Pitt Trustees Approve 2010-11 Budget, Set Tuition Rates, End Salary Freeze

Issue Date: 
July 26, 2010

To meet the educational needs of the University of Pittsburgh’s increasingly talented and high-achieving student body, to further advance the University’s position as an international center of pioneering research, and to sustain its long-standing tradition of public service initiatives, the Pitt Board of Trustees Budget Committee advanced and the Board’s Executive Committee shortly thereafter approved a $1.889 billion University operating budget for the 2011 fiscal year.

That budget provides for $6 million in additional funding for financial aid, $2 million in new academic initiatives, enhanced support for library acquisitions and new student life initiatives, debt service of $2 million, and significant increases in IT software maintenance payments, utility costs, and health insurance and pension expenses. The budget also includes a 3 percent salary increase pool. The salaries of University faculty and staff were frozen last year.

To support critical investments in the University’s mission, to meet rising expenses, and to offset both low yields on fixed-income investments and a flat level of Commonwealth funding, the budget also provides for tuition increases ranging from 2.5 percent for students at the University’s four regional campuses, to 3 percent for out-of-state students at the Pittsburgh campus, and to 5.5 percent for in-state students at the Pittsburgh campus. Tuition rates for both in-state and out-of-state students in the School of Dental Medicine also will be held to 2.5 percent. Further, the University leadership felt it was necessary to institute these increases after a year of permanent budget reductions, a salary freeze for all Pitt employees, no increase in tuition at the four regional campuses, and modest tuition increases throughout the rest of the University.

In commenting on the budget, Pitt Chancellor Mark A. Nordenberg said, “The past fiscal year was a year of intense budgetary challenges, which came at the end of what already had been a very difficult decade. Because of pressures on virtually every revenue stream, we were forced to impose a salary freeze and to engage in other significant cost cutting. At the same time, it was a year that brought historic levels of success in both education and research. We continue to attract dramatically larger numbers of applications from more academically accomplished students. And the fact that our research expenditures soared from $654 million to approximately $735 million, an increase of more than 12 percent, was incredibly good news—not only for the University, but also for the regional economy, which increasingly depends upon higher education and health care as the principal drivers of local job growth.”

Nordenberg continued by noting, “Our three top priorities in structuring this budget were to maintain the high quality of our programs, to provide relief from the current salary freeze for the committed Pitt employees whose efforts have been central to our progress, and to keep tuition increases as moderate as possible. Given both the economic challenges that we continue to face and the market data available to us, we believe that we struck the best possible balance. This budget provides a financial foundation that should enable us to sustain the momentum that has seen Pitt climb higher and higher within the ranks of America’s top public research universities.”

In commenting further on the approved compensation pool, Nordenberg stated, “Our annual benchmarking of peer institutions confirms that we have been losing ground on the salary front. To recruit and retain the caliber of employees whose work is essential to our continued success in attracting both the best possible students and the highest possible levels of research support required that we make a commitment to end our salary freeze and provide for at least modest salary increases this year. In faculty recruitment and retention, in particular, we compete on a national basis against the country’s very best private and public universities. This is a highly competitive market for top talent, even in the current economic environment.”

As has been true for many years, the University’s single-largest revenue source is research funding, which for FY 2011 is budgeted at $775.2 million, an increase of considerably more than $120 million in just two years. “If one compares those research expenditures to the total Commonwealth appropriation of $185.4 million—which includes $7.5 million in federal stimulus money and $9.53 million of federal Medicare funding—the University attracts nearly $4.20 in research for every $1 of appropriation,” commented Arthur G. Ramicone, Pitt’s vice chancellor for budget and controller. “It is highly unlikely that any other Commonwealth investment provides that rate of return. And if only the Commonwealth dollars—$168.4 million—in Pitt’s appropriation are included, the University attracts $4.60 in research funding for every $1 of appropriation.”

