Horizon, Host: Ted Simons

March 31, 2009


Host: Ted Simons

ASU President Michael Crow

  |   Video
  • Arizona State University President Dr. Michael Crow talks about how the university is responding to significant state funding cuts and other challenges created by the economy.
Guests:
  • Michael Crow - President, Arizona State University
Keywords: ASU Michael Crow Arizona State University,

View Transcript
Ted Simons:
Good evening and welcome to "Horizon," I’m Ted Simons. The state legislature has already cut its appropriation for Arizona’s universities by 141 million dollars and more cuts could be ahead for the next fiscal year. Federal money from the stimulus package will make a difference but we don't know as yet how much of a difference. Certainly some challenging times for Arizona state university. Arizona state university president Michael Crow joins us tonight on "Horizon." Good to see you again. Thank you for joining us.

Michael Crow:
Nice to see you, Ted.

Ted Simons:
How has Arizona changed as it stands right now because of funding cuts?

Michael Crow:
I think the best way to look at the university is we’re moving through these financially complex times is that we’re restructuring, focusing on providing service to our students, intensifying our service and so what change, if you will, has been fantastic positive momentum our staff and faculty to engage our students and sort of weather these financial storms in many ways, the stresses have produced positive reactions while we’re trying to manage our way through them.

Ted Simons:
Indeed are certain things -- because when you went in front of the legislature and went public for the first time upon hearing the options for public universities, you were hearing dire responses from the university because of potential cuts. Have those come to pass?

Michael Crow:
What’s happened is Arizona state university has received the largest of the cuts in the country to any public university so we’ve been managing our way through those. We furloughed the university staff. We made unfortunately a number of layoffs of personnel and kept other positions vacant. We have cut back certain expenditures and done a range of things, eliminated some graduate programs, a whole range of things that we've implemented for the fy09 budget. We’re in the middle of all of that.

Ted Simons:
Did you foresee cuts of that magnitude?

Michael Crow:
I don't think anyone has been able to correctly predict sort of where we're headed or where we are. We did not think about cuts of that level of reduction. It’s surprised, I think, the people in the legislature and surprised everyone.

Ted Simons:
Indeed, when you first talked again about what could happen should the cuts go through, talk of closing campuses is that still an option? The east campus? The west campus? Could those be closed if the fy10 budget comes in pretty bad?

Michael Crow:
So the situation in Arizona is people have to decide whether or not the universities are part of the offense, that is the positive energy that needs to move towards the future or not. We believe that the universities are. Some of the proposals that have been put on the table from some legislators would require us to take unbelievable steps to adjust or spending. That would include the elimination of entire programs and entire programming. We don't know the scale is so steep. There’s real leadership coming from the governor and some of the plans she's put on the table to think about how to weather the storm. I think as we get around the basis of thinking about how to weather the storm and continue to provide services at a high level of excellence, I think we're finding ourselves in a position where most people want to move in that direction.

Ted Simons:
Indeed. If we have people watching the program right now who are students on the west side or the east side, do they take from your response that not likely those campuses will close?

Michael Crow:
I think we've made the adjustments we need to make to adjust to the FY2009 reality. What we've done and where they should take some comfort is that we've concentrated our programs on the polytechnic campus, what you call the west campus and the east campus. what we've done there is concentrated our assets and lowered our administrative costs and focused our program offerings there and done so in a way where we can continue to do the single most important thing for us which is to provide outstanding world-class academic programs to our broad cross-section of students.

Ted Simons:
There are some folks, civic leaders, politicians on the west side who are upset about the idea of changing that west campus --

Michael Crow:
Right.

Ted Simons:
-- in the way you've changed it, want to change it or continue to change it they act as though and they've said publicly it's not a priority for you, the west campus. Respond to that if you would?

