Lawmakers try to please everyone with higher-ed overhaul

Posted: June 20, 2012

Less than two weeks before Gov. Christie's July 1 deadline for concluding a deal on a higher-education overhaul - which includes drawing Rutgers-Camden closer to Rowan University - lawmakers are rushing to piece together a measure that will satisfy the multitude of constituencies in play.

Those stakeholders include political figures, English professors, union bosses, and students wondering what their school might be called next year.

Already more than 100 pages long, the legislation has undergone multiple additions and deletions since it was introduced two weeks ago by a legislative coalition led by Senate President Stephen Sweeney (D., Gloucester).

A second Senate committee approved it Monday, and legislators already have found some success, though concerns and confusion also abound.

Faculty at Rutgers-Camden have been among the most vocal critics of the plan, but on Tuesday they expressed support for an amendment that would ensure that both tenure for professors and academic standards at Rutgers-Camden would remain under the control of the larger university's board of governors.

Still, their support is bracketed by fears over a provision in the legislation that the Camden campus would be overseen by a joint board with Rowan.

"The tenure and promotion issues are important, but nobody I have talked to thinks now we have achieved our personal goals the rest doesn't matter," said Perry Dane, a law professor at Rutgers-Camden. "The issues we care about are not just our own careers. It's the ability of this campus to be excellent."

And uncertainties lingered Tuesday not only over the impact of some of the changes to the bill but also over the overhaul's costs. One member of the Rutgers board of governors has raised concerns about potential tuition increases.

A shift from Christie's original plan, the latest version of the legislation calls for Rutgers-Camden to remain tied academically to the larger university but under the control of an independent board. The legislation calls for the Rutgers-Camden name to remain untouched.

The University of Medicine and Dentistry of New Jersey would be broken up, with most of its assets going to Rutgers and its osteopathic school in Stratford going to Rowan.

Candace Straight, an investment banking consultant and Republican fund-raiser who was appointed to Rutgers' board of governors by Christie, told lawmakers at the hearing Monday that their legislation could result in double-digit tuition increases due to costs involved in restructuring the universities' debts.

That contradicted analysis by the state Department of Treasury, which said the overhaul would require no bond reissue.

Analysis conducted by a financial firm hired by Rutgers has put a $155 million price tag on reissue of Rutgers' $950 million in debt.

A Rutgers spokesman did not respond to an e-mail seeking comment on the financial concerns expressed by Straight and others.

Straight would not elaborate on her testimony Monday. But in containing real numbers it was in contrast with remarks from two sponsors of the bill, Sens. Joseph Vitale (D., Middlesex) and Donald Norcross (D., Camden), who did not provide detailed cost estimates to the committee. Last week, they had told another Senate committee they would provide figures on Monday.

A policy aide, however, testified that costs would be negligible - no more than $40 million - but provided no breakdown.

At the end of Straight's testimony, a Rutgers lobbyist whispered in her ear.

"Let me make one clarification," she then added. "I don't want to leave anybody with the idea that I'm opposed to this bill. I support it. I have made known to you my concerns. But it's a very excellent bill, and I know we will work together to make it an even better bill."

That prompted the chairman of the budget committee, State Sen. Paul Sarlo (D., Bergen) to declare: "I don't know what to make of this hearing anymore."

The day after the marathon legislative hearing, Rowan University business professor Phil Lewis, quipped that he had all but given up trying to make sense of the process.

"I don't know my thoughts are appropriate for print. The legislation is such a cobbled-up mess at this point," he said Tuesday. "I'm not sure what's in there and what's not."

The union coalition representing faculty and staff at the state's universities endorsed the legislation Monday after getting legislators to agree to a one-year, no-layoff guarantee.

But after Treasury Department officials testified Monday that by consolidating administrative functions UMDNJ could save $4.3 million a year, some union members wondered whether their leadership had misstepped.

Nat Bender, a spokesman for the union coalition, said he was uncertain how large any layoffs would be.

"This legislation is what it is, and we're supporting it," he said. "We've got time for individuals to make adjustments. If this thing is done the right way, maybe there doesn't have to be layoffs. Maybe they can do it through early retirement and attrition."

And even as long-argued issues are worked out, new concerns are coming to light.

At Monday's hearing, Straight detailed the potential financial liabilities for Rutgers in taking over UMDNJ and implored legislators to adjust the bill to better address UMDNJ's debts.

She ran off a laundry list of concerns, noting among other things that two thirds of UMDNJ's $263 million in accounts receivable were recorded as doubtful and might not be collectible.

She also cited off-balance-sheet liabilities of $150 million or more in outstanding medical malpractice claims, which are now covered by state taxpayers.

"UMDNJ today is not a financially stable institution. Obviously, we at Rutgers believe over time we can strengthen it," she said.

But, she added, "the bottom line is that taking on UMDNJ is a high-risk proposition, made all the more risky because of the limited time to complete a thorough review of the potential losses."

If Rutgers took on all the losses, she said, every $100 million that Rutgers absorbed would mean a 15 percent increase in tuition.

"That's a pretty heavy increase on our undergraduates," she said. "I do not want to finance this transaction on the backs of students and their families."

When the legislation will go to the governor's desk remains uncertain.

The bill is being rushed to the Senate floor for a vote Thursday. But Assembly Speaker Sheila Oliver (D., Essex) has not yet scheduled hearings on the bill nor declared her support. She oversees a restive caucus of Democrats in the Assembly who have the power to derail the plan.

Oliver and other politicians in Essex County, including Newark Mayor Cory Booker, have expressed concerns that University Hospital, which would be spun off from UMDNJ and remain independent, is well enough funded to serve the needy in Newark.

A representative for Booker's office declined to comment.

For faculty, who might be vacationing or spending their summer break in the lab, the intrusion of politics onto their campuses is wearing thin.

Lewis said whatever new developments come to pass, the process has begun to feel caustic.

"We weren't happy Sunday, we weren't happy yesterday, and we're not happy today," he said of Rowan faculty.

Contact staff writer James Osborne at 856-779-3876 or

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