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

August 31, 2000

University representatives tell legislators reasons for schools' financial struggles

Officials from Pennsylvania's public universities told state representatives recently that their schools are barely keeping pace with costs — despite prospering endowments, hundreds of millions of dollars annually in research grants and private gifts, and recent tuition increases at nearly double the inflation rate.

One reason the universities are struggling financially is that the share of their budgets covered by the state has shrunk in recent years, said representatives of Pitt, Penn State, Temple and the State System of Higher Education at an Aug. 23 roundtable held at The Carnegie Museums of Pittsburgh by the Pennsylvania House Education Committee.

For example, in 1975 the state provided 32 percent of Pitt's revenue. That has dropped to 14 percent for the current fiscal year, said Robert Pack, Pitt vice provost for Academic Planning and Resource Management.

The commonwealth's subsidy of the state university system has declined from 62 percent in 1986 to 48 percent of the system's budget today, said system Vice Chancellor Greig Mitchell. In other states during that same period, the average subsidy for state-owned schools dropped from 79 percent to 68 percent, he said.

Legislators convened last week's roundtable to discuss accelerating tuition hikes. Tuition increases for this fall ranged from 6.23 percent at Penn State to 4.8 percent at the state system campuses, with a 5 percent hike at Pitt.

Other than property taxes, tuition increases generate the fiercest outcry from taxpayers, legislators said. Public university tuition in Pennsylvania is the third-highest in the country.

University representatives said their schools' tuition increases, while unfortunate, were justified considering high-quality academic offerings and student services, and financial pressures facing the institutions.

Those pressures, they said, include the following:

* Student financial aid. Pitt has increased financial aid by $22.8 million during the last six years, Pack said. That, combined with $32 million the University spent to enhance its academic, student life and research programs (including major technology upgrades), accounts for almost Pitt's entire tuition increase during those years, according to Pack.

* Disproportionately high inflation. "Universities, like everything and everyone else, are subject to inflation," Pack said. "Unfortunately, however, because of the nature of the goods and services they buy, the rate of that inflation is significantly higher than that described by the Consumer Price Index."

Since 1990, the CPI has risen by 7.6 percent but the Higher Education Price Index (which tracks on a national level the goods and services purchased by universities) has gone up by 18 percent, Pack said.

For example, scientific journals have increased in cost by 70 percent since 1995, he noted, while the cost of electronic library resources has increased tenfold.

* Personnel expenses. Higher education is labor-intensive. "Salaries represent about twice as large a portion of our budget as it does in many sectors of the economy," said Penn State budget officer Richard Althouse.

Althouse and the other universities' representatives said their schools are having difficulty competing with universities in other states for high-quality faculty. Althouse complained that other Big 10 universities see Penn State as a prime raiding ground for faculty. Pack said that, from 1995 to 2000, Pitt could increase the salary of its professors by only a cumulative 12.6 percent, compared to the 22.5 percent average at the other 32 public research universities in the Association of American Universities.

* Deferred maintenance. Mitchell of the state university system said that of the 605 buildings on the system's 14 campuses, 350 have not been renovated in more than 35 years.

House education committee members sympathized with the universities' financial plight. But they offered no concrete help or advice except to suggest that the schools do a better job of telling their story to the public.

Rep. Nicholas Colafella, D-Beaver County, said taxpayers get confused and angry when, after hearing university announcements of huge grants and fundraising successes, they learn that tuition will go up at double the inflation rate.

"You have a difficult job, trying to explain things like deferred maintenance to the general public," said Colafella, who has introduced bills in the state House aimed at addressing the so-called "crumbling academe" problem.

He suggested that schools spend as much time telling the public about their problems as their successes.

— Bruce Steele

Filed under: Feature,Volume 33 Issue 1

Leave a Reply