University Times

In October, Gov. Edward G. Rendell announced that more than $7.25 million (4.25 percent of Pitt’s appropriation) would be withheld from the University’s final appropriation payment of the fiscal year if the state’s financial picture didn’t improve. Following a dismal mid-year budget report, in December Rendell increased the freeze to Pitt and its fellow state-related schools to 6 percent.

For Pitt, the cut of more than $10.3 million to the Education and General and other line items would put the current appropriation below the University’s FY06 appropriation of nearly $164.65 million.

In addition, more than $18.5 million in funding for the School of Medicine, Western Psychiatric Institute and Clinic, Pitt’s dental clinic and the Center for Public Health Practice, which comes through the Department of Public Welfare with matching federal funds, also is targeted for a $1.11 million, or 6 percent, cut.

The expected reductions would cut more than $11.3 million from Pitt’s combined $189.25 million in state support.

Pitt’s overall FY09 budget is $1.71 billion.

The state’s financial picture has continued to worsen. State officials report that general fund collections are lagging 6.8 percent behind estimates and the deficit could rise as high as $1.7 billion by the end of the fiscal year.

Although the governor has made the cuts in Pitt’s appropriation contingent on the economic situation, Associate Vice Chancellor for Commonwealth and City/County Relations Paul Supowitz said, “It would be Pollyanna-ish to think there’s going to be a turnaround and we’re going to see that money.”

In such a dismal financial climate, University officials aren’t expecting much love from legislators when they travel to Harrisburg next month to brief state House and Senate appropriations committees on Pitt’s budget needs.

As it has since 2006, the University requested an 8.5 percent appropriation increase for the coming fiscal year (see Sept. 25, 2008, University Times) although legislators ultimately have bestowed much lower increases. Last year, for instance, Pitt’s appropriation was increased just 1.5 percent.

“It’s going to be very tough because they’re looking for places to cut in this year’s budget and going forward into next year’s,” Supowitz said.

Hailing Pitt’s successes to legislators won’t be hard, Supowitz said. “Pitt has a good story to tell. Everything at Pitt has gone so well over the last dozen or so years.”

Citing the new technologies and new jobs the University generates, he noted: “We really have to try to educate [legislators] and open their eyes to the fact that in a difficult economic period research universities are one of the best engines for recovery. That has to be an important part of the discussion.”

He pointed out that in western Pennsylvania job creation largely has come through the region’s universities and hospitals. “Almost all of that is a result of research going on here and research funding. If you want to invest and stimulate the economy, we’re a good place to do that.”

In addition, Supowitz said the point needs to be made that Pitt and its fellow state-related universities have “absorbed more than our fair share of the pain in difficult budget years.”

The University weathered a 3 percent mid-year cut from the state in FY02, followed by a 3.7 percent cut in FY03 and a nearly 5 percent reduction in its FY04 appropriation, cuts from which it was just beginning to recover. “We’ve more than shouldered our share of the burden,” Supowitz said.

Looking at the long term, the current strategy of scrutinizing hiring and leaving positions unfilled isn’t sustainable forever, since universities are a people-intensive business, Supowitz said.

Given that tuition dollars and the state appropriation are the two unrestricted sources of revenue used to pay employees, he said, “We’re going to have to start cutting if funding continues to be eroded.”

Regardless of the value of their arguments, University leaders may find themselves facing a tough audience of legislators saying, “We’d love to help you but there’s no money here and we’re looking to take back money,” Supowitz said.

—Kimberly K. Barlow