Monday, April 14, 2014

Introducing PASCU - Part 15

The Pennsylvania Association of State Colleges and Universities (PASCU)
 
PASCU President Claims “Government” Higher Education Condemns PASSHE Students to a Life Sentence of Privatization Without Representation
 
Angelo Armenti, Jr., the president of the Pennsylvania Association of State Colleges and Universities (PASCU) defines “government higher education” as what students get when the State controls more than 50% of the governance seats, while providing less than 50% of the annual funding;  he cites Pennsylvania as an extreme example for clinging to 100% control but providing only 25% of the funding.
 
According to Armenti, privatization—the rapid defunding by the State—of public higher education has been happening in Pennsylvania and many other states for at least the last three decades.  In his recent book¹ entitled, Privatization Without a Plan, he shows that privatization is largely unavoidable as well as irreversible due to powerful demographic and economic forces that are due to a rapidly aging America.
 
The book also shows that privatization itself is the result of causes that are fundamental and external, while the absence of any serious plan for dealing with the consequences of that privatiztion is the result of causes that are political and internal, i.e., a matter of policy choice.
 
Stakeholder Theory
 
In a book entitled Strategic Management: A Stakeholder Approach (1984), R. E. Freemen defines a “stakeholder” as “any group or individual who can affect, or is affected by, the achievement of an organization’s purpose.”
 
With respect to the Pennsylvania State System of Higher Education (PASSHE), an organization which defines itself as a system of 14 public universities with more than 112,000 students and 600,000 alumni, Freemen’s “stakeholder” definition clearly applies to the PASSHE students, parents and donors, primarly alumni, whom we have previously referred to as PASSHE’ s “Majority Stakeholders.”  These individuals meet the “stakeholder” definition because they are clearly “affected by” the achievement (or not) of PASSHE’s purpose: ‘High quality education at the lowest possible cost to the students.’”  They also meet the definition of “Majority” stakeholder since, as a group, they  now provide 75% of the annual funding.
 
Historically, the governance of public universities was a settled matter.  For example, in the 1950s when many states were still providing 90% of the cost of education at public universities, there was no clamor for seats at the governance table by the students and parents who were providing the remaining 10%.
 
Even in 1983, when the state colleges became state universities and the State share of PASSHE’s budget had fallen to 63%, and the share paid by students and parents grew to 37%, there was still no clamor for representation by students and parents, no doubt because the State was still the majority stakeholder, a situation that didn’t change until 1993, when the State share of PASSHE’s budget first fell below 50%.
 
But in the 21 years since 1993, the State share of PASSHE’s budget has plummeted to 25%, and the share provided by students, parents and donors, primarily alumni, has skyrocketed to 75%.
 
Stakeholder theory, according to Armenti,  places great emphasis on organizational process and in particular, on the role of major stakeholders in the decision-making process.  It is clear, with PASSHE’s Majority (75%) Stakeholders controlling 0% of the governance seats, that their best interests cannot possibly be getting served very well under such an un-American arrangement.
 
As shown in Privatization Without a Plan, the privatization of public higher education in Pennsylvania has been happening inexorably since July 1, 1983, the day the PASSHE system of universities first began.  A careful reading of Act 188 will reveal that its authors, in apparent anticipation of such a privatization, included many new provisions that would for the first time not only enable, but facilitate, encouage and celebrate the raising of private funds to enhance the 14 Universities by supplementing State funding.
 
And while the authors of the original Act 188 anticipated the need for alternate funding to complement rapidly shrinking State funding, they sadly did not forsee a need to change the way the members of the Board of Governors and the Councils of Trustees were selected, and to give a direct decision-making voice to the students, parents and private donors,primarily alumni, who  now pay 75% of PASSHE’s bills.
 
“Government” higher education, as practiced in Pennsylvania under its current version of Act 188, locks in an organizational structure that places no limit on how small the State’s share of PASSHE’s budget can become while, at the same time,  preserving  at 100%, the share of the governance seats controlled by the Minority (25%) stakeholder—the State—in the person of its elected and appointed officials.
 
It is in that sense that “government” higher education condemns PASSHE students to a life sentence of privatization without representation, a tyranny that the majority stakeholders must come together to rise up and throw off, before they can claim their rightful place at PASSHE’s decision-making tables.
 
¹ http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Daps&field-keywords=angelo%20armenti.
 
The Role of PASCU
 
PASCU’s mission is “To ensure that the statutory purpose of public higher education in Pennsylvania as specified by Act 188 of 1982: ‘High quality education at the lowest possible cost to the students,’ is indefinitely preserved and faithfully delivered.”  To advance that mission, PASCU seeks to reform the governance of PASSHE so as to enable it achieve its statutory purpose as mandated by Act 188.

