Governor, Come Home and Sell the Higher Ed Bond Issue
October 24th, 2012 | by Gordon MacInnes | Published in NJPP Blog: As a Matter of Fact ... | 7 Comments
Governor Christie is probably the best-traveled governor in the nation.
His recent stops have included Iowa, Montana, Ohio, Florida, and New Mexico. There is a reason he was invited by Governor Romney to give his party’s convention keynote speech in Tampa and to headline a big rally in Ohio: Governor Christie is the master communicator.
He knows how to frame an argument, using plain and memorable language to make the case. His personality arguably is more magnetic than any New Jersey politician, present or past.
On top of that, his communications operation is superb at connecting with social media, smothering criticism, and ensuring the governor’s dominance of an issue.
In short, the governor sets the agenda for public discourse in New Jersey.
That’s why we need him back in New Jersey to stump for the Higher Education Bond Issue. It’s a proposal the governor supports – after all, he signed the bill that put the measure on the ballot – and argues for it emphatically and effectively on occasion. But for the sake of the future of our state and our students he must do so more often as the November 6 vote approaches.
When he’s in front of higher education folk or in building trades union halls, Governor Christie uses his persuasive eloquence to make a powerful case for borrowing $750 million by issuing bonds and then investing the money in higher education facilities to create things like modernized laboratories and technology-friendly classrooms.
It’s been almost a quarter century since New Jersey made this kind of investment in higher education. The 1988 measure produced $350 million ($680 million in today’s dollars) for technology, research centers, and upgrading laboratories so New Jersey could compete for high value-added jobs. That was a long time ago. Unfortunately, since then public colleges and universities have been on their own – and they are stretched thin.
Governor Christie understands that investment in higher education is long overdue. He understands the importance of once again making New Jersey competitive for the kinds of research and innovation jobs that helped make it the nation’s second wealthiest state. He acknowledges that we’ve been losing those jobs to other states that have invested in research and higher education – states, by the way, that have taxes as high as New Jersey’s.
It’s especially important for him to lead this charge because he alone commands the attention and has the rhetorical clout to explain that supporting higher education in New Jersey is crucial – in fact, more important than ever – in the face of members of his party in Congress that have stoked a frenzy over federal debt and deficits and declared war on federal investments in medical and basic research, funding for higher education, student scholarships and loans, not to mention funding for highways, bridges, airports, and port development.
With this noisy drumbeat about debt and the need for “small government,” there is real danger that many New Jersey voters might be wary of adding to the state’s debt for any reason, no matter how sound.
A campaign for the bond issue is underway, with the support of business leaders, college and university folk, the building trades unions and groups like New Jersey Policy Perspective. Former Governor Tom Kean is the chair and he appears in public on behalf of the measure with Republican and Democratic legislative leaders. Opinion polls on the question are encouraging, but this is too important an investment to take passage for granted.
Missing from the campaign is Governor Christie’s compelling presence. There is a good chance that he – and maybe only he – can connect persuasively with voters otherwise inclined to automatically vote “no” to any new debt or spending. He just needs to make the kind of powerful, persuasive case for the bond issue that he already uses with its supporters, to his town meetings and press conferences that are more widely covered than anything in New Jersey (except Snooki or indicted politicians). We need Governor Christie to travel across New Jersey and preach to the congregation, not the choir.
Governor Christie is the essential salesman for the bond issue. Taking credit for putting on the ballot doesn’t count if it doesn’t pass. The bond issue is the governor’s to lose, and New Jersey can’t afford for that to happen.
Gordon MacInnes is president of NJPP and also a member of the Rutgers Board of Governors. The views expressed above do not represent those of the Board or administration of Rutgers University.
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October 25th, 2012at 1:06 PM(#)
I read the question we are to vote on and I must say I was surprised it did not mention money for the payment of college education. I understand buildings need to be updated but honestly I believe we should be putting how the students are going to be paying for college before we update the colleges. Why can’t NJ be like other states where if a student maintains a certain gpa they can get a free ride to college? This is the kind of thing I would like to see happening, not paying more taxes to fund buildings (and to private institutions also) but to see more money be given to students in the forms of grants, or whatever.
October 25th, 2012at 2:32 PM(#)
How far along is the NJ taxpayer in paying off the older bonds? How will these new bonds be paid for?
Do future students need new buildings or affordable tuition?
