Credit: (AP Photo/Seth Wenig, File)Gov. Phil Murphy has proposed an increase of more than $100 million in state spending on New Jersey higher education, a boost that might seem like welcome news to schools that have not always received such support from Trenton.
But the funding, part of his budget proposal for the 2023 fiscal year, is instead drawing questions and worries from some college officials unhappy with the way Murphy is reallocating funds. The amount spent in support of higher education would go from $2.79 billion to $2.89 billion.
Close to $24 million of that increase would go to the Garden State Guarantee, a program to provide free or reduced-cost tuition to low-income juniors and seniors at state colleges. Another $20 million would be distributed to colleges through the “outcomes-based allocation” model, which was designed by the state to reward colleges based on their enrollment of low-income students, the number of degrees awarded and how many of them are given to minority students.
That money would come at the expense of general operating support to the colleges, which Murphy proposes cutting by $42.2 million, or 5.3%.
While the administration signaled a change in college funding several years ago when the state adopted a higher education plan, some college officials say the change is making it difficult for them to balance their budgets.
Where there’s less state funding
Harvey Kesselman, president of Stockton University, said that he supports the Garden State Guarantee, but it does not make up for the losses to his university’s operations budget. “I have relied on the current governor for support of Stockton,” he said. “But every time we get that support, the dollars never match up with our growth.”
As one of the few higher education institutions in South Jersey, Stockton University, said Kesselman, has grown exponentially in recent years, but lower operating budgets have hindered that progress. Murphy’s proposed budget includes an 11% cut in funding to Stockton, from $32.7 million for 2021-22 to a little less than $29 million for 2022-23.
Other schools that would receive less money if the budget is approved as written are Rowan and Montclair State universities and Ramapo College.
Direct funding to senior public colleges and universities, excluding University Hospital in Newark — which, as a teaching hospital, is considered a higher education institution — would increase by just $2.4 million overall. However, the almost $2.9 billion the Murphy administration would direct to higher education — a 3.7% increase — includes almost $600 million in direct aid to students, mostly in the Tuition Aid Grants based on financial need.
Most of the $100 million increase would cover increased pension and health care benefit costs. There is also an $8.1 million increase to expand the Community College Opportunity Grant Program, $4 million for a vocational school pilot program and an additional $1 million in Educational Opportunity Fund scholarships for disadvantaged students.
More for lower-income residents
The proposed higher education budget also includes $3 million for a program to try to get thousands of adults who have taken some college courses but never got a degree to go back to school. The program is part of an effort to help the state reach its goal of getting 65% of the population on track to earn a post-secondary degree or certification by 2025.
Under Murphy’s budget proposal, both the Community College Opportunity Grant Program and Garden State Guarantee would provide free tuition for those with household incomes less than $65,000 and discounted tuition for those with household incomes between $65,000 and $80,000.
The Community College Opportunity Grant Program has been in place for those with household incomes of less than $65,000 for several years. For his latest budget, Murphy wants to expand that to provide some assistance to those with slightly higher incomes and extend the program to four-year colleges to cover the third and fourth years of education.
In his budget message, Murphy touted that the state has “put a higher education at both our community and four-year public colleges back within reach for thousands of students with the Community College Opportunity Grant and the Garden State Guarantee.”
While supporting those programs, college officials don’t necessarily want to see aid they used to receive for operating support cut at the same time.
Higher costs
Eugene Lepore, executive director of the New Jersey Association of State Colleges and Universities, said that over the past few years operating aid has failed to keep up with these institutions. “Over that period of time we should have seen increased support to account for their growing costs, inflation, growing labor costs,” he said.
The percentage of public college budgets that New Jersey tax dollars fund has been dropping for decades, as has the percentage of the overall state budget devoted to higher education.
A 2013 report by the New Jersey Policy Perspective think tank found that the percentage of the state budget spent on higher education declined from 8.4% in 1995 to 6.1% in 2012. Under Murphy’s budget proposal, it would drop further, to 5.9%.
College presidents had long sought a formula for funding their operations that would be reliable and take account of enrollment and costs.
The outcomes-based allocation model is not exactly what they were asking for, though it appears to be the state’s effort to create a data-driven formula for funding at least part of the colleges’ operations.
Brian Bridges, the state’s higher education secretary, said that the model is intended to close long-standing equity gaps and accelerate upward mobility for students from underserved backgrounds.
“Outcomes based allocation is designed to award senior public institutions for post-secondary outcomes that are aligned with our priorities,” he said.
He added that his office worked with the state colleges on the funding formula and had “not heard any complaints regarding OBA” from these officials.
Bridging the funding gap
College officials have complained to lawmakers, though, about a lack of adequate funding. To mitigate funding gaps for some universities that historically have had a lower funding level per student, including Stockton University and William Paterson University, legislators have added money for specific schools through the annual budget process. An additional $22 million was allotted for certain colleges in the budget for fiscal year 2022, Bridges said.
But because these are legislative add-ons, these funds are absent from the fiscal year 2023 budget; legislative add-ons get put into the budget before final committee passage. They don’t get allocated, like everything else in the budget, until the governor signs it.
‘Applying the same rigid standards across all university environments is a disservice to all.’
Bridges said that appropriations are only guaranteed for one year at a time. He said he expects that the colleges “will raise that concern” with lawmakers as they consider Murphy’s budget proposal.
Kesselman argued that it is not ideal to have to ask for this funding every year.
“I follow the philosophy,” he said, “But we can’t keep doing this every year.”
“We will be working with the legislature to try to get those funds back to address those inequities,” Lepore said.
William Field, a professor at Rutgers University and Legislative Chair for the New Jersey chapter of the American Association of University Professors, said it is ineffective to tie aid to enrollment, because that makes so much of a school’s budget dependent on attracting new students.
He also said that while the outcomes-based allocation model encourages innovation and reform, it does not account for the time it takes to see a noticeable change in these outcomes.
“Cutting state contributions as punishment undermines the entire institution working to improve outcomes,” Field said. “Applying the same rigid standards across all university environments is a disservice to all.”
Risk of higher tuition costs
One of the greatest consequences of underfunding colleges is the possibility of increased tuition, as it is difficult to keep up with rising costs.
However, the state has attempted to mitigate fears of that outcome by devoting more funds to the Tuition Aid Grant program.
“Institutions do their best to hold the line and keep tuition as consistent as possible, but we have seen costs go up as funding has waned,” Lepore of the New Jersey Association of State Colleges and Universities said.
Several reports, including one by Education Data Initiative, have found New Jersey’s public higher education system to be among the most expensive in the country.
Bridges agreed that the state needs to address affordability issues for higher education and said he is confident that the budget proposal removes significant financial barriers for underserved students. He also understands that there is more work to be done before this budget is officially approved.
“This is the Governor’s proposed budget,” he said. “This is the beginning of the conversation.”
