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June 28, 2001

Trustees expected to okay 7.5% tuition hike

The University plans to raise tuition by 7.5 percent this fall.

The hike — the largest proposed at Pitt since a 9.9 percent increase in 1988 — is part of a $1.17 billion fiscal year 2002 operating budget that the Board of Trustees was expected to approve this morning.

The trustees' budget committee endorsed the budget on June 21. The committee also okayed a $80.4 million capital budget for next year. See story on page 3.

Final approval of Pitt's operating and capital budgets by the full board was virtually assured, said trustees budget committee chairperson Frank V. Cahouet. "Both budgets are fully consistent with what the board wants to see in terms of improving institutional quality," he said.

With the planned 7.5 percent increase, tuition for in-state, full-time students in the College of Arts and Sciences would go up by $480 to $6,902 per year. Out-of-state students would pay $15,160, an increase of $1,056 per year.

"This is more than most of us would like, but it is in line with our strategy" of improving academic programs, student life, technology and research, Arthur Ramicone, vice chancellor for Budget and Controller, told the trustees budget committee. "Unlike the economy, this is not a stagnant university."

He and Chancellor Mark A. Nordenberg noted that Pitt's state appropriation (the University's major source of unrestricted revenue apart from tuition income) for next year will be just 0.6 percent higher than this year's.

"This made it impossible to hold our tuition increases to a lower level," Nordenberg said. "During this same period, the rate of inflation was approximately 3.4 percent, and costs borne by colleges and universities rose at an even higher rate. Faced with the difficult choice of increasing tuition or abandoning plans to move the University forward, we chose progress."

In defending the 7.5 percent increase, Pitt officials cited tuition hikes approved for next fall at several peer institutions. They included Ohio State University (9.3 percent), Indiana University and Purdue University (7.5 percent at each school) and the University of Illinois (14.7 percent for new students and 4.6 percent for returning students).

Pennsylvania ranked third in the nation in public university tuition costs last year, behind only Vermont ($7,135) and New Hampshire ($6,493), according to a survey by the American Association of State Colleges and Universities and the National Association of State Universities and Land Grant Colleges.

Traditionally, Pennsylvania has been a "high-tuition, high-aid" state where lawmakers are more generous with direct financial aid to students than in subsidizing state-supported universities.

Even with a tuition increase that is double last year's inflation rate, Pitt remains "a very good value in the higher education marketplace," according to Nordenberg.

"In developing this budget, we did take into account the fact that applications to the University of Pittsburgh have increased by nearly 100 percent since 1995," the chancellor said. "We have, in a systematic way, generated feedback from potential students, from current students and their parents, in an effort to determine the things that influence students to come to Pitt. Nothing has been more important than the perception that Pitt is an institution that's committed to delivering a high-quality education."

Nordenberg said the administration does not expect next fall's tuition hike to affect student applications or retention.

Under the proposed FY 2002 budget, the largest increases in expenditures would be for faculty and staff compensation ($625.8 million, up by $39.7 million) and student aid ($80.3 million, a $6.5 million increase).

The budget also includes $8.1 million in student life and academic program enhancements (up by $1 million), $9.5 million in research incentive programs (a $600,000 increase) and $3.1 million to cover increased utilities costs as well as operating expenses for new facilities such as the Petersen Events Center.

The University's $500 million capital campaign, publicly launched last fall, won't impact the FY 2002 operating budget, Nordenberg said. "Certainly, the capital campaign will be an important source of financial support over time," he said. "In many cases, contributions will create endowments that will provide [fiscal] relief. But we're still collecting on pledges at this time."

Nor will Pitt's operating budget be affected next year by distribution of Pennsylvania's $11 billion tobacco settlement windfall; 19 percent of the money is earmarked for medical research at universities and other research facilities, in proportion to the amounts each institution receives from the National Institutes of Health (NIH). Pitt and the University of Pennsylvania ranked No. 10 and No. 2, respectively, among institutions for NIH funding last year.

About $65 million in tobacco settlement money is expected to go to Pennsylvania universities and research facilities next year.

Nordenberg said: "We are very pleased that Pennsylvania's tobacco settlement funds will be invested in human health, and that the agreement reached in Harrisburg provides for significant investments in medical research. We expect that many of the important programs here at the University will enjoy new forms of support through the distribution of tobacco settlement dollars. But those dollars won't impact on our budget for next year."

Today's Board of Trustees meeting was scheduled to begin at 8:30 a.m. in the Masonic Temple Ballroom.

In addition to approving the operating and capital budgets, the board was expected to elect six new members.

Nominated were: G. Nicholas Beckwith III, president and CEO of Beckwith Machinery Co.; John M. Cleland, president judge, McKean County Court of Common Pleas; Richard L. Fischer, chairperson of the UPMC Health System Board of Directors; G. Watts Humphrey Jr., president of GWH Holdings, Inc.; Howard M. Picking III, president of The Picking Co., and Edgar M. Roach Jr., CEO of Dominion Delivery.

— Bruce Steele

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