ABOUT THE AUTHOR
Dr. Angelo Armenti Jr. served as President of California University of Pennsylvania (Cal U) from 1992 to 2012. Before that, he was a Dean at Villanova University, a professor of physics, and author of The Physics of Sports (American Institute of Physics, 1992). During his career at Cal U, Armenti is credited with establishing numerous funding sources for student scholarships and for campus revitalization projects, efforts made in part to address the problems that he describes in Privatization Without a Plan. In June of 2012, Armenti founded a non-profit corporation entitled The Pennsylvania Association of State Colleges and Universities (PASCU) whose mission it is to preserve the statutory purpose of public higher education in Pennsylvania. 

Monday, April 7, 2014

Introducing PASCU - Part 14

The Pennsylvania Association of State Colleges and Universities (PASCU)
 
PASCU President Sees Ascendance of “Government” Higher Education as a Threat to America’s Future
 
Angelo Armenti, Jr., the president of the Pennsylvania Association of State Colleges and Universities (PASCU) claims that the demise of traditional public higher education in America is leading to a fierce public-policy battle between advocates for its two logical successors, “government” higher education on the one hand, and “state-related” higher education on the other, with the former now winning the battle, and the latter just joining the fight in earnest after years of uncertainty, denial and doubt.         
 
Armenti asserts, based on data from the Association of State Higher Education Executive Officers¹ (SHEEEO), that while the traditional highly State-subsidized public higher education of the 1950s and 1960s still exists in parts of the country, it is also evolving into something quite different in other parts, thereby creating the need for different labels for the different types of formerly public higher education.
 
The evolution was driven by a half-century of powerful demographic and economic forces that changed the Funding/Governance relationship that had historically defined traditional public higher education.  Those changes eventually required new labels with which to describe accurately two very new realities.     
 
Armenti’s classification scheme provides three labels to define the three types of higher education that exist today, with all three having evolved along different paths over time from their common roots in the traditional “public” higher education of the past:
 
Public Higher Education: State Funding Share greater than 50%; State Governance Share greater than 50%;
State-Related Higher Education: State Funding Share less than 50%; State Governance Share less than 50%; and
Government Higher Education: State Funding Share less than 50%; State Governance Share greater than 50%.
 
“State funding share” is the percent share of the operating budgets provided by the State, and “State governance share” is the percent share of the seats on the governing boards controlled by the State.
 
Costwise, Public higher education is the best of the three types in terms of its higher subsidies and hence lower costs to the students. 
 
And although both State-related and Government higher education institutions suffer from lower subsidies, and hence higher student costs that stem from receiving less than 50% of their funding from the State, these two types of higher education are quite unequal in terms of the opportunities that they provide with regard to both institutional and student success.
 
From the perspective of the Majority Stakeholders, State-related higher education is enormously preferable to  Government higher education—despite the state funding shares being less than 50% for both cases—because state-related institutions can control their ultimate destiny because they control a majority of the seats on their governing boards which is, unfortunately, not the case for government higher education institutions.
 
Because State-related institutions are able to control decision-making at every level of the institution, they are able to preserve and deliver their statutory purpose and their chosen vision, mission, goals and objectives without being left totally at the whim of the politically-driven decision-making that typifies Government higher education.  
 
On the other hand, the danger that government higher education presents to America’s future is that which stems from political decisions that have no place in formerly public universities where a majority of the funding now comes from private checkbooks of students, parents and donors, primarily alumni.
 
The Funding/Governance disparity in Pennsylvania and its growing negative effects on both the PASSHE universities and PASSHE students, are described in detail in Armenti’s new book² entitled “Privatization Without a Plan: A Failure of Leadership in Pennsyvania Public Higher Education.”
 
In Privatization Without a Plan, Armenti documented the privatization of public higher education in

Pennsylvania over the last 30 years.  For the current (2013-14) fiscal year, based on the classification scheme just cited, the “public” higher education provided through the fourteen “state-owned” or PASSHE universities in Pennsylvania would now earn the dubious distinction of “Government Higher Education,” owing to a state funding share of 25% coupled with a state governance share of 100%.
 
Majority versus Minority Stakeholders
 
The negative consequences of government higher education arise from the large funding/governance disparity that lies at its very heart.  Government higher education relies on an organizational alignment that is fundamentally flawed because it is not aligned to serve the best interests of its majority financial stakeholders—the students, parents and donors, primarily alumni—who are now paying 75% of the bills, while controlling 0% of the seats on the boards where all key decisions affecting them are made.
 
While Pennsylvania is admittedly an extreme example of government higher education, even the less extreme examples will share similar weaknesses because they will always feature minority financial stakeholders being the majority governance stakeholders, that is, the minority financial stakeholders will always dominate decision making, while the majority financial stakeholders will pay most of the bills.
 
