Northern Arizona University expects this month to pay off $21 million of debt from a 2002-03 bond issue for academic projects, easing debt service over the next 10 years and increasing its ability to borrow, vice president Jennus Burton said.

“NAU’s financial position has vastly improved over the last nine years,” according to a report prepared for the Arizona Board of Regents meeting this month.

With state revenue falling, NAU has been forced to rely more on tuition, the report said.

State funds made up 42% of revenue in 2002 and are currently 32%, representing a nine-year low. Tuition accounted for 19% of revenue in 2002 and is now at 30%.

Glen Nelson, chief financial officer at the Board of Regents, urged a larger rainy-day fund to help manage coming cuts from the state. 

As the Arizona Legislature prepares for its 2011 session, it faces another year of deep spending cuts to balance the budget. Regent chairwoman Anne Mariucci noted that delayed payments from the state have caused continuing cash-flow problems.

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