Question No. 1: Penn State’s Finances

In view of sharply declining state appropriations, what steps should Penn State be taking to secure its financial future?

[Back to Board of Trustees Election 2012 page.]

1. Matthew J. Lisk ’95, New Providence, N.J.

Shrinking state appropriations is not a problem unique to Penn State. State funding has not kept pace with the growth in college enrollments. According to a study recently completed by my company, The College Board, state appropriations per full-time equivalent student declined by 23% in inflation-adjusted dollars over the last decade while enrollment in public colleges and universities increased by 33%.

Institutions that rely on state funding, wholly or partly, are subjected to the widely varying economic conditions of the state. Under these conditions longer term planning is nearly impossible. When hard times lead to a decrease in funding a university is left to cut critical expenditures at the last possible moment with very little planning. During good times, if a university tries to stash appropriations for a rainy day, they are penalized in future years when the state feels the school does not need the funds. As such, universities are forced to rely on tuition for an increasing share of their revenues.

Given that Penn State is not a truly “public” institution (it is “state-related”…essentially trading BOT seats for funding) it needs to assess all viable options to deal with the funding shortfall. It is critical that the University finds alternative funding sources that meet the objectives of the colleges and departments. Whether through sponsorships or finding ways to get students to graduate faster (to more quickly generate tax revenues for the state to reinvest in Higher Education) no option should be considered off the table.

2. Ryan J. McCombie ’70, State College, Pa.

[Did not respond.]

3. Jes James Sellers ’74, ’76g, Cleveland, Ohio

The declining appropriations for state-related institutions in our Commonwealth is a manifestation of our polarized political times.  Most educators would agree that it lacks the kind of economic vision that good stewards of state government need to have in order to protect our Commonwealth from economic decline.  The political zeitgeist of wielding hatchets to university budgets while offering tax deals for big corporations – even those that use university developed engineering and mineral science technologies to drill for natural resources in our backyards, fuels the frustrations of many alumni.  Penn State has been knocked down by near-sighted politicians in the past, but we have gotten back up to fight another day for a state government that is not afraid to invest in higher education and its people.

Now is the time for a bold, new roadmap toward fiscal security and independence. This roadmap should include:

a. Increased Investment in Penn State’s Technology Transfer efforts to secure patents that yield real dividends for our future economic stability and improved fiscal independence.

b. New opportunities in cost savings with investments in ‘green  technologies’ and ‘sustainability efforts’ in each department with every faculty, staff and student across the Penn State Campuses.

c. Continuous quality improvement and fiscal responsibility reviews in all university departments as exemplified by the successful University’s ‘Academic and Administrative Services Review, aka The ‘Core Council’ reviews.   These reviews encourage scholarly collaboration, efficient delivery of programs and services and welcomes new ideas for cost savings.

4. Thomas J. Sharbaugh ’73, Philadelphia, Pa.

There are a number of actions that would help secure our financial future. First, although Pennsylvania funding will not return to prior levels in the short term, the University should nevertheless rally its huge Pennsylvania alumni base to lobby Pennsylvania legislators. Most alumni do not know the small relative size of Pennsylvania funding, nor that it is at its lowest level since the 1980s. I would use technology to reduce operating costs, as businesses have been forced to do. Greater use of online classes is an important place to start. This is being done not only in the “for-profit” universities but also in highly respected private schools like Stanford. We could also use technology to collaborate with other schools to offer more efficiently courses for which there is insufficient demand to justify the required resources at individual schools. Moreover, we could employ technology to combine data processing, recordkeeping and other functions with those of other universities. I would not freeze salaries because they have been frozen in two of the last three years. On the revenue side, I would maximize our opportunities to license inventions and consider charging fees for advisory services to the extent that doing so would not conflict with our Outreach mission. I would give the Development Office sufficient staffing to grow the endowment to a level comparable to our peer schools. I would also consider privatizing certain non-core campus operations in order to increase the endowment with the proceeds.

5. John C. Foster ’77, ’83g, ’97g, Carlisle, Pa.

[Did not respond.]

6. Richard Dirk Matson ’77, Ligonier, Pa.

The solutions I will advocate for include reducing our need for state appropriations by cutting expenses, expanding revenue sources, reclaiming our honor, giving alumni more voice at the Trustee level, and diligent long term planning.  Penn State will not receive the type of support from the state legislature that we have enjoyed prior to 2011/2012. Pennsylvania’s debt from state worker and teacher pensions are expected to create an unfunded liability of $40.1 billion by 2013, compared with an unfunded liability today in excess of $20 billion. Pair that with a pledge by our Governor and many state legislators to not raise taxes and with the state’s economy not fully recovered, Pennsylvania does not have the money to allocate like in the past.

From a purely financial standpoint for the short term, that leaves reduction of expenses and raising revenues from other sources. As a Trustee, I would require the administration to recommend a reduction of expenses with a goal of a tuition increase of no more than 2%.

We need to vigilantly market the many qualities of our university to reclaim our honor and our brand. We also need a change in the structure of our Board of Trustees to give alumni a majority voice at the university, with 17 elected alumni.   Our long term strategic planning requires addressing the changing needs of students, building our brand, creating good value with our product, generating alternative revenue sources by developing private/public partnerships, and continuing to reduce expenses.

7. Craig W. Micklow ’69, Southlake, Texas

[Did not respond.]

8. Patricia Marrero ’88, Hoboken, N.J.

Any company or large institution is facing the same problems as Penn State.  It’s always a question of revenue vs expenses. With state appropriations declining, Penn State needs to address the bottom line and look at expenses more closely as well as continuing to raise donations. There isn’t one simple solution. It’s usually a combination of factors that will go into coming in at budget. Every expense should be scrutinized and looked at – is this a necessary expense for day-to-day; is this a must-have or nice-to-have? Do we need to build that new building?  Will it improve our output? Some things will have to be cut and it won’t make everybody happy, but in order to survive and thrive, the expense line needs to be looked at more closely.

9. Edward A. Paskey II ’94, ’97 JD, York, Pa.

Penn State has, by far, the largest dues paying alumni association in the United States. The key to securing its financial future lies with alumni. I don’t say that solely in terms of relying on donations, building endowments, and encouraging estate planned gifting. Through our alumni, greater relatonships with private industry should be encouraged to provide partnership to help explore ways to increase revenue for the university. Our strength in this area is clearly in our numbers.

10. David E. Robbins ’78, Broomall, Pa.

There was a time when the cost of a Penn State education was within the reach of families of modest means. Many of us benefitted from that arrangement. Sadly, that isn’t true anymore. Rising costs and reduced state support (funding for PSU has decreased from nearly 65% to less than 20% of the University’s budget since the 1970s) have made Penn State an expensive choice.

It is imperative that the University and its Board create a positive, open relationships with legislators, especially alumni lawmakers, to assure sufficient government financing. I have already discussed this with some legislators who would like to assist in efforts to maintain Penn State as a priority. Education paves the path to success.

Our future alumni are stakeholders in PSU’s future. PSU’s Administration and Alumni Association should promote programming and engage students as “alumni” before they graduate to encourage their allegiance to the University (e.g., help students see value as an “alumni” while still in school).

We need to take advantage of the shrinking world and prepare our students for participation in the global economy. An adjunct of this concept is PSU’s recruitment of international students (through increasing PSU’s overseas’ presence) who will pay full tuition while expanding the cultural exposure of Pennsylvania’s own.

The recent alumni outpouring reflects the prospect of tapping past students for their knowledge, connections and other expertise to help make Penn State more efficient and better operated on the available funds. Won’t you join me?

11. Martin R. Davis ’86, Pottsville, Pa.

[Did not respond.]

12. Stephen M. Hladik ’89, Harleysville, Pa.

Declining state appropriations are an unfortunate reality in these challenging economic times. Like any entity or agency that receives taxpayer monies, Penn State can best secure its financial future by being good stewards of the resources it currently receives and demonstrating that fact to state legislators and taxpayers.

Good stewardship requires that Penn State and the Board of Trustees conduct its business in an open and transparent manner. Full university compliance with Pennsylvania’s Right-To-Know Law would be a proactive and positive first step toward openness and transparency.

Penn State must also be committed to controlling costs. Students and alumni must live within their means, and it is only fair to expect Penn State to do the same. The Board of Trustees must demand justification for every line of the university budget from administrators on an annual basis. Programs that cannot demonstrate their efficiency and effectiveness must be held accountable, while those that do can be entrusted with additional resources.

13. Timothy Michael Freeman ’90, Short Hills, N.J.

[Did not respond.]

14. Amy L. Williams ’80, Wayne, Pa.

As the percentage of Penn States General  Funds Budget supported by state appropriations have grossly eroded over the last four decades, the University will need to work with the state to increase the overall percentage or re-evaluate  level of control the state has over PSU. This includes, but is not limited to, re-evaluating  the number of BoT seats so they  reflect the percentage of Penn States overall budget covered by state appropriatons.   Current percentage of overall budget covered by the state is ~ 5%.  This translates into 2-3 board seats vs. the current 11 which are State controlled.

