Just as the recession has taken a toll in other states, New Jersey state budget coffers are shriveling up as public colleges and other state-supported services are asked to do more with less.
New Jersey Gov. Chris Christie’s slashing of $173 million from public colleges and universities has drawn the ire of higher education leaders, educators and students and has forced the public schools to impose a 4-percent increase in tuition and adopt additional cost-cutting measures.
For some, the bad economy represents only a small aspect of the problems facing public colleges across the nation. While the recession has exposed chronic problems in financing public colleges, many argue that it will take more than an improved economy to solve these issues. The realization has some schools and states thinking more strategically about long-term reforms. New Jersey officials will unveil some recommendations designed to address issues impeding its higher education institutions.
“States have been disinvesting—not all states, but the state of New Jersey clearly—and many other states have been disinvesting in higher education for years,” says Dr. Darryl Greer, president of the New Jersey Association of State Colleges & Universities (NJASCU), a nonprofit advocacy group based in Trenton.
With the exception of Rutgers, The State University of New Jersey, NJASCU represents nine of New Jersey’s public colleges and serves nearly half of all the students attending the state colleges. The schools have seen their share of state dollars continually decrease while the state has maintained control over key regulatory measures.
“New Jersey has been headed in the wrong direction since the early 1990s,” says Greer. “New Jersey is literally financially bankrupt, and I am not using that term lightly.”
Greer argues that continuing to shift the burden for paying for state colleges from the state to the colleges and students while allowing the state to control key aspects of financial regulatory issues makes the state a “bad partner” and straps the colleges with state-negotiated unfunded mandates.
According to a May 10 editorial by the Newark Star-Ledger, the state so underfunded its colleges and universities in the past 20 years that the percentage of higher education costs covered by the state dropped from 48 percent to 16 percent. The number could drop as low as 13.7 percent because of this year’s budget cuts. NJASCU’s data project that students’ share of educational costs has climbed 30 percent since 1990.
Much of this shift, argues Greer, stems from archaic regulatory controls that prevent public colleges from efficiently negotiating building contracts or negotiating directly with labor unions, combined with the lack of state funding for capital projects. (Rutgers, the University of Medicine and Dentistry of New Jersey and the New Jersey Institute of Technology are the only public institutions allowed to negotiate their own agreements with staff.)
An added dimension to the issue of funding for public colleges and universities, says Greer, is the seismic shift from private to public colleges as the leading educator of American students.
“Eighty percent of people who went to college as recently as 1950 were attending private colleges,” he says. Today, 80 percent of students attend public colleges. Greer questions whether these public institutions can serve as the same engine of opportunity for low-income students and students of color, who disproportionately use them, given the influx of students who would have previously attended private school.
Shifted Strategy
New Jersey schools aren’t the only public colleges affected by the recession or thinking along the lines of advocating for newer financial models and greater autonomy.
“It is across the board,” says Richard Novak, senior vice president of programs and research at the Association of Governing Boards of Universities & Colleges (AGB). “There are several institutions in several states who feel that greater flexibility on the fiscal side both in terms of setting tuitions and managing the money they do have” is needed.
For the second consecutive year, AGB released a survey detailing how public colleges responded to the economic recession. In the Public Institution and University System Financial Conditions Survey, schools revealed that more strategic measures have replaced last year’s blanket response of raising tuition, increasing enrollment, hiring freezes and cutting back services.
“Last year we saw more budget-balancing kinds of strategies: ‘Let’s raise tuition. Freeze travel. Let’s freeze new hires.’ Now they are getting more strategic,” says Novak. “So it’s more a longer-term strategic response because I think most institutions feel they are going to be in this for some time.”
Of the 120 schools surveyed in 50 states, about 48 percent had their operating budgets slashed. Forty-four percent reported increases in their operational budgets, mainly from tuition increases and federal stimulus money that made up for the revenue losses from states. Yet with the stimulus money running out this year, schools could start hitting a wall next year, particularly those schools that used stimulus dollars to plug immediate gaps instead of seeking more strategic uses.
While nearly all states had public colleges funding faults exacerbated by the economic downturn, New Jersey tops the list because of its lack of capacity.
According to data from NJASCU, New Jersey ranks last in providing space for undergraduate state students desiring to attend public colleges. NJASCU puts the number at 30,000 students lost annually at a cost of $6 billion to the state. In addition, tuition at state schools ranks second-highest in the nation.
Thinking Big
In April, Christie appointed a Task Force on Higher Education, headed by former Gov. Thomas Kean, to address some of the issues public colleges face. The group this month expects to release its recommendations, and advocates hope some of the matters affecting sustainability and regulatory issues will be addressed.
Education leaders, for their part, are not idly waiting for the recommendations and the economy. They are redefining themselves.
“We need big ideas,” said Dr. Lawrence Nespoli, president of the New Jersey Council of County Colleges, which represents the state’s 19 community colleges.
NJCCC has begun an initiative named “The Big Ideas” as a means of uniting education leaders and the public in redefining the role and image of community colleges.
“If you look to the private sector, you think of any number of sectors trying to reinvent themselves, re-engineer themselves, coming up with new business models, whether it’s newspapers, the auto industry, whatever. Community colleges need to find ways to reinvent themselves so that they can deliver postsecondary programs cost-effectively going forward,” says Nespoli.
Excited by a community college cover story in Time magazine, the White House’s Summit on Community Colleges and additional philanthropic help, Nespoli maintains a guarded optimism about the future of public colleges.
“There’s a real excitement, but it is a very sobering climate because, even if the recession ended tomorrow, there still would be little prospects for increased funding for higher education because there are other demands on state budgets that governors and state legislators are required to fund—let’s start and end with Medicaid,” Nespoli says.
“(Christie has) probably said in five or six speeches that higher education is his No. 1 priority and the place where he wants to invest state funding when the state and national economy recovers,” Nespoli says. “We find that encouraging but we’re not holding our breath that it will be next year or the year after that.”
