Higher Education Funding

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Incoming Chairman of the Arizona Board of Regents Fred DuVal talks about his priorities which include a one-year tuition freeze and predictable levels of state funding at Arizona’s public universities.

Ted Simons: The Arizona Board of Regents will have a new chairman as of tomorrow. Regent Fred Duval will take charge. The board governs Arizona's three state universities. Duval's goals are centered on making higher education more accessible and affordable. Joining us now is incoming board of regents chair, Fred DuVal. Always a pleasure.

Fred DuVal: Thank you, Ted.

Ted Simons: Let's talk about priorities and agendas here and we go to the accessibility and affordability. And sounds like your top priority is find something predictable to fund the thing.

Fred DuVal: There are two issues in running the business side of higher education. There's two things, the first is the sufficiency of the revenue between the tuition and state investment and the second is predictability where you're running an enterprise where your costs are faculty in long-term contracts you have to make sense that you can make long-term commitments and the massive cuts that have come about because of the recession have made it difficult. Bipartisan, long-term buy-in that is predictable and we can count on is a priority.

Ted Simons: How long along the line are you?

Fred DuVal: We're meeting with legislators and everyone in open minded there's a understanding of the need and a lack of cash.

Ted Simons: As far as your agenda, I notice, you're calling for no tuition hike in the 2012-2013 school year. Is that viable?

Fred DuVal: I hope so, the tuition hikes over the last few years have been among the highest. We were a bargain for a long time. Our enrollment growth demonstrates there are still students coming at the higher tuition levels but it's becoming an unsustainable level of growth. Our proposition to the legislation is this. We have gone through a recession, the economist say we're starting to see some updates, it's not huge, but measurable. There's new money to invest and we helped to pass prop 100 on the basis for support of to education. Put some money back against the 490 million cuts to education and in change exchange, we'll draw zero on tuition increases and give the family of Arizona a break.
Ted Simons: That sounds reason A. but is that viable? Give it back, is that something that anyone down there wants to hear?

Fred DuVal: They have tough choices to make but they hear from parents who are paying the tuition raises and we want to give them the victory of having the first zero tuition increase in Arizona history.

Ted Simons: Another agenda items is to model funding on performance and productivity and these things. Tell us about that.

Fred DuVal: Sure. Currently the state invests in enrollment. Input, the bigger we are the more money we get from the state. A freshman is as valuable as a senior, it measures growth and size rather than an output. and our proposition is different. Treat us, pay for us, invest in us invest in us, productivity basis. We want to produce so many degrees and nurses and teachers, what does the workforce needs of the state of Arizona and incent us to meet those needs by investing in the output sides rather than the input sides of institutions.

Ted Simons: I can see community college transfer rates and credit hour efficiencies, those things, but the ideas of the contribution to the needs of the state. How do you quantify that?

Fred DuVal: You tweak it based on what's happening this the state and knowing that certain discipline, healthcare and bioscience and aeronautics, things that are drivers the state's economy, let's make sure we're producing the degrees we need to feed the strategic assets we have in the economic base first.

Ted Simons: I think you mentioned this would give the state the biggest bang for the buck. We've talked about funding and how to get the most out of the what we've got. How do we make sure we'll we're doing this, students are getting a good education?

Fred DuVal: It's a very important question. 80% of our total costs are in faculty. The quality proposition in higher education is the quality of the faculty and as we've gone through these cut, we've remanaged the institutions and redesigned the relationship between colleges, and done everything we can to change the dynamics of our cost and operational components to protect the quality, in the form of keeping good faculty.

Ted Simons: And you're confident that can be done?

Fred DuVal: We've taken $490 million over the last four years on a per student basis, the biggest cuts in the United States, it's been challenging and we're hopeful that the Arizona economy and legislature will stabilize the platform and allow us to move forward.

Ted Simons: Financial aid reform is a big idea. Looks like we're 49th in the country in terms of financial aid and conversely, the universities are doing everything they can to dole out money from the institution. It seems like things are imbalanced-- what do you see.

Fred DuVal: We're a poor state, a history of lower participation. In some of our economic and ethnic groups and we need to make sure that every gifted student who can perform at a university level can come and graduate and change the dynamics and the futures of their families. That requires financial aid. Arizona has not had a state-funded financial aid. We've done it on university dollars and as the economy requires we're going go to the legislature and say, look, it's important we not lose sight of the egalitarian basis, that talent is the most important thing we're investing in.

Ted Simons: Something I've heard from regents is the enterprise driven approach. It sounds similar to a performance model in terms of revenue. What is -- what is enterprise outcome driven approach?

Fred DuVal: Sure, it's an important part. We have three universities who historically each tried to resemble the other. One gets a medical school, the other gets one. There are some instances where the more nurses, the better, the more teaching degrees, the better. But we don't necessarily need every program at every school. We need to have some centralized governance that allocates assignments to different schools to do different things to keep the costs down. Number one. Number two, there's things we do as a system, which if we do it as a system, we can save costs.

Ted Simons: Sounds like an integrated system across the three universities?

Fred DuVal: I would draw a distinction. Integrated on a operational basis so as to achieve efficiencies where centralized operations accomplish that. But differentiated admissions with the universities protecting their brands and different degree outputs.

Ted Simons: We've talked about the legislature and I want to get back to that, but are the universities working together now as best they could?

Fred DuVal: Yes, better than ever before and I've been around awhile and had regents assignment in prior jobs and they're working together well. This conversation about different assignments between the three universities is brand new but going well. It is thrust upon us by the economic reality.

Ted Simons: I was going to say it's like the universities are in the same foxhole and you have to watch out. With the last question, we've talked about the legislature and the tuition freeze, it's almost dependent on the legislature giving something back here. With that in mind, that's the way it seems at least. With that in mind, do you sense an adversarial relationship between lawmakers and higher education in Arizona? I do. I get that sense, enough to where that's going to change, doesn't it?

Fred DuVal: We're working hard to work collaboratively. The interesting part, it leads you to a different conversation instead of how much money we're demanding. We're saying let's have a conversation. You're the policy makers, the fiduciary, what do you want the universities to produce for the future of the state of Arizona and to whom do you want to make this available? Let's decide the public policy question and turn the knobs in a fashion where we invest on a mutually agreed --

Ted Simons: Has that been expressed as well it could have been in the last couple years?

Fred DuVal: We're trying to have that conversation, we've gotten cross wise a time or two. We're a expensive piece of the state budget, we get that. But we can't, in a knowledge-based global based economy, we can't allow the universities to fail. And all parties and ideologists agree with that.

Ted Simons: Good to see you.

Fred DuVal: Thank you very much.

Fred DuVal: Chairman of the Arizona Board of Regents;

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