Understanding the Pitt Budget
Evaluating Your Investment
May 15, 2012
An overview for Pitt parents and students.
Where the Money Comes From
Where it Goes
Why Research, Endowment, and Gift Dollars
Can’t be Used to Reduce Tuition
General Fund–Supports Education
Money comes primarily from:
• Tuition
• Commonwealth appropriation
• Investment income
• Sales, services, other
Pays for:
• Teaching
• Maintenance & facilities
• Administrative support
• Institutional financial aid
• Student services
Auxiliaries
Self-supporting auxiliary units pay the full cost
of operations, including capital investments and
maintenance, and receive no taxpayer or
tuition monies.
Self-Supporting Services:
• Student housing
• Food services
• Bookstores
• Parking
Donated and Research Funds
(Restricted)
Money comes primarily from:
• Grant funding for specific
research projects
• Gifts and endowment pay out
generally for restricted use
by a designated donor
Sources of Revenue
Auxiliaries
7%
Gifts 4%
SOMD 9%
Pays for:
• Some scholarships and
fellowships
• Salaries and benefits
for some faculty
• Research programs, centers
School of Medicine Division (SOMD)
Money primarily comes from:
• Tuition from medical students
• SOMD state funding
• UPMC support
General
Fund 39%
Pays for:
• Teaching
• SOMD administration and operations
• Institutional financial aid
Budget Primer, Fiscal Year 2012
41%
Research
How Pitt Spends its General Fund
The proposed budget cut would be a
30% reduction in the appropriation to
the General Fund and would force a
tuition increase.
62 cents of each dollar goes to academic activities
• Teaching
• Academic Support
• Student Services
14 cents of each dollar goes to financial aid
• Additional aid is awarded through individual
schools, not through the general fund.
12 cents of each dollar goes toward institutional
support
• Administration, budget, accounting ,and finance
• Public safety
• Central human resource services
• Central information technology
• Legal services and compliance
10 cents of each dollar goes to facilities operation
and maintenance
• Facility upkeep and maintenance
• Utilities
2 cents of each dollar goes to public service
• Community outreach programs
Budget Primer, Fiscal Year 2012
Declining State Support
Drives Up Tuition
There is an inverse
correlation between state
appropriation levels and
tuition levels.
• Mid-1970s: Commonwealth
appropriation was more than 30
percent of the University’s total
budget.
• Mid-1990s: Commonwealth
appropriation was about 20 percent
of the University’s total budget.
Change in Tuition and State Appropriation (CPI adjusted)
20%
15%
10%
5%
0%
FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12
-5%
• FY 2013: If the Governor’s
proposal succeeds,
Commonwealth appropriation will
be about 5 percent of the
University’s total budget --the
lowest level of support (adjusting
for inflation) since Pitt became
state-related.
-10%
-15%
-20%
-25%
-30%
• Cumulative two-year cuts in state
support will result in well over $100
million being slashed from our
education budget.
Tuition Change
Appropriation Change
School of Arts and Sciences Tuition Rates
Budget Primer, Fiscal Year 2012
Keeping Pitt Affordable: Financial Aid
Financial Aid increases from Pitt
have been in the double digits for 6
of the last 10 years.
•
In 2010-2011, more than $215 million in total
financial aid was given to Pitt undergraduate
students. This amount included state, federal,
private aid and loans and Pitt institutional aid
(not including scholarships awarded by the
schools).
• Institutional undergraduate financial aid has
grown much more quickly in percentage terms
than tuition, and has well outpaced inflation.
• During the past five years, need-based aid
awarded on the Pittsburgh campus has
increased 64.3% or more than 2.5 times the
rate of tuition increases.
• Pitt serves a large number of low-income
federal Pell Grant recipients. In 2010 the
Pittsburgh campus enrolled a higher fraction
of first-time freshmen Pell grant recipients
than the other three top research universities
in PA.
Increases in Pitt Institutional Financial Aid
Academic Year
Financial Aid
Millions
% Increase
By Year
2001-2002
$15.1
12.7%
2002-2003
$18.0
19.2%
2003-2004
$19.8
10.0%
2004-2005
$21.1
6.6%
2005-2006
$22.9
8.5%
2006-2007
$23.3
1.7%
2007-2008
$27.0
15.9%
2008-2009
$33.1
22.6%
2009-2010
$36.9
11.5%
2010-2011
$38.6
4.6%
Pittsburgh Campus Only
Budget Primer, Fiscal Year 2012
Why Costs are Rising
•
Pitt has faced substantial cost increases in key areas of
support to our mission, such as libraries, information
technology, and compliance obligations.
•
Increasing costs of operations include public safety
initiatives, utility expenditures, and debt service as well as
the costs of products and services that Pitt purchases.
