A draft ruling from the US Department of Education could mean that $160 million in cuts to the UA and Arizona’s other state universities this fiscal year would be completely covered by federal stimulus dollars as a condition of accepting federal support, according to the Associated Press. Backfilling the university budget cuts would give the state access to an additional $800 million that could be used for any state education program.

However, leaders in Arizona’s higher education system caution that even if the draft rule is put into effect, tough decisions remain ahead for the UA.

“”My understanding is that the requirement in this draft guideline is that the state, if they accept the money, (must) use the stimulus money to bring, immediately in ’09, the level of funding back up to what it was at the higher of either ’08 or ’09,”” UA President Robert Shelton told the Daily Wildcat. “”I don’t think that that requires they eliminate our cuts.””

Republican legislative leaders told the AP Thursday that federal “”maintenance of effort”” guidelines for obtaining and using the stimulus money for education are now expected to require it be used first to backfill state budget cuts in the current fiscal year.

The development is a complication for legislators and Republican Gov. Jan Brewer as they struggle to keep the current budget in the black despite a new shortfall expected to reach $500 million. That’s despite the January approval of a plan to close a $1.6 billion gap in the then-$9.9 billion budget.

The shortfall in the budget for the fiscal year starting July 1 is expected to exceed $3 billion based on $11 billion of spending.

Brewer spokesman Paul Senseman said the governor “”views the stimulus funds as an opportunity to restore some needed university funding.””

“”Does it make even more challenging to balance the (2009) and (2010) budgets? Certainly, but that was a tremendous challenge that she inherited to begin with,”” Senseman said. “”Clearly it’s the governor’s goal to accept and utilize these funds to help our economy and address challenges in our state budget deficit.””

However, legislative leaders had hoped to save that money for use in balancing the next fiscal year’s budget and thought that was permissible.

Before, “”we thought it was (just) a goal,”” said Senate Appropriations Chairman Russell Pearce regarding use of the money to backfill this year’s cuts.

Despite the apparent good news for the university, Shelton reacted with caution, explaining that the federal money would only be available for a few years, while underlying state budget cuts were unlikely to be restored.

“”They’ve given us a permanent cut to our budget, and these stimulus dollars are one-time dollars, so even if you replace permanent dollars with one-time dollars, yes, for that year, you’re okay, but then you’re up the creek the next year. There still has to be a strategy to live off of a leaner budget,”” Shelton said. “”It would buy us some time, but we can’t be foolish and not make hard decisions.””

Fred Boice, chairman of the Arizona Board of Regents, agreed with Shelton’s assessment.

“”It’s very hard for people to understand; they cut you, and I’m just picking numbers, but they cut you $100 million, well they gave you $100 million, well, that makes you even, doesn’t it? Well, not quite,”” Boice said. “”But to John Q. Public, Joe Sixpack, you took away 100 and gave me 100 and I’m even. That’s part of the frustration with the stimulus.””

For Boice, long-term solutions to the problem of funding for universities will almost certainly include even higher tuition for students, even with the arrival of federal stimulus dollars.

“”Are we going to have to raise tuition? I think probably we will,”” Boice said. “”We have to build that base, or you’re going to have that stimulus money for 1, 2, 3 years, and then it’s like a train going down the track at a high speed and then there’s a big canyon ahead of you.””

Boice admitted that raising tuition in the face of students’ own economic woes and big money from Washington would be a difficult decision for regents to make.

“”How do you tell somebody you’ve got all this stimulus money and you’re going to raise tuition? How greedy can you get?,”” Boice said. “”It’s hard for Joe Sixpack to see. ‘You’re getting all this stimulus money, well, why are you charging the kids?’ That’s the last thing I want to do. But I think it may well be irresponsible not to.””

Despite the federal rule, legislative leaders are still seeking ways out from under the requirement to cover the cut to universities.

Pearce said he wants Gov. Jan Brewer to request a federal waiver on the use of federal stimulus money. It wouldn’t directly lift the maintenance-of-effort requirement but it would provide the state with flexibility that could help overall, he said.

Senseman said he was not aware of a request that Brewer ask the federal government for a waiver on the federal stimulus program’s education money.

Both Boice and Shelton expressed a degree of budget and stimulus fatigue, however.

“”Since we don’t have the final guidelines, I’m not going to assume any closure,”” Shelton said. “”What I’m keeping in mind firmly, whatever the guidelines turn out to be, is the difference between our core recurring budget that we have to live on, and the one-time money that we can use to help plug one-time holes.””

Boice was a bit more direct.

“”It changes all the time,”” he said, referring to the status of the stimulus money. “”Am I interested? You bet your sweet bippy I’m interested, but to get all excited one day, and then the next day they say it’s something else, and then the next day they say you need to use it to cover the mounting deficit in the ’09 budget ð- I’ve just kinda said, well, when you boys get through and give me a final, I’ll be glad to address it, but until then I just kinda shrug and say, well, tell me about it when it is indeed the regulation.””

– The Associated Press contributed to this story.