Legislator: String tied to stimulus education cash

PHOENIX - State officials say a requirement for obtaining a big pot of federal stimulus dollars for education could require them to undo recent funding cuts imposed on the state's higher education systems. The stimulus money is seen as crucial for balancing the next fiscal year's budget.

The dollar amounts involved are big: $160 million of possible restored funding for the universities and community colleges and approximately $800 million of stimulus money that could be used for any state education program.

Republican legislative leaders said Thursday that federal ``maintenance of effort'' guidelines for obtaining and using the stimulus money for education are now expected to require it be used first to backfill state budget cuts in the current fiscal year.

The development is a complication for McComish and other legislators and Republican Gov. Jan Brewer as they struggle to keep the current budget in the black despite a new shortfall expected to reach $500 million. That's despite the January approval of a plan to close a $1.6 billion gap in the then-$9.9 billion budget.

The shortfall in the budget for the fiscal year starting July 1 is expected to exceed $3 billion based on $11 billion of spending.

Brewer spokesman Paul Senseman said the governor ``views the stimulus funds as an opportunity to restore some needed university funding.''

``Does it make even more challenging to balance the (2009) and (2010) budgets? Certainly, but that was a tremendous challenge that she inherited to begin with,'' Senseman said. ``Clearly it's the governor's goal to accept and utilize these funds to help our economy and address challenges in our state budget deficit.''

However, the legislative leaders had hoped to save that money for use in balancing the next fiscal year's budget and had thought that was permissible.

Before, ``we thought it was (just) a goal,'' said Senate Appropriations Chairman Russell Pearce said regarding use of the money to backfill this year's cuts.

Pearce, R-Mesa, and House Majority Leader John McComish, R-Phoenix, said only university spending cuts apparently would need to be backfilled because those for community colleges and K-12 schools would not run afoul of the federal criteria.

However, legislative budget director Richard Stavneak later said the $160 million of funding that might have to be provided anew would include community colleges as well as universities.

McComish and Pearce said it's not clear how the issue will be resolved, including whether or how the $160 million in cuts would need to be restored.

For now, McComish said, it would.

Pearce said he wants Gov. Jan Brewer to request a federal waiver on use of federal stimulus money. It wouldn't directly lift the maintenance-of-effort requirement but it would provide the state with flexibility that could help overall, he said.

Senseman said he was not aware of a request that Brewer ask the federal government for a waiver on the federal stimulus program's education money.