Northern Arizona University

FY 2018 FY 2019 FY 2020 ACTUAL ESTIMATE APPROVED

OPERATING BUDGET Full Time Equivalent Positions 2,316.5 2,316.5 2,316.5 1/ Personal Services 157,751,700 160,464,200 160,464,200 Employee Related Expenditures 49,990,400 51,847,800 51,990,700 Professional and Outside Services 12,074,200 8,677,100 8,677,100 Travel - In State 345,000 540,600 540,600 Travel - Out of State 447,700 0 0 Other Operating Expenditures 26,137,800 28,868,800 28,868,800 Equipment 405,400 459,700 459,700

OPERATING SUBTOTAL 247,152,200 250,858,200 251,001,100

SPECIAL LINE ITEMS 2003 Research Infrastructure Lease-Purchase Payment 5,896,500 5,896,200 5,899,500 2/ 2017 Capital Infrastructure Funding 0 4,520,900 4,611,300 3/ Arizona Financial Aid Trust 1,326,000 1,326,000 1,326,000 Biomedical Research 3,000,000 3,000,000 3,000,000 4/ Economic Policy Institute 0 500,000 500,000 5/ NAU - Yuma 3,025,600 3,071,400 3,071,400 One-Time Funding 3,202,800 1,590,200 6,650,000 Teacher Training 2,440,700 2,291,700 2,291,800 6/

AGENCY TOTAL 266,043,800 273,054,600 278,351,100 7/8/

FUND SOURCES General Fund 108,612,700 112,095,700 117,250,900 9/10/11/ Other Appropriated Funds University Collections Fund 157,431,100 160,958,900 161,100,200 12/ SUBTOTAL - Other Appropriated Funds 157,431,100 160,958,900 161,100,200 SUBTOTAL - Appropriated Funds 266,043,800 273,054,600 278,351,100

Other Non-Appropriated Funds 299,691,200 317,175,800 336,395,000 Federal Funds 101,264,000 102,276,700 103,299,500 TOTAL - ALL SOURCES 666,999,000 692,507,100 718,045,600

AGENCY DESCRIPTION — Established in 1899, Northern Arizona University (NAU) is one of 3 public universities governed by the Arizona Board of Regents (ABOR). The university’s primary focus is undergraduate residential education. NAU had 29,289 full-time equivalent students at its campuses in fall 2018.

FOOTNOTES 1/ Includes 34.4 GF FTE Positions funded from Special Line Items in FY 2020. 2/ A.R.S. § 15-1670 appropriates $5,899,500 to NAU from the General Fund in FY 2020 to finance lease-purchase payments for research infrastructure projects. 3/ A.R.S. § 15-1671 appropriates $4,611,300 to NAU from the General Fund in FY 2020 for capital infrastructure projects. 4/ The biomedical research funding shall be distributed to a nonprofit medical research foundation in this state that collaborates with universities, hospitals, biotechnology and health research centers. A nonprofit foundation that receives monies shall submit an expenditure and performance report to Northern Arizona University. The University shall transmit the report to the Joint Legislative Budget Committee on or before February 1, 2020. The report must include at least the following: 1) The type and amount of expenditures from all state sources of monies, including the amount leveraged for local, state, federal, and private grants, 2) A description of each grant received as well as the percentage and locations of positions funded solely or partly by state monies and the nonprofit foundation's projects with which these positions are associated, 3) Performance measures, including: (a) Outcomes that are specifically related to the use of state monies; (b) Progress that has been made toward achieving each outcome, including activities, resources and other evidence of progress; (c) Reportable inventions or discoveries related to each outcome;

