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

March 4, 2010

Pitt makes case for state funds

HARRISBURG — In their annual testimony before the state appropriations committees, Chancellor Mark A. Nordenberg and his fellow heads of Pennsylvania’s state-related universities answered legislators’ questions and touted the value of Pitt, Penn State, Temple and Lincoln universities not only in terms of educating students, but also as leaders in research and contributors to the state economy.

However, after nearly two hours of testimony before the House of Representatives, appropriations committee chair Dwight Evans (D-Philadelphia) wrapped up the Feb. 23 hearing with a dose of harsh reality: “It’s a matter of time that you may not be seeing any appropriation from the state. And it’s not anybody’s particular fault. It’s where we are today.”

Citing predictions of rolling deficits in state budgets, other priorities including health care and basic education, and the realities of upcoming budget-busters including funding for the state employee pension system and prisons, Evans said, “In reality, higher ed is going to be on the losing end.”

In its fiscal year 2011 appropriation request filed Nov. 12, 2009, with the state Department of Education, the University asked for $194.68 million — a 5 percent increase in its appropriation. (See Nov. 25 University Times.) With that level of state support, administrators stated that the University intended to limit tuition increases to 4 percent and increase the compensation pool by at least 3 percent.

However, the state’s FY11 budget proposed by Gov. Edward G. Rendell last month holds funding for the state-related universities steady at FY10 levels. (See Feb. 18 University Times.) Budget estimates through FY15 also show no funding increases. (The governor’s proposal is available online at

Although FY10 began last July 1, the state-related universities’ appropriations weren’t approved until December, held up by disagreement in the legislature over table games legislation. (See Jan. 7 University Times.)

And, Evans pointed out, some in Harrisburg proposed cutting funding for the state-related schools altogether, adding that the federal stimulus money may have been all that saved them from the budget ax.

Senate committee members took note of Evans’s comments during their March 3 hearing. “Hopefully that day will never come,” said Senate committee chair Jake Corman (R-Centre Co.). The sentiment was echoed by minority chair Jay Costa (D-Allegheny Co.), who told university leaders, “It is not our desire to not fund the state-related universities.”

However, Costa acknowledged that $30 million in federal stimulus money that currently is shoring up the state-related universities’ operating budgets will go away after FY11.

Noting that the $657 million in state dollars appropriated for the state-relateds is $10 million less than in 2003, Corman pointed out the state government’s similar straits: Once federal stimulus money is gone, Pennsylvania faces a budget that will be $4 billion less than two years ago. “Our challenge is we’re going to have to restructure state government,” he said, asking the leaders for their institutions’ help.

“This is not a one-year recession,” Corman said, adding that revenues that have declined are not coming back.

Noting that education is key to recovering from the recession and that higher education is among the state’s greatest resources, he told the leaders, “To allow you to wither on the vine is not an option.”

Once the federal stimulus money disappears, Nordenberg said, “There are a lot of big holes to be filled in some effective way. If they aren’t filled, a lot of people and a lot of programs that matter are going to be falling.”  He asked the Senate committee to extend the state’s increased support for basic education to include higher education. “That’s what the commonwealth needs —strength from beginning to end.”

Penn State President Graham Spanier pointed out that a permanent 6 percent budget cut is built into the state-related schools’ base appropriation: “We right away are at a deficit.”

Temple University President Ann Weaver Hart said making up for that 6 percent would “represent draconian cuts and changes as well as increases in tuition for all of us.”

Referencing Evans’s remarks, Corman asked how the institutions would be impacted “if state money would evaporate in the future.”

Spanier said the change would “turn us completely into the equivalent of private universities” and convert in-state students, who pay lower tuition rates, into the financial equivalent of their out-of-state counterparts.

Nordenberg said, “Perhaps the most apt comparison would be to the tuition charged by our private counterparts within the commonwealth, which is about three times the tuition charged by our universities,” noting that tuition at Pitt or Penn State is approximately $25,000 lower than Penn and Carnegie Mellon.

Nordenberg told the senators that the institutions’ role as economic drivers also would be undermined should state funding disappear.

In written testimony to the committees, Nordenberg labeled the past 10 years “a lost decade for Pitt and Pennsylvania’s other state-related universities” in terms of state funding.

He noted that between FY01 and FY09 the state’s general fund budget grew by nearly 40 percent, inflation rose more than 24 percent, state support for community colleges increased 33 percent and state support for State System of Higher Education schools rose 6 percent, but Pitt’s appropriation grew by less than 0.3 percent.

