NALEO

HORIZON visits the National Association of Latino Elected Officials Conference, which was held in the nation’s capital last weekend.

Transcript:

>>Ted Simons:
Tonight on "Horizon" we break down the numbers for the 2009 State Budget. Issues with the legislature and upcoming elections are confronted by our political antagonists on "one on one." And a gathering at our nation's capitol focuses on the Latino vote. That's next, on "Horizon."

>>Ted Simons:
Good evening, thanks for joining us tonight on "Horizon," I'm Ted Simons. The governor signed a 2009 state budget Friday. The $9.9 billion budget passed the House and Senate by narrow margins, just in time to prevent a state government shutdown. The new fiscal year begins tomorrow. Joining me now to dissect the potential economic impact of the budget is Dr. Tony Sanders, an ASU Professor of Finance and Real Estate for the W.P. Carey School of Business. Thanks for joining us.

>>Tony Sanders:
Thank you.

>>Ted Simons:
Critics are saying this budget is fiscally irresponsible. What do you think?

>>Tony Sanders:
What I would say off the top of my head that might be rather strong rhetoric. I would not want to be the governor in a place where we have a $1.3 billion deficit and the economy does not look to be improved over the next year. It's a tough row to hoe.

>>Ted Simons:
It seems as though there are two battling theories here. One side saying, "Times are tough; this is not the time to cut services that help folks through tough times." The other side saying, "Times are tough, this is the time when everyone needs to sacrifice." Is that the kind of dynamic you see playing as well?

>>Tony Sanders:
Absolutely. You have, again, we can stylize this as Republicans versus Democrats. One side is saying, take the pain, make the cuts now, and preserve the budget. The other side is saying, which is when we need the government the most. We can't turn people out on the streets. We can't stop educating people. It's a tough policy for both parties to try to achieve.

>>Ted Simons:
As far as the future is concerned, moving the state forward, do you find moderation between the two? Or do you say, let's hold on until times get better?

>>Tony Saunders:
I think that's what the budget is reflecting. This is the let's hold on for a year and hope over the next fiscal year things improve. Unfortunately, when I look to the budget, I just don't see where that probably makes a lot of sense.

>>Ted Simons:
Do you see a turn-around any time in the near future? What are you seeing out there?

>>Tony Sanders:
Let's start at the micro level, the community level. The housing market means that communities have less property taxes to raise, less disposable income by households, so they're spending less. And Arizona, the state, derives income from certain purchases that people are no longer making. The worse this housing crisis goes at the local level, the worse it is not only for the municipalities, but also for the state, as well.

>>Ted Simons:
So revenue shortfalls all around?

>>Tony Sanders:
That's right. And we're not predicting a turn-around for probably at least a year.

>>Ted Simons:
Okay. With that in mind, we've got a lot of borrowing in this budget. With that in mind, does it make better sense to go ahead and try to whistle past this particular graveyard for at least a year, and then start making up the difference?

>>Tony Sanders:
That's the important question here. The answer to that is, is that the budget here is really strengthening health and education, two things that Arizona wants to pride itself on. Again, noble, that's great. But the problem is, when the economy is looking on the downward trend, those are tough things to sell. Again, in the long run, if we're trying to attract people to Arizona, you can't do it with lousy school systems and rotten health care coverage. That's just the way it is.

>>Ted Simons:
Let's talk about attracting people to Arizona. There's a lot of talk about the state's equalization tax, get rid of that and you will have businesses saying, hey, friendly tax climate in Arizona, let's go. Didn't happen. The permanent repeal didn't happen. How much do things like that affect businesses around the country, which may be looking, or startups saying, maybe Arizona is a good place to start.