“Viewed in another way,” Ramicone concluded, “the Commonwealth’s actual investment in Pitt’s appropriation has increased by only $408,000, or 0.2 percent from Fiscal Year 2000 to Fiscal Year 2011. Inflation since 2000 has been 27 percent. To be clear, we are very grateful for the support that we have received from the Commonwealth, particularly during these very challenging times. However, these flat support numbers, over an extended period of years, do convey some sense of the rather stark budgetary realities that we face.”

The University’s enviable position in attracting research support is reflected in its high federal research rankings. Based on the most current statistics available, Pitt ranks 5th among all American universities, public or private, in terms of the competitive grants awarded to members of its faculty by the National Institutes of Health. Pitt also ranks among the top 10 universities nationally in total federal science and engineering research and development support.

Among some highlights of recent Pitt accomplishments are the following.

● By frequently used conventions, 36 jobs are generated by every $1 million in research and development expenditures. Pitt’s research expenditures of approximately $735 million for 2009-10 then, taken alone, supported, directly and indirectly, some 26,500 local jobs. In 2008-09, Pitt’s research expenditures totaled $654 million dollars, then an all-time high. The dramatic single-year surge to approximately $735 million amounted to an increase of more than 12 percent.

● In terms of its most basic mission, Pitt nearly tripled applications for admission to the undergraduate programs on its Pittsburgh campus in a 15-year period—going from less than 7,800 in 1995 to more than 22,000 this year. And Pitt’s students, once enrolled, are performing at the very highest levels. This past year, to give just one highlight, the University claimed its third Rhodes Scholar in the last five years. Since only 32 Rhodes Scholars are selected every year, from the very best students at the very best universities in the country, that really is a noteworthy record—more typical of an elite Ivy League institution than a public university in Pittsburgh.

● Pitt was the nation’s top-ranked public university in the 2009 edition of “Saviors of Our Cities: A Survey of Best College and University Civic Partnerships”—reflecting the University’s deep commitments to the economic health and general vibrancy of this community.

● During the past decade, University of Pittsburgh graduates claimed, among many other honors, the Nobel Peace Prize, the Nobel Prize in Medicine, the National Medal of Science, the Pulitzer Prize for Fiction, the John Fritz Medal in engineering, the Shaw Prize and Albany Medical Center Prize in medicine, the Grainger Challenge Prize for Sustainability, and the Templeton Prize. Pitt graduates also were elected to such prestigious organizations as the National Academy of Sciences, the Institute of Medicine, the National Academy of Engineering, and the American Academy of Arts and Sciences.

● More than 80 percent of Pitt undergraduates and more than 75 percent of Pitt’s entire student body come from Pennsylvania, and 60 percent of Pitt’s nearly 270,000 living alumni make their homes in the Commonwealth of Pennsylvania.

● During the past decade, senior Pitt faculty were elected to membership in such prestigious groups as the National Academy of Sciences, Institute of Medicine, American Academy of Arts and Sciences, American Society for Clinical Investigation, American Association for the Advancement of Science, National Academy of Education, American Academy of Nursing, and American Educational Research Association.

● In the last 10 years, Pitt faculty members claimed, among many high honors, the National Medal of Science, the Institute of Medicine’s Gustav O. Lienhard Award, the Charles S. Mott Prize, the Andrew W. Mellon Foundation Distinguished Achievement Award for exemplary contributions to humanistic studies, the Chauvenet Prize from the Mathematical Association, and the Frederick Douglass Book Prize.

In the last decade within Allegheny County:

● $48.7 billion was earned by more than 70,000 Pitt graduates;

● $14.3 billion in direct and induced local spending was attributable to the University and its employees, students, and visitors;

● $11.7 billion in personal income was generated by more than 34,000 Pitt-supported jobs;

● $1.1 billion in local government revenues were attributable to the presence of the University; and

● The University completed 1,751 capital projects, involving construction expenditures of $1.142 billion.