Lawmakers are eyeing an extra $56.7 million collected in tuition by the three public universities, possibly to directly or indirectly help balance the state budget.
Members of the Joint Legislative Budget Committee refused Thursday to grant a favorable review to the plan by the Board of Regents to spend the funds. Rep. Russell Pearce, R-Mesa, said the state's larger-than-expected deficit makes it necessary for legislators to use any revenue for the most critical needs.
Despite the vote, a spokeswoman for the regents said they intend to spend the money anyway, and in the way they want. Andrea Smiley said board members read the law to allow the committee solely to "review'' how the regents intend to spend the money, not to "approve'' the spending.
"These monies were considered when universities were creating their operating budgets,'' she said. "We don't anticipate any change in the universities' budgets as a result of this action.''
The regents are not ready to do the same thing with a separate request to borrow money for capital improvement projects. On Thursday, the Joint Committee on Capital Review gave its blessing to $64.6 million in what lawmakers said are the most critically needed safety projects.
The panel, however, has not considered any other requests despite the fact that the full Legislature authorized borrowing $470 million for the Phoenix medical campus being operated jointly by Arizona State University and the University of Arizona and $170 million for each of the three universities. Pearce won't even put the items that he considers not to be emergencies up for a vote until lawmakers address the state's $1.2 billion deficit.
Regents President Fred Boice pointed out that Gov. Janet Napolitano said she believes once the requested projects are on the committee agenda they are considered "reviewed'' and the money can be borrowed, even if the panel does not act on the items. Napolitano said the universities need not wait for "approval.''
"Our bond counsel is not comfortable with that as yet,'' Boice said of the governor's opinion. He said that, for the time being, the regents will proceed only with the safety projects actually authorized Thursday. Boice said, though, the board is consulting with lawyers to find ways to proceed if the legislative committee continues to refuse to review the measures.
More immediate is the question of those tuition dollars.
Smiley said it would be wrong to characterize all of that as "unanticipated'' revenue. She said the budgets lawmakers approved for the three universities computed tuition revenue based on what was being charged at the time. The regents later approved increases ranging from 6.9 to 7.8 percent at the three main campuses. Smiley said the regents, knowing that extra money was coming, built the dollars into the budget.
But Pearce said that does not give the universities the right to spend the funds. Pearce said no additional spending, above and beyond the $9.9 billion state budget, should be approved for anyone until a special legislative session to deal with the anticipated $1.2 billion deficit.