New Jersey's public colleges and universities, which have lost substantial ground in state funding over the last few years, would get a reprieve under a revised budget proposed by Gov. Corzine.

The $40 million in new funding would come from federal stimulus funds and, if approved by the Legislature, would keep the budget at $2.2 billion for higher education, including the state's 12 publicly funded colleges and universities, community college system, and other agencies and programs.

That's the same as the current year, said Tom Bell, a spokesman for the Treasury Department. The governor previously proposed a 5 percent cut in funding.

The new allocation would be in addition to $34 million in stimulus funds that will be used for tuition aid to needy students, Bell said. The state received a waiver from the federal government to use some funds for tuition assistance, he said.

The state may place tuition-increase caps or other restrictions on colleges as a condition of receiving the restored funds, Bell said.

"It basically seems to reverse the cuts, which is good news for us and for college affordability," said Paul Shelly, spokesman for the New Jersey Association of State Colleges and Universities.

The proposed change, which still faces legislative approval as part of the budget process, comes as some college officials and New Jersey legislators have lobbied for a fairer share for colleges.

"New Jersey is among a handful of states that have taken a beating in the last couple years in regards to state support of its higher education system," said Daniel J. Hurley, state relations and policy analysis director at the American Association of State Colleges and Universities.

New Jersey was one of four states nationally to decrease its taxpayer-funded higher-education appropriations from fiscal 2007 to 2009, according to the Grapevine Survey by the University of Illinois.

The State Higher Education Executive Officers group in Colorado, which looks at all revenue spent by states on higher education, found that New Jersey's spending per full-time student dropped 24.1 percent over the last decade when numbers are adjusted for inflation.

The drop came as enrollments increased substantially, making accessibility to the state's public higher-education system more important, said Paul Lingenfelder, the group's president.

Only five other states had greater drops over the decade. Pennsylvania fell 20.7 percent.

"In my opinion, it's horrible the direction New Jersey is taking with higher education," said Senate Majority Leader Stephen Sweeney, a Democrat from West Deptford. "Since we don't support higher education the way we used to, a lot of these kids end up going to other states, and they wind up staying in other states."

The state, he said, has shown strong funding commitment to K-12 schools: "We need to finish the job."

Restoring the funding this year, at least, "sends the right message" that New Jersey is focused again on its colleges, Sweeney added.

Assemblyman Patrick J. Diegnan Jr., chair of the Higher Education Committee, defended the administration, which has had to make tough decisions in difficult economic times.

"It's just an awful, awful situation. The governor is doing the best he can under the circumstances," said Diegnan, a Democrat from Middlesex County. "There simply isn't enough money to go around."

He added that New Jersey generously supports low-income students with its $290 million tuition-assistance program and through the STARS program, which also has been cut back. That program allows students in the top 15 percent of their high school class to go to community college free. Students also get some tuition relief if they transfer to a state university for their third and fourth years.

"I don't think New Jersey has really turned their backs on the students, they just need to be resourceful in what is available to them," said Assemblywoman Pamela Lampitt, vice chair of the Higher Education Committee.

She said the universities also must look harder at their spending.

"We need to ensure the fact that the trustees that oversee these universities are taking every measure that they can to have the tools necessary to provide the right kind of financial oversight," said Lampitt, a Democrat from Cherry Hill.

At Rutgers University, which is to receive about $309 million in state funding, president Richard McCormick in recent days has asked department heads to prepare for a 5 percent cut.

"I'm told that the budget model we're all working off of is supposed to be the worst-case scenario, in hopes we can then work backward," one official said.

The cost of college has been a point of contention at Rutgers for years. It currently costs nearly $22,000 a year for tuition and room and board to attend the main campus in New Brunswick.

At Rowan University, officials are planning for a tuition increase, staff reductions, and managerial wage freezes, in addition to parking fee increases and rental fees for use of facilities. Employees are being offered 10-month work schedules.

The university also has begun turning off all of its computers at night, which it estimates will save $100,000 a year. And it will require all academic managers to teach one class next year, reducing the expense of adjuncts.

Hearing of the restored funding yesterday, Rowan spokesman Joe Cardona said he doubted it would reverse much of the planned cuts. The school, which now would get $36.2 million, still may have to absorb salary increases and other inflationary increases with no boost in funding.

"The likelihood is that 90 percent of that list will be done no matter what," Cardona said.

Rowan president Donald J. Farish earlier this week lamented the loss of higher-education funding, which he said had been cut six times over the last decade.