First Things First

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State lawmakers have referred a measure to the 2010 general election ballot asking Arizona voters to repeal First Things First, an early childhood development and education program, funded by a tax on cigarettes, that was passed by voters in 2006. If approved, the measure would redirect tax money collected for First Things First to the state general fund. Rhian Evans Allvin, Executive Director of First Things First, discusses the referendum.

Ted Simons: In 2006, Arizona voters approved a tax on tobacco to fund early childhood development and education. At the same time they created a new state agency called First Things First, to administer the money. So far the tax has generated about $500 million. First Things First is responsible for using that money to fund programs to keep kids healthy and get them ready to enter kindergarten. But state lawmakers have referred a measure to the November ballot that asks voters to repeal the program and send money generated by the tobacco tax to the state's general fund. Here to talk about that is Rhian Evans Allvin, executive director of First Things First. Good to have you here. Thank you for joining us. We talk about preparing kids for kindergarten, which is what First Things First does, what does that mean?

Rhian Evans Allvin: It means that they have every opportunity to have a solid foundation. It means that they are getting the kind of developmental screenings that they need. It means they are getting the pediatric services they need. It means that they are having bonding and they are building their vocabulary and their literacy from birth. We know now from neuroscience that learning begins at birth. So it's a combination of all of those things that give kids the solid foundation they need to be successful in school.

Ted Simons: With that in mind, the tax was approved and the money is coming in to the tune of somewhere upwards of $500 million or so. There are concerns that your agency, your organization is sitting on too much of that money. How do you respond?

Rhian Evans Allvin: The tobacco revenue comes in approximately $150 million per year. The legislation with the statutory language was written, it required a year delay before we started spending the funds. We know that the tobacco revenue is a volatile revenue stream. So in good fiscal planning, we wanted to make sure that we were budgeting based on solid numbers, not on what we thought might happen. So the revenues collected and then we budget and then the money gets spent. So there's always going to be a bit of a fund balance, number one. Number two, we know tobacco declines over time, tobacco revenue. And so we wanted to account for years into the future when we knew the revenue stream would be declining. So the fund balance was planned and purposeful. It wasn't by accident.

Ted Simons: So, but does it justify, as "The Republic" reported, 2/3 of the funds generated are still not used? That's a lot of a balance there.

Rhian Evans Allvin: Revenue was just passed in 2006. So we are three years into it. We have allocated at this point $284 million to our local regions and to the state.

Ted Simons: OK. Much of the reason that this is, this was referred by lawmakers is there was concern last fall, when health services needed help with the cost of child care licenses and these sorts of things, requested $2 million from your organization. And they were turned down. Didn't please a whole lot of people. What happened there?

Rhian Evans Allvin: Again, the statutory language in First Things First initiative said you cannot supplant these funds. So we are, by law, bound to not fund things that the general fund is funding or supposed to fund. And so, it would have been illegal for us to have just filled in the gap for the State. Having said that, there are a lot of partnerships that we have with State entities. We work very closely with DES on subsidy. We are doing a lot of public health initiatives with the Department of Health Services. We have been in collaboration with those agencies since the beginning. We just can't supplant funding when the legislature decides to cut funds for an existing program.

Ted Simons: It makes the critics say that's what exactly is First Things First for when to help to with child care licensing costs which would affect a whole lot of kids, the organization can't be found.

Rhian Evans Allvin: Right. But I certainly understand that. But at the same time, when you think about what First Things First is funding, related to developmental screenings, related to outreach to kids care, related to all of the things that we know go into making sure that kids are healthy and prepared for school, I will give you an example. There are a lot of communities in this state, rural communities that prior to First Things First did not have a pediatrician. Did not have occupational therapists. We are stipending a lot of health professionals to go into rural communities. Woman in Yuma who tells her story about having to take her son to Scottsdale for developmental screening who was on the cusp of being diagnosed with autism. Had to drive him to Scottsdale. Now with First Things First she is getting the developmental screening her son needs in Yuma.

Ted Simons: Is that information getting out? More than one lawmaker has said on the record we don't know what's happening with this money. We don't know what they are doing. There are charges that there have been conflicts of interest and favoritism involved. Because very small percentage of nonprofits seem to be getting a large percentage of what little money has been doled out so far. What's going on here? Is there a disconnect? What's happening?

Rhian Evans Allvin: First of all, I think in terms of the word getting out I think we need to think about Arizonans and the word getting out different than the word getting out with lawmakers. I think many, there are 300 volunteers across the state involved in making the decisions on how we spend First Things First money. So I would charge anyone to go into a local community and ask them if they didn't know about First Things First. I think it's very popular. I think lawmakers have not necessarily known all of the work that we are doing and we are working to educate them.

Ted Simons: The idea, though, of conflict of interest and favoritism, how do you respond to that? It sounds like some folks involved with the organization are getting some of these grants.

Rhian Evans Allvin: We are required by law to comply with all of the state's conflict of interest laws. And, in fact, we go beyond that. We do trainings for our council members. They recuse themselves from conversations that they have related to grants that they have. They are not allowed to have conversations related to any contract that are let. So we feel very confident that we are not only biding by the law but taking the extra step to make sure there are not conflict of interest.

Ted Simons: There was also some concern regarding emergency grants without the competitive process. I think 30 some odd million, something along those lines. These were emergency grants so we can understand why maybe the process was changed a little bit but the law, legislators will say we have an emergency here at the State and we need some of the money that this organization is sitting on. Do those things parallel? Can you understand why the State is coming from? It sounds like they see a whole lot of money, they see a whole the lot of kids here starting with kids care and are going from there.

Rhian Evans Allvin: Let me answer your first question. Related to the emergency funding, tens of thousands of kids would be dropped off of not being able to go to child care had we not stepped in and done emergency funding. We followed all of the procurement process. And we went through and worked with the Department of Administration and got permission to do what we did and we feel very confident that we did the right thing. I believe related to lawmakers, we have offered on for the last year, we have been offering to help with the State's budget crisis. We offered a loan. It is now upwards of $300 million that we have offered. No interest to be paid back through 2017. We are requiring the bulk of those payments to be in the latter years because we recognize that the State is in a huge crisis. I feel like we have really worked to be part of the solution.

Ted Simons: With that in mind very quickly, is a solution a compromise, is something being worked out here? I know the thing has already been referred. Are changes ahead?

Rhian Evans Allvin: We hope so. We are working very hard in partnership with lawmakers to rescind the action they took which there is precedent to do that, to have in place of sweeping eliminating first things first and permanently sweeping the tobacco revenue into the general fund to be spent at the discretion of lawmakers, we are proposing that lawmakers accept our loan, no interest, that they -- we would jointly work to make sure that it passed at the ballot in November.

Ted Simons: All right. We have to stop it right there. Thank for joins us.

Rhian Evans Allvin: Thank you. I appreciate it.

Rhian Evans Allvin:Executive Director of First Things First;

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