Senate ED and House ED COR

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ARIZONA STATE LEGISLATURE

Fiftieth Legislature – First Regular Session

SENATE EDUCATION AND HOUSE OF REPRESENTATIVES
HIGHER EDUCATION, INNOVATION AND REFORM
COMMITTEE OF REFERENCE

Minutes of Interim Meeting

Tuesday, November 15, 2011

Senate Hearing Room 1 -- 1:30 p.m.

CoChairman Crandall called the meeting to order at 1:33 p.m. and attendance was noted by the secretary.

Members Present

Senator Rich Crandall, CoChairman	Representative Tom Forese, CoChairman
Senator Sylvia Allen	Representative Ben Arredondo
Senator Nancy Barto	Representative Tom Chabin
	Representative Doris Goodale
	Representative Amanda Reeve

Members Absent

Senator Linda Lopez (excused)
Senator David Schapira (excused)

Opening Remarks

CoChairman Crandall explained that the Arizona Board of Regents (Board) is a Constitutional body and, as such, is not renewed or extended by the Legislature. The Committee of Reference today will review a Performance Audit and learn of the tremendous gains made over the last few years by the Board and the future vision the Board has for Arizona’s three universities.

Presentation by the Office of the Auditor General

Shan Hays, Performance Audit Manager, Office of the Auditor General, addressed the Committee to present information on the performance audit and sunset review done on the Arizona Board of Regents (Attachment 1).

She stated that her office issued two reports about the Board which are informational and do not include any recommendations:

· Arizona Board of Regents, Tuition Setting for Arizona Universities, Report Number
11-11 (Attachment 2), a questions and answers document on the Board’s tuition setting for Arizona’s three universities

· Arizona Board of Regents, Sunset Factors, Report Number 11-12 (Attachment 3), providing information on the statutory sunset factors

Ms. Hays explained that, because the Board was established by the Arizona Constitution, only a majority vote of the people can terminate it. She defined the Constitutional responsibility of the Board to govern Arizona’s university system which includes Arizona State University (ASU), Northern Arizona University (NAU), and the University of Arizona (UA). The Board is composed of 12 members, including the Governor and the Superintendent of Public Instruction, and has a staff of 25 persons, including the president of the Board.

Ms. Hays stated that the Board sets tuition rates, prescribes admission requirements, establishes curricula, oversees some university operations, and adopts operating budgets. She explained that in FY2011 the Board’s revenues totaled $6.2 million, including $2.4 million of general fund monies and $1.9 million from the universities.

Ms. Hays discussed in some detail each of the six questions about tuition setting (Attachment 2):

1. What are the legal requirements for setting state university tuition in Arizona?

2. What is the process the Board uses to set tuition?

3. How do universities use tuition revenues?

4. Why has undergraduate tuition increased at the universities?

5. How much are students actually paying to attend Arizona’s universities?

6. What steps has the university system taken to mitigate the impact of tuition increases on students and minimize tuition increases?

Ms. Hays addressed Mr. Chabin’s question about question #5, explaining that the universities pulled information regarding resident full-time undergraduates from the student data systems. Discussion ensued on the percentage of the total tuition cost that is borne by students from different family income levels and/or receiving different types of scholarships or financial aid.

Response by the Arizona Board of Regents

Tom Anderes, President, Arizona Board of Regents, introduced the Regents in attendance. He presented a brief overview of the Board (Attachment 4), which works with the entire educational pipeline while looking for affordability and access to quality degrees. He described how the Board works closely with K-12 in order to design, test, and pilot programs to ensure that students are college-ready. He described the Board’s connections with the ten community college districts.

Dr. Anderes explained that, over the last 18 months, the Board has worked very closely with the university system presidents to develop an enterprise of institutions with different priorities and missions, but that is working towards statewide goals. These goals are clearly defined using 32 metrics in four categories with annual benchmarks per university leading to the year 2020.

Dr. Anderes described how this outcome-driven approach for governing and managing the education system will lead to affordability, accessibility, and accountability. He then showed the Members an informative video giving an overview of the enterprise plan.

