Prop 100 could mitigate budget woes, Haeger says

Haeger details plans for
cut to salary budget

Northern Arizona University will be able to implement a 2.75 percent cut to its state salary budget by using one-time funds from the voluntary faculty retirement program.

NAU President John Haeger said the university can meet a directive from the Arizona Board of Regents to cut the salary budget by using some of the nearly $4.6 million saved in salary and employee-related expenses from the 43 tenured faculty members who will be retiring this fiscal year.The president has said that NAU tentatively does not anticipate furloughs for FY11. If the proposed 1-cent sales tax increase fails on the May 18 ballot, Haeger said more drastic measures may be needed.

He will present his plan to the regents in May.

A proposed temporary 1-cent sales tax increase will help Northern Arizona University weather an ongoing budget storm, but if Arizona voters turn it down, it could deal a devastating blow to both K-12 and the universities, NAU President John Haeger predicted Tuesday.

During a campuswide forum with faculty, staff and students at the High Country Conference Center, Haeger presented three projected university budget scenarios based on the outcome of the statewide sales tax vote. He urged the audience of about 200 to get out and vote on May 18 and to encourage others as well.

But he cautioned that even if the sales tax passes, it doesn’t solve the state’s budget problem. “There still could be additional cuts,” he said, explaining that state funding is not likely to return to previous levels.

In a best case budget scenario, university analysts assume the passage of Proposition 100, and that state appropriations are maintained through FY12 while the trend in increasing student enrollment continues.

If this scenario comes to light, Haeger said NAU “will be fine in FY10” and even into FY11. However, he said FY12 remains a question mark. “We are in a sense doing educated guesses about what will happen, but I can’t tell you that any of this will work as we hope it does.”

In Haeger’s worst case scenario, Prop 100 fails, state appropriations to the university’s general operating fund are reduced by as much as 10 percent and the university sees limited enrollment growth. Under these circumstances, Haeger said faculty and staff furloughs would again be a possibility.

“We could be staring at a $27 million problem,” he said. “We have to find a way to actually deal with it.”

Haeger said the university is looking at systemic changes at the university that include not hiring tenure or tenure-track positions next fall to allow for a careful evaluation of curriculum. “We want to look at curriculum as a whole before we commit to additional positions that require a long-term commitment,” he said. He also would like to achieve an 85 percent student retention rate.

He reminded attendees that NAU has successfully mitigated budget challenges in the past, even as recently as FY10, when the university’s general fund was reduced by $7 million due to cuts in state appropriations. Through midyear tuition changes and surcharges, the university brought in an additional $12 million to cover the shortfall, which allowed NAU to mitigate furloughs, approve critical hires and build reserves.

But he acknowledged there is a limit to how much tuition can increase. “We believe predictability in this environment is more important than anything else,” he said.

Some of the strategies he said are being considered in this next round of budget planning include using reserves for immediate, one-time reductions, dipping into local funds for university use and considering reductions in financial aid.

He emphasized that, above all, the university must continue moving forward to fulfill its mission, goals and priorities. “This is a university that is still on the move,” he said “We can’t just all of a sudden stop dead because then we’ll begin to lose students and faculty. It will cascade very fast.”

Haeger also took the opportunity during the forum to celebrate “an enormous number of good things happening at this university.” He cited major accomplishments in NAU’s research agenda, the highest ever GPA among NAU student-athletes last semester and state-of-the-art upgrades to campus buildings and facilities.

David Bousquet, vice president for Enrollment Management and Student Affairs, also urged faculty and staff to “be mindful that the difficulties we face are the same difficulties shared by colleges and universities across the country.”

Michael Stevenson, dean of the College of Social and Behavioral Sciences, asked the president how individual faculty members can participate in a constructive way to help get Prop 100 passed, considering laws that restrict state employees from lobbying. The president appealed to those interested in being involved to become part of Solutions Through Higher Education, a public education effort aimed at raising awareness of the critical role of higher education. He also reiterated his call to get out and vote on May 18.