Holding Higher Education Accountable

Today, as the Senate Education Committee met over Senate bill no. 1609 (Lesniak, Whelan) The New Jersey Business and Industry Association petitioned that although it didn’t disagree with the project set out in the bill which seeks to reform New Jersey’s Higher Education Act, or to the installation of a new secretary of higher education, it wanted to ensure that “flexibility” was available to New Jersey’s state universities. I believe the sentiment was that “business believes in flexibility.” This was followed by, I think it was: “business also believes in affordability.” Ok, well, there comes a time when we have to stop thinking about what this business chump “believes.” Have you seen what he’s done to Rutgers, no, even better, to the country? So what if business believes in flexibility, the pope believes a lot of fine things but people still give that guy a hard time.

Proposed legislation, among other things, does the following:

• Installs a Secretary of Higher Education at the head of the New Jersey Commission on Higher Education.

• Forms the membership and stations of the new New Jersey Commission on Higher Education.

• Requires that the boards of state colleges and universities create an audit committee of financially experienced voting members of the board, an internal audit staff, and an external auditor.

• Compels the New Jersey Commission on Higher Education to prepare a “comprehensive master plan” for state higher education.

• Requires that the boards of state colleges and universities create a nominations and governance committee to revise policy and oversee the internal governance of the board itself.

• Requires that the boards of state colleges and universities develop fund raising strategies.

• Places tighter restrictions on campus expansion and new construction.

• Requires that outside grants and funds received be for the purpose of higher education.

• Redirects all incoming revenue through the Office of Management and Budget and to the discretion of OMB’s director.

Given the recent and varied controversy at our research schools these reforms are good things. Especially striking are the audits, and other reports required from the commission which could add a much needed layer of transparency and community involvement to New Jersey higher education. Also, the redirection of funds through OMB is a great idea. These are good steps toward creating oversight so state universities can do what they are supposed to—teach New Jersey kids. Though the bureaucracy and process described in the bill is enormous, perhaps the rigorous oversight will gain more revenue for higher education in the long run, capturing it from the various projects which have had nothing but tentative connections to higher education, and from the scandals that have not only injured our public higher education funds but the general morale of students, alumni, and taxpayers.

Regarding “flexibility,” we have to ask ourselves whether our state universities have actually earned their autonomy since passage of The State College Autonomy Laws (SCAL) of 1986. Have these institutions budgeted with student affordability in mind? When they accepted money from outside sources, did they do so for reasons that would ultimately increase the likelihood that kids would graduate on time and pay less out of their own pockets? In 2008, the New Jersey Association of State Colleges and Universities claimed that tuitions increased because states cut back their funding and because their capital projects must be financed independently. This latter, independent financing, means that the debt falls back on students. I remember that representatives of a certain college were going on about how hotel room-like accommodations were absolutely necessary if they were to enhance their enrollments. They complained that not only was there less funding but that more regulation/oversight would cramp their style and that they would not be able to find the most competitive bidder for this project. They blamed other state schools for dirtying the bath water and bringing this regulation down on them. They blamed the state for insufficiently funding their “campus modernization” processes and forcing them to raise tuition. Under the SCAL of 1994, the college or university is allowed to invest college funds, to put their income to work. Also, our state colleges under the SCAL, fix tuition. There is simply too much incentive to raise tuition in order to use state money to offset the costs of capital projects.

As SCAL increased the powers of colleges and universities to self govern, the Education Restructuring Act (ERA) of 1994 in turn removed the then unnecessary State Department of Higher Education. There since has been no balance between taxpayer money and the receiving institutions. A new Secretary of higher education would be a great thing, or, at least, not a bad thing. Flexibility and business is out of place in a state funded school. Also, what’s the use of funding an institution that admits the majority of its student population from out of state? These kinds of state institutions exist among those included in the bill. Leave that out-of-state diversity to someone else, to Seton Hall, state schools. There’s plenty of diversity here in New Jersey, and disparity, too.

Do state colleges and universities think that this new layer of bureaucracy is paralyzing and unfair? You bet they do. But to many in the public, accountability is what is needed here. For many,New Jersey’s colleges and universities have blown their chances at autonomy. If some of our state colleges or universities think that they are being punished for wrongs that they haven’t committed, then perhaps these people shouldn’t have been so complicit when others in the system were abusing their autonomy. Being innovative with finance, “flexible,” can certainly help during a recession, but great business ideas are just bad bets when they go wrong. New Jersey cannot let its state higher education schools gamble with public money.

Here’s Michael Riccards talking about his experience working for the previous higher education agency in New Jersey listen>