>>Tony Sanders:
Again any sort of tax rebates, tax holidays, however you want to structure it, generally those are very good to bring in like an Intel or some other big employer. The problem is those are very expensive. To make a company get up and move -- Texas tried to drag 3M down from Minneapolis offering tons of holidays and rebates, couldn't get them to do it. Plus, we're moving all these people into the state. We have to educate them, we have to hire more police, hire the whole gamut of public services. If you're giving one party a cut, you'd better hope the tax revenues from the additional payments that people make, they go out to the grocery store and shop; you have to hope that outweighs the costs by giving up the tax base. Sometimes it doesn't work.

>>Ted Simons:
Back to what attracts businesses and folks to a particular location, Arizona. If folks back in Nebraska or somewhere in Ohio look at Arizona and read fiscal problems, they're having fiscal difficulties, does that affect a business that really wants to relocate?

>> Tony Sanders.
Absolutely. Businesses are worried about a couple of things. One of them is taxes and one is labor. If we have a growing deficit or they see taxes growing, and we see people actually no longer migrating into Arizona, that's a negative signal. They might start looking elsewhere for a place with an excellent labor pool and low taxes. To the extent we mess that up, we might have trouble attracting additional businesses.

>>Ted Simons:
You mentioned labor pool and maybe even expanding the stimulus package. Two of five were accepted by the legislature this go-around. Talk about stimulus plans and how much government can affect the job market.

>>Tony Sanders:
In this economic climate in the United States, where we're seeing sort of mixed signals, the market definitely has slowed down. Some are saying recession, others are saying inch-like growth, it's very difficult to author a lot of stimulus packages in this type of a market that will work. When the market was booming a few years ago, it was a lot easier. Now you have to give up a lot to do that. It's unclear whether the viability is even there.

>>Ted Simons:
I was going to say you give up a lot. But can you get as much or more in return?

>>Tony Sanders:
Generally speaking, not in this economic environment. That's going to be really challenging.

>>Ted Simons:
Again, you're looking at -- let's go ahead with the stimulus packages. If we have another year of a down cycle or just struggling through, do these packages then get extra steam, a little bit of extra momentum when things pick up?

>>Tony Sanders:
That would be what they would argue, and that could really be the case. However, supposing the return of the economy doesn't occur for two, three years? You know, so we've given up a lot for these tax packages, and they're not generating the benefits. That's a tough sell.

>>Ted Simons:
The idea of solar energy -- I don't want to get too deeply into this one -- I believe they go at tax credit through at the last minute regarding property tax breaks for renewable solar energy plans. Is solar energy ever going to be viable? Is this the type of push that's needed for Arizona to take these steps? I remember back in the 70s Jackson Browne singing about solar energy. Is now the time?

>>Tony Sanders:
Jimmy Carter had a solar plant installed on top of the White House. I don't think they use it anymore. It's never really been cost-effective. The technology just isn't there. It's okay selectively, if you put something on top of a house, if you want to cover the cost, that'll help a little bit. But no, it's probably not the long-run solution.

>>Ted Simons:
Last question: Considering what the lawmakers just went through, and what could possibly happen next go-round, is a tax increase going to happen?

>>Tony Sanders:
There are two things the state can do. They either have to ratchet up taxes and leave the budget in place, or do budget cuts, and those are painful at the state level, or a combination of both. My prediction is they're going to have to raise taxes, but they're going to have to take actions on the side not to discourage businesses from coming to Phoenix.

>>Ted Simons:
Right keep that attraction there but do something to help the revenue.

>>Tony Sanders:
That's right.

>>Ted Simons:
Well, Tony, thank you so much, we appreciate it.

>>Tony Sanders:
Thank you.

>>Ted Simons:
Now for our regular Monday feature focusing on issues of concern to those watching the state legislature and upcoming elections. Two political types go one on one. Tonight Barrett Marson, State House Republican Spokesman goes head to head with Emily Derose, the Arizona Democratic Party Communications Director.

>>Emily DeRose:
So Barrett, it often seemed unlikely, even impossible, but it looks like this year the legislature came to a budget agreement that Arizonans can live with, a budget agreement that had some pretty drastic cuts in services, while also protecting some of the most critical services in our state, and continuing long-term investments well into the future. It came together because moderate Republicans joined with Democrats to give the governor a budget that would work for the state of Arizona.

