University of Pittsburgh
July 13, 2012

University of Pittsburgh Trustees Approve 2012-13 Operating and Capital Budgets

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PITTSBURGH—The University of Pittsburgh’s Board of Trustees, acting through its Executive Committee, today approved a $1.94 billion operating budget and a $57.7 million capital 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. Action by the Board was deferred at its June 22 annual meeting, pending final enactment of the Commonwealth’s budget.

In commenting on these actions, University Chancellor Mark A. Nordenberg stated: “The University of Pittsburgh has achieved a level of recognition and respect that places it among the top public research universities in the country. In education, we are regularly recognized as a best-value university—one that delivers the highest-quality student experience at a reasonable cost. And in the most recent rankings released by the National Science Foundation, Pitt ranked among the top five American universities in terms of total federal science and engineering research and development support. These not only are milestones for Pitt, but are important indicators of impact for our home region and state as we move further into the innovation economy of the 21st century, as local job-creation is even more strongly tied to higher education and health care, and as local company-creation is even more strongly tied to university research. 

“As we continue to move through difficult times, our basic budgetary challenge is deploying limited resources in the most effective way—preserving access for students from low- and middle-income families, supporting some of the nation’s most talented faculty members as they pursue their pathbreaking work, and maintaining the overall quality that has come to be characteristic of Pitt,” Nordenberg continued. “That task was eased considerably when the deep cuts proposed in February, as the state budget-building process was beginning, were eliminated. We are grateful to the legislative leaders who offered such strong support for public higher education and to the Governor for his willingness to restore our funding when the state’s own revenue receipts increased.”

The University’s operating budget includes a tuition-rate increase of 3 percent for all students, in-state and out-of-state, enrolled in programs on the University’s Pittsburgh campus and a tuition-rate increase of 2 percent for all students, in-state and out-of-state, enrolled in programs on the University’s four regional campuses at Bradford, Greensburg, Johnstown, and Titusville. These two levels of increase produce a University-wide blended tuition-rate increase of 2.8 percent. The budget also increases the University’s financial aid expenditures by the same percentage as the blended tuition-rate increase. 

The operating budget includes a salary-increase pool of 3 percent. Pitt imposed a University-wide salary freeze in Fiscal Year 2010. Last year, when the salary-increase pool was 2 percent, all employees whose base salaries exceeded $40,000 had their salaries frozen for the first half of the year. The University implemented, as one of many cost-cutting measures, a Voluntary Early Retirement Program, which saw 352 valued staff members retire from University employment, effective June 30. 

“The faculty and staff of the University obviously have played a major role in crafting Pitt’s remarkable record of progress,” Nordenberg said. “They have made significant salary sacrifices in recent years and will be moving forward with substantially reduced numbers in the year ahead. This year’s salary-increase pool, while not overly generous, does at least reflect the fact that, at Pitt, our people are a high priority.

“Challenging times clearly are not behind us,” Nordenberg added. “Even with the elimination of the cuts that had been proposed for this fiscal year, we have only been restored to a funding level that was largely shaped by the historically deep cuts of the preceding year. One clear sign of the resulting impact is in our capital projects budget. During the last five years, we averaged $157 million in annual capital expenditures. For the current year, we are looking at capital expenditures that are nearly $100 million less than that. That not only is a big drop for Pitt, but is a reduction that will be felt throughout the local construction industry. There will be other examples of budgetary stress on wide-ranging fronts as we move through the year. However, we have an enviable record of meeting difficult challenges, and I am sure that the year ahead will be another very good year for Pitt.”

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