Journalists Roundtable

Nov. 18, 2005

Transcript:

>> Michael Grant:
It's Friday, November 18, 2005. In the headlines this week, governor Janet Napolitano is urging fiscal restraints as republican lawmakers ponder tax cuts. House speaker Jim Weiers says he doesn't want to delay construction of a new state archives building but he would like it relocated closer to the state's capitol. The Arizona AFL-CIO has launched an initiative drive for the 2006 ballot to raise the minimum wage in the state to 6.75 an hour. That's next on horizon.

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>> Michael Grant:
Good evening. I'm Michael Grant. This is the journalists' round table. Joining me are Paul Davenport from the associated press, Chip Scutari of the Arizona republic, and Mark Flatten from the east valley tribune. With the start of the new legislative session just under two months away, battle lines already being drawn on state revenue and tax cuts. Governor Janet Napolitano urging fiscal restraint while lawmakers and a business group are pushing for tax cuts. Paul, let's start with the governor. What did she have to say in her weekly media briefing?

>> Paul Davenport:
As you said, she is calling for what she called fiscal restraint. I think at this point she doesn't want to be put in a box too early. She has some proposals, she's obviously considering more spending. She's talking about maybe getting rid of some of the accounting gimmicks used to balance the budget during the recent hard times, but she's being noncommittal. At the same time she's hearing a lot of talk from the business community, republican legislators and others to do major tax cuts. Big tax cuts are probably not going to be where she wants to go. So she wants to dampen things down a bit.

>> Michael Grant:
Mark, as a capitol veteran, it's been interesting over a long time to watch budget and revenue cycles. I don't know if it's tougher when they have got absolutely no money at all as they did a couple three years ago or when they are in a situation where they have -- this is estimated at $750 million.

>> Mark Flatten:
What you're seeing in this is sort of the classic divide between sort of the Symington supply side type economics and the governor's tax cuts just cause budget problems. She says, look, we fought our way out of a budget deficit, and we scrimped and saved. Of course, what brought us out of the deficit was the economy turned around. Meanwhile, Symington is making the point, it was the tax cuts in the '90's that essentially gave us a good economy through the '90's. This actually harkens back to when she ran for office. She repeated some of the same rhetoric about it was the foolish tax cuts of the '90's that put us into a bind. Bad tax policy. I don't know if she has explained that fuller, but when we asked her at election time, which of the taxes were bad, she didn't really have an answer to that.

>> Chip Scutari:
And Michael I would bet Mark's salary that when push comes to shove at the end of the legislative session, governor Napolitano will have some small kind of income tax cut to put on her political resume to say, I'm a tax-cutting democrat, like she did with the business property taxes. Republicans will complain it was such a measly business tax cut that it really won't make a difference, but I bet you in the end she will come up with a targeted tax cut so she could say, I cut taxes, but just like Mark was saying, she doesn't favor huge income tax cuts. You cut taxes, benefits the rich and the rich -- it trickles down to the middle class and lower rungs of society because more is being invested in the economy.

>> Paul Davenport:
Even if that's what ultimately gets improved we don't know what's going to happen along the way. I think you've eluded that, it could get really messy if the legislature passes a bigger tax cut that's not acceptable and she feels she has to veto it.

>> Mark Flatten:
I was going to say, it makes some of the arguments we have been hearing the last three or four years ring more hollow. We don't have the money for the Flores thing, for example, or the things Tim Hogan has gotten us into with his lawsuit. And now suddenly they've got a pretty positive outlook and don't know what to do with it.

>> Paul Davenport:
And the senate president today raised that during he speech, which we'll talk about later. He said, this is going to be the most difficult year in his legislative career. Recalling back to the '90's when there was surplus and they did have money to spend, how usually the demand is 100 times more than there is, and people don't want to back off.

>> Michael Grant:
Well, and that's what I was indicating. I'm not sure which is more difficult. You've certainly got a contingent of lawmakers that would like to see the rainy day fund replenished. You have state employee pay which some maintain has been -- increases of any substantial nature have been deferred for too long. You got the Flores case, I mean you've got a lot of competing priorities in addition to it's an election year. So I really think we should try to do something on the tax cuts.

