State’s delayed payment to NAU called surmountable for short term

President John Haeger says the state’s delayed December payment to Northern Arizona University is a difficult challenge but one that will not impose serious hardship on the institution in the short term.

At the same time, Haeger cautioned that prolonged delays in Arizona’s payments to NAU could have a profound impact on operations and university bond ratings.

“The state and Northern Arizona University are facing extraordinarily difficult budget times,” Haeger said, “but through careful spending and previous cuts, NAU will be able to meet all of its obligations, including payroll.”

Arizona requires that universities turn their tuition revenues over to the state every month, which the state later gives back to them along with a monthly state allocation. NAU and the other two state universities rolled over nearly half of their May payments and all of their June payments into the following fiscal year as a budget-balancing tool. Last month, the universities were told that December’s payment would be deferred to January.

Echoing a letter sent to Gov. Jan Brewer by Ernest Calderón, president of the Arizona Board of Regents, Haeger said NAU is not in a position to face long-term delays in state payments. “Our students expect the same high-quality educational experience they have always received, and we cannot jeopardize that,” Haeger said. “We also have obligations to faculty, staff and vendors that could be threatened if the current atmosphere continues.”

He added, however, that he “fully expects” the state to make future payments.

During her State of the State address on Monday afternoon, Brewer called for raising “additional revenue.”  In the past, Brewer has proposed a temporary sales tax increase.

“But as I have stated from the beginning,” she said, “the depth of the problem is so severe that we cannot solve it through cuts alone. The damage done to education and public safety would be far too great.”

Later in her speech, Brewer said, “The jobs of the future will demand an increasingly skilled workforce, and that starts with our schools and universities. I’d like to recognize the work to date by the regents and presidents of our universities and community colleges in response to my call for a new higher education model that promotes greater access, quality and affordability.”

In the past, both Haeger and Calderón have sent letters supporting Brewer’s budget proposals and higher education efforts.

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