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June 13, 2002

Due to state uncertainty, board postpones action on Pitt budget

With Pennsylvania lawmakers potentially still weeks away from approving a state budget for the fiscal year that begins July 1, Pitt trustees have postponed meeting to approve the University's own budget.

The trustees' budget committee had been scheduled to meet today (June 13) to endorse a fiscal year 2003 Pitt budget for consideration at next week's meeting of the full Board of Trustees.

But because the Pitt budget hinges largely on the University's state funding, trustees have postponed their budget committee meeting until July 15.

Assuming the trustees' budget committee approves a Pitt budget on July 15, the trustees' executive committee (which is empowered to approve University budgets) would meet later that same day to give final approval, said board Secretary Robert E. Dunkelman.

Meanwhile, full Board of Trustees will meet as scheduled on June 20, but without considering the budget, Dunkelman said.

Pennsylvania's revenue shortfall for the current fiscal year totaled $1.1 billion by the end of May and is expected to reach $1.3 billion by the end of this month, Chancellor Mark Nordenberg noted at the June 10 Senate Council meeting.

"Despite the fact that these are big numbers, I'm not sure that people within the University appreciate just how serious the situation is," Nordenberg said. "So, let me say: Those are really big numbers, and this is a serious situation for the commonwealth and for the University."

A cut in Pitt's state appropriation would hurt the University during FY 2003 and could have "longer-term implications for the structure of the institution," the chancellor warned.

He recalled a 1995 Pitt salary freeze (necessitated, in part, by a meager state appropriation) that effectively reduced salary levels here for years afterward, taking into account inflation and the fact that many peer universities awarded raises that year.

Last summer, state lawmakers approved a 0.6 percent increase in Pitt's appropriation for the current fiscal year, bringing it to $178.5 million. But, facing a recession-related deficit, Gov. Mark Schweiker later imposed 3 percent freezes on funding to Pitt and other state-supported universities.

For Pitt, the 3 percent freeze amounted to $5.4 million. State officials warned that they might withhold the full $5.4 million from Pitt's final monthly appropriation payment for FY 2002, scheduled for late this month.

"We still have not gotten definite word from the state that it is withholding the full $5.4 million from our June payment, but all indications are that that will be the case," said Thurman Wingrove, assistant vice chancellor, Financial Information, in an interview yesterday.

To prepare for absorbing the hit, the University's senior administration last winter ordered unit heads to hold 3 percent of their centrally budgeted funds in reserve.

On Tuesday, the state House of Representatives approved bills recommending appropriation reductions of nearly 3.7 percent next year for Pitt and Pennsylvania's other state-related universities (Penn State, Temple and Lincoln). The state Senate is now considering the House's recommendations.

Schweiker had proposed an even deeper cut — 5 percent — in aid to the state-related universities.

In response to the House's vote, Chancellor Nordenberg said: "Obviously, this is a very difficult budget year, and we're grateful for any help that we are able to get from the state legislature."

— Bruce Steele

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