The Arizona House and Senate appropriations committees are holding budget hearings for fiscal year ’09 as the Executive Branch and the Legislature negotiate over how to address the fiscal year ’08 shortfall.

President John Haeger was in Phoenix last week to meet with legislative leaders regarding the two budgets.

“The fiscal picture in Arizona has declined from its optimistic view a year ago,” Haeger said. “We have to formulate a strategy that will make critical investments where necessary and trim areas we can.”

The Legislature and Gov. Janet Napolitano have made proposals to address the FY08 shortfall and they have submitted their proposed budgets for FY09.

Napolitano’s ’09 proposal calls for an increase in all university budgets, including an additional $8 million for NAU, as well as proposes a mechanism to deal with critical university capital needs. The Legislature’s ’09 proposal recommends funding student enrollment growth only.

In the plans to balance the ’08 budget, Napolitano keeps the university budgets intact while a proposal by the chairmen of the House and Senate Appropriations committees suggests cutting university budgets by about $100 million, including $16 million from NAU. FY08 is more than halfway over, ending June 30.

During the meeting of the Arizona Board of Regents in Tucson last week, the members unanimously passed a resolution in support of the governor’s plan to balance the ’08 budget. “The governor has laid out measures in her budget presentations, including debt financing of school construction, which would prevent cuts in the universities’ budgets,” the resolution says. “We support measures which will help protect Arizona’s investment in the university system.”

Meantime, Haeger has addressed the university Cabinet, which comprises vice presidents and deans among others, to ask for fiscal restraint while moving forward with critical expenditures.