Governor asks state watchdog to examine state university’s flagging finances

Gov. Phil Murphy urged a state watchdog to delve into the flagging finances of New Jersey City University amid reports the state school had depleted its reserves and plunged itself into debt.

Murphy’s request comes about a month after the university declared a financial emergency and its longtime president, Sue Henderson, quit. The 5,000-student state university is located in Jersey City and has a campus in Monmouth County.

“My administration understands the harsh realities that the COVID-19 pandemic brought upon the higher education industry, with colleges and universities everywhere combating a steep decline in enrollment and shortfalls in tuition revenue,” the governor said in a letter to acting State Comptroller Kevin Walsh . “However, the troubles at NJCU appear to predate the pandemic and stretch back nearly a decade.”

A spokesperson for the university declined to comment.

In late June, the university adopted a 90-day interim budget meant to provide the school time to find solutions to address its blooming deficit, one a February 2021 audit found had ballooned to about $ 67 million. Layoffs began soon after.

The university’s faculty senate lodged a no-confidence vote against Henderson last September, charging decisions made under her tenure had fully drained the $ 101 million the school had in reserves and pushed it millions of dollars into debt.

Henderson gave up her position on July 1. She told ROI-NJ the departure was planned months in advance and not linked to the school’s financial distress.

The school saw a sharp decline in enrollment during the pandemic, though that drop had already begun materializing in the years before. In 2016, the university had nearly 6,700 matriculating students. By 2021, that number had fallen to less than 5,300.

At the same time, enrollments plunged. Just 1,295 new students enrolled in or transferred to the Jersey City college in 2021, the lowest number since at least 2013.

A loss of $ 2.7 million in state funding in 2020, coupled with a lack of grant income and rising salaries, helped contribute to the university’s flagging fiscal position, auditors said.

The college is one of the smallest public four-year universities in New Jersey and received $ 167 million in direct state aid in the budget adopted last month. Only Ramapo College had fewer students and received less financial support from the state.

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