Pitt’s tuition will increase 8.5 percent this year for in-state students and 4 percent for… Pitt’s tuition will increase 8.5 percent this year for in-state students and 4 percent for out-of-state students, as part of the University’s $1.94 billion budget announced Friday.

Tuition will go up $1,196 for Pennsylvania residents from $14,076 to $15,272, while out-of-state students’ tuition will increase to $24,680, up $948 from last year. This marks the largest in-state tuition increase at Pitt since 2003, when tuition went up by more than $1,500.

However, Pitt students will get a little more help in the fall. Pitt’s financial aid budget will increase by $13 million, and more than $163 million in financial aid should be made available in the next fiscal year, Chancellor Mark Nordenberg said at the Board of Trustees Executive Committee meeting that decided the budget. Also, the state financial aid agency will increase its grants for the next year.

Nordenberg said that constructing the budget was not easy, and “we believe that we have struck the balance that best positions Pitt to maintain its remarkable record of achievement and impact.”

Pitt officials said that the tuition hike would cover 40 percent of a $40 million cut in state aid to the University, while the rest came from reduced spending. The Board of Trustees’ Executive Committee also approved a 2 percent salary increase for Pitt employees.

Faculty members making less than $40,000 a year will enjoy their increase retroactive to July 1, while those making in excess of that amount won’t see their increase until January 1.

Nordenberg and other board members blamed the rise in tuition on Pitt’s appropriations bill that Gov. Tom Corbett signed into law June 30. The other three state-related universities face similar funding cuts, but only Temple University has announced its tuition rate for the fall — a 10 percent increase.

Pitt saw cuts totaling more than $40 million across various programs — a 22 percent reduction in state support. This includes the 19 percent reduction to general appropriation and a 50 percent reduction to Pitt’s academic medical center funding.

This year’s appropriation marks the largest decrease in Pitt’s funding in more than a decade. The total appropriation — $136 million — is nearest to Pitt’s 1993 appropriation of $135 million. Last year, the University received more that $184 million, including more than $10 million in federal stimulus funds that ran out this year.

Most state agencies received cuts this year as well, but the Pennsylvania Higher Education Assistance Agency will use a $50 million public service contribution to cover a 2 percent cut from the state. This will raise the individual maximum grant Pennsylvania students can receive to $4,309, an increase of $807 from last year.

Nordenberg said that Pennsylvania ranked 46th out of 50 states for per capita support for higher education before the most recent cuts.

At the same time, Pitt was ranked as the second most expensive public university in the country by a Department of Education analysis. Penn State University, another state-related school, came in first.

Pitt also faces increases in health insurance, facilities costs, technology improvements and licensing fees. They are also committed to certain academic investments needed to maintain Pitt as a “high-value provider of high-quality higher education,” according to a press release sent out by the University after the meeting.

The estimated $30 million dollars it would cost for these investments is expected to create a total budget gap exceeding $70 million, Nordenberg said in a statement issued at the meeting.

That gap will be covered by cost-cutting, budget adjustments and increased revenue streams, including tuition, said Art Ramicone, Pitt’s vice chancellor for budget and controller. Ramicone said he understood the hardships students and families face and said that the effect of the cuts should be shared by the University, not just the students.

“We have fully expressed a commitment to our students and their families to not place the burden entirely on their collective shoulder,” Ramicone said. “We are going to cover 60 percent of the budget shortfall through a combination of central and unit level budget cuts and adjustments. The remaining 40 percent will come in tuition”

Nordenberg was visibly upset at the meeting and said that it was difficult for him to break the news to students and staff about Pitt’s funding last week.

“It was a dark day for Pitt and for all of higher education, not only because of the steep budget cuts, but because of the lack of regard for the work we do, which seemed to be reflected in those proposals,” he said.

Student fees will remain the same, along with Pitt’s tuition structure, which does not change based on a student’s year.

Board member of the Budget and Executive Committees, John Pelusi, said that while the 8.5 percent tuition hike is high, it is reasonable with what the University is working with.

“8.5 percent pales in comparison to what the state cut in the budget,” Pelusi said.