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September 28, 1995

FY97 budget request to state has salary increases, 3.5% tuition hike

Pitt's administration has proposed increasing tuition next fall by no more than 3.5 percent, under a fiscal year 1997 funding request submitted to the Pennsylvania Department of Education this week.

Also under the plan, Pitt would increase the pool of money for salaries and fringe benefits by 5 percent for most faculty and staff. The exceptions would be employees in the School of Medicine, Western Psychiatric Institute and Clinic and the Services for Teens at Risk (STAR) program, where increases would be 2.5 percent.

Pitt Director of Communications Ken Service said the administration originally planned to propose 5 percent salary/fringe benefits increases for all University employees, but decided on a lower percentage for the medical school, Western Psych and STAR on the advice of Thomas Detre, senior vice chancellor for Health Sciences.

Health Sciences News Bureau director Jane Duffield said the decision to recommend lower raises for employees in those units was made because their salaries are funded by Presbyterian University Hospital, "so they're governed by the same economic situation as the hospital. In this day of declining health care dollars and cost containment, it seemed that 2.5 percent was a reasonable salary request." (In separate resolutions this month, the Staff Association Council requested a 7 percent salary-pool increase for all staff members next year, while the University Senate budget policies committee called for a 6 percent salary-pool increase for continuing faculty. See story on this page.) The Pitt administration's proposals to the state regarding tuition and salary increases are based largely on two assumptions:

* Stable University-wide enrollment.

* A total state appropriation for FY 1997 (July 1, 1996-June 30, 1997) of $157,230,000, which would be a 6.8 percent increase over Pitt's current state appropriation.

Of the two, stable enrollment would seem to be the safer assumption.

While University-wide, full-time equivalent (FTE) enrollment dipped from 27,990 in fall 1993 to 27,139 in fall 1994, Pitt enrollments have remained fairly steady in recent years. Last year's decrease of 851 FTE students was twice as large as any other one-year fluctuation so far during the 1990s. (Enrollment numbers for fall 1995 won't be calculated until next week, said James Ritchie, director of Pitt's Office of Institutional Research.) For the last five fiscal years, Pitt and Pennsylvania's other state-supported universities have received no increase in their base appropriations from the state. Additional state funds have come almost entirely through the state's Tuition Challenge Grant Program, which gives the schools a financial incentive for limiting tuition hikes for in-state students. For example, Pitt is expected to get an additional $3.2 million in challenge grant money this year as a reward for keeping its fall 1995 in-state tuition increases to 4.5 percent.

Last year at this time, Pitt was asking state lawmakers to abolish the Tuition Challenge Grant Program and increase the University's appropriation by 6 percent. This year, in addition to requesting a 6.8 percent increase, Pitt is again asking the state to do away with the challenge grant program.

"The initial rationale given to support the Tuition Challenge Grant Program is no longer appropriate," Interim Chancellor Mark Nordenberg wrote in Pitt's budget request document. "Times have changed. Universities can no longer dramatically increase tuition; the market will not bear such costs. Institutions in other states are holding down their tuition rates without similar 'challenge' programs. Indeed, the Pitt budget proposed in these pages assumes only a 3.5 percent tuition increase for FY 1997, a full percentage point below that allowed this year under the terms of the challenge.

"Of greater concern is the size and inequitable allocation of the Tuition Challenge Grant fund," Nordenberg continued. "The Tuition Challenge Grant fund has not only failed to grow but has twice been cut significantly since the program's inception in FY 1990. During FY 1991, the fund was reduced by half at mid-year. In FY 1996, the total amount appropriated for the program for all five participating institutions was cut from $32 million to $24 million, a 25 percent decrease from that allocated in FY 1995.

