Mark A. Nordenberg

The past year also brought recurring budgetary challenges. Undoubtedly, many of you have followed news of the appropriationsetting process in Harrisburg and the tuitionsetting process in Pittsburgh. If so, you know that the current year has arrived with more of the same.

It is important to note, from the outset, that the Commonwealth of Pennsylvania has been Pitt’s most important partner since we became a staterelated university some thirtyfive years ago. In recent years, we have benefited, in particular, from capital projects support and from special line item appropriations that better positioned us to renovate and equip labs and to move forward with our information technology plan. The past several weeks also brought the passage of legislation providing for the distribution of tobacco settlement proceeds, and a sizeable portion of that fund will come to Pitt in support of healthrelated research.

However, we continue to struggle in our efforts to obtain levels of Commonwealth support for our base budget that are more comparable to the state support received by peer public research universities. In fact, this was a particularly difficult year for Pennsylvania’s state-related universities. The appropriation bills passed in Harrisburg provided for funding increases of less than 1% for each of the four institutions—a clear reminder that Pennsylvania, in the funding of its public universities, has been, and apparently will remain, a low-appropriation, high-tuition state.

In its annual budget submission to me, the University Planning and Budgeting Committee recommended the creation of a 4% salary increase pool. That recommendation was grounded in an assumption that our appropriation would include at least a 3% increase to our base budget, as the Governor had recommended last February. However, as already has been reported, the bill ultimately enacted provided for only a 1.2% increase to our base budget and a 0.6% increase to our overall appropriation.

Particularly given our clear commitments to quality, closing that very significant gap presented real problems. Among other things, it required a tuition increase that was substantially larger than we had anticipated. However, sharing the UPBC’s expressed belief that maintaining salary competitiveness should be a high institutional priority, everyone involved has worked hard to avoid sacrificing the proposed 4% salary increase pool.

Though united in its recommendation as to the size of the pool, the members of the UPBC were evenly split with respect to its allocation and tendered two recommendations. One was that 2.5% be made available for salary maintenance to all employees with at least satisfactory performance evaluations; that 1% be allocated for merit increases; and that 0.5% be distributed by senior officers to particular units on a differential basis to address market and equity issues. This recommendation subsequently was endorsed by the Senate Budget Policies Committee, and I intend to implement it.

To repeat, what this will mean for the current fiscal year is that we will preserve the recommended 4% salary pool, and it will be allocated on the following basis: 2.5% will be made available for salary maintenance to all employees with at least satisfactory performance evaluations; 1% will be allocated for unitlevel merit increases; and 0.5% will be distributed by senior officers to particular units on a differential basis to address market and equity issues. For continuing members of the faculty and staff, these increases will be retroactive to July 1, the beginning of the new fiscal year, and will first appear in September paychecks.

As I have said on many past occasions, I am grateful for everything that each of you has done to make this University a better, stronger, more exciting place. I hope you enjoy the second half of summer, and I look forward to working with you in our continuing quest for further progress in the weeks and months ahead.