Local reporters discuss the week’s top stories.
Ted Simons:
Hello and welcome to "Horizon." I'm Ted Simons. Joining me are Mary Jo Pitzl of "The Arizona Republic," Casey Newton of "The Arizona Republic," and Paul Giblin of "The Arizona Guardian." The latest on the state budget, Mary Jo, what are we looking at now as far as numbers are concerned? Let's fix '09 and then jump over to the baby.
Mary Jo Pitzl:
This week lawmakers had one of their three times a year meetings with finance advisory committee, these are economists that come in as well as the own budget agency to give advice on what's happening with the economy and from there, they can project what they're going to do with the budget. For the current fiscal, and if you remember, back in late January, the legislature bridged the budget gap. Thought they'd fixed it. Now its $510 million and pretty much plan on you're going to need to fill another $650 million because you need to leave a cushion. You just never know what will come up and a lot of stuff has been coming up in the last two months.
Ted Simons:
And there's sales tax collections and income tax as well?
Mary Jo Pitzl:
Both. The state relies most heavily on sales income and personal income and corporate income tax and the first two are down big time.
Ted Simons:
The local economists, when they talked to -- the lawmakers, when they talked to economists, were there any surprises there, good or bad?
Mary Jo Pitzl:
I noted that usually, economist Elliot has rapid fire presentations with all sort of outrageous slides and usually gets good laughs. There was one during that whole time. It was grim.
Paul Giblin:
There was a little bit of hope. Where they said we might be approaching the worst of the recession. That might be a surprise.
Mary Jo Pitzl:
But the other cautions, if we're at the bottom, don't expect it to be a sharp V. It will drag along the bottom like a long U for quite some time.
Casey Newton:
If the state is going to have to cut another $500 million by the end of June, it's hard to get excited about that.
Mary Jo Pitzl:
It's not there to cut. They're going to have to bring in federal stimulus dollars which are at their disposal, but that will leave that much less money to deal with next year's budget, which is estimated to have a $2.93 billion deficit.
Paul Giblin:
They would have to move money from 2011 to 2010 which leaves a hole for 2011 and no way of filling that hole.
Ted Simons:
Back to the economic forecasters. Afterwards, response. Lawmakers, what was said? I guess I'm trying to figure out if this changes any minds regarding revenue? Anything changing down there?
Paul Giblin:
One thing we hear a lot, Ted, at the capitol, some of these Republicans who think government is too big, in a strange way they look at this as good news. They want to bring down the size of government. This really gives them ammunition to do that. This helps to prove their point that government is too big. In a strange way it's good news to some people.
Ted Simons:
Is that still happening with the accelerated losses as far as revenues, even those folks holding to their guns?
Paul Giblin:
I know Mary Jo was speaking to them in the last few days. Yes, they still want do this without tax increases and see the way to do that is cut the size of government.
Casey Newton:
John Cavanaugh said raising taxes is the last tool I take out of the toolbox. That echoes what we're hearing from the Republican leadership.
Ted Simons:
Is the toolbox approaching empty?
Mary Jo Pitzl:
Yes, in fact, last week when draft budgets of the Republican budget plan came out, the legislative leaders said, yeah, here's what we've got so far. We still have this gap. Maybe $400 million to $500 million. We don't know where we're going to get the money and looking for ideas.
Paul Giblin:
I've heard other Republicans saying if there is a tax, they don't want to get one particular tax. They'd like to spread it around. Lot of little taxes rather than one big one.
Ted Simons:
To that end, the Arizona Republican party had a poll regarding taxes and another one that seemed the opposite. First of all, what's going on here?
Paul Giblin:
As you mentioned, there were two polls. One that was done by a reliable polling official, and then the Republican Party had their own. One showed good support for raising tax. The one that the Republicans released, and then the other one, strong opposition to a tax. Dueling polls is nothing new. But the interesting part is the reaction from some of these hardcore, most conservative Republicans; they were pretty vicious about their own state party for releasing that poll. Undercutting our efforts at the capitol and angry at the state party and this is classic. He said -- oh, I'm going to miss his exact words, but this kind of misguided case by the governor to increase taxes. And I'm thinking, wow, this is a Republican speaking with the Republican Party and the Republican governor in public. What do they say in private? And what about Democrats? It was wild.
