Ted Simons: Good evening, and welcome to "Horizon." I'm Ted Simons. The Arizona board of regents is asking lawmakers and the governor for more money to operate state Universities. The board recently approved a state funding request for next fiscal year that's about $120 million more than Universities got this year. But according to most board members, the request is a fraction of what Universities really need. Here to explain is chairman of the Arizona board of regents, Fred Duval. Good to see you again.
Fred Duvall: Nice to see you as well.
Ted Simons: 800 some-odd million dollars, 18% increase from the current fiscal year. Why so much of an increase?
Fred Duvall: First let's put 90 perspective. State investment in the University isRs 4 years ago was $1.2 billion. We've taken significant cuts. That's been taken about roughly equal in actual cuts out of the Universities themselves and tuition increases, which are pricing students out of our product and a real concern. So we're going to the legislature this year and say, OK, three years in a row of cuts. We've got money in the budget this year, let's try and begin a process of restoring some of these cuts and get these Universities back on track.
Ted Simons: $36 million for permanent additions to base funding. Permanent additions.
Fred Duvall: Additions which then become part of the base and become part of the ongoing budget expectation as opposed to one-time which is largely buildings in almost every case large classrooms to facilitate this enormous enrollment growth we've had. And we need a place to teach them.
Ted Simons: Is that going to be a tough sell, the permanent aspect?
Fred Duvall: We're mindful that we are not fully out of the recession yet. Economists indicate there will be $300 million in new money and our basic case is this -- about a billion and a half of new money came in through prop 100, that was a sales tax which the voters passed largely on the basis of protecting education. We haven't seen any of it yet. This is the last year of the prop 100 money. What we're saying S. one-time money, one-time needs.
Ted Simons: The budget request also calls for funding discrepancies to the tune of $15 million. Funding, what kind of discrepancies?
Fred Duvall: Historically the way the state has invested in Universities is based upon enrollment. There's a formula based upon how large each University is. That formula hasn't been funded since 2009. As a result, because NAU and ASU have grown faster than U of A, their per student commitment from the state is less. And what the legislature has asked us to do is to isolate what that number was and then indicate to them in order to bring those other two universities up to parody with U of A on a per student funding bases what would that number be, and that's reflected in our question.
Ted Simons: The lone dissenting voice on this budget request, because he thinks it's going to be the hurting the U of A.
Fred Duvall: Instead of lifting the other two schools to catch up to the U of A, that what this will do is give those who are critics of Universities an opportunity to take everybody down to the lowest common denominator.
Ted Simons: Is that the result of a study bite legislature?
Fred Duvall: It was an assignment in the budget last year asking us to do a study and isolate what the disparity number is. We've done that about 76 million dollars in the aggregate in our budget proposal suggests that we deal with that disparity over a five-year basis. $15 million of this year's request moves the Universities towards parity.
Ted Simons: Was there also I think I see here an assignment for performance-based funding to get -- I know you're big on that.
Fred Duvall: Yes.
Ted Simons: I guess has it been done? Is it figured out? You start in 2014?
Fred Duvall: We are -- we have a draft proposal, we're going to use this year to talk it through. It's going to be complicated. It's a complete paradigm change to go to a performance-based model. So this budget is sick, it's the first time the Universities have not gone in and said, based upon enrollment growth here's our budget request. That would be about $173 million over the last three years. We recognize that old formula doesn't apply. The new formula will take a year to implement performance fund can. This year we'll do one-time needs, primarily classrooms and go to performance funding next year.
Ted Simons: And also studied the information on like student centered financial aid, just a financial aid model. What did that assignment come up with?
Fred Duvall: There are -- we've looked at best practices, there's a number of ways to do it. Many states have very large financial aid packages that are state money as opposed to tuition set-asides. We've looked at some states have loan forgiveness based upon students who stay in state, become taxpayers and adding jobs. A number of different ways to do it, and we've provided choices for the legislature.
Ted Simons: Back to that performance-based funding thing. Not quite as tough a sell to the legislature do you think?
Fred Duvall: I don't want to count noses yet, but it changes the conversation from one of, here's how much more money we need, to, what do you want us to produce to meet the work force needs for the future, viability and competitiveness for the state of Arizona? If that's what you want us to produce, fund us to make that happen.
Ted Simons: What are you hearing from lawmakers?
Fred Duvall: Very encouraged by the innovative thinking we're showing, our willingness to change the model. If you look at the performance-based funding model, if you look at this Newark tech which your where we've blown through the walls between the community colleges and universities, seamless transfers, hybrid pathways, those two in combination Adrew Morrill attic reform proposals and you think -- I think the legislature, many of them give us credit for doing something different.
Ted Simons: Are there models out there, can we look at a state and say that's what we want to aim for, or that's something we want to avoid?
Fred Duvall: Bits and pieces, but in its entirety, in its ambition, size, we're really the best practice. We are the state that other states are coming to to look at and say, how is it you're merging your systems into one integrated system that produces more degree opportunities in more placing at a lower cost.
Ted Simons: And again, as we mentioned earlier in the program, this is in mind of this sales tax, this temporary sales tax, this money going away. You talk about changing goalpost and changing targets.
Fred Duvall: It will go away, and next year they'll say the sales tax is gone so we can't afford in universities. That probably is right. This is the year that the taxpayers, we've made a promise we're going to invest in education. There's money this year to do so. And I believe we have a moral commitment to do it.
Ted Simons: for the most part the board is in unanimous agreement?
Fred Duvall: Absolutely.
Ted Simons: Very good. Thanks for joining us.
Fred Duvall: Thank you.