Declining State Revenues

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state revenues are declining. State Senator Jay Tibshraeny will explain why and what lawmakers may do about the situation.

Ted Simons:
Tonight on "Horizon," state tax collections are not meeting the budget created by state lawmakers. One of those lawmakers will tell us what might be done about the situation. The Arizona Meth Project is using ads like this in hopes to reduce meth use. Arizona attorney general Terry Goddard will tell us about the second phase of the anti-meth ads. And he served in four presidential administrations, helping to forge peace agreements. Meet Ambassador Dennis Ross. All that's next on "Horizon."

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Ted Simons:
Good evening. I'm Ted Simons. Welcome to "Horizon." Although state revenues went up in July by 4.4% compared to a year ago, the money was not enough to meet the state's budget needs. According to the joint legislative budget committee, lower-than-expected revenues reduced the carry-over from last year's budget from $529 million to $303 million. The budget passed by lawmakers and signed by the governor is reliant on that carry-forward, and that means a shortfall. Here to tell us more about that is state Senator Jay Tibshraeny. Senator, good to have you here. We're talking - what, 220 some odd million less than expected. What happened?

Senator Jay Tibshraeny:
I'll tell you what happened. Thanks for having me so we can talk about it. It's a pretty significant issue. The carry-forward that legislative leaders had planned onto help balance the budget year we subsequently went into never materialized. The main numbers were significantly lower than what they were projecting. June continued to plummet. The long and short of it is, as you mentioned, we began the year 225 million out of balance before we ever started. We started with a $225 million deficit. The money was already allocated, already put into budget spending. So there is a shortfall, and that creates a real significant problem.

Ted Simons:
How much does the housing slump play into all of this?

Senator Jay Tibshraeny:
I think the whole economy in Arizona is tied very heavily to real estate. The mortgage crisis has affected dramatically the housing. 10%, 15%, 20%, this year we won't see that. We'll still see growth but not the kind of growth we've seen the last few years.

Ted Simons:
How are these projections made? What kind of things are looked into and how are they formulated?

Senator Jay Tibshraeny:
I think the different experts, the legislative staff, the governor's staff, they look and make forecasts. Also they put together a budget. My concern this year really was that maybe we spent too much time on the spending side, not enough time looking at the revenue. So the spending was put together, and then I felt that the revenues that were projected maybe were more to meet the spending needs versus really the other way it should have been. They should have been more conservative on the revenue numbers, the numbers from May and June coming in. The money wasn't going to be there, so there needed to be a downward adjustment in spending. That didn't occur. We began the year with the budget way out of whack.

Ted Simons:
Is this the kind of adjustment that's going to need a special session of the legislature.

Senator Jay Tibshraeny:
This will absolutely need a special session. I had pushed from -- and just for full disclosure, I voted against the budget because of this very issue. It wasn't structurally balanced, ongoing revenue to ongoing expenses, but also the cash balances then that you need to make that work weren't there. So I've asked our caucus to meet. We will be getting together in the next few weeks to talk about it. To solve a problem of this magnitude -- and I just got a preliminary look at the august numbers that usually come out a week or two from now. They're going to be 75 million, I was told, below forecast. That puts the current problem at about 325 million below budget, and that could project to an $800 million deficit. So to solve a problem of that magnitude, we absolutely will need to come into special setting, need to do some cutting of the spending put into the budget. It really is going to put, I think, our opportunities to solve this problem, it'll limit them greatly.

Ted Simons:
Spending cuts, adjustments. All them what you will. What do you see most likely to be affected?

Senator Jay Tibshraeny:
We have our JLBC staff looking at areas. I think it's going to be some kind of across the board cut. Obviously you'll have to look closely at not carving out too much out of public safety 'cause that's a critical thing we do in the state. You probably have to protect public safety but also look at all other areas of the state. It's going to be some kind of across the board cut. This is really something that should have didn't done in the budget process, and now we're going to have to do it now. We should not wait until we come into session in January, because the year by then would be seven months old, and it leaves you five months to make these budget cuts, and then it would be very, very painful to do that.

Ted Simons:
In looking into the future, how far do you see this trend going?

Senator Jay Tibshraeny:
The trend for the months that we're in now, the first two months are pretty much in the tank. We will continue to be under forecast. We'll still have about for the year 2% growth, which is not a lot. But in terms of the housing market and what have you, I've listened to the experts. The experts are all making presentations. I think you're looking at about a year of this slow growth and a quiet housing market, and I think it'll come out of it. But we're paying the price for a very explosive housing market that we had last year and for the previous three or four years where prices escalated 20%, 30%, 40%. Now, with the mortgage crisis, what have you. So it'll come back, but there is an adjustment making place, and it affects state revenues.

