MEMORANDUM

To: NJIT Faculty, Staff and Students

From: Robert A. Altenkirch

Date: Tuesday, June 27, 2006

Subject: FY07 Budget Update

Constructing a balanced budget for FY07 that accommodates the Governor’s proposed budget has, to say the least, been challenging. We continue to make progress though in identifying opportunities, both revenue enhancements and expenditure reductions, to address the proposed State appropriation shortfall, lack of State supported salary increases, and the freezing of State supported fringe benefit expenditures to the FY06 level. The work of the Ad Hoc Budget Task Force has been most helpful in identifying areas and approaches for review; each suggestion was carefully considered, and, to the extent practical, is being implemented. Some will be carried over for further consideration with respect to construction of the FY08 budget. A summary of the current status of the budget, which shows the progress made to date, may be found on Highlander Pipeline under FY07 Budget Information as well as the public site at http://www.njit.edu/publicinfo/budget_updates.php.

The currently unfunded balance of $3.8 million is still being addressed, but it is reasonable to presume that with the items still under consideration, including a tuition and fee increase for which we do not have a recommendation at this point in the process, a balanced budget will be achieved. Accordingly, the working budget, which reflects the changes shown on the summary is in the process of being uploaded to FRS; it is expected that departmental budgets will be in place when the system opens for FY07 on July 6, 2006. Importantly, other than personnel funds for academic departments, i.e., those with teaching responsibilities, have been held harmless in the budget process such that the FY07 reduction in other than personnel expenditures will be absorbed by departments not directly responsibility for curriculum delivery.

The State budget process continues as well. As you may know from reports in the media there is considerable difference in the approaches preferred by the Assembly from that proposed by the Governor. While New Jersey usually has a budget in place by July 1, it is not clear that that will happen this year, in which case the State may take steps to limit its operations to essential services. However, this will not impact NJIT. The University has several revenue streams that will allow us to bridge a reasonable delay in adopting a State budget, so we will continue on the schedule previously announced.

We will continue to work on the budget and further refine our revenue and expense options. It is expected that we will present the recommended budget, with the attendant schedule of tuition and fees at the July 20, 2006 Board of Trustees meeting. I will keep you apprised of any significant developments before then and have a presentation posted on the website after the Trustees complete their actions.

Thanks.

Bob