Lawmakers are trying to tap the state’s main retirement system for public employees to replace state funding for research projects meant to help spur economic development.
The House Commerce Committee on June 10 voted 5-2 for a new piece of legislation requiring the Arizona State Retirement System’s board to ”authorize” its director to make an investment in Science Foundation Arizona.
Republican Rep. Frank Antenori of Tucson said the new legislation would put the foundation on a more businesslike footing, including giving the state a return on investments. He and other critics have argued that the state’s involvement with financing the foundation amounts to corporate welfare that can’t be justified, particularly at a time when the state faces a massive budget shortfall.
But a retirement system representative said the legislation would violate the system’s constitutional mandate to act only in the best interest of members and retirees.
The foundation’s funding of research typically involves partnerships between universities and private companies. The state initially provided the foundation with $35 million, and the Legislature in 2007 added a four-year commitment averaging $25 million a year, starting in 2007. The proposed legislation would repeal the appropriations already approved for each of the next two year fiscal years, and envisions the retirement system giving the foundation about $20 million annually.
The move comes in the wake of other attempts by some lawmakers earlier in the session to eliminate the state’s funding commitment to the foundation. The commitment was established under a 2006 law supported by then-Gov. Janet Napolitano, university officials and business groups.
The foundation’s president, Bill Harris, said details need to be worked out but that the legislation could be a way to get ”consistent funding.”
However, retirement system representative Lesli Sorensen said any investment would have to be based on financial market opportunities.
Also, she said, ”our concern is the constitutionality of mandating an investment of this sort.”
Several committee members who ultimately voted for the bill said they didn’t see it as a mandate.
The proposed legislation is a strike-everything amendment that replaces an unrelated bill’s original wording.