University Funding

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Governor Doug Ducey has proposed cutting nearly $78 million from university budgets in Arizona. Arizona Board of Regents President Eileen Klein will discuss the possible impact of that possible cut.

Ted Simons: Coming up next on "Arizona Horizon," the Board of Regents responds to the governor's proposed cuts to University budgets. And find out about a new center geared toward mimicking nature to help improve technology. Those stories next on "Arizona Horizon."

Video: "Arizona Horizon" is made possible by contributions from the Friends of Eight, members of your Arizona PBS station. Thank you.

Ted Simons: Good evening and welcome to "Arizona Horizon," I'm Ted Simons. U.S. Supreme Court justices today heard arguments in a challenge to Arizona's Independent Redistricting Commission, and its drawing of boundaries for U.S. House seats. The issue is whether or not voters can take power the U.S. Constitution gives to state legislatures to draw those boundaries. The suit was brought by Arizona Republicans not happy with the maps drawn by the state's Independent Redistricting Commission.

Andy Biggs: As our attorney argued very well, and as we've been pleading for many years now, the elections clause of the United States Constitution delegates that authority to the state legislatures. We believe that's our prerogative, and that's where we need to be.

Andy Tobin: Clearly no one could argue that these congressional lines drawn weren't partisan. And that's what spiked the concern about public impression about what was going on at the Independent Redistricting Commission.

Kathay Feng: We are pleased that several of the Supreme Court justices expressed concern about the problem of political gerrymandering and wanted to respect the will of the people. We do think that this issue of politicians choosing the voters rather than voters choosing the politicians is something that will impact on just about every single state, if the Supreme Court decides to rule with the Arizona Legislature.

Ted Simons: The justices today asked tough questions to lawyers on both sides of the case. An opinion from the court is likely to be announced sometime this summer.

Ted Simons: Arizona's three Universities are expected to be hit hard by Governor Ducey's plan to cut $78 million from higher education. Here to talk about the impacts are the Arizona Board of Regents President Eileen Klein. Thanks for joining us.

Eileen Klein: Thank you.

Ted Simons: 75, 78, it adds up there, like 58% of the total budget just on Universities, your thoughts.

Eileen Klein: Right. It's not just the cuts on the table now but $77 million in Governor Ducey's proposed budget, it's everything before today. It was over $400 million cuts during the Great Depression, $200 million in payments still owed, building renewal formula moneys that have not been provided. It isn't so much, could we manage 77 million, that is tough enough. It's everything it comes on top of.

Ted Simons: I was going to say this is an issue now, but Arizona's been cutting for years. It's an enough, and then hit the wall here? We have been going through this every budget.

Eileen Klein: It does seem like here we go again. The revenues increased a little bit for the state and the Universities did regain ground, which was helpful. Universities are one of the last unprotected areas of the state budget. It makes them especially susceptible to being cut. It seems now they are the go-to place for balancing the state's budget. If we want to have a thriving University system, it's not going to be affordable for our families in the form of tuition.

Ted Simons: A couple things we talked with you about and previous chairs, as well. The idea of performance based funding students, where does that stand and with this budget proposal?

Eileen Klein: It's something Universities would like to move in the direction of. We would like to move away from inputbased funding. Our degree production is up by 16%. Our research capacity continues to grow and we want it to. But how do we get funded at the levels that we need to be successful.

Ted Simons: Why $40 million cut to ASU, 21 to the U. of A., 13 to NAU. What's going on there?

Eileen Klein: Certainly the Presidents have differing opinions about how the cuts should be applied. The Governor's basis put it on an FTE basis. Certainly the largest University in the state, they receive larger cuts. It would be better to give the cuts in a lump sum fashion to the universtiies, the university president can sit down with me and find out how to allocate the cuts so that each institution can thrive. To the extent possible with the available state resources and, most importantly, that no one institution is disproportionately hurt.

Ted Simons: I heard talk that some programs at the U. of A. were being protected. Is that valid?

Eileen Klein: The way it was applied it did exclude certain programs that U. of A. funded. I don't want to spend time having the state debate the right methodology for cutting. The point is people need to get engaged and help minimize the cuts to the public University system. We won't have the growing economy that we need, the state only provides 25% of the operating budget. People think these funds are important to support Universities, they are really to support students and student programming.

Ted Simons: And I know tuition hikes are off the table.

