This story appeared on Arizona Sonora News on Feb. 12, 2015.
PHOENIX — Have you heard of the Arizona Public Enterprise University? One senator wants to remake and rename Arizona State University into “an autonomous, quasi-public, nonprofit corporate entity,” with a bill introduced this session.
While Eileen Klein, president of the Arizona Board of Regents, said the governing board is not taking a position on the bill from Sen. Jeff Dial, R-Chandler, she said it does go in the direction of a “public-private” model the Regents would like to see for state universities.
“It’s time to think about we design a total operational for our universities that is going to work in the long term,” Klein said.
With further cuts looming over higher education in Arizona, public universities are finding ways to rely less on the state for funding at the expense of the students they serve.
Gov. Doug Ducey in his budget proposal called for $75 million in cuts to funding to state universities, which represents about 10 percent of state support. Board officials say some legislators may propose deeper cuts beyond the Ducey’s proposal.
Daniel Scarpinato, a spokesman for Ducey, would not say if the governor would be open to further cuts to universities beyond what he proposed.
The Regents issued a call to action last week to not allow more than the proposed $75 million reduction, which Klein said came at the request of university presidents. The Board of Regents governs the state universities — ASU, the University of Arizona and Northern Arizona University — and sets their tuition rates.
The consequences of this decline in state funding haven’t affected state universities so much as their students.
Despite less state support since the recession, Arizona universities still spend about the same on their academic mission, said Donna Desrcohers, a higher education finance researcher with the Delta Cost Project at American Institutes for Research.
“It’s the sources of revenue for Arizona universities that have shifted over the years,” she said.
According to data from the Delta Cost Project, a non-profit that researches higher education funding, the costs for higher education across the country have largely shift toward students. Arizona has seen one of the sharpest increases in in-state tuition costs, rising more than 40 percent in the past five years, adjusted for inflation, according to the College Board. Only Louisiana and Georgia have seen steeper increases.
This happened at the same time the state reduced higher education funding by about $400 million since the recession from a time when Arizona used to give more than $1 billion to its universities.
“Students in Arizona have been asked to take on more responsibility for the cost of their own education than in any other state,” Klein said. “Students and families can’t be the backstop to the state’s ongoing fiscal troubles.”
While Desrochers cautioned that not all students pay the sticker price of tuition with many getting financial aid and fees that are charge on top of tuition, they are bearing more of the cost burden now without state support.
The lack of state support also means universities are relying more on private donations, grants and higher tuition to fund operations. For example, legislators tried, and failed, last year to get state funding for a veterinary school for UA. A donation from the Kemper and Ethel Marley Foundation later funded the program.
Mark Killian, the chair of the Board of the Regents, said that the state does need to support its universities.
“The route we are on right now, we are ensuring that tuition is going to continue to climb and increase and we’re going to make it so impossible for middle class and lower-middle class families to have their kids get a college education in Arizona,” Killian said. “It is absolutely, totally insane.”
Killian said that each time the Regents vote to raise tuition, the board insulates the Legislature from criticism for cutting university funding. He says he would not vote to charge students and families more.
“As far as I’m concerned, we are done with raising tuition,” Killian said.
At a January meeting of the Regents in response to Ducey’s proposal, ASU President Michael Crow echoed those feelings, saying he would not raise tuition for in-state students. UA President Ann Weaver Hart will wait until after the budget is resolved before deciding whether to support a tuition hike for in-state students, said Chris Sigurdson, the university’s vice president for communications.
Bills have been introduced in the Legislature to reduce the tuition burden on different groups — such as National Guard members or those who were in foster care — Sen. Dial argues his bill would be a way to address rising tuition costs.
Dial said, as universities rely less on state funding, he believes this corporate model would give them more flexibility and help to keep tuition down for students.
“Let’s give them the freedom to work more like a private-public partnership … freeing them up from regulations,” Dial said.
Arizona universities are considering phasing out the current pension system for new employees to make the colleges operate less like state institutions in this move to a public-private model. Klein said the Regents do want to design a new benefits system that would be “affordable in the long term.”
“Especially in an era where we are getting reduced resources, we’re very eager to evolve from the state agency model because that is creating additional costs for us,” Klein said.
This movement away from relying on state funding for public universities in some states follows the model set by the University of Michigan more than 30 years, said Tom Volgy, a political science professor at the University of Arizona.
The University of Michigan receives about 16 percent of its funding from the state and operates more like a private institution. “The Michigan model has been the alternative to throwing our hands up in the air and saying, ‘Well, what can we do?’” Volgy said.
Killian said that Arizona is different than others states that have gone this route with its constitutional mandate to keep education nearly as free as possible. He said that while he would like much less in cuts to universities, it’s “not the reality of what we’re dealing with.”
Killian said he believes the next step for the Board of Regents is to sue the Legislature and go to the state Supreme Court for violating the part of the Arizona Constitution that stipulates college education in the state should be as close to free as possible. This would be similar to the action taken by representatives for K-12 schools, who sued the Legislature for underfunding them.
While there is not yet support among the Regents for the action now, Killian said, he believes there will be soon.
Klein, however, said the Board has not contemplated any such action, yet. She said the Regents will evaluate whether they are upholding their constitutional mandate to keep costs low, but it is “premature” that any decisions have been made.