Northern Arizona University President John Haeger describes the state budget released Monday by Gov. Jan Brewer as a “responsible, thoughtful and workable solution” to Arizona’s budget crisis that takes a forward-thinking approach to economic recovery.

While the state Legislature must still approve a final budget bill and disagreement persists over such issues as the governor’s proposed temporary tax increase, Haeger said, “The governor’s budget positions Arizona to rebound as quickly as possible without long-term devastating effects.” The NAU president also has written a letter of support to Brewer praising her efforts to protect the universities and other critical state services.

The governor’s budget, which addresses a $4 billion projected budget shortfall in FY10, calls for a reduction of $42.9 million to the university system for the coming fiscal year. For NAU, this plan would reduce the FY10 budget by about another $6.5 million.

However, the budget reductions will be mitigated by federal stimulus funding that the governor plans to allocate to the universities. The universities do not yet know the timing of the phased allocation of federal stimulus monies.

Unlike the budget put forth earlier by the legislative leadership, the governor’s budget does not sweep fund balances that are used for university operations and emergencies. Her budget also preserves the state Stimulus Plan for Economic and Educational Development, or SPEED, which provides funding for much-needed building renewal and capital projects at the three universities.

Other highlights of the governor’s budget include:

  • state spending reductions of about $1 billion
  • a temporary state sales tax increase of one percentage point for 36 months, which is expected to generate about $1 billion per year
  • a provision that a referendum go to the voters in November 2010 that would require re-approval of any voter-approved ballot measure involving expenditure of state revenues passed between 1998 and 2004
  • a phased repeal of the state equalization property tax, with permanent repeal occurring proportionately over a three-year period beginning in FY10

“Arizona’s growing fiscal crisis stands to inflict a devastating impact on our state,” the governor wrote in her budget transmittal letter. “I will not sign a budget that incorporates unrealistic spending cuts, excessive gimmicks or phony revenue projections. I will not sign a budget that, in the interest of expediency, dims Arizona’s future.”

Arizona Board of Regents President Fred Boice commended the governor’s approach. “This well-crafted budget protects our state’s core services and is fiscally responsible in utilizing federal stimulus monies, making prudent cuts and seeking out alternative revenue sources—building a better Arizona now and in the future.”

ABOR Vice President Ernest Calderón echoed Boice’s sentiment, saying, “Governor Brewer has been true to her word of support for higher education but, in particular, her support of Northern Arizona University…for which I am grateful.”

The current fiscal year ends June 30, leaving 26 days to resolve the FY10 budget.

As the university continues to work with the governor and legislative leaders on the budget, Haeger said, “One thing is certain, Northern Arizona University will have more students on the Flagstaff campus than ever. We will be educating increasing numbers of students through our statewide sites, and we stand ready to help this state climb out of the economic downturn pending a reasonable solution to our fiscal crisis.”