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June 12, 1997

FY98 budget being sent to board this week; no specifics disclosed

Administrators refused to reveal details of the proposed fiscal year 1997-98 Pitt budget the University is mailing (or, in some cases, hand-delivering) this week to trustees.

But Chancellor Mark Nordenberg said Monday that the budget's proposed salary and tuition numbers would "likely be close to what the UPBC [University Planning and Budgeting Committee] has recommended": a 4.5 percent tuition increase for next fall, a 1 percent cut in the overall compensation budget and a 2.5 percent increase in the pool of money for faculty and staff raises.

As in recent years, raises will first show up in employees' September paychecks, retroactive to July 1, said Art Ramicone, interim vice chancellor for Finance.

Although Pennsylvania lawmakers approved Pitt's state appropriation May 13 — at least six weeks earlier than usual — it still will take until the end of summer for Pitt to process individual employee raises after the Board of Trustees has approved a University budget, Ramicone said.

The trustees' budget committee is scheduled to consider the proposed Pitt operating and capital budgets at a public meeting June 19 at 3:30 p.m. in 2P56 Forbes Quadrangle. The proposals would then go to the full board for final approval June 26.

Chancellor Nordenberg rejected as "not very realistic" a recommendation by the University Senate budget policies committee to increase the pool of money for faculty salaries by 4.3 to 5.3 percent.

In keeping with Pitt's official salary policy (which the University has rarely followed in recent years), the Senate committee recommended both a cost of living raise equal to last year's Consumer Price Index increase (3.3 percent) and a separate allocation (1 to 2 percent) for merit, market and equity raises.

Additional money would be available for raises if Pitt would adopt a faculty early retirement plan, the Senate committee stated. Without taking sides on whether Pitt should adopt a permanent or "window" policy to encourage early faculty retirements, the committee urged the administration to resolve the issue as soon as possible.

According to the committee, many older faculty members are putting off retirement until they see what kind of incentive plan Pitt adopts; resolving that question would restore at least the normal faculty turnover and free up additional salary money as retirees are replaced by younger faculty at lower pay.

The Senate committee also noted: "This year, the increase in the state appropriation (3 percent) is almost consistent with the CPI increase (although part of it was granted on a one time basis) and the likely tuition increase is above the rate of inflation.

"However, there are other likely expenditures which will have increased from FY97 at a rate greater than inflation or are new," including debt service for construction and renovation, program initiatives and campus enhancements, actions to resolve the "Year 2000" problem on Pitt computer systems, Title IX expenditures, and new hiring in the Office of Institutional Advancement as Pitt prepares for a capital fund-raising campaign.

Even so, the committee concluded: "We are not persuaded that a convincing case has been made that this is so exceptional a year as to justify deviation from the salary policy. The case for an exception to the policy would require the demonstration of special needs or circumstances this year. The needs or circumstances are not special unless the case for them can include a convincing demonstration that similar situations will not arise every year. This demonstration has not been made. In its absence, an 'exception' represents a de facto change in the salary policy.

"We recommend that the salary policy be followed." In rejecting the Senate committee recommendation, Chancellor Nordenberg told the University Times: "I respect the members of the budget policies committee and understand the point that I think they're attempting to make — that is, that salaries ought to be an institutional priority.

"But when, on the other hand, you add up the total amount of money that the committee assigned to each of the salary pool components and you consider that we are moving through a year in which the [state-appropriated] increase to our base budget was 2 percent, and the fact that we are attempting to control tuition and that we do have other investments to make — the committee's recommendation is not very realistic." Nordenberg pointed out that the Senate group's salary recommendation exceeded that of UPBC, which is a group of staff, students, administrators and faculty (including the chairperson of the Senate budget policies committee) that advises the senior administration.

While UPBC ultimately voted to recommend a 1 percent cut in overall compensation and a 2.5 percent salary pool increase, the group's budget parameters subcommittee favored a 1.5 percent overall cut and a 3 percent salary pool increase.

Several faculty members of UPBC said the committee approved the lower salary pool increase only after administrative members made it clear that the senior administration would not accept the 1.5 percent/3 percent formula.

— Bruce Steele

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