!"##$%&'(#)(*$+,-(-"-Related Institutions of Higher Learning: Moving the Commonwealth Forward

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1 !"##$%&'(#)(*$+,-(-"-Related Institutions of Higher Learning: Moving the Commonwealth Forward!"#$%&'"()%*'++,&-."+/"0,%123(%,4"4'-related universities 5 Penn State University, the University of Pittsburgh, Temple, and Lincoln 5 provide outstanding higher education to 170,000 undergraduate and graduate students, 150,000 of whom are Pennsylvania residents. These four state-related institutions also represent the largest non-governmental employer in Pennsylvania, with more than 68,000 full- and part-time employees (faculty and staff) throughout Pennsylvania. Thus, in addition to the role these public institutions play in educating the next 6'+'("4/2+%21%*'++,&-."+/"0,%-'"7'(,)%4$'&%"('%8'&%9-"&'(,%"+7%'#2+2:/#%'+6/+',%/+%4$'/(%$2:'% communities and in the state. When taking into consideration tuition, combined with spending by students, faculty, staff and visitors, these institutions have a far-reaching, powerful economic impact on the Commonwealth. ;$'%#(/4/#"-%/:9"#4%4$','%/+,4/434/2+,%$".'%2+%*'++,&-."+/"0,%'#2+2:&%/,%7'4"/-'7%2+%4$'%"44"#$'7% chart (Attachment 1). Pen+,&-."+/"0,%93<-/#%(','"(#$%3+/.'(,/4/', attract more than $1.7 billion dollars of research funding annually from outside of the Commonwealth. Those research dollars alone support nearly 60,000 jobs. The combined research force of these institutions is a major asset to Pennsylvania on the national and international level. In pointing the way toward economic growth and recovery, as well as providing top-notch education to countless students, the state-related universities represent a tremendous investment for the state and its citizens. Economic Impact: As primary providers of high quality higher education in the fields of science, technology, engineering, and mathematics =>?;!@AB, the state-related institutions have helped to advance the Commonwealth and made vital contributions to its economy. These fields provide the basis for /+7/./73"-,%42%"7."+#'%"+7%,3##''7%/+%4$'%>+'C%'#2+2:&DA%%E'&2+7%43/4/2+)% the economic impact of these institutions includes direct and indirect spending for goods and services by its employees, students and visitors and research expenditures in excess of $13 billion. These dollars support local business, which employ local individuals to sell goods and provide services to the state-related universities. In addition: Penn State has achieved the ranking of ninth in the nation in total science and engineering research expenditures among American universities 5 this year totaling nearly $800 million, including over $100 million annually in private industry-sponsored R&D. As th'%,4"4'0,% Land Grant University, Penn State is positioned to lead research efforts related to Marcellus Shale, with over 500 researchers with extensive expertise in energy and the environment. In "77/4/2+%42%4$'%#(/4/#"-%,3992(4%*'++%?4"4'0,%F2--'6'%21%G6riculture and Cooperative Extension provides to the agricultural and forest industries, it has for the past five years +",-'*'

