Holloway delivers 1st annual budget address to University Senate

On Friday, University President Jonathan Holloway became the first Rutgers president to address the University Senate regarding the institution's finances.

He plans to deliver a budget address annually so he can directly provide more clarity about the University’s finances to members of the Rutgers community, Holloway said in an interview with The Daily Targum.

As a public institution, Rutgers’ finances are open information, but individuals still have trouble navigating through University bureaucracy to access them, he said. 

“I have been in too many conversations where the person asking the question (about finances) is very frustrated because of their inability to sort of muddle through things to …find the actual answer,” Holloway said. “So I wanted to give an address that basically said, 'I'm not gonna hide.'”

He said he wants to dispel misconceptions that individuals have about University finances and provide basic budgetary information to the public such as the extent of the administration’s control over Rutgers budget and endowment.

Holloway said that individuals should understand that the administration cannot easily withdraw funds from its $1.9 billion endowment to fix issues at the University. The endowment itself is disproportionately small compared to the number of individuals at Rutgers, according to his address. 

“Our budget is $4.8 billion (and) our endowment is $1.9 billion. You want the endowment larger than the budget,” he said. “Frankly, our budget is going to be the same, more or less. The endowment needs to be doubled in size.”

Holloway said the University needs to restructure its revenue streams in order to raise enough funds to work on initiatives such as revamping buildings and raising faculty salaries.

In his budget address, he said Rutgers currently receives 19 percent of its $4.8 billion budget from the state government but requires more funding in order to improve itself.

In order to increase state investment in the University, Holloway said he will continue working with the state government through attending quarterly meetings with Gov. Phil Murphy (D-N.J.) and supporting efforts by the Rutgers State Government Affairs.

“I have a great relationship with the governor already, and I have been committed from the very beginning to build similarly healthy relationships with people in the (state) Assembly and the (state) Senate,” he said.

While he believes the state government will provide more resources to Rutgers, Holloway said these appropriations will not be enough to address the University’s major issues.

He said in the budget address that the funding to solve these problems also cannot come from reducing University expenses such as employees’ salaries or Rutgers Athletics spending.

This year, Rutgers is due to increase employee salaries by 5.5 percent due to a tentative agreement between the University and unions such as the American Association of University Professors and American Federation of Teachers (AAUP-AFT), according to his address.

Prior to the pandemic, the University had signed an agreement with labor unions stating that it would increase employee salaries by a certain percentage over the next couple of years, Holloway said.

In October 2020, Rutgers declared a fiscal emergency that released them from the obligation to pay the salary raises, according to a press release from the AAUP-AFT. Unions challenged this action and formed an agreement with the University to defer employee salary raises rather than have them canceled. 

“Had it not been for negotiating agreements with unions and then non-unionized employees to defer those pay increases, we would have been in a much deeper budget hole because (employee salaries) are two-thirds of our budget,” Holloway said. “So the 5.5 (percent increase) is simply a catch up to where we would have been in the first place.”

With regard to Athletics, Holloway said he believes that the Department plays a large role in generating revenue opportunities and in the Rutgers community, as a whole.

In response to individuals calling for cutting Athletics spending, he said the Department’s budget takes up only 2 percent of the University funds, and reducing it would not be enough to solve Rutgers’ major issues.

Moving forward, Holloway said he will deliver the budget address every year but keep his speech shorter and more technical in its content.

“I think it's a sign of respect to the community that you show up,” he said. “This (budget address) is not a one-and-done … this is a good, healthy practice for the community, and we're gonna keep on doing it.”