Budget Cuts:
- Thread starter PSUFTG2
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I shudder to think about it !
PSU could do things tomorrow - that would reduce annual operating budget issues by $100 Million - with ZERO negative impact on any of PSU's missions (and, likely, enhance and improve some of those missions).
Such as….??
Should the governor's proposal of tuition being capped at $1000 per semester for in-state students from lower- and middle-class families come to fruition, it will cost PSU half a billion dollars in tuition revenue.
I looked up 57.8% of PSU students in state and 87,903 total enrollments = 50,807 in state students. The proposal wants to cut tuition by almost $18k per year for those students from lower- and middle-class families. If even half of the in-state students are from lower- and middle-class families, then PSU brings in nearly half a billion less (-$457,271,406) in tuition than they do today. So where does half a billion come from?
PA tax payers?
Massive layoffs and budget cuts at state schools?
Some combination?
I looked up 57.8% of PSU students in state and 87,903 total enrollments = 50,807 in state students. The proposal wants to cut tuition by almost $18k per year for those students from lower- and middle-class families. If even half of the in-state students are from lower- and middle-class families, then PSU brings in nearly half a billion less (-$457,271,406) in tuition than they do today. So where does half a billion come from?
PA tax payers?
Massive layoffs and budget cuts at state schools?
Some combination?
That is not, at all, the "Governor's Proposal". The governor has actually made no proposals at all, but the item you are referencing is a balloon he is floating for the STATE SYSTEM schools - not PSU, Pitt, Temple, Lincoln.
$100 Million/yr is a very (VERY) conservative estimate.
Just as a starting point:
First, just looking just at personnel costs (which are a significant part of the budget):
A) Just looking at non-mission ("administrative") positions:
- Making reasonable reductions in utterly duplicative administration positions.
- Making reasonable reductions/eliminations of administrative positions (in some cases entire departments) that do NOTHING to further PSU's mission
Would/could easily reduce annual operating expenditures by the mid-8 figures or more per year if done with any sense of accountability
- The correlating reductions in support/collateral staffing for those positions? Who knows, but certainly savings in the eight figures per year
- other staff's time wasted on the nonsense (busy work) generated? Another sizeable chunk of change.
B) Looking to faculty positions:
-- Holding faculty accountable to the existing policies regarding teaching loads, research etc. would easily yield $30-40 million in savings enterprise-wide... and I think it could be much more than that, if we actually opened all the books.
You are likely over $100 million in annual savings already - and just getting started - and any impact on the missions of the university would be positive, not negative. Truly
And that's just a start. There are numerous other areas for savings.
C) PSU now carries a debt service load of probably $120 Million or so per year.... and it is going to go up a lot in the near future.
Just getting 1/2 way under control with the pricing of the projects we take on - let alone actually using reasonable prudence with WHICH projects we take on at all - would make huge strides in controlling that cost. And, of course, those savings are cumulative (lets say you use 1/2 a bit of responsibility, and reduce annual debt service bloat by $5 million, do it again the next year and the annual savings are now $10 million per year, and so on and so on)
What is already baked in the cake will, of course, remain baked in the cake for a generation. All the more reason to stop "doing stupid **** - and paying twice what we should for it""
D) The Endowment. I have spoken at length about that over the years - the problems have only gotten worse. Easily $40-60 million per year in annual savings (actually, increased funds available). Why has that not been done? Why will Board and Admin leaders not even "open the books"?
Without even breaking a sweat, well over $100 million in annual improvement - easier than falling off a log. And that is far from a robust or thorough effort.
And we haven't even begun to get into the weeds and the more difficult work.
The fact that the Board gave Dr Bendapudi 4 years, until 2026, to be held accountable for a "balanced operating budget"?
Crazy.
FWIW: "The Board" did not make that decision. Someone, apparently, did that - but it was never deliberated, discussed, or decided by "The Board". That highlights another huge issue of inefficiency and waste.