Because government higher education always places the decision-making power into the hands of the minority financial stakeholders—at the expense of the majority financial stakeholders—the chances of ongoing peaceful cooperation between the two stakeholder groups are clearly slight.  
 
But as bad as it appears, according to Armenti, this patently unjust and Un-Americn arrangement is exacerbated further by: 1) a blatant failure of PASSHE’s 100% political leadership to preserve and deliver the mandated statutory purpose of public higher education in Pennsylvania: “High quality educaton at the lowest possible cost to the students;” 2) its failure to adopt a fiduciary relationship with the PASSHE students (i.e., the duties of care, loyalty and obedience); and 3) its failure to prevent the financial death spiral all 14 PASSHE universities now face, with five already having publicly declared financial distress.
 
¹ http://www.sheeo.org/sites/default/files/publications/SHEF-FY12.pdf.  p 32, Figure 7
² http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Daps&field-keywords=angelo%20armenti.

The Role of PASCU

PASCU’s mission is “To ensure that the statutory purpose of public higher education in Pennsylvania as specified by Act 188 of 1982: ‘High quality education at the lowest possible cost to the students,’ is indefinitely preserved and faithfully delivered.”  To advance that mission, PASCU seeks to reform the governance of PASSHE so as to enable it achieve its statutory purpose as mandated by Act 188.
ABOUT THE AUTHOR

Dr. Angelo Armenti Jr. served as President of California University of Pennsylvania (Cal U) from 1992 to 2012. Before that, he was a Dean at Villanova University, a professor of physics, and author of The Physics of Sports (American Institute of Physics, 1992). During his career at Cal U, Armenti is credited with establishing numerous funding sources for student scholarships and for campus revitalization projects, efforts made in part to address the problems that he describes in Privatization Without a Plan. In June of 2012, Armenti founded a non-profit corporation entitled The Pennsylvania Association of State Colleges and Universities (PASCU) whose mission it is to preserve the statutory purpose of public higher education in Pennsylvania. 

Monday, March 31, 2014

Introducing PASCU - Part 13

The Pennsylvania Association of State Colleges and Universities (PASCU)
 
PASCU President Says “Public” Higher Education Has Become Illusory and Increasingly Replaced by the Onerous Reality of “Government” Higher Education
 
Angelo Armenti, Jr., the president of PASCU (Pennsylvania Association of State Colleges and Universities) says that the growing Funding/Governance disparity in so-called “public” higher education reveals a sad fact: True public higher education in America is disappearing at an alarming rate, even as state-funding continues to erode, while state-control is either constant or increasing.   
 
There was a time, according to Armenti, when the term “public” higher education meant “highly state-subsidized” higher education—a truly public good that made higher education readily accessible to citizens of even limited means.  That public policy returned economic and other civic benefits to the larger society in a virtuous circle that accouned for much of the shared prosperity of the 80s and 90s.
 
But for a host of reasons, the former public policy was gradually replaced with a view that public higher education was a private good requiring today’s beneficiaries increasingly to pay for it themselves.  And while the former public policy is largely gone, so too is the good that once flowed from it, as the states and country struggle financially, and too many college-educated citizens fight to find appropriate work.    
 
The Funding/Governance disparity in Pennsylvania and its growing negative effects on both the PASSHE universities and PASSHE students, are described in detail in Armenti’s new book¹ entitled “Privatization Without a Plan: A Failure of Leadership in Pennsyvania Public Higher Education.”

“The future is already here – it's just not evenly distributed.”  William Gibson

According to Armenti, the truth of William Gibson’s observation may clearly be seen in data from the State Higher Education Executive Officers Association (SHEEO) for FY 2012.² Those data reveal that 24 out of the 50 states provided less than 50% of the annual funding for “public” higher education institutions sponsored by those states, while 26 states provided more than 50%.  But the range of variation in levels of state support is amazingly large.  
 
By way of background, 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—with the respective shares varying greatly, state to state, from about 70%/30% to 30%/70%!

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

Majority versus Minority Shareholders
Factually, no state in America today provides 100% of the funding for public higher education.

When states provided all or nearly all the funding, one need only be concerned with the “State Funding Share.”  Now we must also be concerned with “Net Tuition Funding Share” since students and parents in America today are large, and in some states, the majority financial sponsors of public higher education.
Even states with the highest funding shares still require “net-tuition” funding.  For example, Wyoming, New Mexico, California, Alaska and North Carolina require 13.8%, 22.8%, 25.6%, 27.6% and 28.5% of the funding from net tuition to complement their much larger state shares.

While at the same time Vermont, New Hampshire, Delaware, Colorado and Pennsylvania require 85.1%, 84.5%, 72.9%, 70.8% and 69.9% of public higher education funding from net tuition, to supplement their much smaller state funding shares.
 
“Governance Share,” on the other hand, is defined as the percentage share of seats on the various governing bodies that are controlled by the various financial stakeholders.

