Skip to Navigation
University of Pittsburgh
Print This Page Print this pages

July 9, 2009

Outlook for state budget funds bleak

As Chancellor Mark A. Nordenberg enumerated Pitt’s recent and ongoing fiscal challenges at the June 26 Board of Trustees meeting, more bad news for Pitt was being released in the state capital.

In a midday press conference, Gov. Edward G. Rendell was announcing a new round of proposed budget cuts that included an additional 13 percent reduction in support for state-related universities Pitt, Penn State, Temple and Lincoln University.

His revised proposal would appropriate $140 million for Pitt — nearly $20.5 million less for fiscal year 2010 than he originally proposed in February.

Rendell also announced that the state-related universities would not be part of Pennsylvania’s application for federal stimulus State Fiscal Stabilization Fund money, although he stated in a prepared release that the application “can be amended when the final state budget is enacted.”

(Of Pennsylvania’s 2009-10 allocation of $953 million in stimulus funds, according to a release from the governor’s office, the June 26 application sought $173 million in general budget relief; $418 million for the second year of Pennsylvania’s school funding formula; $77 million to restore proposed cuts to the State System of Higher Education, community colleges and Thaddeus Stevens College of Technology, and $285 million in one-time grants to school districts.)

Rendell had announced in March that he would direct $42 million of the state’s share of federal economic stimulus funds to restore planned budget cuts to the state-related universities’ FY10 appropriations. (See March 5 University Times.)

Nordenberg told the trustees, “Key underpinnings of the president’s federal stimulus package clearly are grounded in a belief in the positive powers of higher education,” noting that the plan includes grants, work-study funding and tax credits for students.

In addition to the funds intended to restore state spending cuts to higher education is a total of $16 billion for research, including $10 billion for the National Institutes of Health. Nordenberg noted that the research dollars are aimed not only at scientific advances, but to bring economic recovery to the communities in which they are spent.

Pitt faculty have submitted more than 1,000 grant applications for funding under the federal stimulus program, including more than 800 to NIH, Nordenberg said. “Pitt is well positioned to spur growth by bringing sizable shares of those dollars back into our home state and our home region,” he said.

“There is increasing demand both for high quality education and for cutting edge research — our most basic products.”

In stark contrast to the June 2008 trustees meeting, which Nordenberg called an “almost totally upbeat session,” the chancellor enumerated to the board the fiscal challenges faced by the University in the past year.

Noting that last year’s state appropriation increase of 1.4 percent (compared to a state budget increase of 4 percent overall) was “just the beginning of the fiscal difficulties that awaited us as we moved into the new academic year.” Nordenberg went on to excoriate state legislators for their lack of financial support — an issue he said has become a “perennial problem.”

He noted the state’s December announcement that it planned to hold 6 percent, or $11.4 million of Pitt’s fiscal year 2009 appropriation in reserve, as well as the University’s response to the fiscal downturn in the form of budget cuts, slowdowns in hiring and capital projects, freezing pay and increasing Pitt’s liquidity. “No one can fairly criticize the state for taking prudent steps to deal with what now has been labeled ‘the great recession.’ However, the least favorite status that has been assigned to the state-related universities is a real cause for concern,” Nordenberg said.

“It is seen in disproportionately small increases in good times and disproportionately large cuts in bad times and in the exclusion of our students from the proposed tuition relief act. This relegation to a place of low priority flies in the face of dramatically increased demand for our programs in the marketplace of high achieving potential students. It also is inconsistent with the growing recognition that the economy of this region has been rebuilt on a widely envied foundation of higher education and health care.”

Nordenberg offered some preliminary statistics on the Pittsburgh campus’s incoming freshman class.

Of students who have paid deposits for fall 2009 admission, the average SAT score was 1266, up from 1262 last fall, and from 1110 in 1995, the year Nordenberg became interim chancellor.

Nordenberg said the University anticipates that half its incoming freshmen will have graduated in the top 10 percent of their high school class — up from 48 percent last year and from 19 percent in 1995.

Likewise, freshmen who graduated in the top 20 percent of their high school class are expected to make up 79 percent of the Pittsburgh campus’s incoming class, up from 74 percent last year and 39 percent in 1995.

Nordenberg said applications for admission to the Pittsburgh campus also have risen from 7,825 in 1995 to 20,639 in 2008 and 21,687 for the fall 2009 class.

“In less than two months, we fully expect to enroll the best freshman class in our history. We also anticipate that there will be increased financial need within that group,” Nordenberg said. “Though we will not be positioned to pass a final budget until we know more about our state appropriation, our plans for that budget include a larger-than-normal increase to our own financial aid budget and increased University contributions to our Perkins loan account.”

In other business:

• Pitt trustee Stephen R. Tritch, chair of Westinghouse Electric, was elected chair of the Board of Trustees, succeeding retired Chief Justice of Pennsylvania Ralph J. Cappy, who had served as board chair from 2003 until his death in May.

Tritch earned an engineering degree at Pitt in 1971 and an MBA from the Katz Graduate School of Business in 1977.

• J. Brett Harvey, Martha Hartle Munsch, Craig A. Hartburg and Howard M. “Skip” Picking III were elected special trustees.

Harvey is president and CEO of CONSOL Energy and chair and CEO of CNX Gas Corp. Munsch, a 1970 Pitt graduate, is a partner in the law firm Reed Smith.

Hartburg, a 1977 Pitt graduate, is president of Servco Services and chair of the Pitt-Bradford advisory board. Picking is the retired CEO and president of the Miller-Picking Corp. and vice chair of the Pitt-Johnstown advisory board.

Re-elected were board vice chairs Suzanne W. Broadhurst, director of corporate giving for Eat’n Park Hospitality Group, and Robert M. Hernandez, chair of RTI International Metals and retired vice chair and CFO of USX Corp.

Re-elected to the board as trustees were Broadhurst; Charles R. Bunch, chair and CEO of PPG Industries; George A. Davidson Jr., retired chair of Dominion Resources; William S. Dietrich II, managing director of The Dietrich Charitable Trusts; Lee B. Foster II, chair of the board of L.B. Foster Co.; Bobbie Gaunt, retired vice president of Ford Motor Co. and retired CEO of Ford of Canada; F. James McCarl III, president of the McCarl Group; Susan P. McGalla, past president and past chief merchandising officer of American Eagle Outfitters; Thomas H. O’Brien, retired chair of PNC Financial Services Group; Bryant J. Salter, president and CEO of Business Diplomacy Consulting LLC, and Charles M. Steiner of the Steiner Family Office.

• Nordenberg presented a framed copy of the board’s “resolution of respect and gratitude” in Cappy’s memory to Cappy’s widow, Janet Fry Cappy.

An endowed scholarship fund in the School of Law has been established in Cappy’s memory. First-year law student Sabrina Robinson has been named the first Cappy scholar.

• The board increased student center fees for Pitt-Greensburg students. Effective this fall, fees will rise from the current $45 per term to $80 per term for full-time students and from the current $17 per term to $32 per term for part-time students.

• The board voted to name the chapel to be constructed at Pitt-Bradford in honor of Harriett B. Wick, who last year donated $500,000 toward the project. In 2007, her children donated $1 million as the lead gift toward the chapel construction.

• The board approved changes in the audit committee’s charter. The changes, endorsed by the committee in May, add the inclusion of the University’s general counsel in executive sessions, modify language on risk oversight, add provisions on internal control oversight and advise committee members of new accounting and financial reporting requirements.

—Kimberly K. Barlow

Leave a Reply