The state government general fund shortfall in the current fiscal year is projected to be between about $550 million and $1 billion. This shortfall will need to be eliminated through spending cuts and/or revenue enhancements. The Legislature has demonstrated a preference for spending cuts. However demand does not decline during a recession for most public-sector services, including university services. Any reduction in funding for universities will have a negative and direct effect. A reduction in state government spending for universities of around $200 million would cause direct and indirect job losses of approximately 4,000. A substantial decrease in state government funding for universities will have negative consequences beyond these short-term effects.

Unlike the rest of the Phoenix metropolitan area, population density in central Phoenix dropped during the 1970s and 1980s. The primary cause was a decrease in the number of housing units. Rising vacancy rates contributed, but the increase in vacancy rates was similar to that of the entire metropolitan area. Between 1990 and 1995, population density rose in central Phoenix. A sharp decline in vacancy rates was a major factor in the turnaround, though the vacancy rate decline only matched that of the entire metro area. Another major factor in the increase in density was the rising number of people residing in prisons, homeless shelters, or on the streets.