The state legislature hasn’t formulated its budget for next year. Governor Janet Napolitano will talk about that and other pressing state issues in her monthly appearance on HORIZON.
Ted Simons:
Tonight on "Horizon," the clock is ticking and still no state budget from lawmakers. We'll see what Governor Napolitano has to say about that. Also, we'll ask the governor about any possible jobs she might take if Barack Obama becomes president. And the governor signs a bill that opts Arizona out of a controversial national i.d. card. The governor will address those issues and more, next, on "Horizon."
Ted Simons:
Hello and welcome to "Horizon". I'm Ted Simons. State lawmakers are talking about options to keep the state afloat if they can't get a budget passed by June 30th. One idea is to pass a temporary budget. Here to talk about that and more is Arizona Governor Janet Napolitano. Governor, good to see you again. Thanks for joining us.
Governor Napolitano:
Thank you.
Ted Simons:
What happens if there's to budget deal by June 30th?
Governor Napolitano:
First let's focus we got some time and the legislature; there's a lot of talking going on. Let's hope they can produce a budget I can sign by June 30th. We've been this late in the fiscal year before. Although I wish it could have been done earlier done in a more organized fashion, Legislature being what they are take a lot of time there are a lot of pieces to put it together and size of deficit doesn't make the job any easier this year. In some respects in a way it does because it really does limit the options. They have to employ all of the tools in the toolbox about the budget. But I'm hopeful over the next week to 10 days they reach a resolution that I can sign and we can put this behind us and move into the next fiscal year.
Ted Simons:
And yet the conversation, some of the conversation this week has been if the deadline isn't met x, y and z could possibly happen. Again, what happens?
Governor Napolitano:
Well the basic function of government will continue. The legal analysis has been done, there's not a total government shutdown in that regard. It's not an ideal situation. Not too much of a gloss over it. It's inconvenient and there are expenses associated with even that. Again, it just makes the case for the legislature to get together and really what I'm waiting for is for the Republicans and the Democrats and the House and the Senate when all four leaders are ready to come to me and say we have a budget. We can sit down and I can look at it and all right I can agree to this and this and negotiate and we're done. It has to be at this point bi-partisan and both houses.
Ted Simons:
I want to get to the meetings and negotiations and who is talking to whom in a second. Would some workers lose their jobs if nothing is done before June 30th?
Governor Napolitano:
I don't want to play the what-if game because what will happen if I say yes of course, then I've got every state worker emailing in saying is it me? Is it me? Is it me. Here's the plain fact of it, basic functions of government will continue, we hope there's no stoppage at all and we have a budget by the fiscal year and that's what really the Legislature really ought to aim for.
Ted Simons:
And some of the Legislature the state treasurer also mentioned the possibility of having to bring out the National Guard to cover the prison system if again there's nothing there by June 30th. Are we dealing with people looking for the worst-case scenario?
Governor Napolitano:
There's a few out there that I think are using apocalyptic vision. In fact I would venture to say there are a few in the legislature who want this and this is what they have been aiming for it and they have been contributing to the delay to what ultimate end I don't know except they like the idea of seeing if the government will actually shutdown. The basic functions of government will continue. Again it's not an ideal situation. The legislature, they have 10 days left. They know the issues. The numbers are out there. They have all of my numbers. What I'm waiting for again is for the Democrat and Republican leadership of both houses to reach an agreement amongst themselves so they can come and talk to me.
Ted Simons:
You can understand though state workers you mentioned would be unnecessarily concerned as you see. But then again, they do have some concerns and lawmakers would have concerns as again what would happen if the loggerheads continue to be there?
Governor Napolitano:
Don't misunderstand what I said. I understand that the state workers are concerned. I wish they didn't have to be. I wish this was done and we had a budget. I cannot announce the budget. I can give the Legislature my recommendations. They've had those for months. Under the Arizona's constitution it's the legislature's power to adopt the budget and indeed it's their responsibility to adopt a budget. I think they're now at the position finally realizing it can't be Republican only, they have to add Democrats to the mix. Those discussions I think are now really beginning. And so there's a lot that can happen over the next week. And remember, A. we've been this late in the fiscal year before. But also B. when we had to go back and fix the '08 budget this year. What's happening? What's happening? When it finally moved, we were able to get the whole thing done in 20 hours.
