ASU Empire

Arizona State University President Michael Crow recently wrote an op-ed pushing back against the Republic's libertarian/"Goldwater" Institute columnist on funding for higher education. Crow wrote in part:

The Arizona Constitution is clear — public schools will be free and universities will be as close to free as possible. It is also clear in the Constitution that the state will use tax revenue to support the universities and to maintain them. But that’s not where we are today. In 2019, we have evolved to the point where nearly 90 percent of the financial support and maintenance of the university comes from sources other than the state.

And:

ASU is one of the most efficient universities in the country. Yet, with our mission of making tuition affordable and the limited state investment we still have a shortfall of $225 million per year to educate resident students. We subsidize the cost of their education through other means, including out-of-state and international student tuition.

If anything, Crow pulled his punches. Arizona's low funding for universities is a scandal decades in the making, as the Legislature paid for tax cuts in part by continually reducing general fund money for higher ed and slashing funding that was never replaced. This has had a profound effect on hurting the state's competitiveness, as well as its constitutionally mandated promise to in-state students. I'd love to see a lawsuit over this.

But under Crow's leadership, ASU has worked around the Kooks to build an empire.

Early on in his tenure (which began in 2002), Crow set out to monetize everything possible. This was clear from our first meeting. He asked me what ASU should do? I drew up a list of dozens of holistic economic-social-environmental benchmarks we needed to track to get a sense of where metro Phoenix stood beyond population growth and housing starts. Soon after, I was contacted by the head of the economics department. He'd been given my list (thanks a lot) — but his task was to create something that could be sold. I don't think it ever happened, but much else did.

Crow established and built out the Biodesign Institute, which attracted large federal grants to study, among other things, protection against bio-weapons in the post 9/11 world. It now looks into fields as diverse as neurodegenerative diseases, biocomputing, environmental health engineering and immunotherapy. The impressive buildings take up a substantial portion of the once largely vacant land on the east side of the Tempe campus.

ASU spread out to multiple campuses, especially in downtown Phoenix but also SkySong in Scottsdale and the polytechnic on the old Williams Air Force Base. These were often heavily subsidized with partnerships from the cities involved. ASU has been the most important driver of downtown Phoenix's revival, and is an important part of the Downtown Biomedical Campus. ASU is also building a stealth medical school in partnership with the Mayo Clinic. Crow speaks the language of developers, an invaluable skill in a state where real estate is the No. 1 industry.

Funding came from cultivating big donors, too. One example is the Walton Sustainability Solutions Service, thanks to Walmart heirs Rob and Melani Walton. A supercharged ASU Foundation keeps setting records, bringing in $253 million for fiscal 2018. Crow was also able to push past years of resistance to bonding, to gain state approval for a 25-year, $1 billion program to fix existing buildings and construct new ones for all three universities.

It's hard not to find Arizona State University — from establishing an outpost in Washington, D.C., to its pioneering online degree initiative with Starbucks, to the ASU Center on the Future of War. The latter is especially intriguing, bringing in international heavyweights on national security and military affairs. I would love to know who funds it. But it's an example of the many ways ASU is expanding its prestige, not merely in the size of its student body.

Since early in his tenure, Crow has been the envy of the UA. This is rich for Sun Devils, because the rival in Tucson always believed it was the university. It fought ASU becoming a university. Now, in so many areas, it's playing catchup or is consigned to second place.

ASU is the only real university in the nation's fifth-largest city and 13th largest metropolitan area. (UA realized late it was being shut out of the state's population center and has been clawing in, though not without its old parochial hesitations and conflict). This is unique in the United States — not good for Phoenix and excellent for ASU.

Still, Phoenix remains an economy that punches well below its weight, mostly with development, tourism, and back-office jobs. It trails peers in adults with bachelor's degrees or higher. Opportunities for most ASU graduates are found elsewhere. But the university is the metro area's leading light, and is essential to its future (if one can look past magical thinking about the "Sun Corridor").

That this has been accomplished despite the vicious anti-education agenda of the political elite is even more impressive.

