October 15, 2012
Letter from the Chancellor
Dear Dr. Hicks:
Thank you for your letter of September 25, 2012. After a review of your request for binding arbitration, the Pennsylvania State System of Higher Education (PASSHE) must decline your offer. Under the provisions of PASSHE’s enabling legislation, Act 188, the Board of Governors and I have fiduciary and legal duties to assure that the system is operated in a transparent and fiscally responsible manner. We believe it would be improper to delegate those responsibilities to a third party arbitrator who does not have the responsibility or duty to consider the financial implications of their decisions and who is not obligated to take into account the interests of Pennsylvania taxpayers or the long-term effects of those decisions on the Commonwealth or PASSHE.We also considered the following in making our decision:
- Based on our ability to reach agreements with five of our bargaining units, we remain committed to the negotiating process.
- We fully endorse our proposal presented at the October 5th bargaining session which contains the following elements:
- Salary increases consistent with the Commonwealth pattern established with the AFSCME bargaining unit as well as step increments for faculty moving up the salary schedule, annual cash payments for faculty at the top of the pay range, and an increase in compensation for summer employment. In addition, the proposal provides summer, winter and overload compensation tied to the current academic year's salary structure.
- Moditifications to the PASSHE health care plan to make it more aligned with the PEBTF benefit plan. Membership in PEBTF includes 80,000 Commonwealth employees including the Governor and other executive branch personnel and almost 4,300 of 12,700 PASSHE employees.
- Realignment of pay for temporary faculty to better reflect regional rates at other higher education institutions while assuring that PASSHE universities remain competitive employers.
- Final phase-out of the distance education incentive payments originally inserted into an agreement in 1999. PASSHE distance education programs and online courses have significantly grown since that time, and far more faculty have the requisite skills to revise a course, which negate the need for the original concept.
- A proposal to shift to a defined contribution model of funding retiree health benefits for new hires only, similar to the model recnetly adopted by Penn State. This is necessary to begin to address the growing retiree health care liability, which currently is $1.4 billion.
- Offer to reopen the one-time retirement incentive program offered to eligible employees in 2010 if the successor collective bargaining agreement is ratified by APSCUF members by December 31, 2012.
PASSHE believes that the collective bargaining process is the best way to reach an agreement and we remain committed to reaching a fair and affordable contract.
Dr. John C. Cavanaugh