FY 2020 Appropriations Report 367 Northern Arizona University (d) Publications, presentations and narratives related to each outcome and how the expenditures from all state sources of monies that the nonprofit foundation received have benefited the state. (General Appropriation Act footnote) 5/ The appropriated amount for the Economic Policy Institute line item may not supplant any existing state funding or private or external donations to the institute or to the university. The appropriated monies and all private and external donations to the institute, including any remaining balances from prior fiscal years, shall be deposited in a separate account, shall be used only for the direct operation of the institute and may not be used for indirect costs of the university. On or before October 1, 2019, the institute shall submit a report to the President of the Senate, the Speaker of the House of Representatives, the Chairpersons of the Senate Education Committee and the House of Representatives Education Committee and the Director of the Joint Legislative Budget Committee a report that includes at least the following information for the institute: 1) The total amount of funding received from all sources; 2) A description of the faculty positions and courses offered; 3) The total undergraduate and graduate student participation; 4) Significant community events, initiatives or publications. The Chairpersons of the Senate Education Committee and the House of Representatives Education Committee may request the Director of the Institute to appear before the committees to report on the Institute's annual achievements. (General Appropriation Act footnote) 6/ The appropriated amount for the Teacher Training line item shall be distributed to the Arizona K-12 Center for Program Implementation and Mentor Training for the Arizona Mentor Teacher program prescribed by the State Board of Education. (General Appropriation Act footnote) 7/ Other than scholarships awarded through the Arizona Financial Aid Trust, the appropriated monies may not be used for scholarships or any student newspaper. (General Appropriation Act footnote) 8/ General Appropriation Act funds are appropriated as an Operating Lump Sum with Special Line Items by Agency. 9/ The state General Fund appropriation may not be used for alumni association funding. (General Appropriation Act footnote) 10/ The FY 2020 General Fund budget as adjusted for statewide adjustments is $117,250,900. This amount includes $100,088,400 in NAU's individual section of the FY 2020 General Appropriation Act, $1,700 for statewide adjustments, $5,899,500 in A.R.S. § 15-1670 lease-purchase appropriations, $4,611,300 in A.R.S. § 15-1671 capital infrastructure appropriations, and a one-time $6,650,000 appropriation in section 155 of the FY 2020 General Appropriation Act for capital improvements or operating expenditures. 11/ The increased state General Fund appropriation from Laws 2014, Chapter 18 may not be used for medical marijuana research. (General Appropriation Act footnote) 12/ Any unencumbered balances remaining in the University Collections Fund on June 30, 2019 and all collections received by the university during the fiscal year are appropriated for operating expenditures, capital outlay and fixed charges. Earnings on state lands and interest on the investment of the Permanent Land Funds are appropriated in compliance with the Enabling Act and the Constitution of Arizona. No part of this appropriation may be expended for supplemental life insurance or supplemental retirement. (General Appropriation Act footnote) ______

Operating Budget (Please see the Agency Detail and Allocations section.)

The budget includes $251,001,100 and 2,282.1 FTE 2003 Research Infrastructure Lease-Purchase Payment Positions in FY 2020 for the operating budget. These amounts consist of: The budget includes $5,899,500 from the General Fund in FY 2020 for the 2003 Research Infrastructure Lease- FY 2020 Purchase Payment line item. FY 2020 adjustments are as General Fund 117,250,900 follows: University Collections Fund 161,100,200 Refinance Adjustment FY 2020 adjustments are as follows: The budget includes an increase of $3,300 from the General Fund in FY 2020 to adjust the Certificates of Statewide Adjustments Participation (COPs) payment. The budget includes an increase of $142,900 from the General Fund in FY 2020 for statewide adjustments. As amended by the FY 2017 Higher Education Budget Reconciliation Bill (BRB), A.R.S. § 15-1670 appropriates an General Fund 1,600 annual amount from the General Fund to the state University Collections Fund 141,300 university system from FY 2008 through FY 2031 to finance lease-purchase payments for research

FY 2020 Appropriations Report 368 Northern Arizona University infrastructure project agreements entered into before July and health science research centers. Previously, NAU 1, 2006. awarded the funding to the Translational Genomics Research Institute (TGen). (Please see the Department of Since this funding appears in A.R.S. § 15-1670, this funding Health Services section for additional information on would not appear in the FY 2019 General Appropriation nonprofit medical research funding.) Act. In total, the universities have issued $482,500,000 in COPs for research infrastructure projects. Of this amount, Economic Policy Institute NAU has issued $42,210,000 in COPs. The budget includes $500,000 from the General Fund in (Please see the Long-Term Budget Impacts narrative FY 2020 for the Economic Policy Institute line item. This below and the 2003 Research Infrastructure narrative in amount is unchanged from FY 2019. the ABOR section for more information.) The funding for the Economic Policy Institute was used to 2017 Capital Infrastructure Funding support the institute's mission of rural economic development, financial literacy, and entrepreneurialism. The budget includes $4,611,300 from the General Fund in This was the first year of state funding being allocated to FY 2020 for the 2017 Capital Infrastructure Funding line the institute. item. FY 2020 adjustments are as follows: Funding for the Economic Policy Institute line item was Inflation Adjustment previously labeled as one-time in FY 2019 and is now The budget includes an increase of $90,400 from the labeled as ongoing. General Fund in FY 2020 for a 2% increase in capital infrastructure funding. The FY 2020 General Appropriation Act also specifies that the state appropriations and all private and external Laws 2017, Chapter 328 established A.R.S. § 15-1671, donations to the institute must be deposited into a which provides General Fund appropriations from FY 2019 separate account. - FY 2043 for new university research facilities, building renewal, or other capital construction projects. Since this NAU - Yuma funding appears in A.R.S. § 15-1671, this funding would not appear in the FY 2020 General Appropriation Act. The budget includes $3,071,400 and 25.9 FTE Positions A.R.S. § 15-1670 increases the appropriation annually by from the General Fund in FY 2020 for NAU-Yuma. These the lesser of 2% or inflation. amounts are unchanged from FY 2019.

(Please see the 2017 University Infrastructure Funding NAU operates this campus in conjunction with the Arizona narrative in the Capital Outlay - ABOR Building System Western College in Yuma. section for more information.)