The Need for a New Classification Scheme for “Public” Higher Education

“If language is not correct, then what is said is not what is meant; if what is said is not what is meant, then what must be done remains undone.” Confucius

A new classification scheme below proposes a total of three descriptors, with “public” being retained, “State-Related” and “Government” being added, and all three being more precisely defined in terms of funding share and governance share as follows:    

·         Public Higher Education:  State Funding Share > 50%; State Governance Share > 50%
·         State Related Higher Education:  State Funding Share < 50%; State Governance Share < 50%

·         Government Higher Education:  State Funding Share < 50%; State Governance Share > 50%


The Ongoing Privatization of Public Higher Education

In Privatization Without a Plan, Armenti documented the privatization of public higher education in
Pennsylvania over the last 30 years.  For the current (2013-14) fiscal year, based on the classification scheme just cited above, the “public” higher education provided through the fourteen “State-owned” universities in Pennsylvania would now earn the dubious distinction of “Government Higher Education,” owing to a state funding share of 25% coupled with a state governance share of 100%. But as the SHEEO data clearly attest, Pennsylvania is hardly alone.
 
American public higher education has been rapidly privatized in just one generation.  In FY 2012, the average net tuition share of funding for public higher education across the 50 states was 47.0%, up from 23.3% just 25 years ago in 1987.  The average net tuition contribution to public higher education funding across America has been increasing inexorably at about one percent per year for the past 25 years!
 
Should that rate continue, traditional highly-subsidized public higher education could vanish entirely in America in just one more generation.  We must hope that in its wake will follow more examples of “State-related higher education” and fewer examples of “Government Higher Education.”  
 
¹ http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Daps&field-keywords=angelo%20armenti.
² http://www.sheeo.org/sites/default/files/publications/SHEF-FY12.pdf.  p 32, Figure 7

Monday, March 24, 2014

Introducing PASCU - Part 12


The Pennsylvania Association of State Colleges and Universities (PASCU)
 
PASCU President Says PASSHE Universities are Trapped in a ‘Death Spiral’ Not of Their Own Making
 
Angelo Armenti, Jr., the president of PASCU (Pennsylvania Association of State Colleges and Universities) blames the announced financial crises at five of the 14 PASSHE Universities on a cruel combination of demographic, economic and political forces, over which the universities themselves have little control. 
 
All three forces, as well as their growing negative effects on PASSHE universities and PASSHE students, are described in detail in Armenti’s new book¹ entitled “Privatization Without a Plan: A Failure of Leadership in Pennsyvania Public Higher Education.”
 
Media stories published between mid-August and late October 2013 reported that Clarion², Edinboro³, Mansfield⁴, and East Stroudsburg⁵ had, in that order, announced plans to cut tenured faculty positions and to take other actions in order to close budget gaps ranging from $5.5 million to $12 million.

On December 24, 2014, Slippery Rock University⁶ became the fifth PASSHE university to declare financial distress, specifically, a projected $10 million deficit for 2014-15, accumulating to $29 million by 2015-16.
 
According to Armenti, the funding crises just described were totally predictable—and in fact had been predicted to PASSHE’s top leadership—on the basis of evidence which he presented during an invited one-hour keynote address to a joint meeting of the PASSHE Board of Governors, the Pennsylvania Association of Councils of Trustees, and the PASSHE University presidents, back on October 13, 2010.⁷
 
The title of his keynote address was “The Future of Public Higher Education in Pennsylvania,” and it focused on three very disturbing Assertions which later also formed the basis of his book in 2013:
 
“Assertion 1: California University of Pennsylvania (Cal U) and all the public universities in Pennsylvania are being privatized without a plan.” 
 
“Assertion 2: The business model under which the 14 PASSHE universities currently operate is financially unsustainable.  Without changing key policies that drive that business model, PASSHE universities will  face severe financial distress and bankruptcy in the near term, resulting in impending mission failure in the near term as well.”  
 
“Assertion 3: Although the PASSHE universities were intended to carry out the purpose spelled out in Act 188 of 1982: “…to provide high quality education at the lowest possible cost to the students,’ the rapid decline in Commonwealth funding, compounded by key operating policies, portend mission failure, both with respect to providing high quality education, as well as with respect to providing the lowest possible cost to the students.” 
 
According to Armenti, it seems inexplicable in view of clear evidence of impending financial disaster based on seven years of audited financial statements, that PASSHE’s Board of Governors would choose to ignore that evidence and allow individual PASSHE universities to fail—through no fault of their own.

“Demographics is destiny.” Arthur Kemp
 
According to Armenti, of three major forces creating the ‘death spiral’ in which the PASSHE universities find themselves, the first two—demographics and economics—involve powerful laws that humans can’t control but, to a limited degree, can choose decisions to best accommodate universities to those laws.    
 
