Monday, October 13, 2014

Act 188 and The Pennsylvania Promise - Part 2

As we saw in last week’s blog post:
 
It was thought that Act 188 would provide a sufficient buffer between the 14 universities and direct political control to allow the PASSHE universities and PASSHE students to thrive.  In fairness, the law worked perfectly well for its first 19 years (1984-2002), but it has increasingly failed to work since 2002.¹
What Went Wrong?
 
In a word:  The clear mandate of Act 188—The Pennsylvania Promise of “High quality education at the lowest possible cost to the students”—has been ignored by the PASSHE Board of Governors since 2002.
 
Act 188² created a two-step process for the annual funding of the 14 PASSHE universities and from the very beginning, that process was predicated on the presence of two very different sources of funding:  1) State appropriation revenue, provided by the taxpayers; and 2) Tuition + Fees + Other revenue, provided by the PASSHE students, parents and private donors, primarily PASSHE alumni. 
 
Historically speaking—in terms of these two PASSHE budget sources—the State provided 90% in 1950, 63% in 1984, and 25% in 2013, while the budget share provided by students, parents and alumni rose from 10% to 37% to 75%!  This huge shift in the costs of “public” higher education from the State to the students, parents and alumni donors has been called “privatization without a plan.”¹ Official data show this cost shifting has been happening relentlessly in Pennsylvania and in many other states for decades.
 
Under Act 188’s statutory funding process, Pennsylvania’s elected officials get to decide how much appropriation the State can afford to provide to PASSHE in any given year, and then the Board of Governors gets to decide what the PASSHE tuition rates must be in order to achieve PASSHE’s statutory purpose: “High quality education at the lowest possible cost to the students.”
 
Since Act 188 doesn’t authorize any role for the Pennsylvania governor in the tuition-setting process, the authors of Act 188 apparently never anticipated that elected officials would insert themselves into that process, with the unfortunate result that the statutory purpose of the 14 PASSHE universities since 2002 has been sacrificed to the political expediency of politicians from both parties. 
 
The promise given was a necessity of the past: the word broken is a necessity of the present.”
                                                                                                                        Niccolò Machiavelli, The Prince

 As shown in the attached chart,³ half of the increase in the quality of the educational experience delivered to the students by the good policy decisions of the Board of Governors in PASSHE’s first 19 years was erased by the poor policy decisions of the PASSHE Board of Governors in the next 11 years.
 
And as shown in another attached chart,⁴ the Board of Governors is not providing a PASSHE university education at anything like the lowest possible cost to the students.       
 
In effect, the Pennsylvania Promise: High quality education at the lowest possible cost to the students, which was made to PASSHE students with passage of Act 188, became a broken promise in the years between 2002 and the present.

Since the underlying law was not changed during that time, the sudden change in results can only be explained by a change in the politics of the situation, a self-serving change that would have come as no surprise to Machiavelli, as the following quote makes clear:  
 
“One can say this in general of men: they are ungrateful, disloyal, insincere and deceitful, timid of danger and avid of profit...Love is a bond of obligation that these miserable creatures break whenever it suits them to do so; but fear holds them fast by a dread of punishment that never passes.”  (Niccolò Machiavelli)

Considering PASSHE’s failure to deliver the Pennsylvania Promise of High quality education at the lowest possible cost to the students, and considering Machiavelli’s two quotes above, one conclusion becomes inescapable:   Machiavelli’s hypothesis about broken promises by politicians fits PASSHE’s fact pattern.
The PASSHE Fact Pattern and the Emergence of PASCU

Since 2002, elected officials from both parties, Democratic and Republican, have controlled not just the level of State Appropriation to PASSHE—which is their right and duty—they have also controlled the tuition-setting process in PASSHE—a right and duty which Act 188 reserves to the Board of Governors. 
By caving in to political pressure from two Governors to keep tuition rates (sticker price) low—when Act 188 requires not the lowest possible tuition but, rather, the lowest possible cost to the students (bottom line)—politically subservient Boards of Governors since 2002 have allowed the Pennsylvania Promise: High quality education at the lowest possible cost to the students, to become just an empty promise.  

But Machiavelli also offers hope for change in the last phrase of the above quote by identifying what all self-serving politicians apparently fear the most: “…a dread of punishment that never passes.”
The individuals harmed the most by the lawless way in which the mandate of Act 188 has been ignored are the Majority Financial Stakeholders—the PASSSHE students, parents and alumni donors—who now provide 75% of PASSHE’s annual operating revenue, while the State provides just 25%. 

But until now, elected officials from both parties had no reason to fear punishment at the polls from the hundreds of thousands of PASSHE students, parents and alumni negatively affected by the brazen failure of these officials to deliver the Pennsylvania Promise, as mandated by law in Act 188. And that is because those Majority Stakeholders have not yet found their voice.  But that is about to change.    
The Pennsylvania Association of State Colleges & Universities (PASCU)⁵ was created to awaken PASSHE’s Majority Stakeholders—a huge sleeping giant—whose interests have been ignored by Pennsylvania’s elected and appointed officials for years in favor of advancing their own self-serving interests instead.

On behalf of PASSHE’s Majority Stakeholders, PASCU hopes to instill in Pennsylvania’s elected and appointed officials the fear that Machiavelli calls “the dread of punishment that never passes.”
Were Machiavelli alive today, he might comment on the broken Pennsylvania Promise as follows:

What self-serving elected officials fear most is electoral defeat and exclusion from the public trough.”
¹ http://www.amazon.com/Privatization-Without-Plan-Leadership-Pennsylvania/dp/1491295244/ref=sr_1_1?ie=UTF8&qid=1408368767&sr=8-1&keywords=angelo+armenti.
² http://www.passhe.edu/inside/bog/Pages/Act-188.aspx.
³ https://www.keepandshare.com/doc/6794551/privatization-without-a-plan-chart-9-and-caption-january-23-2014-pdf-387k.
https://www.keepandshare.com/doc/6802256/privatization-without-a-plan-chart-20-and-caption-january-29-2014-pdf-390k.
http://www.pascu.net/.

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