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Fiscal 2008 Budget Policy Statement
adopted December 15, 2006
in higher education is an investment in our state, our economy,
and our quality of life. The New Jersey Commission on Higher
Education is pleased to provide budget policy recommendations
for fiscal 2008 to enhance that investment. Our recommendations
are consistent with New Jersey’s long-range plan for higher
education, A Blueprint for Excellence, which is focused on the
inextricable link between educational opportunity and the economy.
The most notable
public benefit from higher education is its ability to fuel a
state’s economic competitiveness by preparing the workforce
and advancing research. Colleges and universities equip workers
with the necessary skills to increase human productivity, which
in turn contributes to overall increases in economic growth.
New jobs in the knowledge economy strongly favor highly skilled
workers, and skill requirements for existing jobs are increasing.
Furthermore, university research and development cultivates technology
and innovation that drives business improvement and growth.
the state’s ongoing fiscal constraints, the Commission
recommends targeted increases for higher education that will
yield positive returns to our students, citizens, and state.
These increases are focused on providing affordable, high-quality
educational opportunities for students and enhancing the economy.
FOR FISCAL 2008
for Colleges and Universities
support and student tuition and fees are the two primary
sources of revenue for most colleges and universities. Targeted
operating aid increases are recommended for fiscal 2008 to help
deliver high-quality programs and services and minimize increased
costs for students.
Public Colleges and Universities: In November, the
Commission adopted Policy Recommendations for Operating
Support of Senior Public Colleges and Universities in New Jersey.
While specific details have not yet been developed for the
implementation and phasing-in of these recommendations, we
encourage policymakers to consider the dual funding components
of base support and targeted incentive funds to support these
state institutions, which provide extensive educational opportunities
and services for the state and its citizens.
recommends increased base operating support for the 12 senior
public institutions to help fund contractual salary increases
and other inflationary costs and to provide competitive educational
programs for more students. Base operating support is also critically
important for the competitiveness of the three public research
universities in the area of research and development. In order
to provide the state-of-the-art facilities and the faculty talent
to be competitive for national research awards, it is imperative
that there be a stable operating base.
state support of fringe benefits for employees at these institutions
is equally important. The state has historically covered this
significant and growing expenditure. Loss of state support for
these required annual costs would require institutions to cover
them with student tuition and fees and base operating aid, diminishing
funds available to maintain and enhance academic quality, programs,
component of the recent recommendations calls for incentive funds
for targeted state priorities. While budget constraints may preclude
initiation of this component in fiscal 2008, a pilot effort could
be established with a relatively small set-aside to address a
critical state need.
Colleges: New Jersey’s community colleges rely
on state, county, and student support, ideally with a one-third
share of operating costs from each. These 19 institutions play
a dual role in meeting the growing demand for higher education
and addressing workforce needs: as a cost effective launch
to a bachelors degree and as institutions offering associates
degrees and industry recognized credentials for more immediate
help in the workforce. Increased state operating support is
necessary for the community colleges to help fund contractual
salary and benefit increases and other inflationary costs.
The Commission recommends that the state provide additional
operating support for community colleges in fiscal 2008, moving
closer to a one-third state share. As the state moves toward
that goal, counties should strive for at least a one-third
share as well, thereby minimizing the need for tuition increases.
Colleges and Universities: The 14 independent colleges
and universities serve over one-quarter of the students attending
four-year colleges in the state. And 77 percent of the students
at these colleges are New Jersey residents. The state support
provided to the independent institutions helps to hold down
the cost to New Jersey students and to enhance the quality
and capacity of the educational programs. For fiscal 2008,
the Commission recommends that the state initiate a multiyear
plan to reach the level of funding called for in the Independent
College and University Assistance Act.
November, the Commission adopted Long-Term Capital Planning
and Support Recommendations for New Jersey Higher Education.
For fiscal 2008, we recommend the state begin providing some
level of assistance to the senior public institutions to address
the significant deferred maintenance needs and ensure safe and
healthy campus environments.
We look forward
to working with policymakers in the future to develop a statewide
capital plan for higher education and mechanisms to support initial
and ongoing investments in capital construction and renovation.
for Student Financial Aid
has long been guided by a desire for higher education access,
affordability, and choice for students. The state is consistently
among the leaders in the nation in providing need-based student
financial assistance, and merit aid has expanded during the past
for Disadvantaged Students: The primary student assistance
programs, Tuition Aid Grants (TAG) and the Educational Opportunity
Fund (EOF), should continue to be a priority. For fiscal 2008,
the Commission recommends that the state maintain the one-year
lag in TAG award values for students demonstrating the highest
need and begin efforts to move other eligible students closer
to the one-year lag level. With the growing demand for higher
education access, particularly from low-income and other disadvantaged
families, a provision for an increased number of awards is
approximately 12,300 students, but the funding for the critical
academic support for these students has been flat for several
years. In addition, fiscal constraints have resulted in a decrease
over four years of 870 students served by the EOF Summer Program,
which is so critical to the transition to college. For fiscal
2008, the Commission encourages consideration of an increase
in EOF Article IV grants for institutions to provide adequate
support services for all EOF students. Consideration of increased
support for Article III is also recommended to enhance the quality
and increase the number of students served in the EOF Summer
Aid: The Commission recommends revamping the merit
programs. NJ STARS has shown potential as a way to attract
academically talented students to the community colleges and
this fall sent the first group of recipients to senior colleges.
As word of the program spreads, it is expected that the number
of participants will grow and require additional funds to meet
the financial needs of the program as these students attend
also recommends a new look at the Outstanding Scholar Recruitment
Program. While the funds should be continued for existing students,
we recommend that the merit program be targeted to state needs
in the future and that scholarship amounts be tied to financial
need. While all scholar candidates would receive aid, those scholars
with demonstrated financial need would receive additional aid.
Attracting and retaining the most accomplished academically talented
students is not only good for the college, but we would argue
that all the students at that college benefit from the inclusion
of that talent.
As the institutions
deal with budget constraints, the need to increase external fundraising
is a top priority. Building the endowments at all of our colleges
is critical if we are to build research capacity, attract the
best scholars, develop stable funding sources, or respond to
emerging needs. A small investment in such a fund would leverage
considerable dollars for higher education and make participating
institutions more resilient in the future.
As the state
struggles with competing demands and budget constraints, it will
remain important for higher education to continue to find more
efficient ways to provide the best service to students. The state
process is being mirrored on campuses, and university departments
are handling reductions as the state officials are planning for
additional cuts this year. While the colleges are often seen
as having the option of raising revenue through tuition increases,
it is increasingly clear that future tuition increases will create
insurmountable hurdles for many New Jersey families. In short,
we are pricing more students out of college every year.
in which we have recommended increased state support do not represent
all of the areas of need, but they are the most critical areas
given limited resources and state needs. It is also important,
of course, to strive to maintain state support levels for programs
that serve special populations in need of targeted services.
the direct impact of the structural budget issues on spending,
we urge you to make further reductions to the higher education
budget a last resort. Colleges will continue to work to operate
more efficiently, and the Commission will do all that it can
to support new ways of cost effective collaboration and the pursuit
of external funding. Thank you for your consideration. We look
forward to working with you during this budget period.