With the state budget signed and passed last week, Rutgers U. is bracing for what several administrators are calling one of the most challenging fiscal years in school history.
“As you can imagine, it is with much sadness that I present this budget information to you …and I truly wish that I had better news to report,” said University President Richard L. McCormick in a letter to the University community regarding the budget. “However, the economic troubles that haunt New Jersey and the nation have greatly exacerbated the challenges we have already faced for more than a decade as a result of the state’s longterm trend of underfunding higher education.”
State appropriations to the University were slashed by $46.6 million with the signing of the state budget last Tuesday, a 15 percent cut from last year’s total. Combined with the mandated across-the-board salary increases and unavoidable inflationary increases, such as increases in debt services, insurance, fuel and utilities, the University’s budget hole is more than $96 million, said Philip J. Furmanski, executive vice president for Academic affairs. While much of the governor’s proposed budget for higher education remained unchanged in the state budget last Tuesday, some funding was restored to the Educational Opportunity Fund, Tuition Aid Grants and NJ STARS programs, Furmanski said.
The controversial merger proposal between the University and Thomas Edison State College, the State Library and State Museum was also scrapped from the final budget, he said. Yet the 4 percent cap on tuition and educational fees — which the University has protested since its inception — remained in the final budget, which Furmanski said will limit the University’s ability to fund different programs and, with less class options available, keep some students from graduating on time.
“It’s a very unfortunate thing,” he said. “We did need a little more flexibility and that would have been money that would have saved jobs … and would have allowed us to make even modest investments to ensure the very best education for our students as possible.”
The cap, which applies to only undergraduate in-state tuition and educational and general fees, would raise an individual student’s tuition about $380, said Nancy S. Winterbauer, vice president for University Budgeting. If a 4 percent overall tuition increase is instituted for all students, it will generate about $21.6 million in revenue for the University, she said. The Board of Governors will approve tuition changes and other budgetary matters during its next meeting on July 15.
A part of the budget that ends the state’s pension contributions for statewide higher education employees who are enrolled in the Alternate Benefit Program and make more than state cabinet members — currently $141,000 — will also greatly affect the University, Furmanski said.
“This is going to seriously harm our ability to recruit the very best people here because this is not the kind of program that is used for pensions at most of the different universities across the country right now,” Furmanski said.
To help close the budget gap and avoid more severe money-saving moves like mass layoffs or class eliminations, the University instituted a salary freeze for all employees systemwide that will save $30 million and jobs, Furmanski said.
“This is under the general framework of sharing the difficulty, of coming together as a community to make sure we save jobs [and] that we are able to deliver the services that we need,” Furmanski said, noting that the freeze was across-the-board for those covered under contract deferral agreements and those “non-aligned” to maintain equability.
The University justifies the move under a provision in most of the contracts with the 14 bargaining groups that makes salary increases “subject to the appropriation of and allocation to the University by the state of adequate funding for the specific purposes identified for the full period covered by this agreement,” which did not happen this year.
But union leaders from the Rutgers American Association of University Professors-American Federation of Teachers and Union of Rutgers Administrators-American Federation of Teachers said an agreement signed last year deferring 2009 contract raises to this supersedes this provision and started grievance processes claiming breach of contract.
A hearing before a New Jersey Public Employees Relations Commission official will be held Wednesday morning in Trenton, regarding a joint request between the AAUP-AFT, URA-AFT, as well as American Federation of State, County and Municipal Employees locals 888 and 176 and Service Employees International Union/Committee of Interns and Residents for expedited arbitration, which would help speed up the grievance process.
“We certainly want to get this settled as quickly as possible,” Furmanski said. “Whether expedited is the right way to go or whether we should go through a regular process — that remains to be determined.”
And although University administrators claim the freeze is in place to prevent more drastic budget moves from coming to fruition, Adrienne Eaton, president of the Rutgers Chapter of the AAUP-AFT said the University has failed to demonstrate the severity of its financial situation. Eaton said the University has refused to disclose requested budget documents and claims Section C of the deferral agreement aimed at budget transparency through committee meetings regarding the expenditure of federal stimulus funds was violated by the school.
“We are skeptical until we see that [budget information],” Eaton said. The University’s salary freeze justification of shared sacrifice was also questioned by Lucye Millerand, president of the URA-AFT. “It is an unfair labor practice to hold a union contract hostage to a wish list for someone who doesn’t have a contract,” she said.
Yet even if tuition goes up 4 percent across-the-board and the salary freeze stands, the University will still face a shortfall in the budget, Winterbauer said. There will still need to be cuts across the institution which may include layoffs, service cuts, deferred expenditures and hiring freezes.
“It’s still a difficult budget year … even with the salary freeze,” Winterbauer said.