Ted Simons:
I was going to say scare tactics aside, maybe it's a good thing some of the folks are realizing there is a deadline and there are ramifications if something doesn't get done.
Governor Napolitano:
The Legislature moves best sometimes when there isn't actual a hard deadline. In some states they have a hard deadline when the session must end. That's a pressure on the budget. In our state we don't have that sort of thing. We do have the beginning of the fiscal year. Historically there were times in decades past they moved the hands on the clock to make the day go longer and so forth. Again not an ideal situation of the legislature should have gotten at it months ago in a much more organized fashion and legislatures are legislatures. They are 90 people from different areas and different agendas. So it has taken awhile. But again when the floor leaders, the majority head of the president of the senator, the speaker of the house, the minority democrats in each house, they have an agreement amongst the four of them, I'm ready to sit down and talk.
Ted Simons:
Are you getting piecemeal presentations? Are you getting ideas? Is someone from the Republican leadership are they sending things over for you to look at , for you to consider?
Governor Napolitano:
They are beginning to exchange ideas through democratic leadership. Through them, yes, we have some ideas. They are very vague. Again this is a big budget. There are major decisions that need to be made and small ones that need to be made. Unfortunately it's an era and year where the revenues are not what we would think we wish them to be. Hard decisions need to be made. I think I made a lot of the hard decisions. They are in my proposals to the Legislature. Again, I'm waiting.
Ted Simons:
Speaker Wiers quoted as saying huge progress is being made regarding the budget. Do you agree?
Governor Napolitano:
Well again I'm not sure. What I'm waiting for and I think I've said it very plainly on this program when he and the President and the two minority leaders have reached an agreement on what can get a 16 to 31 vote in the Legislature, I'm prepared to see what they have agreed to see if I can agree to it.
Ted Simons:
State hiring freeze, is that in effect?
Governor Napolitano:
That is in effect.
Ted Simons:
And that go on for how long?
Governor Napolitano:
I predict the end of calendar year if not the next fiscal year.
Ted Simons:
I want to move on to economic stimulus plans that's making rounds. I know you don't comment on specific legislation. This encompasses four, originally five I think this included the university construction bill or idea. But now four things are banding together as a stimulus plan for construction here in the state everything from a entertainment district south of the ballpark, to a T.S.A. down in tourism sports authority in Tucson. These have a lot of ideas and bunched together. is this the best way to give Arizona's economy a little bit of the kick start.
Governor Napolitano:
Well again let's not lose sight of the university package. The university package is also proceeding. That is a package that allows to us complete the biomedical campus in phoenix, provides millions for repairs on all three of the universities' campuses (Northern Arizona, UofA, ASU). And also allows us to build new buildings. we know we need the university capacity. That's construction and construction jobs right now. That's a stimulus right now and gives us capacity moving forward. That will be part, I believe, ultimately of the overall budget resolution as will these other items. These other items I had a hearing on them this week. They came up late in the session. the two you didn't mention were the expansion of the research and development tax credit and solar tax credit. I think the latter two actually have a direct connect to economic growth in terms of job, job creation, long-term job creation for our state. And again all of those things will have to be part of the end of the session, mixed where the actual budget is concerned.
Ted Simons:
Critics of the ideas say these plans won't generate jobs fast enough to make a dent in Arizona's problems regarding the economy. Your response?
Governor Napolitano:
I don't predict on particular bills and they haven't passed either chamber. It's a little pre-mature. I do believe we should be the Persian Gulf of solar. I've said that a long time and on a day like today, we can appreciate the wisdom of the statement. And again research and development tax credits and I had a meeting teleconference just this afternoon with a C.E.O. of a company one of things we are evaluating what kind of tax structures that are there that would support research and development. Those are things I can connect directly from things I do for possible job, job creation in Arizona. The universities to me is no-brainer. It's there. the numbers have been penciled out. The question is paying for it. There's a variety of options presented for that. Of course, the big job stimulus program is going to be on the ballot. That's the transportation initiative. That transportation initiative would provide literally thousands of jobs in all 15 counties in Arizona should it pass.
