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Stockton University’s $4.6 million for expansion held in sequester

An influx of $4.6 million in state aid that would allow Stockton University to begin the second phase of its Atlantic City project is being held as the governor determines whether the state has enough revenue for 2020, state officials said.

The Department of the Treasury released a list Wednesday of $235 million in spending items, including aid for Stockton and millions of dollars for other higher education institutions, to be held in reserve, and funded only if revenues and savings outperform Gov. Phil Murphy’s expectations.

“Funding will be released contingent upon whether the questionable savings the Legislature included in their budget materialize or if revenues exceed the targeted fund balance the governor has specified in order to safeguard the state’s fiscal health,” Murphy’s Deputy Press Secretary Matthew D. Saidel said.

Stockton President Harvey Kesselman said the money was necessary for the school to move ahead with Phase II of the campus — a $64 million dormitory that would house about 400 more students.

“We need no less than $5 million in our base budget in order to take on a project of this magnitude,” he said. “What’s so important about this investment is that this investment will be part of a project that generates $60 million worth of jobs. That’s not an insignificant amount of work for people in our region.”

Kesselman said he learned about the holdup Wednesday along with everyone else but remained optimistic and diplomatic, thanking the governor for not outright vetoing the money. The $4.6 million in state aid put in reserve this week was in addition to the $1.3 million in funding allocated to Stockton in Murphy’s original budget proposal, which it will receive.

Kesselman said he hopes the stall is temporary.

“He’s demonstrated support of Atlantic City and certainly of Stockton since he’s been governor, and I have every reason to believe he’ll continue to do so,” Kesselman said of Murphy.

The second phase of Stockton’s Atlantic City campus received approval from the Casino Reinvestment Development Authority in May.

Christopher Paladino, president of Atlantic City Development Corp., which is developing the project, was not immediately available for comment, but he has said he expects to break ground in September and finish by summer 2021.

Kesselman said Stockton will need to know “in the very near future” the status of the state’s appropriation.

“If the delay is lengthy, then obviously we will have to delay this project, there’s no question about that,” Kesselman said. “Stockton, we’re among the least funded of the institutions, so this is very critical for us.”

David Ridolfino, acting director of the state Treasury Department’s Office of Management and Budget, said Wednesday the items “have been placed in reserve until further notice.”

Murphy signed the Legislature’s $38.7 billion budget Sunday but line-item vetoed $49 million of it and put an additional $235 million on reserve to ensure a balanced budget with an anticipated surplus of $875 million and a rainy day fund of $401 million.

He said the executive order was needed because the Legislature’s budget included questionable savings unlikely to materialize and new spending initiatives that the Legislature failed to adequately fund.

Murphy had pushed for an increase in income taxes on those making more than $1 million per year, but the Legislature refused to include the so-called “millionaire’s tax” in its budget.

In a statement released Wednesday, Senate President Steve Sweeney called the freeze “a shameless act of political retribution” and specifically called out the freeze on Stockton’s funding.

“It is an irresponsible move that could have serious consequences by denying financial support to cancer programs, putting a medical school out of business, choking off the economic and educational growth of Stockton University in Atlantic City and refusing to provide timely aid to municipalities as they work to deliver vital services and hold down property taxes. This is an artificial freeze that is entirely about politics and nothing about finances,” Sweeney said.

Murphy has said if legislators provide a new funding source he would consider releasing some of the sequestered spending.

State Sen. Chris Brown, R-Atlantic, said he was frustrated by the OMB’s announcement Wednesday. Brown said he has been advocating for more aid for Stockton and met with Kesselman in November on the subject. Stockton receives $1,995 in aid per student, just over Montclair State University at $1,912. The state average is $3,570 per student.

“Clearly, our Atlantic County families deserve to have Stockton University fully and fairly funded so our children have an affordable path to a college degree as the university helps create new jobs by revitalizing Atlantic City,” Brown said.

Atlantic City Councilman Jesse O. Kurtz, who represents the neighborhood where Stockton’s first phase was developed, declined to comment until he knew more.

Mayor Frank Gilliam is on vacation and not immediately available for comment, his office said.

Asked how the funding delay would affect the revitalization efforts of Atlantic City, Lisa Ryan, spokeswoman for the state Department of Community Affairs, which oversees the city’s finances and operations, deferred comment to the Treasury Department.

Gov. Phil Murphy has put $235 million in state funding on hold until revenues for 2020 are more certain, and that may include some or all of the $4.5 million in additional funding for Stockton University. State Senate President Steve Sweeney, right, called the move irresponsible.

Gov. Phil Murphy has put $235 million in state funding on hold until revenues for 2020 are more certain, and that may include some or all of the $4.5 million in additional funding for Stockton University. State Senate President Steve Sweeney, right, called the move irresponsible.

Contact: 609-272-7219 Twitter @MichelleBPost

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