Monday, August 31, 2015

A New Name for a New Kind of University System - Part 2


The Difference Between “Public Education” and “Public Higher Education

As shown earlier, the Pennsylvania Constitution Article III, LEGISLATION, Public School System,
Section 14, contains the following mandate:
 
“The General Assembly shall provide for the maintenance and support of a thorough and efficient system of public education to serve the needs of the Commonwealth.”  (Emphasis added.)
 
As noted earlier, however, Section 14 does not mandate a precise level of support, either overall or for any one “sector” within Pennsylvania public education—those decisions are left to the Legislature’s discretion.   And as noted previously, “public higher education” is just one sector of “public education.”
 
The past sixty-five years of Pennsylvania history show that the Legislature has used its discretion to reduce public support for public higher education by decreasing the annual funding share of the fourteen PASSHE universities from 90% to 25%, for an average reduction of one percent per year for the last sixty-five years.
 
Who Will Deliver the “Public Higher Education” Purpose?

If State Appropriation to the fourteen PASSHE universities were to be reduced to zero, there would be no State funds with which to subsidize the cost of education to the students.  The students would then be forced to pay the total cost of education, rendering those universities—financially speaking—private.

If that were to occur, PASSHE would no longer be able to deliver the public higher education purpose.
 
As stated in last week’s blog post, “…for political reasons alone such an action by the Legislature [reducing PASSHE funding to zero] is not very likely to occur.”
 
By way of explanation, reducing PASSHE’s State funding to zero would eliminate the only chance which Pennsylvania students currently have to study at institutions—specifically the PASSHE Universities—whose statutory purpose is “To provide high quality education at the lowest possible cost to the students.”
 
While the four State-related universities receive public funding and provide educational opportunities for Pennsylvania students, their high tuitions and public statements of institutional purpose make it clear that their lofty goals do not include providing education at “the lowest possible cost to the students”—which is, and has been, the hallmark of “public higher education” in America since its beginnings in the 1830s.
 
A Comparison of Tuitions and Institutional Purposes

For 2015-16, the yearly in-state tuition rates for PASSHE and the State-related universities are as follows: PASSHE - $6,820; Penn State- $16,572; Pittsburgh: $17,772; Temple - $14,696; and Lincoln: $7,160.
 
The statutory (Act 188) purpose of the fourteen PASSHE universities is: “To provide high quality education at the lowest possible cost to the students.”
 
None of Pennsylvania’s four State-related universities has a remotely similar purpose. 

Neither the mission statements of Penn State University,¹ the University of Pittsburgh,² Temple University,³ or Lincoln University⁴ includes the words “…at the lowest possible cost to the students.”
 
The above facts make it clear that, should State funding to the fourteen PASSHE universities be reduced to zero, no existing institutions in Pennsylvania would be available to provide the “public university purpose.”

Unless elected officials wish to defend Pennsylvania becoming the first State in the Union to eliminate public (i.e., subsidized) higher education, State funding to PASSHE will not soon, if ever, be cut to zero.
 
Pennsylvania with its 25% funding share of PASSHE’s annual revenue is only the fifth worse State when it comes to funding public higher education.  Vermont (at 15%) and three other states (New Hampshire, Delaware and Colorado) still provide a cushion between Pennsylvania and total educational ignominy.  

The Funding/Governance Disparity: The Status Quo versus the PASCU Proposal
 
In view of the gigantic disparity between the State’s funding share (25%) and its governance share (100%), there needs to be a substantial lowering of the State’s governance share at the PASSHE universities. 
 
The State’s governance share on PASSHE’s fifteen governing boards should be cut from 100% to no more than 30% of the seats on the Board of Governors (BOG) and the fourteen Councils of Trustees (COTs). 
 
