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Barbara Berreski, JD, MS

Chief Executive Officer

Director, Government & Legal Affairs

bberreski@njascu.org


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Patricia S. Berry

Chief Operating Officer

pastearman@njascu.org


Pamela J. Hersh

Communications & Public Affairs

pjhersh@njascu.org 


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Charlene R. Pipher

Executive Assistant/Web Design

crpipher@njascu.org


Terry Toth

Part-Time Secretarial Assistant

tmtoth@njascu.org 



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New Jersey Association of State Colleges and Universities

150 West State Street

Trenton, New Jersey 08608

609-989-1100 office


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Analysis of the Governor’s Proposed FY 2020 Appropriations Act

 

On March 5, 2019, Gov. Phil Murphy delivered his FY 2020 budget address.  The FY 2020 budget totals $38.6 billion, with “more than $2.57 billion in direct support to higher education institutions and for programs that provide financial assistance to students.”  Governor Murphy repeatedly has stated that “affordable, accessible, and accountable” high-quality higher education for New Jersey is a top priority for the Murphy Administration.

 

The Governor is proposing a new Outcomes-Based Funding formula for the four-year public colleges and universities, which includes the “redistribution” of $15 million in current operating aid and an additional $20 million in new funding.  FY 2020 budget amount reflects $15 million that was shifted to the Outcomes-based Allocation.  Six million dollars of the FY 2019 “legislative additions and a supplemental allocations” for the higher education public institutions was eliminated.

 

To access the state appropriations portion of the $2.57 billion, colleges and universities will be required to commit to the Student Bill of Rights, the Financial Aid Shopping Sheet, and “other principles in the forthcoming student-centric state plan for higher education.”

 

The “other” principles refer to “elements of completion,” i.e., the total number of degrees awarded; the number of degrees awarded to underrepresented minorities; and the percentage of enrolled students, who qualify for need-based funding.  It should be noted that the completion criteria are based on actual numbers, NOT graduation rates.  Community colleges are not subjected to these specific standards for funding public higher education institutions; the two-year colleges are already subjected to their own outcomes based funding criteria, as imposed by the NJ Council of County Colleges which oversees the appropriations process for its community college members.

 

Secretary Smith-Ellis indicated that this proposed budget allows the senior public institutions to retain their FY 2019 state appropriations support, with additional funding being allocated on the basis of the above-outlined criteria.

 

The FY 2020 fringe benefit cost decreased because of savings from the negotiated changes in health benefits.

 

The Free Community College program is being expanded.  But the Governor now seems willing to go along with a need-based/last-dollar program, rather than a free-for-all, regardless-of-need program.  The Governor is asking for an additional $33.5 million (for a total commitment of $58.5 million) to help approximately 18,000 students obtain a two-year degree at no cost.

 

Tuition Aid Grants proposed allocation represents an increase of $5.03 million for a total of $437.9 million.  This money will go for new grants.  Educational Opportunity program, now in its 50th year, is proposed to increase by $2.25 million for a total of $47.572 million to “support the pursuit of higher education for low-income students.”

 

Most NJASCU members (affiliate and full) retained their state-funded position allocations except for Thomas Edison State University (cut by 95 positions) and Rowan/Cooper (cut by 100 positions).  It is possible that the Office of Management and Budget was basing its numbers on the preliminary FY 2019 budget and not on the final FY 2019 budget.

 

Operating Aid to the Senior Public Colleges and Universities: Grants-in-Aid General Fund; NJASCU members (and affiliate members) in red.

Institution

Final FY 2019 Appropriation

Proposed FY 2020

Difference

The College of New Jersey

$27,177,000

$27,698,000

$521,000

Kean University

$30,469,000

$33,060,000

$2,591,000

New Jersey City University

$24,954,000

$26,472,000

$1,518,000

Ramapo College of New Jersey

$14,953,000

$15,627,000

$671,000

Stockton University

$18,391,000

$19,736,000

$1,345,000

Thomas Edison State Univ

$4,292,000

$5,137,000

$845,000

William Paterson Univ

$30,357,000

$32,215,000

$1,858,000

Public Research Institutions

Rutgers Univ– New Brunswick

$329,189,000

$327,514,000

($1,675,000)

Rutgers Univ – Newark

$31,880,000

$33,671,000

$1,791,000

Rutgers Univ – Camden

$20,171,000

$20,644,000

$473,000

Agriculture Experiment Station at Rutgers

$23,431,000

$20,931,000

($2,500,000)

Rowan University

$92,883,000

$94,479,000

$1,596,000

Montclair State University

$35,859,000

$39,607,000

$3,748,000

 

Independent Colleges and Universities

 

The independent college and universities would receive $1 million in operating aid in FY 2020, the same as in FY 2019.

