This afternoon Governor Christie delivered his FY2012 Budget Address stressing the need for the State to exercise fiscal discipline while funding priorities. Revenue projections for FY2012 are $29.4 billion, which will result in a 2.6% overall reduction in State expenditures spread over a number of departments. However, public higher education institutions will see level base funding maintaining the FY2011 adjusted appropriations for FY2012. The complete proposed Budget Summary can be found at http://www.nj.gov/governor/home/budget_2012.html.

Some highlights of the Governor’s Address focus on his assessment of the need for the State to reduce taxes to spur job growth, to reform pension and health benefits to assist in reducing property taxes, to implement school reform, including rewarding excellent teachers and putting additional publicly funded charter schools in place, and to halt further reductions in higher education funding. The text of the Governor’s Address can be found at the web site listed above.

With regard to higher education, as mentioned above, the Governor’s proposed budget is to maintain FY2011 base operating budgets level. In addition, the proposed budget does not include a tuition increase cap as was the case last year and in a number of previous years, increases Tuition Aid Grants by $27 million, a 9.0% increase, and makes some adjustment in other programs resulting in a net increase of 5.3% in Student Financial Assistance.

While this coming year’s proposed budget is a welcomed relief to the years of State reductions and tuition increase caps, we will face financial challenges due to the cumulative effects of reduced State funding over a number of years. As in the past, we “will need to come together in a spirit of cooperation and resolve as we address the challenges that lie ahead, and I am confident that together we will meet that test,” in order to serve as responsible stewards of our resources and deliver on our Value Proposition.

I will keep you informed as the budget process continues. As you know, the Governor’s proposed budget for FY2012 is the first step in the budgeting process that will ultimately culminate in a budget passed by the Legislature and signed by the Governor by June 30, 2011.

Thanks,

Bob