The Status Quo
 
Current PASSHE Funding Share provided by State Appropriation - 25%
Current PASSHE Governance Share controlled by the State - 100%
Current PASSHE Funding Share provided by the Students, Parents and Alumni Donors - 75%
Current PASSHE Governance Share controlled by the Students, Parents and Alumni Donors - 0%
 
The PASCU Proposal
 
For numerous reasons provided in previous blog posts, PASCU (the Pennsylvania Association of State Colleges and Universities) is committed to the adoption of the following proposal in order to rectify the current huge funding/governance disparity with regard to the functioning of PASSHE:  
·         Whereas: The Commonwealth of Pennsylvania became PASSHE’s Minority Financial Stakeholder in 1993 when its funding share (49%) first fell below 50%; and

·         Whereas: The share of PASSHE’s annual operating revenue provided by the State is now 25%; and

·         Whereas: The share of PASSHE’s annual operating revenue provided by PASSHE’s Majority Financial Stakeholders—PASSHE  Students, Parents and Alumni Donors—is now 75%; and

·         Whereas: The State, the current Minority (25%) Financial Stakeholder, controls 100% of PASSHE’s governance board seats; and

·         Whereas: the current Majority (75%) Financial Stakeholders control 0% of the governance board seats;

Therefore: It is proposed that the necessary laws be passed or amended to change the governance shares of the two primary financial stakeholders—PASSHE’s Minority and Majority Financial Stakeholders—to more closely match their respective current funding shares.
 
Specifically, the new governance shares would be as follows:
 
Of the twenty seats on the Board of Governors, six would continue to be controlled by the State, and fourteen would be controlled by the Students, Parents and Alumni Donors.
 
Of the eleven seats on each of the fourteen Councils of Trustees, three would continue to be controlled by the State, and eight would be controlled by the Students, Parents and Alumni Donors.  

To be continued.

²http://www.ir.pitt.edu/factbook/fbweb05/general/MISSION.PDF.
³http://www.temple.edu/bulletin/archive/webarchive/bulletin2013/Overview/about_temple/overview_about_temple.shtm.
http://www.lincoln.edu/president/stratplanmission.htm.

Monday, August 24, 2015

A New Name for a New Kind of University System - Part 1


A Constitutional Mandate

Pennsylvania’s financial support for “public higher education” in the State is mandated by its Constitution in Article III, Legislation, and Section 14 - “Public School System,” which reads as follows:
 
“The General Assembly shall provide for the maintenance and support of a thorough and efficient system of public education to serve the needs of the Commonwealth.”  (Emphasis added.)
 
The words “thorough and efficient” create a wise and practical tension between quality on the one hand and cost on the other while, at the same time, “serving the needs of the Commonwealth” in the process.   
 
According to Merriam-Webster, when appearing in laws, “shall’ is used “to express what is mandatory.”
 
Therefore “shall” in Section 14 of the Constitution basically mandates that the Legislature maintain and support a public school system that is faithful to the twenty-six word description found in Section 14.
 
In response to that mandate, the Legislature has maintained and supported an extensive public school system that includes K12, the community colleges, the “State-owned” and “State-related” universities, and varying numbers of “State-aided” institutions, depending on the State’s budget situation in any given year.  

Legislative Discretion
 
Note that those twenty-six words do not specify a precise level of support, either overall or for any one “sector” within Pennsylvania public education—those decisions are left to the Legislature’s discretion.
 
Evidence for such Legislative discretion may be seen in the history of State funding to the fourteen “State-owned” institutions, now known as the fourteen “PASSHE” universities, in the forty-seven years since the Pennsylvania Constitution was last amended in 1968. 
 
Back then, State appropriation was providing the vast majority (about 75%) of the annual operating revenue at the fourteen “State-owned” institutions.  Today, the State provides only 25% of that funding!
 
A more detailed history shows that the State share of annual revenue to the 14 PASSHE universities fell from 90% in 1950, to 75% in 1968, to 63% in 1983, to 49% in 1993, and to 25% today.
 
Because of the drop in State funding, the PASSHE students, parents and alumni donors—who together pay the balance of the actual costs of education not covered by State appropriation—have seen their share of the cost explode from 10% in 1950, to 25% in 1968, to 37% in 1983, to 51% in 1993, and to 75% today.
 
The speed of Pennsylvania’s disinvestment in “public higher education,” from 1950 to the present, may seem very abrupt (from 90% to 25%) but, in fact, it fell by only one percent per year—for 65 years! 

A Comparison with National Trends

In a 2012 report¹ entitled “State Funding: A Race to the Bottom,” the American Council on Education (ACE) made a number of predictions.  In terms of what was happening across America, the report stated:  

“Based on the trends since 1980, average state fiscal support for higher education will reach zero by 2059, although it could happen much sooner in some states and later in others. Public higher education is gradually being privatized.”  (Emphasis added.)