We don't do that because the folks in charge have no incentive to do it, no accountability for not doing it, and - certainly in many cases - not the requisite basic skills to do it.
That's the truth.
Present day PSU is in many ways eerily reminiscent of 1970s Chrysler and US Steel. An institution with zero introspection or accountability, pointing fingers outward and believing (hoping) they can live off of "The Brand", Nostalgia (football), and PR Spin. At least long enough to vamoose safely into retirement before the chickens come home to roost.
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You’ve done a decent job explaining point D with actual numbers. I can actually understand your argument for D.
You at least allude to hints of math in point C. More details are needed.
Your claims for A & B are unbelievable until you show some details to support them. I’m not saying that A & B are not possible, I’m just not going to take your word for it because your name is Barry Fenchak.
You may be correct but the article that I am referencing specifically says "The second prong puts more investment into higher education and makes it so low- or middle-income Pennsylvanians wouldn’t have to pay more than $1,000 per semester at state universities or community colleges."
It may be that the journalist covering it is not precise in their language. They don't name schools for inclusion/exclusion to the plan.
However, if this plan comes to fruition, it will either gut PSU's tuition revenue by being included in the plan or it will gut PSU's tuition by massive loss of enrollments. 57.8% of PSU students are in-state students that would now have an option of paying $20k per year to go to PSU or $2k per year to go to most other state schools.
Pennsylvania governor proposes sweeping overhaul of higher education system (msn.com)
Whether it is "imprecise" journalism, or folks making incorrect inferences, that whole bit is about the State System schools (Not PSU/Temple/Pitt/Lincoln - which are not state system schools). The writer's use of the term "state universities or community colleges" is NOT PSU (and the others)... I assume he knows that, but even if he doesn't, that is the case.
The part that MAY effect PSU (and Pitt/Temple/Lincoln) directly would be the stuff the writer referred to as "Third, Shapiro wants his universities to receive funding based on how they are performing and increase transparency in the outcomes at the schools." But that is also a long, long way from being fleshed out, if it ever even does come to pass in any meaningful form (don't hold your breath), and whether it would - at some time in the future - apply to PSU (and the others) is even more opaque and nebulous. Everything I have yet seen on that bit is, at best, very ethereal at this point... and, at this point, unlikely to be of any real impact (but, it is very very early in the process, so worth watching, for sure)
Best guess (one person's read) is that the most likely significant impacts on PSU would be if there is a change in the competitive higher-ed landscape... and that could go in any direction (Just a couple for instances: Reduction in number/quality/breadth of state system educational options ?" Could be a positive for PSU.... Higher state funding (lower tuition costs) for state system schools? Maybe a death knell for PSU Commonwealth campuses, and a "ding" to PSU UP as well. A lot of unknowns, for sure.
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The exact impact on PSU is not known. However, it seems quite reasonable to me to recognize either a large tuition revenue reduction impact (as much as half a billion annually) if the governor's plan does apply to PSU as well or a large increase in competition for in-state students who would suddenly have many options that are 90% less expensive if the governor's plan excludes PSU.
You offer a new concern in terms of funding being tied to performance whose measure will almost certainly include a large weighting by average starting salary expected of graduates divided by the 4-year tuition. Anyone familiar with PA's department of Education knows that this is a favored measure for evaluating schools. My sense is that if PSU has in-state competitors that are churning out even ballpark average expected starting salaries with a 90% lesser tuition cost, then PSU, Pitt, and others will suffer in the PA DOE ratings which would then lead to punishment in state funding.
In my view, PSU is going to have to compete with these very low-cost options which the state will use to fully subsidize them and pull funding from the PSU and Pitt's. PSU's options will be to
1. significantly increase their product such that average expected starting salary increases massively for grads (good luck) or
2. cut tuition or
3. deal with less state funding and become the only rich kids need to apply school or
4. a combination thereof.