Michael Crow:
There’s nothing that backs up that conclusion. I understand where people are frustrated, there's lots of tension when you're dealing with financial matters in your family, in your business, in your university. It’s always the same. People get into discussions about these things. The numbers basically say the following, we've dramatically increased student enrollment on the west campus. We’ve expanded the number of degree programs. We’ve expanded the size of the faculty. We’ve expanded the diversity of the student body and of the faculty so we're very much on progress toward building programs there that have national standing and national ranking so we're on track to what we've been trying to do there.

Ted Simons:
So, when people act as though president Crow only cares about the downtown campus and the Tempe campus, would you say?

Michael Crow:
I would say that's not the case. I said it that evening. I care about the success of our students and the west campus was a fantastic investment 25 years ago. It’s a good location. Great facilities, in fact, the best facilities within the university itself. So what we've been trying to do there is to hone our programs so that they can be as high quality as possible. And serve as many students as is reasonable and so that's what we've been doing through all of these changes. now, we've been making adjustments to the budget so the budget reduction that has we've taken from the state just to put them into perspective, they're larger than the entire state investment in the west campus and the polytechnic campus combined and so what we didn't do was go in and eliminate those programs. What we went in and did was focused those programs as well as other programs so majority of the reductions within the university didn't occur on those campuses. They occurred in programs elsewhere.

Ted Simons:
We’re talking about money that money seems like it's underneath everything we're going to talk about this evening. Tuition increase at ASU, is it needed?

Michael Crow:
We built a base tuition model where tuition could be very predictable. now what we've had happen is we've had $90 million removed from our operating budget for instruction so our sources for revenue for instruction are tuition and state investment, the state for reasons necessitated by the financial condition of the state reduced by 18% their commitment to us we then god to adjust to that. We’ve taken some cuts -- then gotten to adjust to that we've taken some cuts. We need to generate additional revenue. We can't do that except by to increase tuition. We’re going to adjust tuition by program fees for certain colleges and probably something we're calling now an economic recovery surcharge. The economic recovery surcharge would be a temporary bump in the cost to students to cover part of the reduction from the state so we're not looking to recover all of it. We’re looking to recover part of it.

Ted Simons:
Is that a surcharge that could go away in one, two, three years should the economy and the university's financial health return?

Michael Crow:
That’s why we're calling it a surcharge as opposed to a permanent tuition it could go away for a number of different reasons.

Ted Simons:
Um, when does -- and I know it's a dynamic that you're very familiar with, but from a distance it seems like it's quite a balancing act for a public university raising tuition, raising costs, surcharges, whenever, when does it cross that bounds and become too much for the average student in Arizona to cover?

Michael Crow:
So the line that we look at is the line related to access and so the way that we run that equation, that calculation relative to price is when have we reduced the ability of a student to attend? Now, in 2002, our level of access was very low. our level of access today with the tuition more than twice what it was in 2002, our level of access is even higher because of federal financial aid, private financial aid, university financial aid and a limited amount of state financial aid, that's what allows us to be able to get the resources that we need to deliver the excellent program that we desire.

Ted Simons:
Should ASU cut back on scholarships? Certain scholarships? I know AIMs was discussed. National merit scholarships. So many kids are coming in and it's a great bonus for the university but should that be cut back as well?

Michael Crow:
I mean we're looking at everything. When you go merit scholarships, I know some people argue, why are we investing in merit scholarships at all? We invest 2/3 of our scholarships in merit scholarships in Arizona’s students we do that because we want the best and the brightest of Arizona to stay in Arizona. That’s one of the reasons. the second reason is these are fantastic students academically who often come from families of modest economic means and so you may have a partial scholarship to Stanford -- we have a number of students admitted as national merit scholar that has are also admitted to Stanford. They can't go to Stanford. They can go to ASU. We find a way to make certain where every ounce of talent could find a way with financial barriers as minimal as possible.

Ted Simons:
I know some are watching saying, that's great. You get the best and the brightest and the kids could go to either Stanford or ASU, but my neighbor kid won't go to Stanford or Harvard but he should get a university education and ASU is right down the street down the road. How can you convince those people you're taking care of that kid, too?