>>Barrett Marson:
What this is a Democratic budget, and there's no doubt about that. But I'm not sure about draconian or drastic cuts to use your words. There's only 3% cuts in state government. 3%. When you think about draconian cuts, I don't think anyone would say, oh, a 3% reduction in state services is in any way draconian, and that's the problem.

>>Emily DeRose:
I think it's how the cuts were targeted in certain areas.

>>Barrett Marson:
Such as meth interdiction money.

>>Emily DeRose:
It made the most sense to cut in some places versus other places. One of the things that makes the most sense is to make sure that money in C.P.S. or money in addiction treatment programs is targeted toward families in C.P.S. and we wanted to make sure that was the case in this budget. We wanted to make sure that there were more C.P.S. case workers and so the budget was adding-

>>Barrett Marson:
Why cut meth interdiction money?

>>Emily DeRose:
You know, Barrett, I wasn't involved in the negotiations myself.

>>Barrett Marson:
Neither was I.

>>Emily DeRose:
And so I know there was a process of weighing some things against other things. For instance, the governor and the legislature asked that school districts delay some construction because it's unnecessary construction at this point. Even though they might want to do it, even though that would seem to make sense in some places, it's an ask -- unreasonable ask at a time when the budget is suffering.

>>Barrett Marson:
I couldn't agree more. The problem is, is when you get to the borrowing aspect. We are borrowing for schools built in the year 2006. We're borrowing for that money.

>>Emily DeRose:
The house leadership proposed also included bonding for the school construction.

>>Barrett Marson:
But not for the 2006 year, that's the difference, Emily, as your budget borrows from money we've already paid for. What the House Republicans wanted to do, noticing we do have a problem, borrow for the current year problems. Instead, we're now borrowing for three years ago's problems, where no problem existed. We're borrowing now to free up money. And I think that's the issue we've already paid for that.

>>Emily DeRose:
One of the issues is that we need to make sure our schools have adequate repairs, for instance, Corona Del Sol High School has a huge issue, needs about $12 million in loans to fix a problem, loans that Republican Representatives of that district voted against.

>>Barrett Marson:
Actually they voted for it.

>>Emily DeRose:
If you look at the budget, they voted against it.

>>Barrett Marson:
Emily, if schools need the money that you say, why did they cut the building renewal money, $66 million?

>>Emily DeRose:
They were desperately hard cuts. They were really hard choices.

>>Barrett Marson:
Very few cuts, and that's the problem.

>>Emily DeRose:
There were about $430 million in spending reductions.

>>Barrett Marson:
There was $370 million in spending reductions and one billion dollars in borrowing. We've had a lot of good over the last six months, a lot of good, a lot of bad, and certainly some ugly. One of the great things from the session was the House really took an effort to lead the way on solar energy production. This year what the state did, the bill has passed and it's awaiting a signature from the governor, is continue a taxing scheme for solar energy production that ensures that companies like Solano building in Gila Bend, when they come on line it'll encourage more companies like that to come on line and build solar producing sites here in Arizona. And that is going to be a great benefit for Arizona for years to come.

>>Emily DeRose:
I certainly think that solar energy is incredibly important, and that's why our congressional Republicans should vote in favor of extending solar energy tax credits. But what I was going to say about the budget was that moderate and reasonable people came together to solve a problem, and move Arizona forward. So you saw the House leadership proposing a budget for which there were not even enough votes in the Republican caucus, and you saw Democrats and Republicans coming together to give us a budget. But there were some bad things that happened, too, because of Republican leadership. Arizona is facing some critical problems, critical problems with transportation, with state land use. And those are problems that the legislature should have dealt with, that they should have considered. Instead, those issues have to be referring to the voters because the legislature couldn't find time to get to them.

