scottsdale Proposition 402

May 9, 2006

Transcript:

Michael Grant:
Tonight on "Horizon." Illegal immigration is the sticking point for Arizona lawmakers trying to agree on a bill that deals with our state's border issues. We'll have an update. Scottsdale voters will soon decide what some are calling the most important issue on may 16th ballot and hear arguments on both sides of the measure. Those stories next on "Horizon." Good evening. I'm Michael Grant. Welcome to "Horizon." first off, the race for the U.S. senate officially got a bit more interesting today. John Vercamp today officially announcing he is running as a democrat. He served 10 years in the Arizona legislature as a republican senator from Flagstaff. During his formal announcement he said he switched to the Democratic Party because of president Bush's handling of the war in Iraq. He added his interest in running for the senate stems from the growing concern about incumbent senator Jon Kyl's and democrat candidate Jim Pederson's lack of attention to the war. Tempe-based US Airways has good news for its stockholders, turning a profit in the first quarter. The airline says it earned $64 million from January to March. This came as a surprise to analysts, who expected a loss for the company.

Michael Grant:
It is a divisive issue and now it's dividing those on usually the same side: immigration reform and border control. State lawmakers have been meeting on the issue of comprehensive immigration package. Some of the complicated issues holding up the progress are whether local law enforcement should ask detainees for their legal status, money for the cities if they are to enforce immigration laws, funding for the National Guard, sanctions for employers who hire illegal immigrants, funding for border radar, and the issue of whether illegal border crossers should be charged with criminal trespassing. The governor thinks that bill is unconstitutional. Capitol Media Services Howie Fischer updates us.

Howard Fischer:
This is one of the big fights because people from the philosophical perspective say this is the governor's weak point. It's an election year. "If we want to tell people how she doesn't care about the issue, lets send the trespass bill and let her veto it and say it's her fault why we have 500,000 in state and 11 million in the country who are not here legally." There are others saying, "look, we made our point. What exactly are we accomplishing here? If we send her a bill that she will veto, who looks stupid?" Is it the governor for vetoing it or us for not knowing what is going on in the first place? They are backing off. For example, I'm sure the National Guard language in the bill is simply the $10 million to put the guard on the borders without the mandates to do it thereby getting around a veto. They seem hung up on the question of the trespass bill. You have not only the constitutional problems but folks with other concerns. For example, representative Jennifer Burns from Tucson said, look, part of the reason you don't want local police enforcing federal immigration law is you want people from the shadow communities to report crimes, domestic violence, child abuse, robbery. You don't want them to have a target painted on their backs. She said to her colleagues, if you don't give a darn about the immigrant community, let's consider the other fact. What if they are the only witness to your brother's murder? Do you want them to get away with murder because they believe if they contact the police department they will be deported? There seems to be heartburn among the republicans to do this. Will they be able to get 16 republicans in the senate and 31 in the house for the bill? I think it will be very difficult at this point.

Michael Grant:
We did that interview with Howie late this afternoon. He gave us his read on the rest of day and the rest of the session.

Howard Fischer:
Leadership is going to meet into the early evening, probably meeting still at this hour trying to figure out what they can sell to their own caucus. What's complicating the matters is last week the governor said, I want the immigration issue linked to the budget. She said if we're going to spend 50 million, 100 million on immigration, it needs to be part of the $9 million state budget. These are the same people who haven't been able to get a budget proposal out because it's a question of who gets the money? What are we spending? Are we going to fund the polytechnic unit at ASU? And specifically who will get the tax breaks? The governor said 100 million tax breaks they had 200 million--actually they want 800 million over three years. Should we cut state income taxes? What about property taxes? Should we do it at as an opponent? We have the money now and could hurt us later when the economy goes south? My guess is if I were laying money on a pool, not until after the Memorial Day.

Michael Grant:
More news from the capitol on tomorrow's "Horizon." Voters in Scottsdale are considering raising the city's spending limit on May 16th. Proposition 402 would allow the city and adjustment of 12 million dollars. In 1980 an amendment was added to the state constitution that sets limits for city spending. The state annually adjusts the limit for inflation and population growth. Residents can vote to do that. Larry Lemmons takes us to Scottsdale where the overriding question appears to be, to spend or not spend.