Look to new channels of revenue vs. the derivative approach of returning to the same channels for income.  The strategy of increasing tuition and fees is pedestrian, needs to evolve and should be used only as a last resort.

Evaluate all cost centers for efficiencies.  On a yearly basis grade and rank all cost centers based on Return on Investment and cost effectiveness.  Publish results

15. Joseph H. Clapper III ’92g, Sewickley, Pa.

Penn State University has a longstanding tradition of providing high quality education to its students.  Numerous programs and majors are routinely ranked at an elite status.  However, it is imperative that the administration and board closely scrutinize all programs and services provided by the university to determine their overall effectiveness as well as their long-term viability and relevance.

I currently serve as a public school superintendent, so I fully understand the current financial stress being placed on educational institutions.  Last year, funding for K-12 public schools was reduced by nearly $1 billion in the commonwealth. As a result of the funding crisis, I have had to make some very difficult decisions in relation to programs, services to students, and personnel deployment.  I have had to develop a long-term plan for financial sustainability that has included a comprehensive analysis of all facets of all operations.  Clearly, that is the same process that Penn State must be engaged with at the current time.    Penn State must also increase efforts for fund raising from corporations, alumni, and friends. There is no question in my mind that by engaging the creative intellect of faculty, administration, staff, students, and trustees, a comprehensive plan for sustaining the long-term viability of programs and outcomes can be achieved.

16. Jonathan L. Wesner ’65, Reading, Pa.

Penn State University is one of the largest employers in the Commonwealth.  There are over 300,000 alumni in PA as well. As I said in my podcast at  http://www.goonshowpsu.com/bot-election, just visualize the massive revenue stream this introduces into Pennsylvania’s economy year after year after year. Nonetheless, the Governor has recommended profound cuts to our appropriation again this year. This is a lot like “biting the hand that feeds you.” Instead of making our job to produce talented, dedicated “income generators” more difficult, the Legislature should do quite the opposite.  Penn State’s resident tuition is the HIGHEST in the Big Ten, and appropriation cuts may be part of the reason. We already have a grass roots effort in place, however, as a charitable entity, Penn State is limited in its lobbying ability. I believe we should form one or more Super PAC’s (527 Organizations) for the express purpose of influencing the decisionmaking process in the House and Senate. In this way donors could channel funds to be used to stress issues that are so important to our financial future.

17. Victor S. Provenzano ’02, Enola, Pa.

[Did not respond.]

18. Marta Pepe Forney ’00, Doylestown, Pa.

I believe continued advocacy to Governor Corbett on the investment return Pennsylvania gets from it’s monies into state-related Universities is a must. The state needs to be reminded how much return they get on their investment with Penn State and dropping their investment will only hurt their return to the state of Pennsylvania. Now, bringing up “state-related”, Penn State has been strongly opposed to PSU becoming truly a state school by asking that we remain exempt from opening all of Penn State’s financial records. Though the state won’t fully admit to this, it’s hurting out contributions from the state and I do not believe it is unreasonable to meet the requirements of being a state school if we want to be financed as such. That transparency not only increases our state funding but hopefully increases donor confidence in our university.

19. Dona M. (Davis) Horst ’81, ’83g, Annapolis, Md.

[Did not respond.]

20. J. Michael Murphy ’80, Downingtown, Pa.

[Did not respond.]

21. Darlene A. Marley ’77, ’80g, Leonardo, N.J.

Reduction in state aid is an unfortunate reality that is facing Penn State, as well as virtually every state-supported institution in the United States. This University must explore every opportunity to raise revenues from other sources. I believe that there are ways to reduce the affects of any funding shortfall:

a. The administrators and faculty must be tasked to identify all federal and private grant opportunities and actively endeavor to secure these awards.

b. We need to proactively approach private sector enterprises, proposing cooperative research projects, internships, and corporate-sponsored aid.

c. We need to consider offering more online course options. This could increase enrollment and curriculum choices with minimal overhead expenses.

d. We need to look at every expense incurred by the University to find savings. There should be no expense (unless guaranteed by contract or collective bargaining agreement) that is off the table. The running of this University is a business and it must be managed like one.

e. The private sector, as well as the Federal and state governments have begun scaling back employer-financed benefits and retirement packages. While I oppose any change to benefits packages available to current faculty, administrators or staff, it may be time to consider revamping employee salaries, benefits and pensions for all new hires.

Some Pennsylvania state legislators are fighting to reduce or eliminate proposed education cuts and I believe we need to encourage all members of the legislature to fight to at least keep funding at its current level.

22. Anne Riley ’64, ’75g, Boalsburg, Pa.

Penn State’s academic units and service divisions have practiced lean and mean budget reductions each year the appropriation has been reduced. I support the continued review of eliminating duplicate academic offerings and under-enrolled classes. Using the University’s Strategic Plan (2009-2014), we must work for a balance of classroom experience and online education for each student.

23. Karen Levine Weaver ’82, Franklin Lakes, N.J.

Penn State should push back on the Pennsylvania government officials to continue to fund the university.  In addition to recent attendance at Capital Day in Harrisburg, private meetings should be scheduled with Governor Corbett and other key decision makers for Dr. Erickson and student government representatives to provide an opportunity to share the specific and direct impacts that reduction in funding would have on the students, faculty, future research, and the university’s programs. In-state students would be forced to pay tuition costs that approach what out-of-state students are paying.  In addition, capital improvements for state-of-the-art facilities would be suspended.  The future of Penn State cannot depend solely on generous donors.  It would be a shame to see any of the commonwealth campuses shut down because funding is unavailable to sustain all of them.  However, with a 30% appropriations reduction coupled with the 19% reduction last year, Penn State will be forced to face tough choices moving forward.

24. Joseph C. Atkinson ’92, Chalfont, Pa.

Our threefold mission — of education, research and service to the Commonwealth — does not change, regardless of the level of commitment provided by the State of Pennsylvania.  As a result, we must continue to innovate and explore new ways to do more with less while managing the burden on our students and their families.  Penn State must address its cost structure not only at University Park, but across the state, to ensure that we fully optimize our assets to ensure that a Penn State education remains within reach for all citizens, not just the wealthy.

We have made great progress with our “For the Future” campaign, and the focus on creative development practices and alumni support must continue.  Additional research opportunities, public/private partnerships, corporate support of critical functions all must be explored to ensure Penn State’s future is financially secure.  The country’s private colleges thrive in part because their alumni and friends provide endowment funds that create financial security and flexibility.  Building Penn State’s endowment is one way to provide stability and a better, more predictable financial forecast.  Penn State has given me, like many of my classmates, the tools to succeed in my profession, provide for my family, and serve my community.  I believe it is the duty of every alumnus to invest in our University just as the Penn Staters who came before us invested on our behalf.

25. Joshua D. Fulmer ’01, Easton, Pa.

As a University we need to understand the financial constraints every citizen of the Commonwealth is under. We are faced with rising taxes, decreased budgets, expanding costs, and exponentially increasing tuition.

The Board of Trustees has an obligation to ensure that Penn State remains a place where Commonwealth residents can receive an education of the highest quality, at a reasonable price. We must work closely with the State Legislature to ensure that we receive the maximum amount of funding, but we must also understand that in the current economic environment, we are forced to make tough budgetary decisions and reduce operating expenses across the board. Finally, Governor Corbett has called for a substantial reduction in the state’s appropriation to Penn State. I believe it is an enormous conflict of interest for the Governor to propose such a reduction, while sitting on the board and deciding which programs within Penn State need to be cut.  It is clear that he will pressure the board to make sufficient cuts in order to justify the reduction to the state appropriation. I have called for the Governor, in his role as a trustee, to abstain from voting on any budgetary issues, and also speaking with the board on these matters in order to avoid any undue influence over the other Trustees. I would ask that you join in my Petition to the Governor, which can be found on www.joshuafulmer.com.

26. Jayne E. Miller ’76, Baltimore, Md.

In the immediate future, Penn State must continue to repair the damage from the Sandusky scandal. The potential liability it faces from alleged victims is just part of the financial risk that lies ahead. Funders, donors, and prospective students must have confidence that Penn State has embarked on a new course of responsive, transparent leadership. Otherwise, the University will face uncertainty in its support—the very reason Moody’s has assigned to Penn State a “negative outlook.”

For the long term, Penn State should seize the opportunity to lead the way in higher education in fiscal reform. The Board of Trustees should appoint a task force to recommend substantive change to put Penn State on a more sustainable course. It should include outside experts in finance, development, and cost controls.  It should engage in bold discussion about the structure of the Penn State system. The task force should operate separately from but in full awareness of the Governor’s recently appointed commission on higher education, on which Penn State is represented. The Board’s task force should hold as its top priority Penn State’s academic independence.

