MEMORANDUM

To: NJIT Faculty and Staff

From: Robert A. Altenkirch

Date: Thursday, March 13, 2008

Subject: FY09 Budget Preparation

As you most likely know from our many discussions over the past few years, State funding per student in public higher education in NJ has declined. The fraction of educational cost paid by an NJIT student in 1994 totaled about 43%, while the State provided $57%. Today, the student is responsible for about 66% of the cost, the State providing 34%. Every year from FY02 through FY08 there has been a shortfall in State funding at NJIT, ranging from 3% to 17%. This coming year, FY09, will be a particularly challenging one with over a 16% projected shortfall in State funding. As you know, we have worked hard to maintain and improve services while minimizing tuition and fee rate increases, 7 to 8% per year over the past five years, which assist in covering the State funding shortfalls. We have been able to do so through strategic expenditure reductions, reallocations, and generating efficiencies, but there are limits to! these approaches.

In order to prepare for the FY09 budget, there are some preemptive actions that need to be taken to protect funds that can be moved forward into FY09 in order to spread accommodation of the shortfall in State funding over more than one fiscal year. In particular:

  • Operating fund balances as of January 31, 2008 of, by and large, non-academic units have been reduced 15%. If there is a critical expenditure that may need to be made and there are insufficient funds, a request must be made to the appropriate Vice President for consideration. Such requests should be kept to a minimum and should focus on only the most essential purchases. It is important to work within the balance available.
  • Operating budgets (non-personnel) for, primarily, non-academic units will be reduced by 5% in FY09.
  • Positions currently vacant, with the exception of faculty searches underway, will be held vacant through, at least, June 30, 2008.

The budget development process for FY09 is an ongoing process. We will keep you apprised over the next several months of internal efforts as well as those at the State level regarding development of the FY09 budget.

Thanks,

Bob