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September 25, 1997

Pitt submits FY1999 state budget request

Tuition increases would not exceed 3.5 per cent next fall, under a fiscal year 1999 funding request that Pitt submitted to the state Department of Education this week.

The document also proposes a 3.5 percent net increase in the budget for faculty and staff compensation (salaries plus benefits). That would be achieved through a 1 percent cut in the base compensation budget followed by a 4.5 percent increase for remaining faculty and staff positions.

Pitt followed a similar salary policy for the current fiscal year, with a salary increase pool of 3 percent and a 1 percent cut in the compensation base. Tuition here increased this fall by 4.5 percent for in-state students and 5.5 percent for out-of-state students.

The University's proposed tuition and compensation increases for the fiscal year that begins July 1, 1998, are based on Pitt receiving a total appropriation of $166,203,000 — up from the current year's total of $153,152,000.

Under Pitt's budget request, next year's state appropriation would include $158,544,000 for educational and general purposes and seven other existing line items, plus $7,659,000 for new initiatives in instructional technology, laboratory modernization, infrastructure modernization, and programs to ensure that Pitt graduates can compete for jobs.

The two-part budget request is consistent with a new lobbying strategy that Pitt and Pennsylvania's other state-funded universities agreed among themselves this year to follow.

Each school, in its funding request for FY 1999, is asking state lawmakers to make what Pitt Chancellor Mark Nordenberg calls "a predictable annual investment" in higher education over the next four years.

That investment would include annual 3.5 percent cost-of-living increases in each school's base budget, plus annual 5 percent increases for university initiatives designed to boost Pennsylvania's "global competitiveness." For FY 1999, Pitt is requesting $7,659,000 for four such initiatives: * Instructional technology programs to train Pitt faculty in state-of-the-art instructional methods and enhance student learning. Among those methods are two-way interactive video, Internet communications between teachers and students, and "computationally simulated environments" that allow students to engage in simulations of lab experiments that would otherwise be unaffordable or involve hazardous materials. Pitt is requesting $1,750,000 for this initiative.

* Laboratory modernization ($2,159,000) to ensure that students and faculty have access to modern facilities and equipment. Graduate students and upper-division undergraduates — those students most likely to be active in research — comprise half of the Pitt student body, the University's budget request points out.

* Infrastructure modernization ($2,500,000) to upgrade Pitt physical facilities. "Many of our buildings were constructed from the late 1950s through the early 1970s to accommodate the surge in enrollment created by the 'baby boom' generation," the budget request states. "These facilities were not designed to support the demands placed upon their infrastructure by modern instructional and research programs." Americans With Disabilities Act requirements, increasingly rigorous fire and safety codes, and environmental regulations also have driven up the cost of renovating and maintaining older buildings, the document states. Just to meet its most critical infrastructure needs, Pitt plans to spend $6 million over the next four years.

* Student competitiveness programs ($1,250,000) to make Pitt graduates as competitive as possible in the job market. "Internationalizing" curricula and expanding the University's placement service are among these programs.

Ann Dykstra, Pitt director of Commonwealth Relations, said the universities are seeking additional funds largely through new line items because that approach has worked best in recent years with Pennsylvania lawmakers, particularly Gov. Tom Ridge.

For the current fiscal year, for example, Pitt received a 3 percent increase in its appropriation. One-third of that increase was for special projects: laboratory modernization, deferred maintenance and initiatives to improve student life.

"The governor seems more inclined to approve funding increases to universities for specific projects, not for the E & G (educational and general) line," Dykstra told the University Senate budget policies committee at its Sept. 12 meeting.

"Whether we like it or not, he [Ridge] is not inclined to increase our budget just because we're a great university that does great things," she said.

Under its existing line items, Pitt is requesting the following for next year: * Educational and general funds — $141,139,000, which would be a 3.5 percent increase over the current appropriation, by the University's reckoning. But that's assuming that the $1,486,000 in "special projects" money Pitt received this year will be rolled into next year's E & G budget. And state lawmakers have made no such promise.

The Commonwealth appropriation and tuition dollars are the two major sources of E & G revenues, which the Pitt budget request describes as "the University's most important revenue stream. They are the only available revenue dollars that are not earmarked for specific purposes…These are the dollars that must be used to keep our faculty and staff salaries competitive, to keep our libraries current and technology up-to-date and to provide state-of-the-art laboratories and scientific equipment." * Services for disadvantaged students — $338,000, a 3.4 percent increase over the current fiscal year. This money would fund Pitt programs to recruit and retain minority students, faculty, staff and administrators, "to create and promote opportunities for minority students to move into careers where they have been traditionally underrepresented," and to create "a racially and ethnically diverse campus environment," according to the budget request.

* School of Medicine — $6,587,000 (a 3.5 percent increase).

* Dental clinic — $1,088,000 (3.5 percent).

* Western Psychiatric Institute and Clinic — $8,122,000 (3.5 percent).

* Services for Teens at Risk suicide prevention center — $525,000 (3.6 percent).