27. Sam Y. Zamrik ’61g, ’65g, Mesa, Ariz.

The decline in state appropriations has a serious damaging effect on the university budget and carrying out programs. The first inclination is to raise tuition. It is a sobering possibility that we may face but must be avoided because we have remedies that we can institute. This situation reminds me of serious financial problems our professional society was facing. Increase of dues was ruled out because economic downtrend and loss of jobs. As a member of the board of governors, we instituted immediate reforms: combined number of related programs. Increased our professional educational courses, combined regional offices and reduced the overhead. We hired financial advisors to manage our investments. In a short time, we reversed the downtrend. Today, the society is financially sound and growing. Penn State must start looking inward on its operation:

a) Scale down its building construction.

b) Increase online programs through our World Campus that generated considerable income to leading universities.

c) Increase our continuing education offerings of short courses and conferences in the summer.

d) Combine similar operations.

e) External auditors to scrutinize the operating budget for cost savings and identify duplication in services and root out waste.

f) Manage our investment portfolio by professional investors with an oversight.

g) Increase alumni financial participation in sponsoring scholarships and endowment. We are the world’s largest dues-paying alumni association. If necessary, maintain modest tuition increases to complement budget expenses.

28. Joanne C. DiRinaldo ’78, Pittsburgh, Pa.

WIth Governor Corbett’s proposed budget cut plan by 20% to the state system of higher education, Penn State will either have to reduce expenses, increase tuition or take more out of the endowment. Endowments have historically been used to fund research and not for the taking care of business, “teaching students.” Let’s take a closer look at Penn State’s approximately $2B endowment fund. Additionally, there needs to be an equitable plan implemented by assessing our current academic and administrative units with across the board budget reduction and freezing employee salary increases. A major reduction should include scaling back on major maintenance and capital improvements.

29. Jefrey F. Wall ’74, ’76g, Ambridge, Pa.

The leadership at Penn State must demonstrate to all funding sources, public and private, that the University is doing everything possible to enhance it’s “spend management” (read “save money and cut costs!”). Routinely crying poor, while showing cost increases well above that of the general rate of inflation, does not resonate well with the public.

This means making difficult choices each and every budgetary cycle, not just when the State and private dollars are tight, as they are now. Questions such as “do we absolutely need this and can we afford it” need to be asked on a daily basis. Every employee vacancy needs to be evaluated to see if a reorganization of current personnel can get the job done.

The rapid growth of facilities and programs over the past 20-30 years, and all future plans for expansion, requires a thorough and ongoing review. Like most educational institutions, the focus needs to be on the organization’s core offerings. Marginal programs may require renewed scrutiny to determine their continued efficacy.

All of the above ideas are not new. During the most recent economic downturn, every successful organization has done most of these things and more. If Chrysler, Starbucks and Ford can do it, so can Penn State. I’m sure we have some really smart people at the University that can study these success stories and employ the “best practices” used elsewhere.

30. Stella M. Tsai ’85, Philadelphia, Pa.

Penn State offers an affordable and accessible world class education to approximately 50,000 undergraduate and graduate students each year. As a land-grant institution, Penn State was created to provide as a different type of higher education in areas such as  agriculture, science, and engineering (without excluding classical studies. Penn State has fulfilled its obligations to the Commonwealth and it would be in the best interests of the Commonwealth to reciprocate.

The steps we should take are fairly basic – as alumni and as an institution, we need to lobby our representatives, including the Governor, to fight the reductions to the state appropriations (which at this point constitute 14 percent of Penn State’s budget for General Funds) and remind the General Assembly and the public that education should always be a priority. The Commonwealth will most certainly lose any competitive advantage and the ability to attract business and generate wealth unless we invest in affordable education for our children, youth, and adults. We should join forces with other interest groups to combat those forces who cannot to acknowledge the benefits of affordable education. What industry or business can survive without an educated workforce in the 21st century?

Other steps to secure our financial future are in play, but could be emphasized – we need to redouble our efforts to grow the endowment and engage in grassroots capital campaign.  Another potential area for growth is the pool of international students, who can serve as ambassadors for Penn State.

31. Scott K. Munroe ’98, Catonsville, Md.

There are three major steps that the University must take to ensure its financial future.

a. Regain and rebuild support in Harrisburg in two steps. The first is through a full understanding of the mutual benefits that state funding of Penn State has for Pennsylvania and how this funding actually helps the residents of Pennsylvania.  The second is through the election of pro-Penn State members to the General Assembly by leveraging the talent and skills of our Alumni and the voting power we have.

b. Fiscal Budget discipline. We must look to all aspects of the University to find areas where we can streamline spending and costs, while ensuring the maintenance and quality of our facilities.  This will involve very difficult decisions and may even result in the restructuring of academic programs and departments as well as how our physical plant is maintained and operated with a strong focus on preventative maintenance and long term reductions in life cycle costs.

c. Developing and enhancing alternate revenue streams. We are good but we can be better at gaining research grants and donations.  We must be better in the targeted use of funds that we get in, by refocusing on our existing infrastructure and programs and making their long-term viability the priority for fund expenditure before additional expenditures are made.  If a structure or program is not viable for the long term then we must cut it.  No new programs should be added unless they have proven long term funding and support.

32. Ronald C. Wagner Jr. ’89, Glenside, Pa.

When funding drops, you either have to raise revenue or reduce expenses to compensate. Penn State has to do both and they can do so in dramatic fashion by “expanding the classroom.” Whether Penn State wants to admit this or not, the foundation of higher education has shifted under our feet.

The growth of online learning has led many to challenge the value of a 4-year residence-based education. I believe Penn State needs to more urgently embrace, expand and place premium value on the World Campus, eliminate underperforming satellite campuses or convert them to digital learning hubs and reduce questionable, costly prerequisites in many majors.

These actions alone will result in lower operating expenses, lower fees to students and a more robust, relevant and balanced Penn State that is leaning forward into the digital learning age.

33. Barry M. Simpson ’69, Harrisburg, Pa.

First and foremost, Penn State needs to do all it can to address the declining state appropriations. This means supporting the efforts of the Penn State administration in its communications with members of the legislature and the governor. This takes the efforts of the Trustees and all alumni in reaching out to the state government and reminding them that a quality education is a necessity. While disturbing that it has come to this, I applaud the exploration of privatization and other alternatives by the Trustees. Where the downward slide of state appropriations will end, if it does, is impossible to predict and Penn State needs to be prepared for that eventuality.

Penn State needs to continue to cultivate a culture of unrestricted giving by its alumni. When compared to other universities and colleges we are way behind, despite generous efforts of alumni. The income derived from investments can offset loss of state appropriations if that continues to occur.

Penn State needs to continue to examine its business model and take appropriate action. While President Spanier and his administration did an excellent job in this regard, more needs to be done. For example, a business plan and budget that includes salary freezes for faculty and staff occurring frequently in recent years cannot be sustained. Penn State will not be competitive in the market place for this talent. Where can resources come from in the future? For example, expenses may be managed better with continued emphasis on expanding the commonwealth campuses and the World Campus.

34. Robert J. Bowsher ’86, San Diego, Calif.

Expanding Penn State’s student population will do wonders for securing our beloved alma mater’s financial future.  The university has spent a lot of money lately on constructing buildings.  Now it’s time to attract a student population that can help pay for those buildings and their legacy costs.  Through its online curriculum and its Global Programs, Penn State needs to reach out to Baby Boomer retirees and other people who can build the tuition base that will help offset the sharply declining state appropriations.    Innovative cost-saving programs that boost morale will also be needed to secure the university’s financial future.  The last thing Penn State needs now is a “slash-and-burn” round of cuts that destroys morale and makes employees fear for their jobs.  Instead, employees should be recognized and rewarded whenever they reduce costs and simultaneously improve their work environments.

Promoting Penn State athletics will help too.  The university sports teams bring in much-needed revenue and bring much-needed attention to our alma mater.  Some people believe athletics undermine a school’s academic reputation.  If that’s the case, then with all of its football team’s recent success, why are degrees from Stanford University just as valuable today as they were when the Stanford football team was posting losing records?    By taking steps like the ones described above and by adopting a philosophy of living within its means, Penn State will survive these economically challenging times.

