February 10, 2011

Testimony: Higher Education

Source: NYSUT Legislative Department


The 2011-2012 Executive Budget proposes a devastating cut of 10 percent to SUNY, CUNY and New York’s community colleges, which are already reeling from three straight years of budget reductions. In testimony on Thursday (see below), NYSUT Executive Vice President Andrew Pallotta told the state Senate Finance and Assembly Ways and Means committees that, if enacted, the budget proposal would jeopardize academic quality and access to higher education, and would wreak havoc on already-underfunded campuses.

Testimony of Andrew Pallotta, Executive Vice President, New York State United Teachers, to the Senate Finance Committee, John A. DeFrancisco, Chair, and Assembly Ways and Means Committee, Herman D. Farrell, Jr., Chair, on the Proposed 2011-12 Executive Budget for Higher Education

February 10, 2011

Senator DeFrancisco, Assemblyman Farrell, honorable members of the Legislature and distinguished staff, I am Andrew Pallotta, Executive Vice President of New York State United Teachers (NYSUT). NYSUT represents more than 600,000 teachers, school-related professionals, academic and professional faculty in higher education, professionals in education, in health care and retirees statewide. My testimony today represents the concerns of 68,000 faculty and professional staff who work in colleges and universities across New York state. These include the members of United University Professions at the State University of New York, the Professional Staff Congress of the City University of New York and the faculty and staff at nearly all the SUNY community colleges in this state.

I am joined today by Dr. Phillip Smith, President of United University Professions (UUP), and by Dr. Barbara Bowen, President of the Professional Staff Congress (PSC). You will hear from both Dr. Smith and Dr. Bowen concerning the 2011-12 Executive Budget in a few moments.

Thank you for convening these public hearings and for the opportunity to testify today.

While there is no doubt that our state continues to face enormous fiscal challenges, NYSUT and our higher education affiliates are deeply concerned over the continuous deep cuts to public higher education that are proposed in the 2011-12 Executive Budget.

We recognize that everyone must sacrifice their fair share to enable this state to get through this economic crisis. It is clear however, that when you look at the numbers, public higher education has paid more than its fair share during the last three years and in fact, has been disproportionately cut compared to any other state operations.

I'm here today to say, enough is enough. Our public higher education institutions simply cannot afford to continue to take these deep and disproportionate cuts.

It is clear that we have forgotten the important role that our higher education institutions have played in the history of our great nation and state. History has taught us that significant investments in higher education have a positive impact on our economy.

After the Civil War, our nation built a network of land grant colleges that helped transform our economy, extending access to higher learning to the masses, giving a new stature to the practical subjects of engineering and agriculture, and enabling America to lead the world through the Industrial Revolution. After World War II, Congress enacted the GI Bill, opening the doors of opportunity wider than ever, boosting the nation's productivity, and setting off the longest economic boon the world had ever seen.

There was a time when New York understood those lessons, and applied them. Over the course of nearly two centuries, under a succession of leaders, New York built a system of higher learning second to none. We developed the nation's first and third largest public university systems in SUNY and CUNY. We also invested more in need-based student aid than the next three states combined and provided levels of state operating aid to SUNY and CUNY which enabled them to thrive.

Lately however, we seem to have become shortsighted and have forgotten those lessons. While we keep hearing that public higher education is an integral part to our state's economic success, we routinely and systematically cut these institutions off at the knees. Since 2008, SUNY, CUNY and our community colleges have been cut by nearly $1 billion.

The 2011-12 Executive Budget continues to bleed SUNY and CUNY. SUNY state-operated campuses (excludes statutory colleges) are cut by $100 million on a State Fiscal Year (SFY) basis which would increase to $131 million if applied on an academic year basis. In addition, the SUNY hospital subsidy of $129 million is completely eliminated along with an accelerated Disproportionate Share (DSH) payment of $25 million for a total impact of $154 million on our teaching hospitals. CUNY's senior colleges are cut by $70 million on a SFY basis which increases to $83.2 million when applied on an academic year basis. In addition, an $11.9 million cut that carries over from the state's current-year deficit reduction is proposed for a total state aid impact on CUNY's senior colleges of $91.5 million.

The proposed cut to SUNY and CUNY community colleges is $46.3 million on a SFY basis which increases to $62 million on an academic year basis. This represents a $226 cut per full-time equivalent student lowering the level of state base aid funding from $2,260 per student to $2,034 per student.

In total, the proposed cuts for our public higher education institutions equate to $438 million (academic year basis). If we accept the publically repeated notion that SUNY and CUNY are an integral part of our state's economic success and that they are "economic engines" for our state, does it not raise the question, "do these cuts make sense?" By proposing yet another deep round of cuts to public higher education, aren't we doing the exact opposite of what a smart "job creating" economic development strategy calls for?

If enacted, the proposed cuts to SUNY and CUNY would further exacerbate the harsh impacts that have occurred over the last three years which have limited student access and eroded academic quality. More academic programs will be eliminated, class sizes will continue to rise and graduation rates will continue to decline and/or be delayed. Does that sound like a recipe for economic success?

We are also very concerned with the elimination of the entire state subsidy to SUNY's three teaching hospitals. Without state support, it is questionable as to whether these institutions can remain solvent. These institutions are the only state entities that pay their own collective bargaining and fringe benefit costs and the debt service on bonds issued for their capital projects. They provide a high level of clinical care to the people in their communities. They are especially vital to the large indigent population that they serve who have no other alternatives for health care.

Without them, the current level of unique, critical life-saving health care services not readily available at other hospitals will be jeopardized, first-rate medical care to all citizens of New York – regardless of their ability to pay – will be compromised, and the quality of graduate medical education and cutting-edge research will be diminished. We urge you to restore this funding.

