Move would restrict hiring and cut employee benefits, including retirement plans

PHOENIX ÷ The UA and Arizona Health Sciences Center would lose $35.2 million more in state funding between this academic year and next under a budget-balancing proposal state lawmakers released yesterday.

Under the proposal, the university and the AHSC would lose $15.8 million in state funding by July and an additional $19.4 million next year as legislators try to fill what is now projected to be a $1.3 billion gap between state revenues and expenditures.

Senate Appropriations Committee chairman Robert Burns (R-Sun City) said the universities and other agencies funded partially on state dollars can cope with cuts by moving money around, using federal dollars and other revenue sources.

But more cuts, especially of the magnitude proposed yesterday, would mean trouble, said UA lobbyist Greg Fahey.

The latest cuts pile on top of the $45 million UA has lost in state funding during the past two years.

"This faculty will leave. They will despair ... This is a very significant amount of further damage," Fahey said.

The timing would be problematic if UA has to face a big cut by July 1, Fahey said. It would give the UA hardly any time to find places to cut and employees to fire, Fahey said.

"I don't know how we do it, or how other agencies do it. You can't just throw people out without giving notice, no matter how hard-hearted you are," he said.

Lawmakers in the Joint Legislative Budget Committee proposed reducing the amount of money UA receives to hire instructors and staff to serve a growing undergraduate population by cutting $1.5 million in funding allotted for enrollment growth.

The committee also proposed that the state stop subsidizing students who are long undecided about their majors or stock up on majors or double. Under the JLBC proposal the university should not get money to hire additional instructors to provide for students who haven't graduated by the time they've earned 140 units.

More than 600 UA students ÷ mostly undergraduates ÷ are taking too long to graduate, picking up 140 units or more when only 120 are needed, the JLBS said.

The JLBC also included in their proposals cuts to employee benefit funds. Currently, the University and employees each contribute 7 percent to employee retirement plans, but under the JLBC proposal the state would only give the UA enough money to contribute 5.7 percent to employee benefits.

However, employees won't feel the effect of the cut, the university will, Fahey said. If the state stops paying the full tab on retirement, the UA will have to pick up the rest of the bill whether it can afford to or not, Fahey said.

"You can't go to the faculty and say, unlike at every other school, you are going to pay seven and a half percent or eight percent. We're going to have to eat it. "

The cuts the JLBC is proposing this year would automatically be in effect for the next academic year, and possibly years following.

"It's tough, and it's going to be painful," said Sen. Jorge Luis Garcia (D-Tucson), whose district includes the UA campus.

The Republican-held legislature and Democratic Gov. Janet Napolitano are still debating whether to cut services or borrow more money. It may take lawmakers until late spring to reach an agreement on a budget for this year and the fiscal year beginning in July.

Legislators still must finalize a budget before it can head to the governor for her consideration.

The JLBC proposal is just a starting point that "no one's happy with" yet, said House Speaker Jake Flake (R-Snowflake).

"This is a work in progress," he said.

Unlike previous Gov. Jane Dee Hull (R), Napolitano has extended her pledge to protect education from budget cuts from K÷12 to the universities.

Napolitano's budget does not include cuts to the university for the remainder of this academic year, but does propose UA cuts of $75,900 for 2003-2004.

Republican lawmakers said Napolitano's proposal is based on an unrealistically optimistic projection of growth in state revenues, coupled with a lot of borrowing.

Napolitano has said that a natural disaster or prolonged war could throw her proposal off, forcing her to draft a new budget, which could mean more cuts for UA.

Likins did not return phone calls yesterday.