To:         All Faculty and Staff at Rutgers University

From:     Karen Kavanagh
              Executive Vice President for Administrative Affairs

Date:      July 30, 2003

Re:         Impact of the Current Budgetary Crisis on
              Salaries at Rutgers for the Coming Fiscal Year

     Last week President McCormick wrote to you regarding the current condition of the University's budget and the need for budget reduction planning. In his e-mail, he noted the university's success in securing a sizeable budget restoration, but added that a $20 million cut still remained. To address this significant gap, a 9% tuition increase was enacted and permanent budget reductions totaling $7.5 million will have to be achieved across the University, with the cuts ranging from 0.85% for the instructional units; to 1.98% for the research, extension, library, and core student service units; to 2.4% for administrative units.

    Vice Presidents and Provosts will be determining how to apportion the cuts in their units over the coming weeks, and you will be hearing more regarding the effects of the reductions on your own units in that context. While there is no doubt that we are experiencing difficult budgetary times, the situation would be far bleaker were it not for the partial restoration of the budget we achieved through all of your efforts. Nevertheless, reductions will be necessary, and those reductions on top of already lean budgets will be extremely painful for some units, a fact I deeply regret.

     A significant part of the University's budget consists of the cost of the salaries we pay to our faculty and staff. Indeed, we are proud that our salaries are extremely competitive, and that our benefits package is very generous. However, any salary increases the University awards for the current fiscal year only add to the magnitude of the budget reductions we will have to make, because the current state budget includes no salary funding for state college or university employees. This continues a troubling pattern of insufficient state support for higher education in New Jersey. Last year, for instance, the state failed to provide any funding to cover over $18 million in salary increases at Rutgers. Over the past five years (through fiscal year 2003), the state provided Rutgers new appropriations totaling just 19% of the University's salary increases during that period, leaving no new funds for enrollment growth or non-salary cost increases. This continuing lack of adequate state support is why, in negotiations with those of our employee unions with whom we have discussed salary, the University's current position is that there should not be any general increases in fiscal year 2003-04. Similarly, pay increases recommended through this year's Pay for Performance program for Administrative/ Professional/Supervisory staff, or through the merit-based compensation program for our t-coded administrative staff, are not planned.

     We realize that this news is disappointing and has an impact on each of you. As you may have read in the press, state employees will not receive general salary increases in this coming year. Our hope is that once the Governor delivers his January budget message for the coming fiscal year, we can begin to plan our salary improvement programs for all of our employees for fiscal year 2004-2005. It is our sincere hope that we will be able to do so in an improved economic climate. All of us at Rutgers need to continue, and strengthen, our advocacy efforts directed towards appropriate funding of higher education to try and reverse the current negative trend.

     Thank you for your spirit of cooperation and partnership as we go through these challenging times together.