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AZ Legislature: Reconsider Budget Cuts


Flagstaff is an amazing community and has a growing science, technology and economic eco-structure, in large part due to the careful and successful decisions made by Northern Arizona University and its partners. The growing bio-medical sector is a vital part of our STEM City and our future economic growth; research talent and infrastructure at NAU significantly supply this sector. Now the Arizona legislature and the governor are publically discussing a plan to cut NAU, and the other state universities not only by the original $75M planned in January, but also by an additional $30M. This would result in an $18M cut to NAU. Flagstaff business and community leaders are watching very closely and are deeply concerned.

NAU is the key driver of Flagstaff’s economic engine. The most recent economic study shows that each

Arizona dollar to NAU generates over $16 of economic activity, including substantial contributions to the local tax base. NAU is also responsible for 1 in 5 jobs in Coconino County.

While it is clear that the persistent state structural budget deficit requires hard choices, it is equally important to make sure our short term choices do not lead to long term unintended consequences. The $750M Higher Education budget looks attractive to the cost cutters, especially when proponents of cutting say that NAU has more money today than they did before the great recession. Closer inspection reveals that almost all of that increase comes from expanded student enrollment and external research dollars. These are extremely beneficial to our local economy, but they do not result in a net gain for NAU. In fact, evaluation of per student funding shows NAU has less money per student than they had in 2008. Even during this period of great recession, NAU has managed to award more degrees and had the highest levels of completed credit hours since 2009. But there is only so far one can cut before the structure collapses.

Now our elected officials are coming back for more. However, focused analysis, again, reveals that other options exist to make up this 30 million dollars. The rainy day fund has a balance north of $380 million and is not planned into the budget for the next two years. An elimination of the funding trigger for 1,000 private prison beds would save $24 million in FY 17. Counties have indicated they have beds that the state could contract for. Additionally, in this time of belt tightening, one might wonder why now is the best time to eliminate the .1% job training tax, which will reduces revenue by $13 million.

Flagstaff’s own Representative Bob Thorpe is the Chairman of the House Government and Higher Education Committee and he has championed several of the regulatory reform proposals from the universities to free them of burdensome processes. We thank Rep. Thorpe for his leadership on important higher education policy.

As an organization of business leaders in your state, we respectfully request Representatives Bob Thorpe, Brenda Barton and Senator Sylvia Allen ask their leadership to reconsider the original budget proposal by Governor Ducey and go no further in cutting our state universities. Additionally, allowing the Arizona Board of Regents to allocate those cuts with consideration to the unique mission and performance of each university will insure the cuts will have as minimal of an impact as possible. We are confident in NAU’s performance and leadership, and are grateful for the strong community investment and resource they provide Flagstaff.

Michael Zervas, CEO

David Engelthaler, Chair

Flagstaff Forty

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