Hobbs now owns UA’s budget crisis. That could be good
When Gov. Katie Hobbs pushed the nuclear button on the people who are working to save the University of Arizona from its budget disaster, we expected firings and forced resignations to follow. Why?
Her words were tipped with warheads.
“Appalling and unacceptable,” she called the actions of the Arizona Board of Regents in her Feb. 26 statement.
University leadership has been “clueless.”
“Regents appear more concerned with saving face than fixing the problems they created.”
“Time for them to come down from their ivory tower.”
When the governor had spoken, Arizona awaited her next move.
Nothing happened.
Hobbs set a meeting for March 6 to discuss next steps and then spent the week in Mexico on a trade mission. That seemed like a mistake.
When you roar as loudly as the governor had in her statement, you signal that heads are about to roll.
When those heads don’t roll, you leave yourself with leaders whom you’ve undercut and publicly humiliated, who must now manage their reputational damage along with the financial crisis before them.
Developments since then have begun to change our mind.
First, the crisis grew worse.
The university’s troubles caught the attention of the bond market. Moody’s this week revised its outlook on the university’s bond rating from stable to negative, according to the trade newspaper The Bond Buyer.
Also, this past week, the U.S. Department of Education signaled it intends to force UA to pay back millions in student loans from its acquisition of the online and scandal-ridden Ashland University, a for-profit operation.
Judging the governor’s anger by this more complete picture makes it a bracing slap that speaks to the seriousness of this issue.
University administration through poor budgeting practices, risky ventures and mismanagement had already blown a $177 million hole in the UA budget and will now have to balance their mistakes with layoffs and program cuts.
For their part, the Arizona Board of Regents failed to provide the oversight that might have caught the problems.
Second, when the governor shook the rafters with her strong words, she also roused the Regents and UA administration to take their own independent actions.
Fred DuVal announced that he would step down as chairman of the Board of Regents and said he would continue to work with UA in the two years left in his board term.
John Arnold stepped away temporarily from his job as Regents executive di
But despite all the uncertainty — and how at polar opposites the proposals from these two factions appear to be — a few things are clear for Arizona:
Both plans agree that the Lower Basin should be required to use far less than the law allocates to them, even when there is far more water in the lakes than there is now.
Both plans call for 1.5 million acre-feet in cuts in what I’d call the decent times — like now, after a wet winter and a heavily funded water conservation effort have radically improved the short-term outlook.
The system would have to be mostly full to stop these reductions in both plans, even if how they measure “full” is wildly different.
But there is wide agreement now that the Lower Basin should own these cuts.
And that’s light-years ahead of where we were at this time last year.
The Lower Basin’s plan spells out how that 1.5 million acre-feet in cuts might break down by state.
As you’d expect, given our junior water-rights status, Arizona could end up shouldering 760,000 acre-feet of it.
Which is roughly equivalent to the amount of water that the Central Arizona Project delivered to metro Phoenix cities, tribes and farmers last year.
And, again, that’s just the status quo. Both plans contemplate making up to another 2.4 million acre-feet of cuts to water use on top of that, should the reservoirs dip to dangerously low levels.
The Lower Basin plan says all seven states and Mexico should share in that pain.
The Upper Basin plan says that only the Lower Basin should be responsible for it.
But either way we go, Arizona would have to learn to live without a ton of water.
This is a key point that, after years and billions of dollars in federal investment, few have learned.
We’ve put tons of water back in Lake Mead, but mostly by paying people to temporarily not use it.
That hasn’t produced the lasting kinds of changes the Lower Basin will need to save 1.5 million acre-feet (or more) year-in and year-out.
If that’s the goal, we’ll need to invest even more in efficiency measures, talk seriously about transitioning some less productive farmland to other uses and develop additional water supplies, such as recycled or desalinated water.
And no, I don’t know how we even begin to find that kind of cash. Just know that getting there will require not only a sizable but sustained investment.
And that could be a tough pill for a lot of folks to swallow, particularly after the current federal largesse is spent.
No matter how this shakes out –– via some seven-state compromise, Reclamation laying down the law or (let’s hope not) litigation –– there is a lot of work before us.
Work that, if past is prologue, will eclipse everything else as we move closer to 2026, when the current rules expire.
That doesn’t leave a ton of time to put rural groundwater basins on a more sustainable path or find better ways to balance groundwater use and growth in metro Phoenix.
Both of which we’ll need to survive the Colorado River maelstrom that lies ahead.