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Holloway gives 3rd annual budget address, Rutgers AAUP-AFT shares thoughts

A spokesperson from the Rutgers American Association of University Professors and American Federation of Teachers (AAUP-AFT) discussed University President Jonathan Holloway's third annual budget address with The Daily Targum. – Photo by

On February 16, University President Jonathan Holloway presented his third annual budget address for the 2024 fiscal year to the University Senate.

The Daily Targum spoke with a representative from the Rutgers American Association of University Professors and American Federation of Teachers (AAUP-AFT) on its interpretation of this year's budget.

In 2023, Holloway outlined initiatives to reduce and eliminate a predicted $125 million deficit, as the University faced heightened operating challenges. In this year's address, he said Rutgers ended last year with an actual deficit of $88.5 million.

He pointed to three key elements influencing the current budget and deficit reduction plans: varying support from the state of New Jersey, plans to increase enrollment and revenue growth strategies.

He said the state budget contributes to approximately 21 percent of the University's revenue and that volatile state policy on funds for public universities could negatively impact Rutgers' future financial position.

With respect to cost cutting, Holloway said the reduction of staff, equipment, travel and other expenses in line with budgetary decisions has largely been allocated to departmental leaders.

"These are difficult days as we continue to rebound from the impact of (COVID-19), build back our enrollment and make progress on a plan for achieving and maintaining financial sustainability," he said. "I know that in many departments, some of the decisions are difficult and painful, but there are also exciting opportunities to create and enhance programs for the future."

He also said that, despite issues with the new Free Application for Federal Student Aid and internal software, the University aims to pursue a strong enrollment strategy.

Rutgers' adoption of the Common Application in the undergraduate admissions process this year has led to a significant rise in applications across all three campuses — increases of approximately 250 percent at Rutgers—Camden, 140 percent at Rutgers—Newark and 60 percent at Rutgers—New Brunswick.

He also said the University has hired 76 new faculty members as part of the Faculty Diversity program and implemented $7.2 million to boost interdisciplinary academic collaboration.

Additionally, Holloway mentioned that external funding and grants from sources such as the Public Service Electric and Gas Company, New Jersey Economic Development Authority, University Hospital and National Institutes of Health can enable the University to invest in infrastructure and aid in the University's clinical and environmental efforts.

Michelle Gittelman, an associate professor in the Department of Management and Global Business and chair of the Budget and Priorities Committee at the Rutgers AAUP-AFT, said the University is mischaracterizing the current $88.5 million deficit.

She said the deficit accounts for less than 2 percent of the entire budget, and a majority of the deficit is categorized as professional services costs at Rutgers Biomedical and Health Sciences, which she said is most likely consultant and short-term contract expenses.

Moreover, she said the University's actual compensation and wages for 2023, the largest type of cost in the budget, were $80 million less than the budgeted figure. 

Concerning post-pandemic operations, she said the University created budgets with large expected deficits in fiscal years 2021 and 2022, but at the end of both years, there were record financial surpluses achieved.

Gittelman said the University's net assets, or the amount of resources available minus obligations, grew from more than $1.9 billion in 2020 to $2.7 billion in 2023, and unrestricted reserves rose from $500 million in 2020 to $897 million in 2023.

"These are all measures of increasing, not decreasing, financial performance … But this year, state funds grew by 8.4 percent to over $1 billion, and sponsored grants reached an all-time high. The financial reports just don't support the grim financial picture painted by the administration," she said. "Indeed, Moody's gives us a solid AA3 (credit) rating on financial health. Not the top, but hardly cause for belt-tightening and financial restructuring ... We're on a good path."  

Gittelman also said department heads have a poor understanding of the unit and school budgets they receive and, despite an administrative push to cut costs at the local level, decisions are made based on how the University allocates the revenue that these units generate.  

"In addition to never answering to anyone for their own spending decisions, the administration puts schools in a financial straitjacket and makes them scramble to figure out what to cut," she said. "It's an incredibly non-transparent system that centralizes decision-making power in the administration."

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