Tuesday, May 09, 2006

Who Knew? School Administrators Come Out Against Cuts

Corzine Watch reports that, surprisingly, school administrators don't want their budgets cut. In fact, the administrators of our institutions of higher education feel so strongly about it, they've almost taken to threatening the legislature in testimony:

The administrators also argued that the financial hardships would be far worse than the $169 million in cuts, because the state has asked schools to take on an additional $121.8 million in new costs. The heavy financial burden the state is putting on the schools could have a long-term effect. Less students would be able to afford state schooling, which could force students out of state.
The state of New Jersey spends boatloads of money on its colleges. Take Rutgers, for example. In 2006, net subsidies through the Department of State budget totaled almost $331 million; 2007 net subsidies will be just short of $275 million (click to enlarge):

What's staggering to me is the gross amount of state support to Rutgers through Grants-in-Aid -- nearly $1.6 billion. The cut in state aid, shown in this budget line, is less than $31 million, or 1.9% of the total grant. This will hardly bankrupt an institution that has been in existence since 1766.

You'll notice from the table that one other line is significantly different between 2006 and 2007: Receipts from Tuition Increase. In 2005 and 2006, Rutgers had extra income of $26 and $28 million, respectively, from higher tuition rates.

The table below, again taken from the Department of State budget, shows the cost of attendance at Rutgers increased by 3.6% in 2005, and by 5.5% in 2006. In each of those years, tuition for both in-state and out-of-state undergrads increased by 8% (click to enlarge).

This year's budget only anticipates $860,000 from higher tuitions, and this is a proper position for the governor to take. Like the state, Rutgers (and the other institutions of higher education) must learn to manage expenditures within expected revenues. The model of the past, in which revenues are managed to cover desired expenses, has got to go. Students, as the administrators have correctly recognized, can no longer afford annual 8% increases in tuition. Neither can the state.

Tags: New Jersey, Taxes, Budget, Education