With regard to Pennsylvania, the report stated:

“Pennsylvania has also accelerated its retrenchment efforts in funding higher education. Extrapolating trends since 1980, Pennsylvania was scheduled to reach zero in 2058. But extrapolating trends since 1990 moved this date forward to 2049. And the rate of decline accelerated further in the last decade: the trend since 2000 will take Pennsylvania to zero by 2038.”  (Emphasis added.)
How Public Higher Education is Funded

Public higher education in America today receives financial support from two major sources—state funding provided by State legislatures, and “net tuition” provided by students and parents.

Net tuition is defined as the funding provided by students and parents, less financial aid.

SHEEO, the State Higher Education Executive Officers Association, has issued a report entitled “State Higher Education Finance FY 2014” which lists individual state-by-state data as well as averages across all fifty states.²  That report (Figure 9, page 33) shows that the respective funding shares in FY 2014 varied greatly across the fifty states, from about 15%/85% at one extreme, to about 85%/15% at the other!  

And while some states (e.g., Wyoming) provide 85% of the revenue and require only 15% in “net tuition,” and other states (e.g., Vermont) provide 15% of the revenue and require 85% in “net tuition,” America as a whole, over the last three decades, has been accelerating its disinvestment in public higher education.

The five states requiring the lowest levels of net tuition (in rank order) include Wyoming, California, Alaska, New Mexico and North Carolina.  The five states requiring the highest levels of net tuition in rank order) include Vermont, New Hampshire, Delaware, Colorado and Pennsylvania. 

American public higher education has been rapidly privatized in just one generation.

In FY 2014 according to the report (Figure 4, page 24), the average net tuition share of funding for public higher education across the 50 states was 47.1%, up from 24.5% just 25 years earlier in 1989.  The average net tuition contribution to public higher education funding across America has been increasing steadily at about one percent per year for the past 25 years!

Should that rate of disinvestment across the fifty States continue, traditional highly-subsidized public higher education could vanish entirely from America in one more generation. 

The Politics of Zero State Funding for Public Higher Education

Although the Pennsylvania Constitution might not prohibit the State Legislature from reducing the State’s funding share of public higher education to zero (from its current 25% share), for political reasons alone such an action by the Legislature is not very likely to occur.  
 
To be continued.


Monday, August 17, 2015

A PASCU Chapter at Each PASSHE University - Part 20

In Search of a New Name for a New Kind of University System

 Throughout its history, Pennsylvania created and promulgated five different versions of its Constitution. They appeared chronologically in the following years: 1776, 1790, 1838, 1874, and 1968.  
 
The previous blog post noted that the Pennsylvania Constitution contains provisions that bear directly on the substantial differences between the fourteen PASSHE, a.k.a. “State-owned” universities on the one hand, and the four “State-related” universities on the other.

We noted that a key reason why the new university system will never be called a “State-related” system stems from provisions in the Pennsylvania Constitution, including: Section 14 - Public School System; and Section 15 - Public School Money Not Available to Sectarian Schools.   

Another section of the Constitution is also relevant to the difference between “State-owned” and State-related universities, namely Section 30 - Charitable and Educational Appropriations.  It reads as follows:  
 
“No appropriation shall be made to any charitable or educational institution not under the absolute control of the Commonwealth, other than normal schools established by law for the professional training of teachers for the public schools of the State, except by a vote of two-thirds of all the members elected to each House.” (Emphasis added.)

The Definition of a “Normal School
 
From Encyclopedia Britannica, a “normal school” is an archaic term coined in the 19th Century to describe what would later become known as a teacher-training college or teachers college in the 20th Century.

All 14 of the current PASSHE Universities in Pennsylvania began as private normal schools in the years between 1837 and 1893.  In 1911, a revised School Code was enacted which authorized the Board of Education to purchase the State Normal Schools, prior to which time, they simply received State subsidies.  Pennsylvania’s State Normal Schools began to be called State Teachers’ Colleges in the 1920s, State Colleges in the early 1960s, and have been called State Universities from 1983 to the present time.    
 
A Difference in Terminology
 
Section 30 of the Pennsylvania Constitution provides a subtle distinction between “State-related” and “State-owned” universities without ever invoking those specific titles.  The most recent revision of the Pennsylvania Constitution occurred in 1968, fourteen years before passage of Act 188 of 1982 which changed Pennsylvania’s thirteen State Colleges into State Universities and, together with Indiana University of Pennsylvania which already held university status, created a public corporation now known as PASSHE—the Pennsylvania State System of Higher Education—consisting of the fourteen “public,” or “state-owned,” or “PASSHE Universities.”  That time lag may account for the difference in terminology.
 
