New Legislative Leaders

The Arizona House and Senate have selected new leaders. Hear what Senate President-elect Bob Burns and House Speaker-elect Kirk Adams have to say about the issues they’ll face next session.

Transcript:

Ted Simons:
>>> Tonight on "Horizon" we talk to the newly elected leaders of the legislature and what their plans are for the upcoming session. We talk about a new report released today about Arizona's infrastructure needs over the next 25 years. That's coming up next on "Horizon."

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Ted Simons:
>> Good evening, welcome to "Horizon" I'm Ted Simons. The state legislature has new leadership. Senator Bob Burns has been elected as president of the senate while Kirk Adams was elected to lead the house as speaker with new leadership comes new dynamics in a legislative process. Here to talk about their roles is senate president-elect Bob Burns and house speaker Kirk Adams. Both of you, good to have you on the program. Thank you for being here. We certainly appreciate it.

Bob Burns:
>> Thank you.

Ted Simons:
>> Let's start with you. Let's start with the senate. What kind of changes do you see yourself making as far as your predecessor would be concerned?

Bob Burns:
>> The big change is the process and how we address the budget. I think the situation we have on our economy and drop in revenues put us in a position where we need to focus up front the first thing out of chute will need to be the budget negotiations, budget development, if you will. It's my intent to work the budget before we get into other bills. Make sure all the members get focused on the budget. I intent to have the standing committees work similar to what would have been our subcommittee format in the past, however, I would not require them to come up with a number recommendation but instead to investigate the functioning's of an agency, sort of scrub the agency, if you will, to make sure that for example that certain programs are on mission, try to find out if they're actually effective or not, try to get some background information worked up for the actual appropriations committee who will then make the final decision.

Ted Simons:
>> As far as comparing and contrasting with your predecessor, there were some that thought the previous president was a little too cooperative with the governor in terms of budget matters especially. Your thoughts?

Bob Burns:
>> I think we need to be cooperative and we also need to challenge. There are certain things that I believe that need to be done and I think we need to in some cases draw a line in the sand. We cannot continue to spend more money than we receive through tax revenues. It just doesn't work. And so there's got to be some tough decisions made in that regard. But I'm ready to cooperate. I'm ready to work with whoever is at the helm and i guess some people are wondering about that at this point in time. I'm looking forward to working with Kirk especially and we'll see how it goes.

Ted Simons:
>> Well and let's ask you, Kirk, you ran for this position for speaker. Why'd you want it?

Kirk Adams:
>> Well, it's really quite simple. I felt like the house was due for a change in style as well as a focus on openness and transparency, particularly as it relates to the appropriations process. Over the last two years, you saw the House of Representatives that did not have a say in the final budget package. And I think it's time that we reinvigorate that appropriations process, include more members in the process and encourage the executive to do the same. My message to the executive and to the senate and i know senator burns is in agreement with this, is we need to bring the budgeting process back into the appropriations committee. It's the single most important thing that we do, pass a budget. It needs to be done in as open a way as we possibly can.

Ted Simons:
>> In the same sense that the predecessor in the senate, some perceived certain maybe an obliging attitude towards the governor for lack of a better word right now. Up on the house side, there were some who saw your predecessor as maybe being too combative and thus not getting enough done. Your response?

Kirk Adams:
>> I think speaker wires and I perhaps have a different style in how we approach these issues, but, you know, primarily, I think we can all fight over the issues we disagree about, do what is best for Arizona, but at the end of the day, we need to respect one another and show their respect and how we respond to those we disagree with. I know there's going to be a lot of issues over which the house and the senate have strong disagreement from the governor. We should take those battles to the legislative floor and the bottom line is though we have got to do what is best for the State of Arizona. I hope we can accomplish that.

Ted Simons:
>> There's been criticism that moderates within the Republican Party and democrats overall have either been shut out, ignored or in some way overlooked in many of the bills, much of the legislative process. First of all, do you agree that that is happening? Secondly, can that change?

Bob Burns:
>> Well, first of all, I think probably that position of those folks comes from the appropriations process. I don't think that's the case necessarily in the processing of other bills. But in the budget, I agree there's a tremendous amount of problems getting the openness that we need, the -- keeping the budget into the appropriations committee. In the past, when you have money, it's easy to work things through the appropriations committee. When you don't have money, then the situation changes completely because there's real tough decisions that have to be made. There are people that are willing to make those decisions, however, if they make the decision and then it's reversed by someone higher up on the ladder, then they basically end up taking the heat and getting no results from that. They just get criticized for making a tough decision that doesn't hold. And so we need to allow the appropriations committee to work the budget all the way through. My you goal will be to make sure we have 16 votes before we move the bill out of the committee which means the members of the appropriations committee are going to have to work the members that are not in the appropriations committee to get in agreement. There's going to have to be some negotiation going on outside of the committee to bring people to get the necessary votes.