Mary Jo Pitzl:
I don't think Ron Gould speaks for the majority. There is no question where he's coming from. There to promote smaller government and lighten the tax burden and he's not going to waiver. These polls aren't going to move him one way or the other. But the polls were done to lay the groundwork, the governor's a little slow out of the gate but trying to sell her five-point plan and the most pointed part of that plan is the tax increase. She's got to sell it and she's got a sales job because the Republican leadership of her own party is adamantly against the tax increase.
Casey Newton:
You could say the governor was slow out of the gate, asking for that tax increase, but you're starting to see the P.R. The poll that the Republicans put out was an effort to do just that.
Paul Giblin:
You're right. Ron Gould is on one end of the spectrum. But speaking with him on the house, there are about four or five other members which if you lose all of them, then the Republicans have a different job because they can't pass the budget by themselves. They have to bring in Democrats to make that happen. The house you have the same thing. The seal on those people who are in the Gould camp. You would lose them.
Ted Simons:
The Democrats came out with a budget plan, Mary Jo, and again, any surprises here? Is this basically ideas we've heard of that were easily dismissed by the Republicans?
Mary Jo Pitzl:
It was pretty detailed, and it balanced, if you accepted that their deficit figure of $2.4 billion, like the next day was proven to be off by a half a million.
Casey Newton:
Half billion.
Mary Jo Pitzl:
Oh, that it would be a half million -- chump change these days. The surprise, I thought it was interesting there was an excess utility -- a utility excise tax which they insisted would be paid by a lot of -- paid by a lot of out of state customers. But they said this was only for fossil fuels generated electricity -- and Palo Verde is nuclear. They said let's roll it back for the top income brackets and we'll get $80 million and some people saw that as class warfare and others as a way to bring more balance to the state tax structure.
Ted Simons:
As far as everything else is concerned and let's compare and contrast democrat and Republican. Did the Democratic idea; are those closer to where the governor is than the Republican?
Paul Giblin:
In a lot of ways, they are, the governor and Democrats, though they have started talking now, they've developed these ideas independently, but they're similar.
Casey Newton:
When it comes to things like education and the social safety net. The democratic was to protect those things and when the governor weighed in on the budget fix, the suggestions she made were to do similar things.
Ted Simons:
Are we seeing more work between Democrats and Republicans at the capitol as time goes or not?
Mary Jo Pitzl:
It's only April.
Ted Simons:
Ok.
Mary Jo Pitzl:
And I say that facetiously. There are many standing and saying, why aren't we seeing work? It is April and they don't need to have the budget done until June 30th at the stroke of midnight. But no, we're not seeing any work yet between the Democrats and Republican.
Casey Newton:
Although the Democrats are having weekly meetings with Brewer.
Paul Giblin:
You can go back further than that. The Republicans aren't talking with the Republicans right now. You have the Republican leadership putting together the budget both in the house and senate -- correct myself. Just this week, they started to reach out to the rank and file and let them know what's going on. Yeah, the Republican ranks and file not even aware.
Ted Simons:
Didn't you write that the Democrats were starting to get cranky with each other?
Paul Giblin:
Yes, they are getting cranky and that's a different argument. They see this as an argument. They think the Republicans won't be able to put together a budget on their own. They have the numbers but won't be able to do it. They say they have to be prepared when the Republicans come to -- people like Ken Cheuvront, he says they ought to be on the same page and they'll be able to push their agenda through.
Ted Simons:
No one is getting along.
Paul Giblin:
No one is getting along.
Ted Simons:
There was a report, a fact report, some university administrators and instructors and thinkers came out. You know, the lawmakers are saying give us ideas. This taskforce comes up with ideas including an idea on how to raise taxes without two-thirds majority. Talk to us about that.