>> Chip Scutari:
Well I think Senator Dean Martin, who chairs the finance committee in the senate, totaled it up for us. If you pay back all the gimmicks like the education rollover, 195 million, if do something on Flores, if you give the state employees a substantial pay raise, he calculates it's about 550 million. Other conservatives want to put $400 million in the rainy day fund. So like you mention, there's going to be competing schools of thought as to what to do with the big surplus.

>> Paul Davenport:
There's every expectation from both camps that the big increase in the revenue percentage-wise will slow down. It's not going to be this 22% increase they saw in the first quarter of the fiscal year. It will be about half that.

>> Mark Flatten:
Long term, having watched this for a while, if you go with big tax cuts when the economy does ultimately turn down, which it inevitably it will, there's the argument to be made that, well, do we need to raise taxes now, which is certainly an unpalatable decision. The other half of the equation is we have all this new money, let's create or fund new programs. Then when the economy turns down you're stuck with these new programs. Do you want to cut these programs? It's easier than being on the receive receiving end of the stick.

>> Paul Davenport:
A lot of people can take credit for things like that.

>> Chip Scutari:
I think politically speaking, it's an election year. Republicans have always had the tax cuts as their ace in the hole. So it's a good year for republicans when you talk about big tax cuts. They might be hoping to send up a very large tax cut to the governor's desk, make her sweat and make her veto it and say she's big government Janet, she's not for tax cuts.

>> Mark Flatten:
I have a hard time imagining she's sweating too many bullets about her election at this point.

>> Michael Grant:
Well, let's go down to the border, not literally, but a couple of border issues, Paul, the governor's office, governor Napolitano kind of quietly backed away from that request for FEMA money for border issues.

>> Paul Davenport:
Yes, and the point is she backed away from requesting it. She had earlier said, we know you guys are tied up with katrina and have botched that. Let us have more time to ask for FEMA money for the border. Now she's said no, not even going to bother to apply for it because we're not going to get it so why go through the exercise? That quietly goes away.

>> Mark Flatten:
So it was basically, you remember that gimmick we talked about that we knew never had a prayer? Take the whole thing off the table.

>> Michael Grant:
That suggestion by her was what led to the pretty flamboyant, even by JD hayward standards, comments.

>> Paul Davenport:
Looting. Comparing the governor of his home state to a looter. That's right. [laughter] that did raise eyebrows.

>> Michael Grant:
Speaking of JD Hayworth, he was chilly about having the president to Arizona. The president scheduled later this month, Chip I understand he's talking about going down to the border, maybe.

>> Chip Scutari:
He's coming for a fundraiser for senator John Kyl, a 1,000 dinner at the Biltmore. Now he's talking about tying into that a visit to the border to see what's going on down in southern Arizona. We're not sure yet if JD Hayworth will be accompanying him, but I think senator Kyl is trying to facilitate that, kill two birds with one stone.

>> Michael Grant:
And Mark, it would fit because when JD was talking to Don Imus on Imus in the morning in New York City, he did say what I would like to see the President talk about or visit Arizona on would be the border, so that would be --

>> Mark Flatten:
Well, yeah, and actually from Bush's perspective I think the white house and republicans in Washington have finally realized, hey, maybe this whole border thing might be a big political issue if we don't handle it right. We could have some problems. I think what you have seen in the last three or four months is the white house coming to grips with the fact that their base isn't happy with what they are doing about the border and the whole immigration issue. I think they see the need to take a tough proactive I got my finger on the pulse kind of photo-op.

>> Michael Grant:
Paul, Arizona going to come to grips with the issue of school district consolidation?

>> Paul Davenport:
Just what we need, another big redistricting thing. Over the years, over the decades, there have been several attempts to reduce the number of school districts we have in Arizona. We've got more than 200. Some are really tiny, couple dozen students, couple hundred students. And this new commission is going to take a look at it, and the key difference between this and some of the others, which flames out either in the legislature or out of the legislature, is that every proposal has to go for local votes. So that's -- that was a comforting factor for some of the legislators when they dealt with this last spring. The commission has just now started work, it will take about two years.

