Thursday September 27, 2001

Estimated $13.8 mill cut probably not the last, officials say

TEMPE - UA staff and faculty not tenured or on contract may be vulnerable for job cuts as soon as next semester as a result of cuts in state funding being made by the Arizona Legislature, UA officials said at yesterday's Arizona Board of Regents meeting.

Shortages in state tax revenues - $90 million last fiscal year, projected to be $500 million by April under current conditions - have left the Legislature looking toward public universities as one of the few areas where they are legally permitted to cut costs.

This shortfall would force the University of Arizona to cut its budget by approximately $13.8 million, a number that has yet to be updated since the Sept. 11 terrorist attacks on the United States.

UA President Peter Likins and members of his cabinet have determined that staff and faculty positions are among few places where cuts can be made.

"The people most dramatically damaged will be our employees. (Cutting jobs) is something that we desperately want to avoid, but it seems inevitable." -UA President Peter Likins

"The people most dramatically damaged will be our employees," Likins said. "(Cutting jobs) is something that we desperately want to avoid, but it seems inevitable."

Eighty-five percent of the state funding UA receives is spent on services and personnel, namely payroll, Likins said. The other 15 percent is divided among operations, utilities and library services.

Though Likins does expect to make cuts in library funding, he said he cannot cut utilities or operations budgets any more than they have already been cut, due to past cuts that were never reversed.

"What we have from a previous time are operating budgets that are cut to the core," Likins said.

And construction projects cannot be stopped.

"There's no way that any of us can imagine imposing budget cuts of this magnitude, or greater, without hurting people," Likins said. "We'll pull back on any capital equipment that we can pull back on legally, but unfortunately, most major projects are either already under construction with contracts signed, or they're in planning stages in which little is being currently expended. So we don't see any project that we can pull back from to secure a significant part of the money."

The only area left to take money from is personnel, Likins said, adding that the UA employees in the most danger of losing their jobs are those who are not tenured or on contract.

Likins said most well-paid UA employees have one-year or multiple year contracts, so a disproportionate burden must fall on those people who do not have contractual obligations."

In recent years, the UA has left full-time positions open, hiring part-time faculty, staff and adjuct faculty to fill full-time positions, Likins said. These employees, who may not have contracts for spring semester, will be the first to be cut, Likins said.

Problems stemming from these cuts could create a domino effect.

The loss of staff and faculty would translate into fewer sections of classes being offered and overcrowded classes, Likins said in a letter to the Gov. Jane Dee Hull.

The loss of UA jobs would ripple through Tucson's economy, causing job loss elsewhere, and the Integrated Learning Center may not open next semester as expected due to lack of personnel to staff it, Likins said.

While 60 percent of the state budget is protected and cannot be changed, Arizona public universities lie in the 40 percent of the budget that the Legislature is expected to cut by 4 percent.

"The bottom line in all this is that yes, it's going to be very hard on universities," Hull said at the meeting.

Hull also said that these reductions in state funding may not be the last.

"It's very difficult to say to you 'I won't be back and ask for more cuts,'" she said.

Employment growth in Arizona is down from 5 percent to 1 percent, and revenues from sales and income taxes have dropped.

There are five options for the Arizona Legislature in dealing with what Hull is calling a national recession. Tax increases, "accounting gimmicks," using the "Rainy Day Fund," budget cuts, and selling revenue bonds, said Tom Betlach, director of Strategic Planning for the governor.

"At this point, raising taxes, raising tuition, raising fees is not on the table," Hull said. Neither are "accounting gimmicks." Hull said she is hesitant but will consider dipping into the state's "Rainy Day Fund."

"Fiscally, the year 2003 is going to be much, much, much tougher," Hull said.

Floating revenue bonds to generate $325 million is an option, but bonds will not provide enough money fill the revenue void, which may expand due to pending lawsuits against the state.