Donald Payne 1934-2012

Congressman Donald Payne passed away last week.  I attended his funeral service on Wednesday.  It was a remarkable tribute to a man who gave his life to public service.

The funeral was an incredible celebration of his life.  Governor Christie, President Clinton, Mayor Booker, Senator Lautenberg, Attorney General Holder, ambassadors and numerous federal and state government leaders were in attendance, as were over a thousand individuals who in some way were touched by Mr. Payne’s actions.

He was a dedicated alumnus of Seton Hall, remaining highly involved since graduating in 1957.  He participated and spoke at reunions, visited campus often and attended numerous basketball games, rooting on his beloved Pirates every time he could.

He also helped Seton Hall move its federal government relations program ahead.  Each year for the past 8 years he hosted our annual “Hall on the Hill” reception in the Gold Room on Capitol Hill.  The event has cumulatively drawn well over a thousand individuals who gather at this event to celebrate Seton Hall.

Mr. Payne was also instrumental in securing significant federal funding for Seton Hall’s Science and Technology Center.  Through it, our students have and will be able to learn using state-of-the-art technology to complement their classroom studies.

It’s not every university that has an alumnus for its congressperson, but Seton Hall did.  Donald Payne remained involved.  He always appreciated his education and how the experiences he gained helped shape him to become the leader and role model to so many residents of his beloved city of Newark and beyond.

Christie Releases FY13 Budget; Higher Ed Sees Some Gains

New Jersey Governor Chris Christie (a Seton Hall Law School alumnus) delivered his budget address to the NJ Legislature on Tuesday, February 21.  Higher education, public and private, saw a proposed increase of $107 million, or 5.4%, from the FY12 budget.

There was a mix of good and disappointing news for the state’s 14 independent colleges and universities.  There was hope that some level of direct assistance through the Independent College and University Aid Act (ICUAA) would be restored.  The Act was originally passed years ago in recognition of the public benefit that independent (private) colleges and universities provide.  Funding through the Aid Act was cut in the FY11 and 12 budgets.

There was good news in that funding for Tuition Aid Grants (TAG) was increased by 10%, to $325 million.  TAG awards go to the neediest (income-wise) students to complement federal funding they receive.  In many cases the TAG awards provide the financial difference in whether those students will be able to attend college.

With the release of the Governor’s proposed budget, things will certainly heat up in Trenton as the Legislature will now hear from numerous organizations.  The new budget begins on July 1.

Obama Sets Sights on Higher Ed Costs

In just a couple weeks it seems the debate about the cost of a college education moved from overdrive to light speed.  What kicked the discussion into a higher gear was President Obama’s call for a “shared responsibility” among federal government, states, colleges and universities to “promote access and affordability in higher education”.

The President sent colleges and universities a strong message: rein in tuition hikes or suffer the consequences.  Specifically, he said colleges that can show they are providing students with good long-term value will be rewarded with additional dollars.  Those that don’t “act responsibly” in setting tuition will receive less campus-based aid.

How will things like “good long-term value”, “additional dollars” and “act responsibly in setting tuition” be measured?  That remains to be seen.  As the debate shapes up, higher ed officials are already in high gear reaching out to their contacts in the executive branch and in Congress to share their perspective on the President’s challenge.

Seton Hall has been at the forefront of the issue.  Several months ago, the university announced its initiative to drastically lower tuition for students meeting certain academic standards.  This initiative mirrors less-public efforts the university already provided to make tuition more affordable.  It also eliminates the uncertainty about the real cost of tuition for those students who qualify.

I suspect that the debate about college affordability – and what folks see as the solutions to address it – have only just begun.  Transparency in pricing, federal student aid, decreased state aid, and the role of endowments in making tuition affordable for more families are all topics that will come under greater scrutiny.  What is clear is that this is not an issue that is going to go away.  What was at light speed will likely be at warp speed soon enough.

Fighting for Student Aid

We are in a tough economy, no doubt.  Unemployment continues to hover around the 9% range.  Federal revenues do not match federal spending levels.  A “supercommittee” has been formed to deal with rising federal budget deficits.

