Dem threat to university merger plan disintegrates

June 22, 2012 4:55:35 PM PDT
A far-reaching plan to overhaul New Jersey's higher education system will be heard in the Assembly, as a faction of Democrats trying to delay the fast-moving legislation fractured.

The Assembly Budget Committee will hear the bill Monday, along with a companion measure that would ask voters to approve $750 million in borrowing for higher education. Final votes in the Assembly and Senate could come next week.

The Assembly hearing was announced a day after nine Democrats led by former Majority Leader Joe Cryan threatened to withhold their votes for the state budget unless Speaker Sheila Oliver stalled the merger bill. The faction told Oliver in a letter they don't oppose the university overhaul per se but feel its costs and impact on students have not been fully assessed. They wanted the vote delayed till after the November election.

By late Friday, however, two of the nine had backed down, meaning the budget will have 41 votes from Democrats, the number needed for the bill to pass. Republicans don't support it because it defers Gov. Chris Christie's tax cut until at least January. Christie, playing to a national audience, wants to start phasing in the 10 percent cut immediately.

Assembly members Connie Wagner and Tim Eustace, both of Paramus, now say they will support the budget despite ongoing concerns about how quickly a plan to revamp Rutgers, Rowan and the University of Medicine and Dentistry is being sped through the Legislature. They say they are comforted by the fact that the reorganization wouldn't take effect till next July.

Cryan, in a statement said nothing's changed.

"Our decision was based on principle," said Cryan. "There is not enough information available for anyone to be able to vote yes on this merger proposal. We don't know short-term or long-term costs or what impact this will have on education in the state for decades to come, and there is still no reason to force this vote."

The plan combines Rutgers-Camden and Rowan University and transfers most of the University of Medicine and Dentistry, including about $500 million in debt, to Rutgers. Rowan gets UMDNJ's osteopathy school in the deal; the medical school's teaching hospital, University Hospital in Newark, would continue to operate as a nonprofit.

Proponents of the higher education restructuring include Gov. Chris Christie, who proposed a version of it in January, South Jersey Democratic leader George Norcross III and Senate President Steve Sweeney, a Norcross ally and a sponsor of the bill.

Oliver said she wants to move the discussion forward in the Assembly.

"The legislation has seen many changes to make it better, and I think it's important for the legislative discussion to continue," she said. "I look forward to hearing Monday's testimony as we weigh the next steps in this vital discussion."

Proponents say the overhaul will increase educational opportunities in fast-growing South Jersey focused around a health sciences curriculum. Rowan gained a medical school in partnership with Cooper University Hospital in 2009. Norcross is chairman of Cooper's board; his brother, Donald, is another of the bill's sponsors.

Opponents include Rutgers' governing boards, which object to their loss of authority over the Camden and Newark campuses. The bill calls for new trustee boards at each site, and creates an oversight board with authority over Rutgers-Camden and Rowan.

Board members maintain their authority over any of the Rutgers campuses cannot be taken away. The trustee board has hired a constitutional expert to fight the legislation.

Candice Straight, who sits on Rutgers' Board of Governors, voiced concern about the amount of UMDNJ debt Rutgers could assume, saying tuition would increase by 15 percent for each $100 million in debt.

Proponents and opponents disagree over whether existing debt would have to be refinanced, and at what cost. A fiscal memo from the Legislature's research arm says the costs will be borne primarily by Rutgers, Rowan and University Hospital, the state's largest charity care provider.

University Hospital has $110 million in outstanding bond debt, with debt service costs of $6.7 million. The hospital may not be able to support such debt without additional state support, the Office of Legislative Services says.

Essex County lawmakers have been reluctant to support the plan because of concerns about University Hospital's viability. Amendments to the bill may help ease their concerns.