Idaho lawmakers reject plan to revamp University of Phoenix purchase

The Idaho Senate voted to kill a late-session bill to rework the University of Phoenix purchase – and legislative leaders say the startling vote could stop the $685 million deal in its tracks.

Hardline conservatives and several Democrats banded together Wednesday to defeat Senate Bill 1450, which had the backing of Senate leadership and the University of Idaho.

The next steps are unclear – and Senate President Pro Tem Chuck Winder indicated the UI’s plans could be dead.

“If they don’t have a legal way to go forward, I don’t know that they can complete the deal,” Winder, R-Boise, told reporters Wednesday afternoon, moments after the 14-19 Senate vote.

UI isn’t closing the door on affiliating with Phoenix – which university officials have touted as a moneymaker that also would expand online education opportunities in rural Idaho. “We are disappointed this bill did not pass and are reviewing our options,” UI spokesperson Jodi Walker said in a Wednesday afternoon email.

The Senate vote came after two state elected officials urged lawmakers to reject SB 1450.

Attorney General Raúl Labrador’s chief deputy said the bill failed to fix the purchase’s structural flaws.

“It still permits the (State Board of Education) to exercise authority outside the scope of its constitutional charter, still raises serious separation of powers concerns, and still lacks a primarily public purpose,” Phillip Broadbent wrote in a Tuesday letter to Sen. Lori Den Hartog, R-Meridian.

On Wednesday, state Treasurer Julie Ellsworth publicly criticized SB 1450.

“If this transaction were to go through, we still believe there could be liability borne by the state of Idaho if things were to go south,” Ellsworth said in a letter to legislators.

Both letters circulated through Senate chambers, and likely had a bearing on the outcome.

On Tuesday “I think it would have passed,” Winder said.

Unveiled Monday morning, and passed almost unanimously in committee Tuesday morning, SB 1450 would have overhauled the Phoenix deal.

It would have scrapped UI’s plan to place Phoenix under the umbrella of a nonprofit, Four Three Education – a structure that Labrador and two attorneys for the Legislature have called unconstitutional.

Instead, Four Three would have been required to operate as a quasi-governmental body.

The bill would have required Four Three to file annual reports with the Legislature, while forbidding Four Three from seeking state funding.

The bill also sought to limit the state’s financial risk – and would have diverted any proceeds from Phoenix into a higher education account under the Legislature’s purview.

But the Senate spent little time discussing any of these details, during a brief and odd floor session.

Before Winder could open debate, Sen. Scott Herndon tried to force a full reading of the six-page bill – a procedural protest designed to slow down a session. His motion was deemed out of order, and Herndon then said he would try to make his points in debate.

After Winder opened debate, no senator rose to follow suit. Even Herndon stayed seated. “We knew we had the votes,” Herndon, R-Sagle, said after the vote.

During the roll call vote, several senators did stand up and explain their votes.

“I just think this cannot go wrong,” said Sen. Kevin Cook, R-Idaho Falls, a supporter who praised Phoenix’s technology.

“It seems odd to me that we are the only state clamoring to make this happen,” said Den Hartog, who voted no.

The vote cut across party lines, and divided Senate Republicans.

The four members of GOP leadership supported the bill, as did Senate Education Committee Chairman Dave Lent, R-Idaho Falls. Hardline conservatives led the opposition, and were joined by four of the Senate’s seven Democrats.

The Senate vote came nearly a month after the House passed a separate resolution – which urged the State Board to reconsider its support of the purchase, and opened the possibility of a legislative lawsuit.

The Senate hasn’t taken up this resolution.

But after the Senate vote, House Speaker Mike Moyle also suggested the purchase is dead.

“I think it’s a tough go from here for anything,” said Moyle, R-Star. “I think it’s done. But I could be wrong.”