PASSHE Institutions Merging

[Fightingscot82]

What WILL eventually be needed in PA is a closure law similar to BRAC used by the Federal government to close and realign military bases. The difference with what is underway now is that BRAC determines a top-down view and forces realignment and closures. The law creating BRAC takes all recommendations to Congress and the package gets passed in total or not. It always passes as Congressional delegations that are pissed are outnumbered. Some bases get closed and some merged and some expanded, etc... The way PA is approaching this now leaves each institution to figure it out which can result in a myopic view. All institutions of higher education, state, and state-related universities, as well as community colleges, should be included. Like BRAC, this shouldn't be a one-time process. By doing it over a series of years, the legislative delegations that disagree will be kept small. BRAC works.

If that were the case, Pitt and Penn State would be reduced to a handful of campuses between them. A lot of those branches are failing enterprises that make PASSHE look salvageable.

We need more community colleges in PA, too, not fewer. PA has a patchwork collection of higher ed options, not a comprehensive strategy responsive to the needs of all in PA.

[BADinPA]

What WILL eventually be needed in PA is a closure law similar to BRAC used by the Federal government to close and realign military bases. The difference with what is underway now is that BRAC determines a top-down view and forces realignment and closures. The law creating BRAC takes all recommendations to Congress and the package gets passed in total or not. It always passes as Congressional delegations that are pissed are outnumbered. Some bases get closed and some merged and some expanded, etc... The way PA is approaching this now leaves each institution to figure it out which can result in a myopic view. All institutions of higher education, state, and state-related universities, as well as community colleges, should be included. Like BRAC, this shouldn't be a one-time process. By doing it over a series of years, the legislative delegations that disagree will be kept small. BRAC works.

[boatcapt]

Some people affiliated with West Chester raised the question and tried to get that momentum building. PASSHE put the kibosh on that quickly.

I believe the legal opinion is that West Chester would have to buy its independence from the state for the market value of the campus. That's gotta be several billion dollars of which they have nothing close.

Jeez...And you wonder why the whole system is failing. Can't win...can't break even...can't even quit the game...

[Fightingscot82]

You wonder if one of these schools could just say screw it and try to walk away from the PASSHE. Didn't West Chester contemplate it a couple years back? Obviously, most aren't in that position to even consider it.

Some people affiliated with West Chester raised the question and tried to get that momentum building. PASSHE put the kibosh on that quickly.

I believe the legal opinion is that West Chester would have to buy its independence from the state for the market value of the campus. That's gotta be several billion dollars of which they have nothing close.

[IUPbigINDIANS]

Yes, they were encouraged to defer state pension contributions as part of their relief to take the place of missing state funding. One of those things that in hindsight was really, really stupid.

Management did fight back against the biggest union and the faculty went on strike. It didn't go over well. One thing that's unique in PASSHE labor relations is that campuses don't have a vote from the management side. Each campus union chapter votes locally but "management" votes go through system management and the system board. The individual campuses don't have a say or vote during negotiations. I think we might have seen some different outcomes over the years had that been the case.

You wonder if one of these schools could just say screw it and try to walk away from the PASSHE. Didn't West Chester contemplate it a couple years back? Obviously, most aren't in that position to even consider it.

[Fightingscot82]

Were state entities like PASSHE allowed to defer payments or were they permitted to defer them?

Yes, costs always increase over time. Biggest increase is often labor costs. But when a system is facing budget deficits, the managers really need to fight in labor negotiations.

Yes, they were encouraged to defer state pension contributions as part of their relief to take the place of missing state funding. One of those things that in hindsight was really, really stupid.

Management did fight back against the biggest union and the faculty went on strike. It didn't go over well. One thing that's unique in PASSHE labor relations is that campuses don't have a vote from the management side. Each campus union chapter votes locally but "management" votes go through system management and the system board. The individual campuses don't have a say or vote during negotiations. I think we might have seen some different outcomes over the years had that been the case.

[boatcapt]

The Corbett years also allowed entities to delay state pension contributions so now state agencies like PASSHE, school districts, turnpike, lottery, etc. are paying double contributions.

Plus cost increases for benefits. The contracts also dictate specific deductibles regardless of cost. As you can imagine, they're high cost plans. Costs increase every year while revenue is flat at best. For any small % appropriations increase the system has also seen enrollment declines and cost increases that far exceed what increase they get from Harrisburg. That is the gist of Armenti's thesis.

Even before Covid considerations, its a failing formula.

Were state entities like PASSHE allowed to defer payments or were they permitted to defer them?

Yes, costs always increase over time. Biggest increase is often labor costs. But when a system is facing budget deficits, the managers really need to fight in labor negotiations.

[Fightingscot82]

Great points! Most of the Unions, get raises nearly every year. 1-2.5%. Even a 1% raise for that many employees adds up to hundreds of thousands or millions of dollars.

And I don't begrudge employees of making money. It's just the demand for the services they provide is falling.

And that's been going on for a LONG time too.

The Corbett years also allowed entities to delay state pension contributions so now state agencies like PASSHE, school districts, turnpike, lottery, etc. are paying double contributions.

Plus cost increases for benefits. The contracts also dictate specific deductibles regardless of cost. As you can imagine, they're high cost plans. Costs increase every year while revenue is flat at best. For any small % appropriations increase the system has also seen enrollment declines and cost increases that far exceed what increase they get from Harrisburg. That is the gist of Armenti's thesis.

Even before Covid considerations, its a failing formula.

