Office of the President

MEMORANDUM

To: NJIT Faculty, Staff and Students

From: Robert A. Altenkirch, President

Date: February 14, 2003

Subject: FY04 Projected Budget Update

As you know, in order to address the projected revenue shortfall of $5 billion over projected expenditures for FY04 for New Jersey, the Governor has proposed that the FY04 appropriation for state colleges and universities 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. This implies an effective reduction of about 13 percent of the operating state funding, not including fringe benefits. In addition to the appropriation reduction, there are other changes in projected expenditures for next year that are unavoidable. Adding together reductions in the state appropriations, projected salary increases, increased operational costs, and increased debt service, our net shortfall approaches $11 million, approximately 6.5% of the unrestricted budget, which we must account for through increased revenue or decreased expenditures. This shortfall does not include reduced state financial aid for students or the proposed elimination of grants from the Commission on Science and Technology.

Over the coming weeks and months, in preparation for constructing the FY04 budget, we will need to plan carefully and keep from making commitments now that we may not be able to cover in the next fiscal year. Consequently, in order to facilitate planning a this point, in addition to maximizing revenue streams, e.g., maximize enrollment to the extent possible, we will need to freeze hiring for the time being. We will honor any outstanding employment offers, but new offers or the initiation of new personnel recruitment efforts should be put on hold. Any exceptions will be considered on a case by case basis through requests submitted to the appropriate vice president and approved by the president. While this may be a difficult step for many of you, because personnel costs are our major budgetary item, it is important to hold off on making personnel commitments until we have had the time to work through various budget scenarios. At the time that we are comfortable with how we might handle the shortfalls outlined above, we will revisit the hold on hiring.

As we work through the budget preparation for next year, as stated earlier, we all need to keep in mind preservation and strengthing of the programs and initiatives that are at the core of the institution. Consequently, we will need to think carefully and strategically about how we will achieve this aim, and at the same time accommodate the financial situation in which we find ourselves.

Thanks,

Bob