Skip to Navigation
University of Pittsburgh
Print This Page Print this pages

October 27, 1994

Pitt submits its FY96 budget request to state

Pitt has proposed limiting next fall's tuition hike for in-state students to 3.5 percent and increasing the salary and fringe benefit pool by 4.35 percent as part of a funding request submitted by University administrators this month to the Pennsylvania Department of Education.

In light of its plan to hold next fall's tuition increase down to 3.5 percent, the University also has asked the state to eliminate the Tuition Challenge Grant Program that for the past several years has sought to limit tuition increases for in-state students to no more than 4.5 percent.

Pitt has long opposed the Tuition Challenge Grant Program on the grounds that it unfairly allocates funds, since it is based solely on full-time, undergraduate students and does not take into account the fact that it costs more to educate graduate and professional students than undergraduate students.

Overall, Pitt is asking the state for approximately $152.74 million for fiscal year 1995-96, which begins on July 1, 1995. The total request represents a 6 percent increase over the University's current state appropriation.

Pitt's request includes the following budget line items:

* Education and general funds – $135.37 million (6 percent more than the current fiscal year appropriation)

* Recruitment and retention of disadvantaged students – $341,000 (6.2 percent increase)

* School of Medicine – $6.61 million (6 percent increase)

* Dental clinic – $1.1 million (6 percent increase)

* Western Psychiatric Institute and Clinic – $8.15 million (6 percent increase)

* WPIC Services for Teens at Risk suicide prevention program – $527,000 (6 percent increase)

* Graduate School of Public Health – $265,000 (6 percent increase)

* Rural Education Outreach – $375,000 (25 percent increase)

State money currently accounts for 18.5 percent of Pitt's total revenue, the budget request points out, but 36.2 percent of the University's unrestricted income for educational and general purposes. According to Ann Dykstra, Pitt's director of Commonwealth Relations, unrestricted income is money that is not earmarked for narrowly defined purposes such as grants for specific research projects. Student tuition and fees provide another 47.4 percent of the University's unrestricted income, the budget request notes.

Since the mid-1980s, the state's contribution to Pitt's educational and general revenue has dropped from 42.5 percent to 36.2 percent.

According to the University's budget request: "This trend demonstrates a clear pattern. When the annual commonwealth appropriation increased at a greater rate, the University was proportionately less dependent upon tuition dollars for its educational and general revenue. As increases in the commonwealth appropriations diminished, Pitt was forced to become more dependent upon tuition as a source of income." Pitt's funding request is the first formal step toward setting the University's state appropriation. Pennsylvania legislators and the governor's office will now consider Pitt's budget request – along with those from other state-funded institutions – and try to come up with a fiscal year 1995-96 state budget by the end of June.

Universities rarely get all the money they request from the state. For instance, in fiscal 1994-95 Pitt requested $148.7 million, but received only $139.84 million. That total was about $559,000 more than the University received from the state in fiscal 1993-94. The proposal to keep next fall's tuition increase for in-state students to 3.5 percent is one of the noteworthy changes in this year's fund request by Pitt. Under the Tuition Grant Challenge Program proposed by Gov. Robert Casey and enacted by the General Assembly in fiscal year 1990, institutions that increase tuition for in-state, full-time students more than 4.5 percent in any given year receive only a $10,000 increase in their state appropriations for that year. That $10,000 increase also is earmarked solely for the recruitment and retention of minority students.

Although Pitt is proposing to increase tuition for in-state students by 3.5 percent, approximately the projected inflation rate, the University only will be able to meet that objective if it receives a 6 percent increase in appropriations from the state, according to the budget request.

And even if the state does approve the full 6 percent increase requested by Pitt, the University still will face a budget shortfall of $3.5 million, money that will have to be made up through budget cuts in various areas.

"This request represents a serious and sincere commitment to keeping tuition increases to a minimum," the budget request notes. "The key to lessening Pitt's dependence on tuition revenue, however, is more adequate commonwealth support. It has never been the University of Pittsburgh's intent to raise tuition to unacceptable levels and we are now voluntarily proposing to increase tuition a full percentage point less than that proposed by the Tuition Challenge Grant Program." The budget request goes on to point out that Pitt's primary objection to the Tuition Challenge Grant Program is with the way funds are distributed. The University has repeatedly argued that the allocation of funds based on simple in-state, full-time student enrollment overlooks the fact that it takes far more to educate a master's, doctoral or professional student than it does an undergraduate.

Awarding money only for full-time students also ignores the fact that one-third of all Pitt students are enrolled on a part-time basis and penalizes all Pitt students by awarding the University a lesser increase than that granted to schools with different student demographics, the request points out.

During the current fiscal year, the budget request notes, Pitt will receive an increase of 3.4 percent in state funds, while Penn State will receive a 4.8 percent increase, the state system of universities a 3.8 percent increase, Temple, 2.5 percent and Lincoln, 1.4 percent.

"In light of our genuine effort to voluntarily restrict tuition costs, we therefore ask that the program be eliminated pending further study and investigation," the request states.

To support its request for money and show state officials that Pitt is doing its share to keep costs under control, the budget request contains a list of actions taken along those lines by Pitt. They include:

* Renegotiating contracts with providers of major, widely used services such as telecommunications, software, food service, life insurance and overnight and package mailing.

* Altering the faculty and staff benefits package such as: for employees hired after Jan. 1, 1994, reducing the matching funds Pitt contributes for employees enrolled in the tax deferred annuity program and requiring a three-year vesting period for the program.

* Redesigning investment practices, billing systems and cash management techniques.

* Initiating a more aggressive effort to collect delinquent tuition, parking fines and miscellaneous receivables.

* Implementing a new travel policy with stricter controls on expenses and negotiating corporate hotel discount rates for employees traveling on University business.

* Renegotiating contracts with various vendors and changing the type of paper used for University letterhead and envelopes to a cheaper grade.

— Mike Sajna

Filed under: Feature,Volume 27 Issue 5

Leave a Reply