Lawmakers want to revamp funding formula for state colleges

Two state lawmakers are looking at overhauling the formula used by the state to gauge how much state funding goes to public colleges and universities, amid a devastating financial impact from the COVID-19 pandemic.

Proposed Senate Bill 1230 – which has bipartisan support – would create the 11-member “New Jersey Higher Education Funding Formula Commission,” which would look at how other states send aid to universities and the needs of colleges and universities in the state, and develop legislation based on the commission’s recommendations.

It comes in response to years of waning state funding to universities, which students and labor unions contend has translated to pay cuts and tuition increases.

The notion of spotty funding for higher education is nothing new in the United States. The Great Recession between 2008 and 2009 brought a steep decline in federal, state and philanthropic support for universities.

According to a report by the Midwestern Higher Education Compact, university funding from New Jersey fell 17% between 2007 and 2017.

“[M]any students and their parents are likely coming to grips with the reality that paying for tuition this fall, even at a supposedly lower-cost state school, isn’t as affordable as they had hoped,” reads a May 5 statement from Senate Republican Leader Thomas Kean Jr., R-21st District, one of the sponsors.

“That’s because our state has consistently underfunded our colleges and universities leading to tuition increases and a crisis of affordability,” Kean said.

The bill’s other sponsor is Sen. Vin Gopal, D-11th District, who contended that a revamped higher education funding formula would stave off university tuition increases.

“New Jersey needs to provide predictable state funding for colleges and universities,” Gopal said. The alternative of student loan debt to finance a college degree “has dramatically slowed down life plans for young individuals just getting out of college.”

They estimate that roughly 3.63% of state tax revenues go toward higher education funding, ranking New Jersey toward the bottom of all 50 states.

Gov. Phil Murphy’s proposed $45 billion budget for the 2022 fiscal year, which begins on July 1, calls for $2.6 billion toward higher education, up from the current $2.5 billion.

Many universities saw revenue crater during the pandemic because of campus closures and remote learning. Money from student housing, campus dining, parking fees, campus athletics, and events and conferences has all dried up.

In order to break even, they’ve been dependent on federal funds under the Coronavirus Aid, Relief and Economic Security Act, and could get more relief under President Joe Biden’s $1.9 trillion “American Rescue Plan.”