Kirk Adams:
>> I think you I'll respond to that as well. There was a group that was shut out of the process the last two years. It wasn't the democrats. It was the house republicans. Really, if you're committed to openness in the appropriations process it also takes a willing executive to do that as well. To be patient with the process and to encourage heard democratic colleagues in the legislature to participate with that process and find the solution of this crisis we find ourselves in.

Ted Simons:
>> Let's talk more about this crisis. We're talking 1.2 billion dollars deficit and perhaps again next fiscal year. Are things so bad right now that it's almost easier to find consensus?

Kirk Adams:
>> I guess we'll soon find out about that. I do believe, though that most Arizonians and many elected officials don't fully appreciate the depth of the hole that we find ourselves in. This is an historic fiscal crisis let me give you a couple of numbers to wrap your mind around on this the deficit for 2009 is $1.2 billion! That's the 2009 fiscal year. That's the year we're in now. That represents 12% of the general fund revenues. Then when you throw in the fact that we the legislature don't have power to appropriate 100% of the general fund, you begin to better grasp the full breath and depth of the trouble in which we find ourselves.

Ted Simons:
>> There are those that say, though, in troubles times -- and we certainly are experiencing very troubled economic times -- this is the worst time to cut many of the social services that are no doubt being looked at the legislature. How would you respond to that idea? The idea being obviously folks want to cut some things but some of the things that are looking to be cut are needed the most now?



Bob Burns:
>> Well, and I think we have to set priorities. And we have to make those reductions. How do you function if you're spending more than you receive in revenues? My question to people who say we can't cut in certain areas is what are you going to do if we run out of money before the fiscal year ends and there's no money and then what? How do you run a state government if you've complete the run out of resources? So we have to prioritize. We may have to do some reallocations to make this all work. You have to live within your income or at some point in time, you're going to crash. We got by the last fiscal year because we used up all of our cash reserves. Basically, we drained the saving account. Now, the saving account is gone. The rubber now meets the road. We have to bring our spending in line with our revenues. Others say raise revenues. That's not easy to do you can't raise taxes in the state of Arizona within a legislative body without a 2/3 vote. I don't think you can get it. The other thing to do is refer it to the ballot and have the voters make that decision. I don't think voters in this kind of an economic downturn are going to be anxious to raise taxes.

Ted Simons:
>> another equation though says that -- draconian cuts here, especially in terms of government agencies and social services means a lot of folks lose their jobs. A lot of folks then have less to spend and the economy continues a downward spiral. First of all, do you buy that? Secondly, how does that play into all of this?

Kirk Adams:
>> Well, certainly in an ideal world, would you make these cuts with a scalpel and be as careful as you can could be. The fact of the matter is you're going to be required to reduce or spend spending on certain programs to simply balance our books. We don't have the luxury of printing our own money. Since money in the state of Arizona is a finite resource, we need to reduce the budgets. There'll be a lot of pain. There'll be a lot of excruciating decisions. That's what the voters hired us for when they elected us to this office. We have to make those decisions. They'll be tough.

Ted Simons:
>> If the decisions result in lesser services, more of a demand for services and more problems because the services aren't being met, where do we go? What do we do?

Bob Burns:
>> Again if you don't have the resources, you can't provide the service. There's a reality check that has to take place here, I believe. There'll probably in some cases be challenges to whatever we do. Lawsuits, for example. So, again, as just has been stated, this won't be an easy thing to do. This'll be a tough job. But it has to be done. Part of the problem is we waited too long. Hindsight being what it is, we should have been making much larger reductions a year ago two years ago when things started to go bad. We shouldn't have waited. We shouldn't have used our saving account to maintain spending levels we couldn't continue to support.


Kirk Adams:
>> I also think just to add onto that, we need to give perspective on this in 2006, state revenues increased by 20%. We appropriated every single dollar of the 20% increase. We should have known that was an anomaly, that wasn't going to persist. If you look at state spending over the last seven years, it's increased by double digits. If we've increased by double digits in 2007-2008 and 2009, if we begin to reduce and pull back some of those increases, is the world going to end? No, it's not. But there'll be some tough decisions.

