NJIT Faculty and Staff
Robert A. Altenkirch
March 21, 2006
State Budget Update

Later today the Governor will deliver his annual budget address to a joint session of the Legislature. We have received some information in advance of the address, and so I wanted to let you know what the Governor is likely to say in his address with respect to funding for higher education.

You probably know that the State is facing severe fiscal issues that constitute a $4.6 billion shortfall in the State budget, approximately a 15% plus shortfall. This shortfall will, in all likelihood, be made up from a combination of expenditure cuts and tax increases.

For the twelve senior public colleges and universities, our understanding is that we will be faced with a proposed 15% reduction in operating support from the State as well as level salary support from last year, implying an additional revenue shortfall from the State. The net result is an approximately 23.5% shortfall on the State base funding. There are additional proposed reductions to higher education that may have some impact on us, but these two are by far the major elements of the proposed budget that confront us. This proposed shortfall does not, of course, include any internal funding commitments and/or built in cost increases such as increased utility rates.

While the Governor’s budget is the starting point for development of the State budget, and adjustments will take place in the legislative process over the next few months, the level of the proposed reductions and resulting shortfall give you a sense of the seriousness of the financial situation with which higher education will have to contend, at least in the short term.

As more details of the Governor’s proposed budget and from the budget development process become available, and we begin to analyze various budget scenarios for NJIT, we will keep you informed.