I'll take a crack at claim A by using just one small example. Currently we have 4 library Supervisors, with each supervisor assigned to cover one of the following on-campus libraries which include: Architecture Library, Earth and Mineral Sciences Library, Engineering Library, and Physical and Mathematical Sciences Library.
It seems to me that one person could supervise all four of the above libraries, but I'll concede that we should trim in stages to be cautious. With this in mind I would propose two supervisors to cover all four libraries and revisit in a year or two to evaluate the impact.
It should now easily follow that a similar approach across the entire University could and would result in massive cost savings with very little impact.
Now see, these are the examples that can make things tangible. Actually, there are more than five library supervisors at UP. However, in this particular example, a large portion of the job responsibilities of those individual supervisors are the day to day operations of the library. You could consolidate the management portion, but the remaining tasks would still need to be done by someone. For what it is worth, the number of full time staff at these four libraries has been reduced over the years. There are at least three fewer supervisors at Pattee & Paterno than there were two years ago.
The Engineering Library is being significantly downsized and will have very little physical collections in the new Engineering building across Atherton. Plans are in the works to do the same with the Physical and Mathematical Sciences Library. This is not just a Library initiative, but a move from the Provost as they need more classroom & lab space.
As some here know, I am one of those four supervisors. I am well aware that my position is becoming redundant. As libraries trend away from physical collections the position will someday become irrelevant.
After almost 26 years with the Libraries, and another five years part time, I am no where near retirement. Time will tell if I am able to retire from Penn State. It would suck to lose my job, but I suppose that I have been fortunate to have never been downsized before.
I am wondering when libraries will be come redundant. I've gone around to a couple of local libraries in our local system recently. I was surprised (like John Cleese in the Cheese Shop) to find very few actual books there. There seems to be more fiction, anyway, in one's local Barnes & Noble. SF books? One shelf front and back. When I was a kid I liked to go to my school library as well as the local one (when I could get my parents to take me) and just pick out books from the shelves. Hard to do that now--you almost have to know what you want before you get it--and following a series? Ugh. On line services like Overdrive, which my library has, help, but even there....
But we have a brand spanking new library in my neighborhood--with lots of study rooms with computers and lots of programs. But not a lot of books. I always recall the engraved sign over Pattee's front entrance--"A true university is a collection of books". Not anymore....
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We have a beautiful, updated local library though the updates are makers, open space, and a 3-D printer and sound engineering rooms. No reference type books anymore and I would say that over 2/3 of the books in the library are geared towards teenagers and younger.
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Not to mention that we don't want people reading books anyway.
Propaganda of some kind. Nothing good has ever come from reading books.
Here’s the latest reported stats (FY2022) for the Libraries.
https://libraries.psu.edu/about/organization-glance/libraries-statistics-and-data
A sampling:
| Initial Circulations | 146,214 |
| Full-text Article Requests | 4,460,476 |
| Titles Held | 8,890,897 |
| Volumes Held | 10,155,291 |
| Electronic Books | 3,121,809 |
| Requests to Other Libraries | 35,001 |
| Requests from Other Libraries | 35,512 |
| Reference Transactions | 29,615 |
| Gate Count | 2,531,674 |
| Total Library Expenditures | $60,141,210 |
| Total Salaries & Wages | $28,979,677 |
| Total Staff, FTE | 547 |
A little over 50 K as the average salary so not bad but what are the main items for the other 30 million in expenditures?
Not trying to critique it just for my own information. Thanks.
For the record, I’m not a big numbers guy. Keeping track my unit’s budget is more than enough for me.
good observations and sounds like you have good experience. Universities are a business like anyone else and have to function fiscally. At a national level we are seeing demographic shifts that reduce the number of paying customers (i.e. students), so you have to adapt. Increase market share with better product/price combo. You might have to INCREASE price on in demand products. Zero scholarships for high demand programs like medicine. Centralize and go to shared services across the state. Close or consolidate programs and campuses that are not sustaining. A lot of these cost cuttings focus on "overhead" areas, but you also have to attack the cost of instruction meaning faculty. Also, the real estate footprint makes no sense for many of these schools.