Ted Simons:
Senator, thank you so much for joining us. A second phase of some very graphic ads meant to discourage meth use have started running on TV. The ads are part of the Arizona meth project, which hopes to discourage young people from using the drug. I'll talk to Arizona attorney general Terry Goddard about the ads. But first here are two of them.

Hey. What about me?

Hey. What about you?

Oh, come on.

Give her some.

Yeah. Give me some.

All right. All right. You want meth, kid? Here's your meth. And here's your meth dealer. And your meth boyfriend.

Oh.

And your meth baby. And don't forget your meth face.

[Crying]

Come on. Ha-ha.

We should have taken that shortcut through that empty parking lot. I wish they'd broken my ribs, put me in the hospital. But I didn't get jumped. I went to that party. I did meth for the first time. Now all I do is meth. All I do is meth.

Ted Simons:
Here to tell us about the ads and the goals of the Arizona meth project is Arizona attorney general Terry Goddard, who is also one of the co-chairs of the Arizona meth project. Good to have you here. Welcome to "horizon."

Terry Goddard: Thank you.

Ted Simons: are these ads any way different than the ads that have been running before? This is phase two?

Terry Goddard: This is phase two we kicked off just this week. As you can tell, they're gritty. They're graphic. They're designed to grab and get the attention specifically of an audience of 12- to 17-year-olds. So it's not for everybody, and I think many people find them very, very hard to watch. I do certainly. But to make it through the clutter, to make sure we get young people in particular paying attention and understanding the message, these have worked. They worked in Montana, where they were pioneered, and I believe they're working very well in Arizona.

Ted Simons:
Is there any measure up there in Montana as to how well kids are paying attention to these messages?

Terry Goddard:
Well, there has been. We're still too close to the front of the campaign in Arizona to have polling results to show what effect it's had, but in Montana, after almost three years of Montana meth and Montana -- Arizona meth. We are very creative in Arizona. They say a significant falloff in very important factors. Emergency admissions for meth usage are way down. Prison testing, the people coming into jail specifically with meth in their system way down. And random testing in the workplace that shows methamphetamines among workers way down. And I'm talking 20%, 30%, even 40% in each of those categories. So it's working in Montana, and I believe, from what I hear, it's working here in Arizona.

Ted Simons:
As far as here in Arizona, what can you tell us? We were talking about survey results you were discussing early on before the show. How are we doing?

Terry Goddard:
Well, we're not doing that well initially. In other words, we have a teenage use of meth that is twice the national average. We have, in some counties, especially in the northern part of Arizona -- we have spectacular disastrous amounts of meth penetration into the teenage market in particular. So we've got a lot to be worried about, and that's one of the reasons we've opted to go with this very striking and dramatic ad prevention program, because we need to get attention, and we need more than anything else to get young people, teenagers in particular, and their parents talking to each other. We also are doing radio ads which are extremely -- they're not graphic in the sense of what you just saw, but they are real life adventures. They are people who have been hooked on meth, real Arizonans, talking about their experience. And I think that has a tremendously positive impact. But we've got a crisis on our hands, and we have to deal with it very aggressively.

Ted Simons:
In terms of things that can be measured, though, arrests, these sorts of things here in Arizona, whether it's because of the ads or not, again, how are we doing?

Terry Goddard:
Let me tell you where we are right now. I wish I could tell what the progression is, but I can't. The baseline is very sobering. Over 50% of the people booked into the Pima County and Maricopa county jails have meth in their systems, so we know it's impacting the criminals. The sheriffs across the country have said meth is the number one crime problem. In Arizona, they've identified 75% of property crime and a slightly higher amount of violent crime have meth antecedents. In other words, the drug is somehow involved. In my office, we handle all of the child abuse and neglect cases for child protective services. When we did a survey of what the approximate cause of abuse or neglect was, in 65% of the cases we handle, the case worker named meth as the contributing cause to the child abuse or neglect that caused the children to be taken out of their homes, out of their families. We believe the number's higher than that. It's just 65% named meth. 25% more said drugs were the cause, and meth probably was involved in lot of cases.

Ted Simons:
Some of the smaller communities are absolutely getting ravaged by this plague. Do we know why that is?

Terry Goddard:
We don't know all the reasons, but we do know, unlike other addictive drugs we've seen in the past, meth seems to be an equal opportunity destroyer. We don't know any racial connection that one race or another is more likely. We don't have an income connection. There's an organization in Scottsdale called "not my quid" because so many upper income, well-educated families with all the opportunities in the world end up with a meth habit or their children do, and it's very easy to deny it. Not my kid means couldn't possibly be happening to little Johnny or Sarah. I must be something else. There's lots of excuses parents use, and we're trying to cut through those excuses and make sure people understand that, no matter what advantages a kid may have or disadvantages, their chances of becoming hooked on meth are almost equal.

