Education

Feb. 4, 2009

Transcript:

Ted Simons:
$580 million in spending cuts were part of the budget fix signed by the governor, nearly half came from universities and k-12 and more cuts are likely as the state faces a $3 billion deficit in 2010. Meanwhile, university presidents have been warning lawmakers to proceed with caution when making decisions that could affect the quality of education in the state of Arizona.

Robert Shelton:
The question is what does this state want to be when it comes out of this deep, deep financial crisis? And we feel strongly that education, and, of course, we're speaking for higher education, must be part of the solution. Must be part of the positive aspects to bring this state out of this situation. We are essential, we feel, in providing the talented workforce and essential in attracting businesses here. They want to know they have that workforce and know that their employees will have great educational opportunities for themselves and their families and in every dimension of economic growth and development, assuming we want to do more than just be a tourist destination, the universities are essential. The cuts at this level eliminate the universities' ability to perform that function and service to the people of Arizona.

Ted Simons:
Here to share his unique perspective between the dynamic of investing in education and cutting education is Dr. Jim Zaharias vice president for Education for Greater Phoenix Leadership, a business group whose mission is to improve economic vitality and the quality of life in our state. Jim was superintendent of Mesa Public Schools from 1984 to retirement in 1999, and he's spent two years as special assistant to president of ASU east and now as polytechnic.

Jim Zaharias:
Thanks.

Ted Simons:
Speaking in general terms and you can speak for yourself and the organization and group as well. But in general, the '09 budget, your thoughts.

Jim Zaharias:
The bill, they almost don't have an option because education consumes a large part and much is protected. Having said that, those who value education and see it as critical to the infrastructure of our state wish that we could have got a hold of this earlier and been a little more targeted in the cuts and planned the two years together and looked at this for the longer term. It's important that the cuts we take this year and next are thoughtful and leaves us in a strong position to grow out of this difficult time.

Ted Simons:
Does it seem to you that these cuts were thoughtful enough?

Jim Zaharias:
Well, I -- speaking from a legislative point of view, I don't think there was a lot of choice because that's where so much of the money is. The problem that some of us have who are speaking about the investment side the education, seeing that it's critical to the growth of the state, simply believe that we need to look at stuff other than cutting. As we look at all the options, we need to look at cuts, certainly, and significantly, but also enhancements to the revenue and whether fixes are short term or long term. We need to look at debt financing, that's all part of the solution. Whether that is this year or next year, it's no longer this year.

Ted Simons:
Right.

Jim Zaharias:
It will be for next year, we want that process to include all of those things as we look to solving this difficult challenge.

Ted Simons:
We get a lot of email and a lot of people, when we talk about education, a number of questions are circled around the idea that we're ranked 49th per pupil in spending. Why is Arizona not 39th, 29th or 19th?

Jim Zaharias:
The shorter answer is we don't spend enough money on education in the maintenance and operation budget. We do spend money on the capitol part and because we're building facilities for new children. But we have to have more will to spend the money in education on a per pupil basis and that's not yet occurred in Arizona.

Ted Simons:
As far as tax cuts, though, we have people -- and I want to ask you this question because it seems to apply that tax cuts, getting folks out here, the economic climate, improving that, that those are taking precedence over education spending. Give me your dynamic on that. Are tax cuts more important than spending money on schools?

Jim Zaharias:
No, if you look at the critical infrastructure of a state you have both, you have to have a business climate with a low tax structure but in addition, in order to generate more money from taxation but in addition to have to have a quality public education and university system. They are critical when employers come to this valley and look at this state; they look at that as one of the top variables. It has to be both if we're to be a vital state.

Ted Simons:
Do you think lawmakers are getting that message? Do lawmakers do you think understand the concept of spending $2 to get back three at a later date?

>> I think many do and history has proven that. Since proposition 301 and things have fallen, there's been an investment in education. We've hit a difficult economic downturn and part of that is our tax policy, it's not stable and is too cyclical and we're subject to downturns and education being a large part has to be part of the reduction because there's no option.

Ted Simons:
Talk about diversifying the economy. We're hearing more about that. This. Even the tax structure needs to be reformed, a lot of people say. Everybody says we've got to diversify and -- what do we do?

Jim Zaharias:
We have to look at, what we call stem, science, engineering, mathematic, that produce universities -- we think it's important to invest in our universities so we can incubate companies and develop a labor force to staff those companies that are high wage and high skilled people and diversified so we're not subject simply to construction cycles.

Ted Simons:
Is that something that has to wait until the economy turns around? Those investments are taking a back seat to cutting and cutting.

Jim Zaharias:
The challenge is to be careful about cutting back too far. We have to leave what I call seed corn embedded in our institutions so we can grow them back. If we cut too far, I think bodes great danger as a state and leaves us in a very bad position to grow out of this.

Ted Simons:
ASU president Michael Crow says it can send ASU back 20 some odd years in terms of growth in terms of growth and being viable and competitive on a global stage.

Jim Zaharias:
From a university standpoint, particularly, I think we've been able to -- we've been trying to build great universities. They are taking severe cuts. It's going to be harmful. The question is how do we grow out of this? We have to leave in place the critical infrastructure so we can build upon that. That's why GPL would say "we believe we have to protect that. We have to protect the kernel of that, the core of that so we can grow out of it. We think these difficult times should perceive as temporary and not permanent." Things we do in terms of cuts and revenue enhancements, we need to build a bridge where economy becomes stronger and revenue greater so we can continue the pattern we've started.

Ted Simons:
Some lawmakers say that things like debt financing, all that does is push things further down the road. It needs to be cut now. The concept of debt financing and things are gimmicks.

Jim Zaharias:
No, we believe as business people, speaking from the GPL's point of view, that debt financing is a critical part of long-term asset financing. If something is lasting 30, 40, 50 years, we think that's a wise policy as we try to manage the revenue in our state.

Ted Simons:
As a long-time teacher, as you see the education climate in Arizona, you've been around the block and you have history and experience, have we seen education this vulnerable in the past?

Jim Zaharias:
Yes. I have. But I'm old. I've been through three cycles like this and there's difficult times and because education is the largest part of the state budget, k-12, and universities are a -- and universities are a critical part, and not protected they become subject to more cutting. So either you raise revenue or you take the cuts and where they're not voter protected or insured by formulas. This is the most difficult that I've seen in my 44-year career in terms of impact and these institutions are more critical to our state then ever. If we do not compete with a powerful education system, if we do not produce and compete well, we will not have the economic vitality we need as a state. The greatest asset we have is our human talent and that has to be developed and nurtured.

Ted Simons:
All right. Very good. Thank you for joining us on the program. Great discussion.

Jim Zaharias:
Thank you.