LEGISLATIVE FISCAL ESTIMATE
[Second Reprint]
ASSEMBLY, No. 6212
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: DECEMBER 26, 2025
SUMMARY
|
Synopsis: |
|
|
Type of Impact: |
One-time State expenditure increase and recurring State revenue decrease. One-time Kean University revenue increase and recurring Kean University expenditure decrease. |
|
Agencies Affected: |
Kean University. Office of the Secretary of Higher Education. New Jersey Educational Facilities Authority. New Jersey Economic Development Authority. |
|
Office of Legislative Services Estimate |
|
|
One-Time State Expenditure Increase |
$25,000,000 |
|
Recurring State Revenue Decrease |
Indeterminate |
|
One-Time Kean University Revenue Increase |
$25,000,000 |
|
Recurring Kean University Expenditure Decrease |
Indeterminate |
· The Office of Legislative Services (OLS) finds that this bill will increase FY 2026 State expenditures by $25.0 million as the bill appropriates that amount from the State General Fund to Kean University to assist with the acquisition and integration of New Jersey City University. For Kean University this grant represents a one-time $25.0 million revenue increase.
· The bill requires the State to help Kean University reduce the debt it absorbs from New Jersey City University that is owed to the New Jersey Educational Facilities Authority and the New Jersey Economic Development Authority without specifying the form or scale of State-provided debt relief. Any debt relief would be an indeterminate recurring decrease in debt service expenditures to Kean University and an indeterminate recurring decrease in debt service payments received by the State. As of June 30, 2024, New Jersey City University had $182.1 million in outstanding New Jersey Educational Facilities Authority and New Jersey Economic Development Authority debt.
BILL DESCRIPTION
This bill supports Kean University’s acquisition of New Jersey City University as laid out in the October 1, 2025 acquisition agreement between the two institutions.
Among its provisions, the bill appropriates $25.0 million from the State General Fund to Kean University to assist with the acquisition and integration of New Jersey City University. In addition, without specifying the type and level of support, the bill requires the State to help Kean University reduce the debt of New Jersey City University held by the New Jersey Educational Facilities Authority and the New Jersey Economic Development Authority.
The bill also includes various provisions pertaining to the rights of employees of New Jersey City University who are transferred to Kean University.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS finds that this bill will increase FY 2026 State expenditures by $25.0 million as the bill appropriates that amount from the State General Fund to Kean University to assist with the acquisition and integration of New Jersey City University. For Kean University this grant represents a one-time $25.0 million revenue increase.
In addition, the bill requires the State to help Kean University reduce the debt it absorbs from New Jersey City University that is owed to the New Jersey Educational Facilities Authority and the New Jersey Economic Development Authority without specifying the form or scale of State-provided debt relief. Any debt relief would be an indeterminate recurring decrease in debt service expenditures to Kean University and an indeterminate recurring decrease in debt service payments received by the State. As of June 30, 2024, New Jersey City University had $182.1 million in outstanding New Jersey Educational Facilities Authority and New Jersey Economic Development Authority debt.
These limited conclusions do not address the financial impacts of the acquisition of New Jersey City University on Kean University beyond the State assistance provided in this bill. As autonomous State institutions, the two entities have the ability to merge and their October 1, 2025 acquisition agreement is not explicitly conditioned on the receipt of State financial support or the enactment of the other provisions in the bill. Therefore, the OLS hesitates to causally attribute to the bill the larger financial effects of Kean University’s acquisition of New Jersey City University.
Nevertheless, for informational purposes, the remainder of this analysis will present select fiscal information related to Kean University’s acquisition of New Jersey City University. The data in the two tables below are from the two institutions’ recent audited financial statements.
|
Kean University, Including Kean University Foundation ($ thousands) |
|||
|
|
FY 2024 |
FY 2023 |
FY 2022 |
|
Total Assets, Including Deferred Outflows of Resources |
$954,934 |
$905,095 |
$898,956 |
|
Total Liabilities, Including Deferred Inflows of Resources |
($490,174) |
($495,566) |
($496,193) |
|
Total Net Position |
$464,760 |
$409,529 |
$402,763 |
|
|
|
|
|
|
Operating Revenues |
$182,939 |
$149,792 |
$133,118 |
|
Operating Expenses |
($334,243) |
($307,836) |
($286,363) |
|
Operating (Loss) Income |
($151,304) |
($158,044) |
($153,245) |
|
Non-Operating Revenues and Expenses, and Others |
$206,535 |
$164,818 |
$163,947 |
|
Increase (Decrease) in Net Position |
$55,231 |
$6,774 |
$10,702 |
|
|
|
|
|
|
Outstanding Debt |
$269,167 |
$283,230 |
$292,870 |
|
New Jersey City University, Including New Jersey City University Foundation ($ thousands) |
|||
|
|
FY 2024 |
FY 2023 |
FY 2022 |
|
Total Assets, Including Deferred Outflows of Resources |
$446,244 |
$427,339 |
$445,950 |
|
Total Liabilities, Including Deferred Inflows of Resources |
($466,266) |
($456,693) |
($479,630) |
|
Total Net Position |
($20,022) |
($29,354) |
($33,680) |
|
|
|
|
|
|
Operating Revenues |
$94,087 |
$95,696 |
$92,040 |
|
Operating Expenses |
($132,399) |
($145,879) |
($163,119) |
|
Operating (Loss) Income |
($38,312) |
($50,183) |
($71,079) |
|
Non-Operating Revenues and Expenses, and Others |
$47,644 |
$54,509 |
$60,750 |
|
Increase (Decrease) in Net Position |
$9,332 |
$4,326 |
($10,329) |
|
|
|
|
|
|
Outstanding Debt |
$197,258 |
$199,921 |
$202,567 |
The acquisition of New Jersey City University by Kean University will increase annual State expenditures for the Tuition Aid Grant program because as students at a classified public research university, Kean University students receive larger Tuition Aid Grant amounts than students at New Jersey City University, which is classified as a State college. The estimated Tuition Aid Grant impact of the acquisition is a State cost increase of $2.4 million annually.
Moreover, Kean University’s credit ratings are superior to New Jersey City University’s, which will make it less costly for Kean University to borrow for any future capital improvements to the current New Jersey City University campus than it would be for New Jersey City University. Notably, Kean University has a credit rating of A2 by Moody’s, which is an upper medium grade rating with low credit risk. New Jersey City University, in turn, has a Moody’s credit rating of Ba2, which represents a non-investment grade rating with high credit risk.
Lastly, there will be indeterminate transition costs
borne by Kean University to consolidate the two universities. The transition
costs may include bringing in an outside transition team to facilitate the
transition, legal costs, the name change on everything from signage to stationery,
combining payroll and other human resource functions, integrating computer and
information technology functions, merging the athletic programs, identifying
and reducing personnel redundancies, and ensuring Health Insurance Portability
and Accountability (HIPAA) compliance. The FY 2026 appropriations act made $10
million available to Kean University for transition costs.
|
Section: |
Education |
|
Analyst: |
Assistant Fiscal Analyst |
|
Approved: |
Thomas Koenig Legislative Budget and Finance Officer |
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).