of that affects your
7 overall budget and what we are concerned about with
8 regard to tuition.
9 DR. NELSON: Just to give you a feel for it
10 at Lincoln, my benefits costs -- I don't have it
11 broken down in particular -- but my benefits costs in
12 2000-2001 were $3.5 million. My budget benefits costs
13 for this year, $7 million. And most of that increase
14 is a result from health-care costs going up, and that
15 is consistent with, as I said, we approximately have
16 had about 450 employees over this same period of time.
17 So you can see the dramatic increase. This is a
18 doubling in the 7 years that I have been there.
19 REPRESENTATIVE MANDERINO: Do you purchase on
20 the private market? Do you self-insure? Do you have
21 any kind of cost-control measures that you have
22 attempted to do?
23 DR. NELSON: We go out for bid every year,
24 and I think Pennsylvania is probably the craziest
25 place in the world to bid for this in the sense that I
90
1 think you go through brokers and all of those sorts of
2 things, and we have very little control over how we
3 can, we are not self-insured, and so we go to the
4 marketplace to purchase our health care each year.
5 REPRESENTATIVE MANDERINO: Thank you.
6 DR. SPANIER: Well, it is a huge, huge
7 inflationary challenge for us at Penn State. We have
8 engaged in every imaginable approach to keeping the
9 costs of health care down, but year after year they
10 have been going up at a double digit inflationary
11 pace, so it is a significant driving force in our
12 budget. It vies with salary increases for the largest
13 change in our budget from year to year with which we
14 need to cope.
15 At Penn State, because of our size and our
16 ability to manage costs pretty well, we have been
17 self-insured for a very long time, so we pay all the
18 bills, so to speak, and know what the driving costs
19 are. We are continuing to partner with entities that
20 provide administrative services for us to find ways to
21 reduce the costs, but it is a significant driving
22 factor in our economy right now and in the challenges
23 that the university faces. As the population ages,
24 there is this growing need for health care, the costs
25 of tests and pharmaceuticals and hospital bills
91
1 because of the inflationary forces that they
2 experience. So it is a very, very big challenge for
3 us, and when you have as many employees as we do and
4 the insuring of the members of their families, we pay
5 a lot of attention to it.
6 DR. NORDENBERG: It is a very large and
7 rapidly rising component of our budget as well.
8 A couple of things that I might add. First,
9 it also is a growing concern for our employees,
10 because even though the institution does pick up a
11 sizable share of the insurance premiums, employees
12 also shoulder some portion of that burden, and as
13 those costs have gone up, particularly for the less
14 well paid within the employee group, that becomes a
15 real problem. We are a self-insurer and have been for
16 a number of years. We have this mixed blessing and
17 curse, I would say; that is, our employees tend to be
18 fairly aggressive users of health care, particularly
19 at the Pittsburgh campus. They sit in the midst of
20 this, you know, internationally recognized medical
21 center, and for reasons that we can all understand,
22 they want to take advantage of it.
23 I would say that the biggest thrust for us in
24 the last 2 years has been trying to do more in the
25 area of wellness, in trying to educate this same group
92
1 of employees to the benefits of a different kind of
2 lifestyle in the hopes that that will, you know, make
3 them productive, contributing employees for a longer
4 period of time but also keep them from needing some of
5 the procedures that are particularly expensive and
6 that will drive all of our costs up.
7 DR. HART: I would add that wellness is in
8 fact a big part of what we are trying to do, and I'm a
9 personal recipient of that now that I have a Temple
10 e-mail address for the last 8 months of the
11 announcements that come from our HR office about
12 programs that are available to employees. So we are
13 doing all of the same kind of work that you all are
14 doing in trying to keep your overall health-care costs
15 down.
16 But to just echo what has already been shared
17 with you, just in the 2007-2008 budget that we are
18 looking forward to, while our overall salary
19 expenditures were seen as about a 3.4-percent increase
20 because of union agreements and other commitments that
21 we have already made, we are projecting at best
22 through our health-care providers an increase of over
23 8 percent in our benefits, and almost all of that is
24 in health care. So in that sense, health care and its
25 escalating costs becomes a public policy issue for all
93
1 of us who employ people, and over 70 percent of our
2 costs are directly related to salary.
3 REPRESENTATIVE MANDERINO: Just maybe kind of
4 go down the line quickly with short answers.