"In addition, the methodology used to distribute the Challenge Grant fund does not treat all participating institutions equitably. By failing to take into account the comparative sizes of the universities and the difference in cost between educating an undergraduate versus a graduate or professional student, some institutions receive a far larger percentage increase than others. In the current fiscal year, for example, percentage increases for individual institutions ranged from 1 percent to 3.3 percent. Pitt's increase of $3.2 million is $1 million less than that received in 1995 and represents a 2.5 percent increase that will barely allow us to keep pace with inflation." Nordenberg pointed out that state money currently accounts for 17 percent of Pitt's total revenue but 35 percent of the University's unrestricted income for educational and general purposes. "E & G" income is money not earmarked for narrowly defined purposes such as grants for specific research projects.

During the last 10 years, the state's contribution to Pitt's E & G budget has dropped from 42.5 percent to 35 percent, Nordenberg noted. Tuition and fees now account for 47 percent of Pitt's E & G budget.

"This trend demonstrates a clear pattern. When the annual Commonwealth appropriation increased at a greater rate, the University was proportionately less dependent upon tuition dollars for its educational and general revenue. As increases in the Commonwealth appropriation diminished, Pitt was forced to become more dependent upon tuition as a source of income," Nordenberg wrote.

Pennsylvania has ranked among the bottom five states in per capita funding for higher education for the last 10 years, Nordenberg added.

Pitt's funding request includes the following, existing line items:

* Educational and general funds — $138.81 million (6 percent more than the current fiscal year appropriation)

* Recruitment and retention of disadvantaged students — $340,000 (5.9 percent increase)

* School of Medicine — $6.49 million (4 percent)

* Dental clinic — $1.09 million (6 percent)

* Western Psychiatric Institute and Clinic — $8 million (4 percent)

* Services for Teens at Risk — $517,000 (4 percent)

* Center for Public Health Practice — $265,000 (6 percent)

* Rural education outreach — $375,000 (25 percent)

Pitt also is asking for approximately $1.34 million to help develop a Distance Education Network that would use interactive television (ITV) technology, satellite technology and instructional computing to deliver educational programs to students at remote locations off campus.

Pitt currently has one fully equipped distance education classroom at the Pittsburgh campus and four temporary sites at the regional campuses. The University spends about $1 million annually on distance education, according to the budget request. The proposed network would create six fully equipped classrooms and one conference site in Pittsburgh, two classrooms in Johnstown and one classroom each at the Bradford, Greensburg and Titusville campuses. The plan also calls for hiring a small technical staff, training faculty in distance education technology, and improving Pitt's video production and satellite capabilities to the point that each campus could broadcast classes to the other four.

Pitt plans to seek $3.5 million in state funds over the next four years for the network. "The appropriation request will decrease each year, and by FY 2001, the network will be self-supporting," according to the budget request.

The budget document states that Pitt "already is operating under the leanest of conditions and continues to face uncontrollable increases in basic costs." The document cites the following examples:

* Department budgets in the Faculty of Arts and Sciences have been cut to levels equivalent to nearly a decade ago. "Professors, therefore, are asked to instruct their students with fewer laboratory supplies, class handouts and other instructional support materials."

* Budgetary constraints have forced the University to cut its maintenance costs by 20 percent in recent years. "Emergency repair projects are the only ones to receive authorization even though our priority deferred maintenance backlog is approaching $50 million and is in excess of 500 projects."

* Complying with the federal Americans With Disabilities Act ultimately will cost Pitt more than $36 million.

* The federal Clean Air Act eventually will prohibit chloro-fluoro carbons, which are used in 90 percent of Pitt's chilled water generators. Replacement costs will amount to about $5 million over the next decade.

Such costs, combined with "inadequate" state revenues, force Pitt to spend less than it should on faculty and staff salaries, new educational technologies and in other vital areas, the budget request argues.

Pitt's funding request is the first formal step toward setting the University's state appropriation. Pennsylvania legislators and the governor's office will consider Pitt's request, along with those from other state-funded institutions, and try to come up with an FY 1997 state budget by the end of June.

— Bruce Steele

Filed under: Feature,Volume 28 Issue 3

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