By James W. Hughes
The current year's state budget of $34.5 billion includes $2.2 billion for higher education -- and of that, about $775 million for Rutgers. Is New Jersey's investment in its state university paying off?
Yes, handsomely. According to a new report by the Edward J. Bloustein School of Planning and Public Policy, every dollar of that state appropriation brings nearly seven dollars in new economic activity in New Jersey. There's no question that Rutgers continues to be a smart investment for New Jersey in many ways, not the least in economic terms.
Rutgers is a job creator. As the third largest non-governmental employer in the state, Rutgers directly employs 26,000 people, and combined with the indirect effects of its operations, the university sustains nearly 58,000 New Jersey jobs in manufacturing, transportation, financial services, retail, and other fields.
That doesn't count the construction-related jobs that have been created during the university's billion-dollar academic building boom over the past five years, which has generated about 2,400 short-term jobs each year.
Rutgers is one of the more powerful engines moving the state's economy forward. Rutgers is instrumental in creating the high-technology, information-based industries that are critical to the future of New Jersey, and the sophisticated, highly- skilled workers that are necessary to staff them.
Rutgers activities in support of its teaching, research, and service mission generate $5.2 billion in economic activity, including $4.3 billion in wages.
The integration of the former University of Medicine and Dentistry of New Jersey into Rutgers has helped expand the university's reach and importance to the state. Healthcare has been an economic driver of the state and national economy over the last decade, and Rutgers is helping make New Jersey a much more significant player in the health care field. The university spends $684 million a year on patient care, including more than $12 million in low- or no-cost services for low-income patients.
For New Jersey, the investment is a can't-lose proposition. The state appropriation not only generates nearly seven times its value in economic activity--it also returns those dollars, and then some, in the form of state and local tax revenues. For its $776 million investment in Rutgers, New Jersey received more than $403 million in state tax revenues, and more than $394 million in local tax revenues.
This impact does not even factor in the social value of the education the university offers to 69,000 students as they prepare for careers and civic life. It does not account for the scientific, medical, and other advancements Rutgers' $658.1 million in research generates. It does not monetize the benefits Rutgers provides across the state through programs such as small business development centers, continuing education and certificate programs, plant and shellfish breeding programs, and technical support for public schools and municipalities.
And it does not include the return on investment for each student who attends. According to the U.S. Census Bureau, in 2015 the mean salary for a college graduate in the United States was about $65,500--or $30,000 higher than the mean salary for those with only a high school diploma. An advanced degree added another $27,000 to the typical American worker's salary.
And while these are national figures, there is strong reason to believe Rutgers graduates are making these same gains. In fact, Forbes ranked Rutgers one of its best value colleges -- 21st among all public universities--in its list of "300 schools worth the investment." And Money listed Rutgers among 20 public colleges "most likely to pay off financially."
As New Jersey faces increasingly complex fiscal challenges, the competition for each dollar of state funding grows more intense, and the state must weigh each competing need against others. It is clear, however, that each dollar appropriated for its state university is a smart investment that brings a multitude of economic and social benefits--and that each dollar eventually comes back to New Jersey government entities to be reinvested to keep the Garden State growing.
James W. Hughes is dean of the Edward J. Bloustein School of Planning and Public Policy.