Arizona plans to use about $16.5 million in remaining federal pandemic aid as a one-time offset for operating-budget reductions at its three public universities. The governor’s announcement allocates nearly $8.1 million to Arizona State University, more than $4.7 million to the University of Arizona, slightly more than $2.6 million to Northern Arizona University and slightly more than $1 million to the UA Health Sciences Center.
The deadline behind the allocation
Arizona received $4.2 billion through the American Rescue Plan Act in 2021. The funds were intended to help state and local governments address pandemic impacts. The Arizona Office of Strategic Planning and Budgeting says the state had to obligate the money by the end of 2024 and must spend it by the end of 2026.
In its announcement, Gov. Katie Hobbs’ office said the allocation is meant to cover reductions to university operating funding in the fiscal 2027 budget. The universities will receive the money; cuts to other state agencies are not being reversed through this allocation, KJZZ reported.
The reduction being covered
The June 2026 budget, an $18.3 billion plan signed by Hobbs, applied a 2.5% across-the-board cut to multiple state agencies, including the universities. KJZZ reported that Republican lawmakers had first proposed a 5% permanent lump-sum reduction for agencies, which would have meant $38.9 million in university cuts. Hobbs negotiated that proposal down to a one-time university reduction of less than $16.5 million. The new allocation covers that one-time reduction.
University funding context
University officials told KJZZ that state funding helps address recurring budget cuts and capital maintenance needs, as well as keep tuition affordable for Arizona residents. They said state aid accounts for about 12% of university budgets.
A report from the Office of the University Economist at Arizona State University found that, in fiscal 2022, net tuition and fee revenue for Arizona public higher education was 45% higher than educational appropriations. The report also ranked Arizona 20th nationally for net tuition and fee revenue per student.
A longer-term measure of state support
Arizona appropriated $7,103 in higher-education funding per full-time-equivalent student in 2023, 34.6% below its 2008 level, according to a State Higher Education Executive Officers Association report cited by Higher Ed Dive. This shows the change in Arizona over time; the cited figure does not establish the state’s rank against others for appropriations. It is also a different measure from the report above’s ranking of net tuition and fee revenue per student.
