A PASCU Chapter at Each PASSHE University - Part 12

PASSHE’s Various Stakeholders

Dictionary.com defines the word “stakeholder” as “a person or group that has an investment, share, or interest in something, as a business or industry.”   (Emphasis added.)
 
Employees are not normally seen as financial stakeholders in an organization in that they receive compensation in exchange for the services they provide.  But they certainly have a valid “interest” in what happens to their employer and by implication—to them—if the status quo were to be changed.  For that reason, we will include the various employee groups within PASSHE on the list of stakeholders who, along with other groups, may enjoy significant support in the Pennsylvania Legislature and, as a result, would have potentially significant influence in any legislative debate on changing the status quo.
 
For slightly different reasons, we will also need to include the four State-Related Universities on our list of PASSHE stakeholders in this debate to change the status quo because they too would have a valid “interest” in what the competition and financial implications would be for them if one or more PASSHE Universities were to join them as State-Related universities.  It is safe to say, e.g., that the state-related universities would see a state-related West Chester University as a serious threat to their best interests. 
 
Due to the geographical distribution of the four State-Related universities and their sheer size and large legislative delegations, the State-Related universities have always been a force to be reckoned with in terms of Pennsylvania public policy.  I’ve been told by people who were present and witnessed IUP’s attempt at State-Related status in the 60s that, the failure of that attempt could be traced to a resolute effort against IUP’s proposal by the legislative delegations associated with the State-Related universities.
 
To gauge the numerical power of State-Related delegations, Penn State, e.g., reportedly has more of its alumni serving in the Legislature than any other single university!  Temple University and the University of Pittsburgh, owing both to their large size and location in major cities, also possess powerful legislative delegations that are inclined to support their best interests and to oppose any threats to those interests.            
 
We will now look for the winners and losers from the following list of PASSHE stakeholders:
1)      The Commonwealth of Pennsylvania - In the person of both its taxpayers and its elected officials having the duty and power to vote on State Appropriation to PASSHE.  Over the last sixty-five years, the State share of PASSHE’s annual revenue fell from about 90% to 25%, thereby making the Commonwealth PASSHE’s Minority Financial Stakeholder today.

2)      The PASSHE students, parents and private donors, primarily alumni, are PASSHE’s Majority Financial Stakeholders, now providing about 75% of PASSHE’s annual revenue.

3)      Pennsylvania’s four current State-Related Universities.

4)      The PASSHE Board of Governors (20 members).

5)      The PASSHE Councils of Trustees (14 x 11 = 154 members).

6)      PASSHE employees in the Office of the Chancellor.

7)      PASSHE employees across the 14 PASSHE Universities.

 

The Instant Proposal for Change

 
Recall the instant proposal for change is one in which an individual PASSHE (i.e., State-Owned) university would be permitted to secede from the PASSHE system to then become a State-Related university. 

Here is a list of the projected Winners, Losers, and Neutral Parties if, for example, the West Chester proposal to secede from PASSHE and become an individual State-Related university had succeeded.

 

Winners Under a Successful West Chester Proposal

·         PA Taxpayers - Based on news reports that some $100 million would be paid back to the State by West Chester to compensate for the State’s investment over many years in its land and buildings.

·         West Chester’s Majority Financial Stakeholders - West Chester’s Students, Parents and Alumni Donors would have become huge winners if the West Chester Proposal had succeeded.  Financially speaking, the State-Related universities are 85% private, receiving 15% of their annual operating revenue from the State; the State-Owned universities are 75% private, receiving 25% of their annual operating revenue from the State.  But the 10% decrease in annual State funding in moving from State-Owned to State-Related status is more than made up for by the enormous increase in Majority Financial Stakeholder governance shares associated with State-Related status.  PASSHE’s Majority Financial Stakeholders now pay 75% of the bills while controlling 0% of the seats on the governance boards where all key decisions are made.  The Majority Stakeholders at the four State-Related universities pay 85% of the bills but control 67% of the governing board seats!  In a very real sense, the State-Related universities control their own destinies despite receiving funding from the State.          

Losers Under a Successful West Chester Proposal

·         Pennsylvania’s Elected Officials - Based on the fact that the fourteen PASSHE Universities have been operated on the basis of political patronage for 100+ years!  If one PASSHE University were to become State-Related, the patronage opportunities might be a near “wash” (+12 seats gained on a State-Related Board - 11 seats lost on a State-Owned Council of Trustees).  But any loss in political control of the PASSHE universities would be seen by elected officials and the public as an enormous loss of political power.  This is a political, but not a partisan, problem.  Elected officials from both major political parties benefit from the status quo and would lose under the West Chester proposal. 

·         Students, Parents and Alumni Donors at the Other 13 PASSHE Universities - The thirteen PASSHE universities left behind by West Chester’s departure from PASSHE would see themselves as huge losers.  And since the PASSHE universities are also largely spread out, geographically speaking, the legislative delegations for these other 13 universities would provide to a large number of negative votes in the Legislature that might easily dwarf West Chester’s legislative delegation in the process.

·         Pennsylvania’s four current State-Related Universities - As shown earlier, the four current State-Related universities would have been huge losers if the West Chester proposal had succeeded. 

Neutral Parties Under a Successful West Chester Proposal

·         PA Taxpayers: Based on news reports that West Chester would continue to receive the same State Appropriation as a State-Related University as it did as a State-Owned University.
 
To be continued.