35. O. Richard Bundy III ’93, ’96g, South Burlington, Vt.

The approach to securing Penn State’s financial future lies in both increasing revenues and reducing expenses, but neither will be particularly easy. First, we must invest in activities where we have the greatest potential and capacity to increase revenue, chief among these our nationally ranked research portfolio and private philanthropy.  Gifts and grants represent 16% of the institution’s budget (nearly $660 million) — and they are sometimes mutually beneficial.  For example, when a donor establishes an endowed chair to support outstanding faculty, their gift provides discretionary resources that the faculty member can use to advance his/her research and more successfully compete for additional Federal, State, and industry funding in the future.  On the expense side, Penn State must continue to seek overhead reductions, consolidation or elimination of poorly performing or obsolete programs, and greater operational efficiencies.  Often, the decisions that earn these savings are unpopular among our stakeholders, so they must be made in a manner that is consistent with the institution’s strategic plan, with broad participation from the campus community, and with the highest levels of transparency.  Finally, Penn State should take steps to further strengthen our Grassroots Network to make an even more powerful statement in Harrisburg about the value of the Commonwealth’s investment in Penn State.   For every dollar the state invests, Penn State returns $25 in direct economic impact.  Pennsylvanians must let their elected officials know that disinvestment in higher education will have serious implications on the long-term economic vitality of the state.

36. Vincent J. Tedesco Jr. ’64, State College, Pa.

Penn State should take the following steps:

a. Increase lobbing actives in Harrisburg.

b. Make much greater use of the tens of thousands Penn State Alumni and supports to put pressure on all elected state officials so support funding for Penn State.

c. Get a commitment from the Governor, State House and Senate to support an annual 5 year funding plan.

All of the above must be done. The first step, however, must be for the Board to Trustees to begin to regain it’s honor by admitting it handled the firing of Coach Paterno very badly and promise to conduct it business in an open manner.

37. John W. Diercks ’63, ’67g, ’75g, State College, Pa.

Reduced state appropriations are affecting universities across the country.  Penn State has been attempting to stay ahead of these reductions over the past decade or so by conducting strategic reviews that evaluate all University functions with the intent of cost savings.  There have been cost savings from these reviews.  These strategic reviews should continue on a regular basis.  However, with continued reductions in State appropriations, a point will be reached when a long-term solution may be required that changes the structure of the University.

The University needs to stay ahead of a possible future funding crisis by forming a high-level committee of knowledgeable representatives from the Board of Trustees and University to thoroughly review the advantages and disadvantages of at least three options:  1.Remain as a Land Grant, State-supported university.  2.Transition to a private university.  3.Transition to a hybrid private/Land-Grant university along the model of Cornell’s structure.

This committee would be charged to review the impacts of each option on University operations, including, but not limited to, academics, research, athletics, finances, student life, and alumni relations.  After the initial review, the committee would then present their preliminary findings and recommendations to groups across the University, State, and Federal Government for feedback and suggestions.  The key to forming this high-level committee is to thoroughly study these options with input from many sources and then have a recommendation and plan ready to implement in advance of a possible future funding crisis.

38. Edward (Ted) B. Brown III ’68, State College, Pa.

Penn State has always done a great job raising funds for buildings, sports venues, department chairs, scholarships, etc. My family and I have been active contributors, giving money and time to my Fraternity, Thon, Parmi Nous Endowment, Blue Band, Worthington Scranton campus and so forth. The best evidence of this is our Mt. Nittany Society membership. All Board of Trustee members should be expected to be active leaders in fund raising, contributing time and money. The fact that there are 86 candidates for three Board of Trustee seats, shows that Penn State Alumni make things happen when they get energized. The Grassroots Network should get more energized. There are hundreds of Alumni Chapters and Alumni Interest Groups throughout the world. They should be energized to lobby with the State and to establish scholarships. I am one of the founders of the Parmi Nous AIG’s Endowment. Why doesn’t every Alumni Group have scholarships? Why are less than half of Penn State Alumni are members of the Alumni Association? They’re not energized. Penn State needs to improve its marketing to the commonwealth, to the citizens of Pennsylvania, and to the Alumni. In addition to my crisis management experience, I’m prepared to bring my sales experience (from IBM sales Rep to President and Chief Sales Officer) to the Board of Trustees. There have been a lot of VALID complaints about the lack of transparency and openness of the current Board. Board members should be part of Town Hall meetings. Visibility will raise funds.

39. James R. Antoniono ’71, Greensburg, Pa.

Annual tuition increases have become a serious problem, one the Board of Trustees MUST address. We have one of the highest in-state tuitions of any school in the Big Ten. That is a number one ranking we should NOT be proud of.

Penn State’s mission states: “As Pennsylvania’s land-grant university, we provide unparalleled access and public service to support the citizens of the Commonwealth.” We are failing miserably in providing “unparalleled access” to the citizens of the Commonwealth. Working class families are finding it very difficult to send their sons and daughters to PSU and many students are leaving PSU with education debt in the six figures.

There are two ways to tackle this problem, cut cost to lower the per-credit tuition rate and raise more money to cover the cost of a first class education. The athletic department has set a great example. They do not take in the most money of any Big Ten school but they have operated the athletic department at a lower cost than many of the universities. The result is that our athletic department is the most profitable athletic department in the Big Ten. That is a first place position we can be proud of!!!

If we scrutinize the University budget line by line, from the budget for the Trustees and the Office of the President on down, we will find dollars that can be saved without jeopardizing the quality of  education.

40. David L. Roush ’04, Bronx, N.Y.

a. Place a moratorium on any current or future proposed acquisitions of real property or construction of new facilities. Buildings look beautiful, but are costly to maintain, even if constructed using funds from external sources. As tuition increases, enrollment can be expected to decline, and with it – the need for additional square-footage of facilities.

b. Create and enforce a tuition cap OR a set maximum allowable tuition increase for the next five years to allow current and future students to accurately plan their funding needs. Utilize across-the-board spending cuts to live within the cap or pre-set increases.

c. Increase efforts to drive revenue out of preexisting Auxiliary Enterprises. Put the facilities and infrastructure that we already have in place to better use.

d. Encourage alumni to rally legislators to increase appropriations.

e. Form a panel of experts to begin drafting a 10-year strategic contingency plan that includes transition to private status. If appropriations disappear, we need to be ready to live inside of that reality.

41. David A. Dell ’76, Strasburg, Pa.

Penn State leadership must communicate very well across the commonwealth insuring all citizens of Pennsylvania are familiar with positive effect Penn State has on each citizen’s standard of living. A better informed public and alumni will become the strong grassroots work force needed in supporting Penn State through their legislators, both local and state. Increased communication on the importance of Penn State fulfilling the land grand mission of “education of the industrial class” will improve understanding by all segments of the state’s citizens.

Additionally, Penn State leadership must find more efficient alternatives to deliver quality education. From facilities to personnel performance and compensation, more efficiency is needed.  Invite business leaders with experience successfully leading businesses to provide valuable input as advisors and mentors for Penn State administration and faculty.

42. Russell T. Larson ’72, ’74g, Dover, Del.

Pennsylvania is not unique in its budget problems. It is, however, probably one of the most damaging to its institutions of higher education. If I’ve done the math correctly, PA is the bottom 10% in the country for per/capita state supported funding. My job in Delaware is to recommend state funding for all programs and I’ve seen the major cuts we’ve had to make to remain fiscally stable.  Nevertheless, we’ve still held the belief that funding for state supported schools is of paramount importance and, in fact, an obligation. State support is, of course, only one issue with maintaining some fiscal integrity and stability. We must continue to pursue the wealth of other revenue sources such as grants and research projects. The president and the board must remain diligent in its quest for private support. And we must constantly review our programs, goals, and direction. We must adapt to an ever changing environment, which, in theory, is what makes a great university great.

43. Jonathan Mills ’86, Orlando, Fla.

Each of these three questions are connected to one another by the financial issues of the day.  Inevitably, there will be some overlap. Declining State Appropriations must bring discussions on just how much influence the State or Governor should have on University policy.  This supports the argument for change in the Board of Trustee structure. It is my position that the number of appointees should be reduced

—B.O.T. should strive to make the Branch Campus System self-sufficient.  Certainly there are repetitive costs and program offerings that could be streamlined.

—Provide incentives for faculty and administrators to pursue external funding from public and private sources.

—Investigate and implement greater global outreach.  Significant revenues could be achieved through these programs without the additional facilities costs.

—The Board of Trustees need to address the financial challenges of the University from an increase in revenues, cut costs view, rather than, how do we get more from the state view point.  Most states are cutting funding to higher education and the trend in Pennsylvania will continue.

44. Gregory S. “Sandy” Sanderson ’00, Glenshaw, Pa.

[Did not respond.]