Larry Lemmons:
Here at the Austro gallery in Scottsdale Ignacio Bahna shows one of his works. The Chilean artist appreciates the city's appreciation for the work.

Ignacio Bahna: It's good because we have more local art and main street. That's very important because of the people coming every Thursday. Its more popular and coming and looking around on the gallery.

Larry Lemmons:
Scottsdale has many more things but the degree of emphasis on the arts is certainly something that makes the valley city unique. If proposition 402 isn't passed, some say the emphasis could be jeopardized.

Mary Manross:
Those or one of the aspects of the quality of life in Scottsdale that sets us apart from other communities. That's where people want to live here and bring their businesses here and visit. But it's not a mandatory. It's not a have to. It's not something that you need to survive. So arts and other things similar to that would be what we would have to consider cuts going 402 doesn't pass.

Larry Lemmons:
The city says it must raise the expenditure limit to allow the raise from public safety tax two years ago and spending on a program from 2000.

Mary Manross:
Because there's a future quality of life for the city of Scottsdale is what we're talking about here. In 1979 when the state constitution was changed, the spending limit capped legislation. It did not at all account for or consider anything but population change and inflation in what it allowed cities and towns to spend. And what cities and towns have done is besides growing is we've also changed our priorities and added new programs and new sources of revenues. We have different visions than we had in 1979. That's why it makes sense to raise the spending cap so that we can fund those programs that our community has already voted for. We have the revenues. We just need the ability when this passes to fund the programs the voters already voted for.

Larry Lemmons:
Despite support at city hall for proposition 402 not all in Scottsdale agree that voters should vote for it.

Lamar Whitmer:
Because it's the only way they have to be able to keep the city spending in check. It's the constitutional debt limits or expenditure limits are restricted to inflation and population growth. The city budget has grown over 50% or about 50% over the last three years and they are proposing a 14% increase this year that would put them over the cap. Now if they only increase spending by 8%, then they would be under the cap, which would be the amount, allowed for population and inflation growth.

Mary Manross:
We are fiscally responsible otherwise we would not have received AAA bond rating for five years in a row and property tax rates would not be going down for nine years in a row. We have a balanced budget, and we provide over 180 different programs for our community. In Scottsdale, we bring in good, healthy revenue and averaged seven years for more than 7% in a year. This allows us to spend revenue we have coming in now. Not new revenues in the future. No new taxes. Does not affect your assisted value whatsoever or taxes.

Lamar Whitmer:
Expect their chief financial officer says this year's budget and future year's budget is depending on development revenue. It's cyclical. Once it slows down, who will pick up the taxes? It will be tax increases. Maybe not today or November but sometime.

Larry Lemmons:
Beyond the fiscal questions supporters of the bill says it's like previous fights with the city over sex club regulations.

Mary Manross:
He filed an action against the sex-oriented businesses in our community and only a couple of them. Clearly it's clear to just about everyone that the attempt was to just thwart 402 and make it difficult for the city. There's no reason to be doing that.

Larry Lemmons:
Lamar Whitmer's answer is short to the point.

Lamar Whitmer:
I'd say they were misinformed.

Michael Grant:
Here to tell us about proposition 402 is the president and CEO Scottsdale area chamber of commerce Rick Kidder and Lamar Whitmer is from the Scottsdale small business association. Welcome to you both. Is there a time to the controversy over the sex club regulation?

Lamar Whitmer:
The cabaret really is not involved in the issue. The property owner of one of them got involved when he collected signatures for the referendum and talked to the small businesses in Scottsdale and heard the stories that they told and something needed to be done, we formed a small business alliance. Prop402 came along at the same time.

Michael Grant:
The timing does look a little suspicious. I think you told the Scottsdale republican that the spending is out of control across the board. That's the opposition to 402 and sex club regulations.

Lamar Whitmer:
Cabarets are an issue that prompted him to get involved. All civic activists have different motivations. His came when he was out collecting signatures and talking to small business people and said they didn't get a fair shake at city hall. He felt like something needed to be done. With some other people, we formed this group. This is going to be a long time thing, it's not just about 402.

