Rutgers’s Big Spenders

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Over the course of the last 18 months, Rutgers has been in crisis mode, laying off hundreds of employees (part-time lecturers and staff), imposing a near-total hiring freeze, stealing contractually agreed-upon salary increases, and generally acting like an institution which is struggling mightily to stay afloat. University management claimed that it was facing major budget deficits, and only severe austerity would carry us through: the scarifying bottom-line deficits were $58 million for FY2020 (ending June 2020), $97 million for FY2021, and now $45 million for FY2022 (ending June 2022). More than two hundred million dollars altogether! Faced with numbers like these, a casual observer might think austerity was the only choice. Certainly everyone in management, from the university president down to the dean of the School of Arts & Sciences, presented cuts as a painful necessity.

But all this appears rather different in light of the recent disclosures about the Rutgers athletics program’s finances, reported on in great detail by Abbott Kolloff and Jean Rimbach for NorthJersey.com (this link is to a follow-up story; their first report is subscribers-only). Rutgers’s athletics' own true 2020 deficit, the report calculates, was $73 million. Years of deficits and broken promises have left the program $265 million in debt. In other words: without the financial failures of the athletics program, failures that predate COVID-19 and will, doubtless, continue after it, the university’s overall deficits in the pandemic era would practically have disappeared. So would the justification for the layoffs and the cuts to academics. It is one thing to imagine Rutgers painfully laying off workers in order to keep the classes and labs and libraries going—though, in fact, our union’s analysis showed its unrestricted reserves (around $600 million then) and its share of federal emergency funds (at least $133 million through July 2021 [edit 10/5/21: make that $365 million]) were more than adequate to the size of the emergency need. But even setting that aside, it is quite another matter to trade the livelihoods of people essential to the university for Big 10 football pretensions.

The information about athletics' finances only came to light after my union sued the university over its refusal to produce it in response to Open Public Records Act requests. We won the suit, but it has taken a long time and a series of further judicial orders to compel the university to hand over (or, in some cases, confect) its documents. It does not strike me as cynical to say that the university’s senior managers have been acting like there is something to hide. In additional to the financial numbers, disastrous in themselves, the university appears to have been breaking its own rules. For several years the university’s policy on internal loans has been that these only support capital projects. But the disclosures from the lawsuit make clear the university also loaned athletics money to cover its ever-expanding operating deficits. The Board of Governors hurriedly rewrote its policy this summer, and—absurdly—the university’s managers drafted agreements for years of loans going back to 2017, in order to furnish them as ordered by the judge. While the academic units of the university were being brought to heel under “Responsibility Center Management” budgeting, which limits most units to spending only what they bring in in tuition and grants (less a hefty “tax” to central management, which operates under no such constraints), athletics was given an unlimited credit line to make up for the money it lost. Indeed Athletics Director Pat Hobbs told the [NorthJersey.com reporters](https://www.northjersey.com/in-depth/news/watchdog/2021/09/04/rutgers-athletics- 265-m-in-debt-borrows-to-keep-pace-in-big-ten/8047865002/) he is formulating a “master plan” for even more new facilities, on the promise that those will bring the program to profitability. This most-favored-program status would be outrageous at any time, but in this epoch of crisis it is unconscionable.

The budgetary smoke-and-mirrors and the legal obstructionism are designed to prevent any of the university’s constituents—which is to say, students, faculty, staff, the people of New Jersey or their elected representatives—from considering the fairness of this arrangement. The subsidy to athletics comes at a major cost. Some of that cost is charged directly to students in fees ($12 million goes to athletics this year, according to the FY2022 budget). But the lion’s share—direct support, internal “loans,” payments on external debt contracted for athletics—is carved out of the university’s general operating budget, funded largely by tuition and by the state of New Jersey. The “internal loans” that fill in the athletics program budget holes are, in reality, transfers—not least because, as Rutgers president Jonathan Holloway hinted to the NorthJersey.com reporters, he and the Board may well “forgive” the loans. In fact this eventual debt jubilee is a near-certainty, since athletics has shown no prospects of ever turning a profit, or even slowing the growth of its deficits, in the years since Rutgers entered the Big 10 conference. By contrast, many core academic programs are made to scrape by, watching the slow replacement of tenure-track positions by non-tenure-track ones across the whole university even as the student body continues to grow. No ambitious thinking about the future of knowledge here, please; we’re tightening our belts, and charging students as much as we can while providing their education as cheaply as we can. Yet as it turns out, Rutgers’s managers are perfectly capable of making very sizable long-term bets on future growth prospects without any immediate financial returns attached to them—just so long as the prospect is the football mirage. If it is a question of the transmission and development of knowledge, however, penny-pinching short-termism is the order of the day.

I’m sure that the enablers of athletics are hoping such concerns about the tenure track or the fate of Rutgers workers will seem narrowly self-interested to everyone else. To students and other New Jerseyans, perhaps, a few hundred dollars a year in student fees which go to athletics might well be worth paying for the chance to see the home team play in the big leagues (even if usually the home team ends up with a record of crushing defeat). In American culture, in which sports are among the mostly widely practiced, esteemed, and talked-about forms of competition and achievement, the symbolic payoff of investments in athletics is real. Last Saturday, after the disastrous flooding from ex-hurricane Ida, the campus emergency messaging system sent out a campus-wide message before the football game against Temple: “State Highway 18 has been fully reopened in both directions. Go RU!”

But those student fees do not measure the true cost to students or to the public of supporting the Big 10 ambitions of athletics. Most of the support for athletics is coming out of the university’s general operating funds, which come from student tution and the state. Thus the true cost is measured in ever-escalating tuition. It is measured in degraded academic quality as essential staff are lost and retiring faculty are not replaced, even as the student body continues to grow and grow. Ultimately, it will be measured in the loss of public trust that the university does its job well with the public resources it has.

Governor Phil Murphy, interviewed for the report, says he finds the revelations “quite, quite disturbing.” Well he might, and not only because it suggests that the Rutgers senior administration and its Board of Governors have colluded in mismanaging public money and concealing their mismanagement. It certainly seems like an occasion for a state-level inquiry into doings at the university. But Murphy and other state politicians might also come to question the degree of support the state should really extend to Rutgers. During the pandemic, Murphy and the state legislature, unlike their counterparts in other states, wisely chose not to cut their usual appropriation to higher education, instead keeping Rutgers’s allocation for 2020–2021 more or less at pre-pandemic levels. (These levels are in truth far from adequate, but by comparison to his peers in other Democratic-controlled states, Murphy showed he understood better the significance of public higher education in a social and economic crisis.) But it turns out that this decision, made despite enormous pandemic pressures on the state budget, will have been substantially to the benefit of Rutgers athletics and of its boosters and enablers in Rutgers' management. The rest of us, those of us who don’t coach football or write budgets but merely teach, research, or learn, are left holding the bag. Athletics is apparently entitled to unlimited credit, but the discredit the disclosures about athletics bring on Rutgers falls not on the sports program alone but on the university as a whole.