PASSHE Has Hoarded Money Under Both Democrats and Republicans
We have used similar headings in earlier blog posts and employ this one because it suggests something powerful and sinister about how decisions motivated totally by politics tend to play out.
That PASSHE has been hoarding money for the past thirty-two years—regardless of whether Democrats or Republicans were in charge says money-hoarding, while clearly political, is just as clearly non-partisan.
The PASSHE system of fourteen universities, with a central office in Harrisburg consisting of the Office of the Chancellor and the Board of Governors (OOC+BOG), is controlled almost totally on the basis of political expediency. And money, lots of money, is needed—and available—to facilitate that political convenience.
The fourteen PASSHE universities include: Bloomsburg, California, Cheyney, Clarion, East Stroudsburg, Edinboro, Indiana, Kutztown, Lock Haven, Mansfield, Millersville, Shippensburg, Slippery Rock and West Chester Universities.
Lest anyone doubt that PASSHE is controlled 100% by politics, just consider the following facts:
·
Every member of the 20-member PASSHE Board of
Governors is either an elected official (5), the representative of an elected
official (1), or a political appointee of elected officials (14); and
·
Every member of the eleven-member Councils of
Trustees at the fourteen PASSHE universities (154 in all) is a political appointee
of elected officials.
And while some political appointees to the PASSHE Board of Governors and the fourteen Councils of Trustees care about the best interests of the students at the fourteen universities, many other political appointees—based on my twenty years as a PASSHE university president (1992-2012)—made it clear that the primary goal of their “service” was their own personal enrichment via their political connections.
Most of PASSHE’s political appointees get there, not by making donations to the Universities to provide desperately needed student scholarships, but by making political donations to politicians in the hopes of getting appointed, and reappointed, to their governance positions of power.
In return for political donations, many political appointees expect perks in return that PASSHE’s leaders are all too often happy to provide, as with all political transactions.
Politics and Money: State
Appropriation vs. Student Tuition and Fees
Pennsylvania’s PASSHE system of fourteen universities is like the other State systems of higher education throughout America in one key respect: The bulk of its revenue for educational and general (E&G) matters comes from two main sources—State Appropriation and Student Tuition and Fees (a.k.a., Net Tuition).
But that is where the similarity with the majority of other 50 States ends. The respective shares of funding coming to public higher education in America from those two sources range from 85% Appropriation and 15% Net Tuition at one end of the spectrum, to 15% Appropriation and 85% Net Tuition at the other end.
Net Tuition is the gross amount of tuition and fees, less state, Federal and institutional financial aid.
Key evidence for this disparity in the level of public support for so-called “public” higher education across America comes from SHEEO, the State Higher Education Executive Officers Association. Their reports show that over the twenty-five year period from 1989 to 2014, the share of revenue for “public” higher education coming from the Net Tuition paid by students grew by about one percent per year for those 25 years. The U.S. average Net Tuition percentage grew steadily from 24.5% in 1989 to 47.1% in 2014.¹
The SHEEO report on Net tuition revenue by State for fiscal year 2014² reveals that the State of Wyoming, with 15.1% Net Tuition (and 84.9% from State Appropriation), is the most generous in America with its State funding for public higher education, followed by California, Alaska, New Mexico, and North Carolina.
At the other extreme, that same SHEEO report reveals that the State of Vermont, with 84.5% Net Tuition (and 15.5% in State Appropriation) is the least generous in America with its State funding for public higher education, followed by New Hampshire, Delaware, Colorado and Pennsylvania.²
Also revealing is a SHEEO report showing that the percent change in educational appropriations by State between 2009 and 2014 ranged from a high of 40.5% at one extreme, to a low of -38.4% at the other. Louisiana came in dead last at -38.4%. Pennsylvania came in next to last at -35%.³
These SHEEO Reports lead to two unavoidable conclusions: 1) Traditional—i.e., highly State-subsidized—public higher education is rapidly becoming a thing of the past in America; and 2) Pennsylvania is among the group of States currently leading the race to the bottom.
Mystery Money Suddenly Appears and
Disappears from OOC+BOG’s Fund Balance
Although the Commonwealth of Pennsylvania now provides only 25% of
PASSHE’s annual operating revenue, PASSHE’s central office, OOC+BOG, has access
to lots of money as our recent blog posts—based on official PASSHE data from Right to Know requests—have made clear.
As shown last week, despite the fact that OOC+BOG is limited by law to
annual revenue equal to ½ of one percent of total PASSHE revenue (as precisely defined
in Act 188), the OOC+BOG somehow managed to deposit more than $50 million into
its fund balance over the four fiscal years (1998 and 2003-2005).
Based on PASSHE’s official reports that a large percentage of OOC+BOG’s annual revenue is consumed each year by high personnel and other mandatory costs, those $50 million in deposits had to have come from outside of OOC+BOG’s normal revenue sources, although not necessarily outside of PASSHE itself.
Then in FY 2006, OOC+BOG’s fund balance suddenly dropped by $35 million, meaning that those funds were either spent or otherwise transferred to another account controlled by OOC+BOG. What did they buy with all that money? Or, what account was all that money transferred into?
Nagging questions remain: Where did all that money come from? Where did all that money go?
The Sources and Uses of PASSHE Money
and OOC+BOG Money
The sources and uses of revenue for the PASSHE System as a whole—including the fourteen universities plus the central office known as OOC+BOG—are fairly well known. But PASSHE leaders’ efforts to keep the financial transactions of the OOC+BOG out of public view have largely succeeded, at least up to now.
To be continued.
² http://www.sheeo.org/sites/default/files/Figure%209.jpg.
³ http://www.sheeo.org/sites/default/files/Figure%208.jpg.
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