PRICOM, in relief effort, fails to provide cover
In February, 2006 Princeton announced that tuition for 2006-07 would be increased by 4.9%, from $31,450 to $33,000, and that other charges to students would be increased by similar amounts. The current rate of inflation is 4.4%. This means not only that Princeton is continuing to hit students for tuition that it doesn’t need, but also that it is doing so at a rate that is accelerating more than ten percent faster than the general cost of living. This is so blatantly out of the strike zone that I have been wondering who could be responsible. The answer turns out to be so Piersall-like that it is both preposterous and amusing, although deadly serious for people who have to pay the tuition bills. The ultimate responsibility for university spending and tuition appears to rest somewhere in the field between the president and the trustees. The preposterous and amusing part is that they get their cover from the "Report to the President", presented by The Priorities Committee of the Council of the Princeton University Community ("PRICOM"), dated January 13, 2006, and this committee is openly composed of people who are either disqualified by conflict of interest or unqualified by lack of expertise, or both. The committee is chosen by the council, which is dominated and controlled by the university administration and faculty. The committee has 17 members, each of whom comes from one of three groups—three members are from the university administration; eight members are from the university faculty, and the remaining six members are university students. The 11 members who are either faculty or administration officials have obvious conflicts of interest because the constituencies that they represent benefit personally and directly from higher budgets (much, or most, of the increased university spending is paid to them). The 14 members who are either faculty or students lack the expertise needed to make cost and pricing decisions for the megabusiness that Princeton has become. None of the committee members chosen from the faculty is in the economics department, or from any similar discipline. Their academic departments are: Civil Engineering, Art, Psychology, Biology, Classics, Music, and Sociology. None of the committee members chosen from the student body (two undergraduate seniors, a junior, and a sophomore, plus two graduate students, one in Plasma Physics and the other in Public Affairs) are economics majors, and even if they were, they would be, at this point in their lives, far short of the training and experience needed for the function assigned to this committee. Not a single member of the committee is a Princeton alumnus (or parent) who has experience with a major accounting or consulting firm, an investment banking or advisory firm, a financial planning firm, or a corporate, non-profit, or governmental treasury department. There are thousands of such people, and hundreds of them would be willing to serve on this committee without pay. but none have been invited. The reason is obvious. The committee is a sham, and intentionally so, because its purpose is to act as cover for the bloated budget and indefensible tuition. That cover would not be provided by a committee comprised of independent and qualified people.
Call to the bullpen
The call is to all of the individual members of the Priorities Committee, not very visible out there in the dimly lit reaches of the ballpark, but you know who you are, particularly the rookies, the student-members. Please correct me, or dispute me, by posting comments to this blog, and please include answers to these three questions:
(1) What is the maximum additional revenue that could be generated by the 4.9% increase in 2006-07 tuition that you recommended?
(2) What was the amount of reinvested return on the endowment last year?
(3) What jeopardy would the endowment have confronted if the maximum additional revenue generated by your recommended increase in tuition had been provided by reduced endowment reinvestment instead?
A few walks to the mound will give you time to loosen up your answers, but if any of you declines to play, or answers any of the questions incorrectly, you’ll be back on the bus to the bad bounces and cheap motels in the minor leagues.
