From left: Ralph J. Cappy, chair of Pitt’s Board of Trustees and of the board’s Executive Committee; Chancellor Mark A. Nordenberg; Michael A. Bryson, chair of the trustees’ Budget Committee; and Arthur G. Ramicone, Pitt vice chancellor for budget and controller.

Building on the substantial successes of recent years, the Budget and Executive Committees of the University’s Board of Trustees on July 14 approved a $1.55 billion Pitt operating budget for fiscal year (FY) 2007.

The budget provides additional funding for academic initiatives, research development, technology and infrastructure upgrades, and student life enhancements. It also provides for the most moderate tuition increases in several years.

The board’s action followed the enactment, earlier this month, of the FY 2007 Commonwealth budget, which includes appropriations for Pitt and Pennsylvania’s other state-related universities.

“The University of Pittsburgh continues to move through a period of exceptional progress,” Pitt Chancellor Mark A. Nordenberg said. “Many of our successes can be seen in trend lines charting changes in our performance over time—with far greater numbers of applicants seeking admission, with far better-qualified students enrolling, and with dramatically elevated levels of research support being three key examples. We also just closed another year in which both faculty members and students received national and international recognition for their achievements and in which we made important improvements to the physical quality of our campuses. The budget approved by our board positions us to continue investing in excellence, while moderating tuition increases and taking account of market differences that exist between the Pittsburgh campus and our regional campuses.”

The single largest revenue component of Pitt’s budget is research funding, expected to total approximately $625.7 million for FY 2007. These are the funds that support much of Pitt’s pathbreaking research, that help generate jobs throughout the region, and that have enabled the University to increase its own employment base by nearly 25 percent during the last 10 years. Pitt’s progress on this front is reflected in rankings released by the National Science Foundation that show the University placing 12th among all national universities, public and private, in Federal Science and Engineering Research and Development Obligations and in rankings placing Pitt 7th nationally, among all universities, in funding from the National Institutes of Health.

Another critical revenue component of Pitt’s budget is the Commonwealth appropriation, which this year includes a 4.5 percent increase in the primary Educational and General line item funding, set at $161.1 million. Combined with Department of Public Welfare reimbursements, Pitt’s total Commonwealth appropriation for FY 2007 is nearly $183 million.

“For every dollar invested in Pitt by the Commonwealth, the University brings in more than $3.50 in external research support,” said Arthur G. Ramicone, Pitt’s vice chancellor for budget and controller. “These are dollars that are largely spent on salaries, goods, and services in the local area and represent an extraordinary return on investment for the Commonwealth.”

Pitt’s FY 2007 budget provides new funding for academic, student life, and research initiatives and will advance such priorities as faculty recruitment and retention, laboratory renovations, information technology upgrades, and library enhancements. Medical insurance is projected to increase by 7.7 percent, and utilities are budgeted to increase by 16.5 percent, or $7.2 million, owing primarily to expected rate increases and costs associated with new facilities. Savings from conservation efforts have offset increases by $1.9 million since fiscal year 2002.
To help fund these initiatives, tuition rates at the Pittsburgh campus generally will increase 5.9 percent for students who are Pennsylvania residents and 3 percent for out-of-state students. Tuition at Pitt’s regional campuses in Bradford, Greensburg, Johnstown, and Titusville will increase by 3 percent for Pennsylvania residents and will not be increased for out-of-state students. These are the lowest tuition increases on the Pittsburgh campus since 2001 and the lowest increases in more than 30 years at the regional campuses. To help meet student needs, the University’s budget for financial aid has increased by the same percentages as the tuition rates. The School of Medicine will raise tuition 3 percent for both Pennsylvania residents and out-of-state students.

The FY 2007 budget also includes a faculty and staff salary increase pool of 3.25 percent.

“What really distinguishes this university is the talent and commitment of our people,” Nordenberg said. “In this era of heightened competition for the best faculty, researchers, support staff, and administrators, attracting and retaining high-performing employees is critical to maintaining the high standards that have come to be associated with Pitt.”

Building Pitt’s budget is a process that spans most of the year. It begins with the recommendations of planning and budgeting committees within the University’s various responsibility centers and includes subsequent recommendations to the chancellor from the University-wide Planning and Budgeting Committee, which includes administrators, faculty, staff, and students. Recommendations made by the chancellor are submitted first to the board’s Budget Committee and then to the board or its Executive Committee for final approval.

Because the Commonwealth budget had not been finalized by the time of the annual meeting of the board on June 23, the Budget Committee and Executive Committee took action July 14.