45. Rudolph K. Glocker ’91, ’93g, Henderson, Nev.

To secure its financial future, Penn State needs to embrace technological change, examine and adapt its current offerings, demonstrate its value to the Pennsylvania economy and use its alumni base to enact legislative change. Technology offers the ability to teach students more quickly, more cheaply (with less costly infrastructure) and most importantly, better than many current methods. Penn State should focus on the success of its World Campus and use these tools to evolve and adapt its teachings methods as appropriate for its current offerings. Penn State should focus on value added programs. All Penn State programs – educational and extra-curricular – should be examined and measured by their impact on the educational experience of students. Programs delivering the most value should be continued or expanded. Programs that perform poorly should be improved, adapted, or eliminated. Penn State needs to prove to the Legislature that a $1.00 to Penn State is $1.50 in additional tax revenue to Pennsylvania over time. There are some great programs at Penn State that contribute to Pennsylvania’s economy. These case studies need to be sold as a way to increase the tax base. Penn State needs to rally its considerable alumni base to gain additional political support for its educational mission. Just as it is important to vote for the best candidates in this Trustee election, it is important for alumni to vote for Legislators who support Penn State.

46. Richard L. Marshall ’92, Mount Kisco, N.Y.

In the short term, President Erickson and the Board of Trustees must continue to apply pressure to the Pennsylvania State Legislature and demonstrate the positive economic impact of the University to the Commonwealth.  They, along with the University, also should focus on creating the next generation of state leadership to help ensure state support in the long term.

However, Penn State needs continue as if its reduced appropriations are permanent and implement a strategy to move forward, including revisiting the Grand Destiny Campaign, the most successful fundraising campaign in University history.  Penn State needs to take advantage of the largest alumni base in the country to financially secure its future.

Penn State also should look at industry trends and assess how Penn State can position itself to take advantage of such trends.  As an example, many businesses outsource offshore, but firms and their clients are growing increasingly frustrated with the quality of offshore outsourcing are turning to onshoring.  Penn State should consider the role it can play in this growing trend.  The University can leverage the Smeal College of Business to create a platform for placing graduates in onshore facilities, including the use of local space for such facilities.  Penn State can work with businesses to create local training programs (that could be paired with Smeal MBA programs) that would not only give students more employment opportunities but also enhance Penn State’s partnerships with these businesses.  Such programs would benefit the University, its students and graduates, and its business partners.

47. Lisa W. Witzig ’79, Denver, Colo.

First, Penn State needs to re-think its position as a state university and adopt a hybrid model.  Penn State should be a public university with a profit-and-loss mentality.  Senior managers should be held accountable for achieving financial goals and rewarded for cost-saving actions; merit pay should be considered.    Second, Penn State must focus on both cost-cutting and revenue-generating actions.  As such, it should:

  • Conduct a zero-based review of costs and Commonwealth Campuses.  It must cut duplicative services, while improving the performance of Commonwealth Campuses that are struggling to increase attendance and maintain high standards.
  • Cut departments and majors. Penn State needs to create cross-university criteria to evaluate departments and majors – e.g., low rankings, small enrollments, costly programs – and cut the good to save the great. Penn State should prioritize and fund programs that will be recognized among the top 50 and strive to be in the top 25.
  • Expand online programs and degrees. The University should look toward meeting the needs of local communities with online programs, attracting students from non-traditional backgrounds such as adult learners, and lowering operating costs associated with brick-and-mortar classrooms.
  • Strengthen and enlarge the ROTC program.  This will provide more scholarships and enhance Penn State’s service to our nation.
  • Emphasize private-sector sponsored research.  Penn State should reward departments that provide relevant research and attract outside funding.

48. Paul J. Malaspina ’77, ’80g, Erie, Pa.

Penn State needs to secure its financial future through tough decision making plus breakthrough thinking.    Anyone can choose the attractive option when one exists.  Leaders are defined when all of the choices before them have significant downsides.

Fastidious management attention to administrative and operating efficiencies, economies of scale, and longitudinal efforts to increase philanthropy must be paramount. Harsh financial realities may force austerity measures such as the consolidation of underutilized commonwealth campuses.  This should be a last resort and new sources of funding should be sought first.

Universities typically spend about 5% of their endowment per year, less than their investment income, to allow for the maintenance and some growth of their principal. While no organization wants to dip into their endowment principal to meet operating costs, many hospitals around the state have had to do so, just to stay open.  However, that may be the first step in going out of business.

For Penn State, teaming up with existing industry, and breaking ground in directly incubating new industry can lead to financial returns. Investing a portion of endowment capital as entrepreneurial seed funding, technology incubation and internal loans to “intrapreneurs” to spawn new programs can be developed to generate a financial return to the University. Faculty and students should be eligible to participate. The University has a huge bank of brain power available to constitute a think tank for rigorous due diligence on potential tech and business investments, thus minimizing risk.

49. Henry B. Swoope V ’96, Alexandria, Va.

We have managed cuts in the past by eliminating jobs, merging departments and not offering raises.  Those cuts were nowhere near this deep. There will no doubt be a sharp decline in donations in 2012 as an extremely angry alumni base shows it’s displeasure with a seemingly disconnected and frankly personally unlikeable Board of Trustees. Step one; the Board needs to be removed, replaced and restructured. Step two; we need to continue our Grassroots Campaign and keep pressure on Harrisburg to ensure a Penn State education maintains it’s high value.  Step three; continue to beat the drum to our over half a million strong, thoughtful and hard working alumni base that Penn State needs their help now more than ever. Step four; we must maintain the strength of our Commonwealth Campuses. This is the core of Penn State and we must continue to invest in the future of these campuses.

50. Scott O. Fozard ’89, State College, Pa.

Many people are asking this question, but my opinion is that many of the answers to this question are very myopic. They focus primarily on increasing public appropriations or complaining about the tragedy of Penn State’s appropriations and their decline. The security of Penn State’s financial future will not be attained by focusing only on the appropriations from the Commonwealth. These appropriations account for a relatively small share of Penn State’s budget (approximately 7-13% over the last 10 years). Penn State needs to secure its financial future by evaluating all sources of its revenues and ensuring that it provides an appropriate value for its stakeholders and their relative investment…whether that is the Commonwealth, students, alumni, faculty or other stakeholders. The conversation about Penn State’s budget has been dominated by revenue streams associated with Commonwealth appropriations. Unfortunately, little has been addressed regarding the total Penn State budget and the effective utilization of the University’s expenditures and resources in all facets of its operations. Penn State will secure its financial future by enhancing all revenue streams and providing cost effective value for its stakeholders. That means a critical evaluation of all sides (income, expenses and capital expenditures) of its finances.

51. Michael J. Carroll ’04, Fairfax, Va.

It is a scary thought, but the idea of privatizing the University will likely be upon us before we would expect it.  It is the job of the Trustees to be prepared with the answers about privatization when that time comes.  I am sure that many advocacy and lobbying groups have worked with their networks to raise every penny they can, but it’s time to start looking towards other grant campaigns and corporate sponsors. The following steps could be considered to address securing Penn State’s financial future:

  • Reevaluate our current corporate agreements to see if we can restructure them for additional funding.
  • Appeal to new advocacy groups and highlight the great steps the University is making among its research and development components.
  • Send more lobbyists to Harrisburg and Washington.
The dollar-per-student ratio that Penn State receives compared to Pitt and Temple is demeaning.  In order to stay atop the academic echelon, Pennsylvania legislators need to provide more financial support to Penn State.52. Barbara L. Doran ’75, New York, N.Y.State contributions to Penn State’s budget are well below the national average of 19% at just 7%, with next year projected at 4.5%. With ten state representatives on the Board, including the governor, a renewed push to persuade state authorities to re-prioritize their spending decisions should be initiated both privately and publicly. Penn State makes a $17 billion economic impact on the state, a return of 25 to 1 for every state dollar invested.A newly awakened alumni base, eager to make changes to the existing board governance, is an important group whose support and action should be enlisted to support this lobbying effort. They have shown that when the stakes are high, they are there for their university. The stakes couldn’t be higher: receiving a college education is part of the American Dream.

Cutting costs is an obvious critical component, with all current operating budgets scrutinized for savings and efficiency possibilities, and planned major projects reviewed and shelved if not absolutely necessary.    Raising tuition is a last resort, given the already onerous debt levels students struggle with at $1 trillion nationwide. The mix, however, could be changed, admitting more out-of-state students (currently at 20%) who pay nearly double the tuition. High-margin online education can be prioritized.

The endowment’s performance, an important source of operating income at many schools, should be reviewed and evaluated, as it is below relevant ten-year and twenty-year benchmarks. Top performing endowments have outperformed Penn State by close to 50%.

53. Thomas J. Day Jr. ’88, Washington, Pa.

In order to secure our financial future, first I think we need to focus internally to ensure we are operating as efficiently and effectively as possible and controlling expenditures in two key areas: administrative costs and capital investments.  Second, we need to continue to drive fund raising with the goal of doubling our endowment in the next 3 to 5 years.  A healthy endowment is a key indicator of the long term financial viability of a university.    Our administrative costs are growing at an unsustainable rate, driven primarily by the rising number of administrative personnel relative to the number of students.  The ratio of our administrative staff per 100 students increased by almost 71% from 1993 – 2007.  Our current ratio of students to professors is 38 to 1, while our ratio of students to all University employees is 2 to 1.  We need to downsize where appropriate, to ensure that we are eliminating waste and redundancies.

