Update on Rutgers’ Finances

October 8, 2020

Dear Members of the Senate and General Assembly:
 
Because I am committed to keeping the legislature and other partners and stakeholders informed of major developments at the university, I wanted to take this opportunity to discuss the economic conditions we are facing at Rutgers and the impact of the fiscal emergency on our programs and students, and on the community that supports them.
 
There is no way to sugar-coat this: Rutgers University is facing the most significant and substantial shortfall in the university’s history. The adjusted  university budget, adopted on October 7, 2020, projects a deficit of $97 million, a deficit that will blossom to as much as $180 million if we are unable to reach furlough agreements with some still outstanding bargaining units and unless we are able to secure the deferral of scheduled raises in a fashion similar to that which the state has achieved with its unions.
 
The $97 million–$180 million deficit exists even after the restoration of a proposed cut in state aid that was last month restored by the legislature in the budget enacted by Governor Murphy. The decision to restore this funding was critical and helpful; without this restoration, our deficit would be projected at $200 million or more.
 
The new state budget for FY2021 envisions borrowing as much as $4.5 billion to balance the state’s finances; at Rutgers, we cannot borrow our way out of this fiscal emergency. 
 
We have taken important steps to close the gap including a freeze on discretionary spending related to university operations, a continued prohibition on business travel, and an ongoing suspension of new capital construction projects and a review of all active projects. And we will draw down from previously designated university reserves that had been set aside for other purposes.
 
As you may know, more than 6,000 employees are already participating in furlough programs for this fiscal year and earlier this year senior administrators took voluntarily pay cuts in addition to their furloughs.
 
As our chief financial officer has noted, the pandemic has had a profound impact on finances at all colleges and universities, and Rutgers is no different. With the help of so many members of the Rutgers community—students, staff, faculty, and others—we have made good progress in closing the gap while, at the same time, we have imposed a tuition freeze and reduced fees for most of the 70,000 students who study and learn at Rutgers.
 
These are challenging times. The personal, emotional, and financial toll wrought by the pandemic is heartbreaking. Please know that we will continue to work as hard as we can to minimize the impact of the financial emergency on our employees and students and to ensure that everyone who studies or works at this great institution is recognized, respected, and treated with dignity.
 
Sincerely,
 
Jonathan Holloway
President and University Professor
Rutgers, The State University of New Jersey