Governor Josh Shapiro signed Senate Bill 1154 (SB 1154) on July 17, establishing a Performance-based Funding Council and implementing other higher education reforms as part of the 2024-25 state budget. The bill, sponsored by Republicans, passed the Pennsylvania General Assembly after negotiations, and Shapiro approved it shortly thereafter.
The Performance-based Funding Council will develop criteria for distributing funds to Pitt, Penn State, and Temple universities. The bill’s purpose is “to increase degree attainment, encourage affordability in higher education, meet workforce needs, and grow the economy.” The council will consist of five voting members from the state government, including the secretary of education, two appointed state senators, and two appointed state representatives. Additionally, Pitt, Penn State, and Temple will each have one non-voting representative on the council.
The council is required to submit its funding distribution recommendations to the newly formed State Board of Higher Education, the governor, the Department of Education, and the General Assembly by April 30, 2025, as outlined in the bill. After five years, the council will reassess the effectiveness of the metrics it has implemented. Potential metrics under consideration may include two- and four-year graduation rates, the number of Pell Grant recipients, student retention rates, and post-graduation employment rates and salaries.
Chancellor Joan Gabel expressed Pitt’s strong support for performance-based funding during a Pennsylvania House budget hearing in March. Gabel emphasized that systems developed collaboratively, which account for the diversity of institutions, families, students, stakeholders, and state goals, tend to be the most effective and have the fewest unintended consequences.
University spokesperson Jared Stonesifer echoed this support, stating, “The University is very supportive of the Performance-based Funding Council charged with developing a new funding system for state-related universities. Such performance benchmarks would increase accountability and transparency while creating pathways for increased state funding for Pitt.”
In his March budget proposal, Shapiro suggested creating a performance-based funding formula and increasing funding for state-related schools by 5%. However, the state budget passed in June keeps Pitt’s state funding at the same level it has been since 2019, continuing a trend of funding for state-related universities that does not keep pace with inflation.
State funding constitutes approximately 6% of Pitt’s budget, enabling the university to offer reduced tuition to in-state students. Following the approval of the 2024-25 state budget in June, Pitt trustees approved a tuition increase of 2% for in-state students and 4% for out-of-state students for the upcoming school year.
Previously, House Republicans had attempted to limit Pitt’s access to state funding due to concerns over fetal tissue research, a dispute that was resolved in 2022 when the Senate approved funding for Pitt and other state-related universities.
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