We are also deeply concerned over the proposed cuts to our community colleges. Does cutting community college base aid at a time when they are experiencing record enrollments make sense? Do cuts make sense especially during a time of high unemployment when the opportunity for retraining and acquiring additional skills has become imperative? Is making the entry point to a higher education for hundreds of thousands of people less accessible because campuses are forced to cap enrollment a wise decision? We are already seeing these things happen because the state has not lived up to its end of the bargain in paying its fair share of funding for these campuses. Every year, the budget not withstands the maintenance of effort provisions of the education law and provides less funding to these institutions than what is required by statute. As a result, class sizes have dramatically risen and quality has eroded. These campuses have been cut three times since December 2009 totaling $95.3 million (academic year basis). We urge you to reject the proposed Executive Budget cuts for these vitally important institutions.

Simply put, these cuts are unsustainable and are counterproductive to achieving our goal of creating jobs and improving our state's economy. Instead of providing the necessary resources to SUNY and CUNY that students need to succeed, the Executive Budget provides the same old worn-out ill-conceived University management flexibility proposals.

NYSUT strongly opposes the Executive Budget proposal to remove accountability and oversight in areas such as leasing of state-owned campus proprieties, procurement of contracts for services, and the establishment of public-private joint ventures and partnerships.

With respect to joint ventures, despite repeated requests, SUNY has provided no evidence to demonstrate that public-private partnerships will produce any real revenue. In fact, the Comptroller of the State of New York issued a report recently on public-private partnerships which noted that there are real risks associated with these types of agreements. The report states that "public-private partnerships may underestimate the value of public assets and in doing so, short-change the public" and they "may create unattainable expectations when the private entity promises more than it can deliver or contracts fail to detail the private partner's obligations adequately".

Such has been the case with SUNY which has entered into a number of these partnerships over the past 10 to 15 years, and rather than producing additional revenue, these ventures have created budget shortfalls for their campuses. Public-private ventures at Farmingdale, Morrisville, and Binghamton are but a few examples.

Moreover, the leasing of state-owned assets located on SUNY campuses, without full legislative approval, is both inappropriate and unnecessary. SUNY has not provided one example where existing legislative oversight has been a detriment. In addition, SUNY has never produced any analysis to show that leasing land located on SUNY campuses generates significant revenue for academic purposes. Nor has it shown that the current approval process has, in any way, hindered the university.

The leasing of campus properties to private entities for corporate purposes removes opportunities for future expansion of academic programs and services. These are publicly owned properties and should not be used for private purposes without full public review and full legislative approval.

The claim that revenues from public-private partnerships and the leasing of land will help create 2,200 full-time faculty, 7,000 campus staff jobs and 34,000 construction jobs is completely unrealistic. SUNY has not provided any analytical basis to demonstrate that this potential exists.

Moreover, the proposal provides authority for the financing and construction of capital facilities for not-for-profit corporations affiliated with the University by the Dormitory Authority (DA) or Industrial Development Agencies (IDAs). Any consideration in providing increased flexibility in SUNY operations should be clearly defined to ensure accountability and public oversight. The flexibility authorized in this proposal is overly broad by granting wholesale authority for the financing and construction of all capital facilities for any not-for-profit affiliated with SUNY. In addition, the legislation authorizes the sale, lease, transfer or conveyance of state-owned property by SUNY to a not-for-profit entity thereby allowing for the privatization of state assets without gubernatorial or legislative oversight. NYSUT strongly opposes granting this authority to SUNY.

This overreaching authority will serve as an incentive for SUNY to create or partner with more legally separated not-for-profit entities thereby jeopardizing public employee jobs and further blurring the line of its public mission with that of the private sector. In addition, authorizing IDAs to engage with SUNY on these types of transactions will take away needed state oversight and put it in the hands of local entities. SUNY is a state institution.

Campus foundations and affiliated private or not-for-profit organizations have grown dramatically at SUNY in recent years entering into functional areas (such as dormitories) previously administered, operated and staffed by SUNY proper, using public employees. SUNY's increasing reliance on these private organizations is anti-labor. Functions which should be performed by state public employees are being outsourced. Moreover, the revenue from these operations accrues to the foundations and is not necessarily available to support SUNY's academic mission. Importantly, there is a complete absence of any public accounting or transparency with respect to the operations of these private corporations.

Campus foundations were established to support the core mission of the University to provide an affordable, accessible, quality education. In recent years however, these funds have also been pledged to purchase property while at the same time academic programs, faculty and staff jobs have been threatened due to state budget cuts. In addition, the South Hampton campus at Stony Brook has been shut down while there are more than enough funds in the Stony Brook Campus Foundation to avert this action. We believe that this is inappropriate and demonstrates that the state needs to provide more oversight of these entities.

The authority to enter into public-private partnerships, lease state land and enter into contracts for services will provide little if any revenue for SUNY and will only serve to privatize our public university system. I submit to you that we need more oversight of SUNY, not less. These proposals are ill-advised and are no substitute for state investment in public higher education. For these reasons, we urge you to reject these flexibility proposals.

In conclusion, we fully understand the state's fiscal situation and we are not asking for increases in operating aid to SUNY and CUNY. We are only asking to stop the bleeding of these institutions. We are asking for restoration of the Executive Budget cuts given the disproportionate cuts levied to SUNY and CUNY in prior years and given the important roles they play in providing business and industry with a highly educated, skilled and trained workforce. Cuts to higher education are counterproductive and will only hurt our state's economic success.

Budgets are all about priorities. It's time we make SUNY and CUNY a priority in this state.

Thank you for the opportunity to testify today. I will now turn it over to Dr. Smith who will be followed by Dr. Bowen.



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