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Do my association for federal enterprise risk management summit write for me us army capstone course calhoun academy ms football [Music] good morning and welcome to Sunday square off on the show today prop 123 money it's supposed to be no strings attached so wyd lawmakers suddenly want to know where schools are spending it minimum wage blowback governor Ducey signs a bill making it harder for Arizonans to make law at the ballot box why it's a reaction to the prop 206 victory and new and improved loans high interest lenders are knocking on Arizona's door again why they claim one hundred and sixty-four percent annual interest is a smoking deal but first governor Ducey has come up with a new way to get more money to Arizona's three public universities they would keep the state sales taxes they pay and use the revenue stream to finance hundreds of millions of dollars in building repairs and new construction an estimated 1.5 billion dollars worth perhaps over 30 years but there's no free lunch Arizona cities want to know why the governor is taking the sales tax revenue out of their pockets to pay for higher ed cities and counties say they could lose hundreds of millions of dollars this all has to be worked out in the state budget one of the key players Eileen Klein president of the Arizona Board of Regents which oversees our three universities joining us this morning good morning good to see you put this money in perspective it sounds like an awful lot we haven't been talking about university money a lot over the last few years how much is it and how much does it compare to years past what universities have been getting in years past from the state well first this is a terrific advancement for the public universities it has been at least a decade since people have been talking about how to give the university's more money and this is the most substantial proposal we've seen to that end so we are very encouraged the governor governor Ducey has put on the table not only money for new resident students to help support the cost of their education but importantly an opportunity for us to continue investing in our buildings both to keep our buildings up to date and to create new buildings that will help us with education and research so is it just for buildings and new buildings and repairs are there guardrails on this money that say would keep keep it from being funneled to salary sory administrative expenses the dollars that are under consideration from the sale tax are specifically for building refurbishment and new building investment it's important to understand what we're talking about the universities have close to a thousand buildings statewide on their campuses for education and research purposes it's about 28 million square feet they have an asset value of about 10 billion dollars just on their own so point being this is a huge asset and governor ducey's taken a terrific step forward by making sure that we preserve this asset and that we continue to grow our universities are going to continue to grow as our state grows and we need to have buildings that are up to date for both students and research faculty so it's coming up sales tax revenue would it be a separate budget appropriation for the universities or is this it well the state of Arizona is one of the very few states that actually charges universities for a sales tax on their purchases so the governor's proposed that we Corral those dollars and that we use them as a fund that we can then leverage for further development and investment in our university infrastructure so that but would still be infrastructure absolutely the dollars would be for infrastructure so would there be a separate budget line this year for universities for different kinds of spending that's the goal and so the universities have other dollars that are available for all of their general purpose operating funds and it's important to remember that for every dollar we can secure that helps us keep up with our facilities that's one less dollar that has to come out of other resources on campus so we see this is a huge effort not just to continue our growth and development in research but also to really make sure we're keeping costs affordable for students so they don't have to bear these costs so I mentioned this at the top is this kind of this is a zero-sum game here maybe a hunger game the sales tax money comes out of the pockets of taxpayers in Mesa Phoenix Tempe Flagstaff other other cities why should the money for the universities come out of their pockets the sales tax revenue those cities get well first we should question why the universities are even forced to pay sales tax on their purchases given that they are part of the state government infrastructure that aside it's important to think about how then we use the receipts that are generated and our argument is that but rather than putting them into further growth and of government they be better serve to put them into an area where they can further propel the economic growth of this state there's no better return for this state than to invest in people by giving them a higher quality education and to make sure that we're continuing to attract research dollars we can definitely say that for every dollar of research space we return 352 for every square foot of research space we return $350 to the state so this much more of an impact than if we just dedicate the dollars to the growth of government so they say they need to be made whole they have certain expenses they need to take care of the city's you're saying they just want to get bigger grow their government and you make it sound easy ways to spend pain what very saying that we are with their dollars but I will tell you the amount of money at stake is de minimis it is one half of one percent of their share of state receipts so for our largest cities who are complaining the loudest it is the equivalent of a rounding error and there's their budgets and so really this is revenue foregone revenue in the future and the benefit actually comes back to the cities by having a higher educated population new facilities you've seen the Renaissance just here in downtown Phoenix alone we think that the cities would be wise to partner on a proposal so you're saying taxpayers should not be concerned and the city city's desires to be made whole really don't matter we don't absolutely think that this government doesn't have to take care of that this is a good play for the this is a good play for the citizens of Arizona because it gives a dedicated revenue source to continue to help fund university infrastructures you know universities have taken some of the largest cuts in the state budget over the past decade and for the first time governor Ducey's put a continuing revenue source on the table that comes at a very small impact of cities on their budgets and a very big opportunity for cities to help them grow where it matters in the economy all right I'll een klein thanks so much for joining us thanks so much we come back senator jeff flakes family grills a Supreme Court nominee plus new and improved predatory lenders say they'll charge Arizona 164 percent Interest much less than the other guys and schools have the freedom to spend prop 123 money anyway they liked by state legislators don't like that stay with us [Music] capstone woodworking Sisters of Charity of New York.