 

 

 

 

 

 

Comments

[Mike Doughty]

Having attended asu in late 60’s and still living in tempe now I am amazed at how the university has grown. Is it too big? I don’t know but I really enjoy all the opportunities the university provides. It is important to remember that like most large suburban cities there are two Tempe’s divided by the freeway. The part of the city north of freeway supports anything asu wants. South of freeway people are more circumspect. Like I said. I am indifferent to asu growth but will watch interestedly.

[soleri]

I was walking around Tempe last month marveling at the new construction in and around ASU. The growth is phenomenal, a kind of counterargument to my chronic pessimism that Arizona was sliding into such a deep hole that it would never recover. It seems to show that if you pile enough people into one sprawling metroplex you can find just enough creativity and ambition to revitalize our civic space. Maybe ASU is the Amazon of Arizona, with its multiple campuses and headquarters. Against all odds, it has energized parts of Phoenix into something approaching dynamic.

I won't get carried away, however. There are winners but many more losers in this picture. The losers are those shut out of the higher-education industrial complex. They're mostly brown and live far away from the ladders that would lift them into the middle class. The bifurcated economy uses their labor to prop up the dominant real-estate sector while geographically segregating them into low-income ghettos. You wonder how long this disparity can exist before it collapses the entire endeavor. Phoenix is beginning to resemble a third-world city, teeming with a giant underclass while a prosperous but smaller upper-middle class live obliviously in tony enclaves.

The new economy is reshaping America and educational opportunity is one of its key features. Props to ASU and Michael Crow for figuring out a path forwad leading somewhere other than more sprawl and freeways. What Crow can't do is create the moral will to cut the Gordian knot of social paralysis. Somehow, Arizona is going have to reach down and find that solution on its own. It won't be easy.

[Brian Hall]

Can we privatize Tempe Normal, sell them to U of Phoenix and Grand Canyon. Don’t see the difference between them. Only university worthy of that name in AZ is in Tucson.

ASU is fleecing students making them pay fees to subsidize there failing athletics department and overpaying coaches.

[Sanjeev Ramchandra]

Restructure the Arizona University System to provide greater accessibility, affordability, and accountability to a public university education for many more Arizonans:

http://PSUandAzTech.blogspot.com

[phxSUNSfan]

Do people in AZ still talk about the universities like Brian Hall? How Southern, don't go spiking the palms of Palm Walk with poisoned nails now, ya hear!

Interestingly, Brian also brought up athletic department budgets. While ASU is no Texas, it came in as the nation's 30th most lucrative athletic program in terms of revenue: University of Arizona was 42nd.
http://sports.usatoday.com/ncaa/finances/

I enjoyed my experience at ASU. I found my particular business program and courses in the humanities better than my experience and options at the University of Southern California. This is one reason I decided against an overpriced graduate degree in California, sans Stanford if I would have been accepted.

I unfortunately did look outside of Arizona for a career move. I would love to live in Tempe/Phoenix again but the politics of the state are a major detractor. To make matters worse, it's becoming too hot to tolerate and summer is extending into late Oct/Nov. Even here in New England the winters feel more mild, relatively speaking of course.

[buckobear]

Don't know what the tuition is now, but in 63, I paid $115.00 for 16 semester hours and that included the football games. Books cost me more !

[Jon7190]

I graduated ASU in 1998 and am forever grateful that it was as affordable as it was. Working part time jobs with a bit of student loan money, I paid my living expenses, paid a little over $1000 tuition/semester IIRC, plus ever pricey books and still was able to pay off all my loans within six months of graduating. In my opinion, affordable university education is a worthy expenditure and the scandal of state underfunding is one of the rare areas of concurrence I have with RC.

My School (nursing) has since moved to downtown. I enjoyed living in Tempe, biking to class and being part of the main campus culture. I suspect I would not have enjoyed being downtown nearly as much.