 

State-Funded Positions for NJ Senior Public Institutions

(red indicates NJASCU members)

 

Final FY 2019 Appropriation

Proposed FY 2020 Appropriation

Difference

The College of New Jersey

859

859

0

Kean University

1,074

1,074

0

New Jersey City University

1,129

1,129

0

Ramapo College of New Jersey

573

573

0

Stockton University

1,069

1,069

0

Thomas Edison State University

323

228

(95)

William Paterson University

1,111

1,111

0

Public Research Universities

Rutgers University

8,013

8,013

0

Rutgers Univ – Newark

1,086

1,086

0

Rutgers Univ – Camden

559

559

0

Agricultural Experiment Station at Rutgers

404

404

0

New Jersey Institute of Technology

1,187

1,187

0

Montclair State University

1,316

1,316

0

Rowan University

1,854

1,754

(105 of these for Roawn/Cooper)

(100)

 

 

 


Final FY 2019 Budget

The legislature approved the $37.4 billion FY2019 state budget just hours before the midnight deadline on June 30, 2018. The governor’s line-item veto message indicates no language affecting public higher education.

At $37.4 billion, the final version of the FY 2019 budget will spend the exact same amount of money that Governor Murphy called for in March, when he put forward his original budget plan. The highlights for higher education include:

  • Twenty-five million dollars in new aid for community college students - a top priority for the governor, who asked for $50 million in his original budget proposal.  Twenty million dollars will go for grants to students with a family income cap of $45,000; these will be "last-dollar grants."  Five million dollars is allocated for a planning grant to the community colleges to develop a strategy for implementing a free community college initiative;
  • Increases in government-funded positions for some public higher education institutions (Stockton University, Thomas Edison State University, Rowan University) over what Governor Murphy originally proposed in March; and
  • Several special funding grants including: $1 million for Thomas Edison State University's (TESU) expenditure on National Guard Tuition Waiver Reimbursement; $800,000 for College Bound/GEAR-UP Program at New Jersey City University (NJCU); plus several million dollars for programs at Rowan and various Rutgers campuses (see below).

Also making it into the final budget is $242 million in additional aid for New Jersey Transit that Governor Murphy included in his original budget, and another combined $400 million in additional K-12 and pre-K education dollars. The drama that could have led to the government shutdown concerned the revenue sources. After the budget deal was reached, the governor had to give up his pitch for a true millionaire’s tax, deciding instead to accept the establishment of a ‘pentamillionaires’ tax — a higher state income-tax rate that will be levied on earnings over $5 million. Gone is the restoration of a seven percent sales-tax rate, which the governor had wanted. The governor was forced to accept lawmakers’ call for a higher corporate-tax rate, and to allow for a tax-amnesty program that has the potential to create a $200 million hole in next year’s budget.