Michael Grant:
Rick, if there are valid objections raised to 402, does it matter why the opposition group got together?

Rick Kidder:
It's very hard sometimes to separate the message from the messenger, Mike. What we have here is a personal agenda that is creeping into public policy. The personal agenda has to do with the sexually oriented business ordinance that the city of Scottsdale passed. This group never would have existed had it not been for the city council's action on the sexually oriented businesses.

Michael Grant:
Again, if valid objections have been raised, who the heck cares why they got together?

Rick Kidder:
To be perfectly honest with you, public discourse on this issue is important. When cities and towns are going to the voters and asking them to raise their expenditure baseline adjustment, it's important to have full dialogue. The option in this case has brought forth a litany of concerns about the city that are unrelated to 402 but at the same time some of the discussion has been fruitful for the community to debate the issue.

Michael Grant:
Let's get to the merits or perhaps the demerits of the proposal. Voters passed this 25 years, roughly, ago. It was Arizona's response to proposition 13 in California. One of things they thought important to do was to cap spending because obviously spending is ultimately a driver of taxation. Why in the world should voters say, oh, its okay, blow through that thing?

Rick Kidder:
A city like Scottsdale--let me backtrack. A city like Mesa is in serious budget problems. They have income problems and revenue problems. The city of Scottsdale does not. We've had occasions for people to vote in the city of Scottsdale to add additional revenues to the city and police and fire for buying reserve properties. The city is merely asking for permission to spend the money it already has. This is not a situation where taxes are being raised. It's not a situation where there's going to be out-of-control spending. The permission to raise the caps has been done in 76 cities and towns throughout the Arizona since the passage of the 1979 bill and constitutional amendment, and it's actually a very good check. It's a good check always to have to go to the voters when you're looking to spend more.

Michael Grant:
If you got it, why not spend it? Particularly, as Rick points out, Scottsdale voters have specifically approved some of this stuff?

Lamar Whitmer:
The mountain preservations. Capital costs, police and fire and mayor insists they have already spent that. I asked her in the public letter if they had a plan to implement it. She said they did and implemented it fully. That tax is gone. But what is at stake here is the fact that their own CFO says this is based on development fees. If you want to take a lesson from Mesa, you don't balloon your budget and hope to backfill it with revenue because it has to come from somewhere. For the first time since 1946 Mesa has to reinstitute a development tax. It's a case of letting the horse out of the barn. Once it's out, how do you get it back in? If we balloon the budget, the property taxpayers are the ones at risk and they have to rely on trusting the mayor and city council to hold the line.

Michael Grant:
Do we rely too much on growth? There are obviously cycles to the economy, cycles to development, those kinds of things?

Rick Kidder:
Scottsdale is hitting a point of build out anyway in redevelopment mode. We are seeing incredible investment particularly in the southern part of the city down to the city's border. What we are seeing now is a rebirth of Scottsdale and redevelopment is turning a lot of development fees. At the same time, quite frankly, Scottsdale's history of budgeting well, projecting well, exceeding their revenue projections, year after year after year, has earned it a AAA bond rating. They have that rating because they have solid reserves and a strong fiscal management and they spend appropriately.

Michael Grant:
At what point do voters say, like your track record but we just as soon--particularly if you have 8% growth room, at what point do they say we're not questioning your competence? You have enough money currently?

Rick Kidder:
That's the point. We have the money. This is permission to spend it. That's all. This is permission to spend the money that the city has.

Michael Grant:
It's a permission to spend an increased increment.

Lamar Whitmer:
That's correct. That will go on forever. The issue here is what is the appropriate rate of growth for government? Is it inflation and population? Anything above that should be explained to the voters in a way they can understand. I don't think the proponents of 402 or the city have done a good job of saying what are we going to get for the 79 million? Where is the growth coming from? They are short on the backup. I want to know where's the beef? When the proponents signed onto the issue, it was before the budget was available. They signed on in February to support a budget that wasn't even released until the end of March and so to do that without the due diligence, I think is a little risky.

