Arizona’s universities will lose millions after state budget cuts. What could get axed?

Arizona's universities will face tough financial decisions in the coming months, following multimillion-dollar cuts made in the state's budget signed on Tuesday.

Thursday was a preview of what's ahead after the Arizona Board of Regents, the body presiding over the state’s public university system, approved all three schools’ 2024-25 budgets. Each of the universities expect slower growth in their financial standing for the upcoming year.

This year’s projections came after a turbulent time for the University of Arizona’s finances. The discovery of a multimillion-dollar budget shortfall at UA led to increased scrutiny of all three schools’ balance sheets.

Growth in the net financial position at Arizona State University and Northern Arizona University is expected to slip slightly to 6% and 2%, respectively, according to board documents. The University of Arizona was projected to continue to see a loss, dropping from -7% to -9%. Net position is defined as the difference between assets and liabilities.

State appropriations make up about 13% of the universities’ total operating budgets on average. Other sources of revenue come from tuition dollars, grants and donations.

'The Legislature has given us their priorities'

In the budget signed on Tuesday by Gov. Katie Hobbs, the Board of Regents and Arizona’s colleges took a $27.9 million cut.

The trims to operating budgets will mean $11 million in cuts at ASU, $8 million at UA and $4.1 million at NAU.

The cuts also scale back one-time funding for the Arizona Promise Program and the Arizona Teachers Academy, which supply tuition funding for low-income students and education students who commit to teaching at an Arizona public school. In total, the schools will absorb more than $70 million in cuts to one-time funding for ongoing programs combined, many of which are still required to continue.

University leaders shared their disappointment on Thursday, saying the state's deductions will have a meaningful impact. ASU President Michael Crow said the Legislature's failure to reverse the cuts made during the Great Recession could put pressure on the state's universities to pass some of those costs along through tuition.

"The Legislature has given us their priorities," Crow said. "And the priorities do not include the Teachers Academy. The priorities do not include the Arizona Promise program."

This year’s budget included a one-time appropriation of $46 million for Arizona Healthy Tomorrow, according to board officials. The initiative provides funding for a systemwide endeavor to bolster the state’s health care infrastructure.

Tuition revenue holds steady; UA slows bleeding

Growth in tuition revenue has remained steady at all three universities, coming out to 6% year over year because of rises in both enrollment and tuition costs.

This excludes UA’s controversial online counterpart, the University of Arizona Global Campus. The school has been bleeding enrollment for years, but UA Chief Financial Officer John Arnold maintains student numbers are stabilizing.

UA would have ended its fiscal year with an increase of $14.1 million in net position, but when UAGC's budget was included, the school took a nearly $7 million drop from its original standing.

Arnold said UA now has the third-party reports compiled by Ernst & Young evaluating the finances of UAGC and UA athletics. From that report, Arnold said the university is looking at ways to merge UAGC and UA's preexisting online program. Other goals include improving the experience for online students and chipping away at $12 million to $21 million in potential cost savings.

While all three universities are expected to end with fewer days cash on hand than they began the year with, both ASU and NAU will stay within the recommended range from the board.

UA’s projected days cash on hand will drop to 67 from 97, but board officials have pointed to this as proof the university is experiencing a “slower rate of decrease.”

In place: Gov. Katie Hobbs signs $16.1B budget that erases Arizona's nagging deficit

Helen Rummel covers higher education for The Arizona Republic. Reach her at [email protected]. Follow her on X, formerly Twitter: @helenrummel.

This article originally appeared on Arizona Republic: Arizona universities show latest budgets after millions in state cuts