Currently, the decisions needed to best accommodate the universities to those powerful demographic and economic forces are controlled at the level of the Board of Governors, and not at the level of the universities.  And according to Armenti, too many of those decisions in recent years have been made to deal with political concerns, as opposed to demographic or economic realities faced by the universities.
 
According to the book, the 100% political leadership of PASSHE is focused almost entirely on tuition, i.e., “sticker price,” rather than on the “bottom line,” as mandated in the statutory purpose of PASSHE universities according to Act 188: “high quality education at the lowest possible cost to the students.”
 
Compelling evidence for the validity of all three Assertions is presented in the book¹ as well as in the video of the 2010 Keynote Address presentation.⁷   There is no doubt that all 14 PASSHE universities are destined for bankruptcy and mission failure, unless current PASSHE policies are changed substantially to deal with critical demographic and economic realities, as opposed to current political preferences.
 
According to Armenti, PASSHE’s longtime practice of tinkering around the margins will not forestall the bankruptcy and mission failure that ultimately awaits all 14 of the PASSHE universities, regardless of how financially solid they might now appear to be.  There are only two means available for the other seven PASSHE universities to stay afloat financially: 1) Constant growth; and/or 2) gigantic fund balances. 
 
As a few PASSHE universities continue to grow enrollments—while rapidly impoverishing the rest—those few may delay the inevitable for a while.  But as soon as their enrollments level off, which they eventually must, those universities will also begin drawing down their fund balances in order to survive. 
 
The huge fund balances accumulated over the years by the PASSHE Board of Governors, the Office of the Chancellor, and the 14 universities—totaling well over $500 million—will also help to postpone the inevitable temporarily.  But fund balances are finite, one-time funds, while virtually all university costs are recurring annual costs, which means that while the timing may be in doubt, the final outcome is not.  
 
¹ http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Daps&field-keywords=angelo%20armenti.
² http://www.pennlive.com/midstate/index.ssf/2013/08/clarion_university_restructuri.html.  Penn Live, August 16, 2013.
 http://www.post-gazette.com/education/2013/09/11/Edinboro-University-plans-faculty-program-cuts/stories/201309110152. post-gazette.com, September 11, 2013.
http://www.pennlive.com/midstate/index.ssf/2013/09/mansfield_university_becomes_t.html. Penn Live, September 26, 2013.
 http://www.post-gazette.com/news/education/2013/10/30/East-Stroudsburg-is-fourth-state-owned-Pennsylvania-university-to-announce-cuts/stories/201310300139. post-gazette.com, October 30, 2013.
https://www.keepandshare.com/doc/6756902/tribune-review-december-24-2013-slippery-rock-university-facing-10-million-deficit-possible-l. Tribune-Review, December 24, 2013.
http://www.youtube.com/watch?v=kl_wYG3OC88.

Monday, March 17, 2014

Introducing PASCU - Part 11

The Pennsylvania Association of State Colleges and Universities (PASCU)
 
PASCU President Identifies Three Major Obstacles to West Chester’s Bid to Become a “State-Related” University
 
Despite West Chester’s recently reported enrollment increases and solid financial position, ¹⁻² major obstacles to its becoming State-Related arise from at least three powerful sources: 1) Various existing laws, including PASSHE’s enabling legislation, Act 188; 2) PASSHE’s collective bargaining agreements; and 3) Strong anticipated political opposition from some PASSHE and State-Related universities and their respective legislative delegations.
 
Angelo Armenti, Jr., President of the Pennsylvania Association of State Colleges and Universities (PASCU), former Villanova University Dean and 20-year President of California University (Cal U), recently announced the release of his new book, Privatization Without a Plan: A Failure of Leadership in Pennsylvania Public Higher Education.³

In the book, he describes various aspects of Act 188, the 1982 law⁴ that created the Pennsylvania State System of Higher Education (PASSHE) as a public corporation having authority over the 14 PASSHE universities, which include Bloomsburg, California, Cheyney, Clarion, East Stroudsburg, Edinboro, Indiana, Kutztown, Lock Haven, Mansfield, Millersville, Shippensburg, Slippery Rock and West Chester.  Pennsylvania’s four state-related universities include Penn State, Pitt, Temple and Lincoln Universities.
 
Act 188, as initially enacted and subsequently amended, still binds West Chester and the other 13 PASSHE universities together into a tight system in ways that preclude any individual university from leaving PASSHE to pursue a different legal arrangement such as, for example, state-related status.

Also under Act 188, the PASSHE universities are bound up in a single collective bargaining unit when it comes to its more than five-thousand unionized faculty members spread over the 14 campuses.
 
The 1980 Commonwealth Attorney’s Act⁵ also binds the 14 PASSHE universities together in terms of the legal representation they may receive which, by law, must come from the Office of General Counsel (OGC) reporting to the Office of the Governor.  State-Related universities on the other hand, although receiving substantial Commonwealth funding, have independent legal counsel.
  