•
Because Pitt provides research-based educational
programs of the highest caliber, we must invest in
state-of-the-art laboratories for student instruction and new
technology to support excellence in education.
•
As with all businesses and institutions in the U. S., our
health care costs have continued to rise--by $23 million in
the past 5 years.
Budget Primer, Fiscal Year 2012
How Pitt is Cutting Costs
Pitt Cut $178 Million in Cumulative Costs in Just
the Last 4 Years By:
• Streamlining purchasing practices, consolidating
vendors, renegotiating contracts saving $78
million.
Guiding Principles of Cost-Cutting
•
•
•
•
•
•
Reinvest in Core Strengths of the University
Focus Resources on Core Mission
Achieve Efficiency Without Compromising Excellence
Manage Resources to Enhance Student Experience
Reduce Cost, Complexity of Administrative Operations
Use Best Technology to Contain Costs/Increase Efficiency
• Making changes to benefits and retirement plan
resulting in a savings of $40.5 million.
• Instituting a salary freeze (2010) and salary
increase delay (2012) yielding a savings of $19
million.
• Focusing on energy conservation for a savings of
$8 million.
• Increasing efficiency in the schools and units
resulting in a savings of $32.9 million.
Budget Primer, Fiscal Year 2012
Pitt Ranks as Best Value
Even In the face of declining state
support, the University continues to be
recognized nationally as a “best value.”
• Kiplinger’s ranked Pitt in the top tier of the
100 four-year institutions it identified
nationally that “deliver a stellar education
at an affordable price.” Pitt was also
ranked the best value in Pennsylvania.
• US News ranked Pitt 6th among all publics
for best value. The calculation is based on
academic quality and the net cost of
attendance.
• Pitt was Pennsylvania's only public
institution in the Princeton Review’s 2011
list of 50 “best value” public colleges and
universities.
Your Return on Investment (Figures from
Fiscal Year 2012)
Quality of Experience
Ranks High at Pitt
•
For the second straight year, Pitt was ranked
in the Princeton Review’s top 20 for “best
quality of life” and “happiest students.”
•
The Princeton Review states that students at
the University of Pittsburgh applaud “Brilliant
professors doing fantastic things in their field.
. . . Pitt provides all the resources of a large
research university but also retains a small
college atmosphere with its Honors College
to provide the best opportunities for its
students.”
•
In a 2011 survey of undergraduate students
at Pitt:
– 97% of Pitt students responded that
they would choose Pitt again
– 93% said their experience at Pitt
exceeded expectations
– 96% said Pitt was intellectually
stimulating and challenging
– 95% were pleased with Pitt overall and
91% with their social experience
Your Return on Investment (Figures from
Fiscal Year 2012)
Pitt is Competitive in
Graduation and Placement Rates
Graduation
•
Of the approximately 2,000 4-year colleges
and universities nationally, Pitt is in the top
15% in four-year graduation rates and in the
top 10% in six-year graduation rates.
•
In the 2010 Chronicle of Higher Education’s
report on four-year universities, Pitt had the 5th
highest increase in its graduation rate from
2003-2008.
Placement
•
Placement rates have increased from 82% in
1996 to 90% in 2010.
•
Starting in 2012, a career coach will provide
individualized assistance and support to each
recent graduate actively seeking employment.
2011 Pitt Career Fair
Your Return on Investment (Figures from
Fiscal Year 2012)
Pitt Students Show Greater Satisfaction
With Educational Opportunities
In a recent survey of student satisfaction
at participating AAU universities (the
Association of American Universities
comprised of the leading public and
private research universities in North
America) Pitt ranked:
•
1st in Educational Enrichment
Opportunities
•
2nd in Research Opportunities
•
2nd in Internship Opportunities
Your Return on Investment (Figures from
Fiscal Year 2012)
Pitt Students Report
More Personalized Attention
In a recent survey of student satisfaction
at participating AAU universities (the
Association of American Universities
comprised of the leading public and
private research universities in North
America) Pitt ranked:
•
•
•
•
1st in Access to Faculty
1st in Academic Advising
3rd in Access to Small Classes
3rd in the Percent of Seniors who
know two or more faculty
well enough to ask for a
letter of recommendation
Your Return on Investment (Figures from
Fiscal Year 2012)
Why Keep Pitt Public?
For access to a “stellar education at an affordable price.”
Without a public Pitt, there would be:
• Higher Tuition
– Comparable private universities have tuition about three times the price of Pitt’s
current in-state tuition.
• Fewer PA Residents
– Currently, 75% of Pitt students are in-state.
– Only 30% of students are in-state at comparable private institutions.
• Fewer Low and Middle-Income Students
– Pitt has 50% more Pell Grant recipients than the two top private research
institutions in PA combined.
– 71% of Pitt students apply for need-based aid compared with 56% at comparable
private institutions.
Pennsylvania Needs a Public Pitt