Ted Simons:
>> I want to ask you quickly. We don't have too much time left. Legislative panels out there are gaining headlines because of what some sees is a de facto veto, not looking over things and thus holding projects up. University stimulus plan, department of environmental quality and tuition problem as well with JLBC. First of all, your idea of what the panels are doing and the idea of holding all of these things up by way of not reviewing them or not putting them on the agenda?

Bob Burns:
>> I can answer that I'm the vice chairman of that committee. I supported that decision. The reason was that first of all we are going to borrow money to the -- to build these facilities. We're going to borrow money based on the lottery. Lottery revenue is down. That's item number 1. Item number 2 is if we're going to forego that lottery money and use it to pay off debt, that's money we could be using to close this gap that we've got, the $.2 billion gap. Prioritizing. Where do we use the money that's available that's out there? Do we use it to borrow money? Do we use it to help us get through the crisis we are now.

Ted Simons:
>> As far as a stimulus plan is concerned -- this is more of a legislative machinations here. If it's already passed into legislature and signed into law by the governor, does the panel, should the panel be able to say, "I don't think so" after all of these processes have been accomplished?

Kirk Adams:
>> I'll answer that question i think it's important that we don't lump it into one. The issue of adeq. Those agencies are due to sunset. That's in statute. That's a proper role in function of the committees review whether or not an agency should continue. That's been a long established process. I think there's legal questions as for the authority of jccr to do this clearly, chairman pierce and vice chairman burns clearly believe they're within their authority. There are some that believe they're not within their authority to hold up these projects. But the larger point is this, we must fully grasp and comprehend the historic nature of the fiscal crisis that we're in. There'll be things we must do that we may never do otherwise but we must do it this time because of this hole that we have. Bob brings up a great point. We can decide not to reduce spending. We can decide not to make the tough choices, but what happens when we run out of money at the end of the month and we still have bills to pay? We could literally be facing that situation in the state government.

Ted Simons:
>> Last question, very quickly here. As far as what you would like to see, Arizona's economy become -- we're going to talk about this in a couple of minutes here on the program, what -- diversification as far as Arizona's economy is concerned. We hear about it all the time when times are good. Times aren't good. Should we talk about this?

Kirk Adams:
>> This is the time we discuss diversification of our economy. We could no longer be reliant on the two sectors we have been reliant on. When it comes to business capital, we need to make sure that Arizona is as competitive as our neighboring states. We're not just competing with neighboring states. We're competing with countries around the world for these businesses. Now is the time to begin this discussion.

Ted Simons:
>> Is it time to change Arizona's mind-set as far as these things are concerned?

Bob Burns:
>> Well, I think it might be a good time to maybe look at our tax policy as well as a -- you know, maybe it's time to reform some of our tax policies. Again, it's without raising taxes but there's the opportunity with the simple majority to change the tax policy as long as it's revenue neutral. That may be another area we can look.

Ted Simons:
>> Tax incentives for solar industry?

Bob burns:
>> Tax incentives are sort of a pain in my opinion but we do home to a case-by-case basis typically. If we did an overhaul of the entire system, maybe we wouldn't need the special treatments for certain industries.

Ted Simons:
>> Tax incentives for solar seems to be getting a lot of momentum. What do you think?

Kirk Adams:
>> I think we need to proceed with extreme caution. It's difficult for us to predict which technology will be the renewable energy resource. Who's to say the biofuels program here at asu that's making leaps and bounds at that research isn't that technology. We need to proceed caution in putting all of our chips into one solar energy program to solving our problems.

Ted Simons:
>> Thank you for joining us here on "Horizon" we appreciate it.

Ted Simons:
>>> Over the next five years, Arizona is expected to add 4 million people to the 6 million residents already here. Those additional folks will need more resources in the area of education, energy, heat care, public safety, water, transportation and other areas this morning, Arizona State University researchers released a study outlying lining Arizona's infrastructure needs. Before we talk more about the Arizona 20-30 report, we'll hear from former U.S. transportation secretary norm mineta who spoke at the event today at asu where the report was released.

Norm Mineta:
>> And for me I want to thank all of you for taking time from your own very busy schedules to be part of this conference. I know you have very demanding schedules. There are things that you would rather be otherwise doing but the fact that you have taken time to be part of this conference indicates not only the importance of this subject matter but also your interest. And so for me, it's really an honor to start the day here in Tempe with citizens who really care about Arizona's future. More and more people like all of you recognize that the conditions of Arizona's infrastructure has a direct impact on the economy as well as on the quality of life. And I want to thank Dennis Hoffman and tom rex for spelling that out in their excellent report that was -- that is available here at this conference.