5 Dr. Nelson did give me his actual costs in
6 2007, which is $7 million just on health care. If you
7 know how much your institutions are spending on health
8 care, I would be interested in that number. And then
9 my second question is, one of the things that -- and
10 you can give me a short answer -- one of the things
11 that Governor Rendell's plan for Pennsylvania
12 anticipates or at least talks about or suggests is
13 whether or not we can kind of combine our purchasing
14 power and look at kind of a huge health-care plan for
15 everybody who kind of is not just State employees and
16 not just each individual university but, you know,
17 whether or not we ought to be looking at kind of
18 getting into one huge master plan. At least that was
19 something that is on the table. Is that anything that
20 kind of has hit your radar screen and that you are
21 open to discussions on?
22 DR. SPANIER: Let me just give you a number
23 that is illustrative. The increment, just the
24 increment that we project for next year in Penn
25 State's budget for our benefits and insurances is
94
1 $26,364,000. That is the increment. The entire
2 proposed Governor's recommended increment to the Penn
3 State budget is $5 million. It is dwarfed by just the
4 mandated increases in the costs of---
5 REPRESENTATIVE MANDERINO: If that is your
6 increase, what is your health-care spending per year?
7 DR. SPANIER: I have it and I can pull it out
8 and give it to you, but it is very substantial, and
9 those numbers that I gave you illustrate the dilemma
10 that we have with all of this.
11 As far as being a part of some larger
12 consortium for this, because of our size and because
13 we are self-insured and because, frankly, our benefits
14 are not as generous as, for example, the State
15 provides or the State System of Higher Education
16 provides, our costs will probably go up significantly
17 if we got into a least common denominator kind of
18 situation. We have been better off doing it on our
19 own and probably would want to continue in that mode.
20 DR. NORDENBERG: Just picking up with that
21 last point, my instincts are the same as President
22 Spanier's. That is that health care, among other
23 things, is a highly personal thing, and at least at
24 Pitt we feel as if we have a sizable enough employee
25 independent group to negotiate pretty effectively with
95
1 respect to costs, but it isn't so large that people
2 feel as if they don't have any say into the shape of
3 the structure of the program, and I think that would
4 be a problem for us. Somebody was signaling me that
5 our health insurance costs were $70 million. I don't
6 know how that ties in with the $26 million benefit
7 increase at Penn State, but it is a big number for us
8 as well.
9 DR. NELSON: The number I gave you was the
10 total benefits costs, and now I need to break out the
11 health-care costs. But I would love to join someone,
12 because our group is so small and the cost factor is
13 rising so fast on us. So if you have got someone that
14 we can work with and join, please let me know.
15 DR. HART: Our total health care and
16 prescription benefits costs are $80 million a year.
17 DR. SPANIER: And I have that number now. It
18 is $159 million. It is just the health-care component
19 costs at Penn State alone.
20 REPRESENTATIVE MANDERINO: Thank you. Thank
21 you, Mr. Chairman.
22 CHAIRMAN EVANS: The last questioner is
23 Representative Brian Ellis.
24 REPRESENTATIVE ELLIS: Thank you, Chairman
25 Evans, Chairman Civera, and I certainly thank the
96
1 panel for being here today.
2 I know this is kind of unique for you guys
3 testifying all together before the House, but it is,
4 on a personal note, being a Pitt graduate, nice to see
5 Pitt and Penn State peacefully coexisting, as we do in
6 my household. My wife is a Penn State graduate. Of
7 course, she points out to me she has two degrees and I
8 only have the one, but I can pretty much assure you
9 gentlemen that you have a 50/50 shot of getting my two
10 sons to go to one of your fine institutions.
11 That being said, one of the things that has
12 really been on my mind for the last several years is,
13 my wife works in a high-tech field, and certainly
14 Thomas Friedman's book, "The World Is Flat," we see a
15 need for the high-demand graduates that maybe we are
16 not producing in the U.S. at the rate we should be. I
17 was just curious what your institutions are doing to
18 promote growth in the high tech. You have all asked
19 for additional appropriations that affect the high
20 demand, whether it be in nursing or the medical or
21 technology or, you know, the basic high-demand stuff.
22 What are your universities doing over the last few
23 years to really get our next generation of college
24 graduates prepared for the world market?
25 DR. SPANIER: Well, at Penn State we have a
97
1 great strength in the science and technology area. We
2 consistently ranked first or second in the United
3 States in the number of engineers whom we graduate. A
4 number of years ago we established a new college of
5 information sciences and technology. We have launched
6 some new programs which actually increase our
7 production of graduates going into technology-related
8 areas. So while it is a national challenge to produce
9 enough people working in that area, actually
10 Pennsylvania is doing pretty well. Not only Penn
11 State, but collectively we produce a lot of people in
12 the technical areas. If there were enough really
13 great jobs in Pennsylvania to keep them all, we would
14 keep more of them here. Many of them actually who we
15 graduate, probably about half take jobs outside of
16 Pennsylvania, and so one of the things we are
17 sensitive to is to our role in contributing to the
18 economic development to the State to create more
19 employment opportunities and high-paying jobs to keep
20 these graduates here.
