STATE OF THE COLLEGE ADDRESS February 9, 2011 INTRODUCTION Thank you all for coming today. The college is actually in a good state, all things considered. We have many achievements to celebrate at Ramapo and I will highlight just some of those. I will also describe our budgetary situation as we know it. REPORT OF THE HIGHER EDUCATION TASK FORCE First, I will take you through the report of the Higher Education Task Force chaired by former Governor Tom Kean. Membership on the Task Force included representation from private business as well as public and private higher education. Task Force Overview Membership The Honorable Thomas H. Kean, Chair Robert E. Campbell, Vice Chairman (Retired), Johnson & Johnson Dr. Margaret Howard, Vice President for Administration & University Relations, Drew University John L. McGoldrick, Esq., Chair, Zimmer Holdings, Inc., Executive Vice President – Retired, Bristol-Myers Squibb Dr. George A. Pruitt, President, Thomas Edison State College Process Met with more than 150 people from May to November Issued a 9-point questionnaire to college Presidents and Trustees Recommendations in 6 major categories: Financing/Affordability Governance Mission Rutgers University UMDNJ and Medical Education Workforce Development and Economic Development 3 The Task Force held extensive meetings and I know that they canvassed very broadly. I had two meetings with them myself. Their recommendations were in six major categories: Financing and Affordability, Governance, Mission, Rutgers University, UMDNJ and Medical Education, and Workforce Development and Economic Development. TASK FORCE RECOMMENDATIONS: FINANCING & AFFORDABILITY This is a direct quote from the report, “After twenty years of declining state funding and increased tuition, the fortunes of citizens of our state hang in the balance. Student access to an affordable college education and the economic prosperity of our state are at stake. New Jersey must decide to change course and provide greater support for higher education.” Financing & Affordability “After twenty years of declining State funding and increased tuition, the fortunes of citizens of our state hang in the balance. Student access to an affordable college education and the economic prosperity of our state are at stake. New Jersey must decide to change course and provide greater support for higher education.” Ramapo College: State Support as a Percent of Revenues 4 4 Now, each year I show you this graph and as you can see, we are running out of space at the bottom. If you go back to 1997 and look to the top of the chart, 60% of our revenues came from the state. If you then go to 2011 and look at the bottom of the chart, 24.8% of our revenue came from the state. You don’t need to extrapolate much further to realize that we stand to be a public college for a relatively short period—that issue is met front and center in this report. Financing & Affordability Recommendations Tuition State should not impose tuition caps Institutions should not increase tuition in one year increments that are unreasonably large compared to previous year increases Capital Support State should immediately issue general obligation bonds (the last bond issue was in 1988) Institutions should receive annual capital support Restore Higher Education Incentive Funding Program (to attract private philanthropy) Operating Support Provide greater financial support for operating budgets Develop and implement a more rational approach to allocating state aid The state should fund salary increases that it negotiates for state employees Student Aid Maintain Tuition Aid Grant funding, Increase funding to Educational Opportunity Fund Transform NJ STARS to promote student choice and mobility Improve application process for student assistance 5 I would like to review some of the important recommendations listed. The first recommendation is to deal with tuition. The report says specifically that the state should not impose tuition caps, you recall that they did that last year. It is not the feeling that tuition increases should be unbridled, it is simply that they are the responsibility of the independent boards of trustees, not of the governor or the legislature. The report does say that institutions should not increase tuition in one year increments that are unreasonably large. With respect to capital support, many of you know that we haven’t had any capital support since 1988. The report recommends that the state should immediately issue general obligation bonds. Now, there is a great deal of immediacy in the recommendations but far less in the responses. I will talk about that later. The report talks about providing annual capital support and restoring the Higher Education Incentive Funding Program to attract private philanthropy—largely a matching program that was very effective when it was in place. On the operating side, the report calls for three recommendations. First, it calls upon the state to provide greater financial support for operating budgets. Second, and my personal favorite, it calls for the development and implementation of a more rational approach to allocating state aid. Those of you who are laughing must have been paying attention for the last five years while I have harped on about this at every single State of the College Address, but it has gotten worse since I arrived which I hope you won’t take as a testament to my effectiveness as a lobbyist. The fact is, now there is about a $15 million differential between what we would receive if we were treated the same way on the revenue side as The College of New Jersey. Third, the report says the state should fund salary increases that it negotiates for state employees. Well, we will talk about the budget gap that we face this year and that budget gap is occasioned by the fact that we have salary increases to pay that are not centrally funded. On the student aid side, the report recommends maintaining Tuition Aid Grant funding, increasing funding to the Educational Opportunity Fund, and transforming NJSTARS to promote student choice and mobility—which is perhaps code for abolishing it, and improving the application process for student assistance. Now, you have to admit that on the operating and capital side under the Financing and Affordability category, we couldn’t ask for much more in a report. This is exactly what we in the sector would have written had we been in charge of authoring the report. TASK FORCE RECOMMENDATIONS: GOVERNANCE Let’s turn now to Governance. There was of course a considerable degree of consternation years ago when UMDNJ ran into trouble and the feeling was that there wasn’t adequate oversight. Well, what this report emphasizes is that such oversight really should be the responsibility of the independent Boards of Trustees to run the institutions. The report has some very concrete recommendations on this front. Governance Recommendations Eliminate Commission on Higher Education Identify Secretary of Higher Education and Governor’s Higher Education Council* (*Authorized in Executive Order #52 signed on January 4th) Colleges should initiate the trustee nomination process Pass tool kit bills to reform worker’s compensation, collective bargaining, and elimination of civil service State should pay for any unfunded mandates Eliminate policies that hinder competitiveness: • Caps on state pension contributions • Local approvals for construction projects 7 First, it recommends eliminating the Commission on Higher Education which has become so ossified in its deliberations because its staff has been so cut back that it takes us about five times as long to get approval of a program as you would normally expect. Second, it seeks to identify a Secretary of Higher Education and the Governor’s Higher Education Council. We were very concerned, you may recall, when this commission was established, that it might wind up recommending the recreation of a Department of Education with a bureaucracy that during its prime had a budget that rivaled the budget of our College. And so what has been recommended here is the creation of a single position with a volunteer executive council. And the executive order creating that council has already been signed. Third, the report says that colleges should initiate the trustee nomination process. That would make nominations apolitical, or at least less political. Fourth, the report recommends passage of the Tool Kit bills to reform workers compensation, collective bargaining, and the elimination of the civil service classification in colleges and universities. The workers compensation reform has already been done. The Tool Kit bill that I think has caused the most controversy is allowing individual institutions to bargain collectively. What you may not know is that the nine public colleges in New Jersey, leaving aside the research institutions and the independents and the community colleges, all of whom bargain separately, the nine publics are the only group in all of North America who have someone else do the bargaining for them and then have to deal with whatever is negotiated on their behalf. So, I will tell you and I have told my union colleagues this, that I am personally in favor of collective bargaining school by school because I think we can do a better job at reaching agreement about our particular needs at Ramapo than to have it done centrally for us in Trenton. I think the proof is in that pudding by looking at what has happened in the past. Fifth, the report calls upon the state to pay for any unfunded mandates. That would be a happy change from my standpoint. Sixth, the report calls for the elimination of policies that hinder competitiveness. Caps on state pension contributions being one recent example of this, and more seamless approval of constructions projects being another. TASK FORCE RECOMMENDATIONS: MISSION We now go to the Mission category where the Task Force put a great deal of emphasis on mission differentiation, the idea that under autonomy, which the schools have had since the abolition of the Department of Education, that they have been able to pursue independent missions, and they have been able to do so successfully.