Fred DuVal, Chairman, Arizona Board of Regents, informed the Members that the Board’s recent focus has been on efficiency. As measured by the number of degrees per dollars invested, Arizona is among the most efficient in the United States. The strategic plan is to double the number of degrees by 2020 and to enhance accountability to the taxpayers. He described how the United States was ranked first twenty-five years ago in the percentage of its population getting college degrees but is now number 16 and declining by a place every year. Arizona is ranked 48 of the 50 states, with degree productivity equal to Paraguay’s. He stated that, clearly, there is much work to be done to increase the number of Arizona’s graduates.

Mr. DuVal discussed the assignments from last year’s budget and described the redesigned model to achieve outcome-based goals:

· increase in the number of degrees

· increase in the number of completed student credit hours

· increase in external research and public service funding.

Rick Myers, Chairman-elect, Arizona Board of Regents, addressed the Members to describe the upcoming transition in chairmanship and the fact that the Governor will name three new regents this year, to be approved by the Senate. Mr. Myers stressed the strength of the four presidents of the Board, ASU, NAU, and UA. He assured the Members that the Board wants what is best for Arizona. He discussed accountability and stated that the Board must measure in order to manage. He discussed financial aid as needs-based versus merit-based and financial aid versus gift aid.

Mr. Myers addressed Members’ questions, stating that the Board does try to identify the reasons a student leaves college but that it is not data that is reliably available so it is hard to determine what departures are due to financial hurdles and what are due to other factors.

Discussion ensued on tuition offsets, scholarships, Pell grants, etc. There was also discussion regarding non-resident, part-time, and graduate student tuition.

Mark Killian, Member, Arizona Board of Regents, assured the Members that the Board is very concerned about Arizona’s educational system. He stressed that the Board is meeting its Constitutional mandate.

In response to a question by Senator Barto, discussion ensued regarding the philosophy of the Board as it relates to public policy. Mr. Myers stated that the purpose of the Board and the university system is more to provide solutions and resources than to create policy.

There was discussion about the relative value of different types of degrees. Mr. DuVal stated that degrees do indeed have different costs and different value, but that education is also about personal skills and cultural awareness. He stated that it is important that the workforce needs of the state are met but also that the universities do not simply become elevated versions of trade schools and lose the vast academic resources of the universities to give students a competitive and creative edge.

In response to a question from Senator Allen, Mr. DuVal stressed that academic freedom is important and teaching ideology rather than content can be troublesome.

Representative Reeve explained that she is a graduate student still paying tuition as she completes her thesis. She stated that she views this tuition as an investment in the future, both hers and the state’s. She wants to increase the value of education while minimizing the cost to the students.

Representative Chabin and Mr. DuVal discussed the relationship between tuition increases and budget cuts.

Representative Arredondo stated that K-12 superintendents should meet and address the costs of a college education, as well as inform the parents. Mr. DuVal commented that the ASU campuses at Payson and Lake Havasu will be the new templates of this approach.

Mr. DuVal closed by assuring the Members that the Board does not have a philosophy around politics or ideology; rather it has a philosophy about the system that it wishes to create. The Board has the following design imperatives for the academic institutions:

· more choices

· more places

· lower cost

· marketable degrees

· socially-relevant research

· degrees that are meeting the workforce needs of Arizona

Representative Goodale announced that online registration has begun for ASU classes in
Lake Havasu in 2013.

Public Testimony

There was none.

Discussion

CoChairman Crandall asked for any opinions about continuation of the Board of Regents; there were none.

Recommendations by the Committee of Reference

CoChairman Forese moved that the Committee of Reference recommend to the full Legislature that the Arizona Board of Regents be continued for ten years. The motion carried.

Without objection, the meeting adjourned at 3:17 p.m.

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Jane Dooley, Committee Secretary

November 29, 2011

(Original minutes, attachments and audio on file in the Office of the Chief Clerk; video archives available at http://www.azleg.gov)

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COR - SENATE ED AND HOUSE HEIR

November 15, 2011

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