Takeaway: Rutgers’s management is holding back the July 1 raises we won in our contract last year because it claims the university is in “a fiscal emergency.” We disagree, and we’re fighting them in arbitration. Read the new report on the 2020–2021 budget from the union’s University Budget and Priorities Committee to find out the truth about Rutgers’s financial situation. There is no emergency, and management has no justification for its outrageous actions. The “emergency” is a pretext for attacking workers and trying to undermine hard-won union contracts.
As we recently informed you, Robert Barchi’s parting gift to Rutgers workers was to cancel their promised July 1 raises on the pretext of a claimed “fiscal emergency.” Your union is fighting back, pursuing grievances in arbitration and taking our collective protests directly to President Holloway.
We urge you not to accept management’s scare tactics and anti-worker ploys. Read the new report from the AAUP-AFT University Budget and Priorities Committee for a critical analysis of management’s “emergency” claims and their budgets for the next year. Management is not coming clean about its finances. Rutgers has the money to pay the salaries its contracts oblige it to pay. The university needs to honor its promises instead of pretending it has to take back our wages to balance the budget.
Here are some highlights from the report:
— The university has been deliberately opaque about its finances, despite its legal obligation to prove its claims. Our contracts require Rutgers to provide extensive documentation of its current finances and future projections if it wishes to declare a fiscal emergency. What we got was a single-page budget with no real evidence to back up management’s claimed deficits.
— The university has reserves for emergencies, so if this is an emergency, let them use their reserves. Rutgers could run a deficit as large as they claim ($262 million through July 2021) and more than make it up using the money they have been saving up by imposing austerity on faculty, grad workers, and staff while charging high tuition. The university’s unrestricted reserves totaled $583 million at last count. Another $622 million in restricted expendable reserves makes a total of $1.2 billion in expendable reserves. So much money is in the bank that the Board of Governors praised Barchi for leaving Rutgers “on perhaps its strongest financial footing in recent history” at its most recent meeting. Maybe we should take them at their word.
And that’s not all. The university has other ways it can meet its financial needs, including further assets it can use and access to a great deal of credit. In June, Rutgers apparently netted $58 million through a combination of real-estate deals and bond refinancing to decrease interest payments. The university made $44.4 million by privatizing the lab that developed the COVID-19 saliva test. On top of all that, the university can borrow hundreds of millions of dollars at a time; the Board of Governors just extended its short-term credit line to $750 million. These numbers dwarf the total from our stolen raises (about $40 million for all 20,000 members of the Coalition of Rutgers Unions).
— No one has proven there’s an emergency at Rutgers. The national and global economic crisis is very real. But management has a history of crying wolf. Back in April, then-President Barchi told Rutgers that he expected a revenue shortfall of $200 million through July 2020. Two months later, management’s budget for 2020 showed a deficit of $54 million. You read that right: $200 million turned into $54 million. How do we know the estimates for 2021 aren’t similarly exaggerated?
We took a hard look at management’s 2021 budget projection, studied all the information about revenues and expenses that we could obtain, and came up with an alternative (see page six of our report). With significantly more state and federal money coming in than management accounted for, undergraduate enrollments holding up well, health care revenue on the rise, and money to be saved from reduced operations, we don’t think Rutgers has proven it will have a deficit at all next year. Our alternative budget fixes management’s numbers, includes all the promised raises as well as restored jobs for laid-off PTLs, and still leaves Rutgers with a balanced budget.
We don’t know for certain what the next year will bring. But the evidence shows that management’s claimed budget deficit is wildly exaggerated. We’re not going to take it on trust. The real bottom line is that it’s not about the money. It’s about undermining unions and disciplining the workforce. We went to the brink of a strike in 2019, and now management thinks they can use the pandemic to renege on the promises they were forced to make. But this is no time to hurt the people who make the university work. This is the time to focus on strengthening Rutgers’s core mission of instruction and research.
It’s time for Rutgers to turn things around, and our unions need to spend the summer and fall organizing to make sure this happens. The first step is to learn the facts we all need to know—so set aside some time to read the committee’s 13-page report. We have a fight ahead of us, but we have the facts on our side.
Todd and Andrew
Todd Wolfson, President, Rutgers AAUP-AFT
Andrew Goldstone, Chair, Rutgers AAUP-AFT University Budget and Priorities Committee
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