Mary Jo Pitzl:
That's an interesting idea. Even house speaker Kirk Adams said he found it very interesting. What the university and -- and this is Arizona's universities. What if you made a package and just -- did tax increases in the early years but then offset that with tax cuts in the later years when things are better. And you tie it up with a bow and say it's all one package and, therefore, it's revenue neutral and will balance out and then you just need a simple majority of the legislature as opposed to the two-thirds. Two-thirds seems daunting. Majority vote, not so much.
Ted Simons:
Is this legal?
Mary Jo Pitzl:
Don't know. Even the report's author says it will need legal scrubbing. No one has challenged the whole two-thirds majority rule for passing tax hikes. No one's done this yet. I don't know if this is the case you want to take to the courts when you have a $3 billion deficit hanging in the balance.
Paul Giblin:
This budget needs to do something quickly. If you take something to court, it's going to be forever. This is not a good case.
Ted Simons:
Talk about the income tax and eliminating credits and deductions and the concept of getting rid of tax credits, is that flying at all down there? We keep hearing the big gorilla in the room is the tax increase. What's going on?
Casey Newton:
I don't hear Republicans talking a lot about wanting to get rid of the tax credits. It's something that the Democrats looked to score points on. The tax credit you get if you buy a golf cart or a country club membership.
Paul Giblin:
But haven't heard that much from the Republican side. That was a big piece of the budget proposal you spoke about.
Mary Jo Pitzl:
Yeah.
Paul Giblin:
And the tax credits that the film industry gets when filming here. Everyone seems satisfied with the idea of getting rid of that but there's some discussion I think we'll hear more of.
Mary Jo Pitzl:
I think desperate times get people looking at things that had been put off before and even the Democrats are willing to sacrifice -- the public schools and get rid of that and save the state that tax money, but let's keep the money in the classroom and sacrifice the after-school stuff and the problem with the credits is that one of the biggest loopholes in the tax law is for food and I don't think there's any appetite to reinstitute a tax on food. So then you start to look at, you know, can you close it with all of these -- can you close the budget deficit with tiny credits which -- they're pretty small up against a $3 billion deficit.
Paul Giblin:
And they're talking about changing the tax code by implementing taxes on services, which we don't do in this state. The report also had points about the Department of Revenue which oversees taxation and tax dodgers. That got cut pretty bad and they're saying there's not enough people to bring in the revenue that people decide not to pay. Would put more agents in charge of bringing money to the state. That's another idea. Talking about rehashing the income -- the way we pay income tax. Upping that a little bit.
Ted Simons:
Didn't they talk about a modified flat tax?
Mary Jo Pitzl:
Yeah.
Ted Simons:
Wasn't that in there?
Mary Jo Pitzl:
They said if you want to open the income tax and raise it, perhaps you should broaden the parties to whom it applies. Raise it a little bit but make it flatter. And by making it flatter, you would lower the rate if you put it across more groups. Get rid of the exemptions that we have which goes to the school tax credits and the school tuition tax credits and we haven't had a real serious discussion about since mark Spitzer served in the senate back in the early '90s.
Ted Simons:
Surrounding this is the stimulus money. It's like a flying saucer. Casey, AHCCCS, we've got a decision regarding the state eligibility requirements?
Casey Newton:
Yeah, the basic issue, if you're going to get money from the state from AHCCCS, how often should the state check in with you that you qualify. The state recently passed something saying we're going to check you every six months. The feds ruled that actually constituted a change in the eligibility requirements. And one of the strings attached to getting stimulus funds you have to maintain the effort you were doing before we gave you funds. They said by checking in more often to make sure they qualified was inappropriate and if Arizona didn't change this, they could lose out on $1.6 billion in stimulus.
Ted Simons:
Which suggests they'll go back in and change this?
Casey Newton:
One of the bills of the week.
Mary Jo Pitzl:
I was going to say, right now, while the legislature is in lockdown, the mantra is get the budget down before we move bills out. They have dribbled out a few bills that are budget related. They suspend the rules and rush it through. They did that for childcare, which passed and did it for teacher firing notification, which failed, and then for a tax withholding, which passed. If you do one a week, and you've got 1200 to introduce -- do the math.
Ted Simons:
Can we talk about things that lawmakers have received as far as bright ideas?
