University of Pittsburgh Trustees Approve 2013-14 Operating Budget

The University of Pittsburgh’s Board of Trustees, acting through its Executive Committee, approved a $1.94 billion operating budget for the fiscal year that formally began on July 1. The budget was proposed by the University’s senior management team and was reviewed and recommended by the Board’s Budget Committee.

In commenting on the July 17 budget approval, Pitt Chancellor Mark A. Nordenberg stated, “In recent years, the University of Pittsburgh has regularly been recognized as a best-value university—one that provides the highest levels of quality while also working effectively to contain costs. The merit of that designation was again clearly evidenced in the marketplace this year, when applications for admission to Pitt accelerated their dramatic rise, even as the number of students graduating from Pennsylvania high schools continued to decline. This year, once again, Pitt strengthened its position as an institution of choice for hardworking, high-achieving students.”

University-wide, applications to the University’s undergraduate programs increased nearly 16 percent over the past year. This includes a 13 percent increase in applications from Pennsylvania residents. 

“Maintaining low tuition levels while continuing to invest in quality has been a particular challenge as public support for public higher education has decreased,” Nordenberg said. “We are grateful to Governor Tom Corbett and legislative leaders for making an early commitment to flat funding for our basic appropriation for the current fiscal year, which gave us more of an opportunity to plan. However, that does mean that our state support, in nominal dollars unadjusted for inflation, remains at the levels of funding that we received in the mid-1990s. Since then, essentially all of our costs have increased, and the University also has grown substantially. Despite the very significant challenges this presents, the tuition increases approved as a part of this budget are among the lowest in our history.”

To place this in context, the Consumer Price Index has risen by 53 percent since the 1995 fiscal year, while the Higher Education Price Index, a more accurate measure of university operating costs, has risen by approximately 77 percent over the same period. At the same time, the number of highly qualified students attending the University has increased with full-time enrollment rising by more than 21 percent. The University also has experienced similar growth in terms of its research expenditures. Since 1995, Pitt has attracted more than $9 billion of sponsored research support into the region. Annual research funds have grown from $230 million in 1995 to nearly $760 million in the current year, and the University now ranks fifth among all American universities in terms of the federal science and engineering research and development support attracted by members of our faculty.

The University’s operating budget includes a University-wide blended tuition-rate increase of 2.9 percent. There will be a tuition-rate increase of 3.25 percent for students enrolled in programs on the University’s Pittsburgh campus, the second-lowest increase since 1975. As an example, the tuition increase for students enrolled in the Kenneth P. Dietrich School of Arts and Sciences will be $255 per semester for Pennsylvania-resident students and $413 per semester for nonresident students. Because Pitt, unlike many other universities, does not impose an upper-division surcharge, both the dollar increase and the resulting tuition charge are the same for students from freshman to senior status, which also helps hold down the total cost of a four-year degree.

Tuition for students enrolled in the School of Medicine will increase by 5 percent. This exception is a result of the fact that the School of Medicine still is working to recover from the 50 percent reductions to its state support that were imposed two years ago, when the support to other programs was reduced by 19 percent. 

The operating budget also includes a tuition-rate increase of 2 percent for all students, in-state and out-of-state, enrolled in programs on the University’s regional campuses at Bradford, Greensburg, and Johnstown. Again as an example, tuition will increase $119 per semester for Pennsylvania-resident students enrolled in arts and sciences programs on these campuses. Tuition will be frozen at the Titusville campus. This continues the University’s multiyear commitment of lower tuition increases on the regional campuses. The cumulative impact of these more modest increases has resulted in tuition rates that are approximately 25 percent lower than on the Pittsburgh campus.

To help hardworking students and their families adjust to these changes, financial aid will be increased. “Consistent with the University’s long-standing practice, the financial aid budget has been increased by the same percentage amount as the blended tuition-rate increase, which brings total University-provided financial aid to approximately $165 million for fiscal year 2014,” said Arthur Ramicone, the University’s chief financial officer.

The operating budget includes a modest salary-increase pool of 2.5 percent. Over the past several years, the University has implemented wide-ranging cost-cutting measures, including salary freezes in fiscal years 2010 and 2012. In fiscal year 2012, the Voluntary Early Retirement Program was implemented, which saw 352 valued staff members retire from University employment.

“The University’s remarkable record of progress is obviously a reflection of the significant role that faculty and staff play at Pitt. They have made salary sacrifices in recent years and are forging ahead with substantially reduced numbers,” said Nordenberg. “This year’s modest salary-increase pool, crafted in times that continue to be very challenging, reinforces the fact that our people are a high priority.”