Gov. Katie Hobbs is using nearly $16.5 million in leftover COVID funds to restore the funding cuts made earlier this year to state universities, including Northern Arizona University.
In a press release late Tuesday, the Democratic governor did not dispute that she agreed in June to the $18.3 billion spending plan negotiated with Republican lawmakers. That plan included a 2.5% across-the-board cut across multiple state agencies, including the universities.
But now Hobbs said she has federal dollars left over from $4.2 billion allocated to the state in 2021 as part of the federal American Rescue Plan Act. Those dollars were designed to assist state and local governments in addressing the impacts of the pandemic.
Under the law the state was required to obligate the funds by the end of 2024. And they have to be spent by the end of this year.
But gubernatorial press aide Christian Slater did not answer questions of where those dollars were originally allocated and why they are no longer needed there. Nor would he explain why, if Hobbs had those ARPA dollars all along — and knew in June the universities were being cut — the governor waited until now to replenish their funds.
"I'll decline to comment on the processes by which we determine ARPA funding," he said.
Slater, however, denied that the timing has anything to do with the fact Hobbs is running for reelection and that early voting starts on Oct. 7.
"As the governor has always said, she is committed to doing what's right for Arizona and putting politics aside," he said.
Republican lawmakers originally had proposed a 5% permanent lump sum reduction for all agencies — with some exceptions like the state Medicaid system where costs are determined by the number of people enrolled. Also off limits were what were considered essential services, like state police and the prison system.
Under that plan, the universities' share of the cuts would have totaled $38.9 million. Hobbs said Tuesday she cut that to less than $16.5 million.
And now, with the ARPA funds, even that one-time cut is gone.
Thursday's restoration includes nearly $8.1 million for Arizona State University.
The University of Arizona is getting more than $4.7 million, with slightly more than $1 million for the UA Health Sciences Center. And Northern Arizona University is in line for more than $2.6 million.
The across-the-board funding cuts were the direct result of Republican lawmakers needing revenues to finance the tax reductions in the budget.
Anyway, GOP legislators argued that the schools could afford to take the financial hit.
Kingman Republican Rep. John Gillette said universities are getting millions of dollars in grants and contracts, many of them from overseas. He also produced charts to show that a majority of money collected in tuition comes from out-of-state and out-of-country students.
The schools have never disputed that, saying they are using the dollars from those who want to attend Arizona’s state universities, whether on campus or remotely, to help keep tuition low for Arizona residents. Gillette, however, had a different take.
"This is big business," he said. "If they're going to remain big business, then they don't need state money."
And Peoria Republican Rep. David Livingston, who chairs the House Appropriations Committee, defended the budget, pointing out the cuts to universities were only temporary.
"These universities have multi-billion-dollar budgets," he said.
Nothing in Tuesday's order restores the across-the-board cuts imposed on other state agencies. Slater said Hobbs earmarking the entire nearly $16.5 million in ARPA funds for the schools makes sense.
"The governor is committed to protecting our state universities and ensuring that they have the funding they need to give Arizonans opportunities to thrive and deliver a strong workforce for entrepreneurs looking to start and grow their businesses in Arizona," he said.
