March 6, 2008

Spitzer Pushes $4-Billion Endowment Plan for New York's Public Universities

The campaign for the creation of a $4-billion endowment for New York’s public-university systems is building steam. Gov. Eliot Spitzer, a Democrat, touted the plan today during a conference call with presidents and trustees from the State University of New York and City University of New York systems.

Governor Spitzer has discussed using the state’s lottery to help pay for the endowment, which he has said would result in an initial annual yield of $220-million. The university systems could hire 2,250 faculty members with that money, system leaders have said. The systems have often struggled with unstable finances and small reserves, particularly given their huge enrollments. For example, SUNY has an endowment of $1.1-billion and a total enrollment of 427,398.

“Let’s see if we can make this happen,” Governor Spitzer said on the call, adding that he needed help from university leaders to sell the plan.

The new endowment would be a boost for SUNY’s next chancellor. The university has begun the search to replace Vice Adm. John R. Ryan, who resigned last year. —Paul Fain

Comments

1. This is a pretty creative way of helping public universities — Governor Spitzer deserves a lot of credit for thinking of ways to help public institutions when state budgets are tight.

   R. Cross

   — Ray Cross    Mar 6, 04:15 PM    #

2. The Lottery has worked well as a funding source in Georgia. Not a bad way to go…

   — Jeff Schantz    Mar 6, 04:38 PM    #

3. Here’s a radical idea: How about building an endowment through alumni fundraising, rather than hitting up the taxpayers for it? If they have half a million students currently enrolled they surely must have a couple million alumni/ae, so raising a billion shouldn’t be too difficult. Or is a SUNY education so unimportant that no alums will cough up the dough?

   — J. Ward    Mar 7, 03:48 AM    #

4. Governor Spitzer’s proposal to upgrade New York’s public universities is welcome news, but his ideas need a reality check. The governor’s proposed $4 billion endowment would pay out anually only about $3M per campus, or $500 per student. By contrast, Princeton University’s endowment pays out annually about $80,000 per student. New York deserves a first-class public university system, but that will not happen so long as the campuses are hamstrung by a bloated centralized bureaucracy, deteriorating physical plants, and chronic underfunding from the state.

   — Jim Garland    Mar 7, 08:48 AM    #

5. As the mathematicians say, the lottery is just a tax on people who do not understand probability.

   — J. Ward    Mar 7, 11:41 AM    #

6. Although as a SUNY professor, I love having money thrown at us, the point about alumni giving is a good one. Oddly, offering a low price education does not seem to create the gratitude that either a high priced one or a free one does. Few of my students realize that NYS picks up much of the tab and that they are getting much more than they pay for. Still, most campuses are trying to improve on the type of alumni relationships that eventually generate cash.

   — Bruce Leslie    Mar 8, 06:04 AM    #

7. Lottery funds that go to an endowment are funds that will have to be replaced by tax dollars to fund K-12 education going forward. It’s a sham.

   The State already pays $2.5 billion annually for SUNY’s capital programs. These costs are paid directly by the State and do not show up as a cost to SUNY’s operation. The net impact is that each and every SUNY student receives, on average, over $13,900 per year, per student without any “need test” whatsoever. Many wealthy families, in effect, send their children to SUNY while the difference between cost and tuition is made up through taxpayer dollars.

   So, wealthy students attend SUNY on the cheap; will they expect less pay upon graduation? Will they work for the State for less? Since they graduate with less debt will their increased disposable income upon push up the prices of rentals for all, including private school grads who graduate in far more debt? Where is the balance? Where is the fairness?

   If SUNY/CUNY want an Endowment have them charge market rates for tuition based upon true costs with needed students receiving financial assistance. The increased income should finance an endowment.

   Go to Pg 6 of the 2006 SUNY Annual Financial Report (http://www.suny.edu/templates/suny/sharedfiles/2006AnnualFinancialReport.pdf). The Report indicates debt service paid by the State for SUNY facilities was $2,460,000,000 in 2006:: “debt on education facilities is paid by the State in an amount sufficient to cover annual debt service requirements”. The impact of this annual payment is that each full-time student at SUNY, regardless of need or parental income, receives off-radar ”tuition assistance” averaging $13,914 per year, per student from the State coffers . Accounting for these operational costs in an annual report rather than assigning such costs to their respective SUNY campuses is misleading and provides non-transparent “tuition assistance” that has no relationship to parental wealth or a student’s ability to pay. The result is that students and families of means receive heavily subsidized education by the State even though there is an absence of need which is counter to applied public policy. In addition, from a managerial perspective, there is little pressure for cost containment when the single largest cost component is omitted from the cost structure.

   Page 7: 2006 SUNY fulltime undergrad & grads:………176,800
   Page 7: 2006: tuition and fee income………….$ 880,000,000
   Page 6: 2006 State Aid………………………….$2,460,000,000
   ………..Assistance per student = $13,914
   ………..$2,460,000,000 :/: 176,800 students
   Page 6: 2006 state, local & private grants……$ 636,000,000
   Page 8: 2006 Costs of Operation……………….$7,000,000,000
   Page 10: “debt on education facilities is paid by the State in an amount sufficient to cover annual debt service requirements”. In short, the educational facilities at SUNY—classrooms, administrative buildings, research labs, gymnasia, etc. are paid for by the State. In contrast, at a private university these costs are paid for by the institution itself and thus included in the cost of operation.

   — Mike    Mar 9, 11:14 PM    #

8. lol he has to pay for it

   — Spanky Context    Mar 11, 03:42 PM    #

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