Michael Grant:
I understand the point but to the extent that the city seeks to distinguish itself and certainly I think Scottsdale has done a very good in distinguishing themselves in making themselves something different, if it costs more than necessarily the increment of population growth, for example, and inflation, should be a viable option? Viable local option?

Lamar Whitmer:
I would agree if there was an agreement on how the $79 million would be spent. There aren't. There's no safeguards. The voters have to ask yourself do you want to trust the city council?

Michael Grant:
Rick?

Rick Kidder:
Lamar is misleading you a little on this regard. The $79 million that would be added to the spending cap for the city of Scottsdale is subject to same appropriations process that the other does. No one said that is blank check for the city to do whatever it wants. Scottsdale is a community that is conditioned to a level of services, programs, and amenities that frankly are superior to those that you find in many communities. We are able to pay for that. The citizens have said over and over again, we want that. As long as it's in Scottsdale's means to do so and fiscally responsible for them to do so I think they should pass 402 and use the funds and good discretion and good judgment.

Michael Grant:
Have you, Lamar, or your group has identified areas where the city is being prolific?

Lamar Whitmer:
In the amount of personnel they are hiring. We have hired 200 people in the last 10 years. That's a 10% increase. The issue gets back to one of trust. Two examples of where the city council has disrespected the voters was in 2002 the voters--2000 the voters voted on $9 million of the bonds on the park. They voted it down. The city comes back and spent $100 million on an acquisition for west world parking lot. The other issue is in 1989 Scottsdale decided to tax themselves 2/10ths of a percentage for improvements. It boils down to a matter of trust. Can you trust the city council? If we're not saying that they will bypass it. We're saying they are going to. They're going to do a snow job.

Michael Grant:
Rick's response is look at the track record. It's a AAA rated city. They spend responsibly and deliver a bang for a buck.

Lamar Whitmer:
Look at the track record. They mislead the voters and the only time they talk to the voters they mislead them.

Rick Kidder:
I'm afraid Lamar is misleading as well. Yes, there is a growth in employees in the city because we moved from a private fire service to a municipal one. When rural metro said it would not provide fire service to Scottsdale, Scottsdale created its own fire service. That obviously added employees to the rolls. There are certain areas that need additional personnel. People in the older parts of the city are asking for and receiving improved code enforcement to make sure the alley is also well maintained and city streets are well maintained. That's important to provide the services and amenities that the citizens want.

Michael Grant:
Rick, if voters turn this down next Tuesday, what happens?

Rick Kidder:
If the voters turn it down next Tuesday, then the city has to go into a very serious look at the budget. It will likely have to trim somewhere in the neighborhood of $15 million from the budget and it will not eliminate services willy-nilly. We will see significant reduction in services many of which are extraordinarily important to our senior citizens, arts programs, tourism, libraries, parks, all things that are important to seniors and senior centers.

Lamar Whitmer:
And I would say Mr. Kidder is misleading people now because the city's forecast on capital coming on line from last year's budget of $4 million. Now they are asking for 35. Where's the difference? I'm asking how many people in the fire department? I think we're talking 40 people out of 200. I give you credit for fire department. That was a cost shift that the money was being expended in rural metro. That's not an increase. That's an addition.

Rick Kidder:
You were talking about increases in employees and obviously the fire department is part of that. I guess there will be a trim in the city budget. There's always something for someone to dislike. Realty for proposition 402 for our community is it will allow us to keep the level of service we have now and enhance it in the future.

Michael Grant:
As usual, one man's fat is another man's bone, I guess, goes the expression. Rick Kidder, thank you for joining us.

Rick Kidder:
Thank you, Mike.

Michael Grant:
Lamar Whitmer, appreciate your input as well.

Producer:
Governor Napolitano is on a record-breaking streak. Legislative leaders say it's a sign of weakness and others say its business as usual. This is Wednesday at 7:00 on "Horizon."

Michael Grant:
Directly following "Horizon" tonight stay tuned for "Arizona Stories." Among tonight's stories how Mesa's falcon field played a role in the Battle of Britain. "Arizona stories" airs every Tuesday at 7:30 p.m. Thanks for joining us. I'm Michael Grant. Have a great one. Good night.