Could the proposed bond payments be better used to lower the cruel confiscatory school property tax?
October 25th, 2012at 2:52 PM(#)
The world is awash in debt.
The United States is awash in debt.
New Jersey is awash in debt.
New Jersey tax revenue projections have not been met, and many state-funded programs are being curtailed. Civil servants are being laid off or reducing civil service ranks through attrition at both the state and local government, because it is difficult to pay their salaries.
Gov. Christie has alluded to the state’s inability to meet his proposed budget. He has been criticizing a great many public organizations, including the state,for excessive expenditures and waste, and the state appears to be facing an inability to meet its pension obligations.
And now we are being asked to approve a bond issue without having any knowledge of how it contributes to the existing New Jersey debt and the state’s ability to meet its pension and other obligations. That information seems like a reasonable thing to accompany the request for our vote of approval.
We are further not informed as to who is going to determine how this money will be spent, and on what. While the request goes out for expenditures to improve education, there remain questions to be answered. These include how the $750 million was calculated, and whether or not the money borrowed will be spent on on an expansion of sports facilities, or if it will be spent on academic and vocational programs and educator salaries. It seems reasonable to inquire also as to what portion of that bond revenue will be paid to its managing public administrators and regulators.
Further, the desire to improve New Jersey’s education services does not seem to include any state plan that features a role for private enterprise. If I am being asked as a taxpayer to contribute something to the public interest by approving the bond issue, it seems reasonable that private corporations would at least consider giving up or reducing their state and local tax breaks so they can contribute to the public interest along with the private citizen.
It seems to me that going back to practices that exist in this country’s history that we should be able to organize a program whereby private enterprise can contribute to the development of educational facilities throughout the state. I am aware that some New Jersey based corporations, including several in the pharmaceutical industry, pay for tuition for many of their employees to attain skills that will be used in their business. For example a broad variety of management programs are offered throughout the state, in public and private settings, for the convenience of these organizations.
So it seems to me that the provision of better information and a plan for a more comprehensive public/private approach might be useful. Perhaps we should organize a fund that would help to pay for the maintenance and expansion of existing facilities, and for new ones.
In the meantime, before I vote approval of the bond issue, I still need to have a better justification as to why New Jersey has decided to take on additional debt, and that justification should be offered in the context of all of the states debt and the specific plan to use it.
October 26th, 2012at 3:41 PM(#)
Sharon:
I agree that New Jersey should do more to encourage qualified students to attend the state’s public colleges and universities. It has, in the past, provided incentives for highly qualified students to do so, via programs like the Edward J Bloustein Scholars and NJ STARs. NJ also provides Tuition Aid Grants for students from families of modest incomes and TAG needs to catch up with the recent steep climb in tuition rates now charged. Programs of this kind are financed through the state’s operating budget annually and that’s how it should be done–current beneficiaries helped with current tax dollars.
However, when it comes to academic facilities and the resources to modernize classrooms, libraries, laboratories, and technology it is much more sensible to borrow funds that are repaid over the life of those facilities. That is the idea behind this year’s bond issue. New Jersey has fallen behind states that are competing with us for value-added jobs (like VA, MD, NC, NY, and CT) in investing in facilities that keep pace with science and technology to attract the faculty, researchers, and students who can restore NJ’s reputation for innovation and enterprise. Even in a time of economic stress it makes sense to invest in the future, now when borrowing rates are at historically low levels.
October 26th, 2012at 3:43 PM(#)
Skip:
You’ve asked sensible questions that deserve answers.
The higher education bonds, if approved, would be “general obligation” bonds, meaning that the full faith and credit of the state of NJ are behind them, and are repaid through the annual state budget. Currently, there are about $2.5 billion in GO bonds (down from $3.1 billion in 2006). Other bonds amounting to almost $30 billion are “moral obligations” of the state. For example, the Higher Education Facilities Authority issues bonds to finance a dormitory at Montclair State, which is to be paid off by student dorm fees. If they fall short of the amount required for timely repayment, the state guarantees the payment.
As with any physical facility, investments in classrooms, laboratories, athletic facilities, etc. must be made in their maintenance, renovation, and modernization. Moreover, facilities must be available to accommodate the surge in enrollments at NJ’s public colleges and universities. The fact that 24 years have lapsed since the last state investment demonstrates that NJ is far behind in supporting adequate facilities. Yes, students need affordable tuitions, but debt should not be used to provide operating funds for colleges and, thereby, stable tuition rates. Debt should be used only for long-term capital improvements and additions that will benefit future students to justify future taxpayers helping with the bill.
