Is Penn State Underfunded?
By Kathleen Riley-King
The following is taken from material sent by Ruth Leventhal
on January 29, 1987 to the Board of Advisers, Administrative Council,
and Alumni Society Board of Directors. The questions and answers are
reproduced verbatim. Not all questions from the original memo are
reproduced.
Q. Why does Penn State need more dollars from the state?
A. Penn State is seriously underfunded when compared to other
institutions at both the national and state levels.
In the nation, for example, a study of the 40 largest public
universities with respect to state appropriations for 1985-86
revealed that:
Penn State received a state appropriation that was $6O million
below the average, while simultaneously enrolling 20,000 more
students--50 percent above the average.
Within Pennsylvania, Penn State receives the lowest state
appropriation per student of any college or university in the
state.
The February 1986 report of the Commonwealth's joint state
government commission shows that for the 1984-85 year, Penn
State received an educational and general appropriation of
$2,070 per student from the state. This compares to an average
of $3,160 for the state-owned universities, $3710 for Temple
Uni-versity, and $2,780 for the University of Pittsburgh.
Q. Why are the funding inequities between Penn State and other
Pennsylvania colleges and universities so great?
A. The inequities evolved over a 15-year period, during which time
Penn State's enrollment increased more than other public
colleges and universities in Pennsylvania. At the same time,
percentage increases in state appropriations to the state-owned
universities increased at a substan-tially higher rate.
In the 15 years between 1970-71 and 1985-86, Penn State's
appropriation from the state increased by 148.2 percent. Over
the same 15 years, appropriations for the state-owned insti
tutions increased by 267.5 percent--nearly 120 percentage points
more than Penn State received.
Simultaneously, Penn State's enrollment in-creased by 29.2
percent, while enrollments at the state-owned universities
increased by only 14.3 percent. The University of Pittsburgh's
enroll-ment increased by 8.6 percent and Temple University's
enrollment dropped by 4.1 percent.
Penn State received no additional state funds to support these
enrollment increases.
Q. What can the Commonwealth do to achieve funding equity for
Penn State?
A. The State cannot correct such a serious problem in one year.
Therefore, Penn State is proposing a multi-year plan to close
the existing funding gap between Penn State and other public
colleges and universities in Pennsylvania.
As a first step, Penn State has requested special funding for
1987-88 equivalent to $lBO per full-time-equivalent student. A
total of $10.5 million is requested--an amount which represents
only 2.5 percent of the University's general funds budget.
This funding is needed in addition to basic operating cost
increases for 1987-88 of about $2l million.
Q. How would Penn State use the additional per-student funding?
A. The ' , lnds would be used to meet the University's most critical
r. A portion would be used to make Penn State salaries
m., ompetitive to enable the University to retain quality
faculty members and to recruit new faculty scholars. Another
portion would be used to finance some progress in:
•ig • wi ii-. 1 - .r I• • -
*Updating laboratory instruction to insure adequate staffing,
modern equipment, and laboratory facilities.
*Keeping pace with rapidly changing technology and expanding
use of academic computing and telecommunications.
*Providing critically needed support for the University libraries.
*Providing funds to academic areas identified for enhancement,
such as biotechnology, policy analysis, atmospheric sciences,
and communications.
*Supplementing major maintenance funding, much of which
has had to be defend.
In 1986-87, Penn State received the largest appropriation of any
college or university in Pennsylvania--over $lBl million. Why
can't Penn State solve its funding problems by internal
cutbacks and reallocations?
Penn State has been aggressive in its reallocation and cost
containment efforts for more than fifteen years. Between 1971-
72 and 1985-86, the University pulled back over $32.6 million
from operating budgets for reallocation to areas of greater
priority or need.
Because increases in appropriations during this period were
considerably less than inflationary cost increases, most of the
recycled dollars had to be used for substantial increases in
operating costs rather than for reallocation among academic
programs. For example, 65 cents of every appropriation
increase dollar went for major increases in health care costs,
fuel, and utilities costs, retirement and social security costs.
Further cutbacks or reallocations would threaten the academic
quality of the University.
It should also be noted that Penn State serves the largest
number of students of any college or university in
Pennsylvania. On a per student basis, Penn State's
appropriation is about $l,OOO less than the average of all other
public institutions in Pennsylvania. Penn State also has the
lowest tuition rate of the three public research universities--
$224 below Pitt and $304 below Temple. As a result, Penn
State has the lowest total income base--the sum of the tuition
rate plus the appropriation per student--of any public institution
in the state. By this measure, Penn State is the
Commonwealth's most cost effective public university.
Can't Penn State solve its underfunding problems by raising
money in the private sector?
No. Penn State is in the midst of The Campaign for Penn
State, a major fund-raising effort in the private sector with a
$2OO million goal. To date, more than $lOO million have been
raised. These funds are enhancing the academic quality of the
University primarily by building endowment funds for faculty
chairs, professorships, and fellowships. Funds also are being
raised to endow scholarships for undergraduate students and
fellowships for graduate students, as well as to enhance
academic programs and to augment the collections of the
University libraries. About 25 percent of the $2OO million goal
will be used for capital projects for which state funds are not
available.
State support does not provide discretionary money to fund
improvements and enhancements to academic programs in the
way that private funds do. It is difficult to find a major public
university today that has not found it necessary to initiate a
major gifts campaign. In Pennsylvania, this has been
recognized by the governor's commission on the financing of
higher education, which recommended that, "Private support
should be considered to be supplemental to state support and no
public institution raising private funds should receive less state
support because of its success in doing so."
Where can I get further information if I need it?
Contact Frank Forni, Office of Government Affairs, 117 Old
Main, University Park, Pennsylvania 16802, telephone (814)
865-6563.