2 provided landowners and communities with unbiased information regarding the immediate and long-term opportunities and challenges surrounding the development of shale gas and other energy resources in Pennsylvania. Pitt ranks in the Top 10 nationwide among university recipients of federal science and engineering research awards. Pitt has taken a leadership role in creating new business opportunities out of the ideas that emerge from the lab and the classroom. In the last seven years, Pitt technologies have formed the basis of more than 40 new start-up companies in Pennsylvania that have created employment opportunities and generated tax revenues for local and state coffers. During the past three years, Pitt has averaged $140.7 million in construction projects annually, which generated 1,300 jobs and $51 million in personal income, including new construction for facilities that benefit and are available to residents of 4$'%$2:'%#2::3+/4/',%2+%"--%1/.'%21%*/440,%#":93,',%=,3#$%",%4$'%*/44-E("712(70,%E-"/,7'--% Hall and Pitt-H2$+,42C+0,%Pasquerilla Performing Arts Center, which serve as cultural centers for the surrounding areas); Temple University directly employs nearly 7,500 Commonwealth residents, and in the last seven years, Temple capital projects provided 14,000 jobs in construction and related services for the state. Temple University accounts for $3.2 billion of economic activity across Pennsylvania annually. The University recently embarked on a campus development plan called Temple 20/20 based on the Academic Strategic Compass which will transform the North Philadelphia campus. Construction is underway on a new Architecture building and the renovation and expansion of Pearson and McGonigle Halls. Planning is underway for a Science Education and Research Building and a residential and retail complex which will both break ground in 2011; ;$'%1/(,4%21%4$'%+"4/2+0,%>I/,42(/#"--&%E-"#8%F2--'6',%"+7%J+/.'(,/4/',A%=IEFJB)%K/+#2-+% J+/.'(,/4&)%29'("4',%2+%"%:3#$%,:"--'(%,#"-'%4$"+%4$'%,4"4'0,%24$'(%4$(''%93<-/#%(','"(#$% universities, but it is no less important to the local economy of southeastern Pennsylvania, where, in addition to its Chester County campus, it also operates the Urban Center of Philadelphia, a job-training and employment opportunity hub in the inner city. Medicine/Health Care: The three public research universities (Pitt, Penn State and Temple) provide major contributions in the areas of medical training, research and health care. In this highly challenged economy, the companion strengths of these institutions are key to the role that $'"-4$%#"('%"-,2%9-"&,%/+%4$'%F2::2+C'"-4$0,%'#2+2:/#%,4"</-/4&%"+7%6(2C4$D%L2(%'M"mple: Temple University's School of Medicine, through the Keystone Institute for Translational Medicine, serves one of the most diverse patient populations in the nation, working to diagnose and treat diseases that disproportionately affect urban and rural Pennsylvanians, including pulmonary lung disease, diabetes, hypertension, obesity and specific cancers. In addition, Temple's School of Pharmacy recently announced that it will become a vital partner in the region's renowned pharmaceutical industry through the construction of the first integrated drug discovery center in the Greater Philadelphia area, which will nurture collaborative efforts with business and other academic institutions to expedite the research and development of new drugs; +",-'('

3 The Universit&%21%*/44,<3(6$%$",%<'#2:'%2+'%21%4$'%#23+4(&0,%-'"7/+6%(','"(#$%#'+4'(,%C/4$% FY 2010 research funding exceeding $737 million. These funds alone support more than 26,500 jobs and represent a return on investment of more than $4 for each $1 dollar invested in Pitt by the Commonwealth. Pitt is ranked fifth in the nation in terms of funding from the National Institutes of Health, and is world-renowned for its research in drug discovery,."##/+'%(','"(#$)%7/"<'4',%"+7%g-n$'/:'(0,%7/,'",'o Penn State College of Medicine and Penn State Milton S. Hershey Medical Center serve nearly 4.2 million people as the only teaching and research hospital in central Pennsylvania. Penn State Hershey is not only the largest provider of primary care physicians in the state, but also maintains the highest retention rate of medical school graduates who stay and practice medicine in Pennsylvania. With the addition of the new Cancer Institute and the current construction of a new free-standing Children's Hospital, Penn State Hershey will add another 1,300 high-paying, family sustaining jobs, thus expanding its position as the largest non-governmental employer in Central PA with over 9,000 employees. Appropriations: The recent appropriation history for the four state-related universities illustrates the very difficult funding environment faced by these institutions despite their positive impact on the Commonwealth. State funding for the four state-related universities has stagnated over the past ten years. The attached graph (Attachment 2) demonstrates that even during extremely difficult economic times, state spending in general, particularly in basic education, continued to grow at a very healthy rate, while funding for higher education was flat during this same period. Attachment 2 also shows that during a period of time when education spending and the overall state budget grew dramatically, higher education's share of the total education funding decreased considerably. The deficit currently facing the Commonwealth clearly is not a result of increased appropriations to the state-related universities. The resulting impact of this "lost decade" of funding for the state-related institutions of higher education has been well-documented. In order to preserve the quality of their programs =/+#-37/+6%7'6('',%4$"4%"('%#(/4/#"-%42%*'++,&-."+/"0,%9(','+4%"+7%1343('%'#2+2:&B)% *'++,&-."+/"0,%93<-/#%(','"(#$%3+/.'(,/4/',)%C'('%12(#'7%42%('9-"#'%4$'%,4"4'%13+7/+6%C/4$%$/6$'(- than-7',/('7%43/4/2+%/+#('",',d%*'++,&-."+/"0,%24$'(%+2+-research based public institutions chose to limit tuition increases, and are now being forced to eliminate numerous degree programs that they can no longer afford to offer. Both of these situations are a direct result of shifting funding away from public higher education. The state-related universities have only two sources to fund their annual operating budgets: tuition and Commonwealth appropriations. Other revenue sources, such as endowments, are restricted funds normally limited to specified purposes directed by donors that cannot be used for operating budgets. In the wake of flat Commonwealth funding over the course of the last ten years, tuition costs have increased significantly due to the continued increased costs (utilities, security and insurance rates, health care and related benefits, as well as an anticipated spike funding for the state retirement system for Penn State, combined with escalating price increases for technology and library holdings required by research universities). Although each university has instituted cost control measures 5 including a salary freeze in the fiscal year 5 they remain among the highest level of tuition rates for public universities in the nation. Any significant erosion of current appropriation levels would result in tuition and fee increases that +",-'.'

