Journalists Roundtable

Local reporters review the week’s top stories.

Transcript:

Ted Simons:
Hello and welcome to "Horizon." I'm Ted Simons. Joining me tonight -- Mary K. Reinhart of "The Arizona Guardian," Daniel Scarpinato of "The Arizona Daily Star," and Howard Fischer of Capitol Media Services. Well, Mary Kay, we're nearing the end of August. The state still does not have a balanced budget. They got a budget package though. Is this any different than what the governor vetoed before?

Mary K. Reinhart:
Basically not. We can talk about little details but let's not. It's pretty much the same budget she vetoed on July 1st. $8.4 billion without a one cent sales tax referral to voters which is the key problem here. You know, she called the first budget devastating. She called it fatally flawed. Now, she's presented with basically the same thing.

Howard Fischer:
Well, she had agreed to sign the fatally flawed budget, but only on the condition, as Mary K. points out, if you're going to make $630 million in cuts, give the voters the chance to restore some with the sales tax hike. You can pick up with the sales tax. So far she hasn't come up with the votes in the senate. She's got right now until Wednesday, although there's a possibility of delay. Does she sign the budget, given we're in a crunch and sign the property tax relief and what does that give her to negotiate with?

Ted Simons:
No $400 million tax cuts. Spending caps, are they included?

Daniel Scarpinato:
Yeah, they are but it still doesn't have that referral and the governor said that that budget was fatally flawed. You need to get together and work in a bipartisan manner to get something done and they went through the same exact process they did before and came up with virtually the same exact product.

Mary K. Reinhart:
I think the votes aren't there in the senate among the Republicans. It's clear they're not going to be able to get this done. They're at least two votes short and that's why this whole thing was sent up with a little bit of delay and trying to work on Democrats, just not going to happen.

Howard Fischer:
There's a few -- and I use the term loosely -- moderate Republicans. John Nelson and even Steve pierce, who recognize this isn't going to get done. You've got 18 Republicans, you need 16 and we're four short really from the 18. So really two short. She want to -- two short. They want to reach across the aisle, except what will the Democrats demand? Democrats don't like sales tax in general and don't like the spending cuts and don't want the $400 million in income tax cuts and will you lose too many Republicans by bringing 10 Democrats on board?

Ted Simons:
I want to get to that the bipartisanship in a second. Before we do that, is there a chance that she signs the budget with assurances from leadership that they'll come back with a special session and work on revenue, but assurances, what does that mean?

Daniel Scarpinato:
I don't know. It seems like if you send the same product, you're going to get the same result. But there's really no indication at this point what she'll do. Just like last time, and then she found this way to veto parts of it. Which no one had envisioned she'd come up with the arrangement that balanced the budget but got rid of the things she didn't like. But left unanswered questions.

Mary K. Reinhart:
She did sign the environment bill that allows state parks to continue to operate and allowed federal stimulus money to continue flowing for water projects.

Ted Simons:.
The idea of meeting with leadership and they say, just sign it. We'll try to get in -- I mean, can she -- any leverage if that were to occur?

Mary K. Reinhart:
I want to craft that press release that goes along with that. I don't know --

Howard Fischer:
Here's the problem we're running up against and we're going to talk about this. Dean Martin pointed out, with or without a balanced budget, our ability to borrow against ourselves and the cash flow will run out sometime in the middle of October. Banks will not float a line of credit unless we have a balanced budget and it takes six to eight weeks to set up that credit facility. So there's a lot of pressure on the governor to at least sign the budget part. If she signs that, she'd have leverage. Number one, she can still refuse to sign the property tax repealer. She can say, if you won't send me the sales tax referral, we need the $260 million the property tax will bring in. The Republicans want that incorporated in individual income tax. If you want these, you will send me the referrals. She has a few chips to work with.

Ted Simons:
I know you've been writing about this. Who are these folks and the majority -- Steve pierce, does he becomes a major player, if anything is happening?

