Economies of scale explain Rutgers campus funding

Andy Marlin

Why Rutgers is not run by vile racists

The fiery rhetoric was as cliched and predictable as it was incorrect. Rutgers is the subject of a racist takeover, alleged a department head on the system's de facto satellite campus in Newark. The same charges were levied by a disgruntled former Newark chancellor. Don't forget the claims of how we wanted people to die in the streets of Newark by closing University Hospital. Even absent such disgusting fear mongering, the perception that deep funding inequalities exist and persist between the campuses was widely believed, with these demagogues exploiting the planned UMDNJ merger to extract additional political patronage. George Norcross and Steve Sweeney tried to pilfer Rutgers-Camden by dusting off traditional South Jersey paranoia about getting the short shrift in state funding, even though that actually couldn't be further from the truth.

While the mandarins in Newark shriek about losing influence, there is not a peep from them about the vile, horrific gutting of Rutgers Medical School, a naked power grab orchestrated by North Jersey politicians forty years ago that firmly established the principle that academic excellence meant nothing compared to the prospect of putting a few more cronies on the payroll. This offense was so monstrous that it would seem to warrant by itself the kind of punitive retribution that is being claimed in Newark. In the mere act of righting this historic, criminal theft, the most charitable reading of this rhetoric is one of wild ignorance and lack of perspective, but more likely is that they are hypocrites who are more than happy to help themselves to the spoils of others until the onus starts falling on them.

Regardless, it appears that the supposed funding disparity simply is not true, which truly comes as a surprise to most. The flagship's association with the Newark and Camden campuses is seen largely as a millstone that simultaneously lifts their academic prestige while damaging ours. Of course they should pay a premium, until at least the Rutgers administration is able to implement rumored plans of increasing enrollment on both campuses. Rutgers is effectively synonymous with Rutgers-New Brunswick, and to claim otherwise is disingenuous at best. It seems to have fermented these wild fantasies of collective mediocrity, just when there finally is a push from above to finally let the school embrace academic excellence instead of running from it.

How do you explain why there is clearly so much more capital construction in New Brunswick and Piscataway than in Newark or Camden? It's a basic economy of scale. New Brunswick has 40,000 students (undergraduate and graduate, full and part time), while Newark has 12,000 and Camden 6,400. Suppose there is a new ten million dollar academic building under construction. That's $250 per student (and given that the cost probably is spread over multiple years, in actuality far less) in New Brunswick, $833 per student in Newark, and $1560 per student in Camden. These figures probably aren't exact due to the various tuition/credit breakdowns, but give a rough idea of what's going on. For the same rate of spending, New Brunswick can have at least three new buildings for everyone one in Newark, and six for every one in Camden.

Considering the fact that there is clearly far more demand in New Brunswick, and the reasoning for past resistance to new capital construction on the satellite campuses becomes evident. Add in labor and assorted fixed costs like energy and maintenance, and this adds up very quickly. Think of it like this; for as much as one aspect of the public hates chain restaurants and big box retailers. they still are largely voting with their feet to support them. Because a company like Walmart is so massive, they can negotiate gigantic bulk discounts, and squeeze increasing profits out of every single part of their supply chain. Even if you control for quality, an undershirt from Walmart or a hamburger from McDonald's are going to be a better value than going to Peter Luger's or Urban Outfitters. Perhaps money is no object and you value that increase in quality more than any price premium, but for the majority of people that is going to be true.

Even if Rutgers is hardly an example of ruthless efficiency, this still explains the supposed gap. Growth is always going to be impossible to resist, because, it's, well, growth. A big campus at New Brunswick is a better bang for the buck if you can do it right (e.g., not the Montclair/Kean/Rowan model of crushing debt coupled with heavy faculty teaching loads), which raises a few interesting implications. One is that there should be even more doubling down in New Brunswick, which is happening to some extent, although the campus is largely strained to capacity as is. The focus for now is likely to shift to quality over quantity. Growth in New Jersey higher education slots is likely going to come in Newark and Camden, which you might assume would mollify the critics, but that could not be further from the case.

They want the flowers without the fruit; that is, access to more funding without having to take on the heavy, at times overbearing burden of expansion that has strained the New Brunswick campus to the hilt. That is craven opportunism at its finest. Fortunately, there is enough pressure from above (and blood money for Norcross and Sweeney) that this news will probably put this issue to rest for good. Right now, the goal has to be to get to July 1st unscathed with all the relevant assets in the hands of the Rutgers Board of Trustees. Then and only then will the time be right to push back against Camden or deal with any other lingering internal issues. Too much is at stake, and I will try to explain it in depth soon if I do have time to write something on else on Barchi and the merger in the next few weeks.

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