The Nature of the Dilemma
We concluded last week’s blog post with a section entitled “A Dilemma.”
This week’s post will describe the nature of that dilemma as seen from the point of view of PASSHE’s Majority Financial Stakeholders, i.e., the PASSHE students, parents and alumni donors who together provide 75% of the cost of education at the fourteen PASSHE universities. [Students and parents provide 70% of that cost, while alumni donors provide 5%.] The State, which now provides only 25% of the cost, is the Minority Financial Stakeholder and has been since 1993 when its funding share first fell below 50%.
Despite its minority (25%) financial support of the fourteen PASSHE universities, the State continues to control 100% of the 174 seats on PASSHE’s governance boards. At the same time, while the students, parents and alumni donors provide the majority (75%) of financial support to the PASSHE universities, they control 0% of PASSHE’s 174 governance seats.
The 20-member Board of Governors (BOG) in Harrisburg has overall control of the system of fourteen PASSHE universities. Each PASSHE university has a local Council of Trustees, with eleven members, for a total of 154 seats. Each university Council of Trustees exerts control over that university, subject to the ultimate authority of the BOG.
All key decisions affecting some 100,000 PASSHE students and their parents, and some 500,000 PASSHE alumni, are made either by the BOG or by the 14 Councils of Trustees. And yet, the Majority Stakeholders have no voice at the tables where all the decisions affecting them get made.
Privatization Without Representation
Consider these facts:
1.
With the passage of Act 188 of 1982, the State
designated the fourteen PASSHE universities to be the educational system that
would provide the public university purpose to the students of Pennsylvania.
2.
Specifically, the statutory (Act 188) purpose¹
of the fourteen PASSHE universities is to provide “high quality education at
the lowest possible cost to the students.”
3.
For powerful demographic and economic reasons,
the State share of PASSHE’s annual revenue has fallen from 90% in 1950 to 25%
today. As a result of that defunding by
the State, the share of annual revenue provided by PASSHE students, parents and
alumni donors has increased from 10% to 75%.
4.
State support of PASSHE’s annual budgets fell
steadily during PASSHE’s first thirty year of existence.
5.
For PASSHE’s first 19 years of existence (1984 -
2002), educational quality increased by 29% as the Board of Governors raised
tuition sufficiently to overcome the steady drop in State funding.
6.
For the following eleven years of PASSHE’s
existence (2002 - 2013) educational quality decreased by 14% as the Board of
Governors failed to raise tuition sufficiently to overcome the accelerating
drop in State funding—despite the fact that Act 188 gives the BOG the authority
to do just that.
7.
In justifying its tuition policy decisions since
2002, the Board of Governors proudly touts its policy of maintaining the
“lowest possible tuition” (sticker price) at the fourteen PASSHE universities, while
ignoring the fact that Act 188 mandates the “lowest possible cost to the
students” (bottom line).
8.
The difference between sticker price and bottom
line is enormous and the policy decision to focus on the former rather than the
latter saddles students from less affluent families with crushing student loan
debt, while providing unneeded State subsidies to students from more affluent
families. The BOG’s “low tuition for
all” policy continues to fail on both ends of the financial need spectrum.
9.
The data show that since 2002, the PASSHE Board
of Governors has not acted to deliver either end of PASSHE’s Act 188 statutory
purpose: It has allowed educational
quality to suffer, even while failing to provide a PASSHE education at anything
like the lowest possible cost to the students.
10.
Dictionary.com defines “malfeasance” as “the
performance by a public official of an act that is legally unjustified,
harmful, or contrary to law.” By
ignoring not just the spirit but the letter of the law, the Board of Governors
since 2002 has arguably been guilty of malfeasance in office, and only a change
in the membership of the PASSHE Board of Governors may force the BOG to obey
the law as written.
11.
The change in membership is required because of
the political interference by Governors from both parties into the workings of
PASSHE as mandated by Act 188. From 1984
to 2002, Act 188 worked as written.
After 2002, Act 188 no longer worked as written because Governors wanted
tuition increases kept small for political reasons—regardless of the economic
consequences for students from less than affluent families. BOGs waited for the Governor to signal what
the maximum tuition increase could be—independent of what Act 188 said and what
the economic realities were for students on the fourteen campuses. This problem is political but not
partisan. Both parties benefit from the
status quo to the detriment of the students.
Elected officials in both parties use political patronage to place their
supporters on PASSHE’s governing boards.
But with the State providing only 25% of the funding, it should no
longer be controlling 100% of the seats on the BOG and the fourteen COTs.
12.
In State-related universities, one-third of the
Trustees are either elected or appointed officials, and two-thirds are selected
by the universities. Most of the two-thirds
majority Trustees at the four State-related universities get appointed, in
part, by making private donations to the universities that will benefit the
students. At the fourteen PASSHE
universities, the majority of the appointed members of the Board of Governors
and the fourteen Councils of Trustees get their appointments, not by making
donations to the universities that benefit the students, but by making
donations to the campaigns of elected officials that benefit the elected
officials and themselves, because of the perks that a number of those political
appointees expect to receive because of their positions of power.
To be continued.
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