So at the very least Act 188 and the Commonwealth Attorneys Act, would need to be amended to permit West Chester, and perhaps other PASSHE universities, to leave the PASSHE system to become state-related—while leaving certain other PASSHE universities behind.  But while amending these and other laws for that purpose is achievable in principle, the very act of opening up Act 188 and other laws could generate more opposition than assistance to West Chester’s state-related bid.
 
PASSHE is party to multiple collective bargaining agreements (CBAs) involving different employee groups.  But in each case, according to Armenti, those CBAs bind the employees together into bargaining units that are, at minimum, PASSHE-wide and, at maximum, Commonwealth-wide.  For that reason, every bargaining unit covered by a CBA with PASSHE might potentially be negatively affected by a departure of represented employees from one or more of the PASSHE universities. 
 
Resistance to the proposal from representatives of APSCUF, the union representing PASSHE faculty at the 14 universities, is a telling example of how the various affected unions are likely to see the West Chester proposal.  The president of the local West Chester chapter of APSCUF was quoted⁶ as being “wary” of the proposal.  The statewide president of APSCUF also spoke out forcefully against the proposal in a post on the faculty union website.⁷  

According to Armenti, such responses from APSCUF leaders were predictable for three reasons:
a) If the West Chester proposal were to become law, the faculty bargaining unit representing the PASSHE universities left behind would eventually have to be reduced in size to reflect the departure of faculty members from the universities that left.  This in turn would mean a reduction in the number of dues-paying members in the PASSHE unit and therefore, a reduction in APSCUF revenue.
b) APSCUF objections also reflect real concerns of those faculty members at the PASSHE universities who would be left behind if the proposal were to be enacted into law. Those faculty members would become part of a smaller bargaining unit with perhaps reduced leverage in future negotiations with PASSHE.
c) Another concern would be the labor status of faculty members at universities leaving PASSHE. While there is no prohibition against state-related university faculties being unionized—like Temple University has been for more than 40 years—it remains unclear whether faculty at a state-related West Chester University would be unionized or not and, if so, who would represent them.  
 
Two days after news reports of West Chester’s interest in becoming state-related went public, the University of Pittsburgh became the first state-related university to come out against the proposal.⁸

According to Armenti, the enormous legislative delegation associated with the geographically dispersed PASSHE universities, combined with the geographically dispersed State-Related universities, can be expected to marshal substantial political opposition in an effort to block the West Chester proposal. 
   
 ¹ http://www.post-gazette.com/news/education/2014/02/27/Change-in-wind-for-Pa-college-system/stories/201402270220.
² http://www.post-gazette.com/news/education/2014/03/06/Proposed-legislation-would-grant-more-autonomy-to-state-owned-universities/stories/201403060289.
³ http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Daps&field-keywords=angelo%20armenti.
https://www.keepandshare.com/doc/6772880/act188-pdf-405k.
http://www.ogc.state.pa.us/portal/server.pt/community/about_the_office/3252/commonwealth_attorneys_act/425242.
http://articles.philly.com/2014-03-01/news/47777981_1_state-system-university-faculties-pennsylvania-state-college.
http://www.apscuf.org/blog/item/275-apscuf-potential-passhe-separation-legislation-hurts-taxpayers-and-students.
http://www.post-gazette.com/news/state/2014/02/28/Pitt-s-Nordenberg-urges-state-to-proceed-cautiously-on-adding-more-state-related-schools/stories/201402280163.

Monday, March 10, 2014

Introducing PASCU - Part 10


The Pennsylvania Association of State Colleges and Universities (PASCU)
 
Armenti’s New Book Explains How Two PASSHE Universities Might Appear to be Financially Sound Despite Five Others Having Declared Financial Distress
 
With their recent enrollment increases, West Chester and Bloomsburg may exude financial success, while sister institutions Clarion, Edinboro, Mansfield, East Stroudsburg and Slippery Rock have instead lost student enrollment and signaled financial distress.  But, according to Armenti, all 14 PASSHE universities continue to labor under an unsustainable business model leading to financial distress for all.
 
Angelo Armenti, Jr., the former Villanova University Dean and 20-year President of California University (Cal U), recently announced the release of his new book, Privatization Without a Plan: A Failure of Leadership in Pennsylvania Public Higher Education 
 
According to the book, Armenti provided evidence to PASSHE leadership on October 13, 2010 that the business model under which the 14 PASSHE universities operate was financially unsustainable, and that without changing key policies driving that business model, all the PASSHE universities would face severe financial distress, bankruptcy and mission failure in the near term.  The leadership in question included members of the Board of Governors, the Councils of Trustees and the University presidents. 

