New Jersey Association of State Colleges and Universities committed to college opportunity for new jersey citizens

150 West State Street, Trenton, New Jersey 08608                       609-989-1100     609-989-7017 fax                   njascu@njascu.org

New Jersey Public College Costs are Not Out of Control 

Darryl G. Greer, Ph.D. 

September 22, 2003

The state, to balance its own budget, has shifted key financial obligations to the colleges. The state's obligation to pay the cost of employee salary increases stemming from collective bargaining agreements has transferred to the state colleges at a total cost of over $80 million, conservatively, over the past decade. If the state had met its "state mandate/state pay" obligations, tuition would have increased at more modest levels of 4-6%. Note also that pay for employees, especially those who are highly educated and highly qualified, have had to go up faster than the CPI in order for salaries to remain competitive.

Institutions have had to pay a big share of their own facilities upgrades to meet growing demand. Unlike other states, the State of New Jersey provides no annual appropriation for facilities renewal. And since 1993, the only major state funding streams for facilities improvements or construction, periodic contract bond funding programs, have either required institutional matching contributions to debt service ranging from 25-50 percent, or they required institutional payment of all principal. This state requirement adds to the tuition and fee burden.

The state has, during several recent years, reduced basic educational support, shifting costs to students. And over the past 10 years, state educational support, excluding fringe benefits and adjusted for the consumer price index, has remained relatively flat. In fact, when adjusted for inflation, the FY 2004 direct state appropriation is approximately equal to the FY 1992 appropriation. As a result, families pay about 50% of educational costs now, compared to 30%-40% a decade ago. While on the positive side, the state has shouldered the rapidly increasing cost of fringe benefits for state college employees, this does not moderate the many other cost factors bearing down upon colleges such as mandated salary commitments, facilities improvement and technology.

A caution for analysts who focus on tuition percentages and not dollars: the increased costs of higher education, makes a more dramatic impression for public colleges when expressed as a percentage, simply because the base amounts in the public sector are much lower than amounts in the independent sector.

For example, for academic year 2004, a 9% tuition increase at New Jersey state colleges/universities totals, on average, about $200 for a full-time student, per semester. Even so, we recognize that this is still a burden for the neediest students.

We are effective. Here are some facts on enrollment, graduation rate, and retention.

We are efficient. Because of all the fiscal woes just mentioned -- and because of a longstanding policy commitment of college trustee boards not to shift the full brunt of state cuts to students -- our institutions have no choice but to find new efficiencies each year. Perhaps most striking is the fact that we are serving

6% more undergraduate students than a decade ago, including 18% more full-time undergraduates, but with no more state money to do so. Specifically, the state education subsidy to the state colleges has declined from about 60% of costs to approximately one-half of costs over the past decade.

Other evidence: managerial and fiscal efficiency "audits" of state college performance were conducted in 1997 by state entities; they concluded the institutions, by and large, were operated quite efficiently.

Moreover, some examples of the NJASCU institutions have excelled in service and creatively reduced costs where they can:

Some examples. Thomas Edison State College was recognized by Forbes business magazine as one of the nation's top 20 cyber schools because of its extensive and productive use of technology to deliver higher education. Richard Stockton College's geothermal installation has been registering savings of $300k annually for the past ten years, with 25% less Co2 output. Ramapo is a leader in the use of fuel cells, which cuts by more than half electricity costs in campus facilities powered by them, reduces pollution and ensures back-up power in emergencies such as the 2003 blackout.

For "demonstrated leadership in its campus energy supply," The College of New Jersey received the US Environmental Protection Agency/US Department of Energy 2001 Energy Star Combined Heat and Power Award. The award was for an upgrade in TCNJ's cogeneration plant that allows it to use 12% less fuel.

Facing large cuts, institutions have also made hard program and personnel decisions. Rowan eliminated funding for its performing arts center and New Jersey City University this year (2003) discontinued its football team. Montclair, Kean and William Paterson are among the universities that have instituted hiring freezes in selected areas, making do with existing personnel. In some cases, institutions have "outsourced" a number of non-core services where doing so was permissible and meant a savings: areas such as landscaping, bookstore and housekeeping services.