Arizona's three universities have proposed a plan to stimulate the economy by creating construction jobs, but economics experts are questioning whether the $1.4 billion plan would be enough to save the state from a recession.
The plan, called the Construction Stimulus Program, is being proposed by ASU, UA and NAU and will give the universities $1.4 billion over 25 years to renovate and maintain buildings at the three universities.
The program would immediately create 14,438 jobs for construction workers, as the construction industry has been hit hardest by the recent economic downturn, according to a summary of the package released by ASU to The State Press Friday.
"The quickest way to get Arizona's economy moving forward again is to reverse the sharp decline in the construction industry," the summary said.
The boost to the economy would result in a total of 31,098 new jobs, the report estimates.
ASU's portion of the $1.4 billion — $329.8 million — would go toward building a new school of construction at the Tempe campus, a health sciences building at the Polytechnic campus and new labs for faculty being recruited to the Tempe campus.
UA would get $326.7 million and NAU would receive $310 million, ASU spokesman Virgil Renzulli said. An additional $470 million would go to the Phoenix Biomedical Campus, a partnership between UA and ASU.
"We hope that during this legislative session a bill would be introduced, passed by the legislature and signed by the governor that would approve the state's portion of the debt-service funding on the projects," Renzulli added in an e-mail.
Under the plan, universities would temporarily assume construction costs, which the state would begin reimbursing in fiscal year 2010.
Because the House and Senate are now three months into the 2008 session and no new legislation can be introduced at this point, the measure would likely have to be attached as a strike-everything amendment to an existing bill.
At the start of the session, legislators propose bills, which then get assigned to House and Senate committees. Because there is limited time in the session, it's up to the committee chairs to decide which bills are heard. Bills that aren't heard in committee can be resurrected by striking the entire text of the bill and attaching an amendment with a new bill.
Sen. Meg Burton Cahill, D-Tempe, said the state Legislature has been under-funding building renewal for universities since she started at the state Capitol as a representative in 2000.
"I think it's terrible the way we're under-funding our universities," Burton Cahill said.
The building renovations have been needed for a long time, she added. As a doctoral student at ASU, Burton Cahill said she remembers taking classes in cramped quarters in the basement of the Language and Literature Building.
"Here we were, doctorate students, sitting in those little desks," Burton Cahill said. "It's an investment. From what I've seen, it's a good investment."
Sylvain Gallais, an economics, political science and French professor, said he doesn't trust economists when they predict what will happen.
The state's current economic downturn has gotten worse even in the last week, Gallais said.
"Until last week, in class I was saying, 'We're not in a recession, we're on the edge of it,'" he said. "Now we're in a recession."
The problem with the thinking behind the stimulus package is the belief that Keynesian economics, or the theory that downturns can be fixed by adding jobs, will work, Gallais said.
"It's too bad," he said, "because it would be so easy."
The package could stimulate the economy in the short term, he said, but there's still the psychological problem created when people who are anticipating a recession stop spending money, damaging the economy even more.
Still, he predicted the recession won't last long — probably one or two years.
The bottom line, he said, is that the plan will be good for ASU and other universities, but kick-starting the economy is unlikely.
"That's not enough," he said. "One thing is never enough in economics."
Reach the reporter at: leigh.munsil@asu.edu.
