Universities’ request for research money could split GOP lawmakers

The state universities’ $1 billion request to upgrade research labs promises to bring fireworks to the Legislature and possibly a split among GOP lawmakers while wounds from last session’s Medicaid expansion are still fresh.

The last time the Legislature approved an appropriation for university research, in 2003, the legislation was one of the most watched and hotly debated that session. A host of Republican lawmakers joined a unanimous Democratic caucus and Democratic governor to get it passed while the staunchest conservatives were left out.

The state is still paying for the bonds that were issued to cover the cost of constructing the research buildings. Today, the state’s total debt obligations eat up a huge chunk of the budget. All told, $373 million was set aside for debt servicing this year.

Rep. Bob Robson, a Chandler Republican who was the prime sponsor of the 2003 legislation, said the debate caused hard feelings among GOP lawmakers, but nothing to the extent of the Medicaid expansion. In that case, a handful of Republicans, including Robson, sided with Democrats.

Robson said the 2003 riff was ideological, about taking on debt.

“You’re always going to have a major amount of pushback. There is always a mess of people who just want to say no to anything,” Robson said.

The 2003 Legislature appropriated roughly $35 million a year for 23 years starting in fiscal year 2006-07 to construct buildings on the campuses of Northern Arizona University, the University of Arizona, and Arizona State University.

The Arizona Board of Regents’ new request would accelerate within three years to $78 million dollars a year on top of the $35 million a year. The $78 million appropriation would be maintained for 25 years. The money would buy buildings to house labs for bioscience, biomedical and other sciences.

Rep. Eddie Farnsworth, a Gilbert Republican who was the House majority whip in 2003, voted against the first research expansion. He said the present Legislature is going to have to consider the cost benefit.

Research builds the economy

The sales pitch will be that research leads to a stronger economy.

A white paper produced by the Board of Regents and university economists states that the current level of research done at the three universities is a “major driver of the Arizona economy,” generating $1.4 billion annually in Gross State Product.

“It’s probably one of the best investments we could have made,” Robson said.

ASU President Michael Crow invoked the words of the late House Speaker Jake Flake, a Snowflake Republican who backed the 2003 legislation.

“He said, ‘Come back in 10 years, tell me how it worked and we’ll consider another investment,’” Crow said. “Ten years have run, we know how it works, we know the outcome. It’s a fantastic investment with tremendous return for our competitiveness as universities.”

The new dollars would bring a 7 to 1 return on investment, according to the white paper.

Jon Sanders, an economist with the John Locke Foundation, a conservative think tank, said that return is not believable because if it were, investors would be tripping over themselves to get in on such a rare opportunity.

“Their friends and neighbors ought to be taking out second mortgages to get in on it, too,” he said.

Sanders in 2003 conducted a study for the Goldwater Institute testing the theory that public spending on higher education drives economic growth.

Sanders looked at 20 years of data comparing each state’s spending on higher education to their respective GSP. He found no solid evidence that spending boosts the economy.

Farnsworth said part of the discussion on the proposal will be on the state’s long-term fiscal health, especially in light of restrictions of Proposition 105, a 1998 initiative that protects voter-approved laws from the Legislature.

“We have to understand we continue to have serious constraints,” Farnsworth said.

Regents President Eileen Klein said policymakers have suggested in initial conversations on the proposal that the state is still recovering from a massive economic downturn last decade.

“We understand that as well as anybody,” Klein said. “We just feel like it is important that as the state recovers to make sure the universities are in a position to help accelerate the recovery.”

In 2003, the state was battling a structural deficit and in an economic downturn sparked by the Sept. 11 terrorist attacks, but 75 lawmakers co-sponsored the legislation. It sought to pay for $486 million in new construction for research buildings.

Leaders from both chambers were on board and the measure was one of three separate big-ticket spending proposals that Gov. Janet Napolitano was pushing. The House voted 41-17 and Senate voted 21-7.

The 21 GOP lawmakers who opposed it were by and large staunch conservatives. Four of them serve today and so do seven Democrats who voted for the bill. Only Robson and Sen. Michele Reagan of Scottsdale remain today from the majority of Republicans who supported it.

One of those who voted against it was Superintendent of Public Instruction John Huppenthal, who by virtue of his office is a voting member of the Board of Regents.

Huppenthal moderates view

As a lawmaker, Huppenthal was outspoken about his opposition, calling the idea a fad and sarcastically skeptical of research and testimony in support of it.

In a 2007 newspaper column he said higher education is becoming less affordable by “financing runaway research expansion on the backs of students and taxpayers.”

Huppenthal is more measured today.

“This could potentially be a very valuable investment in Arizona’s economic future, however we need to ensure that the General Fund has the strength to not only bear this burden but its other funding obligations,” Huppenthal said in an email.

Senate Minority Whip Steve Gallardo, a Phoenix Democrat, said that depending on the language of the proposal he expects his caucus to be in favor of it as it was in 2003.

Gallardo said he’d prefer any proposal not to be part of the budget, which would take away some of the negotiating power of Speaker Andy Biggs, who opposed the 2003 measure.

“I think our caucus would like to see a stand-alone bill,” Gallardo said.

This time around, there are four more Democratic votes in the House than in 2003. The Senate split is the same.

Gov. Jan Brewer hasn’t indicated where she stands. Klein, her former chief of staff, said the conversations with the Governor’s Office have only been to acquaint her staff with the proposal and its benefits.

Gallardo suggested Brewer is probably in support of it given her connection with Klein and the majority of members are her appointees.

“It is a Brewer Board of Regents,” Gallardo said.

Where they Stood

These legislators also served in 2003 during a vote to approve a $35 million-a- year appropriation to construct new labs on Arizona’s three universities. The Arizona Board of Regents is now asking for $1 billion for further research expansion.

NO

Rep. John Allen (R)

Sen. Andy Biggs (R)

Rep. Eddie Farnsworth (R)

Sen. Steve Yarbrough (R)*

YES

Sen. David Bradley (D)

Sen. Steve Gallardo (D)

Rep. Debbie McCune Davis (D)

Sen. Robert Meza (D)

Sen. Olivia Cajero Bedford (D)

Sen. Linda Lopez (D)

Sen. Leah Landrum Taylor (D)

Sen. Michele Reagan (R)

Rep. Bob Robson (R)

*Voted yes on House version and no on Senate version.