Michael Crow:
We are. We are. so if a person comes from -- well, first, the best way we're taking care of them is by providing them an outstanding faculty, a faculty equal to the faculty anywhere and we do that by a combination of attracting fantastic faculty and attracting fantastic students and attracting students who might have been more modest such as myself that as your ability was yet to sort of be powered up. And so for the student that comes from a standard family like mine, a working-class family when I went to college, my parents hadn't gone to college, neither of them. My grandparents. No one had ever gone to college in my family. For me, it was making certain I had my pathway and when I got to the university and this is the environment that we're creating; I was fantastically empowered by having great faculty, really smart students. Really creative students, really tremendous libraries and so forth. It’s a mixture of all of those things. You take any of those things away, you take the top nationally ranked students away or top nationally ranked faculty away and you don't have the same type of institution. It’s the creation of this overall environment we're working toward so any student regardless of their family background or their economic position; they've got an opportunity to attend a great university.

Ted Simons:
As far as kids who could get in by way of a scholarship through AIMs scores, that particular avenue, should that be cut?

Michael Crow:
Well, we made a proposal to reduce our investment in the AIMs scholarship program and we did this -- and I know a lot of families and a lot of parents were disappointed by this -- we did this because it was something that we had no revenue source for. It’s fine for the state to have a test they want to build a scholarship around. It’d be better if they had a test that they wanted to build a scholarship around for which there was revenue to pay the tuition. The regents in their wisdom have decided we're going to continue this program so we're continuing it. That means we're going to go out and try to raise more money. We’re going to go out and try to find more ways to make this work and so that's where we're headed with the aims scholarship program.

Ted Simons:
Speaking of money, what's going on with stimulus money? How much are you expecting that money to help ASU?

Michael Crow:
So stimulus money is kind of interesting. It comes in several different pots. So there's a pot of money that comes to the governor. That’s money she'll be able to allocate according to her wisdom to help educational institutions to weather this storm and then there's also stimulus money that the university can compete for. There’s other programs related to energy, energy conservation, and sustainable energy systems and so forth in all three of those categories, we're likely to receive new revenue. All of that revenue however is temporary, and so all stimulus money is temporary. There’s nothing permanent about it and so one has to be careful not to be lulled into being overconfident about our financial position because it is temporary. We have to find a way to replace the revenue that we've lost because the revenue that we've lost is permanent.

Ted Simons:
Right, indeed. Also, there are reports that some of this money, if not most of it, has strings attached to them, in other words, that cuts perhaps already made to the university in general have to go back -- they don't want to back fill those cuts. Is that how you understand this as well?

Michael Crow:
It’s really complicated right now. the signal we're giving out right now is everyone needs to sit at the table, legislature, executive and universities through the regents and university presidents and say -- which I think we can get consensus around -- that we want great universities, number one and number two we want to continue to be of maximum service. number three, we want them to be, in a sense, made more of a powerful offense as we sort of come to try to work our way out of this recession and in doing that how can we take the stimulus, tuition adjustments, whatever else we might do, cost cutting that we might do, budget reductions we might implement and how might we all come together and sort of move the universities off the table of the debate and get them on the track they need to be on for the services that we're trying to provide.

Ted Simons:
One more question on the stimulus money. You mentioned the three different avenues the stimulus money will come in on. Are there things dedicated -- are there things you have to spend the money on? Is it your discretion? Obviously the governor has a look at it? How does the money get fine tuned? Are we getting the cart ahead of the horse here?

Michael Crow:
The governor control controls the allocation based federal rules which announced tomorrow. She’ll be allocating the money in an attempt to stabilize the educational enterprises in the state. Universities, community colleges and k-12. She’ll do that because as a nation, congress has decided that these are critically important assets that they want to see stabilized. Once those resources are allocated to the universities, then the universities would have discretion on how to use them. Our own preference in using these resources is to use them in a way to help us to weather the storm that we're presently in that is to mitigate some of the circumstances of the losses we've already taken and to help us to weather the storm that still lies ahead.