* Center for Public Health Practice, which links Pitt's Graduate School of Public Health (Pennsylvania's only fully accredited public health school) and public health practitioners — $264,000 (3.5 percent).

* Rural Education Outreach provided by Pitt's Bradford campus — $481,000 (3.4 percent).

* * * Pitt's submission of a funding request is the first move in a state appropriation process that could continue through the last day of the current fiscal year, June 30, 1998 — or even beyond, if the state General Assembly and Gov. Ridge fail to agree on a state budget by then.

Between now and November, the state Department of Education and other departments will work on recommendations to be forwarded to the governor. Gov. Ridge's own budget recommendations for next year are expected to remain a closely guarded secret until he makes his annual budget address on Feb. 3.

About two weeks after the governor's address, Pitt and the other state-funded schools usually submit to Harrisburg updated versions of their budget requests, taking into account the governor's proposed budget. In March, university administrators pitch their schools' cases during hearings in Harrisburg before the House and Senate appropriations committees.

Throughout the spring and usually into the summer, legislators and governor's office representatives hammer out a fiscal year budget.

* * * Chancellor Nordenberg's 12-page opening statement in the Pitt budget request emphasizes the University's contributions to economic and social progress in Pennsylvania.

The sections of the statement summarizing accomplishments in the University's three traditional missions are titled "Teaching: Strengthening and Transforming Pennsylvania's Work-force," "Research: Improving Pennsylvania's Competitiveness Through Innovation, Technology and Discovery" and "Public Service: Enriching the Lives of Pennsylvanians Through Applied Scholarship and Community Outreach." Even curricular changes and graduation rates are framed in socioeconomic terms. For example, Nordenberg notes that Pitt has established new undergraduate programs and majors, such as the College of Business Administration and new programs in bioengineering and computer engineering, "to reflect important shifts in the economy and emerging labor market needs." In conferring some 7,000 undergraduate, graduate and professional degrees annually, Pitt is "contributing to the quality and potential of Pennsylvania's workforce," the chancellor states. But the document does not promise short-term economic payoffs. For example, in reporting that Pitt attracts $250 million each year in sponsored research support (placing it among the top 20 U.S. universities in that category), Nordenberg points out: "Attracting funding of this magnitude to the Commonwealth obviously has a direct economic benefit as the expenditure of these dollars filters throughout the economy. The benefits are far greater, however, than any ledger alone can convey. The intellectual exploration made possible by these grants, for example, gives our students special advantages in training for their future employment. And the research results themselves contribute to individual lives that are healthier, richer and more productive — while, in some cases, also fueling economic growth." The chancellor's statement describes actions Pitt has taken to increase its own efficiency: budget cuts and organizational restructurings; a five-year planning process, begun in FY 1996, to reallocate resources to high priority programs and projects; system upgrades such as the new Student On-Line Academic Resource System (SOLARS) project to link and improve student services — among other efforts.

While thanking the state for its support and describing the University's partnership with Pennsylvania as "a good one," Nordenberg details the hardships Pitt has suffered because of appropriations that have totaled slightly more than half the rate of inflation since FY 1990.

The chancellor points out that Pennsylvania continues to rank among the bottom five states in per capita support for higher education; that public university tuitions in Pennsylvania are among the nation's highest; and that Pitt's peers in the Association of American Universities receive, on average, support for nearly 37 percent of their expenditures from their home states, compared to the 18 percent Pitt gets from the Commonwealth.

"Equally disturbing is the fact that, while many states found it necessary to curb their investment in higher education in the 1990s, they are now willing to spend substantially more on public colleges and universities," Nordenberg writes. "Most states are now looking at increases in higher education funding that are significantly greater than inflation. Indeed, during the current fiscal year, more than a dozen states increased public university budgets by greater than 7 percent, while Penn-sylvania's public colleges and universities received increases of less than half that amount.

"Pennsylvania's public colleges and universities, and hence the Commonwealth itself, will be placed at an increasing competitive disadvantage if appropriations increases for these institutions are held to the rate of inflation or below. The University of Pittsburgh, therefore, has joined with Pennsylvania's other institutions of public higher education to ask the Commonwealth to strengthen our partnership through a predictable annual investment that will take us into the next century." * * * In adopting a united lobbying strategy this year, Pennsylvania's state-funded universities are, in part, complying with a request by state lawmakers, said Dykstra of Commonwealth Relations. "The legislators themselves have asked that we work together. They don't like to see us squabbling among ourselves," Dykstra said.

The schools also are following up on the lobbying success they enjoyed last year, she said. In April, the leaders of Pitt and Pennsylvania's other state-related universities (Penn State, Temple and Lincoln) gathered in Harrisburg with heads of the 14-university State System of Higher Education and Pennsylvania community colleges, plus 30 of the state's most powerful legislators. The university leaders successfully lobbied for two things: a 3 percent increase in the schools' state appropriations (Gov. Ridge had recommended 2 percent) and elimination of a threatened tuition cap plan.

— Bruce Steele

Filed under: Feature,Volume 30 Issue 3

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