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Lesniak Testimony On Higher Education Restructuring, Financing And Fiscal Management Bill To Assembly Higher Ed Committee

TRENTON – Senator Raymond J. Lesniak today issued the following testimony to the Assembly Higher Education Committee on A-3245, sponsored by Committee Chairman, Assemblyman Patrick Diegnan, to provide for better structuring, financing and fiscal management of higher education in the Garden State. Senator Lesniak sponsored the identical bill, S-1609, in the State Senate:

“I first introduced legislation to strengthen oversight of our state institutions of higher education in 2007. Although my efforts to draft this legislation began prior to the release of the SCI report, which outlined the many deficiencies in good governance practices of our institutions of higher learning, my bill addressed many criticisms outlined in the report. The legislation you are considering today, sponsored by Assemblyman Diegnan, is identical to legislation I have sponsored, which I hope will soon be heard by the Senate Education Committee.

“This legislation is needed to strengthen the presence of higher education in our state. Since the Legislature abolished the Department of Higher Education, support for higher education has diminished. I believe the lack of a central cabinet level authority is partially responsible for that diminished support.

“The increased autonomy given to the state’s colleges and universities has produced positive results, but at a cost which this legislation seeks to remedy.

“The legislation gives the Commission on Higher Education an opportunity to review and respond to mission, program and financial matters to better coordinate the overall needs of the state with the goals of higher education of each institution.

“In addition to strengthening the presence of higher education in the executive branch of our government and establishing improved co-ordination, the legislation also establishes good governance practices that will insure better financial and policy accountability.

“Lastly, the legislation expands the ability of our higher education institutions to meet their facility needs through the authorization of public-private partnerships which can be financed through the New Jersey Education Facilities Authority.

“New Jersey’s Universities and Colleges face the challenges of declining revenues from the state and increasing need for infrastructure improvements. There continues to be a paucity of capital available for new investment for much needed classrooms, academic support facilities, laboratories, and housing. To further complicate the lack of funding for expansion, our Universities have had to even defer maintenance on some of their most mission critical facilities. This infrastructure problem is positioned against the backdrop of increasing demand for enrollment, pressure to hold the line on increases in tuition, fees, room and board, and declining support from the State budget.

“Higher education Institutions in other states have taken or are taking aggressive steps to find creative opportunities to partner with the private sector to leverage private capital for their infrastructure needs. Not only have Institutions looked to the private sector to address facility needs, but most significantly, Universities have established synergistic relationships with corporate partners that extend into the areas of technology transfer, teaching opportunities for researchers and executives, and mentoring and internship programs. These synergistic relationships have also helped stem the tide of ‘brain drain’ issues by keeping the best and brightest in state through post graduation employment opportunities.

“There are many examples of these types of synergistic public-private partnerships throughout the country from University Park at MIT and Cambridge Center, to the Research Triangle in Raleigh-Durham, to the Virginia Biotechnology Park in Richmond Virginia.

“Recently the Arizona State University embarked on a $170 million plan to renovate Sun Devil Stadium into a modern sports and entertainment venue. University officials and the state legislature are proposing the creation of a University Stadium Tax District. The proposed legislation would give a Board of Supervisors in any county containing a State University the authority to form a stadium taxation district to utilize taxes generated in the district to pay debt service on the project.

“At the University of Notre Dame in South Bend, Indiana, the University and the City of South Bend have launched a technology park focused on transferring high level research from theory to practical application. The University hopes to match its academic research in aerospace, environmental technology and nano-electronics with corporate partners.

“The approach in New Jersey should begin with the cultivation of holistic relationships between a corporate partner and a host University. The potential corporate relocation or expansion has to have synergistic relationships beyond a piece of real estate. There may be an ongoing research relationship between a medical school or basic science department of a research university that the corporation may want to expand; a potential relationship between a chemical company or an energy company with an engineering school; a shipping or utility company that has a shared interest with an Institute dedicated to Marine and Coastal Science; or an insurance company or accounting firm interested in building a relationship with a business school.

“This legislation would establish the ability of a University to utilize all or a portion of tax revenue generated either in an established district or merely on University-owned property to assist in the capitalization of a sponsored project.

“The private sector partner would negotiate a payment to the municipality where the property is located similar to a payment in lieu of property taxes. The State would dedicate a portion of income taxes, sales taxes, and admission and parking fees generated from the project toward capitalizing the synergistic academic investment.

“Mr. Chairman and members of the committee, in these difficult economic times we will not be able to provide all the funds necessary for higher education’s operations and infrastructure. This legislation will insure that the tax dollars we do provide are spent in an appropriate, transparent and accountable manner. It is my hope that this bill will also provide new financial tools and advance support for our institutions of higher education.

“Our effort here aims to secure the operational funds and infrastructure improvements necessary to provide world class higher education in New Jersey for our residents. We already have that world class educational opportunity in most of our colleges and universities in many areas, but without additional funding and expanded facilities, we will not be able to improve on those opportunities nor maintain the world class opportunities that currently exist. I urge you to vote yes to release this bill for a full vote in the Assembly.”

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