Update on State Funding for Rutgers

July 2, 2010

Members of the Rutgers Community:

In March, I wrote to you with a summary of Governor Christie’s budget proposal for Fiscal Year 2010–11. At that time, I noted that the governor’s budget included a significant funding cut for Rutgers, one that would reduce the state’s direct operating appropriation to our university to its lowest level since FY1994. Unfortunately, after three months of budget deliberations in Trenton, not much has changed in the FY2011 funding forecast for Rutgers.

Earlier this week, Governor Christie signed into law S-3000, the state appropriations bill for the coming fiscal year. The new state budget varies little from the plan originally presented by the governor in March. Indeed, for all of New Jersey higher education, the approved funding total differs less than 0.2% from the governor’s recommendation.

The enacted state budget maintains a 15% reduction in direct state operating support for Rutgers, as the university’s base budget in FY2011 will be over $46 million less than the amount approved this time last year. This reduction in state appropriation, combined with no funding for salary increases and a state-imposed cap of 4% on tuition and certain fee increases, has created severe financial challenges for our institution. It will take creativity and sacrifice from all administrators, faculty, and staff to maintain Rutgers’ high quality of teaching, research, and service in such a difficult fiscal environment, and I thank all of you in advance for your help in this effort.

While the governor’s budget plan for higher education has been largely unchanged by the legislature, there are some key differences worth noting. The proposed merger between Rutgers and Thomas Edison State College, the State Library, and the State Museum has been removed from the budget. Also, modest amounts of funding were restored to the following statewide student assistance programs: Educational Opportunity Fund ($1.3 million for student aid); Tuition Aid Grants ($1.7 million to restore award levels for incoming students at independent institutions); and NJ STARS ($1 million for a new class of scholarship recipients).

Also approved by the legislature this week, though not yet signed into law, is a plan to cap the state pension contribution for public higher education employees enrolled in the Alternate Benefits Plan. Under the legislation, S-2094, the state would no longer contribute the 8% employer share for any money earned above the statutory salary limit for state department heads (currently $141,000). Both the university administration and faculty union have argued strongly against this bill, noting that it may put Rutgers at a competitive disadvantage in hiring and retaining talented employees. Having been unsuccessful in stopping the bill’s passage, however, we are currently exploring all options for dealing with this further reduction in state support.

As you can imagine, it is with much sadness that I present this budget information to you today, and I truly wish that I had better news to report. However, the economic troubles that haunt New Jersey and the nation have greatly exacerbated the challenges we have already faced for more than a decade as a result of the state’s long-term trend of underfunding higher education. We will continue to advocate for a greater state commitment to higher education and to New Jersey’s state university. For now, we must all work together to protect our core mission and services, buoyed by knowledge that the work that Rutgers does for its students and so many other constituencies across the state is important and worthy of our efforts.

Thank you for all you do for Rutgers.

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