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FISCAL YEAR 2021-2022 ANALYSIS OF THE NEW JERSEY BUDGET HIGHER EDUCATIONAL SERVICES Prepared by the NNewew JerseyJersey LLegislatureegislature OOfficeffice ooff LLEGISLATIVEEGISLATIVE SERVICESSERVICES April 2021 NNEWEW JJERSEYERSEY SSTATETATE LLEGISLATUREEGISLATURE SENATE BUDGET AND APPROPRIATIONS COMMITTEE Paul A. Sarlo (D), 36th District (Parts of Bergen and Passaic), Chair Sandra B. Cunningham (D), 31st District (Part of Hudson), Vice-Chair Dawn Marie Addiego (D), 8th District (Parts of Atlantic, Burlington and Camden) Nilsa Cruz-Perez (D), 5th District (Parts of Camden and Gloucester) Patrick J. Diegnan, Jr. (D), 18th District (Part of Middlesex) Linda R. Greenstein (D), 14th District (Parts of Mercer and Middlesex) Declan J. O’Scanlon, Jr. (R), 13th District (Part of Monmouth) Steven V. Oroho (R), 24th District (All of Sussex, and parts of Morris and Warren) M. Teresa Ruiz (D), 29th District (Part of Essex) Troy Singleton (D), 7th District (Part of Burlington) Michael L. Testa, Jr. (R), 1st District (All of Cape May, parts of Atlantic and Cumberland) Samuel D. Thompson (R), 12th District (Parts of Burlington, Middlesex, Monmouth and Ocean) GENERAL ASSEMBLY BUDGET COMMITTEE Eliana Pintor Marin (D), 29th District (Part of Essex), Chair John J. Burzichelli (D), 3rd District (All of Salem, parts of Cumberland and Gloucester), Vice-Chair Daniel R. Benson (D), 14th District (Parts of Mercer and Middlesex) Robert D. Clifton (R), 12th District (Parts of Burlington, Middlesex, Monmouth and Ocean) Serena DiMaso (R), 13th District (Part of Monmouth) Gordon M. Johnson (D), 37th District (Part of Bergen) John F. McKeon (D), 27th District (Parts of Essex and Morris) Nancy F. Muñoz (R), 21st District (Parts of Morris, Somerset and Union) Carol A. Murphy (D), 7th District (Part of Burlington) Verlina Reynolds-Jackson (D), 15th District (Parts of Hunterdon and Mercer) William W. Spearman (D), 5th District (Parts of Camden and Gloucester) Benjie E. Wimberly (D), 35th District (Parts of Bergen and Passaic) Harold J. “Hal” Wirths (R), 24th District (All of Sussex, and parts of Morris and Warren) OFFICE OF LEGISLATIVE SERVICES Thomas Koenig, Legislative Budget and Finance Offi cer Vacant, Assistant Legislative Budget and Finance Offi cer Marvin W. Jiggetts, Director, Central Staff Robert A. Melcher, Section Chief, Education Section This report was prepared by the Education Section of the Offi ce of Legislative Services under the direction of the Legislative Budget and Finance Offi cer. The primary authors were Sarah Haimowitz and Lauren E. Lefevre with additional contributions by Christopher Myles. Questions or comments may be directed to the OLS Education Section (Tel: 609-847-3850) or the Legislative Budget and Finance Offi ce (Tel: 609-847-3105). HIGHER EDUCATIONAL SERVICES Budget Pages ....... D-293 to D-341 and D-373 to D-380 The data presented in this Office of Legislative Services Budget Analysis reflect 12-month fiscal years beginning on July 1 and ending on June 30 of the subsequent year. Fiscal Summary ($000) Adjusted Percentage Expended Appropriation Recommended Change FY 2020 FY 2021 FY 2022 2021-22 State Budgeted $1,448,472 $1,642,525 $1,738,244 5.8% Federal Funds 74,981 5,255 5,303 0.9% Other 24,640 36,052 33,704 (6.5%) Grand Total $1,548,093 $1,683,832 $1,777,251 5.5% Personnel Summary - Positions By Funding Source Percentage Actual Revised Funded Change FY 2020 FY2021 FY 2022 2021-22 State 17 21 34 61.9% Federal 1 1 4 300.0% Other 128 119 133 11.8% University Hospital* 2,923 3,500 3,500 0.0% Colleges & Univ's.* 20,363 20,706 20,706 0.0% Total Positions 23,432 24,347 24,377 0.1% FY 2020 (as of December) and revised FY 2021 (as of January) personnel data reflect actual payroll counts. FY 2022 data reflect the number of positions funded. *Position data is displayed as "State-funded" positions for the three years. Link to Website: http://www.njleg.state.nj.us/legislativepub/finance.asp Higher Educational Services FY 2021-2022 Highlights The data presented in this Office of Legislative Services Budget Analysis reflect 12-month fiscal years beginning on July 1 and ending on June 30 of the subsequent year. • The Governor’s FY 2022 Budget includes State appropriations of $1.74 billion in direct support for higher educational services, including institutional support for public and independent institutions of higher education, financial aid for students, and the operations of the Office of the Secretary of Higher Education. This is an increase of $95.7 million or 5.8 percent over the FY 2021 adjusted appropriation. • The Governor’s Budget includes $749.0 million in fringe benefit costs that the State is anticipated to pay on behalf of the senior public institutions of higher education in FY 2022. This is in addition to