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July 24, 2008

2.5% raise awarded for satisfactory performance

The 4 percent pay raise approved by Pitt trustees will be distributed as follows: 2.5 percent for employees with satisfactory performance; 1 percent for merit, market and equity adjustments at the unit level, and 0.5 percent to be distributed by senior officers to address market imbalances among units in the University.

Increases, retroactive to the July 1 start of fiscal year 2009, will appear in September paychecks.

Chancellor Mark A. Nordenberg announced the allocation in a July 22 University Update on the FY09 operating budget. In the memo, he touted last year’s record-setting levels of applications for admission and research funding as well as record fundraising in which Pitt’s capital campaign passed the $1.25 billion mark, but tempered the report’s enthusiasm with talk of “times that are presenting serious fiscal challenges.”

Nordenberg noted that growth of the University’s endowment will be affected by the economy and “dramatically rising costs in expense areas from energy to food also will affect our institutional budget, just as they affect the budgets of the individuals and families who make up the Pitt community.”

He stated that controlling tuition increases (which ranged from 2 to 6 percent) and providing the best possible salary increase pool were high priorities as the University Planning and Budgeting Committee honed its FY09 budget recommendation to the trustees.

UPBC proposed a 3.75 percent salary increase pool that would have allocated a 2.25 percent increase for employees with satisfactory performance, “and further urged that any additional funds made available as the Commonwealth budget was finalized be added to the salary increase pool as a first priority,” Nordenberg stated in the update. Legislators, however, did not stray far from the governor’s proposed budget as they allocated a 1.4 percent increase in Pitt’s overall appropriation. (See story on page 4.)

In spite of the lack of additional state funding, Nordenberg said other adjustments enabled the University to budget a 4 percent salary pool hike and increase the pay hike to at least 2.5 percent for satisfactory employees.

The FY09 raise and its distribution match FY02’s 4.0 percent increase. The pool dropped to 3.5 percent in FY03, held at 3 percent for the next three years, then rose to 3.25 percent in FY07 and 3.5 percent in FY08.

Since FY02, pay increases for satisfactory performance fell from 2.5 percent to 1.5 percent in the next four budgets. In FY07, pay for satisfactory performance was increased 1.75 percent, then 2 percent in the FY08 budget.

While pay raises are increasing, faculty and staff leaders were left hoping for more as many employees’ buying power continues to erode, outpaced by inflation, which stood at 4.1 percent in 2007.

Noting that the raises have gone up three years in a row, Staff Association Council (SAC) President Rich Colwell said SAC is encouraged by the increase in the total salary pool allocation.

However, SAC’s two voting members on UPBC did not support the UPBC recommendation of a 3.75 percent salary pool increase because SAC’s salary and job classification committee had recommended an 8.5 percent increase, Colwell said.

“SAC was pleased to see that an additional 0.25 percent salary pool increase was added to the UPBC recommendation,” Colwell said. “In order to keep staff and faculty salaries competitive, it is essential for the salary pool raises to meet or be above the yearly CPI.”

Although the increase fell short of the rising cost of living, Stephen Carr, who chairs the University Senate’s budget policies committee (BPC), said the raises are “an admirable attempt to address the multiple needs of the University” in the face of a difficult budget year.

Citing very strong agreement among UPBC members — rare given the competing interests among the committee membership, Carr said — “all in all people have done a remarkable job” in developing the budget in the face of challenges that include increased utility costs and a disappointing state appropriation.

He labeled the distribution “a reasonable set of guidelines,” noting that BPC will monitor how the raises actually are distributed.

Carr said BPC supported the UPBC’s recommended 3.75 percent increase, but added he was pleased that additional money was allocated to the salary pool.

“This means it’s possible that a majority of faculty would have a good chance of having a real increase in their wages,” he said.

He emphasized that in order to keep top-rate faculty who in turn attract top students, faculty pay must be competitive in a national market that includes endowment-rich schools such as Harvard as well as public universities elsewhere that receive stronger state support.

University Senate President John Baker told the University Times that in light of last year’s 4.1 inflation rate, the salary pool increase is not as high as he would have liked. “On the other hand, 4 percent is higher than I was expecting in light of the 1.4 percent state appropriation increase that Pitt received this year.”

Baker added, “A salary pool increase of 4 percent within the confines of a 6 percent tuition increase for in-state students and a 1.4 percent state appropriation increase is as high as the administration could possibly make it under those parameters. For that, I am grateful; it could have been worse given the lack of support from the state this year.”

—Kimberly K. Barlow and Peter Hart

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