Over the years we’ve invested significant capital in the construction new buildings for classrooms and laboratories, to the point where we now have excess capacity, and we are therefore underutilizing these facilities.  Even the Penn State Strategic Plan, Section 7.2 acknowledges this: “The University has invested in both the construction of classroom and laboratory.  Too often these facilities are not fully utilized-and the University constructs additional facilities.”  Beyond the initial costs of construction, facilities are expensive to operate with ongoing maintenance and utilities, and we can’t afford to have idle capacity.

54. Ben Novak ’65, ’99g, Immokalee, Fla.

Penn State will do much better all around when the Board of Trustees begins to talk straight. For years, our Board has played the game of “we’re public when we want to be public and private when we want to be private.” At some point we have to decide—are we the flagship University of the Commonwealth? Pennsylvania’s Land Grant University?  The State University?—or aren’t we?       Second, the Board has to come clean on the budget. Its secretiveness on the budget has been so extreme that it makes the world wonder: What are they hiding? Calls and proposals are cascading through the legislature for open budgets, open records. Then there are the tricks. Back in the ‘90s while I was still on the Board, the legislature established the “Tuition Challenge” to keep all state-supported colleges from raising tuition more than 6%. The Board thought it was being very clever in finding a “loophole.” It could keep the tuition increases to less than 6% by adding new student fees that brought the total amount paid by students back up to the 9% it wanted anyway. Neither the legislature, nor the students, nor their parents were amused. The first and most important thing the Board of Trustees can do to improve Penn State’s financial future is to repair its own credibility.

55. George T. Henning Jr. ’63, State College, Pa.

There are many steps that Penn State and the Board can take to address this issue.  Penn State must continue to fight to limit any future decreases in state appropriations.  Initiatives like the Alumni Grass Roots program and Penn State’s legislative connections must be enhanced and leveraged.  I have been active in the grass roots campaigns and visited legislators on behalf of the University. I also envision new campaigns to educate Pennsylvania voters on the benefits higher education brings to our state and to promote contact with members of the legislature by families of Penn State students and graduates.

The burden of the severe cuts in state funding has largely rested on students and families through tuition increases and on our faculty and staff through only one small wage increase in three years.  Nearly 70% of the Penn State education budget is devoted to faculty, staff and administration wages and benefits.  The development of additional efficient delivery methods for education and reduction of programs offered must be implemented.  Reductions in the remaining 30% of the education budget can offer savings.  With my executive experience from industry, I recommend that Penn State, through a joint commission of the Board of trustees, faculty, staff, students, experts and the administration, explore potential cost savings that do not jeopardize the position and reputation of our internationally recognized university. Although I advocate for cost cutting measures, I do that with the understanding that the quality of a Penn State education cannot be jeopardized.

56. Jeffrey A. Krisciunas ’94, ’11g, Philadelphia, Pa.

The bottom line is if the 30% budget appropriations cut occurs, Penn State will be receiving the equivalent (inflation indexed) of less than ½ the appropriations it did nearly 20 years ago.  We can NOT let this happen. We need to fight for every dollar.  However, with any long-term strategic planning, we must find resources and measures that do not sacrifice our academic excellence should reductions occur.

As Bloomberg has ranked Penn State in the top ten of endowment growth over the past 4 years, we must continue these efforts in support of the For the Future- The Campaign for Penn State Students. Thanks to dedicated alumni like you, PSU is over 75% completed toward the 2B campaign goal.  Remember that this campaign is for the Students and we, as alumni, need to insure this campaign is successful! WE must continue to develop scholarship endowments!

We must also continue to look inwardly at our own costs.  While we continue to create a beautiful campus with many new buildings, I believe we need to fully understand the future operating footprint costs that are created for the university in perpetuity.  Capital planning can NOT just be about raising initial capital to build buildings, but also understanding what future cash outflows will burden future budgets.  I am committed to Leading with Honor, Placing Students and Alumni First, and Supporting Academic Excellence; and believe all three of these pillars are at a focal point when discussing Penn State’s financial future.

57. Seth T. Walizer ’00, Fleetwood, Pa.

[Did not respond.]

58. Joseph C. Korsak ’71, York, Pa.

Solicit corporate sponsorships. Increase rates for out of state students. Freeze on hiring staff and faculty. Use professional lobbyists for working with the legislature. Three year freeze on wages.

59. Anthony P. Lubrano ’82, Exton, Pa.

[Did not respond.]

60. Marlene “Myke” Atwater Triebold ’72, Niceville, Fla.

Review ALL budget items at department level, and direct every department to identify and prioritize cost saving measures, with the directive of a 10% reduction in costs to each department as the goal.  If a department is unable to accomplish this, they must identify the reasons and justifications that they are unable to accomplish this goal.  Initiate a cost saving competition for all faculty, staff, students, alumni to identify areas of waste and areas where streamlining services can be accomplished. Reward outstanding contributions with a notable prize and recognition for their contribution to the future of the University. Institute a group or committee charged specifically with the task of working closely with legislators to emphasize and explain our need for state funds and the benefit that state funding renders to the Commonwealth’s economic well-being.  Identify ways that legislators benefit by the contributions Penn State makes to their local constituency.  We need to help Harrisburg understand why their appropriations benefit everyone in PA—not just the students and employees of Penn State.

61. Samuel M. Loewner ’10, Reston, Va.

The only long-term way to secure our financial future is to spend our money wisely. Although the Commonwealth should support us more enthusiastically, it isn’t prudent to depend on the governor and state legislature to sustain our budget.

When it comes to physical plant and human resources spending, we need to make sure that our investments directly impact educational opportunities for students. Improving administrative buildings or beautifying campuses must take a backseat to classrooms, student research facilities, and quality instructional and support staff.

In an even broader sense, Penn State should adjust the manner in which it develops alumni and donor relationships. We can maintain our focus on cultivating strong ties with wealthy donors who make substantial gifts, but we must also actively engage recent graduates and young alumni who can provide small gifts to support the Penn State community.

The Board has a responsibility to define acceptable spending at the University. They can learn more about the ramifications of their financial decisions if they make themselves more accessible to alumni throughout the world. As a Trustee, I will schedule regular meetings with large alumni chapters and communicate online with alumni, students, and all others who are interested in the future of higher education at Penn State.

62. Ryan M. Bagwell ’02, Middleton, Wis.

Penn State has endured an enormous hit to its reputation, and the Board of Trustees should immediately begin the long path to rebuilding trust and confidence in its leadership. But little progress toward a policy of becoming more transparent has been made in the wake of the Sandusky scandal. In fact, the board’s secret and illegal February retreat was a giant leap in the opposite direction. Using my experience as a newspaper reporter, I’ve proposed plans to make trustees more accountable by shortening their lengthy term limits, imposing mandatory financial disclosure requirements and adopting Pennsylvania’s open records law as a Penn State policy. The university’s future – financial and otherwise – depends on electing board members who are committed to the ideals we believe in. We must reject those who lack ideas for reform and embody the status quo.

63. John J. Mika ’85, Tower City, Pa.

PSU should look at its land grant status. Funds from the Government are matched by those from the state. Recently, state funding for Education has been cut drastically we should try and compell our govenor to raise his funding for Education. We should look at Marcellus-Shale drilling and tax them directly for Education Funding. Pennsylvania’s casinos should also be compelled to help fund education in PA as was one oftheir origional promises. There are more options but time and space here limit my response.

64. Chris C. Lindsley ’87, Takoma Park, Md.

Penn State needs to get serious about reducing costs smartly. The Core Council identified $10 million in permanent cost savings for each of the last two years; the University of Michigan cost containment efforts are expected to yield more than $30 million in FY 12. Here are the steps Penn State should take:

a. Leverage its purchasing power to negotiate supplier contracts with favorable pricing, and renegotiate current contracts.

b. Maximize technology to create business efficiencies, reduce costs, FTEs and improve information management and employee productivity.

c. Create a centralized or shared service approach to handling common needs, like IT support, purchasing, and academic and administrative support. This allows experts to handle these services across the University (and all Penn State campuses), which will save money, reduce duplication and increase efficiency.

d. Promote the Penn State 2+2 Plan more aggressively as a way for more students to get a Penn State education and keep the Commonwealth campuses’ enrollment up while saving students money through the lower tuition there.

e. Prioritize all academic programs and review lower-priority programs with an eye toward eliminating those considered the weakest.

f. Use space and facilities more efficiently. Expand the space-sharing initiatives underway, getting all programs on board, and tighten policies around new construction to make sure it is truly needed.

g. Have the Board make further strides toward transparency and open communication. This will help to restore the University’s reputation, help with fundraising, out-of-state enrollment and more.