>>Barrett Marson:
You know, one of the bad things, going on in transportation, that Republicans stopped, was Representative Ed Ableser, who introduced a terrible bill that would have killed the hybrid industry in Arizona. The legislator wanted to kill all hybrid sales, and even the current use of hybrids, by making sure they had special equipment added on. Even the ones that had already been sold here. Thankfully the House stopped that to ensure that we, again, are environmentally conscious. As far as ugly, let me tell you, as ugly as this shirt is, the budget was uglier. It was the beg, borrow and steal budget. We're begging people to play the lottery, and that's the only way we can repay the bonds for the universities. We're borrowing a billion dollars just for every day debt-to fund everyday government. And stealing 30 million dollars from the cities and counties. This was a horrible budget, and we will not see the repercussions of this for a year or two or three down the road. You have 330 million dollars and now you have two months of rollover.

>>Emily DeRose:
Barrett,I have to completely disagree on the ugliest part of this session. It was the myopic focus of the Republican leadership on issues that are entirely ideological in nature. Issues like guns in cars, guns in bars, guns in schools, at the expense of issues that Arizonans actually care about. You guys lost about six seats in 2006. And decided wait, we weren't conservative enough that's why people didn't vote for us. So I think what's next, to get past the good, bad and ugly, is a really tough election year for the Republican Party in Arizona. Since November of 2006, Democrats have added 84,000 new voters in this state. Republicans have added 30, and Independents have added 50,000. We have an incredible opportunity this election cycle to put the state legislature in the hands of people who want to solve problems and work with the governor, and send a congressional delegation to Washington that wants to change the direction of this country.

>>Barrett Marson:
Next you're going to see special sessions to fix the problem that we now have. Everyone will be subject to photo radar, great for the speeders, except it's never going to capture the money that the governor and the Democrats think it's going to. It just won't have that ability. So you're going to see the legislature coming into special session to fix the problems that you've created. Thank you very much. Have a good night.

>>Ted Simons:
The power of the Hispanic vote in the upcoming presidential election was a big topic of discussion at a gathering of Latino officials at the nation's capitol last week. The 25th Annual National Association of Latino Elected and Appointed Officials Conference featured sessions on Hispanic vote as well as other topics important to Latinos, such as education and the economy. Mike Sauceda was there and tells us more about NALEO-the conference and the importance of the Hispanic vote.

>>Mike Sauceda:
For 25 years the national organization of Latino elected and appointed officials have educated and organized officials from throughout the country. The organization has grown to represent over 6,000 Hispanic officials. This year's annual conference was held in Washington, D.C.

>>Mike Sauceda:
It was kicked off with a reception. Those attending relaxed before getting to work. Sessions covered issues important to officials representing the Hispanic community, such as the 2010 census, education, the economy, mental health and race, gender and politics.

>>Hillary Clinton:
Thank you for being part of this organization. But more than that, for discussing the issues that affect the Latino community and the United States. I want to thank all of you for the privilege of having waged this presidential campaign. It was a remarkable journey, and during the course of it I traveled across our country from coast to coast, and everywhere in between. I'm proud this was the first presidential election in history in which the candidates actively campaigned in Puerto Rico, which was a very important milestone.

>>Mike Sauceda:
Former presidential candidate Hillary Clinton addressed the crowd, as did Barack Obama and John McCain. The two presidential candidates present at the Latino organization's event speaks to the growing power of the Hispanic vote.

>>Matt Barreto:
The Latino vote is the fastest-growing segment of the American electorate. It is growing leaps and bounds faster than the overall American electorate.

>>Mike Sauceda:
At last year's conference, the Latino vote was predicted to be a factor for the first time because of early primaries in states with large Latino populations.