Consider the second clause in the one-sentence entirety of the Constitution’s Section 30 above:
 
“other than normal schools established by law for the professional training of teachers for the public schools of the State,”

The words in the above clause, ‘normal schools established by law for the professional training of teachers for the public schools of the State,’ is a clear reference to Pennsylvania’s fourteen former Normal Schools, which later became State Teachers’ Colleges, then State Colleges, then State Universities, and finally today are often referred to as the fourteen PASSHE Universities.
 
With that understanding, this clause from Section 30 of the Pennsylvania Constitution makes it clear that only the 14 PASSHE Universities are constitutionally entitled to receive State appropriation—without the need for a two-thirds majority vote in both houses of the State Legislature.
 
It is in that sense that State funding of the PASSHE system of fourteen universities is said to be “preferred funding,” meaning that it only requires a simple majority vote in both houses instead of a two-thirds vote.    
 
Now consider the wording of Section 30 with that second clause temporarily omitted:
 
“No appropriation shall be made to any charitable or educational institution not under the absolute control of the Commonwealth, except by a vote of two-thirds of all the members elected to each House.”
 
This wording from Section 30 provides a Constitutional basis for funding all four of the “State-related” universities, three of which—Pittsburgh, Temple and Lincoln—were completely private institutions prior to receiving that status.  It also provides a basis for funding Penn State which, although Pennsylvania’s “Land Grant University,” was itself initially chartered as a private institution.
 
But notice that the State-related universities do not receive “preferred funding” but instead require a two-thirds majority vote in both Houses of the Legislature to receive their annual funding.
 
Despite this seemingly large obstacle to State funding for State-related universities, history shows that those universities apparently possess sufficient political clout to regularly meet or exceed the two-thirds majority vote threshold.  

A Fundamental Difference

While the Pennsylvania Constitution provides for a difference in the way the PASSHE Universities and the State-related Universities are funded—the difference being “Preferred” vs. “Non-Preferred” status—the fundamental difference between the two types of universities stems not so much from their State funding arrangements but rather from the enormous differences in institutional purpose and character, as readily revealed by means of a comparison of their official public statements regarding institutional purposes. 

Institutional Purpose and Character

Only the fourteen PASSHE Universities possess the institutional purpose and character needed to fulfill the Constitutional challenge with regard to “public higher education” from Section 14 - Public School System.
 
According to Act 188 of 1982, the statutory purpose of the 14 PASSHE Universities is “To provide high quality education at the lowest possible cost to the students.
 
This combination of high quality education with the lowest possible cost to the students has been the hallmark of “public higher education” in America since its inception in the 1830s.        
 
To be continued.

Monday, August 10, 2015

A PASCU Chapter at Each PASSHE University - Part 19


A Proposed New Kind of University System

We concluded the last blog post with these words:
 
“A new name will be needed to describe this proposed new kind of university system, but its statutory purpose would be clear: ‘To provide high quality education at the lowest possible cost to the students.’”
 
Note that the statutory purpose of this ‘proposed new kind of university system’ is precisely the statutory purpose which Act 188 has been mandating for the PASSHE system of fourteen universities since 1983!
 
But although the new system of universities being proposed here would operate under the same statutory purpose as the current PASSHE system of universities, it is important to note that while the purposes of the two systems would be identical, the results obtained by those two systems would be very different.
 
As shown in previous blog posts, the current PASSHE system has failed since 2002 to deliver the Act 188 statutory purpose of providing ‘high quality education at the lowest possible cost to the students.’  Those same blog posts showed that this dual failure stems from a politically-motivated policy decision by the Board of Governors to remain “fixated on maintaining the lowest possible tuition, i.e., sticker price, when the law, Act 188, explicitly requires a focus on the lowest possible cost to the students, i.e., bottom line.”
 
Recall Mark Twain’s dictum: “The difference between the right word and the almost right word is like the difference between lightning and the lightning bug.”  And so it is in this case as well.

That one egregious and misguided failure, substituting “tuition” for “cost to the students,” has had at least three tragic consequences: 1) the loss of half of the educational quality gains recorded by PASSHE over the 19 years prior to 2002; 2) the severe financial distress reported by at least five of the fourteen PASSHE universities in 2013-14; and 3) the passing on of crushing student-loan debt to students from less affluent families, while simultaneously granting unneeded State subsidies to students from more affluent families.
 
