State Treasurer Dean Martin will talk about his new Web site that lets Arizonans find out how much the state is spending and where that money is going.
Ted Simons: Arizona state treasurer Dean Martin recently implemented a website that allows Arizonans to see how state money is being spent. The site, AZcheckbook.com, was two years in the making. Here to talk about the site and other issues is state treasurer Dean Martin. Good to have you back on the show.
Dean Martin: Thanks for having me.
Ted Simons: Make sure I got that right. It's azcheckbook.com.
Dean Martin: That's correct.
Ted Simons: Why this website, why now?
Dean Martin: Well, it was something I said I was going to do back in my inaugural speech. Literally every dime the state collects and spends has to have a code attached telling the accounting system, how it got here and where it's going. And so I took all of that information and let's put this online so that the public can see what the government is doing with their money.
Ted Simons: Two years in the making, why did it take so long?
Dean Martin: We didn't have a budget. There was no appropriation. We didn't have finances or staff to do. So it was myself, a head of I.T.
Ted Simons: What costs are we looking at here?
Dean Martin: If you were to sit down and do in this, took about four to five weeks of one person sitting in front of a computer. Maybe $13,000 total.
Ted Simons: And in terms of maintaining, what are we looking at here?
Dean Martin: A few minutes to upload the data each month for the spending and revenues and operating budget each day. It's only the hosting cost, about $90 a month.
Ted Simons: There are interesting things there. There's no doubt. Is something like this necessary?
Dean Martin: I think so. I mean, right now, the public is being asked to raise their taxes, being asked to look at cuts, and, you know, what exactly is going on? Where is there money being spent? Who is spending the most on overtime? Airfare? It's difficult to get an answer and so I thought, transparency is the best disinfectant. Sunshine scatters the cockroaches, so to speak. And to put it online gives people power over their government.
Ted Simons: The public has the ability now to see this, but does the public have the resources to put all of this information into context? You can look at a graph and it can go all over the place and you can say, this is good and this is bad. Those sorts of things but can you put it into context?
Dean Martin: That's the reason we did this. I didn't want editorial content. These are just the data and the facts and let the various individuals provide the context. They know what they were spending it on. But we're seeing generally it's a good policing tool because people who work with state government, maybe an employee who is going through the thing, hey, I'm being asked to do this and they're spending how much on that. It's a launching pad. And you can't ask good questions if you don't have a basis.
Ted Simons: Most would agree, but my question is, yes, ask the questions, but where can they get the answers? Is there any way to explain it?
Dean Martin: We have a link on the site to the complete directory of state agencies. You can ask the question to them directly and we provide the information and cannot provide the backup. Only the agencies can do that.
Ted Simons: How far back does this information go?
Dean Martin: Only back to fiscal year '09. We went to the accounting office to ask for historic data and they said it would cost $800 a month, that would be 10,000 a year and we don't have a budget for that. So just stuck with '09 forward.
Ted Simons: As time goes forward, will there be abilities and a way to put into context trends?
Dean Martin: Absolutely. That's why I would like more data going back. Are they spending more, less? You can do it for one year, but more than that, you don't have, so that's why historical data, we would like to have fee waived. Plus we're working on charts and graphs and comparative things. This is more public data and we'll be doing more down the road.
Ted Simons: Senate Bill, wants local governments to do the same kind of things but maybe with more intricacy.
Dean Martin: We're not part of that legislation, but looking for local governments to provide an extra level of transparency and I think it's a good thing. Transparency doesn't hurt anybody. It may prompt a lot of questions. But that's ok. I mean, that's what we should be doing, is answering questions why we're doing certain things.
Ted Simons: You have come out with a idea to reform the budget process and restructure debt. Again, why this plan, why now?
Dean Martin: Well, the state's in crisis. We're more than $500 billion in debt right now. They're having a hard time making ends meet. The state needs to get through this crisis, but I have a philosophy of do no harm. The problem with the tax increase, people are hurting right now. There's no guarantee this will pass so how do we get through this crisis and bring in temporary bridge revenue but without having a major negative impact on services and impacts the economy flew a tax increase and this debt restructuring, we took a page from a company that's failing. You go in and turn it around and cut up the credit cards and streamline operations and we took that page and said, how do we apply this to the state. We can bring in 1.1 billion as much as $3 billion.
Ted Simons: Without getting into the fine details, this sounds like no more sweeps of funds and want to go ahead and refinance -- a one-time refinancing of existing debt. Why are those important things?
Dean Martin: he reason why we're in this mess, the legislature and governor and two administrations ignored the problem until it got out of control and used fund sweeps and debt purchasing and other tricks and gimmicks to cover up the problem. By eliminating fund sweeps, it reinforces good behavior. Right now an agency that saves moneys is rewarded by having that money taken from them. That doesn't make sense. If they want to borrow it, they can. They've got to pay interest. Same with debt restructuring. Right now we have a constitutional debt $350,000 limit. And obviously, our current constitutional debt limit is meaningless. Let's go back and fix that and say any future debt issuance, the voters need to approve it and approve a refinancing of the existing debt. No additional cost to taxpayers but basically a debt consolidation loan.
Ted Simons: And I know some would say, it's -- when you compare government to a private company, which is done often, they really are two different beasts. I company doesn't have to care for the poor. Or those who might have lost a job or a variety of factors there. Cutting and tightening the belts and all of those things, make sense for a company. But how much for a government where you have a lot the folks dependent on a lot of services.
Dean Martin: That's the reason I brought this forward as a option. The legislature is about to look at contingencies. What happens if the tax increase fails and right now it's losing in the polls. This is a real possible the only the option right now is to do major cuts. Well, this is a way you could, if you go this route, bring in some one-time bridge revenue and cover the additional shortfall without doing additional cuts beyond what they have to do. This is a third option. A middle way between the two.
Ted Simons: And this is the way that you say would keep the state from having to sell off state property.
Dean Martin: Not only would we not have to sell it, we'd buy back the capitol and the buildings that were just sold and this is vitally important because right now, Arizona is being compared with California as fiscal mismanagement. We understand the problem and restructuring our debts and buying back or capitol. That says Arizona is getting its act together. Maybe it's a good place to invest.
Ted Simons: But it's also being compared to other states not spending enough on education and services and these things and it doesn't look like the budget is calling for a heck of a lot of increases along those areas where you can increase or decrease. It's not locked up already in the voter protection funds. How do you balance that out? How do you get the quality of life where it needs to be and be attractive to businesses?
Dean Martin: The quickest way to get to surpluses and increasing budgets and putting more into education is to fill these vacant homes and fill the 40 million we estimate of vacant office buildings. You can't do that when the budget is so out of balance that investors say I don't care how much credit you give us. I'm not moving there, you can take it away tomorrow. The focus needs to be on how not to prolong the recession. You can't raise taxes enough to getting just a few more people into homes would do.
Ted Simons: These ideas, they're concrete and you've released them. Talking about them. The legislature has been locked and it's an absolute wrestling match going on down there. Why not these ideas in the past? Why now?
Dean Martin: I testified during the interim before a senate committee and said this is something we're going to look at. A debt committee for the state. Unfortunately, our finances in the state, there's so much debt it took us a while to dive through the numbers. Because you want to make sure the math penciled out before we proposed it. And we rushed through it to get it done in time for the budget week. We dotted all our Is and crossed our Ts. And got it done.
Ted Simons: Good to have you on the show. Thanks for joining us tonight.