FY 2011 Budget Enacted, Cuts Sustained, but Final Negotiations Reflect ASCU Priorities

State colleges will continue to face the challenge of managing large cuts in state operating support amounting to 15% and up as part of the FY 2011 state budget enacted in late June.

Institutions, in addition to dealing with about $50 million in cuts, will still need to find a way to scrape together an additional $30 million to cover state-mandated salary increases.  They will be hampered by a tuition increase rate capped at 4% in budget language.

Some positive developments.  While student aid cuts were significant in the original budget proposal, partial restorations were made in the version negotiated among Democratic and GOP legislative leaders and the governor's office.  Scholarships in the Educational Opportunity Fund (EOF) program were among the partially restored items.  Originally, the EOF program cut was $3.6 million; the final budget restored one-third of that: $1.3 million.  Restoring cut EOF support was an ASCU budget priority and was included in messages from constituents delivered through the New Jersey College Promise Action Network.

The merger of Thomas Edison State College with Rutgers University, part of the proposed Capital Campus Initiative, was cancelled.  Overturning this proposal was an ASCU priority that was also supported by constituent messages delivered through College Promise Action Network.

Other aid restorations included:  $1.7 million for Tuition Aid Grants (TAG) to independent colleges and universities; and $1.0 million to allow the NJSTARS program to pay tuition for a new class of freshmen at county colleges this fall.

ASCU Statement on the Proposed FY 2010-2011 State Budget

The FY 2011 state budget proposal amounts to a 15% cut in direct state appropriations to the nine state colleges and universities.

• It continues an untenable trend that includes:

• Six cuts in the past decade, in addition to several mid-year cuts;

• Operations funding that is about the same as fifteen years ago, with no compensation for increased enrollment, no compensation for increased state negotiated salary costs, no compensation for other inflation;

• No facilities funding.

The total proposed cut, not counting the mid-year FY 2010 reduction, is about $50 million.  The colleges will also be responsible for over $30 million in unfunded, state-negotiated salary obligations for FY 2011.

The new funding level will be about equal to the amount received in FY 1995 when the colleges enrolled 25,000 fewer students.

It will further shift the burden of paying for costs to students and families with the state-funded share of educational costs down to about 40%, and the student share roughly at 60%.

The budget also cuts funding for the Educational Opportunity Fund program, which currently serves about 4,000 disadvantaged state college students.  Moreover, the budget unwisely proposes merging a unique institution serving 18,000 highly motivated adult students -- Thomas Edison State College -- with Rutgers University.

It is a sad fact that for the FY 2005-FY 2009 time period, New Jersey ranked 47th in the nation in change per-student state appropriations.  Additional cuts since FY 2009 take New Jersey even deeper into negative territory on this measure.

It is also regrettable that the equivalent of federal stimulus funds ($17 million) provided to state colleges this fiscal year -- tied to low tuition increases and productivity criteria -- were swept away as a result of mid-year cuts announced in February.

Despite the continued withdrawal of state support, the colleges continue to have positive reputations for providing a very good education at a reasonable cost, and during these difficult economic times, are experiencing robust student demand.

Last fall we received over 57,000 applications from an estimated 25,000 students for about 11,000 first-time, full-time freshman slots at the eight traditional state colleges and universities -- by far the most ever.

Unfortunately, in large part because of underinvestment, New Jersey continues to lead the nation in net-loss of college  bound high school graduates.  The student spending loss alone is estimated to be in the billions of dollars.  The opportunity loss, beyond student spending, is significant.

The falloff in state support will inevitably affect the number of students that state colleges and universities can serve and the strength and diversity of the programs they offer.  Immediate effects include:  larger class sizes, fewer faculty hires, fewer class offerings, cutbacks in services and hours, and cutbacks in technology purchases and facilities renovations.

Cuts of this magnitude cannot be met by colleges through cost cutting at the margin.  Deregulation, greater administrative flexibility and elimination of unfunded mandates are needed to help colleges meet the challenges of increased demand, significantly reduced funds, and artificially determined tuition caps.

We urge the Legislature to help us bring an end to unfunded mandates and costly, unnecessary, regulations that tie college administrations' hands.  Steps that were once wish-list items are now necessities:  college control of workers compensation, exemption of all employees from civil service regulations, authority for collective bargaining, and reimbursement by the state for, or elimination of, state-required tuition waivers.

Beyond the deregulation agenda, we ask the Legislature to support the following:

• No further cuts in college operations funding for FY 2011, and restoration of as much as possible of proposed cuts in order to maintain access and quality.

• Restore the proposed cut to the Educational Opportunity Fund (EOF) program and continue to support student aid as one component of affordability for many of our students.

• Open discussions with college leaders and trustees regarding reasonable tuition and fee schedules appropriate to each institution, and eliminate the proposed tuition cap and punitive budget language tied to the cap.

• Cancel the merger of Thomas Edison with Rutgers University and restore operating aid to Edison, a unique, irreplaceable college.

• As soon as the state can do so, for the sake of future students, job creation and a robust state economy, support long-term investment in the renovation and renewal of NJ's higher education facilities.

The nine state colleges are committed to efforts to constraining costs; to better serve middle-class and low-income students and a rapidly expanding veteran student population; to provide options and incentives for students to graduate sooner; and to make campuses environmentally sustainable.  We feel justly proud that our institutions:

• are viewed by 82% of New Jersey likely voters as providing an excellent or good education;

• rank number three among the fifty states in degree productivity;

• serve nearly 25,000 more students than a decade ago; and

• are winning competitions for exemplary service to veteran students.

We pledge to work with the Governor and Legislature so that we have a budget that preserves college access and affordability, and maintains the quality of public service that benefits all New Jersey residents whether or not they attend a state college.

150 West State Street, Trenton, NJ 08608 | (609) 989.1100 | njascu@njascu.org