4 would significantly restrict access to the high quality education programs (including STEMrelated programs) +2C%"."/-"<-'%42%*'++,&-."+/"+0,%#/4/N'+,D The end result would be a negative 234#2:'%12(%*'++,&-."+/"%,437'+4,%"+7%12(%4$'%F2::2+C'"-4$0,%'#2+2:/#%1343('D The only other option would be a diminishing of the quality of programming offered at each institution 5 which would have a similar adverse affect on the quality of education programs available to Pennsylvania residents. The state-related institutions also rely on Commonwealth funding to supply numerous direct services to Pennsylvania citizens. With the impending loss of federal American Recovery and Reinvestment Act (ARRA) funds, the state-related institutions are at a critical point in time when ('+'C'7%/+.',4:'+4%/+%*'++,&-."+/"0,%93<-/#%(','"(#$%3+/.'(,/4/',%/,%',,'+4/"-%/+%2(7'(%42%8''9% high quality higher education opportunities available and affordable for Pennsylvania students and their families, and to preserve and enhance the vital economic engines that these universities represent. The positive economic impact, research prowess and intellectual capital generated by these research powerhouses cannot be taken for granted. The contributions in medicine, health care, energy research (including the Marcellus Shale), agriculture and national security are real but cannot be sustained without adequate and predictable Commonwealth investment. Although every sector has been affected by the struggling economy, the state-related research universities "('%./4"-%42%4$'%F2::2+C'"-4$0,%"</-/4&%42%C/4$,4"+7%4$','%7/11/#3-4%4/:',%"+7%42%4$(/.'%/+%4$'%+'C% high-tech economy. +",-'/'

5 Attachment !./0)&"+/0+!"##$%&'(#)(*$+!12&)3+4"$"(.35+6#)'".$)-)"$ The Pennsylvania State University, University of Pittsburgh and Temple University Student Data Total Enrollment (Fall 2010) Undergraduate Graduate/Medical/Law Enrollments in STEM Majors (Fall 2010) Engineering Other Programs (Excluding Education) Annual Degrees Awarded ( ) Associate Baccalaureate Graduate/Medical/Law Total (Rounded) 169, ,000 33,000 42,000 18,000 24,000 35,000 2,300 25,000 9,200 Employees 7 Total (November 2010) 68,000 Alumni Total (2010) 1,206,000 Alumni Residing in Pennsylvania 660,756 Financial Data (Fiscal Year 2010) Total Operating Budgets State Appropriation for Operations (Includes Federal Stimulus Funds) State Appropriation as a Percentage of the Total Operating Budgets Research ( ) Total R&D Expenditures Federal R&D Expenditures Industry-Sponsored R&D Expenditures Economic Impact 7 Total Operations (2008) $6.9 Billion $688 Million 9.8% $1.7 Billion $1.2 Billion $123.4 Million $13.44 Billion +",-'0'

6 Attachment 2 +",-'1'