Ted Simons:
>> Indeed here to talk about the Arizona 20-30 report is Dennis Hoffman, ASU economics professor at ASU. Welcome.

Dennis Hoffman:
>> Thank you. Infrastructure, people think of roads, you think of buildings, bridges, that kind of thing. But it's everything, it's power plants, education infrastructure it's the whole of government in a sense, that judicial system, public safety -- did I forget anything? Hospitals, a big piece of the infrastructure pie. Infrastructure is key to economic well-being.

Ted Simons:
>> We're talking a lot of money here. We're talking about tough economic times. Where's the money going to come from?

Dennis Hoffman:
>> Well, we have to be innovative, obviously, but it's very important to understand and one of my colleagues said this today, what differentiates the first world from the third world is the quality of its infrastructure. That's really what it's all about. If we put infrastructure in place, we'll reap economic benefits, enjoy a quality of life -- some people argue it's the quality of infrastructure that's really the key to growth. Where do you get the money? We have to be innovative. Public-private partnerships took a lot of space in the discussion today. People have to recognize there have to be funding streams for the private sector to step up. There has to be regulatory impediments reduce ford private sector investors to come along and take advantage of opportunities.
Ted Simons:
>> Arizona is traditionally ranked very low as far as infrastructure spending is concerned. Why is that?

Dennis Hoffman:
>> Actually, it's not traditionally. We actually invested on a per capita basis or income basis in the 60's, 70's and 80's, it's like we were planning back then. We were preparing for growth. And i would say early 90's, mid-90's, we just slowed to a trickle and now we're ranked quite low. You're right.

Ted Simons:
>> How do you convince -- we just had leadership, legislative leadership in here talking about a budget problem that they say people don't really understand the scope of. How do you convince those folks that this kind of money needs to be spent now and into the foreseeable future?

Dennis Hoffman:
>> Well, Representative Adams I think is pretty close to the mark. There's a big hole this year. There's a cavernous hole going forward. It's a structural imbalance that it's really pretty easy to see. We have huge spending needs. We're going to have to look at ways of developing, I think, a tax structure or a tax base --

Ted Simons:
>> Tax increase?

Dennis Hoffman:
>> That grows with the pace of the Arizona economy we don't have that right now, Ted. Our tax base erodes and has been eroding, partly due to policy action. I'm actually more concerned about the history of tax cuts that have taken place than being a champion of tax increases.

Ted Simons:
>> do you think tax cuts have led to where we are now?

Dennis Hoffman:
>> I think tax cuts have certainly been problematic. If you want to look at the argument for tax cuts, people talk about cutting taxes as a catalyst for growth. If you look at the evidence in Arizona, we actually raised taxes in 1990 just before a major expansion. We cut taxes in the mid-90's. We kind of leveled off and Wall Street boomed so we didn't feel it. The last time we cut taxes, 2006. And we all know what has happened since then. It's been -- I think it's been more political. It's more ideological. This agenda towards tax reduction than having a sound economic basis. I think we have to look at it. Now, we can't tax increase our way out of this problem. That's not what I'm suggesting, nor am i suggesting that all the solutions could be coming from blanket reductions. I would have liked to have had you ask the guests that you had on before if it's all about cuts. If that's what you're going to do, line them up, tell us what they are, what agencies. It's all right there on the spreadsheet, just tell us.

Ted Simons:
>> Speaker-elect Adams said a scalpel would be needed. He wanted to be careful. I think that's his response to what you're talking about.

Dennis Hoffman:
>> He'll have to use that scalpel a lot. You're dealing with $2.3-$2.5 next year possibly.

Ted Simons:
>>Right. Alright, we'll keep an eye on the report of course. We thank you so much for giving us some ideas of what we can look forward to and apparently what we can look forward to as is a whole lot of need for a whole lot of infrastructure.

Dennis Hoffman:
>> Indeed, Ted.

Ted Simons:
>> Thank you.

Ted Simons:
>>> Next month, the board of regents boards for a tuition increase in state universities. Hear what the public says about the proposal and ideas to improve housing from the recent Arizona town hall. That's Tuesday at 7:00 on "horizon." Wednesday, experts talk about the state of education in Arizona. Thursday, a look at the Arizona economy. Friday, we'll be back with another edition of the journalists' roundtable. That's it for now. I'm Ted Simons. Thank you so much for joining us. You have a great evening. "Horizon" is made possible from contributions from the friends of 8, members of your Arizona PBS station. Thank you.

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