Why the Proposed New System Will Never Be Called a “State-Related System

In Pennsylvania, the term “State-related University” has a very specific meaning which goes back to the times when that status was conferred by the State upon by the four institutions now holding that title.
 
Three of the four current “State-related Universities”—Pitt, Temple and Lincoln—were all totally private institutions prior to becoming State-related.  Penn State, on the other hand, is the Land Grant University in Pennsylvania and has been receiving State funding since its founding in 1855.

As applied to the three formerly private universities, the designation “State-related” describes a novel relationship with the State in which the universities agree to provide limited educational services to State citizens in exchange for limited State funding for which, as private institutions, they would not be eligible.    
 
When applied to Penn State the designation “State-related” appears redundant since, as the Land Grant University in Pennsylvania, it has been receiving State funding since long before becoming “State-related.”

One clear aspect of “State-related status” is the fact that, in exchange for the title and the State funding that comes with it, all four institutions apparently agreed to provide one-third of the governance seats on their Boards of Trustees to elected officials, or appointees of those elected officials.
 
The initial agreement between the State and the four State-related universities was reportedly this:  The State would provide one third of the universities’ operating revenues in exchange for one-third of the seats on the respective universities’ governing boards.
 
In the 50 years since State-related status was first granted, the State has continued to control one-third of the Trustees’ seats at these universities.  However, the State’s funding share of their annual operating budgets has fallen well below one-third and now lies in a range at or below the 15% funding level.
 
The Pennsylvania Constitution
 
A key reason why the new system will never be called a “State-related” system stems from the Pennsylvania Constitution which contains the following provisions under Article III, LEGISLATION:   

“Public School System
Section 14.
The General Assembly shall provide for the maintenance and support of a thorough and efficient system of public education to serve the needs of the Commonwealth.”
 
This constitutional provision for ‘public education to serve the needs of the Commonwealth’ extends beyond K12 to include ‘public higher education’ in the State.  The PASSHE System of 14 ‘State-owned’ universities represents tangible evidence for Legislative compliance with the provision of Section 14. 
 
“Public School Money Not Available to Sectarian Schools
Section 15.
 
No money raised for the support of the public schools of the Commonwealth shall be appropriated to or used for the support of any sectarian school.”
 
This constitutional provision appears at first glance to block the transfer of State appropriation to “sectarian,” i.e., “religiously-affiliated” schools.  But actually, it only blocks the transfer of ‘money raised for the support of the public schools.’  This constitutional provision does not rule out State appropriation being transferred to sectarian schools as long as those funds were not “raised for the support of public schools!”  For many years, the Commonwealth of Pennsylvania provided IAG (Institutional Assistance Grants) to every college and university in Pennsylvania, including religiously-affiliated institutions, and apparently, the specific language of Section 15 of the Constitution was not violated by that practice.     

To be continued.

Monday, August 3, 2015

A PASCU Chapter at Each PASSHE University - Part 18


Lessons Learned and the Path to Victory
 
The blog post of June 29, 2015 ended with the words found in the above heading.
 
In this blog post we will review the lessons learned from various media accounts of the West Chester Proposal, and use insights obtained from those accounts to suggest the shape of a proposal that might have a much higher probability of success while delivering many, but not all, of the benefits that State-related status would have provided to West Chester University—had that proposal been successful.

Lessons Learned

To begin, it is important to realize that, had West Chester University succeeded in gaining State-related status, its future prospects as a State-supported—but largely independent—university would have been very promising.  The prospect of such independence had to have been a key factor in the decision by West Chester supporters to launch a bold and ambitious plan to gain independence and realize its aspirations.
 
It was a truly worthy goal, but the political odds stacked against it were simply too great to overcome.
 
As we saw in previous blog posts, the large number of would-be “losers” under the West Chester Proposal, together with their correspondingly large legislative delegations in the State Senate and State House of Representatives, basically determined that the Proposal could not gain the votes needed for victory.
 
To have a chance of success, any proposal to change the legal status of individual PASSHE universities will require an affirmative act of the legislature.  That, in turn, will require a proposal yielding the largest possible number of winners and the smallest possible number of losers, so that the combination of their respective legislative delegations can carry the day by producing a win when the votes are counted.