Ted Simons:
Economic stimulus ideas like the ones we talked about and we'll talk about the tax plans in a second here. But these plans better than say making permanent repeal of the equalization tax.
Governor Napolitano:
Permanent repeal at this point in the way that it is doesn't make sense whatsoever. that was a suspension and again 8 it's really interesting to be lectured by some members of the legislature on the long-term fiscal health of the state when in the middle of the deficit they sent me a quarter of million dollars tax cut that's permanent and not linked to any particular job creation.
Ted Simons:
Critics are saying the money for stimulus plan whether the university or all encompassing kind of thing that money would be better spent especially in these times with statewide services. Again respond.
Governor Napolitano:
Again it's a balance. In the budget we must protect basic safety net services. When the economy is down those go up. in that respect government is counter cyclical. When I hear them say let's cut billions and billions from the budget. What they are not telling you where would the billions come from? The first is higher education. The second place is K-12 and basic safety net services tied with it. When I look at what's happening demand for food banks and demand for healthcare and access, for example. That will not fly. We have to make targeted cuts that makes sense. We'll have to sweep balances again. Those hurtful and real cuts. We have to be not able to expand or grow some things that we would like to do in an ideal situation. Do all of things. In the end we have to use the rainy day fund. We have to bond for construction. We have to do a K-12 rollover and all the tools in the toolbox, which we have to balance the budget.
Ted Simons:
Let's get to the transportation plan here. The 1% increase, could it have been less?
Governor Napolitano:
Not and give you a real statewide transportation plan. Believe me there were lots of options looked at. But this is a one penny increase in the sales tax that wouldn't start until 2010. It's a delayed effective date but the construction would begin now. If you want to have a transportation plan that's not just roads and includes rail and mass transit, then you need that penny. You know when gas is $4 a gallon and going north--actually it's more than $4 a gallon now. People more and more are looking at it and saying that's a good deal for Arizona. That will give us transportation, infrastructure and options for the future.
Ted Simons:
There are those saying this much of a tax increase just the tax itself when it does come into effect and who knows what the situation is then, that would hurt the fragile economy.
Governor Napolitano:
No, they are wrong about that to the contrary. It creates immediate jobs, creates immediate infrastructure and long-term growth, gives us a growth plan for the future in terms of how do we prevent sprawl. The growth will occur on the transportation corridors and allows us to grow Arizona businesses and attract businesses here and because they know we have taken care of basic infrastructure needs which many states are suffering with. It will be long-term investment and it's up to Arizona has to decide. Literally it does produce thousands of jobs.
Ted Simons:
What if Arizonians decide no? Is there a plan B?
Governor Napolitano:
Oh it's a terrible option because we will be out of transportation funding. Within two years we will have no money except to maintain existing roads. We won't be able to do any of the things that people have said repeatedly that they want. And I got to tell you, if you are sitting in traffic as I was trying to get out to the studio this evening to film the show. You realize every moment you're sitting there you're paying tax high price of gasoline and your time. All of which we can deal with over time if we have the ability to build a transportation super structure.
Ted Simons:
I want to get to the ninth circuit court of appeals and employers sanctions all here in a second. I know that is a major topic for a lot of folks and they're very interested in that. Much of what we talked about so far deals with growth. And now we're finding out there's not a lot of confidence, I guess this has been a problem for a while regarding just how much growth there is in Arizona's population numbers. What's going on here?
Governor Napolitano:
What happened I think is a lot of our growth projections were based on housing permits and turns out those housing were being built for spec or speculation purposes. But two years ago I had seen this. I had issued an executive order creating a group to really look at how we do our demographics because a lot of funding decisions and planning decisions are based on accurate populations counts not just for now but projections five years hence and 10 years hence and the like. That is all in place now. I'm confident along with for the first time having a state demographer to really help us to do a better job looking. When you're rapidly growing and we are still are growing but not as rapidly as some as predicted. When that has happen, a good base of data means a lot. We have taken steps to create the situation.
Ted Simons:
Do you think the numbers we have heard bandied about are they inflated.
