Campus Green: $1.25 Billion in Unrestricted Cash at New Jersey’s Four-Year Colleges and Universities

Education, Featured, Policy — By on March 28, 2011 at 3:55 PM

Last year, the Common Sense Institute of New Jersey produced a three-part series on management practices at New Jersey’s nine senior public colleges and nineteen community colleges. One of the revelations of the Campus Green series was the large amount of unrestricted cash assets at the schools, and CSI-NJ recommended that the cash be used to finance the restructuring that would be necessary to help control tuition and increase output.

The Governor’s intent to reinvest in the public higher education system is laudable, but taxpayers should be concerned over the efficiency and effectiveness of the current system. With only 33% of every expenditure dollar spent on instructional activity, CSI-NJ suggests that a consolidation of non-instructional expenses can have a major effect on responsible tuition levels, opening of more accessible mini-campus locations, and increased undergraduate degree output.

An example of consolidation would include the elimination of 225 Executive positions, from 725 to 500, the same as Pennsylvania’s 14-college public state system (vs. New Jersey’s nine-college system). This savings alone would equal $34 million annually, and decrease ‘friction’ of decision making.

Another example of consolidation would include a higher focus on capital to instructional activities. Currently, New Jersey’s nine state colleges are burdened with more than $2 billion in long-term debt, the highest in the nation, yet there has been no accountability on how much of this space is devoted to instructional space, and what process mechanisms can increase classroom utilization to accelerate on-time degree completion.

This white paper updates the Institute’s original series with selected statistics from the 2010 independent audits of the nine state colleges and the New Jersey Treasurer’s Consolidated Annual Financial report. The entire Campus Green series, and official audits for New Jersey’s colleges and universities can be downloaded at

Unrestricted Cash Reserves Increase 19%

As per Government Accounting Standards Board #35, Unrestricted Net Assets are assets, usually cash and short-term investments, which have no external restrictions on their use, such as bond agency requirements. In effect, these cash assets are at the discretion of the Trustee Board and President.

Although undergraduate enrollments increased only 100,000 credit hours, or one credit hour per unduplicated enrollment of 98,500 students, the nine state colleges increased their unrestricted cash reserves by $56 million in 2010 (10% increase).

The 2010 independent audits of the nine state colleges document unrestricted cash reserves totaling $593 million dollars, up from $537 million in 2009. Interestingly, the New Jersey Department of Treasury documents the same nine colleges as having $639 million in unrestricted reserves, with significant differences at Ramapo College and Rowan University.

In addition, Rutgers and the New Jersey Institute of Technology have a combined $613 million in unrestricted reserves, bringing the grand total of $1.2 billion in ‘free cash’ under the discretionary control of the college presidents.

Tuition at New Jersey’s nine public colleges is the most expensive in the United States, totaling more than $11,500 for in-state undergraduate tuition and fees. By comparison, Illinois tuition and fees is in second-place at $9,000 in-state tuition and fees, and neighboring states Maryland, Pennsylvania and New York total about $7,000 in-state tuition and fees.

2010 - Treasury Reported2010 - Audit Reported2009 - Audit Reported2008 - Audit Reported
Kean University $48,079,875 $48,059,000 $45,492,000 $36,408,000
New Jersey City University $29,906,763 $28,800,000 $27,300,000 $28,500,000
Rowan University $79,287,834 $64,471,000 $52,738,000 $49,146,000
College of New Jersey $88,132,000 $83,205,000 $69,687,000 $60,887,000
William Paterson University $91,389,522 $91,655,000 $73,278,000 $68,198,000
Montclair State University $118,825,771 $124,900,000 $122,000,000 $102,900,000
Ramapo College $38,370,000 $10,417,000 $16,693,000 $15,869,000
Richard Stockton College $111,370,912 $110,049,000 $99,916,000 $72,308,000
Thomas Edison State College $33,821,066 $32,109,498 $30,176,665 $30,995,996
STATE COLLEGE TOTAL $639,183,743 $593,665,498 $537,280,665 $465,211,996
Rutgers University $569,521,000
New Jersey Institute $43,924,000
GRAND TOTAL $1,252,628,743

Tuition and Fees increase 3% annually 2009 and 2010, and 4% in 2011

In 2009 and 2010, our nine state colleges increased tuition and fees by an average 3%, and in 2011 the average tuition and fee increase was 4%.

Taxpayers expect their local governments to be responsible fiduciary managers by controlling expenses and lowering taxes, yet we allow our colleges and universities to raise tuition and fees at a time when they have more than $1 billion in unrestricted cash sitting in the bank.

The net result is New Jersey residents and students are asked to pay more for a system that they have already overfunded.

Necessary Higher Education Reform

In the third part of CSI-NJ’s Campus Green series, the Institute unveiled a detailed restructuring proposal that encompasses three general reform areas:

(1) Affordability - Decrease expenditures through consolidation, elimination and privatization to achieve a $9,000 (or less) in-state tuition and fee level;

(2) Accessibility - Expand campus network through location partnerships with community colleges and K12 institutions; and. expand use of online and emerging instructional technologies;

(3) Outcomes - Establish use of institutional and student incentive funding that promotes educational, societal and economic goals of the State.


New Jersey’s nine senior public colleges continue to amass unjustifiable cash reserves while increasing tuition on New Jersey students. The schools have used their high level of autonomy to expand their mission into non-academic areas and they have been relatively ineffective at keeping down costs and increasing accessibility.

While the governor’s task force on higher education offered many innovative solutions for the state’s three research universities (Rutgers, NJIT and UMDNJ), the unaffordability at the state’s nine senior public colleges was largely ignored, and a significant overhaul of that system is still needed.

About the Author

Mark ‘Jay’ Williams is an Economics Fellow at the Common Sense Institute of New Jersey, a non-profit organization dedicated to bringing free-market solutions to the public policy challenges facing New Jersey.

To download this white paper as a pdf, click here.


Leave a Reply

You must be logged in to post a comment.


Leave a Trackback