Debt financing elasticity in state budget are musts for education
Arizona Republic
March 4, 2008


Robert Shelton
My Turn

In 1989, construction began on the University of Arizona's Fine Arts Complex, marking the end of an era.

It was the last project paid for with a cash appropriation from the Arizona Legislature.

Virtually, every UA building project since has been paid for with debt financing or private donations.

For nearly 20 years, university debt financing has been recognized as a more equitable way to pay for public buildings whose long lives will benefit generations of Arizonans.

It has allowed us to grow our campus far more rapidly than we could have if we had been required to have upfront cash for each multimillion-dollar construction project.

The results: a bigger, better campus capable of providing state-of-the-art education to more students, buttressed with more cutting-edge research than we could have imagined possible in the early 1980s.

This year, the budget of the state of Arizona needs all the elasticity it can muster. Converting K-12 school construction financing from cash to bonding represents the single-biggest improvement to the state budget that is under consideration at the Capitol.

Gov. Janet Napolitano, an ardent supporter of public higher education, is championing this sensible conversion, and she's right to do so.

It would free $471 million for other priorities, and with long-term interest charges for bonds running below 5 percent, current market financial conditions could not be better.

The aim of Napolitano and the bipartisan cadre of legislators supporting her is to keep this short-term economic downturn from inflicting long-term damage to Arizona.

Nowhere is that challenge more stark than on Arizona's university campuses. Critical public investments have enabled Arizona's universities to post advances unprecedented in our modern history. At the University of Arizona, we are leveraging our state resources to win intensely competitive federal grants for basic and applied scientific research, teacher training and innovative student preparation.

During the last year alone, efforts to leverage the state's vital investment in UA have enabled us to see our historic Mars mission launch, take over operations of Biosphere 2, win a record $50 million plant science grant from the National Science Foundation and win a U.S. Department of Homeland Security grant for border-security and immigration issues.

These are just some of the headlines we've generated, thanks to the vital support from the state.

Without new thinking in how the state manages its resources, unprecedented cuts to all three Arizona universities are inevitable. Make no mistake about it: The magnitude of the cuts that may be unavoidable could fundamentally cripple the universities as we know them.

That will not come as welcome news to businesses who want to set up shop in Arizona, to families who want to choose Arizona to raise their families or to students who want Arizona to continue providing world-class educational opportunities.

It will be good news to other states and nations, eager to recruit away our best faculty and students.

They will have an easy time snatching the human talent that now defines the excellence of our state university system, because we will not have the resources to compete.

For decades, debt financing has worked well in the construction of Arizona's universities, highway systems and state government buildings. There is no reason not to adopt this for K-12, especially if it means avoiding crippling cuts to higher education and other critical state services.

We must build 35 new schools every year just to keep pace with Arizona's rampant population growth. It would be a shame if those future high-school graduates we are working to educate had no world-class universities awaiting them when they graduate from high school.

The writer is president of the University of Arizona.