Recall that major sources of legislative opposition to the West Chester Proposal arose on behalf of those stakeholder groups who saw themselves as significant losers under the West Chester Proposal, including:
 
1.       The “other” thirteen PASSHE universities that would be “left behind;"
2.       The four existing State-related universities; and
3.       The eight unions representing approximately 90% of PASSHE’s 12,500 employees.
 
The Path to Victory
 
The path to victory must be paved with a proposal that changes many of the would-be losers under the West Chester Proposal, into would-be winners, or at least neutral parties, under the new proposal.
 
One way to turn the other thirteen PASSHE universities from losers into winners would be to craft a proposal under which all fourteen PASSHE universities would greatly benefit.  At that point, opposition from the “Majority Stakeholders,” i.e., the students, parents and alumni from the other thirteen PASSHE universities would be eliminated or at least significantly reduced.
 
Keeping the fourteen PASSHE universities together under this new and potentially successful proposal would also reduce or eliminate the opposition from the stakeholders identified in items 2 and 3 above.

Politics is the art of the possible, the attainable — the art of the next best
                                                                                            Otto von Bismarck (1815-1898)

The above quote is quite relevant at this point in the discussion because the West Chester Proposal—had it succeeded—would clearly have produced the best possible outcome for West Chester University itself. 
 
Recall, however, that the West Chester Proposal came fifty years after the IUP Proposal which would have produced a very similar outcome: A “State-owned” university morphing into a “State-related” university.
 
But the IUP Proposal also failed for the same reasons that the West Chester Proposal failed:  Despite being a best outcome for the individual universities involved, neither proposal was possible, politically speaking.
 
Since the best  outcome for individual PASSHE universities was foreclosed twice in fifty years due to the politics of the situation, it may be time to take von Bismarck’s advice and consider the “next best” option. 

Keeping the Fourteen PASSHE Universities Together
 
Recall that a major obstacle to the West Chester Plan was the notion of breaking up the State-wide collective bargaining units which tightly bind the fourteen PASSHE universities together.  Those labor contracts are negotiated in Harrisburg on behalf of all fourteen universities, and the eight unions that represent 90% of PASSHE’s employees are understandably opposed to breaking up bargaining units.   
 
The next best option then, politically speaking, would be one in which all fourteen PASSHE universities would remain together in a system that would preserve the bargaining units, but while simultaneously providing many, if not all, of the benefits available to individual State-related universities.

The Next Best Option: “A State-Related System of Fourteen Universities”
 
Although the idea of PASSHE as a “State-related system of fourteen universities” sounds interesting, there are many reasons why such a State-related system of universities would also never be politically possible.
 
In view of the fierce opposition by the four State-related universities to just a single PASSHE university becoming State-related, imagine their opposition to a State-related system of fourteen universities!  
 
So the new entity will never be permitted to become, strictly speaking, a “State-related system of fourteen universities.”  But it can and must become a system of fourteen universities that continues to provide the services that true “public” universities must provide, while at the same time receiving many, if not all, of the benefits that State-related universities currently receive.
 
A new name will be needed to describe this proposed new kind of university system, but its statutory purpose would be clear: “To provide high quality education at the lowest possible cost to the students.” 
 
To be continued.

Monday, July 27, 2015

A PASCU Chapter at Each PASSHE University - Part 17


Back on April 6, 2015 we began a series of weekly blog posts that included the words “A PASCU Chapter at Each PASSHE University” in their titles.  Now seventeen weeks later, it may be very helpful to recall the challenge that prompted this series of posts, as referenced in the blog post of April 20, 2015.

Challenge

 “To itemize and discuss the options available to citizens whose elected officials ignore the law.”
 
The law in question is Act 188 of 1982, the enabling legislation which created the public corporation now known as the Pennsylvania State System of Higher Education (PASSHE).

The specific citizens in question are PASSHE’s Majority Stakeholders—the students, parents and private donors, primarily alumni—who currently provide 75% of the operating revenue at each of the 14 PASSHE universities, including Bloomsburg, California, Cheyney, Clarion, East Stroudsburg, Edinboro, Indiana, Kutztown, Lock Haven, Mansfield, Millersville, Shippensburg, Slippery Rock and West Chester Universities. 
 