Ted Simons:
And it sounds like, at least in Montana, these sorts of ads are cutting through a little bit of that invincibility teenagers feel that, no matter what they do, they're going to make out of it ok.

Terry Goddard:
I think that's true. And I don't want to say that meth is a death sentence, but it is highly addicted. It's one of the drugs that that's out there that is most likely to get you hooked on the first time, which is why the slogan we're using is "not even once." the slogan for the ads and for the ones that are just wrapped up is "don't even try it once." it's not cool because of what happens to you physically. It's tremendously dangerous because of the addictive possibility. And what the ads can't say is that it's also -- the treatment is very difficult. And that's something we need to wrestle with better here in Arizona is that we have to take a whole different approach to try to treat people once they get hooked by meth because it is so, so hard to get off of this. Normal treatment prevention procedures have had a huge failure rate, so we've got to find new answers.

Ted Simons:
Thank you so much for joining us. During four presidential administrations, Dennis Ross helped secure peace in the world, first working on soviet relations and then on peace in the Middle East. His most recent post was as ambassador to the Middle East under the Clinton administration. He's written a new book, "statecraft and how to restore America's standing in the world." Mike Sauceda talked to Ambassador Ross about his career, "statecraft," and the Middle East peace process.

Mike Sauceda:
Ambassador Ross, thank you for joining us here on "Horizon."

Ambassador Ross:
Nice to be with you.

Mike Sauceda:
You're in town for --

Ambassador Ross:
I'm speaking to the world affairs council. I'm on a book tour right now. I have a new book out called "statecraft and how to restore America's standing in the world," and I'm trying to talk about how best to restore that standing and pursue our foreign policy in away that will be more productive.

Mike Sauceda:
We'll get back to that book in a minute, the issue of statecraft. Tell us about your career. You started working in administrations during the Reagan administration.

Ambassador Ross:
I actually started first in the carter administration in the defense department. I worked in the Reagan administration first in the defense department, then the state department, then in the national Security Council staff. I worked in the first bush administration, bush for '81 as one of secretary baker's closest advisors. And I became the special negotiator in the Middle East under President Clinton.

Mike Sauceda:
Tell us about your work during the Reagan administration.

Ambassador Ross:
In the Reagan administration, I worked on a variety of issues. Soviet, Persian Gulf, Middle Eastern issues. It was highly analytical, geared towards trying to understand, particularly in the Persian Gulf, how one positioned itself to deal with possible contingencies. In the first bush administration, I became someone who was focused on civil union, start negotiations, German unification and NATO, and also I played a major role in terms of helping secretary baker get us to the peace conference.

Mike Sauceda:
During the Clinton administration, you worked on a couple major key agreements between the Israelis and Palestinians, also Israelis and Jordan. Correct?

Ambassador Ross:
Yeah. I helped facilitate the Israeli- Jordanian peace treated and brokered the Israeli- Palestinian agreement on Hedron. Worked on the interim agreement and the wide river memorandum and I was at Camp David as well.

Mike Sauceda:
Tell us about those agreements.

Ambassador Ross:
The key thing with the Palestinian agreements is that you created -- we created a Palestinian authority which didn't exist before, an area where the Palestinian authority basically was able to govern. You created what were the underpin things of what would be a two-state solution. Once you had a Palestinian government that began to have authority in particular areas, you really created the basis for what would become a two-state approach. We came very close, I think in, in the year 2000, although my judgment was that Yassar Arafat could live with the process, not the conclusion. The idea of ending the conflict required too much personal redefinition.

Mike Sauceda:
To define who he was?

Ambassador Ross:
In a sense, yes. An interesting story captures who he was. I spent more time with Yassar Arafat than any other non-Palestinian, and at the end of one long shuttle -- 'cause I would shuttle frequently. I'd be going around the clock seeing the Israeli leader and the Palestinian leader two or three times a day to try to get things done. At the end of one such shuttle, I told him I was going on vacation. He said, gee, it must be nice to go on vacation. I haven't had a vacation since 1963. I said, well, then you could really use one. He said, how could I take a vacation from my people? Now, the two of us were sitting alone. There was nobody else there, nobody to impress. In a sense, he became his own mythology. He came to believe his own mythology. When you're making peace, you don't reconcile mythologies. You reconcile needs.

Mike Sauceda:
Why has the peace process stalled seemingly within the past six, seven years?

