Gov. Janet Napolitano and the Arizona Legislature demonstrated their continued support for the state university system during a difficult budget process that resulted in an overall budget reduction but approval for the majority of the universities’ capital construction plans.

“Considering the size of Arizona’s budget deficit, the universities have received great support,” said NAU President John Haeger. “Although the budget includes trims to the universities, it does not include deep cuts that would impair our ability to provide a quality education to an increasing number of students. It allows us to continue our momentum.”

The budget for the next fiscal year, which begins Tuesday, includes a $50 million cut to the university system. The reduction comes after funding for student growth, which is critical to the universities’ ability to support new students and is especially helpful to NAU in its efforts to recruit and retain students.

The Arizona Board of Regents will apportion the cuts to the individual universities and approve the operating budgets soon. The regents also will approve the time frame for the capital construction plans, perhaps by mid-July.

NAU budget officials have been modeling various scenarios ranging from a $2 million cut to a $10 million cut.

Patricia Haeuser, vice president for Planning, Budget and Institutional Effectiveness, said with careful spending and strategic cuts, she believes NAU can thrive despite the budget reduction. She added that layoffs have not been part of any discussions.

The new budget includes a University Infrastructure Economic Stimulus component that authorizes state universities to borrow an additional $1 billion to finance construction projects.

The capital construction plan will help boost the state’s construction industry by allowing the regents to issue $1 billion in bonds for capital projects at the three state universities to be repaid by an expanded state lottery. The budget includes several changes to the lottery that will raise revenues by increasing its advertising, prizes and ways to purchase tickets. The lottery changes are expected to generate an extra $1.2 billion over the next decade to fund the university construction.

The stimulus plan will finance critical building maintenance at the universities, construction of much-needed new facilities and the completion of the Phoenix biomedical campus.

Passing a budget that addressed a nearly $2 billion deficit was a hard-fought affair, with the Senate voting 16-10 in favor of the plan early Thursday morning and the House voting 31-29 in favor Thursday night.