According to Act 188, the statutory purpose of these fourteen PASSHE universities “…shall be ‘To provide high quality education at the lowest possible cost to the students.’”  According to Merriam-Webster, “when used in law, the word ‘shall’ refers to what is mandatory.”
 
Despite being mandated by Act 188, official PASSHE data show that the PASSHE Board of Governors has failed to deliver ‘high quality education at the lowest possible cost to the students’ since 2002, suggesting that, in fact, the clear specific mandate contained in Act 188 is being ignored by PASSHE’s leadership.  
 
The elected officials include the Governor of the State and leaders and members of the State Senate who together control the appointment of PASSHE’s governance board members on the 20-member Board of Governors and the fourteen 11-member councils of Trustees at each of the individual PASSHE universities.   

Dealing with Malfeasance

According to Dictionary.com, “Malfeasance is the performance by a public official of an act that is legally unjustified, harmful, or contrary to law.”   If a group of public officials chooses to ignore the law—as the evidence in this case clearly shows—what could be more contrary to law than that?
 
Surprisingly, however, there are few options available to the citizens negatively affected by such choices.
 
Legislative Censure and/or Impeachment
 
When malfeasance involves the Governor of a State, legislative censure and/or impeachment are two political options that have historically been employed to deal with it.  In the instant case, however, the malfeasance is political but non-partisan in that Governors and legislators from both major political parties benefit from the current status quo which has lasted 100 years or more, and in which the fourteen universities are seen as huge patronage opportunities for elected officials from both parties.
 
So while legislative censure and/or impeachment might arise in cases of blatant corruption by a sitting Governor, it is unlikely to arise in cases where politicians from both parties benefit from the status quo.

Appeals to the Office of Inspector General and the Office of General Counsel

Although both of the above named offices possess official responsibilities for guiding State agencies such as PASSHE to operate within the law, appeals to both of these offices produced polite but noncommittal responses which generated little assurance that the failure by the Board of Governors to preserve and deliver the Act 188 statutory purpose of the 14 PASSHE universities might be addressed anytime soon.

The problem one might argue is that, because these two offices report directly to the sitting Governor, they are not likely to dissuade the governor from continuing to operate the 14 universities as the great sources of political patronage they’ve been seen as representing for the last one-hundred years.

Appeal to the Office of Auditor General and the Office of Attorney General

Although the above two offices do not report to the Governor of the State and are, in fact, led by officials who are elected independently of the Governor, both of these offices failed to respond in any way to the certified letters which they received regarding the apparent malfeasance involved in PASSHE’s failure to preserve and deliver the statutory purpose of Act 188.
 
That failure may be due to a recent history which shows that Auditor Generals and Attorney Generals in Pennsylvania have tended to be busy preparing to run for Governor of the State and who could hence be reluctant to abolish the patronage opportunities they might get to enjoy later in their political careers.       
        
The West Chester Proposal
 
There can be no doubt that—if the PASSHE Board of Governors had been concerned about preserving and delivering the Act 188 statutory purpose of the PASSHE universities since 2002—West Chester University would never have needed to even consider seceding from PASSHE to become a State-related university.
 
The fact that all 14 PASSHE universities continue to be operated to serve the best interests of elected officials and their political appointees—at the expense of students, parents and alumni—is the source of a growing discontent at the PASSHE universities, of which the West Chester Proposal was only a symptom.
 
Although the West Chester Proposal was defeated by the politics of numbers, a clear-eyed review of that defeat suggests a path to victory over the tyranny created by ‘privatization without representation.’
 
That victory will also rely on the politics of numbers, just different numbers, that will allow each and every one of the PASSHE universities to escape the suffocating embrace of PASSHE’s totally political governance.
 
To be continued.  

Monday, July 20, 2015

A PASCU Chapter at Each PASSHE University - Part 16

The blog post last time listed some Financial Differences and Governance Differences between State-owned and State-related status.  This post will now focus on some Legal and Aspirational Differences.   

The Differences Between “State-owned” and “State-related Status

Legal Differences - The greatest legal difference between State-owned and State-related universities stems from the different sources of legal advice that they each receive.  As “State agencies” subject to the Commonwealth Attorney’s Act, PASSHE universities by law can only receive their legal advice from the Office of General Counsel (OGC) ¹ which reports directly to the Governor of the State.
 
PASSHE universities pay for the legal advice they receive from OGC attorneys but, as in all “corporate” environments, OGC actually represents the highest entity in the chain that requires legal defense, and extends all the way up to the Governor and the Commonwealth of Pennsylvania itself at the very top.