Armenti also provided evidence to the leadership at that time that the rapid decline in Commonwealth funding, compounded by key operating policies, would result in PASSHE mission failure, both as far as providing high quality education, as well as in providing it at lowest possible cost to the students—the statutory purpose of the 14 PASSHE universities according to Act 188, PASSHE’s enabling legislation.²
Recent news articles have described a plan that would enable West Chester, Bloomsburg and possibly other PASSHE universities with more than 7,000 students to move to state-related status.³⁻⁴ State Sen. Andrew Dinniman, a backer of the proposal, was quoted as follows in the February 26, 2014 article:

“The only way currently that the system has for survival is to take money away from those institutions that are doing well, which is actually only West Chester and Bloomsburg universities, and [shift] it to institutions that are not in as good a shape,” said Mr. Dinniman, citing enrollment gains at both schools.
Financial records recently obtained by a Right to Know request from PASSHE⁵ confirm that between fiscal years 2012 and 2013, West Chester and Bloomsburg universities together added a total of $18.3 million to their unrestricted net assets (fund balances).  At the same time, Clarion, Edinboro, Mansfield, East Stroudsburg and Slippery Rock universities subtracted a total of $12 million from their fund balances. From these data, it would appear that Sen. Dinniman’s characterization of events is correct.
 
However, according to Armenti, the financial evidence presented to PASSSHE leadership establishes that the recent enrollment increases at West Chester and Bloomsburg are actually impoverishing all the other PASSHE universities with constant or shrinking enrollments, due to the PASSHE allocation formula that is aligned to distribute annual operating funds primarily on the basis of enrollment share. That is, universities that grow enrollments are actually taking money from universities that are not growing.
 
One clear consequence of the financial evidence from 2010 is that, under current funding patterns and policy decisions, all 14 PASSHE universities—including West Chester and Bloomsburg—will face mission failure and financial bankruptcy sometime after they have reached level enrollment, a situation that will inevitably occur as both institutions reach their physical capacity and can’t accept additional students.  

Under current funding patterns and policy decisions, according to the book, PASSHE Universities with fixed or declining enrollments—are headed for imminent mission failure and financial bankruptcy, as recent news stories about announced financial distress at five of the PASSHE universities will attest.
PASSHE universities with growing enrollments can postpone that sad fate—but only temporarily.  When enrollments eventually level off, as they must, those PASSHE Universities will also face the prospect of mission failure and financial bankruptcy.

The time between the arrival of level enrollments and the onset of mission failure and bankruptcy, however, can be extended only for as long as it takes for PASSHE universities to burn through the one-time fund balances they still retain.⁵  But those fund balances will only postpone the inevitable.
¹ Privatization Without a Plan: A Failure of Leadership in Pennsylvania Public Higher Education is on sale now, available from Amazon.com in paperback and e-book.  http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Daps&field-keywords=angelo%20armenti.
² https://www.keepandshare.com/doc/6772880/act188-pdf-405k.
³ http://www.post-gazette.com/news/education/2014/02/27/Change-in-wind-for-Pa-college-system/stories/201402270220.
http://www.post-gazette.com/news/education/2014/03/06/Proposed-legislation-would-grant-more-autonomy-to-state-owned-universities/stories/201403060289.
https://www.keepandshare.com/doc/6848404/passhe-2012-13-unrestricted-net-assets-march-10-2014-pdf-87k.

The Role of PASCU

PASCU’s mission is “To ensure that the statutory purpose of public higher education in Pennsylvania as specified by Act 188 of 1982: ‘High quality education at the lowest possible cost to the students,’ is indefinitely preserved and faithfully delivered.”  To advance that mission, PASCU seeks to reform the governance of PASSHE so as to enable it achieve the statutory purpose mandated by Act 188.   

ABOUT THE AUTHOR
 
Dr. Angelo Armenti Jr. served as President of California University of Pennsylvania (Cal U) from 1992 to 2012.  Before that, he was a Dean at Villanova University, a professor of physics, and author of The Physics of Sports (American Institute of Physics, 1992). During his career at Cal U, Armenti is credited with establishing numerous funding sources for student scholarships and for campus revitalization projects, efforts made in part to address the problems that he describes in Privatization Without a Plan.  In June of 2012, Armenti founded a non-profit corporation entitled The Pennsylvania Association of State Colleges and Universities (PASCU) whose mission it is to preserve the statutory purpose of public higher education in Pennsylvania.

Monday, March 3, 2014

Introducing PASCU - Part 9

The Pennsylvania Association of State Colleges and Universities (PASCU)
 
New Book by Armenti Claims PASSHE’s Failure to Deliver the Promise of Act 188 Stems from Lack of a Fiduciary Relationship between PASSHE Leaders and Students
 
According to the book, PASSHE’s 100% political leadership has neither planned for nor achieved the promise of Act 188, “High quality education at the lowest possible cost to the students,” because their official oath of office does not specifically require them to initiate or maintain a fiduciary relationship.    
 