>> Mark Flatten:
What do we have now? Like 220 --

>> Paul Davenport:
220. This only affects elementary and high school districts, whether they should be combined into unified districts. Pretty much going to leave the unified districts alone as I understand it.

>> Chip Scutari:
This seems to be one of the issues at the capitol that makes common sense but yet never gets done. I don't have high hopes for it. Maybe this will be different.

>> Michael Grant:
There are tremendous local problems with it. There are so many different constituents vested in it. Even if it's a three person school district.

>> Mark Flatten:
Look at the city we're sitting in now, Tempe, which has three or four different school districts within its city boundaries. You asked earlier when did they start talking about school district consolidation. If Arizona became a state in 1912, I imagine by 1913 they were saying, where did we get all these school districts?

>> Paul Davenport:
The monster, of course, is Phoenix union high school district and the 13 elementary districts that feed it. That would create a district with more than 100,000 kids. That's apparently not really being discussed. The idea -- there are several ideas on the table, apparently, but not even at the commission level yet, and maybe into several, or not touch it at all. Hard to say.

>> Michael Grant:
You did a story this week, Mark, I'm reading two chapters of it each night before I go to bed, but basically it involves a position state land took with a George Johnson buy of state land that theoretically could cost taxpayers a true chunk of change.

>> Mark Flatten:
With all due respect to your chosen profession, this is an excellent example of what happens when you let lawyers make decisions.

>> Michael Grant:
No argument there!

>> Mark Flatten:
Essentially there's some land in western Pinell County that George Johnson, a big developer, wanted to buy and build a big community. Things were going along just swimmingly at the state land department, which owned about 1600 acres that Johnson was trying to acquire, until 2000, when the county, Maricopa county flood control district said, excuse me, we have dams on that and we have this easement we got in 1964. The land department went ballistic and tried to force essentially the county to get off this easement they have had for 40 years. They invoked this 1967 case that said there's nothing in the state's enabling act which is encompassed in the constitution that says we can give free easements and therefore your easement is no good. Unfortunately, they are legally right. The problem is they forced that position. That easement is the same easement virtually that 863 other government entities have. Tim Hogan, who we mentioned as being the master of getting the state to cough up money, went to actually follow the law, has brought a lawsuit that says, yeah, the county I gotta pay to, so do all these other entities. We're talking about freeways, highways, city streets, county roads. We're talking potentially 3 to 4, $5 billion depending on what the land comes in at. And the funny part was this all happened, these easements were granted so long ago, people don't even know where they are at. Supposedly from what one individual told me part of Scottsdale road is on some of these easements.

>> Paul Davenport:
The argument I take it is there should be this money paying the trust land to go to public schools?

>> Mark Flatten:
Before 1967, for instance, if ADOT or one of the cities needed a road across state trust land, the state would say, fine, here's an easement. But this 1967 case said, no, there's nothing -- the enabling act that allowed Arizona to become a state that let's you do that, but we're not going to go back to the old, we're just going to say from now on you actually have to pay the school trust. Bear in mind this isn't state land, this is school trust land set up to benefit education, but the US Supreme Court just said, we won't even -- let's not talk about those before now. By forcing the issue, after Johnson tried to get this land by forcing the issue on the county flood control district, esentially the land department opened that whole can of worms, and now cities, counties, state agencies throughout Arizona could be forced to pay for the land they have been using for-- since the 20's.

>> Michael Grant:
Andrew Thomas, the county attorney, thinks investors ought to be paying more in property taxes on houses that they are not exactly, Paul, stating correctly as to their use.

>> Paul Davenport:
Right. When you own a house and live in it you get a little bit of a tax break on your property taxes compared to that other house you might own that you rent out. You pay a full share on that, but it turns out a lot of folks own and occupy supposedly lots of houses, in some cases dozens of houses. They are claiming this exemption on all of them. That's obviously not comporting with reality, and Thomas says -- wants to look into that and make people cough up.

>> Mark Flatten:
So the few hundred bucks these owner-occupied versus rental houses warrants attention from the county attorney, but if you're a commercial land developer and you've got hundreds of acres that are zoned for agricultural even though you have a shopping center planned there, that doesn't warrant the county attorney's attention?