The market is going to force change. Those who don't adapt will wind up in bankruptcy. Many state legislatures are going to be challenged on whether they just let some of their public universities fail or convert to lower level say a community college model.
This is a national issue.
The University of Arizona also has a significant budget shortfall. Links to a news article and the University Financial Updates page.
U of A operating in $177 million deficit; 5-15% budget cuts, layoffs coming
New report Monday: The University of Arizona is currently operating in a $177 million deficit. Budget-cutting plan announced; there will be layoffs, interim CFO says.
tucson.com
Ensuring Financial Health and Ongoing Success
The University of Arizona is implementing immediate actions and longer-term solutions to ensure strong financial health and the ongoing success of our teaching, research and outreach mission.
And another struggling institution of higher learning. 54 students in pursuit of 34 different degrees?
Wright State University to suspend admissions to 34 degrees
The public Ohio institution enrolls just 54 students across the affected programs and will give them up to four years to finish their studies.
Wright State’s main campus just outside Dayton has seen steady enrollment declines over the past decade. In fall 2022, it had 9,678 students, down from 16,780 in fall 2012, according to federal data. That represents a 42.3% decline.
Ouch.
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The University of Arizona also has a significant budget shortfall. Links to a news article and the University Financial Updates page.
U of A operating in $177 million deficit; 5-15% budget cuts, layoffs coming
New report Monday: The University of Arizona is currently operating in a $177 million deficit. Budget-cutting plan announced; there will be layoffs, interim CFO says.
Ensuring Financial Health and Ongoing Success
The University of Arizona is implementing immediate actions and longer-term solutions to ensure strong financial health and the ongoing success of our teaching, research and outreach mission.www.arizona.edu
And another struggling institution of higher learning. 54 students in pursuit of 34 different degrees?
Wright State University to suspend admissions to 34 degrees
The public Ohio institution enrolls just 54 students across the affected programs and will give them up to four years to finish their studies.www.highereddive.com
Wright State’s main campus just outside Dayton has seen steady enrollment declines over the past decade. In fall 2022, it had 9,678 students, down from 16,780 in fall 2012, according to federal data. That represents a 42.3% decline.
Ouch.
Obviously these schools just need more football.
Indeed. Bob, you could be in line for a lucrative consulting gig. Do you have a lot of bandwidth? From the newspaper article on U of AZ:
Athletics
The issue of athletics has long been at the forefront of the university’s financial crisis.
In a December faculty meeting, Robbins confirmed the UA had loaned its athletic department more than $86 million in recent years. He said there would be layoffs and serious cuts made to the department.
But at ABOR’s special Dec. 13 meeting, Robbins didn’t share anything about his plan for athletics, and noted how “vexing” of an issue it has been for him.
This includes centralizing administrative functions, resetting the budget and starting from zero, installing hard caps on spending, enhancing revenue outcomes and setting long-term goals. The university will be “engaging a global professional services firm to review athletics finances and operations.”
He said that “the whole athletic model is just flipped upside down over the last four or five years,” causing the university to lose significant money from its department.
According to Arnold’s plan, the university will “modernize athletic operations from the ground up.” In his presentation to UA leadership, Arnold said that there had been “no sustainable growth in athletics” in six or seven years.
With the help of a consulting firm, which ABOR has volunteered to pay for, the UA will try to answer questions that Arnold has asked in multiple presentations: “What do we want out of the athletics department?”
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More football with a side of DEIB.
. Cut out the rest. There’s your bandwidth.Meanwhile, Neeli and Kraft are getting quite the chuckle at ua’s expense.
Whatever DEIB costs (if in fact it costs anything) I think it deserves more simply for how much it upsets old white guys.More football with a side of DEIB.
Meanwhile, Neeli and Kraft are getting quite the chuckle at ua’s expense.
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