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State finally pays schools

More than 20 days overdue, the state of Arizona has fulfilled its monthly financial obligation to all three public universities, education officials said Thursday.


The $75 million owed to the schools since December was dispersed by the Arizona treasury at the end of the business day Wednesday, and January's payment is expected within a few days, said Katie Paquet, associate executive director of public affairs and external relations for the Arizona Board of Regents.

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Johnny Cruz, UA's director of communications, confirmed that the Budget Office received its roughly $30 million share from the state's General Fund, though officials aren't sure when to expect January's check.


The UA relied upon an uspecified amount of emergency reserves to maintain operations during the delay, which was the third in the last year. Cruz said this delay, announced in December, came as a surprise because previous ones were part of scheduled negotiations between Governor Jan Brewer and the Arizona Board of Regents.


""The state is in really incredibly dire times,"" said Christine Thompson, of the Arizona Board of Regents' government affairs office.


The Arizona Board of Regents has publicly supported Gov. Brewer's attempts to balance the budget without cuts to education.


Regents President Ernest Calderón wrote in an e-mail Thursday: ""We are relieved and thankful that the December state general fund payment … has been fulfilled. Significant delays put the universities in peril and encroach on their ability to operate as they currently do."" 


State dollars historically make up about one third of the public funding for Arizona's universities.


The rest of the expenses are paid through tuition, federal grants and private donations.


The state has cut $231.5 million from higher education since the beginning of 2009.


In a Jan. 7 letter to the governor, the Arizona Board of Regents expressed concern that continued delays and cuts could jeopardize the state's eligibility to receive stimulus dollars from the American Recovery and Reinvestment Act.


""What we're doing to the universities is criminal,"" said Rep. Phil Lopes D-Tucson. ""It's the legislature's responsibility to make sure there are adequate funds so that payments to universities are not interrupted. It's our fault.""


Neither the UA nor the Arizona Board of Regents would comment Thursday on whether legal action would be considered if delays continue.


Arizona law does not specify the amount the state must contribute, but does mandate that public education remain ""as nearly free as possible.""


""Anything the legislature does is legal until somebody sues them … if nobody sues us, guess what — it's legal,"" Lopes said. 


Paquet warned that the state is only obligated to keep paying the scheduled amounts through 2011 and that tuition and programming could be severely affected without further protection to education funding.


A review of the regents; ""All Funds Budget"" for fiscal year 2010 confirmed that the universities are shifting the financial burden to students. The budget reflects percentage increases of up to 22 percent for out-of-state graduate students at the UA.


Base tuition for in-state undergraduate students at the UA has nearly doubled since 2004, according to university reports, and the Arizona Board of Regents will meet in March to consider further tuition increases. 


The regents also expressed concern that delays from the state could prevent universities from meeting contract payments for construction and programming, which could affect the schools' credit ratings.


A January 2010 Moody's Investors Service report revealed that Arizona's university credit scores have not yet been penalized.


""Higher education is increasingly being perceived as a private benefit rather than a public good,"" said Jenny Lee, UA College of Education professor and director of the Center for the Study of Higher Education.


Lee said the state's payment delays could have a domino effect on colleges and departments and how programs are funded in the long term. ""Our current state leadership does not prioritize higher education,"" Lee wrote in an e-mail Thursday. ""They are short-sighted in seeing the role of colleges and universities in rebuilding the state economy.""


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