[DoggieCombover]

Thanks, Brian, for putting on display the raging inferiority complex that Tucson and UA have. I didn't attend UA or ASU, but have lived in Tempe for 20 years and am continually amused by the phenomenon. Pretty much the only claim to fame--WILDCAT BASKETBALL!!--is now defunct with the corruption and taint around the program.

It will be interesting to watch the lawsuit filed by the AG against ASU's (and subsequently the other U's) creative funding scheme involving private development on university property. Both sides of the argument are quite compelling.

[AZwriter]

Article 11, Section 6 of the Arizona Constitution does indeed read: "The university and all other state educational institutions shall be open to students of both sexes, and the instruction furnished shall be as nearly free as possible."

Yet, according according to College Board, "published tuition fees for 2017/18 at state colleges are an average of $9,970 for state residents". Whereas, according to Top Universities, "residents of Arizona pay an annual total price of $27,530 to attend Arizona State University on a full time basis. This fee is comprised of $10,104 for tuition, $12,209 room and board, $1,125 for books and supplies and $688 for other fees."

So, ASU tuition alone is greater than the average. So much for "as nearly free as possible".

How did this happen? The state legislature, in 1912, set a tuition cap at $70 (about $1,800 in today's dollars). In 1925 the legisture removed the caps. In 1935 the Arizona Supreme Court ruled that the Board of Regents could set tuition at an arbitrary level, provided that it wasn't "excessive or other than reasonable". In practice, this meant that ASU kept tuition and fees within the lower third of state universities.

Then, in 2003, under the auspices of Michael Crow, tuition was raised 39 percent in a single year. Four students filed a lawsuit, Kromko vs. Arizona Board of Regents, in which it was decided in 2007 by a four-judge panel of the Arizona Supreme Court that the issue was political, not legal.

This is an important case study exemplifying the role played by the courts in determining the meaning of laws. In Arizona, the Supreme Court justices are appointed by the Governor, after which they are subject to a retention election; but who bothers with such elections, outside the usual corridors of power?

For that matter, Section 9 states: "The laws of the state shall enable cities and towns to maintain free high schools, industrial schools, and commercial schools." Note that there is not even an ambiguous phrase ("as nearly free as possible") to construe, but simply the word "free".

Where are those free industrial and commercial schools? Have I missed something?

[AZwriter]

"... the ASU Center on the Future of War. The latter is especially intriguing, bringing in international heavyweights on national security and military affairs. I would love to know who funds it."

According to an ASU website, "Since its formation in 2014, the center has brought together a team of ASU faculty and policy experts... linking more than 100 affiliated faculty at Arizona State University with a team of three dozen national security experts at New America, an interdisciplinary Washington, D.C.-based think tank and civic engagement institution."

According to the New America website, "we acknowledge that New America accepts financial support from numerous sources, including corporations, for research and educational activities that support its mission, endeavoring to maintain a broad and diverse base of support. In addition to individuals and foundations, this includes support from governments, both domestic and foreign, and corporations."

A bit vague, but there it is.

[AZwriter]

A little more specific. According to SourceWatch, the New America Foundation (tied to the ASU Center On the Future of War) is funded by the Peter G. Peterson Foundation:

"Peter G. Peterson, born June 5, 1926, is a controversial Wall Street billionaire who uses his wealth to underwrite a diversity of organizations and PR campaigns to generate public support for slashing Social Security, Medicare, and Medicaid, citing concerns over "unsustainable" federal budget deficits. In 2007, he made a fortune from the public offering of the private equity firm he co-founded, Blackstone Group, and pledged to spend $1 billion of this money to "fix America's key fiscal-sustainability problems." He endowed this money to the Peter G. Peterson Foundation, which he launched in 2008."

According to its Wiki page, the Blackstone Group (which supports the Peterson Foundation, which supports the ASU Center On the Future of War), is "the largest alternative investment firm in the world" specializing in "private equity, credit and hedge fund investment strategies. Blackstone's private equity business has been one of the largest investors in leveraged buyouts in the last decade, while its real estate business has actively acquired commercial real estate... As of 2019, the company's total assets under management were approximately US$ 470 billion dollars."

As reporters would say, follow the money.