Angelo Armenti, Jr., the former Villanova University Dean and 20-year President of California University (Cal U), recently announced the release of his new book, Privatization Without a Plan: A Failure of Leadership in Pennsylvania Public Higher Education 
 
In it, he describes what the absence of a fiduciary relationship between PASSHE leaders and PASSHE students has been doing to the students and the 14 PASSHE universities in Pennsylvania, which include Bloomsburg, California, Cheyney, Clarion, East Stroudsburg, Edinboro, Indiana, Kutztown, Lock Haven, Mansfield, Millersville, Shippensburg, Slippery Rock and West Chester.
 
The book Privatization Without a Plan calls upon the PASSHE Board of Governors to adopt, promulgate and foster a fiduciary relationship between itself and the students, including a duty of care, a duty of loyalty, and a duty of obedience to the statutory purpose of the PASSHE universities.  These three duties are cited as Standards of Board Responsibility² by the Association of Governing Boards (AGB), which currently serves over 1,250 member institutions—colleges and universities, both public and private.
 
The term “fiduciary duties,” as applied to governing boards of colleges and universities is defined on the AGB website to include:

· The duty of care: board members should pay full attention to their responsibilities and protect institutional assets.
· The duty of loyalty: board members should put the interests of the institution before self-interests.
· The duty of 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.
 
According to the AGB, “The duty of care certainly requires that board members protect the financial assets of the institution but, more than that, to also protect the institution’s reputational, personnel and tangible assets as well.  The duty of loyalty requires that board members put the interests of the institution before all others.  The duty of obedience requires that board members act in a manner consistent with the mission and goals of the institution. Failure of this duty can result in loss of public confidence in the institution.”

The oath of officeᶟ taken by the 20 members of the PASSHE Board of Governors, and the 154 trustees on the 14 PASSHE University Councils of Trustees, simply requires each candidate for office to be sworn before a Notary Public and to sign his or her name to the following statement:  “I do solemnly swear (or affirm) that I will support, obey and defend the constitutition of the United States and the Constitution of this Commonwealth and that I will discharge the duties of my office with fidelity. “
 
According to Armenti, the above oath which every candidate for public office must signᶟ is entitled the “Constitutional Oath of Office,” and is taken by numerous elected and appointed state officials who are associated with different State agencies.  And while the wording of the above oath requires each oath-taker to discharge the duties of their office with fidelity, the object of their fidelity—beyond the U.S. and State constitutions—is not specified.  “Regretably, the fiduciary duties expected of higher education governance board members across America are currently not required in Pennsylvania,” Armenti said.
 
The oath of office taken by members of the Board of Governors and the Councils of Trustees, according to Armenti, not only requires no fidelity to PASSHE’s majority financial stakeholders—the students, parents and alumni donors who currently pay 75% of the cost of education—neither does it require fidelity to Act 188, the enabling legislation that created the Board of Governors and Councils of Trustees and describes their statutory duties, nor does it require a fiduciary relationship with the students. 
 
Since the official oath of office taken by PASSHE’s 100% political leadership requires fidelity neither to Act 188 nor to the majority financial stakeholders, PASSHE’s failure to adopt, promulgate and foster a fiduciary relationship with PASSHE students was unfortunately preordained, according to Armenti.  
 
The Role of PASCU

PASCU’s mission is “To ensure that the statutory purpose of public higher education in Pennsylvania as specified by Act 188 of 1982: ‘High quality education at the lowest possible cost to the students,’ is indefinitely preserved and faithfully delivered.”  To advance that mission, PASCU seeks to reform the governance of PASSHE to require a fiduciary relationship between PASSHE leaders and PASSHE students.  
 
¹ Privatization Without a Plan: A Failure of Leadership in Pennsylvania Public Higher Education is on sale now, available from Amazon.com in paperback and e-book.  http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Daps&field-keywords=angelo%20armenti.
² http://agb.org/knowledge-center/briefs/fiduciary-duties.
https://www.keepandshare.com/doc/6750603/oath-of-office-pdf-37k.

ABOUT THE AUTHOR
Dr. Angelo Armenti Jr. served as President of California University of Pennsylvania (Cal U) from 1992 to 2012.  Before that, he was a Dean at Villanova University, a professor of physics, and author of The Physics of Sports (American Institute of Physics, 1992). During his career at Cal U, Armenti is credited with establishing numerous funding sources for student scholarships and for campus revitalization projects, efforts made in part to address the problems that he describes in Privatization Without a Plan.  In June of 2012, Armenti founded a non-profit corporation entitled The Pennsylvania Association of State Colleges and Universities (PASCU) whose mission it is to preserve the purpose of public higher education in Pennsylvania.