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July 23, 2009

Proposed state cuts could result in staff reductions, other measures

Chancellor Mark A. Nordenberg said jobs could be cut, research expenditures curtailed and campus construction projects halted if legislators approve proposed cuts to Pitt’s state funding.

In comments July 16 to the Board of Trustees’ budget and executive committees, Nordenberg cited the impact of declining state support, including Gov. Edward G. Rendell’s plan to eliminate $31 million in state appropriation and federal American Recovery and Reinvestment Act (ARRA) funding for the University.

Nordenberg said, “If that restoration is not made, broader consequences almost certainly will include reductions in personnel although we have worked hard to avoid that — even though our services continue to be in high demand, even though a primary goal of the ARRA is in fact to avert layoffs and create jobs, and even though this region cannot afford to have its one expanding employment sector undermined by inadequate funding.

“The consequences also will include the elimination of program investments, including seed investments that support our research initiatives, which have become one of the key engines of our 21st century economy and which last year brought more than $650 million of research support into this community — an amount that supports directly and indirectly more than 23,000 local jobs. The consequences would include probably a halt to our already-reduced capital investments in a construction market in which many big projects already have been canceled or placed on hold.”

The state’s ongoing budget debates precluded the trustees committees from adopting a fiscal year 2010 budget at their July 16 meeting. However, the committees increased 2009-10 tuition on the Pittsburgh campus 4 percent for most in-state students and 2.5 percent for out-of-state students, leaving open the option of a tuition surcharge later. (See related story.) Tuition on the Bradford, Greensburg, Johnstown and Titusville campuses remains frozen, as the University announced in April.

In a prepared statement, Vice Chancellor for Budget and Controller Arthur G. Ramicone said a tuition surcharge could be imposed if reduced state funding levels leave Pitt with a budget gap.

“In addition, we would need to make up the rest of the deficit through stringent budget reductions that would affect programs, staffing levels and capital projects, along with seed funding for research development that to date has been one of the region’s primary drivers of employment gains and economic vitality,” he stated.

Last September the University sought an 8.5 percent state funding hike for FY10, a level at which administrators told the state they intended to limit tuition increases to 4 percent and raise the compensation pool by at least 4 percent. (See Sept. 25, 2008, University Times.)

Nordenberg told the University Times that the salary pool freeze, announced in March, enabled the University to hold down tuition increases in spite of today’s vastly different economic prospects.

“One of the big changes in terms of the projections we were making last fall and the projections we are making now is that compensation has been frozen within the institution and that’s a big budget adjustment,” he said.

In the FY10 budget request submitted to the state last September, the total personnel compensation line (salaries, wages and staff benefits) was $403.223 million, $18.685 million higher than the amount available for FY09.

On June 26 Rendell announced a budget proposal that would appropriate $140 million for Pitt — nearly $20.5 million less for fiscal year 2010 than he originally proposed in February. At the same time, he removed the four state-related universities from the state’s application for federal stimulus funds for education.

The move prompted a joint letter to the U.S. Department of Education signed by a majority of Pennsylvania’s U.S. Congress members as well as letters from Pitt, Penn State, Temple and Lincoln university administrators asking the department to reject Pennsylvania’s application if the state-related schools were excluded.

While the Department of Education has agreed that the four universities cannot be excluded from the state’s application, inclusion doesn’t mean the governor must allocate any of the stimulus money to the state-related schools.

Rendell spokesperson Barry Ciccocioppo said it’s “possible” that the state-related universities may see no allocation from the stimulus funding.

Rendell, in a July 15 release, stated that the Department of Education’s decision “has reinforced the state’s ability to decide how to allocate federal funds among the State System of Higher Education, the community colleges, Thaddeus Stevens College of Technology and the four state-related universities, and we remain committed to using those funds where they can have the most impact.”

Nordenberg said University administrators have discussed the prospects should funding be withheld. “We also feel that while the processes of negotiation are moving forward in Harrisburg, while there is so little predictability to what might come out of those negotiations, there isn’t much point in getting too focused on those alternatives.”

He elaborated on the prospect of layoffs, noting that any cuts would depend on how much funding is restored to Pitt. “Obviously we are a person-intensive business, so that if we were faced with the task of finding $20 million or $30 million through budget reductions, that would have to affect employment numbers.”

He had no estimate of when any cuts could take place. “It’s hard for me to predict that, not knowing how quickly the processes are going to unfold in Harrisburg and then how we might decide to react, depending on the level of the gap we would need to fill,” he said.

“Our priority is to protect our people and their jobs to the extent we can. We believe that is an important mission not only in human terms but because the demand for our services is going up. We’re not an organization that is facing a declining demand for the services we deliver.”

Staff Association Council President Gwen Watkins said her group is watching Pitt’s state funding issues closely. “The unpredictability of the situation is surely cause for significant concern to the Staff Association Council and to our entire community,” she stated.

“We can only hope for the best in the knowledge that the chancellor is doing everything possible to shield the University’s jobs, research and programs, and are heartened to understand that he imagines Pitt’s mission in human terms, and that means every person delivering outcomes to this institution, whether it be staff or faculty or key leadership.”

Watkins advised staff to urge their state legislators to support funding for Pitt. Information and a sample letter are available at, or by contacting Nicole Urti in Governmental Relations at 4-7719 or

University Senate President Michael Pinsky told the University Times, “I am hopeful that the budget impasse will resolve and the University will get the finances necessary to be fiscally solvent.”

Reiterating Pitt’s role as a major economic engine for Pennsylvania, Pinsky said, “To not appreciate the importance of the University of Pittsburgh is to have a myopic approach to the economic future of the region.” Limiting Pitt’s state funding, he said, “has the serious potential for impacting the longer-term economic future of the region.

“Faculty fully understand the demand of the need to balance the budget in these times,” Pinsky said. Noting that the faculty “stand behind the chancellor in times of crisis,” he said faculty representatives “hope to be members at the table” when decisions on any layoffs or budget cuts are made.

—Kimberly K. Barlow

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