Governor Napolitano:
Some of them may be, in some of the area of the state they very well may be, yes.
Ted Simons:
Your idea was to get the commerce department involved in all this.
Governor Napolitano:
Yes, we moved it over to the commerce department and we created a position for state demographer and really began looking at different sources of population information beyond housing information. And again who is to say what happened and obviously there's changes in the economy that were not fully predicted. Like I said my executive order two years ago, a lot of the way the estimates were being done was not accurate.
Ted Simons:
Let's get back to the ninth circuit here and the employer sanctions. how do you see that thing going?
Governor Napolitano:
I wasn't at the argument and I haven't read the briefs. I gave up my lawyering days when I stopped being attorney general. I believe the law is constitutional and will meet federal challenge. So we're in the process of implementation now.
Ted Simons:
Some of the judges are sound concerned regarding an idea of patchwork of laws. Does that concern you?
Governor Napolitano:
I think that's what the congress has left us with. The congress and administration by their failure to enact revisions to our nation's immigration laws basically have said to the states and cities, you're on your own. indeed in the federal statute that's being challenged now as saying, you know, our law doesn't apply to federal statute. Well that statute itself says state licensing is not effected. And our employer sanctions law is at license law.
Ted Simons:
And that's really isn't the base of this, licensing ok just don't get civil and criminal cases out of this?
Governor Napolitano:
You're exactly right.
Ted Simons:
And so until they make a decision, we all sit back and watch.
Governor Napolitano:
Hurry up and wait.
Ted Simons:
Real I.D. why did you sign a bill to put the kibosh on real I.D.?
Governor Napolitano:
I signed it because federal government hasn't paid for it. When real I.D. first came about in 2005 it was proposed as a national law to put the national criteria on driver's license's so you have better documentation of who was actually driving in the United States. It was supposed to accompanied by significant federal funding. When you change driver's licenses it doesn't sound like a big deal but it's very expensive. And the most conservative estimate of how much this would ultimately cost at least $4 billion. The federal government never appropriated the money for that. From the governor standpoint is like guys if you think it's that important, you got to pony up the money. If you don't pony up the money, you must don't think it's that important. So we've became the 14th state to say we're opting out.
Ted Simons:
The people that sent the bill to you, a lot of those folks were concerned about national I.D. card and security implications and individual civil liberties. That was not your main concern?
Governor Napolitano:
That was not my main concern. I think from a Homeland Security standpoint having good verifiable criteria for identification makes a lot of sense. That argument was not persuasive to me but what was to me and to the other governors of the country because there are a lot of other states moving in the same direction we are very tired on the Homeland Security front of the unfunded federal mandates.
Ted Simons:
We talked earlier about an apocalyptic-type messages. It sounds like the Homeland Security Department is saying you better watch it here, you don't know the ramifications if you don't get on board with this, you won't be able to get on a plane and you won't be able to walk into a federal building. Is that hyperbole?
Governor Napolitano:
I think its hyperbole. First of all the federal law doesn't go into effect for several years. Secondly at this point saying a quarter of the country won't be able to get on plane with the airplane market being the way it is seems to be apocalyptic to the extreme. Thirdly what I think the real message is to congress and next president of the United States is real I.D. needs to back up the bus and rethink the whole process now.
Ted Simons:
How does it effect your three-in-one plan?
Governor Napolitano:
It doesn't. Three-in-one was independent of real I.D. Three-in-one is an involuntary driver's license that Arizonians can use to go back and forth to Mexico and Canada. That meets the criteria of another law called the Western Hemisphere travel initiative. It could be used for the employer sanctions and I.D. for employer sanctions law and driver's license. Those were the three functions. I hope real I.D. is off the table in Arizona the legislature will rethink the three in one option.
Ted Simons:
Operation jump start looks like it's getting ready to stop in the middle of July. What's the latest on this?
Governor Napolitano:
Same, Governor Schwarzenegger, Governor Richardson and I have been banging on every Washington door we can find. I find it ironic in the extreme every border deadline in terms of technology at the border and staffing of the border patrol has slipped. The only deadline they're adhering to is the removal of the National Guard. It seems to me that jump start has been successful and good training place for National Guard. They have done good work down there and we need to keep it there at the federal government's expense.