>> Paul Davenport:
We ought to ask him that, Mark.

>> Chip Scutari:
Picky, picky, picky!

>> Michael Grant:
Speaking of land and state stuff, house speaker Jim Weiers saying he doesn't want to delay the construction of the state archives building, he just wants to move it someplace.

>> Paul Davenport:
It's a touchy issue. The state has approved construction of a new building to house the state archives, the historical records because the existing facilities are dilapidated and the records are at risk. The new building is planned to be a couple blocks west of the capitol. The house speaker and a few other legislatures say they have no intention of scrapping this project, jeopardize it in any way, but they are saying let's get better bang for the buck, maybe, maybe put this as a building next to the legislature, maybe have a nice, big meeting room, maybe put it on a parking lot. Make it a parking garage with the building. Get the use of extra space for that. That sort of put this project in -- I won't say in doubt, but there are questions being asked about it. That's what the little bit of a hangup is right now.

>> Chip Scutari:
What's the archives people's objection to that? They want a specific space, or?

>> Paul Davenport:
The advocates, the friends of the archives say, we fought for ten years for this project. We got the funding approved. Build it. Be done with it. Don't play games with it. That's their position on it.

>> Chip Scutari:
I think we were amazed when they got 30 million in the budget last year. That's a lot of money for an archives building. They are probably frustrated and want to get it done.

>> Michael Grant:
I'm actually surprised it was only ten years. I thought it started the same time they started discussing school district consolidation back in 1915.

>> Mark Flatten:
Well actually, funny little anecdote, back when Symington was governor they spent hundreds of thousands to remodel the governor's office to model, sort of, the historic territorial look of the old capitol. Meanwhile the actual historical territorial old capitol is falling apart.

>> Michael Grant:
The policy advisor at the Arizona house of representatives demoted after it was revealed she secretly received money for public relations work paid by community college lobbyists while she worked on education issues at the capitol. What did she do to get herself in trouble?

>> Chip Scutari:
Well, let me walk you through this. She was the house's top higher education policy advisor, and she was helping Republicans pass a bill that would let community colleges have some four-year degrees, so while this was going on last session no one knew she had been paid $15,000 from the Arizona community college association, which she was the executive director of, and record shows she was getting two paychecks until at least march of this year, so when house speaker Weiers heard about it in October, he launched an internal investigation, and it showed indeed that Kim Shane was taking money from the ACCA while getting her house paycheck, and the thing that I think shocked the most people wasn't the conflict of interest but a serious -- looked pretty bad. People were shocked at how big her salary was, $115,000 a year, because most legislative salaries are not that large.

>> Mark Flatten:
That's not bad, actually.

>> Chip Scutari:
Pretty nice, actually. There's still some unanswered questions about who approved this payment to her. Because another interesting point, she had signed the check to herself as executive director, and she received $34,000 in back vacation pay she got while working at the house.

>> Michael Grant:
Is the concern more, though, with the paper that she wrote as opposed to, well, okay, I've got a lot of accrued vacation time an I'm leaving so I need to be paid for it, or both?

>> Chip Scutari:
Well it's both, but I think it's more so the appearance of impropriety, that she was working on this so-called white paper, which was a public relations document respect for the community colleges, while passing this bill at the legislature, and it might seem a little benign because it's community colleges, but pretend it was, say, someone who had worked as a defense contractor now is working at the house as top advisor trying to get a defense contracting bill or a pharmaceutical giant trying to shovel business to a pharmaceutical giant. That's why I think it's a pretty big deal.

>> Mark Flatten:
I didn't know the Arizona legislature had a lot of defense bills moving through there. It strikes me that the interesting thing is that she continued to do work. As opposed to just a severance, you leave here, you got your vacation time, you got your whatever pay you get, that's one thing. That happens. If you're actually continuing to do work simultaneously for the two agencies, that's --

>> Chip Scutari:
Because of this speaker weirs instituting a new policy when you're hired at the house you must disclose if you have any existing contracts or any private sector work which it hadn't done before, so good government types applauded him for not sweeping this under the rug but said had there been systems in place to deal with this, this would never have come to pass.

