By SUSAN JONES
Pitt’s Board of Trustees' budget and executive committees approved a 2021-22 budget on July 13 that includes tuition increases, small pay hikes, increased capital spending and a 1 percent across-the-board budget cut.
Chief Financial Officer Hari Sastry presented details of the budget to the committee. Here’s what you need to know:
1. The operating budget for fiscal year 2022 is $2.6 billion, a 7.2 percent increase from last year's and fiscal year 2020’s $2.4 billion budget.
2. The research base will rise by 3 percent to $908 million — the first time it’s been more than $900 million. The previous two years it was $878 million.
3. The education and general budget will grow from $878.1 million in 2021 to $907.1 million in 2022.
4. Sastry said a 1 percent permanent budget reduction across the university was needed this year “to balance the budget, while continuing to support compensation increases with faculty and staff, as well as other key initiatives.” This follows a permanent budget cut of 3.7 percent across the board on average in the 2020-21 budget, along with a one-time cut of 5 percent.
5. After no pay raises last year, Sastry said the budget includes “modest progressive salary increases.” This means 1 to 1.5 percent, based on current salary, with a possible 0.25 percent in merit hikes. (See related story).
6. The capital budget is $351 million for fiscal year 2022, more than double the $140 million it dropped to for 2020-21 and a little more than half of the $641 million it was for 2019-20. The highest price tag items are: Recreation and Wellness Center, $40 million; new chilled water plant, $39 million; Hillman Library, Phase 3, $31 million; renovate Scaife Hall west wing, $30 million; and a new engineering building at Pitt–Bradford, $22.7 million.
7. After no increase last year, tuition will go up for 2021-22. On the Pittsburgh campus, in-state undergraduate and all graduate students will see a 2.5 percent increase; out-of-state undergrads will pay 4.5 percent more. There are a few exceptions: Engineering rates will go up 2.5 percent for in-state and out-of-state, and School of Computing and Information students will pay an additional 2 percent.
8. Room costs will go up by 5 percent in Pittsburgh, and slightly lower on the regional campuses. Dining costs will rise by around 3 percent for all campuses.
9. The total appropriation from the state, which hasn’t changed since last year, is $224.3 million. This includes general funds, rural education outreach, money for the School of Medicine and construction grants. This is about 9 percent of Pitt’s total budget. Without School of Medicine or construction funds, the state’s allocation is just under 7 percent of the University’s budget.
10. The budget includes slightly more money from the endowment — $75.8 million vs. $75.6 million in 2020-21 — although the Board of Trustees’ Investment committee voted in June to keep the distribution percentages of funds taken from Pitt’s consolidated investment fund and University operating funds quasi-endowment the same for 2021-22 as the previous two years — 4.25 and 4.75 percent, respectively, of the three-year average fair market value.
In an email to the Pitt community this week, Chancellor Patrick Gallagher said: “It is important to recognize that these budgets follow an exceptionally disruptive year due to the COVID-19 pandemic. … Despite these historic disruptions, Pitt’s operating and capital budgets for fiscal year 2022 represent our institution’s first steps toward a new, post-pandemic normal and a return to in-person instruction this fall. The approved budgets balance our efforts to move on from last year’s budget disruption and begin to engage in a fuller recovery.”
Tyler Bickford, chair of the Senate’s Budget Policy committee and one of the 10 faculty representatives on the University Planning and Budgeting Committee said he is concerned about the “series of austerity budgets starting well before the pandemic. I don’t know where the schools are going to find another 1 percent to cut this year, after the permanent 3.7 percent cut last year, another 1.5 percent cut in 2019-20, and 1 percent again in 2016-17. Each cut is baked into the next year’s budget, so that adds up to about $60 million dollars missing from the education and general budget this year.”
The 2021-22 budget will be used to build a parallel test budget, as Pitt develops a new responsibility center management model. The plan is to have the model infrastructure ready in October to run the parallel year, and then implement the new model for 2022-23.
Susan Jones is editor of the University Times. Reach her at email@example.com or 724-244-4042.
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