Mary K. Reinhart:
They took a baby step. It's historic from the political insider position. You had all sitting down for the first time -- the five party negotiations that the Democrats have been calling for all session. Not negotiations, just let's sit down and look at each other and figure out where we're at. Steve pierce, we were calling him the great communicator. He's been put in a position as someone who does appear to have an ability -- some people -- still, an ability to really win over some of the more moderate members, if you can call them that. There was John Nelson, and came up on the governor's office and they talked to her about a bipartisan solution to this mess because it's just that. We've got to have a budget and it doesn't seem like the old doing the same thing over and over again and expecting different results was working here.

Ted Simons:
Is this possible?

Daniel Scarpinato:
I think the better way to describe them is pragmatists, rather than moderates. And at this point, a lot of people want to get this done. We've been having the same conversation over and over. It's like déjà vu. It's -- we're still at square one that they're now getting together in almost September to sit down and talk about how they're going to solve the budget.

Mary K. Reinhart:
Democrats said today, governor, we're not going to negotiate the budget on your desk. It's not just about the sales tax referral. We're going to need things done with that to make it ok, but we need to reopen the budget and take a look at other things. She didn't like that a lot. I'm not sure, you know, you could expect her to, but hey, she needs these folks in the senate, anyway, and she's going to have to consider whether it's worth reopening the budget to get this done. It's more pragmatic than anything else.

Howard Fischer:
Steve pierce is now part of leadership. Named majority whip after Pamela Gorman imploded. He is not going to do anything unless he gets Bob Burns' blessing to come up with a package to satisfy enough Republicans and Democrats. You're not going to find him pulling together 12 Democrats and four Republicans to -- it's not going to happen.

Mary K. Reinhart:
He's been described as the conduit. The person who connects this sort of burgeoning group of pragmatists with leadership. Howie is right. If senate president Bob Burns and Kirk Adams don't get on board, is it a viable option?

Ted Simons:
What happens if the governor just says no; vetoes again? The landscape, how is it scarred? What are we looking at?

Howard Fischer:
The first thing we're looking at is people are not going to get paid in October. The cash flow isn't there. The state has been borrowing against other accounts that belong to other agencies of the government. The money is not going to be there and the banks aren't going to lend it. It's going to be like California. Issuing IOU's that the banks may or may not honor. Number two, I think you'll see massive layoffs because you cannot support the spending we're doing. One thing we found out, even though revenues are coming in slower, we're spending $100 million more fiscal year to date than we were. Some of that was expected. Unemployed people require care. But whatever the excuse, something is going to have to happen. You may see massive layoffs.

Mary K. Reinhart:
We've got a lot of private sector contractors who as we found during the mid year budget cuts were laying off their own workers. The folks doing business with the state are going to be in the same situation.

Ted Simons:
Should the governor veto with everything described so far and then some, she's gone to the wall on this -- I mean, she's either going to say I was wrong before or I'm sticking by her guns. What's the repercussion?

Daniel Scarpinato:
Sticking by her guns is risky, but every time she's done that, you go out on the street and talk to people, and they say, wow, she's surprised me. Standing up to her party. People don't like the legislature and there's a certain advantage to standing up against them. Whether you can do that at this point from a practical standpoint remains to be seen. I think if she signs them, admits defeat on the referral, it's pretty difficult politically to recover because she's invested so much of herself in that.

Howard Fischer:
We've got an interesting equation. The people Dan are talking to, many are Democrats or independents. Those aren't the people deciding the nominee for the party for next year.

Ted Simons:
Is that -- I mean, she -- Dean Martin, we had him on and everybody has talked to him. He's running without saying he's running. It seems clear. The mayor of Paradise Valley says that he's thinking of running. Isn't it a foregone conclusion if the governor wants to run again, she's going to face opposition?

Howard Fischer:
Let's assume she gets the referral on the ballot. If people pass it, that becomes a sign that she was right. Right all along. If the referral gets on the ballot and fails, she's toast. Pack it up and sit on a beach.

