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July 8, 2004

Appropriation Hiked 3.29%

What a difference a year makes.

Last year, Pitt’s state appropriation bill was not signed into law by Gov. Ed Rendell until Dec. 19, when almost half of fiscal year 2004 was over.

This year, the state legislature approved and the governor signed the fiscal year 2005 budget – including Pitt’s appropriation – only days after the fiscal year began.

Pitt will get $168,768,000 in commonwealth appropriations for FY05, a 3.29 percent increase over FY04 funding. That is almost $10 million less than the $178,460,000 Pitt requested from the state, but more than the 2.25 percent hike in appropriations originally proposed by Rendell in his Feb. 2 commonwealth budget message.

In Pitt’s FY05 request, the University also asked for a $6 million line item for research infrastructure improvements. That request was not approved by the General Assembly.

Pitt’s fiscal year 2005 appropriation includes:

• $150,393,000 for educational and general expenses.

• $416,000 for student life initiatives.

• $6,607,000 for doctor of medicine instruction.

• $1,037,000 for the School of Dental Medicine’s dental clinics.

• $423,000 for recruitment and retention of disadvantaged students.

• $7,740,000 for general maintenance and operations of Western Psychiatric Institute and Clinic.

• $500,000 for Western Psych’s teen suicide center.

• $251,000 for the Graduate School of Public Health.

• $1,401,000 for rural education outreach.

Pitt officials argued in their FY05 budget request that the levels of state funding have declined significantly in the last couple years.

While Pitt was budgeted to get a $178,460,000 state appropriation in FY02, the University ended up absorbing a 3 percent ($5.35 million) freeze that year. That money never was restored.

Pitt’s FY03 appropriation was reduced by 3.7 percent ($6.5 million) from the previous year, and then 2 percent of that funding was frozen during the year and never received by the University.

“To begin to reverse the decline in the commonwealth appropriation, the University seeks restoration of its appropriation to the FY 2002 approved funding level of $178.460 million,” Chancellor Mark A. Nordenberg wrote in Pitt’s FY05 request. Taking into account the $6 million research infrastructure line item, Pitt was requesting a 12.9 percent total increase over FY04 funding.

If Pitt received such an increase, Nordenberg said, tuition increases likely would be limited to 4 percent, and the salary compensation pool for faculty and staff could be increased by at least that percentage.

In February, Rendell proposed a budget that included a 2.5 percent increase in Pitt’s funding for educational and general (E&G) expenses but flat funding for line items that state lawmakers typically increase by a similar percentage as the E&G budget.

A 2.5 percent hike in Pitt’s E&G budget (which in the fiscal year just completed accounted for $145.6 million of the University’s total $163,386,000 appropriation for FY04) combined with no increases for the other Pitt line items would have meant an overall 2.25 percent funding increase.

According to the Department of Revenue, Pennsylvania netted a $637 million surplus in FY04, largely due to a 10 percent boost in state income taxes, which went into effect in January, and other tax increases on cigarettes and telephone usage.

But that unexpected windfall did not influence Rendell’s approving of a higher-than-proposed rate of increase for the commonwealth’s four state-related institutions, Pitt, Penn State, Temple and Lincoln, according to a spokesperson for the governor’s office.

“Governor Rendell is very conservative about the uses for that surplus and already has stored away $190 million for the ‘rainy day fund,'” Abe Amoros told the University Times this week. “The main reason that the governor okayed [the higher percentage than he proposed in February] is that he supports higher education as an important resource and as one of the best ways for keeping our young people here in Pennsylvania. Governor Rendell believes the 3 percent increase for four-year institutions was justified on its merits.”

Amoros added that, under the new budget, financial aid grants to enable students to attend college were increased by 3.8 percent and funding to recruit disadvantaged students was hiked by 31 percent for all Pennsylvania four-year educational institutions.

“We’re pleased to get at least a modest increase, and, given the circumstances last year, for the budget to be passed this early,” said Paul A. Supowitz, Pitt associate vice chancellor for Commonwealth, City and County Relations. As the budget process continued over the year, Supowitz said, “it became clear that we were not going to get as much as we requested. However, we had hoped to do better, to re-coup more of the losses we’re taken in last couple years.

The budget and executive committees of Pitt’s Board of Trustees are scheduled to hold a public meeting July 14 at 8:15 a.m. in the Kurtzman Room, William Pitt Union, to discuss Pitt’s FY05 operating budget, salary compensation pool and tuition fees.

-Peter Hart budget

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