>>Arturo Vargas:
This movement of the primaries to an early schedule really gave Latinos the opportunity to have a mark on selecting both Republican and Democratic nominees. Traditionally, this opportunity had been given to voters in Iowa and New Hampshire, where 91% and 94% of the voters are white, non-Hispanic white. But by moving the primary to an accelerated schedule, Latino voters had a chance to have their voices heard in selecting these candidates. By the time Super Duper Tuesday came around, February 5th, 62% of all Latinos registered to vote had the opportunity to make their voices heard in a caucus or a primary. By the time Texas came around, 85% of Latinos had the opportunity to have voted in the election. And they came out.

>>Mike Sauceda:
Hispanic voters are credited with giving a very crucial win to Arizona senator John McCain and helping to keep Hillary Clinton's campaign alive.

>>Arturo Vargas:
In Florida, Mitt Romney was leading and he won the non-Hispanic white vote in Florida by 54%. Well, he won the majority of the non-Hispanic white vote. And that was over John McCain. So if no Hispanic had voted in Florida, Mitt Romney would have won that state's primary. But because Hispanics voted in Florida and 54% voted for John McCain, and he won by 98,000 votes. Latinos gave the primary to John McCain in Florida. And it was that primary that put John McCain on the trajectory to become the presumptive GOP nominee. Texas, remember Senator Clinton had been winning the Latino vote two to one in states like California and Nevada, Arizona, some of the other key states. And she was able to continue her campaign into Texas, where she split almost the non-Hispanic white vote. She lost the black vote, but carried the Latino vote two to one. She won Texas by a very narrow margin. Latinos gave her the margin of victory in the state of Texas, and kept her aspirations alive all the way to Puerto Rico. The Democrats didn't decide their nominee until a few weeks ago because Latinos gave so much life to Senator Clinton's campaign. We defined this election on the Republican side, come November we're going to define this election for the White House.

>>Mike Sauceda:
A projected 9.3 million Latino voters are registered to vote this November. But the Hispanic vote has historically been a low turnout vote. Professor Matt Barreto of the University of Washington says that might be changing.

>>Matt Barreto:
We saw a brand-new trend in Texas. The most heavily Latino counties had the highest rates of turnout in the Texas primary. If you go back to previous years, those same counties have had the lowest rates of participation-the lowest rates of voting. So that was a big surprise to see they went from very low rates of participation to high. They were energized and engaged this year. To the credit of Senator Hillary Clinton, she conducted a very extensive Hispanic outreach drive, particularly in South Texas, in those counties that are heavily Latino. They went door to door and talked to Latino voters. When you go there and energize a community, mobilize a community, they are going to vote at very high rates. We saw that in Texas with Latinos voting at higher rates than whites or African-Americans.

>>Mike Sauceda:
Although Barack Obama did worse among Hispanics in the primary compared to Hillary Clinton, he is leading McCain 62% to 29% in a recent Gallop Poll. Either way Hispanics are expected to be a swing vote this November in determining who will occupy the White House.

>>Matt Barreto:
The Latino votes are concentrated in large states which are not as competitive in presidential contests. California, Texas, New York, and Illinois, those are very large states with large Latino populations. Those states are not going to be as much of a swing vote because we know the outcome of those states ahead of time. Other states, particularly in the southwest, as well as Florida, you talk about states like Nevada, Colorado, New Mexico, Arizona, Florida, and even places like Ohio, Wisconsin, Michigan, Pennsylvania, they do have the potential to be a swing vote. I think there will be a lot of emphasis on those southwest states, all four of which of those southwest states, but the three I think people are talking about this year, Nevada, Colorado, and New Mexico, went Republican in the last election. If the Latino vote, which has been trending Democrat, continues to trend democrat and increases in numbers, those three states, New Mexico, Colorado, and Nevada could be Democratic this year. That's really the definition of swing vote turning the electorate in those states.

>>Ted Simons:
Tomorrow on "Horizon," how is Arizona prepared for wildfire season? We get an update on fire conditions and restrictions Tuesday at 7:00 on "Horizon." That is it for now. I am Ted Simons, thank you so much for joining us. You have a great evening.