Pitt’s roughly $1 billion education and general budget will increase by 3%, or $29 million, next year, following Tuesday morning approval from the budget and executive committees of the University’s Board of Trustees.
The E&G budget will grow from roughly $878 million in 2021 to about $907 million in 2022, and the entire University budget will increase from $2.4 billion to $2.6 billion. Pitt applied two cuts in last year’s budget — a permanent one at roughly 3.7% and a temporary one at around 5%. The 5% temporary budget cut is restored this year, according to Chief Financial Officer Hari Sastry, but a 1% permanent cut is being applied to “balance the budget while continuing to support compensation increases for faculty and staff, as well as other key initiatives.”
Tuition and fees will increase next year by varying amounts. Sastry said tuition will increase by an average of 2.5% for in-state students, 4.5% for out-of-state students, except for those in the Swanson School of Engineering, along with an extra 2% increase applied to both in-state and out-of-state students in the School of Computing and Information.
Three of the four mandatory fees charged to undergraduate students at Pitt’s Oakland campus — security and transportation, activity and wellness — will increase next year. In all, for full-time undergraduate students, the three fees will grow from $350 to $460, or 3%. The activity fee increase is to restore a 20% reduction installed during last academic year.
Pitt did not increase tuition and fees during the 2020-21 academic year, as Chancellor Patrick Gallagher signaled leading up to last year’s vote, saying it was the “right thing to do under the circumstances.” The University applied tuition hikes ranging from 2.75% to 7% the year before.
Sastry said this year’s tuition increases were “informed by the value of a Pitt education, as well as competitive market factors.”
Pitt spokesperson Kevin Zwick said decisions regarding tuition, fees and room and board rates are “difficult” and “every effort is made to balance the needs of Pitt students and their families with the cost of providing a world-class education.” He added that the University “does not take these changes lightly and is committed to keeping education costs as affordable as possible,” especially during the ongoing COVID-19 pandemic.
Regarding the higher tuition increase for SCI students, Zwick said running “high-quality computing and information programs and ensuring top-of-the-line technology” for students is more costly than other programs. He added that some tuition increases represent investments in financial aid programs that “ensure access, academic persistence and high graduation rates.”
[Read: Pitt’s budget and endowment, explained]
Pitt will apply a “modest, progressive” salary increase of 1.25% to faculty and staff this year, Sastry said. The University did not institute pay cuts or layoffs last year, but did offer early retirement programs for faculty and staff.
“While these adjustments cannot compensate for the flexibility and extraordinary efforts … our faculty and staff demonstrated last year, it represents our efforts to acknowledge their tremendous work, with more focused increases direct to faculty and staff based on income,” Sastry said.
Robin Kear — the University Senate president and a member of the University Planning and Budgeting Committee, which recommends to the chancellor how Pitt’s budget should be laid out — said the committee had to choose between “tough outcomes, with no great choices” when formulating this year’s budget.
“I am sure that the modest salary pool and tuition increases will be disappointing to many, and I know how hard we have all worked to get through the last year to keep Pitt above water and moving forward,” Kear said. “We are hopeful that future budget years will bring salary increases to a higher percentage and closer to inflation.”
Despite the increase, compensation in the education and general budget is expected to decrease by about $14.5 million from $715.5 million to $701 million, a 2% reduction. Compensation has dipped by $19.4 million, or about 3%, since pre-pandemic fiscal year 2020. Zwick said these savings come from the early retirement programs last year, partially offset by salary increases for the upcoming year, as well as hiring replacements for some of the positions that were vacant.
The largest contributor to Pitt’s budget is net tuition — tuition and fees minus discounts, such as financial aid — which is ultimately derived from student enrollment. The budget expects an increase of around 5% in net tuition for the upcoming academic year, in line with what Gallagher described last month as an “extremely strong” double-digit percentage increase in paid deposits for first-time, first-year students at Pitt’s Pittsburgh campus.
Other major revenue sources for the University are state funding and the annual distribution from the endowment. Gov. Tom Wolf signed a flat funding bill for Pitt on June 30, easing some budget pressures for Pitt, though the University had requested a 5.5% increase. A board committee approved a flat payout from Pitt’s $4.3 billion endowment for the upcoming year in mid-June.
Other areas of Pitt’s budget are also changing in the upcoming year. The auxiliaries budget, which includes housing, dining and other services, is expected to earn around $153 million this year, up 7% from last year’s nearly $143 million, though still below the $160 million budgeted for pre-pandemic fiscal year 2020. Costs for these auxiliary operations are expected to decrease this year by around 21%, from roughly $149 million to $117 million. Costs increased dramatically last year, in part by Pitt leasing around $22 million in hotel rooms to de-densify student housing.
Asked about the auxiliaries increase, which would show an optimistic outlook for a more active campus environment, Zwick said Pitt is planning to hold in-person classes this fall, and the campus community vaccination rates will shape Pitt’s approach to a “return to normal.”
Pitt’s capital budget will more than double this year to roughly $351 million, as campus construction continues to resume after the University deferred some projects that it said did not need to be completed during an earlier stage of the pandemic.
This story has been updated with comment from the University Senate.