Ted Simons: Hello and welcome to "Horizon." I'm Ted Simons. Joining me tonight are Mary Jo Pitzl of "The Arizona Republic," Dennis Welch of "The Arizona Guardian," and Howard Fischer of Capitol Media Services. Finally, a state budget, kind of, sort of. Mary Jo, give us the latest now.
Mary Jo Pitzl: Oh, about sometime in the pre-dawn hours of Wednesday, the legislature finally passed out a budget and after dawn, sent it up to the governor and looks like it remained a balanced budget for all of five hours before the governor line item vetoed portions and the rest of the bills that were attached to it and came after a marathon session.
Ted Simons: She had how long to do this?
Mary Jo Pitzl: How long to --
Ted Simons: To make a decision.
Mary Jo Pitzl: Ten days.
Dennis Welch: She took about five hours. She knew what she was going to do well before they sent the thing up to her. They knew the proposal. They knew what they were going to line item. That they didn't get the tax proposal, she was going to do that.
Howard Fisher: And she didn't have the 10 days because the state's spending was dependent on it. -- was dependent on it. Without the state budget, to keep the motor vehicle division office open and the state parks shut it at midnight because they were afraid there was no budget.
Ted Simons: Let's get back to basics. Line veto, calls a special session. How much of a surprise was this?
Dennis Welch: Absolutely no surprise at all. That was the most telegraphed pitch I've seen. They knew what was going to happen. If they weren't going to send a tax proposal, she was going to veto. They were daring her to do so.
Mary Jo Pitzl: I think a little bit of a question, would she outright veto or line item veto. As they got closer to the deadline, looked like she would line item veto.
Ted Simons: How much was vetoed?
Howard Fisher: Well, in actual dollar amounts, a fair amount. The state aid to education, depends on which lines, between $3.2 billion and $4 billion, out of an $8.4 billion spending plan, and also other measures like $40 million for universities that were reductions, but in terms of actual functioning the government, not much. Because what happened is that state aid to schools went out also the same day, got $600 million, actually due last year so the schools can exist without that $4 billion they need.
Mary Jo Pitzl: But just for a little while and on July 15th, another payment is due to the schools. The money will be there. They're still collecting taxes in the state, but there's no authority to spend that because the governor, she wiped out the whole K-12 budget.
Ted Simons: Risky move?
Dennis Welch: In a sense, that's almost like we've created another deadline. We had the July 1st for the fiscal year and now this new deadline so we can authorize it so that the schools can stay open.
Howard Fisher: I think she knows, this has been a game of brinksmanship all along, who has the high ground and who is protecting the frail and meek and huddled masses. And she thinks I'm the one protecting the funding for D.E.S. and everything else. We'll talk about the legislature hopes to trump her at that.
Dennis Welch: I think risky, you know, politically speaking, I think it's good because she does come out and looks like she's protecting education and when it comes to politics in the state, education is everything. Really affects people's lives and definitely looks like the champion of education.
Mary Jo Pitzl: It is risky, but I was talking to the whip in the house, responsible for counting votes and he says he doesn't feel like he's got a gun to his head, but he's going to vote to protect public education. He wouldn't get into specifics, but you can be certain that a majority of the legislature will not allow public schools to go without funding beyond mid month.
Howard Fisher: And she's got them over the barrel to the extent she didn't veto other parts. It's not like they can come back and say we're going to take something out of these agencies and put it over here.
Ted Simons: There were policies decisions as well. The impact fees, the private prisons. Again all of that --
Howard Fisher: And even the $250 million permanent repeal of the property tax. These policy issues, many -- like the property tax, a lot of this were things that couldn't get through on their own, that would die and lawmakers saw the opportunit for some Christmas trees. I've got this idea for a road and actually there is one in there. In the budget that wanted and figured we've got her over a barrel, it's a package. And she said, yes, it was a package if you sent me the sales taxes, not a package, you broke the deal.
Ted Simons: If war is a failure of diplomacy, can we say this special session and corresponding vetoes, basically a failure of who?