65. Edward H. Ridings III ’71, Lewistown, Pa.

The 3 questions posed do take considerable time to evaluate and propose some solutions. The problem of decreasing State appropriations is directly coupled with the problem of the rising cost of tuition nation wide. Solutions to this problem must be possible but at this time certainly seem elusive.

66. Thomas E. Kapelewski ’82, Bloomsburg, Pa.

Penn State has three choices to successfully secure its financial future:

a.  Take the story to the Pennsylvania taxpayers that higher education is the most important building block of the future.  Residents can raise state morale and therefore convince our legislative body that we NEED our university to survive.  The governor and legislators will then review many of their surplus programs (hopefully, but easier said than done) that result in a poor use of taxpayer money; the money is there, it just needs to be properly allocated.  This may be a tall order for success.

b.  Take the fund raising to the alumni to provide a larger endowment for the university; an endowment however, that would need to be prudently spent on our customers, the students.  Before taking on this alternative, any alumni would need to see the true need vs. the income, and get beyond the most recent issues facing our university.

c.  Open the books of the university; scrutinize and analyze our spending ways.  Expenses cannot exceed   income.  We need to “buckle down” and truly evaluate university spending.  It’s a bureaucratic  world, that needs the reality check in budgeting similar to a small manufacturing company.  This may be our best alternative.

67. Richard J. Puleo ’77, Lancaster, Pa.

The University should put on hold any new buildings, construction projects and land acquisitions, and focus on increasing its endowment to allow that savings to be used to offset the reduction in appropriations received from the state.   The fund raising campaign currently in place “For the Future” will go a long way to help secure the University’s Future.

68. William F. Oldsey ’76, Basking Ridge, N.J.

State budget deficits are real. Pennsylvania is not an exception. We need to come to grips with lower appropriations from Harrisburg as a fact of life and take steps to eliminate over reliance on state support. Having said this, we should maintain strong lobbying efforts and regularly remind state government of how crucial and far reaching PSU is as an economic powerhouse across the state.

We must turbo-charge our development/fundraising efforts. Building our endowment is the single most important focus for Penn State’s financial well-being in the future. We should add additional talent and resources to our already strong development function to drive even greater success. Focus on major gifts and large donors remains crucial, but we should perfect other methods through social media to invite grass roots contributions and participation from within and outside the alumni base.

Let’s increase the funding and support we get from major corporations, both private and public that benefit from Penn State’s world class teaching and academic reputation by hiring our graduates and utilizing our faculty and research methodologies. Budget responsibly throughout the university: Be vigilant with controllable expenses and eliminate waste wherever possible.

69. Pratima Gatehouse ’96, ’10g, Short Hills, N.J.

Penn State has a secure financial future with or without state appropriations. State funding is currently 12% of the operating budget (excluding the Hershey Medical Center). Therefore, it is an important part of helping Penn Sate keep tuition down and provide more program options. That 12% is about $200 million; tuition and research bring in more than $800 million per year each. Penn State is a leader in industrial research funding and strong in most research fields. We should grow that area by investing more in faculty and students that conduct that research. Also, newly constructed buildings should be value-engineered with 10% of the funds set aside to endow research faculty such that once the building is fully constructed, those research funds can support the operational costs of that building. For example, the Millenium Science Center’s final cost was  $215 million, which is more than double than the originally contemplated budget. I believe that capital cost overrun would have been better spent attracting faculty that would have created start of the art research programs, which in turn attracts the best gradate students and creates attractive areas of study for undergraduates. As a mechanical engineer (both graduate and undergraduate) at Penn State, I think I can help Penn State secure its financial position while increasing academic excellence. Investing in strong faculty and students will result in greater long-term revenue growth.

70. Kyle B. Heffner ’08, Pottsville, Pa.

In lieu of a sharp decline in state funds, Penn State should be first and foremost, be making an effort to operate within its means. Operating within the budget and keeping costs low is a hard task, but developing a plan now to maintain expenses well under the budget would prevent a shortfall with future state budgets. To do this, wasteful spending needs to cease immediately and greater attention needs to be paid to each individual line item.

71. Thomas R. Davis ’82, ’85g, ’88g, Yardley, Pa.

[Did not respond.]

72. Matthew J. Sliwa ’01, Selbyville, Del.

The first thing we need to do is restore the reputation of the University.  The press coverage has been bad to say the least.  Penn State University has so many incredible stories to tell.  Those are being lost in one issue.  A strong media campaign to show the world the greatness that is Penn State will start to help the financial issues because donors will return when they have a reason to return.  Outside of that, all topics need to be open for discussion.  That includes privitazation of the University, greater revenue from research, cost cutting measures, and any other idea that seems feasible.  They must all be researched and the best ones be implemented.

73. James P. Brandau ’03, Conshohocken, Pa.

Support provided by the Commonwealth of Pennsylvania to Penn State has been declining for many years. In fact, the appropriations now cover less than 7% of our operating expenses. Alumni, friends and business organizations that benefit from a world class University need to work to reverse this downward spiral. Insisting the University’s funding be an issue in State legislative elections will have a great impact. Penn Staters are everywhere, and demanding the Commonwealth sustain one of its greatest assets will have an incredible impact.

Administrators and trustees are charged with managing a very complex institution and solving problems in the short term. Each time appropriations are cut, or costs increase, decisions need to me made. Tuition has been increased to levels that price out the hardworking, highly qualified students that have always been the lifeblood of our University. We need, always, to work to cut unnecessary costs and increase the efficiency of our operations. Thoughtful involvement by the Board in both operational and capital spending can lead to significant improvements.

Having said all of the above, I recognize that expenses can only be cut so much. The loss of key personnel or deterioration of critical facilities can do irreparable harm to our school. I believe we can maintain our status as a great university even in an environment of declining public funding. Continuing development of web-based instruction, leveraging our treasure trove of Intellectual property, and exploring our common interests with industrial and financial institutions are key ways to increase revenue.

74. Shawn D. Manderson ’03, Philadelphia, Pa.

Restructuring of the current University campus system is the first step to secure the University’s financial future. Unifying the resources of the existing 19 campuses and focusing resources and efforts on the local economies simultaneously will increase student enrollment and reduce the University operating costs. The University has already taken steps in this direction. Beginning in the fall of 2012, Penn State Abington, Brandywine and Great Valley will offer a joint Bachelor of Science degree in general engineering. This allows the University to combine the existing resources and strengths of each campus as well as focus on the needs of the local economy. As such, this paves the way for an increase in student enrollment as well as a reduction in operating costs.

This collaboration paves the way for the University to divest from the current nineteen commonwealth campus system and adopt a region-based system similar to other prominent public institutions such as The University of Maryland College Park and The University of Wisconsin. Adopting a region-based approach, the University will become more competitive against other local colleges and universities. Each region would emphasize an academic curriculum based on the economic needs of that the local economy. Decisions on administrative and capital costs, enrollment, and tuition costs, would be based on demand and controlled by each individual campus. Also, the University would have more strategic control over spending while reducing the operating costs to do business.

75. Terry F. Rakowsky ’82, Erwinna, Pa.

This isn’t intended to question the intent of The Penn Stater(TPS). However, these questions place the candidates at a serious disadvantage in time and breadth of knowledge required to respond appropriately. Ostensibly the reason for the questions would be to present a comparison among BOT candidates. However, without the knowledge of an “insider” to the workings of the BOT and the University, responses are likely to be interpreted as shallow.

Because of this, my response will be simply as one intent on changing the status quo. I’ll be a deft learner of topics addressed in the TPS questions along with other issues facing Penn State. As a former Penn State student athlete, and through the last 25 years as a dentist, my record of absorbing knowledge and responding effectively to exigencies as they arise stands for itself. Furthermore, any attempt to reply could divert attention from the main reason I’m a candidate.

Pure and simple, I’m angered by the knee jerk reaction of the BOT to the firing of Joe Paterno! This race to judgment by an entrenched BOT, insulated from the very essence of what is Penn State, is why I’ve agreed to be a candidate who is NOT satisfied with the status quo.

It’s not enough for the BOT to stage their current “listening tour” and then pretend transparency and openness has been achieved. Without substantive change in the University’s charter to change the structure and functioning of the BOT, we can only expect more of the same!

76. Jack F. Beiter ’52, Devon, Pa.

[Did not respond.]

77. Adam J. Taliaferro ’05, Swedesboro, N.J.

[Did not respond.]

78. Mark S. Connolly ’84g, West Chester, Pa.

With all due respect to the Alumni Association, I do not agree that it’s time to “go beyond the events of the past five months that have received so much attention”. It is true that the impending cuts in PA state support to the general fund are a serious concern. But so is the view of the candidates on issues such as the structure of the Board and the standing orders under which it operates. So it an independent review of the actions of the BOT. So is a review of the repressive limitations on candidate’s getting out their message through Alumni Association social media. To secure it’s financial future, Penn State should stop living the fantasy that the state will provide a meaningful increase in funding. It’s not going to happen. Instead, find ways to live without state contributions to the general fund. I’m not talking about going private. I’m talking about eliminating the need for the state’s paltry annual appropriation.