Higher Education Spending Increases

The final budget included the following increases over last year and/or over what the governor initially proposed in March, 2018:
  • $1.5 million - The Educational Opportunity Fund (EOF);
  • $25 million - Community College Opportunity Grant ($20 million for scholarships; $5 million for planning grants);
  • $7 million - the Tuition Aid Grant program;
  • $1 million Thomas Edison State University - National Guard Tuition Waiver Reimbursement;
  • $800,000 New Jersey City - College Bound/GEAR-UP Program;
  • $2 million Rowan University - Center for Research and Education in Advanced Transportation Engineering Systems;
  • $500,000 Rowan University/Cooper/Coriell Institute - Camden Opioid Research Initiative;
  • $3 million Rutgers Camden Board of Governors/Rowan University - Rutgers Camden School of Business Facilities Development;
  • $2.5 million Rutgers New Brunswick - Engineering Information Technology Expansion Initiative;
  • $170,000 Rutgers-Camden - Student Mental Health and Wellbeing;
  • $500,000 Rutgers-Camden - Planning for Future Growth;
  • $1.25 million Rutgers Newark - Scholarship and Transformative Education in Prison Program;
  • $3.7 million New Jersey Institute of Technology - Medical Devices Innovation Cluster;
  • $267,000 Rutgers New Brunswick - Eagleton State Government Science and Engineering Fellowship Program;
  • $2.5 million New Jersey Agricultural Experiment Station;
  • State-Funded Positions - 305 for Stockton University; 95 for Thomas Edison State University; 205 for Rowan, including Rowan/Cooper;
  • Cancer Institute of New Jersey - University Hospital Cancer Center Services: additional $1 million for this purpose: "expansion of National Cancer Institute - designated Cancer Center services at University Hospital in Newark to attract clinical trials and advanced cancer care and prevention strategies to the Greater Newark Area with the goal of ensuring parity among cancer patients, including the underserved and underinsured populations."
  • Hackensack Meridian School of Medicine at Seton Hall University: an additional $4 million;
  • Cooper Medical School - Cooper University Hospital Support:  additional $5 million (governor had proposed $16.297 million, legislature provided $21.297 million).
  • Language prohibiting the New Jersey Higher Education Student Assistance Authority from membership in the National Council on Higher Education Research.  Official language says: "The amounts hereinabove appropriated for Student Assistance Programs are conditioned to the following: the Higher Education Student Assistance Authority shall expend no funds for the purpose of joining or paying membership dues to the National Council of Higher Education Resources."
Operating Aid to the Senior Public Colleges and Universities:  Grants-in-Aid General Fund
These dollar figures include the special grants outlined above; some are new initiatives, others are restoration of funding that the governor removed in his March 2018 budget proposal
InstitutionFinal FY 2018 AppropriationFinal FY 2019 AppropriationDifference
The College of New Jersey$27,177,000$27,177,000$0
Kean University$30,469,000$30,469,000$0
New Jersey City University$24,154,000$24,954,000$800,000
Ramapo College $14,953,000$14,953,000$0
Stockton University$18,391,000$18,391,000$0
Thomas Edison State University$4,292,000$4,292,000$0
William Paterson University$30,357,000$30,357,000$0
Public Research Universities
Rutgers University - New Brunswick$325,922,000$328,689,000$2,767,000
Rutgers University - Newark$30,630,000$31,880,000$1,250,000
Rutgers University - Camden$21,501,000$20,001,000($1,500,000)
Agricultural Experiment Station$20,931,000$23,430,000$2,500,000
New Jersey Institute of Technology$45,440,000$39,140,000($6,300,000)
Rowan University$87,883,000$87,883,000$0
Montclair State University$35,859,000$35,859,000$0


Independent Colleges and Universities

The independent colleges and universities would receive $1 million in operating aid in FY 2019, the same as in FY 2018.

State-Funded Positions
InstitutionFinal FY 2018 AppropriationFinal FY 2019 AppropriationDifference
State Colleges and Universities
The College of New Jersey8598590
Kean University1,0741,0740
New Jersey City University1,1291,1290
Ramapo College5735730
Stockton University*1,0691,0690
Thomas Edison State University22832395
William Paterson University1,1111,1110
Public Research Universities
Rutgers University - New Brunswick8,0138,0130
Rutgers University - Newark1,0861,0860
Rutgers University - Camden5595590
Agricultural Experiment Station4044040
New Jersey Institute of Technology1,1871,1870
Rowan University**1,8541,8540
Montclair State University1,3161,3160
* compared to the governor's proposed budget, this represents a restoration of 305 state-funded positions
** compared to the governor's proposed budget, this represents a restoration of 205 state-funded positions, including Rowan Cooper




Financial Aid Programs
ProgramFinal FY 2018 AppropriationFinal FY 2019 AppropriationDifference
EOF - Opportunity Program Grants$29,054,000$30,554,000$1,500,000
EOF - Supplementary Education Program Grants$14,768,000$14,768,000$0
EOF - Total$43,822,000$45,322,000$1,500,000
Tuition Aid Grants (TAG)$425,859,000$432,859,000$7,000,000

Also Noteworthy:

Center on Gun Violence Research

The governor has proposed $2 million to establish a Center on Gun Violence Research.  He described the center in his budget address:

This budget also provides $2 million to establish a new Gun Violence Research Center to be based at one of our state universities.  Congress has refused to fund such necessary research for over two decades.  It is now up to the states to lead. This investment will start this long-overdue process.  When we [the states of NJ, NY, CT, and RI] formed States for Gun Safety, I recognized the critical need for the data-driven research we need to enact better public policy.  Working together with our partner states, we're taking that approach.

Federal Funds for Statewide Higher Education Planning

The budget includes $3.5 million in new federal funds for "statewide planning and coordination for higher education."  Language in the proposed budget would allocate $500,000 of those funds to support the maintenance of the statewide longitudinal New Jersey Education to Earnings Data System.


What’s New in the 2019 Budget and Its Impact on NJ Residents and NJASCU Members
www.NJTVOnline.org
www.NJASCU.org
July 5, 2018

A cash infusion for NJ Transit, more money for public school and some property tax relief, that’s what is in the new $37.4 billion budget signed by Gov. Phil Murphy. It’s raising $1.5 billion in new revenue to pay for it in new taxes that won’t impact most New Jerseyans, according to NJ Spotlight reporter John Reitmeyer.

