JackCentral

In recent months, resentatives from the Arizona House and Senate have attempted to pass dozens of bills to raise money or cut from all government-run agencies, including the state’s three universities, all to help lessen the blow of the projected billion-dollar-plus deficit.
Despite a still uncertain future, budget cuts for the universities may be moving in a less drastic direction.
For the time being, the state legislature has remained in closed-door discussions, with the governor calling for no cuts for both K-12 and university education appropriations and representatives urging large scale cuts. Christy Farley, NAU’s director of government affairs, said originally legislators had called for an overall 10 percent cut to universities, a total of $100 million. Of that total, $16 million would be cut from NAU.
Farley said the last proposal to the governor called for a reduction of funds to the Phoenix Biomedical Campus and a total of $15 million cut from the whole of the university system.
“This has been slow progress,” Farley said. “We have to start from the basic amount of the shortfall and agree on reductions for each state agency. It’s going to take time to get to the middle.”
But the legislature is also discussing other methods of cutting. Arizona House Majority Leader Rep. Tom Boone, District 4, said the expected budget deficit is $1.2 billion for 2008. With the state legislature looking to make up for a 10 percent shortcoming, Boone said universities would only make up between 2 and 2.5 percent of the cuts.
“With education we want to preserve the maximum we can,” Boone said. “Even with the 10 percent shortfall, other areas in the state will take a larger shortfall.”
One solution to the potential shortfall is a recently released  stimulus program by the state. The Construction Stimulus Program would create more than 31,000 jobs in the state and generate $1.4 billion in university capital projects by boosting the ever-falling construction industry throughout Arizona. According to the program overview, the construction industry lost 5,300 jobs in January alone.
“Construction has slowed,” Farley said. “We strongly believe that if we take care of the infrastructure we can help the state climb out of the deficit in a faster fashion and create a more diversified economy.”
The program would call for financing from the universities, up to $20.7 million by 2012, and then the amounts would become part of the state debt service payments.
The cost for NAU building projects in fiscal year 2009 would be $115 million in the first year, with the majority of $100 million going to expanding the health professions facility. At the end of the program in 2012, NAU’s total would be $310 million.
Dennis Foster, a senior lecturer of economics at NAU, said these stimulus programs often do not work at a state level.
“A single state cannot fight this economic slowdown,” Foster said. “When the national economy rebounds, that will help us.”
Foster added the building plan can cause the state to lose money in future downfalls. But he said an upside is that building during a downfall is often cheaper in terms of materials and hiring workers.
Boone said the stimulus program is “certainly being looked at (by the legislature), but we’re being careful and fiscally responsible.”
Even if Arizona’s universities lose money, Sandy Woodley, the chief financial officer for the Arizona Board of Regents, said the state would still be able to reach its strategic plan goals of creating more graduates as well as improving the overall university system. The system has three goals – bronze, silver and gold – for success in reaching its current levels of improvement. For instance, silver would be an increase from 19,000 to 38,000 graduates annually, as mandated by the governor. The university system can still be successful.
“If there is a cut in state appropriations, we may not reach silver, but in-between bronze and silver,” Woodley said. “Achieving goals are important, as it’s not about the money. Cuts do not mean the entire progress of the system has to stall.”
Woodley said at any point the system could evaluate what is needed in revenue and link it to tuition, to help increase funds by having students potentially pay more. But she stressed that tuition increases do not have to balance any cuts in state appropriations.
Farley said it was the hopes of the legislative body to already have a solution to the budget crisis, but that April “is looking to be a good month.” But whatever the final decision is, economic troubles tend to be cyclical, Farley said.
“This low isn’t going to last forever,” Farley said. “But we do need to take steps to help stabilize the economy in the future.”

This entry was posted on Thursday, April 3rd, 2008 at 12:24 pm and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.