Gov. Janet Napolitano and the top Senate Republican are defending spending $25 million in tax funds to finance research — mostly by private companies — even as the state budget is $600 million in the red.
And both the governor and Senate President Tim Bee are willing to spend another $75 million more in the coming three years.
The comments came as Science Foundation Arizona received a $25 million donation Tuesday from Scottsdale real estate developer Jerry Bisgrove, chairman of Stardust Companies. The money came from Stardust Foundation, the firm’s charitable arm.
That provided the necessary match that legislators demanded when they approved the state budget earlier this year, including $25 million for the organization.
By making the donation, Bisgrove effectively precludes legislators from reconsidering the financing — and altering the budget — as they look for ways to balance this year’s $10.6 billion spending plan: The state’s $25 million remained unspent in the state treasury only until the match.
Rep. Russell Pearce, R-Mesa, called the development “disappointing.”
“When you don’t have money, you certainly can’t fund those kinds of things,” said Pearce, who chairs the House Appropriations Committee. “When you’re talking about cutting critical services, that’s bad timing.”
But Napolitano said Arizona “can’t afford not to do it.”
“This is an investment in our mental capital as important as the investment in our physical capital,” she said.
And Napolitano has a plan to balance the budget without cutting services, a combination of borrowing for school construction, taking money from the state’s “rainy day fund” and deferring some expenses.
In fact, the governor said the economic slump caused by the downturn in housing that has cut state revenue below projections is proof of why this kind of state-private partnership makes sense.
“We have to become an economy that is more knowledge-based and more diverse than the economy we’ve traditionally been able to rely on so we’re no longer dependent on one segment of the market,” she said.
Bee, who supported the $25 million appropriation — and the promise of equal amounts in the next three years — said he agrees.
“This is an investment in our economy,” he said..
Science Foundation Arizona was formed more than a year ago by the three big civic business groups: Greater Phoenix Leadership, the Southern Arizona Leadership Council and the Flagstaff 40.
Lawmakers provided $35 million last year, with $50 million from the Virginia G. Piper Charitable Trust for that first-year match.
According to the foundation, it already has given out or committed to provide about $29 million.
Much of that goes to research. For example, the foundation provided money for a program involving Ventana Medical Systems of Tucson to develop “personalized medicine” to target cancer.
The foundation also funds graduate research fellowships and some programs aimed at K-12 education.
William Harris, the foundation’s chief executive officer and president, said each dollar spent so far has returned an average of more than $9 in federal grant funds.