Development of the Fiscal 2010 Budget

During development of the fiscal 2010 budget, the University identified revenue and expense gaps totaling $120 million in fiscal 2010 compared to the previously adopted financial plan. The gaps were the result of both external economic forces and internal policy choices.

Revenue Gaps

Compared with the original financial plan attributable to external economic forces:

Due to the decline in the endowment's market value and the fact that New York remains one of the very few states not to adopt a more modern version of endowment spending regulation, the budget for income from endowment is $33.2 million less than the original financial plan.

Short-term investment earnings on the University's working capital are expected to be $6.6 million below plan due to very low short-term interest rates.

Annual fund and expendable cash gifts are projected to be $17.6 million less than plan.

Other revenues, including sales of computers at the University's book store, are budgeted with a decrease from plan of $2.3 million.

Compared with the original financial plan that are the result of policy choices responding to higher education trends:

The fiscal 2010 budget increases undergraduate tuition at 3.85% above fiscal 2009 tuition, which is lower than the planned increase of 4.5%. The dollar impact of this change, net of higher enrollment, was a revenue decrease compared with the plan of $8.1 million.

The fiscal 2010 budget increases the room and board at 2.5% above 2009 levels, rather than the planned increase of 4.5%. This represents $5.1 million less revenue than plan.

To meet anticipated increased demand for financial aid, undergraduate gift and grant aid from the University's general operating fund increases by 7.8% in the fiscal 2010 budget, which is $8 million more than the planned rate of increase of 4.9%. This is the second consecutive year that the increase in gift and grant aid for undergraduates from the general operating fund will grow by more than twice the rate of increase of undergraduate tuition.

Revenue Gap Total : $80.9 million

Expense Gaps

Compared with the original financial plan attributable to external economic forces:

Primarily due to required additional contributions to a defined benefit pension fund (to offset investment losses) and a new "Regional Mobility Tax", the cost of employee fringe benefits increases by $7.6 million.

Compared with the original financial plan that were the result of internal policy choices:

As a result of NYU choosing to participate in guaranteed loan programs for international students (our prior loan program for international students did not require these reserves, but lending conditions have changed), the University set aside $4 million in student loan rese

Provost's academic investments — including funding for capital programs in the Steinhardt School of Culture, Education, and Human Development and in the Tisch School of the Arts — total $11.6 million.

An increase in transfers from the operating budget for capital projects equals $13.6 million for the following purposes:

  • Pre-development costs (design and analysis) associated with NYU's long-term plans for physical space.
  • Information technology investments for the continuation of a project to install wireless internet connectivity in all buildings across the campus and continuation of funding for a new student information system.

The University has set aside a reserve of $2.3 million for employee severance payments.

Expense Gap Total : $39.1 million