The proposed higher-education restructuring would fold most of the University of Medicine and Dentistry of New Jersey into Rutgers University and move Rutgers-Camden into a joint relationship with Rowan University. The plan would cost no more than $40 million, its proponents said at the hearing. But Treasury officials and Democratic architects of the bill could not break down those costs.
The new memo reiterates an argument made by the plan's backers on Monday: that Rutgers' bonds would not have to be refinanced as the result of moving Rutgers-Camden out of the Rutgers system.
Members of Rutgers' board of trustees and board of governors disagree, saying refinancing would cost $155 million. Some opponents of the restructuring have said that total costs involved with the complicated mergers could exceed $1 billion.
But Treasury officials see savings. The new memo says reduced costs would come from phasing out duplicative administrative and academic functions. And $55 million would come from Rowan, Rutgers, and the state's absorbing UMDNJ's debt.
For example, if Rutgers refinances UMDNJ's nearly $500 million debt, $43.6 million would be saved due to today's low interest rates and because Rutgers has a better credit rating, according to the memo.
As part of the deal, Rowan would take over the UMDNJ School of Osteopathic Medicine in Camden County. By refinancing the portion of the debt associated with that school, according to the memo, Rowan would generate $3.6 million that could be used to "offset any initial costs" associated with the takeover.
One of the last obstacles to passage of the higher-ed restructuring proposal is cost. While university employee unions and legislative Republicans and Senate Democrats are on board, Assembly Democrats have yet to schedule a hearing.
The Senate will vote on the bill Thursday, and Christie wants it on his desk by the end of next week.
Reached Wednesday night, a spokesman for the governor would not comment on the memo.
Contact Matt Katz at 609-217-8355 or mkatz@phillynews.com, or follow on Twitter @mattkatz00. Read his blog, "Christie Chronicles," at www.philly.com/ChristieChronicles.
