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With legislative budget cuts looming, University departments are beginning to scale back spending and examine what costs can be cut if state money falls through.

Arizona's projected $1.7 billion budget shortfall for the 2009 fiscal year coupled with current economic woes is significantly straining government disbursements, said Jeanine L'Ecuyer, Gov. Janet Napolitano's press secretary.

She said no definite 2009 budget has been decided upon, and Napolitano is in talks with legislators to trim spending from the 2008 budget.

"The governor was hoping it would be done weeks ago," L'Ecuyer said. "But it just didn't work. They couldn't get anything done."

With the fiscal year ending in June, speculation of budget cuts is reverberating across Arizona's universities and, accordingly, ASU administrators are asking all University programs to be aware of potential budget limitations, said Lisa Frace, ASU associate vice president of budget and planning.

"We have asked people to consider what they would do in the event of a budget cut," Frace said.

About one-third of ASU's annual budget comes from state appropriations — last year those totaled $426.9 million.

Frace said that if the state decides to allocate less funding than initially promised in the 2008 budget written last June, ASU would be forced to either trim expenses — or, if already over budget, give money back.

But, in the absence of a finalized state budget, specific University cuts have not yet been required, she added.

Nevertheless, some departments are already taking action.

In a letter to her staff, Ruth Dassen, director of fiscal operations and human resources for University Student Initiatives, called for cutbacks.

"We are requesting that all USI departments reduce expenditures as much as possible, both for state and locally funded accounts," Dassen said. "Travel, equipment, vehicles, business meals, cell phone/blackberry purchases, new furniture, etc., are all typical areas where spending usually can be held to a minimum."

Another strategy, Dassen said in an interview, would be to leave unoccupied job positions empty unless the vacancy could be deemed detrimental to the department's ability to serve students.

But the cutbacks are temporary, she said, and routine in case of dire economic times.

In 2002-03, Arizona was facing a similar budget situation. Dassen said, back then, USI made requests of their personnel parallel to those being made this year.

And L'Ecuyer said the budget situation is not nearly as grim now as it was then.

The state's rainy day fund — more than $700 million put aside to weather emergencies — could decrease the need for universities to bear the burden of the budget shortfall, she added.

"In 2003 it was empty; there was no money set aside," she said. "The key difference is the governor and the legislature have taken pains to replenish [it]."

Nevertheless, some legislators have proposed alleviating the shortfall with cuts to universities, but L'Ecuyer said Napolitano is looking for another solution.

"The governor is really going out of her way to protect universities," she said. "If you cut universities, you cut your workforce training."

At a glance …

Arizona is facing a $1.7 billion budget shortfall for fiscal year 2009, and some legislators have proposed cutting University funding to help recoup the money. Meanwhile, legislators are debating how to reduce spending for the remainder of 2008. ASU gets one-third of it's funding from the state — $426.9 million last year. Though no cuts have been announced thus far, some ASU departments are already attempting to limit spending and all departments are being asked to look for places where cuts could be made.

Reach the reporter at: daniel.newhauser@asu.edu.


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