University Times

In hopes of avoiding job cuts, there will be no salary increase pool included in Pitt’s fiscal year 2010 budget, Chancellor Mark A. Nordenberg announced in a March 2 University Update.

The decision was made on the recommendation of the University Planning and Budgeting Committee (UPBC), which advises the chancellor in decisions regarding the University’s annual operating budget.

The University’s salary pool increase was 4 percent last year.

In the update, Nordenberg stated that, after discussion on the continuing economic crisis and the difficulties that need to be faced in crafting a budget, UPBC at its February meeting “recommended that next year’s budget not include a salary increase pool. I agree with that recommendation and plan to implement it.”

Pay and benefits are the University’s largest expense, totaling $967 million on the $1.66 million expense side of Pitt’s current budget.

The state may withhold 6 percent of Pitt’s $189.3 million combined appropriation for the current fiscal year and Gov. Edward G. Rendell, in his budget proposal for next year, sought to keep Pitt’s appropriation at the current reduced level, placing state support for the University at less than fiscal year 2006 levels.

However, Rendell on Tuesday announced one spot of bright news emanating from $953 million in federal economic stimulus money that is set to come Pennsylvania’s way in FY10. Of that money, $42 million is to be allocated to restore planned budget cuts to Pitt and its fellow state-related universities.

Vice Chancellor for Governmental Relations and Associate General Counsel Paul A. Supowitz noted that the governor’s announcement stated that the 6 percent cut would be restored for fiscal year 2009-10, which begins July 1.

“At this point, there has been no indication that the 6 percent cut for the current fiscal year 2008-09 will be restored,” he said.

The impact of the governor’s announcement about the federal stimulus money is not yet clear. Vice Chancellor for Public Affairs Robert Hill stated, “Because this announcement has just been made, we will need to follow up with the administration regarding the specifics of both the plan and the process for its implementation. And given the continuing economic decline, it is clear that many serious budget challenges remain.  

“However, this is a very important form of support as we work to control tuition increases, maintain program quality and intensify our efforts to help stimulate the regional economy.”

The University’s belt-tightening is not unique: Among the many schools resorting to pay freezes are the 14 Pennsylvania State System of Higher Education schools, Penn State, Temple University and neighboring Carnegie Mellon University.

In the March 2 update, Nordenberg stated, “Even though many other universities already have taken this step, the decision not to provide for salary increases in next year’s budget was not an easy one for me to make or for the UPBC to recommend,” adding, “We value the efforts of our faculty and staff and have made investments in compensation a high priority over the course of many years.”

In his update, the chancellor went on to say, “A significant workforce reduction, the most obvious alternative in an institution with such heavy commitments to personnel expenses, was considered to be a far less desirable option by all involved. As we know from almost daily media reports, many organizations are moving forward with substantial employment cutbacks but sitting at the very heart of our core strengths are the dedicated individuals who work tirelessly and effectively to advance our important institutional mission. It is both equitable and essential, then, that we do everything possible to maintain a reasonably stable employment base. Holding salaries at their current levels will help us do that.”

University Senate president John J. Baker pointed out that the chancellor has been cautioning since fall that the upcoming budget year would be a difficult one. Baker said administrators are being “very, very cautious” in developing next year’s budget and that the announcement of a freeze doesn’t come as a surprise.

“I’m not happy about it, but it would appear to be necessary at this stage,” Baker said.

In response to the news, Staff Association Council President Rich Colwell said, “SAC recognizes the difficult decisions that Chancellor Nordenberg faces and is supportive of his decision to forgo a salary increase pool in lieu of decreasing the workforce.

“These are difficult financial times for all — together, working with the University administration, SAC is confident that we will grow through this process and become a stronger University tomorrow.”

Nordenberg’s update is available online at www.chancellor.pitt.edu/news/2009-03-02.html.

—Kimberly K. Barlow