MEMORANDUM

To: NJIT Faculty, Staff and Students

From: Robert A. Altenkirch, President

Date: January 28, 2003

Subject: FY04 Projected Budget Update

I am sure that most members of the University Community are aware of the unusually serious budget exigencies now confronting the State of New Jersey. State budget deficits have emerged in the wake of the current economic downturn, the effects of which have been particularly severe in our region of the country. New Jersey is now facing a projected revenue shortfall of $5 billion over projected expenditures for FY04.

This evening, Governor James E. McGreevey convened a meeting of all the presidents of the State's senior public colleges and universities at the Statehouse in Trenton. The Governor shared with us the seriousness of the State's budgetary condition and conveyed the decisions and plans his Administration has had to make to address the steps that must be taken during the weeks and months ahead to ensure a balanced budget in FY04.

Although there are more details to follow, I wanted to alert the university community as soon as practical of the Governor's message that the FY04 appropriation would be based on 90 percent of the sum of this year's State support including fringe benefits and an incremental adjustment for FY04 fringes to be paid for by the State. For the State colleges and universities, and so for NJIT, this will mean an effective reduction of about 14 percent of the operating state funding, not including fringe benefits. However, as you know, the university budget consists of other significant revenue sources, so the impact on the overall operating budget needs to be assessed carefully prior to action.

In addition, we have just completed the mid-year review for the current fiscal year. While it does not appear that there will be a reduction to the State support for this year, it is even more critical that we live within our budget. Where practical, major non-personnel expenses and personnel decisions should be held to permit a careful analysis of the impact on next year's budget. It is in everybody's best interest to maintain maximum flexibility this year so that university priorities can be addressed in FY04.

The Governor is scheduled to present his State of the Budget address next week on February 4. While further details will be available then, it may be several weeks before the full text and figures of the entire State budget will be known.

Over the months to follow, we will need to take what will inevitably be painful steps to address very significant reductions in State support while preserving and strengthening the programs and initiatives that are at the core of this institution. Consequently, we will need to think carefully and strategically about how we will achieve this aim, and we must do so by identifying, above all, areas of excellence and strength where we as an institution make the greatest contribution to education, research, and economic development on behalf of the people of New Jersey.

I'll keep you posted as more information becomes available.

Thanks,

Bob