Remarks of Dr. Kenneth M. Mash
Before the Board of Governors
July 9, 2015
Where Does the Money Go?
Chairman Pichini, Governors, Chancellor Brogan, University Presidents, and guests. I am Kenneth Mash, and I am the President of the Association of Pennsylvania State College and University Faculties.
We, APSCUF, have dedicated a lot of time and energy into trying to get a full picture of the finances of the State System and its fourteen great universities. Every time we think we have a handle on those resources, we are surprised to learn something new. Although we agree that the new dashboards are helpful tools, they do not begin to afford someone the full picture of what transpires.
I am certain that if I were to poll the members of the General Assembly, the students and their families who pay the tuition bills, and even members of the general public, they would think that there is an ever increasing amount of money that can be attributed to the costs of instruction, including the costs of salaries and benefits spent on faculty. They would certainly think that if they listened to the presentations given by a couple of the university presidents over the last week.
But if you manage to piece together bits and pieces of information, there is a very different story to tell. I will leave charts with the chair which demonstrate that compared to other 4-year public institutions, the state systems schools spend less, and in most cases far less of a percentage of their overall operating budgets on instruction, than the national average per full-time enrolled students. Furthermore, the majority of our institutions, with some notable exceptions, are spending even less of a percentage of their operating budgets on instruction than they did a few years back.
If that money is not going to instruction, where does the money go? Recent events have given us some clues to start to ferret out the answer. We have not yet gotten our secret decoder rings to figure it all out. But, for one thing, it is clear that money moves pretty freely out of the Education and General Funds at the universities into unrestricted plant funds and to affiliated organizations. We could add to those numbers growth in administration at most of our universities, including some that were simultaneously eliminating programs and laying off faculty.
Clearly the policies of previous governors have hurt our universities. The drastic cuts of the previous administration only tell a part of the story. A richer and more accurate story goes back to how money for capital projects was cut. It is important to understand how our universities were forced to increase matching funds for building projects while being generally ill equipped to raise those funds, how the debt for those projects taps into educational and general funds, and how Key 93 money was eliminated.
With one glaring exception, our universities have not shown themselves to be deft at raising money for building projects. But, why should they be? We are state-owned universities. When our universities “own” buildings, they do not truly own them. The Commonwealth does. Ultimately those buildings are assets of the Commonwealth. I dare say that the members of the General Assembly and perhaps the Governor, do not adequately understand the task that is laid at the feet of our university administrations. To be honest, I have my doubts about whether all members of the Board fully understand.
Regardless, it is clear that money that most would think is dedicated to things like instruction, intercollegiate athletics, academic support, security, residence life, etc. is going to construction. In fact, the matching policies of this Board, the Board’s allowance for the use of the affiliated organizations encourages this. Again and again plans are approved to make purchases without an adequate accounting to what will ultimately happen to those precious E&G funds.
This system’s mission continues to be to provide a high quality education at an affordable cost. Instruction lies at the core of a high quality education, and the university budgets need to reflect that. Ambiance is a key part of running a successful restaurant, but if you skimp on the food, the customers stop coming.
I sincerely hope that when the System puts in its next budget request that it asks for money for the area that seems to be draining its budget, that is, that there is a request for additional capital funds and debt relief for our universities. Until then, I would hope that this Board would ask more public questions about “where does the money go?”