Ted Simons:
I know today on campus, there was a ceremony regarding a new program put in place by Arizona state university involving renewable energy, a new solar project, again, a dedication this morning.

Michael Crow:
Today, we're talking about the installation of solar panels which you see above you.

David Majure:
Covering the top floor of the stadium parking garage at Arizona state university, solar panels provided shade as the university celebrated faze one of its effort to polarize its campuses.

Michael Crow:
So welcome to our new power plant.

David Majure:
There are now five different solar installations on ASU's parking garages and roof tops.

David Brixen:
We completed the installation of two million megawatts of solar energy.

David Majure:
It’s single largest portfolio of any campus in the nation. There are plans to add another 10 megawatts in the next year or so and eventually the university could generate as much as 15 to 20 megawatts of solar power. By comparison, ASU’s total demand for energy is 36 megawatts across its campuses.

David Brixen:
If we have 15 megawatts throughout the day, we're providing half of our total energy demand from a renewable source.

Michael Crow:
This is all of part of where we're headed as an institution overall. This is sort of a simple implementation of a concept that we still need to maintain discovery for. One of the things going on at ASU is intensive concentration in the area of discovery around renewable energy.

Ted Simons:
This particular project, why is this important to ASU and the surrounding community?

Michael Crow:
Well, several factors, we think Arizona should be the center for renewable energy use. There are a lot of industry leaders, utility leaders, community leaders and others that agree with that it also for us provides a way for us to lower our energy costs over the long term. this project we put in that we announced today helps us to do that it also helps us to be more sustainable as an institution and teach sustainability not only by what we teach in the classroom but by what we do as an institution.

Ted Simons:
The costs of the program were there incentives involved?

Michael Crow:
The way it works is kind of interesting. The third party provides the capital to build what you just saw. We buy the electricity produced at a fixed rate over a long period of time. We have a fixed rate for our electricity going forward.

Ted Simons:
Is that more expensive now and the costs should lower over time or how does that work?

Michael Crow:
Slightly more expensive now but over the long term, dramatically less expensive.

Ted Simons:
Is a program like this -- a program like this is obviously progressive. It shows a direction. It shows a mission for the university and going back again to money issues and the legislature; do Arizonians by way of the lawmakers in power that they voted into office, do they want ASU to do things like this?

Michael Crow:
Well, what's interesting, um, not only this but, you know, we get -- we get some mixed signals. So for most legislative leaders, what we hear from them is which want you to build a great university for our community. We want you to be at the leading edge. We want you to be impactful relative to the economy and high quality from everything you do from women's basketball -- which is playing as we speak against the university of Connecticut -- to every research program and teaching program that we have and then we hear from other folks who say listen, I’d really just like you to be a small state college, a few students and a few programs. That’s really what Arizona needs and that's it. And so we don't have -- we don't have that clarity of mission statement yet from the legislature or from other state leaders and we need that.

Ted Simons:
You mentioned -- and a lot of folks do see -- let's just make this a big/small college kind of an attitude. Why are they wrong?

Michael Crow:
It’s not so much that they're wrong. there is a need for that in Arizona and what's happened, I think is that we grew ASU rapidly into what we presently have and what we need in Arizona is more diversity of our educational platform we need more private colleges. We need more parochial colleges. We need more unique sort of niche schools. We need more -- we probably need some state colleges, four-year colleges. Right now, we've got everything in a sense stuck into a single institutional platform. So we're working as we speak to help private colleges to be successful here by working with them and also to build new models for students to go to ASU.

Ted Simons:
Is that something that lawmakers recognize and support or, again is that something that still needs to be shown and exhibited if you will?

