To: NJIT Faculty, Staff and Students
From: Robert A. Altenkirch
Date: Tuesday, April 25, 2006
Subject: Budget development update
As work continues to address the impact of the proposed State budget for higher education and NJIT in particular, I wanted to give you a summary of progress to date toward developing a balanced budget for FY07. From my March 23 memo (http://www.njit.edu/publicinfo/bulletins/proposed_FY07_budget_impact.php) the proposed State appropriation for FY07 plus tuition and fee revenue may be negatively impacted by over $17 million, or 13.4%. Because the NJIT unrestricted budget, including all unrestricted revenues, against which some expenditures are mandated, is over 65% salary and fringe benefits, controls on salary expenditures for FY06 and commitments for FY07 were addressed first.
Eliminating hiring for the remainder of FY06 yields salary savings of about $2 million that will carry forward to FY07. In order to limit commitments against the FY07 personnel budget, hiring into vacant positions for next fiscal year has been curtailed with certain exceptions, which includes faculty hires judged to be critical to particular programs and replacement of Public Safety Officers, for projected recurring salary savings of approximately $2 million for FY07. Additionally, employment contracts for FY07 for 13 non-tenure track faculty were not renewed by the required contract notification time, although, following that action and a review of programmatic needs for FY07, 5 of those non-renewals were offered contracts for FY07, and the probationary terms of 10 staff employees were ended. These difficult decisions result in a personnel commitment reduction for FY07 of approximately $730 thousand. We do not anticipate further non-renewal of employment contracts beyond the actions outlined here, nor do we anticipate workforce layoffs, i.e., termination of employment for those who have a continuing expectation of employment or prior to completion of the term of a contract.
In addition to personnel savings, non-personnel spending this fiscal year has been reduced for the remainder of the year. This action, plus carry forward funds from FY05 that have been held, amount to approximately $3.5 million of one-time funds for carry forward into FY07.
From the above, we have set aside one-time funds or limited FY07 recurring commitments to total approximately $8.2 million, or nearly half of the potential impact. The Budget Task Force, a separate Ad Hoc Budget Task Force of the Board of Trustees, as noted in the minutes of the April meeting of the Board, which will be posted shortly at http://www.njit.edu/trustees/organization/boards/trustees/index.php, and Senior Staff will continue their work throughout the next weeks and months to identify ways in which we may organize the University’s work most effectively and efficiently to facilitate cost saving measures to the extent possible. We continue as well to work with the Governor’s Office and the Legislature on finding ways to alleviate some of the negative impact of the proposed State budget on higher education.
Some decisions to date have been difficult ones, and, undoubtedly, there will be difficult ones to come, but necessary to ensure that our operations are fiscally sound for FY07. We appreciate your patience during this period, and we will continue to keep you informed as the budget process continues.