NJ Continues to Cut Funding for Higher Education, Spends Less Than in 2008

Meir Rinde | May 20, 2016 | Education
As money for college dwindles, middle-class and lower-middle-class families and students appear to be bearing the brunt of the shortfall

As public colleges and universities across the country struggle with funding cuts imposed during the recession, New Jersey is spending less on higher education than it did in 2008 and was one of 11 states to cut funding last year.

Those findings, from a report released Thursday by a Washington think tank, are being used by advocates to argue for a funding boost for higher education that could reduce tuition costs for middle-class families and ultimately strengthen the state economy. But they also highlight a continually strapped budget environment in New Jersey that has ruled out almost any serious discussion of an increase in aid to institutions of higher learning.

“There’s just not right now any discretionary funding available for the state to invest in important priorities,” said Lawrence Nespoli, president of the New Jersey Council of Community Colleges. “We’ve got to get our hands around the solution to the pension and health insurance liabilities before we can move forward.”

Gov. Chris Christie has proposed keeping aid for colleges, universities, and students at $2.2 billion in fiscal 2017, roughly the same as this year and 7 percent lower than in 2015. New Jersey’s higher education spending thus remains 23 percent below 2008 levels when adjusted for inflation, according to the new report from the Center on Budget and Policy Priorities.

The long-term reduction amounts to $2,250 per student and represents a deeper cut than the national average. Ranked by the size of the reduction compared to 2008, New Jersey’s is the 13th largest percentage cut and 12th largest in dollars.

Even heavier reductions remain in Delaware, at 29 percent below 2008 levels, and Pennsylvania, at 33 percent. Arizona has maintained by far the deepest cut at 56 percent. New York is just 6.4 percent below prerecession spending, and four states have increased spending: Montana, Wisconsin, Wyoming, and North Dakota, which stands out with a 46 percent hike in funding.

State Secretary of Higher Education Rochelle Hendricks said the CBBP report showed again that college costs are a national issue, as it has in previous years, and said the Christie administration has nonetheless worked to help schools and students.

“After more than two decades of neglect, the governor stepped in to offer strong support for higher education, providing more than $1.3 billion for 176 higher education construction projects, while maintaining operating funding for higher education next year, and increasing the amount of money allocated for student aid,” she said in an email.

The construction capital was borrowed under the Building Our Future Bond Act, which voters approved in 2012. Christie has boosted funding for the state’s main student aid program, the Tuition Aid Grant, by 60 percent since he took office, and wants to increase it another $18 million to $404 million next year.

Nespoli noted that, in the past, counties were able to help community colleges when state funding fell, but now they are constrained by the 2 percent cap on property tax increases, pressuring schools to boost tuition and fees instead. The state, counties, and students formerly each contributed about a third of college funding, but now the state and counties contribute about 20 percent each and students pay the remaining 60 percent, albeit with help from state and federal aid programs.

“We’re pretty good on capital funding, really good on financial aid, and on operating aid, not so much,” Nespoli said. “All three of our main sources of funding are under stress — the state, the county, and tuition and fees.”

The tuition situation could be worse, however, according to Michael Klein, CEO of the New Jersey Association of State Colleges and Universities.

“While New Jersey had the 13th-highest percentage cut in per-student funding, the state also had the ninth-lowest percentage increase in tuition over that time, a reflection of the hard work of the institutions’ leadership and their focus on students and affordability,” he said in an email.

CBPP urged states to boost revenue for schools, saying that it would “help build a stronger middle class and develop the entrepreneurs and skilled workers that are needed in the new century.” New Jersey Policy Perspective, which released the report locally, said the “continued shortchanging of public colleges and universities cuts off a vital rung on the ladder of opportunity for too many families,” and argued that the shortfall showed the folly of a proposed cut in the estate tax.

“Eliminating an additional $550 million from the pot of money that funds higher education to deliver a tax cut to a few thousand wealthy heirs each year fails the ‘tax fairness’ test, and is incredibly short sighted,” NJPP president Gordon MacInnes said.

While acknowledging that the state budget is in “dire straits,” MacInnes, who served on Rutgers’ board of governors until last year, said it was striking how little focus there has been on finding a way to undo the deep cuts to higher education funding of the past decade.

“We certainly don’t sense that there’s a groundswell of either legislative or public support around an organized effort of some kind, for example as there is with transportation right now,” he said. “This is in the same category, as far as I’m concerned. That is, our being able to do better in supporting higher education is crucial I think to the current generation particularly of middle-class and working-class kids who want a good opportunity at a quality public institution, and for our future.”

Steven Rose, president of Passaic County Community College and chairman of the New Jersey Presidents’ Council, said the state’s relatively strong financial aid programs actually protect many low-income students from the regular tuition increases that have resulted from flat or reduced state and county funding. But many others are feeling the bite from higher costs.

“Those who are above the level where they can get financial aid, which is the lower-middle-class, the middle-class, they are having a problem, because they are not being insulated from these hikes in tuition. And they are truly having a problem,” he said.

As a result, some young people who are “loan-averse” choose not to attend college despite its benefits for their careers and future earnings, Rose said. Students who do take classes may load up on debt or work one or even two jobs, which depresses graduation rates and stretches out college to five or six years, he said.

The need for more support is abundantly clear to everyone, Rose said. It’s just the money that’s lacking.

“There is bipartisan support for increasing funding for higher education. I really believe that,” he said. “And I’m really hopeful in the not-so-distant future, we’ll get to the point where we can come up with a rationale for higher education funding that will start getting us back on track.”