The U. of Arizona's budget woes are raising fears of layoffs and questions about economic division

Like thousands of people in southern Arizona, Josh Ramos' fate is intertwined with the University of Arizona. His mother's job as an accountant at the university supports Mr. Ramos's family and education by making him eligible for a degree. discount that reduces his tuition fees by 75 percent.

“This job has brought us a lot of stability,” said Mr. Ramos, 18, a freshman.

But the University of Arizona surprised the state late last year by announcing a $177 million award shortage in its annual budget of over $2 billion. As the 40,000-student campus prepares for layoffs, Mr. Ramos is concerned. About his mother's work. About having to drop out. About the future of his family.

And the entire state is concerned that Southern Arizona will suffer as the region's largest, most trusted employer loses credibility and trust.

The unrest has shaken the heavily Democratic city of Tucson, where many residents and university officials blame mismanagement at the top.

They say university leaders have landed in catastrophe by spending millions of dollars on top salaries, athletics, risky expansion efforts and tuition subsidies for out-of-state students. Now they worry that middle-class workers and Arizona students will be hit hardest by budget cuts.

“It will touch the heart of Tucson,” said Leila Hudson, associate professor and chair of the faculty.

Other flagship public schools including Penn State And University of West Virginia have recently suffered budget cuts due to inflation and declining enrollment. But the problems in Arizona irritated many people there, because the school was flourishing. The number of students and income are increasing and the university is making money more money from research subsidies and government funding.

University administrators say inflation, the pandemic and widespread overspending have contributed to the financial problems, and they are trying to balance the budget without hurting the university's academics or research. They say that despite the shortage, the university is not in danger of running out of money.

“The university has lost some credibility in the community, and we need to regain some trust,” John Arnold, the interim chief financial officer, said in an interview. Mr. Arnold is also executive director of the Arizona Board of Regents, which oversees Arizona's public universities.

The university's response has failed to satisfy critics and Democrat Katie Hobbs. In a letter She told university leaders last month that there was “no coherent vision” for a way forward, criticizing the school for a lack of accountability and transparency and threatening to change its leadership.

To some, the financial mess points to a widening class divide in higher education, where top administrators and coaches can earn $1 million a year while lower-level instructors and part-time teachers say they get by on less than $50,000.

Faculty members say they have already been furloughed during the pandemic, and teaching positions and staff jobs have remained empty in recent years. As they struggled to keep up, they said, the university bought a struggling for-profit online university and spent more than $60 million to keep the athletic department afloat.

University President Robert C. Robbins struck an optimistic tone on Feb. 9 update who described the school's financial plans and said, “I am confident that together we will emerge from this challenge stronger.”

But that hasn't allayed the fear and anger on campus that grew after The Arizona Daily Star reported that Lisa Rulney, the university's chief financial officer, who resigned amid the mess, had stayed on as a consultant and was still receiving a $500,000 salary. Ms Rulney did not respond to requests for comment.

“We're all on the same stormy sea, but they're in yachts and we're in rafts,” said Gary Rhoades, an education professor who has spent months poring over the university's spending to understand the roots of the problems.

The university has now frozen hiring and pay increases, and faculty members who have been following the budget discussions said they are bracing for as many as 1,000 job losses. Earlier this month, the government asked individual schools and departments to outline cuts from 5 to 15 percent.

A union representing campus workers says a handful of people on one-year contracts have already been fired.

Students and campus employees have responded by holding protests outside the administration building, urging leaders to “cut off the top.”

They urged the university to start with its dozens of vice presidents, rather than targeting rank-and-file employees. Mr. Arnold, the interim head of finance, said the university would scrutinize “every” vice president. Expanding bureaucracies have also plagued and led to other universities and colleges higher administrative costs and tuition fees.

The gap between the university's five- and six-figure workforce is particularly acute in a city like Tucson, population 540,000, where an influx of buyers during the pandemic has pushed median home prices to $$$.385,000 from about $250,000.

Even the university food bank is burdensome: It announced this winter that rising prices and more users had forced it to stop offering hygiene products and cut back on some of its food options.

“I'm so excited to work here, and I feel like the school isn't excited to have me,” said Spencer Gantt, who works in information technology and is a member of United Campus Workers Arizona, the local union that represents the most of the demonstrations against layoffs.

Jobs like Mr. Gantt's are perhaps among the most vulnerable. A financial plan released this month showed that the university would make cuts in administrative areas such as human resources, marketing, communications and, to Mr. Gantt's dismay, information technology.

“I'm very scared,” he said. He worried that he wouldn't have a job in a month and said he didn't even know if he was at risk of being fired. He's putting off changing the oil in his Toyota Corolla until he has some certainty.

Some students and employees say they are noticing the consequences of the money problems. Samantha Gonsalves Wetherell, 21, said she was saddened that the university was delaying the release of a climate action plan, which she spent much of her student years helping to create.

“We are all looking for answers, but no one knows,” says Maria Sohn Hasman, program coordinator at the university. “I wake up every day wondering if this is the day I'm going to be fired.”

The university has yet to detail any cuts, but says it plans to save $27 million by permanently eliminating positions. It also said it would hire outside consultants to scrutinize the athletics department's finances and a polarizing new online venture, the University of Arizona Global Campus.

The university started the program by paying $1 in 2020 to acquire a for-profit online school called Ashford University. The deal added tens of thousands of new online students to the university's roster.

But critics say it also saddles the university with more than $200 million in new costs and ties the university to a school that stands And federal Officials say students have been duped by being misled about the cost and value of their degrees, leaving them with little other than debt.

Tuesday the Arizona Board of Regents released a report detailing how and why it acquired Ashford, in response to Arizona's governor demanding more information about the deal. The board said it had not “set aside” concerns about Ashford's business practices, and said Ashford had assured the university that those “practices had been corrected.”

Attorneys representing Ashford's parent company did not respond to requests for comment.

The university said its global campus has been “cash positive” for the university to date, largely because the university received a cash infusion with the acquisition. According to the university's budget projections, the global campus is expected to have a $2.5 million deficit this budget year but will make money next year.

Pam Scott, university spokeswoman, said the new campus will allow the university to “provide access to high-quality, world-class education to thousands of additional students – students who might not otherwise have the opportunity.” Since the takeover, the university says it has shifted its focus from recruiting students to keeping students in school and on the path to success.

With almost 17,000 employeesthe university is the largest employer in the Tucson area, and it says it's pumping it through $4 billion every year in the economy.

Even amid the turmoil, the sunny, red-brick campus bustles with energy and academic achievement.

Huge mirrors, built in a university laboratory under the football stands, are used to see into the deepest corners of the room. Students in a campus building that resembles a desert canyon are busy learning about sustainable desert agriculture. Scientists who have pioneered the science of studying tree rings are using them to decipher climate change and ancient disasters.

One afternoon last week, Hadi Alim, 22, flew by as he pondered whether his family would have a future on campus. His father, who maintains the university's computer networks, has started driving for Uber in case he loses his job.

Mr Alim, a university student studying sustainable built environments, pays his own tuition, which he said he was only able to afford because of the discount he receives as the son of an employee. He said he went to study abroad, somewhere cheaper, as a way out.

“I'm just trying to take it one day at a time,” he said, “and graduate as quickly as possible.”