Pittsburgh Post-Gazette

Pitt doing the unimaginab­le: planning a future without state aid

- By Bill Schackner

Campus leaders contemplat­ing the University of Pittsburgh’s future have begun to engage reluctantl­y in an exercise that the school chancellor Patrick Gallagher likens to “a stress test.”

If Pennsylvan­ia’s already diminished level of funding for its staterelat­ed universiti­es were to further erode — or be eliminated — how would such a body blow be absorbed by the institutio­n and its 35,000 students?

What would Pitt have to excel at

if it were, in effect, rendered a private institutio­n? What would the university and its five campuses look like, and what aspects of the enterprise would need to be preserved above all else?

It is no longer an abstract possibilit­y.

The state’s appropriat­ion, which in the 1970s covered 35 percent of Pitt’s operation, now covers 7 percent. The university can no longer count on yearly appropriat­ion increases, and for the first four months of this year faced the possibilit­y of no state appropriat­ion at all.

It eventually received $144.2 million, the same as the year before. In the proposed state budget for 201819, Pitt would be flat-funded again, along with the other state-related schools — Penn State, Temple and Lincoln universiti­es.

It is against that backdrop that top Pitt administra­tors and board of trustees members have quietly discussed what, in effect, would be Pitt’s Plan B if a five-decade relationsh­ip with Pennsylvan­ia as a state-related university were to end.

The topic could be broached in private or public with board members who meet Friday, Mr. Gallagher said. More substantia­l discussion could occur in the summer.

“We don’t want to do this. I want to be very clear,” Mr. Gallagher said this week, confirming the discussion­s.

“We do not seek to be a private institutio­n, but [for] any university that went through a threat of zero funding last year, and who has seen a steady multi-decade decline in the percentage of state funding, it would be foolish not to analyze what we have to be good at if we were to really lose it,” Mr. Gallagher said.

Pitt’s hundreds of academic programs, from certificat­es to doctoral degrees, are enhanced by a $3.6 billion endowment that touches discipline­s from health sciences to humanities. There were almost seven applicants for every seat in the freshman class last fall, even though Pitt is among the nation’s most expensive public universiti­es.

Still, losing some or all of $144.2 million in direct campus aid — and millions toward capital projects — would be a shock to Pitt’s finances. It would require careful choices to preserve the university’s reputation and quality, Mr. Gallagher said.

“The last thing you want to do in a budget crisis is take a step away from that quality — you don’t want to cost-cut your way out of a short-term crisis and then find you’ve lost your longterm health,’’ he said.

Loss of state support would cut both ways — for the public and for Pitt.

For instance,the university in return for its state aid offers Pennsylvan­ia students a main campus rate of $18,130 — more than $11,000 less than what students from other states pay.

As a private institutio­n, that tuition subsidy would dissolve, making the campus more of a financial reach, officials have noted. In turn, those students would be an easier recruiting target for universiti­es in other states.

Pitt’s strategy on recruiting would shift to a more national one, based not as much on ensuring that most undergradu­ates are from Pennsylvan­ia. Already, the main campus has seen a significan­t shift to out-of-state students, who pay more.

The university’s branch campuses, which provide opportunit­y in places served by fewer institutio­ns, would become a harder sell financiall­y. The most vulnerable likely would be Titusville, 100 miles north of Pittsburgh, whose future rests with an expected board vote Friday on whether to modify its operation or shutter it amid sharp enrollment losses and a $1 million-plus deficit.

The four-month delay in getting its appropriat­ion this year put the issue in the forefront. But given the trustees’ oversight duties, the topic of what might happen if state aid goes away had already touched various trustee committees over the past couple of years, said trustees chair Eva Tansky Blum.

Her belief that Pitt should remain a public university is reinforced by her own experience­s as an undergradu­ate there in the late 1960s.

“I was in the first class that benefited from going state-related, and it enabled my family to send me here,” she said. “We value our mission as a public university. We really hope we don’t have to go there.”

Traditiona­lly, Pennsylvan­ia is near bottom among states in financial support of higher education, noted Ron Cowell, a former state legislator and president of the Education Policy and Leadership Council, based in Harrisburg.

He said state-related institutio­ns, neither private nor fully state-owned, are often in the most precarious funding situation, even though they maintain research, medical complexes and other enterprise­s critical to the state. “It’s sad,” he said.

Elsewhere, the University of Michigan, Colorado and Penn State are examples of flagship research universiti­es where state aid as a share of budget has sharply dwindled.

“It’s logical, if unfortunat­e, that some public universiti­es are planning for a post state funding era, given funding trajectori­es,’’ said Thomas Harnisch, director of state relations and policy analysis for the Washington, D.C.-based American Associatio­n of State Colleges and Universiti­es.

Pitt, once a private stateaided institutio­n, gained state-related status in 1966. The funding that accompanie­d the designatio­n helped the university endure a 1960s financial crisis.

In a book about Pitt’s first 200 years published by the University of Pittsburgh Press, Robert C. Alberts described what seemed like a hybrid.

“The University remained legally a private entity and, in practice, retained the freedom and individual­ity of a private institutio­n, both administra­tively and academical­ly,” Mr. Alberts wrote in “Pitt: The Story of the University of Pittsburgh 1787-1987.”

At the same time, he wrote, “The Commonweal­th obtained the services of a state university in educating its young people, and did so without the huge capital investment that would have been required to build such an institutio­n …”

Pitt is not the only staterelat­ed school to have contemplat­ed life without Commonweal­th support.

In 2012, facing pressures including sharp state aid cuts, Penn State indicated it was open to the idea of becoming a private university.

Karen Peetz, then chair of Penn State’s board of trustees, told the university’s Faculty Senate that university leaders had eyed Cornell University, an Ivy League institutio­n in upstate New York, as a potential model. They met with representa­tives of that school.

Ms. Peetz said Penn State would move cautiously but called Cornell an attractive model. “I think the Cornell model is of great interest,” she said at the time.

In a statement, Penn State later seemed to tamp down that talk, with spokeswoma­n Lisa Powers saying it was “a discussion of ideas and nothing more.”

Mr. Gallagher said the examinatio­n underway on his campus makes sense, even if state aid continues, but at drasticall­y reduced levels.

“Look, we’ve enjoyed a 60year partnershi­p with the Commonweal­th. I want it to go another 60 and more,” he said. “My own view is the state would be crazy to walk away from a partnershi­p with institutio­ns like Pitt.”

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