University of Pittsburgh Trustees Approve 2008-09 Budget, Set Tuition Rates

PITTSBURGH—To meet the educational needs of its talented, ambitious, and growing student body, to further advance its position as an international center of pioneering research, and to sustain its long-standing tradition of public service contributions, the University of Pittsburgh Board of Trustees Budget Committee today recommended for approval and the Board's Executive Committee shortly thereafter did approve a $1.71 billion operating budget for the 2009 fiscal year.

That budget provides additional funding for academic and student life initiatives, enhanced job-placement support for graduating seniors, library acquisitions, research projects, and technology and infrastructure upgrades, as well as additional support for the University's ongoing and highly successful fundraising efforts. To support these investments in its mission and to offset a pattern of state support that has lagged far behind the rate of inflation, the budget also provides for tuition increases ranging from 2 to 6 percent.

As has been true for many years, the University's single-largest revenue source is research funding, which is budgeted at nearly $650 million for FY 2009. With a Commonwealth appropriation of less than $190 million, Pitt is attracting more than $3.40 in external support for every dollar of its appropriation, making the University one of the Commonwealth's best-leveraged investments. This external support not only funds Pitt's impressive portfolio of high-impact research but also supports thousands of local jobs.

The University's enviable position in this vitally important activity is reflected in federal research rankings. Based on the most current statistics available, Pitt ranks 6th among all universities in terms of the competitive grants awarded to members of its faculty by the National Institutes of Health and ranks 11th nationally in total federal science and engineering research and development support.

In commenting on the budget, Pitt Chancellor Mark A. Nordenberg said, "In virtually every area of activity, the pace of recent progress at the University of Pittsburgh has produced a story of unsurpassed success. We clearly have become an institution of choice within the critical population of potential students, with undergraduate applications to our Oakland campus increasing by more than 164 percent since 1995 and with enrolled students regularly claiming top national and international awards. We have climbed into the very highest ranks of this country's top research universities, with the ideas generated by our faculty members providing the foundation for the future economic strength of our home region in the 21st century's new knowledge economy. We regularly have set new records in our continuing quest for private support. In fact, the only revenue stream that has not kept pace is the level of state support. In a highly competitive world where public research universities are playing an increasingly important role, that places both our University and the Commonwealth at a distinct disadvantage."

In 1975, the Commonwealth appropriation represented 32 percent of the University's operating budget. By 1995, it had fallen to 19 percent. This year's appropriation of $189,257,220 represents slightly more than 11 percent of Pitt's operating budget.

Focusing on even more recent years and approaching this serious problem from a somewhat different perspective, from fiscal year 2001 through fiscal year 2009, the research dollars attracted by Pitt will have increased by more than 73 percent. Over that same period, it is estimated that the rate of inflation will have been nearly 30 percent. However, Pitt's state appropriation will have increased by just 6.7 percent. For the current fiscal year, even though the Commonwealth's overall budget increased by 4 percent and the rate of inflation is running somewhat higher than that, Pitt's appropriation was increased by only 1.4 percent.

According to Arthur G. Ramicone, Pitt's vice chancellor for budget and controller, "This substantial decline in Commonwealth support, when adjustments for inflation are made, has seriously eroded the purchasing power of the appropriation and placed tremendous pressure on tuition, the University's second-largest source of revenue." Citing just one telling example, he stated, "Among University expenses, utilities are budgeted to increase by nearly 16 percent, or $7.7 million. The anticipated increase in that one expense category is more than $5 million higher than Pitt's entire appropriation increase, and this is not a one-year problem. Since fiscal year 2001, our annual utility costs have risen by nearly $31 million, while the annual appropriation has increased by less than $12 million."

The salary increase pool for the University's faculty and staff is budgeted to increase by

4 percent. The budget also has been structured to meet increased debt service, insurance charges, and facilities and maintenance costs, including additional outlays for student, faculty, and staff safety and security measures.

Tuition for Pennsylvania residents enrolled at the Pittsburgh campus will increase by 6 percent, while tuition for out-of-state students at the Pittsburgh campus will increase by 4 percent. Tuition for in-state students at the regional campuses will increase by 4 percent and for out-of-state students by 2 percent. Pitt educates 29 percent of its undergraduates at its four regional campuses. Tuition for both in-state and out-of-state students in the School of Dental Medicine and School of Medicine will increase by 4 percent. To help meet the needs of Pitt students and their families, the University has increased the financial aid portion of the budget by 5.6 percent, a somewhat higher percentage than the percentage of the blended tuition rate increase.

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7/11/08/amm