Michael Crow:
I think many lawmakers would like to see us move in the direction that has we're moving. What’s happened is that the financial situation has forced us to sort of accelerate these things to a hyper-speed. We’re trying to work as fast as we can. We wish we could get the plans done before cuts might be made or we wish we could make adjustments but there are fiscal realities that have to be dealt with.

Ted Simons:
I asked the questions because there was criticism -- I know you've heard it -- that President Crow is moving too fast. He’s trying to accomplish too much in too quick a time with not enough money. How do you respond to that?

Michael Crow:
What’s interesting about that, I wish that was the case because then it'd be an easy problem to solve. We can dial back a little bit and work at a slower speed and everything would equilibrate. It’s not that going on. What we're trying to do is that the community has grown so fast, the complexity of Phoenix, economic challenges, national competitiveness situation, the economic stresses we're now facing, if anything, we're not moving quickly enough. That doesn't mean we can't move better and make better decisions and be more efficient and so forth but what it means is we're going to have to be more creative and move more quickly to adapt to all the circumstances we're presently facing.

Ted Simons:
There was a "New York Times" article that looked at Arizona state university as kind of the example.

Michael Crow:
I heard about it.

Ted Simons:
I bet you did. Suggested, again, too much for this particular institution that the particular time. Is -- university of California, California state university, they kind of have a tiered system over there.

Michael Crow:
Right.

Ted Simons:
For certain things, research and then certain things as far as undergraduate education. Again is there a model there that you are pursuing that Arizonians simply aren't ready for?

Michael Crow:
What’s interesting about that usually in the California example where they have the University of California and the cal state system, what they've done there is they have tremendously bifurcated their educational system into two separate hierarchal positioned platforms. We want to make sure that all students have access to excellence. That all students have access to a great faculty. What we're trying to do is to position that greatness around our schools to focus on our schools and our programs, some of them will be research-intensive some of them will be research-active some won't be active in research at all. What we need is time to, in a sense, move forward each of these three types of units and makes those available. I wish that this was a situation like California where we had -- or other states, Pennsylvania or others where you had large numbers of private colleges; several private universities, public universities, public state colleges, but we don't have that. So we have a huge assignment here in greater phoenix and in greater Arizona to be of service to a very broad spectrum of individuals.

Ted Simons:
I guess the challenge is in tough economic times to convince folks that the challenge that this particular mission can continue but, again, it's got to be tough when times are tough?

Michael Crow:
Well, it is, I mean, these are the most dramatic financial shifts that the country's seen in decades and so we're all weathering our way through these as best we can. What we're focusing on at the university is focusing on our students and so it's like we have this fantastic state-of-the-art set of individuals, our students, in the incubator getting this fantastic educational experience and opportunity. We’re trying to make certain that they get through this as prepared as possible and as creative as possible, because for some of us, including myself, maybe not you, Ted, in terms of being older, we need them to be successful to help carry the whole system down the road.

Ted Simons:
Yes, we all need that. Real quickly, before we let you go, president Obama decides to speak here. Why?

Michael Crow:
Well, I think president Obama is looking for institutions of education that are important to his strategy. We’re one of the largest and most significant universities in the country, even if everybody in Arizona doesn't yet recognize this. We just passed Caltech in our research profile. We produce -- we're number one -- we're number five in nurses, architects, teachers, engineers in terms of producing these people in the entire country and so we would be the logical place to pick in terms of going to a place where the economic stresses are high and where the role of the university is important and so perhaps we were picked as an example.

Ted Simons:
Well, it was quite a coup. Well, thank you so much for joining us tonight. Interesting discussion. I know we answered a lot of questions that folks have. It’s a difficult time for the university and for the state but good luck.

Michael Crow:
Thank you, Ted.

Ted Simons:
coming up on "Horizon" a law expanding the nation's community service programs and what it means to Arizona, plus an update on all the latest news from the state capitol with a reporter from the capitol times, that's Wednesday at 7:00 on "Horizon." that's it for now. I’m Ted Simons. Thank you so much for joining us. You have a great evening.

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