direct support appropriations for higher educational services. The recommended amount for fringe benefits grows by $35.7 million or 5.0 percent over the FY 2021 adjusted appropriation. (The appropriation for fringe benefits is reflected within the Interdepartmental Accounts section of the Governor’s FY 2022 Budget.) • Direct State support for the senior public institutions of higher education is recommended at $813.2 million, an increase of $46.2 million or 6.0 percent over the FY 2021 adjusted appropriation. The increase largely reflects the Governor’s proposed Garden State Guarantee initiative, which is discussed further below. • The Governor’s FY 2022 Budget includes $192.4 million in State operational aid and other financial support to the county colleges, an increase of $21.5 million or 12.6 percent above the FY 2021 adjusted appropriation. Funding to support the operational costs of county colleges increases by $21.8 million to $139.1 million from the FY 2021 adjusted appropriation of $117.4 million. Some $16.8 million of the increase reflects the replacement of federal COVID-19 assistance that is no longer available and that was used to offset State appropriations in FY 2021. • For FY 2022, the Governor is proposing the Garden State Guarantee initiative, which would cost $45.0 million in financial assistance and $5.0 million to implement. As a result, four-year public colleges and universities could complement the State’s community colleges in providing two years of free tuition to students whose annual household income is no more than $65,000. • The Governor’s FY 2022 Budget recommends $27.0 million for the Community College Opportunity Grant program, an increase of $5.8 million over the FY 2021 adjusted appropriation. The recommended FY 2022 program funding is expected to support 13,128 students. The program enables students with annual family incomes not exceeding $65,000 to attend county college virtually free. • Funding for the Educational Opportunity Fund Program is recommended at $51.8 million, $2.8 million or 5.6 percent above the FY 2021 adjusted appropriation. This increase adds $1.65 million to the Opportunity Grants appropriation and $1.1 million to the Supplemental Education Program Grants appropriation. 2 Higher Educational Services FY 2021-2022 Highlights (Cont’d) • Recommended funding for the Tuition Aid Grant Program remains unchanged from the FY 2021 adjusted appropriation of $437.9 million. The proposed TAG funding is projected to support 67,748 awards in the 2021-2022 academic year, which is 1,881 awards, or 2.9 percent more, than were provided in FY 2021. • The FY 2022 Governor’s Budget includes a new $8.5 million appropriation for University Hospital capital growth projects. • During the COVID-19 pandemic, New Jersey’s institutions of higher education have received over $2.0 billion in federal assistance. Of that total, the senior public institutions of higher education have been awarded some $1.03 billion, county colleges $659.4 million, and private institutions of higher education $255.4 million. The residual amount assisted proprietary and other private institutions of higher education. The sums include projected American Rescue Plan Act of 2021 allocations. The background paper starting on page 21 lists the totals by institution. Background Paper: Federal Funding Provided to New Jersey Institutions of Higher Education ………………… p. 21 3 Higher Educational Services FY 2021-2022 Fiscal and Personnel Summary AGENCY FUNDING BY SOURCE OF FUNDS ($000) Adj. Expended Approp. Recom. Percentage Change FY 2020 FY 2021 FY 2022 2020-22 2021-22 General Fund Direct State Services $7,121 $9,150 $9,122 28.1% (0.3%) Grants-In-Aid 1,257,783 1,454,426 1,518,672 20.7% 4.4% State Aid 0 0 0 ---- ---- Capital Construction 0 0 0 ---- ---- Debt Service 0 0 0 ---- ---- Sub-Total $1,264,904 $1,463,576 $1,527,794 20.8% 4.4% Property Tax Relief Fund Direct State Services $0 $0 $0 ---- ---- Grants-In-Aid 0 0 0 ---- ---- State Aid 183,568 178,949 210,450 14.6% 17.6% Sub-Total $183,568 $178,949 $210,450 14.6% 17.6% Casino Revenue Fund $0 $0 $0 ---- ---- Casino Control Fund $0 $0 $0 ---- ---- State Total $1,448,472 $1,642,525 $1,738,244 20.0% 5.8% Federal Funds $74,981 $5,255 $5,303 (92.9%) 0.9% Other Funds $24,640 $36,052 $33,704 36.8% (6.5%) Grand Total $1,548,093 $1,683,832 $1,777,251 14.8% 5.5% PERSONNEL SUMMARY - POSITIONS BY FUNDING SOURCE Actual Revised Funded Percentage Change FY 2020 FY 2021 FY 2022 2020-22 2021-22 State 17 21 34 100.0% 61.9% Federal 1 1 4 300.0% 300.0% All Other 128 119 133 3.9% 11.8% University Hospital* 2,923 3,500 3,500 19.7% 0.0% Colleges and Universities* 20,363 20,706 20,706 1.7% 0.0% Total Positions 23,432 24,347 24,377 4.0% 0.1% FY 2020 (as of December) and revised FY 2021 (as of January) personnel data reflect actual payroll counts.