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The Daily Wildcat

The Daily Wildcat

 

State delay in funding cause for concern

As reported by Anne Ryman in the Arizona Republic Jan. 8, “”the state in December delayed a $75 million payment to the university system as a way to free up cash flow because of the state’s financial crisis.”” This is the third time in less than a year that payment has been delayed and the first time that university leaders have not agreed expressly to the delay. As Becky Pallack wrote in a Jan. 8 article in the Arizona Daily Star, “”this time it (the delay) was involuntary.””

In a letter from President Robert Shelton addressed to UA faculty, staff and appointed professionals published Jan. 12 in the Arizona Daily Star, the UA president offered an update on “”the ongoing budget dilemma in our state and its ramifications for our university.””

Shelton wrote that about $30 million has been delayed from the UA and that the date of that payment is still uncertain. “”To address the shortfall from the missed payment, the University of Arizona is borrowing money from our emergency cash reserves to continue to meet our payroll and vendor obligations,”” Shelton wrote. “”We are able to do this on a short-term basis, but any further missed payments by the state will present significant challenges.””

These challenges could include costing the Arizona universities more in interest or making financing construction projects more expensive. As Ryman noted, a continued delay in state funding could lower the universities’ bond rating, which is similar to a credit rating for an individual. A bond rating assesses the credit worthiness of a corporation’s debt.

In his letter, Shelton endorses the implementation of a temporary sales tax to make up the cash. “”That they (the legislature) have been unable to take this one simple step to help offset … the incumbent loss of essential services to the people of Arizona is, quite frankly, stupefying.””

Though Shelton has as little say as we do in what the state legislature approves, it’s not hard to agree with his word choice when considering how little the state has done to address this issue. Shelton wrote, “”The Governor continues to work to gain legislative support,”” but this does little to pay the bills — ­the state’s or the universities’.

The Arizona Board of Regents held an emergency meeting Jan. 7 to address the situation. They have sent a letter to the governor asking that payment for December and January be provided this month.

The ABOR letter even threatens to withhold tuition collections which universities must, by law, turn over to the state. “”A one month delay of the December general fund payment has improved the state’s cash flow at the expense of the universities’ cash flow,”” the letter noted. “”Further delays of university general fund payments or uncertainty about when the December payment will be made to the universities may necessitate a delay in our remittance of tuition collections to address the universities cash flow concerns.””

As Shelton notes, ABOR’s strong stance is appreciated, but it does little to make up for the $30 million and delays payment to the state. It is merely a threat.

As of Jan. 19, the legislature still has not approved Gov. Brewer’s sale tax increase, and no one within the UA could be reached. Who knows, for sure, whether the UA has received any state funding for December or January?

Voters who feel strongly about higher education should remember the low priority Gov. Jan Brewer places on funding to universities when choosing a gubernatorial candidate in the election later this year. It will also be a vital question for candidates for state legislature: It is our elected officials who are, as Shelton notes, failing to pass the sales tax increase, failing to appropriate funding to state universities as it is due and failing to represent the best interest of the more than 100,000 constituents who currently attend Arizona universities.

— Staff editorials are written and determined by the Arizona Daily Wildcat editorial board. This column was compiled by Kathryn Banks, Lance Madden, Dan Sotelo and Anna Swenson and written by Anna Swenson. Disagreements, comments and rebuttals may be sent to letters@wildcat.arizona.edu.

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