Few spending items have escaped the budget ax.  For higher education officials, student aid has been particularly hard hit.  In response, the Student Aid Alliance created the “Save Student Aid” campaign, with hopes of raising awareness about the importance of financial aid for students.

The campaign features a statement of support and calls for student aid supporters to sign on.  As of today, almost 100,000 supporters have signed the statement.  The Alliance intends to present the information and show of support to the congressional supercommittee as it approaches its deadline of November 23 to reach a deal. 

Pell grants and other financial aid programs are under the microscope.  The Save Student Aid alliance, and its 75 member organizations, are working hard to educate Congress about the importance of preserving financial aid.

A Round Table Discussion

I attended Monday’s higher education “round table” run by the Assembly budget committee.  It was an interesting session.  Members of the committee were joined by several higher education representatives.

Much of the discussion centered around student aid and recent cuts to higher education.  There also a lot of talk about the Kean Commission’s recent report.  The report was often referred to as the “blueprint we have been waiting for” as a guiding force for higher ed’s future in New Jersey.

A theme familiar to New Jerseyans emerged – that of “shared services” and what universities are doing to reduce costs.  The higher ed representatives gave several examples from their campuses (reduced budgets, hiring freezes, layoffs, no salary increases) as evidence that they have also been responsible budget stewards.

However, cutting budgets was not the only response discussed.  Chairman Lou Greenwald (a Seton Hall alumnus) asked, “How do we show the ROI (Return on Investment) for money the state contributes to higher education?”  Several respondents remarked that residents earning college degrees typically enjoy higher incomes and standards of living, that many colleges partner with corporations, and that, as one person said, “prosperity depends on colleges and universities” to produce a well-educated workforce.

Significant discussion then ensued about re-working current student financial aid models. 

The “round table” discussion was an innovative way to discuss the pressing issues confronting the state’s higher education community.  No doubt, the committee will take the information it heard at the discussion in order to help craft the state’s FY12 budget.

We Have a Map!

As you probably saw in today’s Star-Ledger, the state’s redistricting committee has made its decision.  Tie-breaking voter, professor Alan Rosenthal of Rutgers, chose the Democrats’ proposal over the one the Republicans submitted.  With that, Senate President Stephen Sweeney exclaimed that his party will keep control in the November elections.

Seton Hall’s district changed considerably, moving farther northwest.  The university remains in the 27th district but loses Fairfield, Newark, North Caldwell and Orange.  The district gains Chatham, East Hanover, Florham Park, Hanover, Harding, Madison and Millburn.

The district retains the towns of Caldwell, Essex Fells, Livingston, Maplewood, Roseland, South Orange, West Caldwell and West Orange.  All three current incumbents remain residents of the 27th district.  Senator Dick Codey is from Roseland, Assemblywoman Mila Jasey is a South Orange resident, and Assemblyman John McKeon is from West Orange.

Governor Says No More Cuts to Higher Ed

Governor Chris Christie delivered his Fiscal Year 2012 budget address to the Legislature today.  He stated that, “I propose to keep funding steady for higher education.  After several years of cuts to operating support to colleges and universities, there will be no further reductions in this year’s budget.  At the same time, I propose to increase support for student aid programs by $20 million.”

The FY2011 state budget made significant cuts to both public and independent higher education – both direct aid (right to the schools themselves) and to the students at those schools.  It now appears that, while the state budget continues to undergo major changes, higher education will not experience the kinds of cuts it did in the 2011 budget.

Of course, nothing’s been completely decided yet.  The Legislature now gets to debate and discuss the proposed budget and send the Governor a budget that looks exactly like, similar to, or completely different than the one he offered today.  Time will tell…

Fees for Nonprofits? A Taxing Question

A bad economy and reduced tax rolls mean hardships for state and local governments.  In response, many have reduced budgets.  Others are looking for new and enhanced sources of revenue.  And some say they’re looking in all the wrong places.