Eileen Klein: The board has said overall if they want to limit any tuition increases for instate students. But we have to contemplate what does it mean in terms of fees mean for out of state students we have to be very careful with out pricing. Higher education today is more competitive than ever. And policymakers can not just assume that families can pick up the tab.
Ted Simons- Is there as far as the universities handling these cuts. What happens if this goes through as is. What do we see?
Eileen Klein: Look at the downturn. There were several hundred programs that were consolidated. Some of them just ended. So we are going to have to go through that same analysis to figure out what happens when we have 77 million dollars less and truthfully I hope we are going to stay under 77 million there has been a lot of talk at the senate the cuts could even be higher. And that concerns me because ultimately there will be limits on what we can provide to students if we do not have adequate state support.

Ted Simons: There seems to be a disconnect between the business community along with the education community and some folks in the legislature who voted to represent Arizonans. You're saying this might be a low level, a base level. What's happening there?

Eileen Klein: Over time, We've seen an erosion of public higher education support. Medicaid, K-12 has maintained its position relatively -- people are concerned about the amount of funding there, they have really held their ground. But over time this has all come at the expense of public higher education. That's the concern, really. At what point do we draw the line and say we have to find a different way. There needs to be a floor, a way to guarantee a certain level of state support, really to be in adherence with the Constitution.

Ted Simons: Some quotes again, Michael Crow of ASU came out pretty strong in his opinion of this. Not everyone agrees, just in terms of thought processes here. The Governor says that the government is going to have to live within its means. This is coming from the governor's office, going to have to live within its means. Does he have a point?

Eileen Klein: He certainly has a point and he has a terrific challenge ahead trying to right the state's ship. However, it can't come at the expense of other elements of the state budget that really help the state's economy grow. Having more graduates, more research capacity, those things really helped to create a thriving economy. That's what Universities are there to help do. It's important that we not, in the effort to balance the budget, shortchange our future by shortchanging University funding.

Ted Simons: Another quote from the governors office, Arizonans have to tighten their belt, they rightly expect the government to do the same thing.

Eileen Klein: Universities are living within their means the way families are doing it, as well. Our concern that is we cannot simply see the state's budget balance and have that result in a cost shift to families. Our students took on more tuition increases than any state in the nation. There has to be a limit to that and they can't be the ones responsible for helping the state balance its budget.

Ted Simons: The Governor's office also says it's wrong if special interests are not upset. Sounds like some University folks are. Is he just basically saying, I've got to do what I've got to do?

Eileen Klein: Yes, and every governor has that responsibility. They are the one that has to account to the people how the entire state's being run and that's important. Certainly Governor Ducey does value higher education. I want to be clear about that. The challenge is mathematically what to do when there's not enough revenue. Universities shouldn't pay a disproportionate share. They shouldn't be forced to take on a bigger part of the budget balancing solution. Universities are willing to make efficiencies and they do. They can't be the de facto source to balance the state's budget.

Ted Simons: Do you question -- do you question -- the Governor's commitment to higher education?

Eileen Klein: I do not. I do believe Governor Ducey values public higher education. He's signaled many times he's willing to talk with us about the longer term reforms we'd like to see for the State's University system. Regulatory relief. We really want to talk about the operating model and design a benefit structure that works for us for the long term that's affordable. He's signaled a willingness to talk to us about all those things. Right now he has a first job he must do, which is try to get the budget back in balance. We're asking for some temperance in how that's being done.

Ted Simons: Does the whole amount signal that higher education is a low priority in Arizona?
Eileen Klein: What it signals to me is that our resources are not protected like other resources inside the state general fund. Over the long haul we need to decide how we are going to shore up public higher education funding. What will that look like? What will the guarantees be? So that Universities know what resources are coming from the state so they can plan against those. People that live in the state know that dollars are waiting for them so children could see higher education.

Ted Simons: That is what a lot of folks like to see happen. That's what you qwould like to see happen. That's not happening. It doesn't sound like higher education is the most important thing out there.

Eileen Klein: I think it's difficult to assume the state's priorities, particularly in a downturn and an era of scarcity. Only certain things can be moved in the state's budget. We need to turn around the economy for the long term. It's so important not to shortchange University funding. Universities are essential to provide growth for the economy. They will work for employers and create the new jobs. Universities need to research and transfer those technologies into the marketplace. It's short-sighted to in the short run remove the resources for the Universities. We need to make sure there is a level that we can sustain in terms of University funding for Universities can be successful.

Ted Simons: Critics say that's fine and dandy, let's go ahead and raise taxes. Since 2007, 2008, all the way back there, the only way that the state can afford these kinds of things. Is it going to reach that point? Are lawmakers ready to reach that point?

Eileen Klein: Policymakers have made it sure the votes are not there to raise revenues in order to balance the budget. Other cuts have to be considered. Universities are willing to do their share, they just can't be the solution to the state's ongoing budget challenges.

Ted Simons: Thank you so much.

Eileen Klein: Thank you.

Eileen Klein:President, Arizona Board of Regents;

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