Ted Simons:
What happens if they go away?
Governor Napolitano:
Well, we are already looking at what options. There's no good alternative and obviously given the discussion of the budget we don't have the wherewithal simply to plow all of our money on federal government has on the National Guard. we will look at some options that would be available. There's nothing as good keeping operation jump start going for a while longer.
Ted Simons:
Barack Obama the man and you were on board that particular winning train very early. I understand that you and Senator Obama have a relationship and you talk and these sorts of things. Would you consider a position in the an Obama administration?
Governor Napolitano:
Look, I'll tell you what I've told the other 100 people that have asked me that question as presumptuous of me to answer it. There's no Obama administration now. There's an Obama campaign. The first is to win the presidency. It's up to him who he wants to select on the administration. I'm the governor of Arizona and that's my job.
Ted Simons:
How much would leaving the governor's office to a republican governor as your replacement, how much would that factor into your decision?
Governor Napolitano:
Again, I'm just not answering these questions. They're so speculative Ted and un-timely and presumptuous. Really the number one thing on my mind at the national level is to elect Senator Obama as president and bring some change to Washington, D.C.
Ted Simons:
You understand the scenario of you leaving office it a Republican governor has a lot of Democrats concerned and they are not holding back with their concerns. They are worried about this.
Governor Napolitano:
Well, again, my job is governor. I like being governor. I like the job we're doing and the issues we are working on.
Ted Simons:
Alright, are we working on an energy plan? A wide ranging energy plan here in Arizona that would not--that would be satisfying not only to those who want to see alternative energy in general and an energy boost in particular and business interests who say you go too far in one direction, you will hurt businesses.
Governor Napolitano:
Right and the answer is yes. First of all there's an omnibus energy bill pending in the legislation now that we've been working on for months and it's sponsored by Representative Lucy Mason who has shepherding it through the process. Secondly we are working as a member of what they call Western Climate Initiative. This is a consortium of the western states on issues effecting alternative energy, greenhouse gas emission and all the rest. In terms of standards that would make sense for Arizona. As I told business leaders in this state, they are stakeholders in this. They will be at the table as we arrive at those standards but we can't afford not to do anything and we can't afford to go backwards. we need to realize as a state and indeed I think Arizonians as a whole have, the issues of energy and climate change are here and here to stay. We only disadvantage ourselves competitively business-wise and every-where-else-wise if we don't move ahead in the direction of western climate initiative, in terms of good standards that our businesses can meet.
Ted Simons:
Is this a kind of thing where there could be a compromise? I know you vetoed the bill regulating or at least limiting Arizona's greenhouse gas emissions ideas. If that came back up, is that something that can be negotiated? Is that a strong no as far as you're concerned?
Governor Napolitano:
Well the bill took away from the governor, the authority to participate in any of these agreements. And that's a no. That should be in the executive's authority. But including individuals legislatures, business leaders, other stakeholders in the process we've done that with forest health. We've done that with water. We've done that with all sorts of environmental related issues. This is no exception.
Ted Simons:
Real quickly before you go, the idea of rebate of gas taxes over the summer to help folks traveling over the summer. Do you like the idea?
Governor Napolitano:
No, it doesn't work. Administratively it's a nightmare and secondly it's not a substitute for a solid national energy policy. And again I think our resources are better invested in terms of moving us in different sources of energy and in terms of having a transportation plan for a state that has transportation options and making sure we are providing for a long-term health of Arizona.
Ted Simons:
Suspending the gas tax as well kind of the non-starter?
Governor Napolitano:
Non-starter.
Ted Simons:
Governor, it's always a pleasure. Thank you so much for joining us.
Governor Napolitano:
Thank you a lot.
Ted Simons:
The president of U.S. Airways talks about rising fuel prices and other challenges facing the airline industry. Plus why the state is suing the operator of Maricopa Medical Center Thursday at 7:00 on "Horizon". That is it for now. I'm Ted Simons. Thank you so much for joining us. You have a great evening.
Janet Napolitano:Arizona Governor;
