Office of the President

MEMORANDUM

To: NJIT Faculty, Staff and Students

From: Robert A. Altenkirch

Date: Wednesday, February 27, 2008

Subject: Proposed FY09 State Budget

As you may know, the Governor delivered his Budget Address yesterday in which he outlined his proposed budget for FY09. A copy of the proposed Budget in Brief can be accessed at http://www.state.nj.us/treasury/omb/.

In summary, the State faces a structural budget gap, i.e., expenditures exceeding revenues, of $3.2 billion. $500 million of that is proposed to be covered from FY08 carry forward funds. The remainder, $2.7 billion is absorbed through expenditure reductions, some of which will be carried out by reduction in State personnel through implementation of an Early Retirement Incentive program (ERI). It is not known at this point how, or if, the ERI will apply to senior public college and university employees.

The proposal for the senior public institutions is a reduction of the FY08 appropriation of $901.4 million by $96.8 million. $38.5 million is proposed for salary funding toward negotiated salary increase obligations, which is approximately half of what is required. For NJIT, the appropriation reduction is $6.4 million with an estimate of $2 million being added back in from the proposed salary funding for a reduction of $4.4 million from last year’s appropriation of $49.1 million, a 9% reduction in State funding.

Over the next few months we will be working with the Legislature in efforts to increase State support as well as working to increase revenues through enrollment increases, using the strategies and tactics we have discussed at length over the past few months, and to reduce expenditures through implementation of further efficiencies, all in an effort to minimize the direct impact on student costs.

Although we have been faced for a number of years with difficult budgetary situations with respect to State funding, we nonetheless have been able to accomplish much, including improvement in the physical appearance of the campus, a 20% increase in enrollment in the Honors College since fall 03, a growth in external research expenditures over 15% from FY06 to FY07, development of an ambitious neighborhood redevelopment plan that will provide an attractive mixed use residential and retail neighborhood for the enjoyment of City residents and the NJIT community embraced by the City of Newark and scheduled for formal adoption this spring, and development of an exciting plan to add new programs already in the implementation phase, among other markers of an institution moving forward. While not easy, we cannot let challenging fiscal times hold us back. We haven’t and we won’t in FY09 either.

We will keep you posted as the budget process now moves to the Legislature.

Thanks,

Bob