The Arizona Board of Regents Business and Finance Committee met Wednesday to discuss a variety of challenges facing the Arizona university system, paying special attention to the transition to performance funding and increasing the state’s level of educational attainment.
John Arnold, director of the Office of Strategic Planning and Budgeting for Gov. Jan Brewer, gave an overview of how the governor’s proposed budget will affect the university system.
The switch to performance funding, which awards dollars based on degrees, research expenditures and credit hours, will allocate 10 percent of state university funding.
The regents praised the shift to performance funding, but Committee Chair Ann Mariucci said it should allocate more than 10 percent.
“While we certainly appreciate the recognition of performance funding, I’d like to see it go deeper and farther,” Mariucci said.
Board Chairman Rick Myers reminded the board that performance funding does not cover everything. He said it should be applied in a way that boosts economic growth.
“I just think that we want to be careful that as we apply this, it is to drive key growth,” he said.
Regents Jay Heiler and Dennis DeConcini were less supportive. The two agreed that the areas assessed to award performance funding are not representative of how well a university is doing.
Arnold also spoke to the board about Brewer’s planned expansion of Medicaid.
Medicaid has grown 8 percent since fiscal year 2007, and Arnold said funding for that growth has taken money from K-12 and higher education.
Brewer’s expansion will use federal money and provider fees levied on hospitals to cover the increased spending.
Regent Mark Killian said he was concerned about levying fees on hospitals, but Mariucci reminded him that the new funding source would spare money for education.
“If you are wearing your university hat, you are 100 percent in favor of this (Medicaid) proposal,” she said.
Brewer will request the Board’s support Thursday of Medicaid expansion and budget for the next fiscal year.
The committee also heard a presentation from Dan Anderson, its Director of Institutional Analysis, and administration officials from ASU, NAU and UA on demographics affecting ABOR’s achievement of its 2020 Enterprise Plan goals.
The presentation focused on the Board’s goal of doubling the number of degrees it awards by 2020.
The presenters were confident that the universities will be able to meet this goal, but the regents were more focused on improving Arizona’s educational attainment than reaching a set goal.
“We don’t want to achieve our goal and end up being 35th,” Myers said. “We want to make sure that we are aiming for the target that will make us the competitive state we want to be.”
The committee discussed developing clearer campus boundaries through more established signage for the universities and deferred maintenance issues, which are currently valued at $511 million.
ASU has already placed some of its new signage at the University Drive entrance and the Lemon Street and Terrace Road garage entry.
Lorenzo Martinez, ABOR’s vice president for Finance and Administration, showed pictures from the different campuses of mold growths and rusted air units that have been left in disrepair due to lack of funding.
Martinez showed a map comparing the conditions of campus buildings at ASU, NAU and UA.
Many of ASU’s central campus buildings, including the Language and Literature building and the Engineering Center had a quality rating of “poor.”
NAU’s campus had five buildings that were marked for demolition, more than ASU or UA.
Since 2008, the universities have not received funding for building from the state. Martinez said there was no single funding solution for the problem, though one of his suggestions was a new student fee for the purpose.
The committee said it would address the issue more fully at its next meeting.
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