Ted Simons:
In a primary, does it matter?

Daniel Scarpinato:
First after you all, I do talk to Republicans. They're not all Democrats and independents. I think -- yeah, the issue of if it gets on the ballot, does it pass or fail, but if it can't even get on the ballot. This point, her whole M.O. has been this referral. So what next? Who is she if she doesn't get the referral?

Ted Simons:
What do we know about the mayor of Paradise Valley?

Howard Fischer:
There are blacks in the Republican party and blacks in Paradise Valley. He's a long-time political operative. He's been with the department of agriculture. Bright guy. Had some little investigation that was out there, which I don't think is going to cause him any heartburn. Can -- the question is does he have a broad enough background? You open up the primary and if Vernon gets in and Dean gets in, Dean's got statewide recognition. With a name like Dean Martin, he's ring-a-ding-ding! I remember him. I think it's a chance to get statewide recognition. Maybe for a 2012, 2015 campaign.

Ted Simons:
President Obama was in the valley. Spoke here in Phoenix. Most attention went to gun-toting protesters. Daniel, describe the scene.
Daniel Scarpinato:
There were protesters on both sides. The majority I saw were demonstrating in support of the president and healthcare reform. But you had J.D. Heyworth doing his radio show at Tom's Tavern and people on both sides of this, very -- this thing has hit a nerve. I mean, there are people who really want this and people -- it taps into the whole debate over government and the role of government and so it has brought out a lot of people on either side and they were downtown this week.

Mary K. Reinhart:
And it's an opportunity for people to undermine the presidency. It's not just about healthcare. Some of those folks down there -- a lot of them were on Medicare. Keep your hands off my Medicare. So I think it was an interesting collection of folks. There was some infiltration from both sides so you saw little microcosms of first amendment privilege and people going at it verbally. Generally well behaved but the emotions ran high.

Howard Fischer:
Let's get back to our friend with the A.R. 17. Arizona is an open-carry state. You never know when you're going to meet a varmint and need to -- You have an assault style rifle slung over someone's shoulder and guess who everyone followed around. Did it get attention? You bet. Did he cause particular problems other than the -- causing a little bit of traffic jam? No.

Ted Simons:
I feel like it was an A.R. 15. Going to be slinging it over your shoulder --

Howard Fischer:
I had no idea you were such an afficionado.

Ted Simons:
No problems in terms of gunplay, but how did Arizona look to the rest of the country with reports of a dozen or more people packing heat outside a presidential appearance?

Daniel Scarpinato:
Probably people not from the west and don't understand our laws and the culture here, it probably didn't look good but as Howie points out, there wasn't anything illegal about it. And I don't know to people in Arizona, even those who don't own guns, if it was that shocking. I don't know.

Howard Fischer:
But we always -- look, comedy central was out here -- selling off the state capitol, the guns in bars, national news. It's easy to poke fun of Arizona if you're from back East. Darn New Yorkers, and I'm one myself. If you don't understand the mentality and the history and the particular libertarian philosophy, it's easy to poke fun.

Daniel Scarpinato:
I saw a lot of secret servicemen there. Clearly, if there was a risk, they would have stepped in. That doesn't happen.

Ted Simons:
Are we, as Arizonans, familiar with this kind of thing, and, B, right now thinking too hard about something that someone back east or up north is saying, wait a second, there are people with guns outside an appearance by the president of the United States. People wearing firearms as they protest. That doesn't necessarily -- we understand, we live here. But around the country, that could hurt Arizona's image, could it not?

Mary K. Reinhart:
Isn't it the fellow who does FROMMER's said he wasn't going to step in Arizona anymore. And Tiger Woods, his last appearance, he was followed around with by a guy with a gun. The wild west.