Elements specifically aimed at public higher education include the following increases over last year’s budget:

• $1.5 million – the Educational Opportunity Fund (EOF);
• $25 million – Community College Opportunity Grant ($20 million for scholarships; $5 million for planning grant);
• $7 million – the Tuition Aid Grant program; and
• 95 new state-funded positions for Thomas Edison State University.

Increases over what the Governor proposed in his March budget include:

• $1 million Thomas Edison State University – National Guard Tuition Waiver Reimbursement;
• $800,000 New Jersey City University – College Bound/GEAR UP Program;
• $2 million Rowan University – Center for Research and Education in Advanced Transportation Engineering Systems;
• $500,000 Rowan University/Cooper/Coriell Institute – Camden Opioid Research Initiative; and
• 305 state-funded positions for Stockton; 205 state-funded positions for Rowan (including Rowan Cooper).

These increases basically restored the operational appropriations for NJASCU members to the FY 2018 level; the NJCU GEAR UP Program appropriation represents an increase over FY 2018.

“The final version specifically targets wealthy people and wealthy corporations with the big tax increases,” Mr. Reitmeyer said.

A new 10.75 percent tax on the 1,760 people in New Jersey earning more than $5 million, or penta-millionaires, would raise $280 million. Boosting the corporate business tax, or CBT, on businesses making more than $1 million up to 11.5 percent for two years, then 10.5 percent for two years, would raise $425 million.

“That’s really trying to be surgical, to not put any pain on the average New Jersey resident, direct pain on the average New Jersey resident, and keep it on those who maybe have the means to absorb some of these new costs the most,” Mr. Reitmeyer said.

The budget also closes corporate loopholes. One fix called combined reporting would raise $200 million by preventing companies from moving profits out of state to avoid taxes. Repatriation would generate another $200 million by taxing profits parked in offshore shelters. The state also hopes to make $188 million by taxing online retailers from out of state. Businesses call these measures devastating.

“There are so many challenges to this budget and the tax increases across the board. The CBT surcharge, the increase on millionaire’s tax over $5 million, which is a tax on small business, the repatriation language and combined reporting – all these things alone would be concerning. You pile them all together, and we’re very concerned,” said New Jersey Business and Industry Association President and CEO Michele Siekerka.

“They’re doing just fine. They have figured out how to game the system through tax incentives, tax breaks, an army of tax lawyers to make sure their effective tax rate is lower. It’s time to even the playing field for all businesses that operate in New Jersey,” said Sheila Reynertson, a senior policy analyst at New Jersey Policy Perspective.

A 90-day tax amnesty program could raise $200 million, a one-shot deal. The state will also collect 50-cent per ride surcharges on Uber and Lyft, impose the sales tax on home shares like Airbnb and tax the liquid nicotine in e-cigarettes.

“Those are sort of modernization taxes, where you’re kind of bringing the tax code up to date with different services that have become popular since the tax code was originally written,” said Mr. Reitmeyer.

“Quite frankly, costs are going up in New Jersey and we need that kind of revenue to keep the lights on in New Jersey,” Ms. Reynertson said.

What do New Jersey residents get in return for that new revenue? The budget keeps some of the governor’s promises: it pumps $3.2 billion into the pension system and gives NJ Transit $242 million, the amount originally requested in Governor Murphy’s initial budget proposal. The transit system’s been underfunded for the past eight years.

Public schools will get more money, an extra $402 million, and a new formula championed by Senate President Steve Sweeney will attempt to distribute the money more equitably. No one district will see its aid change more than $3.5 million the first year. The budget lets homeowners deduct $15,000 in local taxes from their state tax bill, and also restores $150 million that had been cut from the Homestead Rebate, a popular property tax relief program.

“So, for someone who has a bill over $10,000 that gives them a little bit of a break. Does it make property taxes fixed? No, but it helps cushion the blow,” said Mr. Reitmeyer. “If you’re living on a fixed income, a couple hundred dollars off your property tax bill is pretty meaningful.”

Another plus for families is that the budget creates a new tax credit for child care and dependents and will gradually raise the Earned Income Tax Credit to 40 percent of federal levels. One major benefit comes from what the budget doesn’t do. It doesn’t restore the sales tax back to seven percent.

All sides agree, New Jersey could benefit by crafting careful budgets on a three-year fiscal cycle instead of these one-year budgets with one-shot revenues. But New Jersey’s budget is based on the political calendar with all the pitfalls that entails.



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