State Colleges and Universities Respond to Fiscal Challenges

 

Darryl G. Greer
Executive Director/CEO

Op-Ed: March 4, 2008

This past week, the Governor introduced his FY 2009 spending plan. It includes deep cuts in many areas, elimination of some departments, and another round of cuts for higher education. While higher education reductions are nothing new -- we've experienced five just in the past 12 budget cycles -- their cumulative effect is significant.

If implemented, the cut would be part of what is arguably the largest reduction -- over a three-year time span -- in the history of American higher education. In fact, New Jersey trailed the nation in new investment in higher education during the FY 2006-2008 period. The current proposal would reduce direct state aid by 10.2%. In dollars, it would sink funding for state colleges to below what it was in FY 2000, when the colleges had 15,000 fewer undergraduate students.

The electorate knows that cutting operating aid to state colleges inevitably increases tuition and squeezes classroom spaces available for students. Our last poll of likely voters confirmed this. From it, we learned that 82% of likely voters say that state budget cuts are an important reason for rising tuition costs (50% say "very important" and another 32% say "somewhat important").

State college leaders know that this is the time not only to advocate against cuts, but find new efficiencies. Our group of schools is already the third most productive set of public baccalaureate/master's level institutions in the nation when it comes to degrees produced compared to funding per full-time student. Nevertheless, the schools will continue to tap the best ideas of their trustees and other campus leaders, while maintaining core missions.

As a result of the colleges' thriftiness, innovation and fiscal diligence in recent times, while tuition and fees have gone up substantially, these charges grew at a rather modest pace given that the State of New Jersey has been neither predictable nor strong in its budgetary support.

Here are some examples of how state colleges and universities are smartly managing their resources:

n	Universities have collaborated with one another and with state agencies to mutual benefit. For example, William Paterson University helps coordinate the thrifty purchase of library materials using the buying power of 51 academic institutions through a statewide program called VALE. The University has also partnered with NJ Transit to help students benefit more from public transportation systems.
n	An insurance group, whose creation is based on risk management among a set of highly autonomous institutions, is saving its members hundreds of thousands of dollars annually.
n	The colleges, over the past decade, have become far greener and have also reaped millions in savings through smart energy and utilities policy that includes geothermal technology, cogeneration plants, high efficiency lighting systems, campus-wide conservation initiatives, and smart energy purchasing.
n	State colleges and universities have made huge gains in fundraising from individuals and private sector sources over the past decade. Several multi-million dollar gifts are announced each year and fund drives now seek 5- and 6-figure goals. Big donors include alumni, former professors, and nationally known entrepreneurs.
n	ASCU-member colleges and universities have voluntarily adopted many recommendations of the National Association of College and University business Officials, standards that are aligned with federal Sarbanes-Oxley federal accountability law for publicly traded companies. The schools are still working on adoption of more of these "best practices" standards appropriate to higher education.

 

This year, ASCU has clearly delineated how the State can help these institutions and their students. With the latest round of cuts, we hope that Trenton policy makers feel a special sense of urgency. State colleges are asking for more flexibility in areas such as contracting for facilities and development of public/private partnerships. They are also seeking better control over costs through administration of workers' compensation, as opposed to having the state manage cases and determining settlements.

Meanwhile, our Association will advocate strengthening college boards of trustees. These governing bodies, vital to public accountability, must be kept nonpartisan.

Our Association's advocacy efforts are part of our New Jersey College Promise initiative to keep tuition and fees affordable by giving colleges more control over costs and enabling them to continue to develop the tools they need for effective self-regulation. As this happens, accountability will be preserved -- even enhanced.

Citizens should feel confident the colleges will do their best to keep college affordable while continuing to serve as many deserving students as possible. However, since the state finds itself unable to provide consistent funding, it should, at the very least, be a better partner by cutting red tape and dispensing with outdated regulations.