Pitt doing the unimaginable: planning a future without state aid
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.”