Property taxes pay for the operating expenses of towns, school districts and counties. Future taxpayers should not shoulder the debt for relieving current taxpayers of some of their property tax bill, since they would receive no benefit for their payments.
October 26th, 2012at 3:44 PM(#)
Bob:
You raise important issues about the pending higher education bond issue. First, while I support a “yes” vote on the bond issue, that does not mean that I believe that this proposal has been carefully and fully laid out for voters, as it should be. It was approved in late June without extensive hearings or reports or commissions and been promoted by a tardy and under-financed campaign.
Second, the law authorizing the bond issue, establishes the procedure for determining which projects are to be financed. The $750m is broken into categories for research universities, four-year colleges, community and private colleges. The Secretary of Higher Education receives proposals for capital projects for academic and research facilities (no athletic, administrative, dorms, etc.) and reviews them against criteria incorporated into regulation. All projects require a 25% match by the college/university. The approved projects are submitted to the Legislature that has 60 days to revise the list, or to accept it by inaction.
The $750 million figure grows out of several years of planning and proposing by the public colleges and universities. Over time a $6+ billion wish list was reduced to a $2.4 billion “must-have” list that was trimmed by the political reality of the economy and state with the goal of a number under $1 billion. Since the state has not approved a bond for higher education since 1988, the backlog of unmet need and deferred maintenance is huge, not to mention a surge in enrollments in public institutions.
The role of private enterprise is not addressed in the act. However, $300 of the $750m is aimed at the public research universities (Rutgers,NJIT, and the UMDNJ). The leaders of those institutions and the Governor have been clear that they see the bond issue as an opportunity to finance facilities that would encourage public-private partnerships, most notably in pharmaceuticals. The recent departure of Roche from Nutley to NYC highlighted the need for greater collaboration between, in this case, Rutgers and UMDNJ with a corporate partner (NYC had the benefit of a fully integrated medical school plus a teaching research hospital, while Rutgers is a year away from integrating the two UMDNJ medical schools).
I agree that the roll out of this bond proposal was tardy and incomplete. I agree that voters deserve the kind of information you have sought. The question is framed against the national debate–does NJ invest in capital programs that are essential for the state’s future prosperity and competitiveness at a time of economic stress? I believe that–with all the unfunded liabilities and debt–the state needs to bet on investments that underlie New Jersey’s place as a center of research, science, enterprise, and innovation.
November 1st, 2012at 10:58 PM(#)
The future is always a calculated risk. Should we ever borrow to invest? The cause sounds reasonable. We should never borrow to simply consume. The ‘creation of new wealth’ is absent with the simple act of spending aimlessly into a bottomless pit.
Science and technology certainly brings a perceivable benefit to society which is a sound principle that States, including New Jersey ought to support. The wealth is not always seen by dollars and cents. But life-saving capabilities have increased from the past. Don’t we want to even try to be a part of that? There are many points that come out in reaction. Many very good points, with good questions acknowledged answered by Gordon MacInnes with pertinent documentation. I am inclined to vote yes on the ballot question.
We do also need to support education in ways others have suggested. Requiring NJ to reserve seats for NJ residents as other states do, Good one. Planning to involve private enterprise and collaborate with viable corporations, yes please. Grants for students, intelligent tax incentives and/or consequences to defray or further completely absorb direct costs of higher education, yes, somebody please remember to provide leadership to argue for this. Still, none of these points are reasons to vote “no” on the ballot question; just a reminder for us to keep these other great points in the forefront of what also needs to happen.
Science and Technology is not the only thing that brings “wealth” or benefits to our society and the beloved State of New Jersey. Universities are not the only place that education helps make the world a better place. Local elementary schools are struggling for modest maintenance, not to mention sorely needed upgrades. Primary education nurtures our capacity to be great because we are either fundamentally good or we are nothing. Primary education is extremely important, nevertheless this not a reason to vote “no” on the ballet question.
We should be solving education challenges on so many different levels. Voting YES on the ballot question of a NJ State issued bond is a simple matter of a willingness to restart tooling up. And let’s not forget to look for accountability from our representatives, the intended recipients, and be ever vigilant for the intended results. So the first step, my weary friends, is to vote “yes.” Never, never, never give up.