Ambassador Ross:
I think the Bush administration made a major mistake. They walked away from it when they came in. They were operating on the premise of anything but Clinton. And so, rather than trying to preserve a process -- even with Arafat. As I said, Arafat could live with the process. One thing about statecraft and diplomacy, the measure isn't always what you achieve. Sometimes it's what you prevent or limit or diffuse. If you can't solve a problem, you still try to channel it. What you can't solve today, perhaps you can solve tomorrow. They walked away, and the situation became dramatically worse. What had begun during our time was transformed into a war. Then you had a kind of disbelief on each side. After Arafat was gone, with the new Palestinian leadership, we've also seen again moments of opportunity that were missed when you had to capitalize. You had to act. They say about statecraft that times is in statecraft what timing is to real estate. You have to act when the moment is there. We didn't. When the new leader was elected with a 65% mandate, he ran on a platform of nonviolence, unprecedented in the history of the Palestinian movement, and he made a decision to take on the constituency by getting out of Gaza. That should have been a moment when we were intervening on a full-time basis to make sure that worked, to show Israelis, if they in fact left an area, that the area would be bet after they left it. The Israelis left Gaza, and Gaza became a platform for daily attacks against Israel. Gaza now is governed and run by Hamas. So we're at a point now where what was possible is a lot less possible, and our main preoccupation today should be how do you ensure that the Palestinian movement, which has always been a secular national movement, is not transformed into an Islamist movement.

Mike Sauceda:
Let's talk about your new book now. It's how we relate to the word, how we interact with the world. The book is about statecraft.

Ambassador Ross:
Right. Statecraft is a term often used but not particularly well understood. What I mean by statecraft is you take all the tools of the state, the economic tools, the diplomatic tools, the military tools, the intelligence information tools, and we we've all these in a way that allows you to promote the state, protect the state. If you use all those tools very well, if they're not in the service of purposes that are logical, you can be implementing and using your assets well, but they have to be tied to objectives rooted in reality. Good statecraft depends on marrying objectives and means. If you look at the last six years, we haven't married our objectives and means very often. One way you marry them is by having reality-based and not 16 faith-based assumptions. The assumption was that with Saddam everything would fall in place. We went in without even thinking about it. So if you're going to marry your objectives and means, you have to have those objectives and means formed by reality-based assessments, and then you have to think about how you talk about issues, frame issues, frame objectives in a way that others in the world will also find compelling and acceptable. Because oftentimes our means are going to be insufficient to meet the objectives we established approximate.

Mike Sauceda:
Your book deals with using statecraft. What are your suggestions?

Ambassador Ross:
Among other things, I would say you actually have to listen more than you preach. You create certain things of strategic dialogues with critical partners around the world. But beyond that, we need to become identified with broader public good that everybody accepts internationally as being public goods. Everybody can understand what the stakes are. We need to have a much more active approach in terms of what we'll do to try to alleviate poverty, because ultimately poverty is a national security issue. We need to be seen as doing more. And here the bush administration has done quite a bit on aids at least in Africa and hasn't gotten the credit for it because, again, how it packages it, how it goes about it. We need to be seen as dealing with what are broad international needs on the one hand, and also the style and the character and how we approach others has to be characterized much more by demonstrating a readiness to listen and not just a lecture.

Mike Sauceda:
Do you see a military strike against Iran coming at all? Some people say that talk is ratcheting up.

Ambassador Ross:
Yeah. I don't think the administration is at that point right now. Die think the ad minute station feels that Iran with nuclear weapons change the world as we know it, which I think is true. I think we'll have a nuclear middle east. That changes the world as we know it. If you have 25 nuclear states as opposed to a, you're in a world that is vastly more dangerous. So we shouldn't want to get to that point. I don't think the administration is planning on using force at this point, but I also think it's got a mismatch between its objectives and its means. It wants to prevent Iran from going nuclear. It's engaging in slow-motion diplomacy through the Security Council while Iran is engaging in fast-paced nuclear development.

Mike Sauceda:
Do you see a peace in the Middle East within our lifetimes, within one hundred years? Is it something that's going to continue to go on? We've had a lot of agreements, and the violence seems to continue.

Ambassador Ross:
You know, you can't do what I did for as long as I did unless you're inherently an optimist by nature. Do I believe this conflict can be settled? Yes, I do. The reason I believe it in the end is because the Israelis can't wish the Palestinians away and the Palestinians can't wish the Israelis away. They're going to be there, and they have to find a way to live together.

Mike Sauceda:
Thank you for your time.

Ted Simons:
Coming up, Election Day in the valley this week in four Valley cities. We'll look at the results in Phoenix, Glendale, Avondale and Surprise. We'll discuss the latest developments on Mexico trucks in U.S. and the debate that continues over the pilot program. That's Friday at 7:00 on "Horizon." Thanks for joining us on "Horizon" and thanks to our guests. "Horizonte" is next. I'm Ted Simons. You have a great evening.

Jay Tibshraeny:State Senator;Terry Goddard:Arizona Attorney General;Dennis Ross:Ambassador;

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