In addition, the actual state dollars invested in Pitt fell by more than 5 percent due to the federalization of several medical line items in which state support was replaced by federal Medicaid matching funds.

Nordenberg wrote, “In the budget that has been proposed for fiscal year 2011, funding for the Department of Education would increase by just over 4 percent, with state support for basic education increasing by nearly 5 percent. In contrast, funding for the University of Pittsburgh and the other state-related universities would stay at the same level as the current fiscal year.

“This is the continuation of a clear and extended pattern. Compared to fiscal year 2003, for example, state support for basic education will have increased by 43 percent, while actual state dollars allocated to the University of Pittsburgh will have remained the same.”

He continued: “Obviously flat funding is better than the cuts that were endured last year and in some other past periods. However, flat funding will not provide any support for the cost increases that are a virtual certainty. Even more troubling is the fact that federal stimulus funding, upon which two successive state budgets will have been built, is scheduled to disappear in fiscal year 2012. This ‘funding cliff’ threatens to produce larger state budget deficits and likely will result in even greater pressures on funding for public higher education. Some protections have been built into the basic education funding line. Consideration should be given to similarly responsible planning for higher education.” (The chancellor’s entire statement is posted at

Penn State’s Spanier urged House legislators to think of the state’s education system as broader than K-12. Labeling the governor’s proposed $350 million increase for basic education as a generous and positive development, Spanier pleaded for the state-relateds to be treated in a similar way. “We pick up where they leave off,” he said.

Spanier echoed Nordenberg’s concerns as he pointed out that on an inflation-adjusted basis, the state-relateds have been forced to make up for lost state support with tuition increases and budget cuts.

Penn State, like Pitt, froze employee pay in order to cope with state budget cuts.

“We can’t do that every year because we have a competitive marketplace in higher education just like any other field or industry would. We have a special challenge this year because we would like to give our employees a raise,” Spanier said. Penn State’s appropriation request for FY11 sought a 3.9 percent increase in state funding and included a 2.5 percent increase in its salary pool for merit-based raises.

Spanier told the House committee, “I think one of the problems that we have is that we have helped ourselves to be in a certain state of equilibrium despite the fact that our budgets from the state have been declining.”

Citing a collective $1.5 billion a year in research expenditures and enrollment of 150,000 students at the state-related universities, he noted the schools’ contribution to the state economy.

“I think because of those successes, we worry that it may be easy for the legislature to think, ‘Hey we don’t have to put our money there because they’re going to land on their feet and do good things anyway.’” But, he added, with few exceptions, “The money that you give us is for our Education and General budget, is for our students, it is for the instructional programs of the university.

“These other great things we’ve done to keep these institutions rolling along are really money we bring into the state on a competitive basis from the federal government, from business, from industry and self-supporting operations. But those monies don’t transfer over, because of federal auditing requirements, to be used in our instructional programs.”

So, Spanier said, although the universities are bringing in money, “We’re still very heavily dependent for the sake of our students on your appropriation. Because, for our educational programs, we really only have two sources of money: tuition and legislative appropriation.”

Evans told the university leaders, “There’s no question higher education is important to the growth of this commonwealth. There’s no question about it in terms of this state being competitive. You play a very, very essential role. I don’t debate that at all.

“And yet even though you verbalize it, the finances are going in the opposite direction. Again it’s only a matter of time,” he said, urging the university leaders to enter into discussions with him about the future of funding the state-related institutions of higher education in Pennsylvania.

“Last year I put a proposal on the table — people thought it was kind of crazy — about a dedicated source of revenue,” Evans said, adding he didn’t know whether that would be the solution.

“In this decade, we have to begin to get serious or we’re wasting our time in having you come before us and you’re wasting your time by coming before us,” Evans told them.

Following the House hearing, Nordenberg told the University Times, “Obviously the pattern over a period of decades is not an encouraging one. And the threat of the stimulus funding cliff is a real concern. Still I would emphasize [Evans’s] statement that the universities at this table are essential and, as they go, so goes the commonwealth.

“I’m not sure what the ultimate solution will be in terms of the revenue streams that are needed. But I do think that our case is so strong that if we continue to make it effectively we should be able to arrive at some kind of workable solution.”

—Kimberly K. Barlow

Leave a Reply