On Eve of Senate Vote, Restructuring Still Finds Few Friends at Rutgers, Rowan

Tara Nurin | June 21, 2012 | Education
Lack of solid financial data continues to haunt process, leaving stakeholders to resort to best guesses

One day before a scheduled vote in the New Jersey Senate on a controversial higher education restructuring plan, Rutgers University’s boards of trustees and governors continued to strategize on ways to persuade the plan’s authors to drop provisions they say are untenable.

Representatives from a negotiating team comprising five trustees and governors briefed their colleagues separately yesterday during closed sessions of the respective boards’ annual meetings. A governor who did not wish to be identified told NJ Spotlight, “We swapped views of where we stand and what we know. People have widely different views. It was more like a preliminary meeting because [this legislation] has changed so quickly . . . and there’s not a lot of information about consequences.”

Neither board addressed the controversial legislation to restructure higher education in New Jersey in open session of the meetings, though the issue was forced to light when a group of approximately 20 students from all three Rutgers campuses and Rowan University loudly interrupted the governors’ meeting. Led by New Brunswick sophomore and student union member Marios Athanasiou, the group chanted a list of complaints and demands that included a call for more transparency and student participation and a request for the boards to be more forthcoming about their strategies for negotiating with politicians and setting tuition rates.

A Peaceful Ending

After the group was peacefully escorted out by campus police officers, Athanasiou elaborated, “There was no talk of tuition and no discussion of the Rutgers/Rowan merger, and we feel this is indicative of the poor relationship [governors] have with students.” Athanasiou claimed the board broke tradition by failing to discuss the tuition matter today in preparation for next month’s meeting, during which the board will set tuition for the coming school year. By phone, Vice Chair Gerald Harvey contradicted Athanasiou’s assertion by explaining that discussion customarily takes place at a hearing in April, which was held this year as per usual.

The meetings yesterday came a day before the full Senate was to vote on the restructuring bill that’s co-sponsored by Senate President Stephen Sweeney (D-Gloucester) and senators Donald Norcross (D-Camden) and Joseph Vitale (D-Middlesex) and supported by Gov. Chris Christie. Legislators are rushing to get the bill passed before the current legislative session ends on June 30 to meet a deadline set by Christie, though it was determined in a senate committee meeting Monday that the law would not take effect until July 1, 2013.

Though amendments introduced on Monday did not go as far as critics demand to lessen the power of a widely opposed proposed joint governing board to oversee affairs at a more closely aligned Rutgers-Camden and Rowan, the amendments did go a long way to appease the Essex County delegation who’s been fighting to secure assurances about the fate of Newark’s University Hospital.

According to Sen. Ron Rice (D-Essex), a vocal critic of the bill, members of the delegation are “reasonably satisfied” that some of the arguments concerning labor agreements have been addressed, but they’re still working to obtain assessments for the hospital’s capital needs and estimates on the amount of debt it carries.

Money Matters

“We still don’t know the cost of all this stuff,” Rice said. “The committees are just pushing this stuff out because it’s what the senate president wants. The separation of University Hospital [from the University of Medicine and Dentistry of New Jersey] is still troubling to me. I can’t get any answers to what University Hospital owes people and I can’t figure out how we’re going to address the capital needs until I know what those needs are.”

Despite sharp criticism from members of the Senate’s higher education and budget committees over a lack of figures as to how much the restructuring will cost, both committees have now almost unanimously passed an amended version of the bill. Although the lack of financial data continues to haunt the process, several stakeholders have done their best to estimate. Rice puts the total restructuring cost at more than one billion dollars – a figure he calculated by adding up the known debt of the institutions in question plus his own estimated administrative fees and differences in the cost of borrowing money to fund operations.

Rutgers’ governing boards anticipate that an alteration to their governance of the Camden campus could require them to refinance their debt at a cost of $155 million. And Rutgers-Camden professors who’ve mobilized to fight a weakening of their relationship to Rutgers estimate those refinancing costs could reach $250 million. Despite assurances from Democratic staffers both during and after the budget committee meeting that an autonomous Camden campus shouldn’t trigger a need to refinance, the committee still includes it in the first list anyone’s published to enumerate what will comprise the likely expenses involved with restructuring.

The Assembly Angle

As for the corresponding Assembly bill, there’s talk that the Budget Committee will address it Friday, which would place it on the budget committee’s agenda instead of, or earlier than, the higher education committee, which has so far taken no action. It’s believed that the bill’s co-sponsors — Reps. John Wisniewski (D-Sayreville), Vincent Prieto (D-Secaucus), and Celeste Riley (D-West Deptford) — are waiting for the final version of the Senate bill before writing identical amendments.

So far, the Senate amendments have failed to pacify Rutgers’ governing boards, which are receiving legal counsel from former acting U.S. Solicitor General Neal Katyal on the issue. Katyal is expected to challenge the legislation on constitutional grounds if the bills are enacted into a law that’s inconsistent with a set of principles affirmed last month by both boards.

In addition to conducting discussions regarding the restructuring, the boards used the open sessions at yesterday’s meetings to approve the title of President Emeritus for retiring president Richard McCormick, who will teach history and education after returning from a one-year sabbatical, and to authorize the school’s administration to negotiate for the $295 million purchase of land formerly owned by the New Brunswick Theological Seminary to build a residential honors college, a dorm, a parking deck and a new academic building.