Mary Jo Pitzl: A failure to communicate. There's not good communication going on. Last Friday, it -- from all appearances, Brewer, Adams and Burns had an agreement on what they would do. But Burns and Adams had to sell it to their membership and they couldn't do that and the governor didn't come down and unleash her fire power she has as executive until Tuesday night -- Tuesday afternoon, that's she tried to bring in Democrats to no avail. It's a failure to communicate all around.
Dennis Welch: And there were a lot of members upset, springing it on them at the last minute. The idea of a flat tax. Completely overhaul the state's income tax system and give them 24 hours to think about it before they vote.
Howard Fisher: But this started back in January. I appreciate Jan Brewer and she loves to say she inherited this mess. And then she has a speech: I have a five-point plan. It wasn't a plan, it was an outline of a sketch of an erector set. She didn't have a budget until early June. She was not engaged in this and once she put it out, and then she said I want it this way. I'm sorry, you can't come in on June 4th and say this is what I want.
Ted Simons: Back to my war metaphor. We had Chuck Coughlin earlier in the week and he talked about how it seems as though leadership assembled a war cabinet to go to war with Janet Napolitano and she's gone and you still have warriors on committees and they've got a new person to fight.
Mary Jo Pitzl: That makes some sense. The change up here was that -- I think they would have had that same war cabinet if Jan Brewer was governor. She's just not the type of person they thought.
Dennis Welch: And I think they knew that there was a good chance that governor -- then secretary Jan Brewer was going to be governor Brewer when they stocked those committees and I think President Burns, he kind of reaped what he sowed. These are people he's working with and the problems he had getting stuff out of appropriations, he's the one who made the decision to put the conservatives on the appropriations committee.
Howard Fisher: Let me go a step beyond that. This goes back to last session. Tim B was the one who -- the Republicans were going to make sure it didn't happen again and went to the biggest S.O.B. they could find to a certain extent and knew that Bob Burns campaigned for the office. I don't care, I'll be the guy who stands up to Governor Napolitano. Ok. She's gone. He's still in that mode and never I don't think engaged with Brewer. Had the wrong leadership for this particular governor.
Mary Jo Pitzl: My point is she's not the governor they thought they were going to get. And in different circumstances, maybe 10 years ago, this would have been a very nice marriage of the executive and legislative branches.
Dennis Welch: When you're down there just representing your narrow interests and if you want to be the governor of all of Arizona and if you intend on running again -- we don't know -- you better play to all of Arizona and not just one segment.
Ted Simons: Reaction to lawmakers over the special session. First, can they get a quorum?
Mary Jo Pitzl: Yes,you need 16 in the senate and 31 in the house and representative John McComish -- the Democrats are saying they can get most of their people although some of the people outside of Maricopa County, they may not tell them to rush back on Monday. But all indications are there will be enough to get started.
Howard Fisher: The question is what happens when you come in. You read the -- I'll bet next week's salary that Ron Gould will make a motion for sine die within the first 24 hours. They don't want to be there.
Ted Simons: They don't want to be there. What if they don't get a quorum? What happens?
Howard Fisher: Well, you remember a couple years ago, the killer bees from Texas? Legally speaking, the speaker of the house and president of the senate, call of the house and direct the department of public safety to go out and round these people up. That's only if they're in the state. The Texas legislators went just across the line to get away. Could they do that? Yes. I don't think they're going to play those games.
Dennis Welch: These are the same people who locked the senate doors the other day. I wouldn't be surprised to see some political games.
Mary Jo Pitzl: Perhaps these aren't games but the statement that came out from house Speaker Adams and senate President Burns, if this was war before, these are nuclear bombs. I don't know how you have anything to build on once these things have been dropped.
Dennis Welch: She said she's not up to doing the job. Called her a liar. You can dust off the old "she lied" buttons for Napolitano and recycle them because they accused her of doing just that.
Howard Fisher: The problem with lying, it depends on who agreed to what. From the perspective of the Republican leadership, we only promised to try to sell the sales tax increase. From the governor's perspective, it's you will round up the votes. Now, as I said to Kirk Adams, I've seen how leadership can work. If you want the votes you take the people in the back office, they come out a little bruised and, oh, yes, I will vote for this. Did they do everything they could? Hard to say.
Ted Simons: That goes to the question of Burns and Adams, are they still in control?
Howard Fisher: I think Adams is. Burns is a whole different beast. The senate is a different beast. His leadership effort -- voted against him. I'm sorry, when your majority leader and whip and your president pro tem don't even follow you, how can you expect the rank and file to?
Ted Simons: How can we expect anything to come out of this special session that hasn't been hashed over for the past six months? What is the governor expecting?
Mary Jo Pitzl: She's expecting a sales tax. Prefer an outright vote. Settle for a referral to the ballot. Which puts another time pressure on it. The county elections have to get rolling on it by July 31st. There's another deadline.
Howard Fisher: I think she's finally really ready to deal with the Democrats.
Dennis Welch: After today's press conference, she's willing to deal with the Democrats when she said they've never ever said -- approached her for dealing with the budget?
Howard Fisher: Understood, but let's look at -- particularly on the senate side. Garcia is a pragmatist. He said, I can produce the votes to put the sales tax on the ballot. I need a few things. We can deal here. If you allow that property tax to come back. Ok. And a little more spending and probably need something, because sales tax is regressive. Poor people spend a larger percentage of their income than rich people. You give us a rebate for everyone earning less that $20,000 q year and we can talk. The house has dug into this crazy complicated plan where we lower the sales tax rate, expand it and they think they're going to get people to enact that in the next 10 days.
Ted Simons: Democrats are going to be a factor this time as opposed to what happened before?
Mary Jo Pitzl: They have to be. If the governor's going to get a tax increase, she needs the Democrats but needs to talk to them and they've been ignored all session. Now we're into a new session. But representative John Kavanagh said the vetoes have served to unite Republicans and Democrats. They're united at this point against the governor. Probably won't hold but she can't make it happen without some democratic vote.
Ted Simons: Does this suggest that the last past six months was a big waste of time?
Howard Fisher: I got paid.
Mary Jo Pitzl: They fixed the current year twice and did the scholarships for the disabled kids.
Ted Simons:I feel better then
Howard Fisher: And there are other bills. There are other bills that they did. Most that are sitting on her desk. Some bills on abortion. We are going to legalize sparklers I want you to know. Maybe
Dennis Welch: We did -- they worked through an entire session. Could have done this all in about a week. It seemed like all the work was done in the last week. So --
Ted Simons: So, let me rephrase the last question. If she couldn't get the concessions before, how does she get them now?
Howard Fisher: I think the key is Democrats.
Ted Simons: They really are becoming a big factor.
Howard Fisher: They're suddenly going to become everybody's favorite dance partner. In fact, what's interesting, when I talked to Bob Burns after he came off the ninth floor today, I said the governor wants to work with Democrats and Burns said I want to work with democrats. They're easier to work with than the governor.
Ted Simons: Oh, my goodness. Which leads onto the next question. The 2011 budget, is this going to be an absolute massacre? This doesn't bode well at all.
Howard Fisher: If the sales tax gets on the ballot, if it's approved and there's a billion dollars there, I think it eases things up. Either the tax doesn't get on the ballot or voters reject it and now we're really deep because the stimulus money is gone. Now we're in real trouble. But the other part, if voters reject it, there's a clear signal. As the governor said, I will respect the will of the voters. If they don't want the money for education, the C.P.S. money, the health money, yes, we'll have to cut.
Mary Jo Pitzl: I think another complicating factor is there's no trust or confidence right now. When you get down to working on next year's budget, there's a lot of lack of confidence in the governor.
Dennis Welch: And you can throw in it's going to be an election year. We know how crazy it gets when they're getting prepared to run.
Mary Jo Pitzl: So the math is going to be possibly bad on that and so is the vibe among the negotiators.
Ted Simons: Could the special session mend fences?
Howard Fisher: No, I think it's going to be ugly. I think they'll Cobble something together. Probably the four of us can't figure out who is on what side. And buy the votes they need and everyone will leave hurt.
Ted Simons: Speaking of agreements. Regarding the original agreement between governor and leadership, did much of what she wanted in that original agreement wind up on her desk?
Howard Fisher: Well, she agreed to certain of the cuts. If you look at the -- what they were going to send her on June 4th and what they sent her now, many of the cuts are similar. But she counted on that billion dollars or half a year. Maybe a half a billion dollars to back-fill. And if we can collect $450 million for the last six months of the budget year, we can backfill that and the universities and C.P.S. So the cuts were pretty much the same, which was Kirk Adams' point with some changes but she was counting on the additional revenue.
Ted Simons: Do you agree?
Mary Jo Pitzl: They moved around some cuts so it they didn't hurt as much in areas the governor was trying to protect. What the whole debate is about is the governor wants a tax increase, a temporary one. She says it's the only way out of the woods and the Democrats are not supportive of it either and don't like the idea of a sales tax hike.
Howard Fisher: You go to the Republicans and say, look, do you trust the voters? These are the people who put you here. Yeah, we trust the voters. Do you trust them on the issue of raising their own taxes? Oh, no, that's too complicated.
Ted Simons: It's not like she's saying pass that tax increase. It's just refer it to the ballot so the voters have a say, but even that is simply a non-starter.
Mary Jo Pitzl: Last Saturday when the house appropriations committee was meeting, they only had about 22 Republican votes. They needed 31 to make it pass. Many of the Republicans have taken that infamous pledge and know not to raise taxes and that will come back to bite them in the primary election.
Howard Fisher: The argument is that it would be a one-sided battle. The A.E.A. will come in and throw in a million dollars because they want money for education, and some of the businesses that do well and some utilities will throw in money. But who is going to fund the other side? Well, funding isn't everything. How much do the tobacco companies spend on a proposal or the payday loan people? You can't sell something to people who don't want it.
Ted Simons: The fallout from what we're -- we've been through, are political careers ruined? Will this be forgotten?
Dennis Welch: I think you will see political careers that will be ruined. Like with the sales tax referral, you get beat over the head with that or any one of these cuts they propose, especially to education, that can come back and bite them in the primaries.
Mary Jo Pitzl: When I stumbled out of the capital about 2:00 in the morning or whatever it was -- Wednesday -- to go home and sleep, there was a group of teachers getting a pep talk, saying we need to keep this momentum going to 2010 and the political careers at risk are legislators -- we don't know what Brewer is going to do -- if these folks keep up the momentum, we're going to see --
Howard Fisher: That's the key, because the A.E.A. talks a big talk. The children's action line talks a big talk. If they were doing what they were doing --
Ted Simons: Would they? Because I think that swing districts is the phrase. Are there districts out there in which it doesn't matter what happens? They're going to vote their gal on --
Howard Fisher: If the person is bad enough, they'll vote in someone else but what's happened is some of these districts that are swing districts, the elected moderate Republican in favor of a more conservative Republican. There are things you can do. Tony Helen got bounced.
Mary Jo Pitzl: We're not talking within the primary, we're talking within the general.
Dennis Welch: Talking maybe some of the cuts you're looking at that we haven't seen in years, that changes the dynamics in some districts. Obviously, there are districts because of the makeup it doesn't matter what happens. They're going to elect their guy.
Howard Fisher: And there's districts where if you come in and say, I didn't vote to raise your taxes, that sells. People think very narrow.
Ted Simons: Even in a situation where the state is cutting all sorts of things, education included, no taxes works.
Howard Fisher: How does that work in sun city?
Ted Simons: Then you have to worry about the original question: Are political careers going to be damaged?
Howard Fisher: Some will.
Ted Simons: Last question: Will we be voting on a one-cent increase in the sales tax this fall?
Dennis Welch: Yes.
Ted Simons: You think so?
Dennis Welch: I do think so.
Mary Jo Pitzl: I think Arizona voters are going to be voting on something in November. A tax hike of some form and combination. Some iteration that maybe we haven't quite imagined yet.
Howard Fisher: I think there will be a vote. Closer to the sales tax, rather than what the Democrats want but some provision like the rebate. It's got to happen.
Ted Simons: We'll stop it right there. And by the way, great work, all three of you. A long night and maybe you'll have a couple more before things are said and done.
Howard Fisher: Bite your tongue.