The state Legislature will most likely not use cuts in university funding in 2010 to help cover the state’s $3 billion shortfall, legislators said.

“If at all possible, we’d like to make reasonable cuts to the universities [in 2010], but that doesn’t seem likely,” said Rep. John Kavanaugh, R-Fountain Hills.

Kavanaugh said that’s because of spending regulations surrounding the $1.6 billion in federal stimulus money going to Arizona, which could require the state to maintain levels of funding equal to those in 2008. Currently, the state’s university budget falls $54 million short of that.

House Republicans have planned to cut $40 million from the universities, which is in line with suggestions from university officials, but they may be forced to find other ways to cover the deficit, Kavanaugh said. That could mean larger cuts to other departments, he said.

“We have to balance the budget, and to the extent that we can’t cut Peter, we have to take more from Paul,” Kavanugh said. “[Additional cuts] would probably be spread out over multiple agencies.”

Those agencies would include the Department of Economic Security and K-12 Education, Kavanaugh said, because those are the areas legislators can legally cut the most funding from.

The House Republicans have not formally released a set of budget proposals, but Kavanaugh said cuts for the 2010 fiscal year are tentatively set at around $770 million. The state could also save up to $700 million by selling

assets, such as minimum-security prisons, to private companies, he said.
House Democrats released a radically different plan on Monday, which includes minimal cuts of just more than $39 million and ideas for generating additional revenue. House Democrats have not planned any cuts to the University system.

“The stimulus actually requires that we put some money back in [to the universities],” said Rep. Cloves Campbell, D-Phoenix, referring to the $150 million in cuts the Legislature will have to roll back in order to meet spending requirements. “[But] with that, we’ll actually be able to take advantage and use some of that money.”

Campbell said House Democrats planned to make up for the inability to cut from universities by funding them in smaller installments, which is called a rollover.

Other ideas included rolling back 2005 tax cuts for residents who earn $250,000 or more a year and imposing tighter restrictions on tax relief.

Campbell’s Democratic counterparts in the Senate released their proposals earlier this month, unveiling an unusual plan involving no cuts to state agencies whatsoever. Borrowing money, cutting down on incarceration through the use of house arrest and reinstating the state’s property tax would cover most of the deficit, said Sen. Paula Aboud, D-Tucson.

“We wanted to show the people of Arizona that we could balance the budget without making cuts or raising taxes,” Aboud said.

Senate Republicans have not publicly released their plan for the 2010 budget, said spokeswoman Laura Devany. In a report from The East Valley Tribune last week, however, sources in the Senate said Republican members planned for about $800 million in cuts, not far from suggestions made by their counterparts in the House.

Kavanaugh said the cuts are crucial because the stimulus money will only be coming in for the next two years and will not be able to fund the deficit in 2012.

“If you don’t make cuts now,” Kavanaugh said, “then in 2012, when there’s no stimulus money [coming in], you’ll still have the $3 billion structural deficit that exists today, and you’ll see massive tax increases and massive cuts.”

University spokesman Virgil Renzulli declined to comment on the proposals but said the University is still bracing itself for the possibility of cuts in the 2010 fiscal year.

“The University always makes plans for [many] different possible proposals,” Renzulli said. “The last thing you want to have happen is to be caught without being able to adjust in time.”

Reach the reporter at derek.quizon@asu.edu.