Legislative Update

May 27, 2009

Transcript:

Ted Simons:
Good evening and welcome to Horizon. I'm Ted Simons. This week lawmakers have been working in special session, calmed by the governor, to expand Arizona's corporate income tax credit program to help disabled and foster kids attend private schools. Joining me to talk about that and other legislative news is Arizona Capitol Time's reporter Jim Small. Jim, good to have you here, thanks for joining us.

Jim Small:
Thanks for having me, Ted.

Ted Simons:
House and senate decides this is ok legislation, correct?

Jim Small:
Yeah. They approved the bills today. The house passed their bill then the senate had an identical bill so they just voted on the house measure, passed along party lines, this is a debate we've had at the capitol for several years now surrounding the issues of voucher programs and tax credits and things like that. And you know, it got a little emotional at times and a little heated certainly back and forth, but ultimately this is something that passed and it's something that will be signed by the governor.

Ted Simons:
Let's talk again now exactly what this legislation does.

Jim Small:
Yeah, what it does is currently in law there's an existing tax credit program where individuals and corporations can give money to what are called student tuition organizations, and these are groups of basically funneling contributions, using them to create scholarships for private schools. This kind of expands that program and creates more or less a parallel program that is identified strictly for children who are in foster care and for disabled students who aren't having their needs met in public school. The purpose of this is to replace a voucher program where the state actually paid the private school tuitions for these students that was implemented two years ago in March, the state supreme court struck it down as unconstitutional and violated part of the state institution so this is the workaround to it. The tax credit mechanism upheld years ago.

Ted Simons:
Critics, Democrats are saying the state still is essentially paying for these folks by way of tax credits.

Jim Small:
Yeah, and they can say that, but the fact is the supreme court has said that this is legal to do because technically it's not state revenue, because it never goes from the taxpayer into the state treasury. It goes from the taxpayer to another organization to the students and so in one respect it's an issue of semantics, but, you know, that's what it is.

Ted Simons:
This was put on the fast track because they wanted to make sure this money was in the hands of these parents and kids in time for school?

Jim Small:
Yeah, that's the idea. It's not going to go into effect until 90 days after the special session ends, which was today. And so what that means is, you know, you're looking in late August at this point, so if they'd done it in the regular session we don't know when that's going to end. We're hoping near the end of June, but that puts you at the end of September, school's already started. These kids are kids that are currently in this program that are already going to private schools where, you know, their parents want them to go, would have to enroll in public school and wouldn't be able to go to the private schools.

Ted Simons:
You mentioned it got emotional down there. Sounds like things got a little testy at times. What's going on? Who was saying what and who was getting upset?

Jim Small:
Well, you know, this is a program that is certainly not liked by Democrats. And there was a lot of talk about how this was taking money, on the small group of children who are disabled while at the same time republicans are putting out budget proposals that are cutting -- making deep cuts into social services and healthcare services for disabled people. And then, you know, conversely you had republicans making the argument that look, these are kids, how can you not help these kids that need this help, you know, how can you vote no, against a program like this, where, you know, these parents have said we want to do this for our kids and the state has the ability to do it.

Ted Simons:
When Democrats would say this is now taking more money out of the general fund at a time when, you know, it needs all the money it can get, how do Republicans respond?

Jim Small:
The response is that these tax credits are capped at or the scholarships excuse me, to the students, are capped at 90% of what would be paid for that student to go to a public school. So, you know, they look at it and say look, if it's only 90% of the money they're going to get if they go to public school, this is actually a savings for the state and even though the money's not going into the general fund it's less to spend on education.

Ted Simons:
Governor likely to sign this?

Jim Small:
Yeah this deal was negotiated between leaders in the house, senate, and governor's office, so I have several expectation she'll sign it.

Ted Simons:
Democrats, correct, they're going to have a budget proposal relatively soon?

Jim Small:
Tomorrow morning actually 10:00 they're having a press conference, a joint budget proposal from the house and senate Democrats. They released the house Democrats released about a month ago, month and a half ago, and senate Democrats released a list of options prior to that as well and this is kind of the first time they're both going to be on the same page and the Democrat leaders said last week that they feel that they're going to be able to with this package that they will have more support for this package than republicans do for theirs.

Ted Simons:
Will they have enough support from a republican or two, or will they have enough with this package to be power brokers in any way, shape, or form down there?

Jim Small:
I doubt that right now. You know, we're still giving it another two or three weeks, it's no major progress has been made on the republican leadership side, you may start to see some republicans venturing into the territory of the Democrats for this, but I think right now it's really just a way for them to put something out and say look, we're doing what we're supposed to be doing. We have our own plan, here's why we think its better.

Ted Simons:
Before we let you go, I know you wrote about independent campaign committees out of the republican leadership. What is happening here?

Jim Small:
House speaker Kirk Adams and senate president Bob Burns have created their own kind of caucus campaign committees that they want to use to help expand the reach of republican legislators and get more elected. It's a bit of an odd move, independent of the state republican party, doesn't really have ties to them. Generally the state republican party will spend money supporting candidates in legislative races. It's an interesting issue, some people, critics are saying well, it's a way to try to divert money around the republican party because there's a lot of political strife, you know, within the republican party regarding the chairman and, you know some establishment people who aren't really happy with him, you know, but we talk to Randy, chairman of the republican party last week, and he said he's been aware of this and supports it and the idea is for these committees to work kind of cooperates with the republican party.

Ted Simons:
Have these kinds of committees worked elsewhere in the country? Is this something new for Arizona?

Jim Small:
It's not super new for Arizona, I mean, this was around 20 years ago, but campaign finance laws have been changed significantly since then and really kind of decrease's effectiveness of these kinds of committees. Other states have similar things and, you know, by all accounts they certainly work well and, you know, people who have been around Arizona politics for a long time will know that Burton Barre ran this kind of committee for the house republicans and wielded power with it.

Ted Simons:
But clean elections and matching funds put a new wrinkle, correct.

Jim Small:
Yes, and not only that, campaign contribution limits where every person can only give a certain at of money aggregate for the entire years, like $5,800 a think for a year. State republican and democratic parties can raise money ad infinitum, as much as they want, someone could write a $600,000 check and it doesn't affect those limits.

Ted Simons:
Jim thanks for joining us. Appreciate it.

Jim Small:
Thank you.