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August 18, 2011 11:00 AM Rutgers: Let Them Eat Cake

By Daniel Luzer

Maybe it just gets some really bad press but lately Rutgers, the State University of New Jersey, is revealing some very questionable priorities, especially for a college supported by the taxpayers of the Garden State.

The school is in the midst of something of a funding problem. Like many state universities, it’s getting less money from the legislature thanks to the recession, so it’s cutting costs.

A year ago the college declared that it was in an “extreme fiscal crisis” and so couldn’t afford to give employees scheduled raises. But then in May this year the university spent $30,000 to secure Nobel prize-winning writer Toni Morrison as its commencement speaker. And then the students spent $32,000 so that “Jersey Shore” star Nicole “Snooki” Polizzi could speak at the student center. Earlier in the summer the school agreed to pay outgoing president Richard McCormick $335,000 a year, for the rest of his life.

In July the school hiked tuition 1.8 percent. The chairman of the school’s governing board said “These are different times. The world changed drastically in 2008.” The high unemployment rate and other financial problems related to the recession required everyone to sacrifice.

Well maybe not everyone. According to an analysis of college athletic funding conducted by Curtis Eichelberger and Oliver Staley at Bloomberg, Rutgers’s athletic funding remains very generous:

The 245-year-old school spent more money on athletics than any other public institution in the six biggest football conferences during the 2009-2010 fiscal year, based on data compiled by Bloomberg. More than 40 percent of sports revenue came from student fees and the university’s general fund.
[In addition], under the terms of [head football coach Greg] Schiano’s contract, Rutgers sold the football coach 0.86 acre (0.34 hectare) in nearby Piscataway and spent $142,185 preparing the lot. The university then loaned him $800,000 interest-free for construction of his house. Each year he stays on, Rutgers forgives $100,000 of the balance, which was down to $400,000 as of this year….

Some 42 percent of the Rutgers athletics department’s money comes from subsidies from the school, one of the highest percentages of any large American university.

Football at Rutgers brought in $24 million in 2010. According to the article, “the team had an operating loss of $2.9 million, excluding university subsidies and student fees.”

Admittedly, Rutgers says it’s trying to reduce funding for athletics. Under the terms of Tim Pernetti’s contract as the school’s athletic director he earns a $10,000 in any year in which the school’s subsidy for the athletic department doesn’t increase.

Pernetti, who has worked at Rutgers since 2009, has never received the bonus.

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer