When Bell Bottoms Were Cool…And PSU Charged $675

I just sent the following to a student at Penn State who is writing a paper on Gov. Tom Corbett’s proposed cuts to the subsidies our public universities receive from taxpayers.  I’m posting it here because he’s not the only one who’s seen (and shouldn’t be fooled by) Penn State’s apparent nostalgia for the 1970s:

Thanks for reaching out to me and to the Commonwealth Foundation.  I appreciate the thoroughness of your questions, and I hope you understand that my schedule won’t permit me to answer every single one.  What I think would be most helpful would be a respectful challenge to an underlying motif in many of Penn State’s public statements—and, if I’m reading correctly, in some of your questions.  And that’s the idea that the fact that Penn State’s subsidy from taxpayers covers less of its general funds budget than it did in the Seventies indicates a revenue, not a spending, problem.

Let’s just do some quick, back-of-the-envelope math.

Penn State’s budget website reports that its total subsidy from taxpayers in 1970 was $69,163,000.

The April 2002 “Report of the Tuition Task Force” says the “general funds budget supports most of the teaching, research, and service activities as well as academic and administrative support functions and maintenance of the physical plant” and that at that time, “the appropriation represented about two-thirds of the general funds budget.”  That means the general funds budget at that time was about $103,744,500.

The “Tuition History” page on the budget website does not go back to 1970, but an appendix to the Tuition Task Force report says that in that year, lower division tuition at the University Park campus was $675 for a year.  Yes, you read right.

And the Fact Book says that in 1970, Penn State’s total enrollment was 48,065.

Fast forward to today, and we see that the taxpayer subsidy is now $346,999,000, the general funds budget is now $1,888,867,000, the same type of tuition is now $14,412, and total enrollment is now 87,309.

To account for inflation, let’s convert those numbers to 1970 dollars.  That makes the taxpayer subsidy $60,248,540, the general funds budget $327,959,120, and the tuition $2,502.

Yes, that means the taxpayer subsidy has decreased by about 13 percent in real terms.  But Penn State’s increases both in spending and in tuition dwarf that decline.  The general funds budget has more than tripled in real terms, far outstripping growth in enrollment, and tuition has also tripled in real terms.  Remember also that these days, many Penn State students are paying that tripled tuition for more than the expected four years, given the university’s graduation rates.

Put different, Penn State is now spending $3,756 per student per year on “teaching, research, and service activities as well as academic and administrative support functions and maintenance of the physical plant” as opposed to about $2,158 in 1970.

As former state Deputy Secretary of Education Michael Poliakoff and I said in an op-ed, when you look at the full picture of Penn State’s spending, it begs a question:  Are Pennsylvania taxpayers not being generous enough, or is the university not spending their money as wisely as it should?

I would suggest to you that there is no reason that in the Digital Age, it should cost nearly twice as much to educate a student as it did when bell bottoms were cool.  Looking at that kind of spending, there is every reason for Pennsylvania taxpayers to have cut back on their generous subsidy to Penn State since 1970—and to do again now, as the Governor has proposed.  Harrisburg is broke, with a $4 billion budget gap.  Taxpayers are hurting already.  A tax increase would be disastrous in this economy.  And Penn State has, in addition to soaking students and parents through these tuition increases, grown its administrative staff per 100 students by 70.8 percent between 1993 and 2007, admitted it doesn’t fully utilize its buildings, bragged to the higher education press about getting rid of 8 a.m. classes, and made optional many of the general education courses that are both cheapest and most important.