President McCormick on the 2010-2011 Budget

The following message was sent today by Rutgers President Richard McCormick to all members of the Rutgers community:

Members of the Rutgers Community:

Yesterday Governor Christie presented his budget proposal for fiscal year 2010-11. The governor’s plan addresses a multi-billion-dollar structural deficit in the state budget through funding cuts in many areas, including state executive departments and aid to public schools, towns, and colleges. For example, the governor’s proposed budget reduces school aid by $819 million, municipal aid by $445 million, and aid to higher education by $173 million.

Under this proposal, Rutgers’ direct state operating aid in 2010-11 would be cut 15.1 percent and therefore would be $46.6 million lower than the university’s original appropriation for the current fiscal year. In actual dollars, Rutgers’ operating aid would be the lowest the university has received since 1994. The governor’s proposed budget also does not provide funding for the salary increases that were negotiated between Rutgers and its bargaining units last year.

In addition, the proposed state budget reduces funding for Tuition Aid Grants and the Educational Opportunity Fund and does not provide funding for incoming freshmen in the NJ STARS scholarship program.

Given the depth of the state’s fiscal crisis, these budget cuts are not a surprise. Indeed, Governor Christie made clear when he visited the New Brunswick campus last fall that the state’s fiscal problems would make a cut in higher education funding unavoidable. It will, nonetheless, be very difficult for Rutgers to absorb these proposed reductions, following so many years of state budget cuts, including the $18.5 million midyear rescission the governor announced last month.

Managing the proposed reductions will require greater efficiencies, hard choices, and shared sacrifice. We are firmly committed to preserving the academic core of the institution and to the delivery of outstanding instruction to our students, recognizing that this is made possible by the hard work of all our faculty and staff. We also know that we cannot solve the problem by transferring the burden of these cuts primarily to our students and their families. In the weeks ahead, as the state budget is deliberated and finalized in Trenton, we will formulate our responses inclusively, and with a primary focus on protecting Rutgers’ core missions and values. Beginning tomorrow, I will convene the university’s senior leadership to lay out plans to meet this challenge.

As we make difficult decisions on our campuses, Rutgers will also continue to make its case assertively in Trenton. We will inform policy makers that while public universities across America face cuts in the midst of a global recession, New Jersey is among the three states that have seen the greatest losses in state higher education appropriations per full-time equivalent student over the past five years. We will point out that funding higher education is an investment that drives economic expansion and opportunity; indeed, we are an essential part of the process of stimulating needed job growth that the governor and legislature must develop.

The governor has also proposed to merge Rutgers with Thomas Edison State College, stating that “the combination will allow new classroom-based services for students in Trenton, while leveraging the two institutions’ distance learning programming.” Under this unsolicited proposal, Rutgers also would take over the operations of the State Library and State Museum. Rutgers appreciates the confidence expressed in us by the governor’s proposal, and we will explore how these excellent institutions could be aligned with Rutgers to strengthen and enhance the missions of all. However, the task of vetting this proposal and performing due diligence will require consultation within and beyond the university community and would ultimately require approval by our boards of governors and trustees.

Rutgers’ enormous budget challenges will call on all of us to work even harder to sustain the high-quality education and cutting-edge research that our faculty provides and the supportive environment for learning and scholarship that our staff ensures. As our record numbers of applications and enrollments attest, the public has recognized the university’s success in preparing students to contribute significantly to our state and the world. The extraordinary record we have achieved in winning grants to support our research attests to our competitiveness on a global scale. In the months ahead we will all be challenged to sustain what Rutgers has become—and that can only be achieved by our working together. I ask, and I know I can count on, your help.

Richard L. McCormick

President

Rutgers, The State University of New Jersey

Budget Slashes $175 Million from NJ Higher Ed

Christie challenges teachers union on benefits

Governor Chris Christie presented his budget on Tuesday, outlining about $1 billion of cuts to education in the State, including $175 million to higher education.  The text of his address is available online and you can see more portions of the governor's speech online at NJ.com or at Fox News.  Assembly Higher Education Chairwoman Pamela Lampitt (D-Camden) released a statement (widely quoted) following Gov. Christie’s budget speech, claiming that "he pulled the rug out from under higher education" in the State.  She writes: “Gov. Christie’s budget contains not just cuts to institutions of higher education, but global cuts to programs – like tuition aid grants and the Educational Opportunity Fund – that hit all sectors, putting the financial burden directly on middle class families and removing the prospect of a college education for thousands of New Jersey students.  These cuts also show that the governor does not see our institutions of higher education as the vital economic engines they are. These cuts will likely force staffing cuts across the board and will limit our colleges and universities’ ability to attract and produce the top-notch professionals businesses in the state and across the region have come to expect."

The New Jobless Era

I don't mean to depress you as you go away for Spring Break, but I have been thinking about the situation of higher education within the larger economy.  Right now, I just have a lot of dots, like the inflation issues I mentioned in the last post.  Another dot is represented by Don Peck's "How a New Jobless Era Will Transform America" (The Atlantic, March 2010), which is a scary but important reading for people of college age who, the author argues, are going to face a long period of declining access to jobs and declining salaries in most sectors.  The article does not specifically address how this impacts higher education.  But you have to wonder.  Will a period of declining jobs make people wonder about the value of a college degree?  Will the liberal arts go into an even steeper decline as more students rush to the few remaining areas (such as engineering and nursing) where graduates have a chance at getting a job out of college?  Will jobless college graduates be more likely to default on their loans?

Higher Education Bubble?

I finally read "Will Higher Education Be the Next Bubble to Burst?" (The Chronicle of Higher Education, May 22, 2009) which has relevance to anyone whose project touches on the economics of higher education -- including those writing on community colleges, online courses, privatization, and many other topics.  Published last year, as academics began to understand how the housing market's bursting bubble may have been the main contributor to the global economic downturn, it paints a scary picture of the ways in which inflation in higher education parallel the inflation in the housing market that preceded the crash.  Along the way, the authors offer useful insight into the larger economic forces driving students to community colleges, online courses, and public institutions -- and perhaps making possible greater privatization of public schools (which remain a bargain even if tuition goes up by 30% or more).