21 But I think we are doing pretty well in
22 meeting that challenge, and actually we don't have a
23 shortage of students interested in those areas, at
24 least at our university.
25 DR. NORDENBERG: I would like to have a
98
1 chance to answer, but my colleagues to my right feel
2 as if they are being disadvantaged by the order of
3 answering, so let me defer to them.
4 DR. NELSON: Okay. If you look at our
5 submission on page 8, the form of submission, we
6 graduate about 25 percent of our young people in the
7 sciences. Unfortunately, a lot of those graduates
8 leave Pennsylvania and go other places, med school and
9 places like that.
10 DR. HART: At Temple we are also working very
11 hard to make sure that it is a core part of the Temple
12 education curriculum. We have split off the College
13 of Science & Technology from the arts and sciences
14 some years ago, and we pay a lot of attention to
15 trying to increase the quality and size of our school
16 of engineering and our basic sciences. But we are
17 also paying a lot of attention to science and
18 mathematics education in the presecondary level and
19 have a number of leaders in science education and the
20 preparation of secondary science schoolteachers as
21 well, so that we can contribute not only to the
22 education once they reach college at the postsecondary
23 level but also to work very hard to make sure that we
24 are contributors to the process that prepares
25 Pennsylvania's young people to be successful in
99
1 studying in those high-tech areas.
2 DR. NORDENBERG: There are these global
3 challenges that seem almost overwhelming when you look
4 at the number of engineers being produced in this
5 country, for example, and you compare that with the
6 number being educated in places like China and India.
7 To some extent, those numbers may be overblown because
8 there may not be equivalent forms of education being
9 provided, and I do think as Professor Spanier, or
10 President Spanier and Professor Spanier indicated,
11 Pennsylvania seems to be doing quite well, and we do
12 peacefully coexist, as you and your wife do. You
13 know, when you look at what Penn State is doing in
14 engineering and the size of its engineering school, it
15 really is something that stands out, and I think that
16 we have equivalent programs in engineering, in the
17 sciences, in the biomedical area that, again, are
18 meeting the needs that you are raising, and I think a
19 particular example that will be of interest to you has
20 to do with the decision that Westinghouse just made to
21 locate its nuclear division in western Pennsylvania
22 and to expand it there rather than moving to North
23 Carolina. Throughout those decisionmaking processes,
24 I kept saying to the CEO, you know, we are here; we
25 will help; we can train; we can provide different
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1 forms of education if that would be a plus, and the
2 response that kept coming back to me is, don't worry
3 about that; we already know that is the case; the fact
4 that you are here and we might be here is a big
5 advantage for us and it will factor into our decision.
6 And we are seeing a rebirth in Pennsylvania of some
7 traditional industries that aren't going to require
8 forms of education like nuclear engineering that have
9 kind of gone out of style in a lot of places, and I
10 think that we are ready to help meet those needs.
11 REPRESENTATIVE ELLIS: Thank you very much.
12 CHAIRMAN EVANS: I would like to thank all of
13 you as Presidents of your various institutions and
14 what you want, first and foremost, for the young
15 people, their parents and your faculty, and for the
16 State for the testimony that you have provided. I
17 think all of you except the new President of Temple
18 kind of know the process. We will be sensitive. We
19 will listen and hear what you have to say. The
20 Chairman and I are working very closely together, so
21 we will try to come up with a budget that somewhat
22 strikes in the middle. You know, obviously everybody
23 doesn't get what they would like to have, but we hear
24 what you are saying and we appreciate the time you
25 have come before us.
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1 What I would like to do now is have the
2 committee reconvene at 11:35, and then we will have
3 the Pennsylvania Emergency Management Agency, the
4 State Fire Commissioner, and the Director of Homeland
5 Security. At 11:35 we will reconvene.
6 Thank you again.
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8 (The hearing concluded at 11:24 a.m.)
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1 I hereby certify that the proceedings and
2 evidence are contained fully and accurately in the
3 notes taken by me on the within proceedings and that
4 this is a correct transcript of the same.
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6 ______7 Jean M. Davis, Reporter Notary Public 8
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