>> Mark Flatten:
Whatever happened to the good old days when the only house investigations were whether the house members were chasing the interns? [laughter]

>> Michael Grant:
Interesting new twist on this whole Curt Busch, the sheriff's office, reckless driving breathalyzer deal.

>> Mark Flatten:
Well, the whole case itself with Curt Busch just unfolded in a weird way the way the sheriff's office story kind of went here, went there. It just didn't -- it seemed weird, and the original sort of chatter on these talk radio stations was, well, he got special treatment because he is who he is. Turns out that sheriff's chief of enforcement, the guy who -- let me see if I can get this strait. The arresting office's boss's boss's boss's boss also has a contract to take care of all security at phoenix international raceway.

>> Michael Grant:
A private contract.

>> Mark Flatten:
A private, off-duty contract, which he was working at the time Busch was brought in. A lot of weird things about what happened, the breathalyzer broke, talked to some retired deputies that say the breathalyzer breaks, you find another breathalyzer. So it's the unusual sort of confluence of initial confusion over the weekend and the revelation that the sheriff's chief of enforcement also has this side contract with PIR.

>> Michael Grant:
One thing I never understood about the story was they apparently got some sort of breathalyzer reading on Busch, but the breathalyzer machine was broken.

>> Mark Flatten:
Well, that's one of the weird things. I was never able to get a good explanation for why this happened. The chain of events as the sheriff's office describes them is they pulled him over after he swerved to miss a car and ran a stop sign. He was argumentative with the officer, he refused a field sobriety test. They take him into custody, haul him into this sheriff's command post at PIR, where they are going to do a breathalyzer test. The breathalyzer is sitting right there and they decide to give him a field test, which is not admissible in court. That's where we got the number, .017, roughly a quarter of the legal limit. I asked the sheriff's office, if you're going to give him a breathalyzer why do you do the field test first? You want to establish probable cause. But you're reading from the field test that didn't show probable cause because it showed him way below the limit.

>> Michael Grant: We'll see.

>> Mark Flatten: Yeah, we'll see.

>> Michael Grant:
AFL-CIO going to try to put an initiative on the ballot next year to raise the minimum wage?

>> Paul Davenport:
Yes. This is actually the second one, different minimum wage initiative filed earlier in he year, but this one has labor backing and some other folks, community activists, religious leaders. Higher profile in terms of the juice behind it. They want to have a $6.75 an hour minimum wage in Arizona. We don't now have a state minimum wage. We rely on the federal wage of $5.15 an hour. They have until July just like all the others to collect enough signatures to get this on the ballot.

>> Michael Grant:
If you can get it on the ballot, Chip, obviously consequences for a variety of different races for the 2006 ballot.

>> Chip Scutari:
I think the democrats are trying to get some more of the voters out because they know anti-gay marriage is going to be on the ballot. I don't know how effective this will be, but this is an effort by the democrats to drive their voters to the polls to equal that balance out between the social conservatives coming out for senator Kyl, if the republicans ever find a gubernatorial candidate, get them back in the game.

>> Michael Grant:
All right. We are out of time. Thank you very much. If you'd like to see a transcript of tonight's program please visit the website at www.azpbs.org click on the word Horizon. It's going to lead you to transcripts, links, and information on upcoming shows.

>> Explosive growth and skyrocketing housing prices force valley residents to buy homes farther and farther out from the city center. Buckeye, Queen Creek, Maricopa, Horizon explores the effects of this trend in a special three-day series "Growing Pains." starting Monday at 7:00 on Horizon.

>> Michael Grant:
Tuesday we continue the series with a look at how growth is going vertical in the valley. We'll also give you results of our latest KAET-ASU poll. Wednesday we wrap up the growth series with a look at filling in vacant lots in the middle of the city. Thursday Horizon preempted for Thanksgiving. Friday a special edition, the annual Walter Cronkite award luncheon. It went to columnist Dave Barry. Thanks for joining us this Friday. Have a great weekend. I'm Michael Grant. Goodnight.