Therefore, the legal advice that PASSHE presidents receive from OGC will often be designed to serve those above the president in the chain of command—the Chancellor, the Board of Governors, the Governor and finally the Commonwealth of Pennsylvania.  Inevitably, some legal advice given to PASSHE presidents may not represent the best interests of either the president or the president’s particular university as much as it does the best interests of those farther up the chain.
 
State-related universities on the other hand, despite receiving substantial State funding, are not subject to the Commonwealth Attorneys Act and enjoy “independent” legal counsel as a result, i.e., legal counsel that reports to the university president or possibly the Chair of the University Board of Trustees.   
 
Now the purpose of “legal counsel” in both State-owned and State-related universities is ostensibly the same: to ensure that the university in question operates within the law.  However, the interaction between university leadership and its legal counsel often involves “legal opinions” which the legal counsel in question will provide to the university leadership to help guide its managerial decisions.
 
This issue of “legal opinions” becomes critical inside PASSHE universities because of the PASSHE’s “corporate” structure.  With independent legal counsel, a State-related university president might tell the legal counsel to simply “play it straight” and provide a legal opinion that will withstand scrutiny so as not to embarrass the university if the course of action being contemplated were to be carried out.
 
In PASSHE universities, where legal counsel reports much further up in the chain of command, some legal opinions the universities are required to follow were issued and agreed upon by the Governor of the Commonwealth years, or perhaps even many years earlier.  At times, some of those legal opinions might strike one as questionable, self-serving, and for the benefit of those higher up in the chain of command.
 
A specific example of that kind of legal opinion is the one that states in effect that “Money from the private checkbooks of PASSHE students, parents and private donors, primarily PASSHE alumni become ‘State funds’ once they are deposited in PASSHE university bank accounts.”
 
That legal opinion is manifested in Board of Governors Policy 2010-01-A: Expenditure of Public Funds² which includes these words:  “All university funds are public monies…”
 
The notion that the $1.2 billion of PASSHE’s total $1.6 billion in annual revenue which comes from the private checkbooks of the majority financial stakeholders magically becomes “public monies” the instant they are deposited in university bank accounts is preposterous.  By such logic might not a thief argue that his ill-gotten gains suddenly became legally his once deposited into his bank account?
 
The legal opinion that attempts to justify this triumph of chutzpah over common sense brings to mind an appropriate rejoinder from the Charles Dickens’ character, Mr. Bumble, in Oliver Twist, who said: “If the law supposes that, the law is a ass—a idiot.”                

Aspirational Differences - All universities have aspirations which typically manifest themselves in their written statements of vision, mission, goals and objectives—the documents that define:  i) a university’s essence; ii) what it seeks to accomplish; and iii) the reasons for its very existence.
 
State-related universities answer to a single Board of Trustees.  These Boards often accept their fiduciary responsibilities to the students, which include a Duty of Care, a Duty of Loyalty, and a Duty of Obedience.³   These Boards are dominated by a two-thirds majority of board members selected by the Universities, who put the interests of the University and its 85% Majority Financial Stakeholders above all others. 

·         Duty of Care: Board Members should pay full attention to their responsibilities and protect institutional assets.

·         Duty of Loyalty: Board Members should put the interests of the institution before self-interests.

·         Duty or Obedience:  Board Members should ensure that the mission is being fulfilled and that their actions are consistent with the mission and values of the institution. 
 
Because of these facts, State-related universities are free to pursue and achieve their highest aspirations.
 
State-owned universities answer to a very different reality.  Each PASSHE university reports through a local Council of Trustees to a Harrisburg-based Chancellor and Board of Governors that oversees all fourteen PASSHE universities.  Both the fourteen local Councils of Trustees and the Board of Governors are dominated by a 100% majority of members consisting of elected officials and their political appointees, none of whom are selected by the University or by its 75% Majority Financial Stakeholders.
 
None of the 154 members spread across the fourteen Councils of Trustees, and none of the 20 members on the Board of Governors, are required to accept their fiduciary responsibilities to the students.  In fact the oath of office taken by those 174 members makes no mention of fiduciary responsibilities or duties.
 
To be continued.

¹ http://www.ogc.state.pa.us/portal/server.pt/community/about_the_office/3252/agencies_served_by_ogc/425241.