Howard Fischer:
Here's the other people. There are people who come out here to experience the wild west philosophy. The people who go down to Tombstone with the newly remodeled sidewalks, walking on the boards there. Look, it's Arizona. If you're a New Yorker, if you spent -- my grandfather spent his entire life in Brooklyn. Never had a car or gun. If you're from New York City, of course it's shocking. But that's -- that's -- these are the people that are going to be shocked by Arizona in the first place.

Mary K. Reinhart:
They're going to come out here to see the Grand Canyon. I don't think this is going to have an effect on tourism, if that's where we're going.

Daniel Scarpinato:
The root of this is political statement by the people carrying them that they believe -- that's why they went out and bought guns and ammunition when the president was sworn in. They believe their amendment rights are under threat. This was a political statement and they got the attention they wanted.

Mary K. Reinhart:
And it's par for the course. We've been an oddball political state since I started covering politics.

Howard Fischer:
Long before that.

Ted Simons:
The presidential visit itself, what kind of impact as far as -- you know, the president is out here, this is considered a swing state. Did the Democrats get any bump -- what happened?

Howard Fischer:
I don't think so. The people who like him will continue to like him. It's not like he did a town hall which might have created some interesting feedback where he's taking questions from Arizonans. He came and gave a speech and he ate and left.

Daniel Scarpinato:
The interesting thing about this visit -- and by the way, he still hasn't been to Tucson and a lot of people are waiting for him.

Howard Fischer:
Oh, you keep crying about Tucson.

Daniel Scarpinato:
The interesting thing, the first -- what? -- two times before this he came, I don't want to say people didn't care, but he came, and it was very calm. This time, you had a lot of demonstrations on either side. His approval rating now is on the verge of dipping below 50%. Things have kind of evened out. The honeymoon is over and that was clearly on display, I think, this week in Arizona.

Ted Simons:
All right. I want to get back to the legislature in just a second. We don't have too much time. But jobless rate -- 9.2%, another half percent increase and they're saying it's not over yet.

Howard Fischer:
Oh, no. You have to figure since the recession began we've lot 375,000 jobs in Arizona. 12% of the workforce. We're continuing to go up because consumer confidence remains lousy. Stores are not going to hire unless consumers are buying and I would bet -- I'm willing to bet your salary, since it's easier to bet your money, that I'm willing to bet that we hit 10% and it's a fair chance we'll hit 11%. Clearly the patterns are there. The other question is how realistic is this number? This only includes people who are saying I'm looking for work. If you're discouraged and concluded, oh, I'm not going to find anything or someone in the -- not in the workforce, saying I'm going to stay home, you don't count.

Ted Simons:
We're going to have an economic roundtable on Monday to talk about these numbers and also, Ben Bernanke is saying we've bottomed out. But in Arizona, we're still searching for a bottom.

Howard Fischer:
Arizona's always been a lagging state. We went into the recession later than the rest of nation. Why did we go up? National economy is much broader based. We're still based on housing and construction and a little bit of mining. You know the bright spot? Aerospace. War is good for the economy.

Ted Simons:
All right. Before we get out of here, I do want to get back to the legislature and quickly now, a little speculation, a little prediction. Daniel, what is the governor going to do?

Daniel Scarpinato:
Oh, geez, I think she'll probably find a way to -- to approve parts or most of this package, probably with using some line item and still keep pushing for the referral.

Mary K. Reinhart:
Ever the cockeyed optimist. She's got an extra 10 days, if we give them another couple weeks to negotiate, maybe a bipartisan solution.

Ted Simons:
So piecemeal. Bipartisan? All right.

Howard Fischer:
I think she signs most of the budget and vetoes the property tax repealer, figuring even though the property tax bills will have gone out, you can do a rebate if we come to a deal. That's her ace card.

Ted Simons:
All right. You didn't get any tickets, any photo radar? A lot of folks are getting those.

Howard Fischer:
School superintendents can't seem to read the signs that say 15 miles an hour.

Ted Simons:
All right. We'll stop it right there. Thank you for joining us on "Horizon."