[complaint_hopeful]

A few months back I looked at the PASSHE approved budgets for the last 10ish years. Only once over the time frame was the budget cut. As I recall the years were evenly divided between the same budget the year before and a budget increase.

PASSHE is in a tough place...They can't really compete with the name universities and can't really compete on a precieved quality stand point.

Really interesting! So instead of cut, they kind of stay the same when PASSHE asks for an increase?

[complaint_hopeful]

But it is not that the PASSHE budget is "cut every year." It IS how the PASSHE chooses to spend its budget. Labor strife is never plesant but the PASSHE chose to sign the system-wide labor contracts that committed an ever increasing percentage of its static (or slightly increasing) state provided and decreasing tuition funded budget to its staffs.

The tax structure in PA is one of the most confusing I have ever had the "privlage" of paying into...particularly for what it provides.

Great points! Most of the Unions, get raises nearly every year. 1-2.5%. Even a 1% raise for that many employees adds up to hundreds of thousands or millions of dollars.

And I don't begrudge employees of making money. It's just the demand for the services they provide is falling.

And that's been going on for a LONG time too.

[boatcapt]

Big problem is that Harrisburg signs system-wide labor contracts that bring annual cost increases that surpass any funding increases from the state. Throw in demographic-led enrollment losses and you've got a big problem. Penn State and Pitt have so much to throw around they've been bailing out their failing branch campuses for years. I believe only 2 or 3 Penn State campuses operate in the black and no Pitt branches but Bradford and Johnstown were close. Don't quote me on that - their finances aren't public like PASSHE.

The argument for state funding of colleges & tech schools has been lost. Its obvious because you have politicians who repeat the Heritage Center's cliche "why are my tax dollars paying for the education of somebody else's kid?" The answer is pretty simple - you're more likely to earn more over your lifetime with some sort of post-secondary education. Even a college dropout usually earns more than a high school graduate without any sort of training. More income equals more tax revenue. We all win.

There's going to be a major reckoning in a few decades as the population plummets and the tax revenue can't come near to paying for the government infrastructure built up between the 50s and 80s. Not just higher ed but the parks/forest system, state hospitals, state prisons, massive state police force, etc. Plus the full-time state legislature.

But it is not that the PASSHE budget is "cut every year." It IS how the PASSHE chooses to spend its budget. Labor strife is never plesant but the PASSHE chose to sign the system-wide labor contracts that committed an ever increasing percentage of its static (or slightly increasing) state provided and decreasing tuition funded budget to its staffs.

The tax structure in PA is one of the most confusing I have ever had the "privlage" of paying into...particularly for what it provides.

[Fightingscot82]

I can't. But as I recall, it was a pretty easy Google search. Think I had to find the approved state budget and then scroll to the PASSHE section. I do recall one year were the budget was actually cut (Corbett??) and then every other year the budget was either the same as the year previously or increased over the previous year.

Yes Corbett was the big cut. He always claimed it was a loss of federal funding, but if true, that means that earlier he cut the budget and federal stimulus dollars from the Great Recession filled his previously-created gap. Either way, he cut the budget on a state bureau with lots of fixed costs forcing them to raise tuition something like 10% in one year. Maybe that was the charade he was going for to show public education as unworthy. Corbett's policies were almost cut & paste from Commonwealth and Heritage Foundations. Same as Lou Barletta without the Trump-esque veiled racism.

[boatcapt]

Can you provide a source for that budget info? What I remember is that Corbett made drastic cuts in his early years. After that, if it stayed the same it was still a cut. Under the Wolf administration, the budget has rebounded somewhat.

I can't. But as I recall, it was a pretty easy Google search. Think I had to find the approved state budget and then scroll to the PASSHE section. I do recall one year were the budget was actually cut (Corbett??) and then every other year the budget was either the same as the year previously or increased over the previous year.

[Fightingscot82]

A few months back I looked at the PASSHE approved budgets for the last 10ish years. Only once over the time frame was the budget cut. As I recall the years were evenly divided between the same budget the year before and a budget increase.

PASSHE is in a tough place...They can't really compete with the name universities and can't really compete on a precieved quality stand point.

Big problem is that Harrisburg signs system-wide labor contracts that bring annual cost increases that surpass any funding increases from the state. Throw in demographic-led enrollment losses and you've got a big problem. Penn State and Pitt have so much to throw around they've been bailing out their failing branch campuses for years. I believe only 2 or 3 Penn State campuses operate in the black and no Pitt branches but Bradford and Johnstown were close. Don't quote me on that - their finances aren't public like PASSHE.

The argument for state funding of colleges & tech schools has been lost. Its obvious because you have politicians who repeat the Heritage Center's cliche "why are my tax dollars paying for the education of somebody else's kid?" The answer is pretty simple - you're more likely to earn more over your lifetime with some sort of post-secondary education. Even a college dropout usually earns more than a high school graduate without any sort of training. More income equals more tax revenue. We all win.

There's going to be a major reckoning in a few decades as the population plummets and the tax revenue can't come near to paying for the government infrastructure built up between the 50s and 80s. Not just higher ed but the parks/forest system, state hospitals, state prisons, massive state police force, etc. Plus the full-time state legislature.

[Bart]

Have the big mahoff's figured this out yet?

The foundation is separate from the university and has it's own nonprofit status with the aim to help Bloomsburg. Since it is an independent, private,non-profit organization, they should be able to protect the assets from poachers. Plus all funds are distributed per the donor request.