The December 27, 2010 front page of the Wall Street Journal reported that cities large and small throughout the country are looking to nonprofits to shoulder a greater share of the municipal expense load.  Houston, for example, recently adopted a “drainage fee” to help with chronically flood-prone areas.  And the fee will fall on nonprofits – schools, churches and social service organizations, all of whom claim the fee is a tax from which they are exempt.

Universities are part of the debate too.  The same week, the NonProfit Times reported that Boston is looking at PILOT (Payment In Lieu of Tax) payments made by its resident colleges.

According to the article, Boston’s property tax accounts for roughly 64 percent of its revenues and the city wants to raise an additional $5 million from charities. The amount already raised via PILOTs was not available.

“It’s about fairness,” Boston Mayor Thomas Menino said in an interview with a local radio station. “It’s about how do you want to participate in this city that you get city services from: police, fire, public works. I think you should share in those costs.”

The debate about nonprofits and fees (or taxes) is not a new one but is certainly something we’ll continue to hear about as the economy slowly climbs out of its slumber.  Until things turn around dramatically and tax revenues rise, you can expect cash-strapped governments to consider previously-immune organizations as possible revenue sources.  This isn’t the last we’ve heard about the issue of tax-exempt status and what it really means in these times of economic hardship.

Budget Discussions Continue; Earmarks Debated

Senate and House leaders are trying to reach agreement on an “omnibus” continuing resolution (CR) spending bill to fund the federal government for the remainder of fiscal year 2011, which began on October 1st.  The “omnibus” part means that it will combine spending legislation for various parts of the federal government.  Usually, separate appropriations’ bills are passed for 12 separate parts of the government.   The current CR expires at midnight on Sunday, so Congress must act soon.

With that spending discussion, debate about the future of “earmarks” for higher ed and everyone else continues.  Inside Higher Ed provides a great overview of what’s at stake in the process.  For more on what it means specifically for higher ed, see the Chronicle of Higher Education article.

Earmarks the Talk of the Town

Among the many federal budget issues being discussed these days is the fact that the federal fiscal year 2011 budget has not yet been passed.  Considering the federal 2011 fiscal year started on October 1, that’s not such a good thing.

To address that delay, Congress has passed CR’s, or “Continuing Resolutions” to get the government the money it needs.  Essentially that means funding for each federal agency and program continues at its current level until the new fiscal year budget (or a new CR) is passed. 

With that discussion has come debate about how to handle “earmarks”.  The name comes from the practice of making marks in the ears of animals – particularly pigs – to show ownership.

These become pieces of the federal budget that Members of Congress designate, or “earmark”, for particular projects.  Many earmarked projects are highly worthwhile and a good investment of taxpayer money.  Other projects have been more dubious in terms of their benefit to taxpayers.   A number of projects have been associated with the lobbying scandals of recent memory.  Unfortunately, all earmarked projects, worthy and unworthy, have been thus tainted with a bad name.

Republican House members have sworn off earmarks as a way to demonstrate fiscal integrity.  Their counterparts in the Senate have not done so.  Democrats made their own pronouncements regarding earmarks.  No longer would they use them to fund for-profit organizations.  Instead, they will limit their marks for nonprofit entities.

Roll Call recently reported that Appropriations Chairman David Obey offered a FY2011 budget without earmarks…per se.  However, one man’s (or woman’s) earmark is another’s target.  It’s all in the eye of the beholder.  And Obey’s budget solution does little to do away with the debate over what constitutes an “earmark”.

Although the Garden State ranks near last in return on federal dollar, numerous nonprofits in New Jersey have successfully gained earmarks to help fund their programs.  The Courier-Post ran an article and analysis of some of the state’s return through these congressionally-mandated funds.

Will earmarks ever go away?  While it makes for high political theater to claim they will, the reality is that, since its beginning, Congress has directed funds for those projects, or programs, it has deemed most worthy.  While much work needs to be done to ensure greater transparency in the process, it is unlikely that Congress will really give up its “power of the purse” and turn all funding decisions to the Executive Branch.  Some say that silk purse is turning out to be a sow’s ear and filled with unnecessary spending.

Enjoy the debate!