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March 7, 2013

Legislators support state funding

Pitt and its fellow state-related universities are facing a challenging budget year in fiscal year 2014, but are off to a more positive start as state budget discussions commence, said Chancellor Mark A. Nordenberg recently.

Last month, Gov. Tom Corbett, flanked by university leaders, announced that his proposed state budget for the upcoming fiscal year recommends flat funding for the state universities. In return, the universities pledged to hold down tuition increases. (See Feb. 7 University Times.)

In his Feb. 27 report to Senate Council, the chancellor said, “The starting point for this year’s formal budget process clearly is a lot different than it was in either of the last two years. Most obviously we are not facing a proposal for dramatic cuts from within the administration. Two years ago we were facing a proposal that our general appropriation be reduced by 50 percent and our academic medical lines be reduced by 100 percent. Last year we started out with a proposal that the reduction be 30 percent.”

The chancellor said: “Flat funding is a lot different. I would say that the tone of the conversations, while they were supportive, with legislative leaders each of the last two years, has been even more positive this year.”

Nordenberg, who along with leaders from Penn State, Temple and Lincoln universities testified in budget hearings before House and Senate appropriations committees last week, added, “Committee members from both parties have been apologetic for the cuts that we have been forced to endure.”

Because cuts to higher education are not part of the state budget agenda this year, Nordenberg said, “It does create an atmosphere in which we can begin, I think, talking more constructively about how we move forward together through the continuing period of economic challenge and hopefully beyond.”

Nordenberg noted that Pitt remains at 1995 levels — not adjusted for inflation — in its level of state funding, even as costs have increased, research has expanded and the student population has grown.

“We’ve got nearly 3,000 more students than we had in 1995 and we have a research program that is attracting roughly $500 million more in annual support than was the case in 1995,” he said.

“It also seems relevant to note that overall state funding has risen more than 80 percent since 1995. So getting through the next year, even with flat funding, is going to be another challenging year for us.”


Nordenberg, along with presidents Rodney Erickson of Penn State, Neil Theobald of Temple and Robert Jennings of Lincoln, testified as a panel Feb. 25 before a sympathetic — and at times, apologetic — House appropriations committee. They made similar presentations and answered questions Feb. 28 before the Senate appropriations committee.

William F. Adolph, House appropriations committee chair, thanked the university leaders for their pledge to hold down tuition costs and for understanding the economic pressure on both the state and the nation since the Great Recession.

He acknowledged the state’s own fiscal straits: “We are now approaching the state revenue levels that we were at in 2007-2008,” Adolph said.

“I can’t thank you enough for your cooperation and hard work in what you’ve done with your budgets over the last several years,” he said, acknowledging that higher education “took a tremendous hit” as the state looked for ways to cope with the loss of federal stimulus funding. “I don’t believe you need to take any further hits.”

Joseph F. Markosek, the House committee’s minority chair, said, “I’m proud to say, working together side by side in bipartisan fashion, the legislature fought very hard to get a lot of your funding restored. But over the last two years you’ve still had a 19 percent cut in your overall funds.

“I would suggest that when this commonwealth gets to the point where we’re flat-funding education of any level, we’re falling behind,” he said.

“I think you should get more funding. Not only is education a very serious and deep part of the fabric of our commonwealth and our country, but you are all huge economic generators in your areas,” said Markosek, adding, “I think there’s a lot of people up here, both sides of the aisle, that aren’t happy for flat funding for you this year and we’re really going to try to do our best to get you more.”

Nordenberg reiterated Pitt’s contributions to the economy, noting that the University ranks among the top five in federal science and engineering research and development support.

He said the University’s research expenditures peaked at about $800 million with the help of federal stimulus dollars and currently are approximately $750 million.

“There really are layers of benefit that come from that,” Nordenberg told the legislators. “First, there’s $750 million simply going into the economy. But beyond that, it often does provide the basis for relationships with existing companies who either will move to the region or stay in the region because they do want to have this opportunity for partnering.

“And also there are strong records, I think from all of our universities, in terms of spinning out companies that eventually do become contributors to the employment base.”


In the Senate hearing, Nordenberg noted that Pitt’s state support remains at 1995 levels.

“We’re grateful to this committee for its support during difficult times and I think all of us are very glad that we’re here dealing with a proposal for flat funding instead of the cuts of the last two years.

“But if you do take a year of flat funding following a year of flat funding, following a year of historically deep cuts, following a decade of essentially flat funding, you do get back to 1995 in absolute dollars with no inflationary adjustment,” he said.

“When you think about what has happened in the world over that period of time: The consumer price index has gone up by about 55 percent, the higher education price index has gone up by 77 percent and overall state spending has gone up by more than 80 percent. So, it is a challenge. It’s a challenge we’re working hard to meet, but I have to say it’s difficult.”


In explaining some of the cost pressures the institutions are facing, Temple’s Theobald pointed out that universities’ workforces include a significant subset of highly educated people, a group for which competition has driven up wages.

“Even with the same workforce, the cost of that workforce has gone up substantially as the cost of well-educated people has gone up across this country,” Theobald said. “That is a major, major driver of the increase in the cost of higher education.”

Penn State’s Erickson agreed. “We are in a very, very competitive marketplace for the best talent, the best faculty.

“We compete not only with other state-related and other public institutions, but increasingly with private institutions. In fact, I find that many of the big private institutions are the greatest competition now. And they have far, far more in resources than we have. They have the ability to outspend us by orders of magnitude. And that’s reflected in things like faculty salaries and packages and so forth.

“So we’ve got to balance all those kinds of things and try to get the absolute most out of our dollar that we can, knowing that there are a lot of elite private institutions that are looking at our best faculty every day.”

Nordenberg, who cited Pitt’s inclusion on the most recent Princeton Review and Kiplinger’s best-value colleges lists, which consider both quality and cost, said, “Competition plays a big role in everything that we do. We’re competing for the best students. We’re competing for highly sought after research grants, so we really do have to strike a balance. If we overprice ourselves, we’ll lose out competitively, but unless we’re really delivering high quality in everything that we do, we’re going to lose out in a more basic way.”

—Kimberly K. Barlow

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