One-Time Funding Arizona Financial Aid Trust

The budget includes $6,650,000 from the General Fund in The budget includes $1,326,000 from the General Fund in FY 2020 for the One-Time Funding line item. FY 2020 FY 2020 for the Arizona Financial Aid Trust (AFAT). This adjustments are as follows: amount is unchanged from FY 2019. (Please see the Other Issues: Arizona Financial Aid Trust narrative in the ABOR Adjusted One-Time Funding section for more information.) The budget includes an increase of $5,109,800 from the General Fund in FY 2020 for the adjustment of one-time Biomedical Research funding for capital improvements or operating expenditures. The budget includes $3,000,000 from the General Fund in FY 2020 for the Biomedical Research line item. This The FY 2019 budget included $1,590,200 of one-time amount is unchanged from FY 2019. funding for NAU for capital improvements or operating expenditures. As reviewed at the April 2018 JCCR Funding is allocated to a nonprofit medical research meeting, NAU reported that it is using its one-time funds foundation that specializes in biotechnology and that in FY 2019 toward the cost of renovating its Science Annex collaborates with universities, hospitals, biotechnology building.

FY 2020 Appropriations Report 369 Northern Arizona University Teacher Training • A $(1,020,000) decrease in 2021 and a $160,300 increase in FY 2022 to adjust for university debt The budget includes $2,291,800 and 8.5 FTE Positions service costs. (Please see the 2003 Research from the General Fund in FY 2020 for Teacher Training. FY Infrastructure Refinancing narrative for more 2020 adjustments are as follows: information.) • Increases of $92,200 in FY 2021 and $94,100 in FY Statewide Adjustments 2022 to increase the university's annual Capital The budget includes an increase of $100 from the General Infrastructure Funding appropriation by 2% each Fund in FY 2020 for the Teacher Training line item. year. (The GDP inflator is currently projected at 2.50% for FY 2021 and 2.70% for FY 2022; statute The Teacher Training program serves to increase the funds the lesser of 2% or the actual rate). (Please see number of teachers serving as mentors under the Teacher the 2017 University Capital Infrastructure Funding Training (“Master Teacher”) program. The Arizona K-12 narrative in the Capital Outlay - ABOR Building System Center is affiliated with NAU and is located in downtown section for more information.) Phoenix. University Collections and FTE Positions Adjustments Other Issues Including statewide adjustments, the FY 2019 General Appropriation Act appropriated $157,620,700 from the This section includes information on the following topics: University Collections Fund to NAU in FY 2019. The • Summary Collections Fund for NAU represents a portion of tuition, • Long-Term Budget Impacts fees and a portion of land earnings. (Please see ABOR • University Collections and FTE Positions Adjustments Other Issues for more information.) If collections differ from the appropriated amount, the annual General Summary Appropriation Act includes a footnote permitting the universities to expend those amounts as well as a NAU’s FY 2020 General Fund budget is $117,250,900. Of separate footnote requiring the submission of a report this amount: detailing any adjustments to the appropriated amounts.

ABOR sets tuition in the spring (independent of the • $100,088,400 is included in NAU’s individual section legislative process). Any revised tuition rates as well as of the FY 2020 General Appropriation Act. changes in enrollment can result in collections exceeding • $1,700 is part of statewide adjustments. (or being below) the appropriated amount. The • $5,899,500 is appropriated in A.R.S. § 15-1670 for a Universities reported the adjustments to the University research infrastructure lease-purchase payment. Collections Fund for FY 2019 to the Joint Legislative • $4,611,300 is appropriated in A.R.S. § 15-1671 for Budget Committee in July 2018, and NAU incorporated new university research facilities, building renewal, or the adjusted FY 2019 amounts as part of their FY 2020 other capital construction projects. budget submission. Accordingly, the estimated FY 2019 • $6,650,000 is a one-time appropriation in Section 155 amount has been adjusted upward by $3,338,200 to of the FY 2020 General Appropriation Act for capital $160,958,900. improvements or operating expenditures. The FY 2020 University Collections Fund amount is Long-Term Budget Impacts increased by $141,300 for statewide adjustments to $161,100,200. As part of the budget's 3-year spending plan, NAU's The FY 2019 FTE Position count has also been adjusted. General Fund costs are projected to decrease by $(7.6) The FY 2019 General Appropriation Act originally million in FY 2021 below FY 2020 and an increase of appropriated 2,316.5 FTE Positions in FY 2019 for NAU. $254,400 in FY 2022 above 2021. The General Fund accounted for 865.1 FTE Positions and

the University Collections Fund accounted for the These estimates are based on: remaining 1,451.4 FTE Positions. The estimated number

of FY 2019 FTE Positions remains at 2,316.5. The General • A $(6,650,000) decrease in FY 2021 for the removal of Fund accounts for 852.2 FTE Positions and the University one-time funding for capital improvements or Collections Fund accounts for the remaining 1,464.3 FTE operating expenditures. Positions.

FY 2020 Appropriations Report 370 Northern Arizona University