Update on Fiscal Year 2011–12 Funding for Rutgers

July 7, 2011

Members of the Rutgers Community:

In February, I shared with you an overview of Governor Chris Christie’s budget recommendations for the 2011–12 fiscal year, which included level operating support for Rutgers and New Jersey’s other senior public colleges and universities. Since then, the state’s budget landscape has changed significantly due to revised tax revenue estimates, court decisions on K–12 funding, actions to reduce state employee benefits, and other factors. The FY2012 state budget was enacted on June 30, 2011, with some significant changes from the original proposal.

While direct operating support for Rutgers will remain at virtually the same level as the original 2010–11 appropriation, there were some quite unfortunate cuts within the budget. The final budget eliminates $200,000 in funding for legal clinics for the poor at each of our law schools, and it provides no salary funds for employee pay raises.

The budget will force New Jersey’s senior public colleges and universities to make do without new state money. All of the state’s four-year public colleges and universities have also had their state-funded employee count reduced by 5 percent. This reduction is not necessarily a reduction in force, but it is absolutely a reduction in the number of positions for which the state will pay the cost of fringe benefits. We are working to determine how to best manage this reduction.

Student aid was also affected in the FY2012 budget. Tuition Aid Grant funding contains no new money for 2011–12. In addition, funding is reduced slightly for Educational Opportunity Fund grants (by $215,000) and substantially for NJ STARS (by $4.7 million) in the new fiscal year. Budget language that would have required the state to pick up all of the costs for NJ STARS was eliminated, thus placing a continued burden on the four-year colleges and universities to provide matching funds for the program.

Other reminders of New Jersey’s economic difficulties remain with us, none more compelling than the recent enactment of legislation to reduce benefits for state employees. Whatever you may think about the necessity of these changes from a budget policy perspective—and one could certainly argue that the old system was becoming unsustainable—there is no doubt that the new benefits law will create financial challenges and uncertainty for individuals throughout our university community.

To assist employees and retirees in dealing with the coming changes, the Rutgers University Human Resources (UHR) office is currently reviewing the benefits law and will be providing additional information on how these changes will affect faculty, staff, and others. You can anticipate an update from UHR on these matters in the near future.

Altogether, this continues to be a very challenging time for higher education across the country and in New Jersey. We will need to continue to work together to keep Rutgers strong—for which I thank you.

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