Casey Newton:
Arizonans opened up their minds and thought, how can we fix this? Move the prisons to Mexico. Get rid of the Ageing Commission on the Arts, which doesn't exist. Mary Jo heard something involving gay marriage.
Mary Jo Pitzl:
This was submitted to former Governor Napolitano. She opened up a comment line and then Governor Brewer followed suit. So one follow wrote in, we should legalize gay marriage because if we have that, gay people will not be forced into a heterosexual marriage. And he's quite serious about this, there's a pressure to reproduce and have children. All of that would end when we have gay marriage.
Casey Newton:
See how that works in Iowa.
Mary Jo Pitzl:
And funding the schools and etc. There were a couple of other excellent ideas that came in.
Ted Simons:
Let's stop it right there.
Mary Jo Pitzl:
I like the "Succeed from the Union" idea because then you wouldn't have those nasty federal mandates. Of course, you wouldn't have federal stimulus dollars either.
Ted Simons:
Let's go on to what happened in Washington. I think we're part of the union the last I checked. Looking at sheriff Arpaio and civil rights and racial profiles. And did his name come up as much as expected?
Paul Giblin:
No. About a month ago when the department -- I'm sorry, the justice committee, thank you, announced they were going to have these investigative hearings. At that time when they announced it, they said they were going to look at potential civil rights issues committed by the Maricopa County sheriff's office during the illegal immigration enforcement operations but it didn't go that direction as much as one might have expected. It drifted off to whether illegal immigration is good for the area or bad. Went a lot of different directions and not as much as we might have thought what they said they were going to pursue.
Ted Simons:
Seemed like the 287G program, I'm not sure how much was focused on that. Arpaio wasn't invited, correct?
Paul Giblin:
That's what he said. He says he was not invited. It's interesting to me, if they wanted to get to the bottom of this thing, if this just wasn't a show hearing, you would think they would invite the guy they were supposed to be investigating.
Casey Newton:
Unless you want to make it about the 287 agreements. Because there's a point when Arpaio is not the sheriff and the government wants to determine whether they want to continue this program. And the immigrant community, they're afraid to come forward and afraid to report crimes. The arguments we've always heard about 287G, he's saying one reason to get rid of it.
Ted Simons:
And the testimony got testy. The Republican lawmaker asked him how he got there.
Casey Newton:
Yes, and it turned out it was an immigration reform group that had paid for his ticket. The Republicans were doing what they could to discredit his testimony.
Ted Simons:
Why didn't the Republicans invite Arpaio?
Paul Giblin:
I can't answer -- I don't want to speculate.
Ted Simons:
Ok, let's move on to reaction here in town. I think a lot of us saw on the local news sheriff's deputies telling the mayor of Phoenix, at least one, saying, just shut up. And that's --
Paul Giblin:
That was Joe Sousa. He's a big guy. He's a guy in charge of the squad that goes out after the illegal immigrants so he told him shut up. He sounded angry and that was directed toward the mayor.
Casey Newton:
Interesting, considering it was last year on Cesar Chávez day when the mayor came out and started to speak out and at least in one sense, they're getting what they want. Gordon said he's not making any more comments about the sheriff.
Ted Simons:
With all of that going on, you've got deputies telling the mayor to shut up. You've got the sheriff being focused on in Washington D.C. and investigations still continuing. Has this gone from theater to its getting serious now?
Paul Giblin:
This reminds me a few months ago at the board of supervisors meetings where these conflicts flared up. It was getting angry and it's cooled down in the past months, but seems to be getting angry again. The reform people are promising another big showdown, rally, and to me that indicates -- would suggest to me maybe the F.B.I., which has been investigating the sheriff's office for about a year now, maybe they ought to push along their investigation and either indict him or leak that they're not doing indictments.
Ted Simons:
We should mention that the mayor of Phoenix who was told to shut up had referred to sheriff Arpaio similar to Bull Conner, a shape that no one wants to be referred to as far as racism in the south. That's it. We'll end on that pleasant note. Thank you for joining us on "Horizon."
Mary Jo Pitzl:The Arizona Republic;Casey Newton:The Arizona Republic;Paul Giblin:The Arizona Guardian;
