Rutgers' Steps in Dealing with the Global Economic Crisis

October 13, 2008

Members of the Rutgers Community:

The turmoil in credit markets, banking, and financial markets in the United States and around the world is affecting every part of the economy, including higher education. Today I joined Executive Vice President Philip Furmanski and Senior Vice President Bruce Fehn in reporting to the Rutgers Board of Governors on the steps the university is taking to deal with this global crisis. I encourage you to read this report at http://www.president.rutgers.edu/economy.shtml.

Rutgers today is in sound fiscal shape. We have the cash we need to pay our bills and meet our current obligations. And we will continue to meet the university’s financial aid commitments to students, including Rutgers scholarship awards.

However, the downturn will cause problems for Rutgers on several fronts, including its impact on the incomes of our students and their families; the possibility of midyear state budget cuts; decreased interest income on our investments; and the steep challenge of fundraising in this environment.

For all these reasons, we are managing our resources with the utmost care and preparing for the impact of this crisis as much as possible. For example:

  • Dr. Furmanski has communicated with all academic and administrative units to request contingency plans for a possible midyear reduction in our operating budget. As we always do in preparing for cuts, we will preserve our core missions, our most important strategic initiatives, and our new revenue-generating programs to the greatest extent possible.
  • Vice President Fehn and his staff are working closely with the university’s financial consultants to navigate the markets, both to ensure our ability to finance capital projects and to protect our investments.
  • Vice President for Enrollment Management Courtney McAnuff and the financial aid and student services offices are preparing to help students and their families in dealing with the challenges of financing their education.
  • We are taking a hard look at all our facilities projects to be sure we proceed prudently, including the expansion of Rutgers Stadium. Fundraising for the project has gone more slowly than we had hoped, and borrowing for all capital projects has become harder and more expensive. I have therefore asked University Facilities and the Division of Intercollegiate Athletics to develop options for the stadium that would continue to place priority on constructing additional seats while reducing the overall cost. When we have more information, we will be able to decide how to complete the project in an economic fashion.

As I told the board, our fundraising campaign will continue. Our foundation and our faculty and staff have worked hard to identify those ambitions with the greatest potential to transform Rutgers, including vital support for scholarships and endowed professorships. Now it is more urgent than ever for us to redouble our fundraising efforts. For some of our potential benefactors, this may be the moment that they can make the greatest difference for Rutgers.

Yes, we face tough times. But we will continue to shepherd our resources so we can invest in our highest priority academic and student support functions and sustain the programs that bring excellence and recognition to the university. That is our future and it is also our pathway out of the current difficulties. Rutgers has been here for 242 years, and we intend to be here and to be increasingly outstanding for at least another 242.

Richard L. McCormick
President
Rutgers, The State University of New Jersey