79. Neal W. Biege Sr. ’67, Center Valley, Pa.

a. Keep the quality of a Penn State education very high which helps create demand even if tuition is high. A recent Wall Street Journal survey ranked Penn State No. 1 among corporate recruiters. A survey by Bloomberg Businessweek of corporate recruiters ranked the Penn State Smeal College of Business No. 1 among all undergraduate business programs.

b. Cut costs by more extensive use of new teaching technologies. Don’t be to education what Borders was to books. Today’s technology brings the best instructors to more students at lower costs.

c. Continue a high level of alumni donations by promoting the university. Do not deemphasize football since it is a great media outlet.

d. Do a better job of convincing the electorate and in turn politicians, to increase funding for higher education. Of all government programs, support of higher education is the only one proven to change people’s economic standing in life.

e. The effect on our IMAGE from the Sandusky scandal and the board’s reaction, including the firing of Joe Paterno, could have a serious financial impact if the culture of the Board of Trustees is not changed. As a Retired Marketing VP I can help repair the tarnished image of Penn State. As a former General Manager I can be persistent in leading cost reduction. Using my experience as a former Chairman of a 62 member committee of the world’s leading cement industry group, I can take a leadership role within this 32 member board to implement these changes.

80. Casey A. Coyle ’06, Harrisburg, Pa.

I refuse to accept the premise that tuition increases at Penn State are simply a result of cuts to state funding for higher education. Between 2000-01 and 2010-11, the university received nearly $3.5 billion in state appropriations. However, over that same period, in-state tuition and mandatory fees more than doubled — from $6,852 to $15,250 — growth that is far over inflation. It is therefore misleading to suggest that the recent reductions in state funding are the root cause of Penn State’s tuition crisis.

That said, the university can more firmly secure its financial future by increasing the size of the  endowment and limiting its capital expenditures. Concerning the former, future cuts in state appropriations for higher education are probable, given the current economic realities faced by the state government. Nonetheless, Penn State can reduce its dependency on state appropriations by making a more concerted effort to grow the endowment, as other public institutions have done, such as the University of Michigan. Regarding the latter, I believe that Penn State has a spending problem, not a revenue problem, and one of the key contributors to the university’s financial situation is its focus on endless construction and acquisition projects. At a time when every American is being asked to do more with less, Penn State cannot continue to spend beyond its means.  While this may require the university to freeze or eliminate certain capital improvement projects, it is likely what is needed to halt the rises in tuition.

81. Andrew Tellep ’74, Mar Lin, Pa.

Declining state appropriations, rising tuition, and PSU’s land-grant mission in the 21st century are related. In simple terms, we must spend taxpayer money and money from tuition in a way that will prepare our graduates for a job / profession. By doing that, we would fulfill our land-grant mission to educate the citizens of the Commonwealth and would show the state citizenry, our students, and legislators that the dollars they give us are worthy of their investment. The Board must set University goals / priorities that are realistic, “penny wise”, and student / taxpayer oriented. What can be done to convince our legislators that we are a good investment? Formerly, I was part of Penn State Schuylkill’s Legislative Advocacy Network. We invited state representatives and our state senator to a discussion of faculty work being done with students, on projects that affected communities near our campus. Afterwards, our state senator, the chair of the Senate Education Committee, said that our visitors were unaware and we must “get the word out”. We should invite legislators to the “branch” campuses, not University Park, more often. They would see and be seen observing good work by Penn State, in their home districts, where they get votes. Given the opportunity to take credit for favorable votes in the legislature (i.e. at ribbon cuttings, program openings, cultural events), in their home districts, they may be more likely to “want” to help. Stopping the decline in appropriations would be helpful. An increase would be monumental.

82. Gregory M. Kerwin ’71, ’75 JD, Lykens, Pa.

We need to reexamine our priorities. In the last decade or so, there have been a significant number of capital improvements made at University Park. These are beautiful edifices which bring much pride to our school.  But we are simply at a point where the pace of improvements must be slowed. If we can’t fill the buildings with students because they can’t afford to go to Penn State, what good are they?

We must examine more closely our Commonwealth campuses as a greater source of student enrollment and revenue. I think some of them have been neglected for years at the expense of projects developed at the Main campus. Others perhaps should be consolidated for greater efficiencies.  No option should be off the table.

We must look at scholarships, endowments and our alumni as resources, many of whom have been tremendously generous in the past. We must tighten our belts and look at better controls on our spending. Obviously, that is not popular but the very survival of our University as we know it depends on it. Finally, we must do more to convince our legislators in Harrisburg, that funding for Penn State is an investment in the future. This requires an honest presentation on exactly what it takes to run Penn State. I am absolutely convinced that a quality education from Penn Sate pays back our Commonwealth many times over in terms of productive, taxpaying citizens, whether they are scientists, IT people, doctors, teachers, writers, artists, lawyers or even legislators.

83. Gregory H. Wolf ’77, State College, Pa.

The “sharply declining state appropriations” make it clear that the University can NOT rely on the State as an increasing or even stable means of sustenance. Securing the University’s financial future requires prescient planning, spending discipline, effective budgeting, and increased revenues. Much work goes into each of these functions-more than certainly can be addressed here, and it would appear that the University Trustees and Administration have devoted considerable focus on the first three of these tasks. However, I believe that targeting increased sources of revenue is a strategic imperative for the University if it is to secure it’s financial future. Those sources of revenue include Federal funds and research grants, Alumni contributions, partnership and joint venture revenue with business and industry.

84. John P. Rodgers ’93, ’97 JD, Hazleton, Pa.

The financial mismanagement of Penn State under former President Spanier and the current Board of Trustees must end. Tuition should be immediately frozen. My long term plan would be to reduce tuition to less than $10,000 per year for in state residents. This would make Penn State once again affordable for middle class students.  To do this Penn State must stop investing in buildings and start investing in its students. As a member of the BOT I would introduce a resolution to place a moratorium on all building projects. Penn State should also immediately freeze spending and undertake a comprehensive review of its finances. As a result of fiscal mismanagement the ratio of professors to students and employess to students is totally out of line. In the short term Penn State must institute a hiring freeze. After the review of the finances is completed each Department should be required to reduce staffing levels by atleast ten percent.

85. James E. Carnicella ’73, Ocoee, Fla.

Before securing our financial future or wrestling with any future issue the following must occur:  The Governor should recuse himself from the BOT and designate a replacement elected by the alumni, there should be a national, full-scale search for a new President for PSU, then, there should be conducted an “organizational audit” of all Executive and Department Directors and replace any of those that advised/manipulated the other members of the Board of Trustees into abdicating their Fiduciary responsibilties to the PSU community. The Governor, the President and a select few others have used their political and personal agenda’s to guide PSU toward a financial “dysfunctional organization”. The conspiracy to drive our University toward a private institution, fraught full of secrecy and deceptive business practices, must be stopped. The second phase of the organizational audit would be to determine if all departments are being administered in an effective and efficient manner. No other Nominee has the specific experience, as do I, to effectuate and evaluate a comprehensive organizational cleansing which I have excelled at, while at the Executive level of the many public sector organizations I have served. The BOT has proven they will continue to cover-up the above mentioned conspiracy when they appointed a replacement from the President’s office that was responsible for the present dysfunctional structure!

86. Darlene R. Baker ’80, Warminster, Pa.

Penn State needs to be creative in light of the new reality. Any organization needs to continually review its operations for efficiency, prioritize each of it initiatives whether capital expenditures, expansion planning, and even its planning horizon.

Educational quality and continued research cannot be sacrificed as that is what we owe to future generation of Penn Staters. Declining government funding has been an issue in the past will continue to be a challenge that will require collective brain storming that produces tangible actions and continued focus by the Board of Trustees. It will be interesting to review the current financial plans to that they are grounded in the new reality. I look forward to ensuring the financial success of Penn State.

[Question No. 2: Tuition.]

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2 Comments Add your own

  • 1. Otto Grupp III  |  May 9, 2017 at 4:41 pm

    Question: If a student is delinquent in a past tuition payment, he/she will not receive a diploma until the past amount due is paid. If that amount is now 3 years old, I was told that the amount of that tuition amount is the current tuition in 2017 and not the tuition amount that was delinquent in 2014.
    Was this policy approved by the Penn State Trustee Board.
    If so , what was the date of approval
    If not approved by the Board, when was it adopted by the Finance/Bursar’s office

  • 2. Tina Hay  |  May 9, 2017 at 6:58 pm

    That’s a question that’s outside of our area of expertise. You might want to contact the Bursar’s office: https://www.bursar.psu.edu/question.cfm.

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