Crunching the numbers behind Erie’s competing higher education plans | Fact Check

By: - April 17, 2020 6:30 am

ERIE, Pa. — When one of the state’s most powerful Republican state lawmakers voiced his concerns regarding the numbers in Erie County’s community college plan, the Capital-Star did an analysis and discovered several typographical errors.  

One error was found in projected student enrollment numbers of the original community college plan presented to the state in June 2017. Another was a $10 error in the estimated tuition costs of the second plan, submitted to the state in Dec. 2018.

“From the very beginning, the numbers that they put out are flawed. When you base the whole initial premise of a community college on flawed numbers, the financing is flawed going forward,” Scarnati, R-Jefferson, told the Capital-Star last month.

Of these errors, Erie County Finance Director, Jim Sparber, said that while “You hope you don’t see a typo in a document like this …  I can’t think of what else it would be.”

With that cleared up, the financials of the proposed community college and the already existing Northern Pennsylvania Regional College (NPRC), which was established with the help of Scarnati, and uses a hybrid of digital and face-to-face interaction to educate students in nine counties of northwest Pennsylvania —  can be compared. 

NPRC v. Erie Community College

Tuition rates for the Spring 2020 semester at NPRC are $185 per credit, according to the college’s website. 

“The tuition rate at NPRC is higher than Pennsylvania’s fourteen community colleges,” noted the Legislative and Budget Committee’s May 2018 report. “However, when estimating the average cost of student fees per credit hour … NPRC is in line with other community colleges, ranging from a low of $136 per credit at Lehigh Carbon Community College to a high of $216 per credit at the Harrisburg Area Community College.” 

Erie County’s 2018 college plan estimates tuition rates to be set at $125 per credit for year one with a gradual increase to $155 per credit by the fifth year. 

‘The whole … premise is flawed’: Scarnati questions the math on Erie’s community college plan

“The community college would remain the most affordable option in the region for post-secondary education with first-year tuition and fees projected at $3,528, or $1,012 less than the annual tuition and fees at the Northern Pennsylvania Regional College,” the Dec. 2018 plan reads. 

Funding for these two institutions comes from a number of sources. 

“The capital and operational costs of the college will be funded fully through a grant from the Erie Community Foundation and through gaming fund revenue,” according to the Erie County community college 2018 plan. 

“The revised plan represents a significantly lower capital and operational investment with the updated plan calling for $8.6 million less than previously projected,” Erie County Executive Kathy Dahlkemper  said last December. “The updated plan’s capital funding requirements could now be fully funded through the available $10 million in RACP money that is distributed annually.”

RACP is the Redevelopment Assistance Capital Budget Program, a grant program created by the commonwealth’s Office of the Budget, “for the acquisition and construction of regional economic, cultural, civic, recreational, and historical improvement projects.” It’s generally used to fund lawmakers’ pet projects.

Erie County applied for RACP funding of $2,619,244. As of March 10, 2020, no amount had been granted, according to state data.

Waiting Game: With state Board of Ed meeting looming, Erie County’s community college debate may soon be over

“So this notion that this money sits there and exists? It does not. It does not sit there and it’s (not) a guaranteed funding source for Erie County,” Scarnati told the Capital-Star. “It’s on the wishlist.” 

NPRC got a $7 million appropriation in the 2019-2020 state budget.

Community Colleges and Local Business

Both schools have the same goal; connecting with local businesses and organizations to determine degree programs that will give students the necessary skills for Erie’s shifting job market. 

Manufacturing makes up the largest economic sector in the city — nearly 20 percent. 

“The second biggest factor is health care and social assistance,”  Kenneth Louie, the director of the Economic Research Institute of Erie (ERIE) at Penn State’s Erie campus, told the Capital-Star. “Health care and social assistance produce, in recent years, about $1.5 billion and they account for just under 15 percent of total output.”

Erie County believes building a stand-alone community college will provide connections with local businesses and training for available jobs in the region.

“We have a skills gap that continues to grow as we move into a new economy,” Dahlkemper told the Capital-Star. “We’ve always been a manufacturing base. Many of those manufacturing jobs have been replaced by automation. So the manufacturing jobs that we have require greater skills. Again a great job usually for people and gives them a good wage, but they need the skills to get there.”

Dahlkemper continued: “(Students are) going to be able to get a certificate or a two-year degree or an accreditation through the community college and fill those empty jobs that are out there right now. I could go on and on in all sorts of areas.”

At NPRC, “It’s a total collaboration with business and industry,” Scarnati told the Capital-Star. “Their board just put on an individual from Erie County and so representation of Erie County is on the board. They collaborate with all the businesses on what curriculum they want. It’s not just a stand-alone community college that does that. NPRC is doing it.”

The Verdict

To determine if Scarnati’s accusation that a stand-alone community college would be “fiscally irresponsible,” two types of questions must be asked, said Louie.

“The first question is: Are those estimates of cost to get the college up and running, are those reliable? Are they accurate?,” Louie told the Capital-Star. 

If one were to determine Erie County’s capital and operational cost estimates to be fairly accurate, could the second question be asked: Is this model sustainable and financially responsible? 

The economic impact study conducted by Economic Modeling Specialists International (EMSI), an economic modeling company, reviewed the estimated costs and published their study on the proposed Erie County community college in Sep. 2019.

Louie, who provided notes on the study when it was released last year said: “Overall, the methodology used by EMSI to prepare their report …  appears to be sound.” 

The economic impact study by EMSI “relies on certain assumptions,” Louie continued in his analysis of the report. 

“For example, in estimating the impact of the capital spending for the proposed Erie County Community College, the EMSI model assumes that the college’s spending patterns on construction or renovation, equipment, and other needs are similar to national average spending patterns on those three categories of expenditures by junior colleges across the country. Likewise, in estimating the impact of the operations spending (including payroll) by the proposed community college, the EMSI model assumes that the spending patterns of college personnel are similar to those of the average consumer in the entire economy,” Louie noted in the 2019 study.

Though there is “no reason to doubt the accuracy or plausibility of these or other assumptions used in the model,” it is important to note that these are all estimates, Louie told the Capital-Star.

Louie’s major conclusion of the economic impact study was, “The EMSI report provides a persuasive argument that the proposed Erie County Community College will generate substantial economic benefits for the local economy.”

The Pennsylvania State Board of Education decided on Mar. 12 to postpone the public hearing scheduled for Mar. 18. Both sides will now have to wait for a final decision. 

Erie County has been awaiting approval since June 2017, when their initial plan was proposed. 

The hearing has not been rescheduled as of publication.

“It is my hope that as soon as the health concerns related to COVID-19 are stabilized the board will make the rescheduling of this hearing a top priority,” Dahlkemper said in a March 12 statement.  “The people of Erie County have been waiting nearly three years for a vote and are deserving of a decision as soon as safely feasible.”

Correspondent Hannah McDonald covers Erie and northwestern Pennsylvania for the Capital-Star. Follow her on Twitter @HannahMcD0nald.

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