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December 10, 2009

UPDATE: Dec. 15
Contingent Pitt budget approved

The Board of Trustees budget committee on Dec. 15 unanimously passed a $1.733 billion operating budget for fiscal year 2010, contingent upon approval of a state appropriation for the University.

That total includes $962.3 million for education and general expenses, $587 million for the School of Medicine and $183.9 million for plant expenses.

The House of Representatives on Dec. 14 approved a number of appropriations bills for non-preferred institutions, including nearly $176.64 million for Pitt. The University’s appropriation includes $160.49 million in state funding, $7.5 million in federal stimulus money for FY10, which began July 1, and $8.64 million in federal stimulus money for FY09.

The appropriation, Senate Bill 1036, still needs the governor’s signature in order to take effect.

Approximately $17.4 million in funding for University medical line items was included in the Department of Public Welfare budget, which was passed as part of the state budget in October. Those line items are funded through state and matching federal dollars.

Chancellor Mark A. Nordenberg hailed the House action as an important step in the process of receiving state funding for the current fiscal year. “This does mean that there is an added element of certainty in terms of the budget … that was contingent upon receiving levels of state funding that actually are included in the bill that was passed yesterday,” Nordenberg said, expressing hope that Gov. Edward G. Rendell would sign the bill promptly.

However, Rendell spokesperson Gary Tuma said the governor’s stance has not changed. “He is of a mind to insist that the table games legislation be on his desk before he can sign the non-preferred appropriations,” Tuma said.

The House was expected to continue discussion of table games legislation Dec. 15. Once approved in the House, the legislation would then go to the Senate.

Vice Chancellor for Budget and Controller Arthur G. Ramicone said Pitt’s proposed FY2010 operating budget is contingent on the passage of Pitt’s expected $185.4 million appropriation for FY10.

“This appropriation represents a combination of $177,902,000 received from the commonwealth last year plus the addition of $7,505,000 in federal stimulus money,” he said.

Ramicone pointed out that state support has remained flat over the past decade. “Since the commonwealth support also includes approximately $10 million in federal Medicare money for the University’s medical-related line items, the commonwealth dollars contained in this institutional budget are essentially at the same level as when we began the decade,” he said.

Ramicone said the current year’s budget “was built around the realities of a difficult economic environment and the objectives of maintaining the university’s momentum,” reiterating the “modest” Pittsburgh campus tuition increases of 4 percent for in-state students and 2.5 percent for out-of-state students passed by trustees in July, with no increase in tuition on the regional campuses.

“This budget could only be accomplished by imposing a salary freeze on all University employees plus requiring $8.3 million of permanent budget reductions,” Ramicone said, noting that budget reductions were based on the University’s priorities and implemented following discussion between unit leaders and their respective senior university officers.

Nordenberg said a tuition surcharge that University officials previously warned could be necessary would be ruled out once the governor signs the bill. “If so we will have the appropriation upon which we have based our budgetary planning and there won’t be any need to revisit tuition for the spring term,” Nordenberg said following the meeting.

The chancellor, however, would not rule out the possibility of staff cuts. “Our two main lines of activity — education and research — are very strong. We continue to attract larger numbers of applications for admissions to our educational programs; the research dollars that are being attracted by our faculty continue to rise, so that we do have a basis for maintaining a relatively stable job force, which obviously is not only good for us, but good for the region. That doesn’t mean there will not be positions lost in particular units, as planning to deal with the current circumstances emerges. But we’re not planning any kind of large-scale widespread layoffs at this time.”

Nordenberg said putting together this year’s budget “has been a real challenge,” adding that credit is due not only to the University’s financial professionals. “A lot of credit needs to be extended to the broader Pitt community for the resolve they have displayed in helping to push Pitt forward and for the sacrifices they have been willing to make for the greater good in these difficult times,” he said.

Trustees also approved a capital budget of $179.16 million, which includes $86.2 million from the state. Capital projects include construction of a new wellness center at Pitt-Johnstown and a new chapel and student housing at Pitt-Bradford, in addition to renovation and preservation projects on all the University’s campuses.

—Kimberly K. Barlow

Filed under: Special