Legislative Update

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A mid-week legislative update with a reporter from the Arizona Capitol Times.

Ted Simons: Good evening and welcome to "Horizon." I'm Ted Simons. Job creation, term limits, pay day loans, you name it and chances are it was scheduled for a hearing at the State Capitol this week. Lawmakers are plowing through the remaining bills of the session, hoping to finish their work sometime soon. Here with an update is Jim Small, legislative reporter for "The Arizona Capitol Times." Good to see you again.

Jim Small: Thanks for having me.

Ted Simons: Want to get some of the legislation in a second but first of all of the governor apparently now going to go ahead and join the lawsuit against the feds.

Jim Small: Right. It's the lawsuit I think that 14 or 15 other states have already joined suing, saying the federal health care legislation infringes on states' rights and state sovereignty. They had the option, and there was some discussion, about whether the governor would just join this existing lawsuit or kind of file a new one since, you know, some of Arizona's problems are unique. We have the biggest budget deficit where we have some different Medicaid requirements than most states. I think there is only a handful of states that are in the same boat that we are in terms of health care funding. So apparently they decided for whatever reason, you know, that this would be the best strategy, would be to just kind of jump on to this existing suit, certainly it's cheaper to do. The governor's personal staff counsel is going to be the one handling this. It's probably only going to cost a couple thousand dollars for them to do it this way as opposed to file a new suit where they would have to likely go out and hire an attorney and go through the whole process.

Ted Simons: OK. Still hearing from Attorney General Goddard that it's a waste of time and money, Democrats say the same thing.

Jim Small: Of course they are. There's no surprise. They have been saying that since the idea of filing this lawsuit came up and obviously, Attorney General Goddard is perspective gubernatorial nominee Goddard so you have that as well.

Ted Simons: On the Democratic side. Indeed. Let's get to an interesting story here regarding the Arizona Hospital and Health Care Association. The idea was that they were going to go ahead and put a tax on the ballot to help pay for a variety of things. They have since changed their minds. Why?

Jim Small: Yeah, well, one of my colleagues spoke with the president and C.E.O., John Rivers of the Hospital and Health Care Association. And he said they were really concerned apparently about damaging relationships with Republican legislative leaders. Truly, they were going down a path where they were starting to get a lot of push back from GOP leaders. One of them in the house, Andy Tobin, had actually worked on an amendment that would have assessed a tax on all health care doctors, hospitals, dentists, psychiatrists, all of them would have faced a 2% tax on medical services provided. And so rather than have these dueling things moving forward and animosity the health care association decided, OK, maybe discretion is a better part of valor here, we could figure out another way to do this so we don't end up butting heads and really setting up a conflict for years to come.

Ted Simons: It sounds like the GOP is, and the legislature came back very hard. That's hardball there. Although the idea of taxing hospitals and doctors not entirely unreasonable. Other states do it. Correct?

Jim Small: Correct. It certainly was hardball without a doubt. It was a reaction directly related to this proposed income tax but other states do impose this provider tax. I know Minnesota has a very similar tax already in place that they use like Arizona was proposing to do on their Medicaid program and paying for low-income, for health care for low-income residents.

Ted Simons: For now that's off the ballot. There's no chance of that the group getting together with that initiative?

Jim Small: Right. They have called off that effort.

Ted Simons: OK. What about the jobs bill? I know it's now been rewritten. This was Kirk Adams, speaker Adams' jobs bill. It looks like it's been rewritten to satisfy concerns in the Senate?

Jim Small: Concerns from the Senate and I think from the governor to a certain extent. It was scheduled originally to be heard in committee today. It got pulled off yesterday and it's going to be heard instead on Monday. But they did a strike everything amendment basically. Has the same, many of the same provisions. Couple things it does it gets rid of an individual income tax cut for all Arizonans. Would have been about 5% across the board. And by getting rid of that it also gets rid of, that was the provision that cost the most money. And the analysis from the legislative budget analyst pegged this thing at $900 million or so. That alone cost about $400 million. So they are getting rid of that. And they are delaying a number of the other tax cuts, some of the income tax cuts and property tax things are delayed a little bit. And the idea behind that is to take away the ammunition from the Democrats have been using against this bill which is Republicans want to give businesses a tax cut at same time they are asking you, the voter, to raise your sales tax. So they equated it to a corporate bailout, you are taking money from voters and turning around and giving it right to businesses. By delaying this the implementation largely for most of these cuts, they won't go into effect in any meaningful way until after that sales tax has stopped being collected. The idea is to try to undercut that argument a little bit.

Ted Simons: Still work to be done on that one as well and some other areas.

Jim Small: Yeah, there is still discussion between the Senate and the House as to the final wording of amendments and various other provisions that may or may not be included. Obviously, there is some trouble with getting support that they need in the Senate in order to pass this.

Ted Simons: Pay day loans, once again, seem to rear its head and once again it seems like we are like whack-a-mole or something. Seems like someone got it again.

Jim Small: That was another one that was supposed to be in the same Senate Finance Committee this afternoon that ultimately was kind of withdrawn, and it wasn't heard. It was a new way to do pay day lending. It would have shoe horned the industry into a small consumer loans provision that already exists for regular banks and would have put them in there. As soon as the amendment became public, the pay day loan critics came out in full force. You know, went to their people and had them call lawmakers, email them, sent out email blasts, did the whole nine yards. The thing they have been doing this entire year with all these pay day loan bills and were obviously able to convince the Senate that really it wasn't worth hearing this and more likely than not you are not going to pass it.

Ted Simons: And that's the last we will hear about this session?

Jim Small: It sure seems to be. You know, you can never fully count a measure dead until they sine die the session and go home but for all intents and purposes this thing is dead and this industry will disappear this summer.

Ted Simons: The last question very quickly. Term limits looks like it's cleared a house committee. How far can it go?

Jim Small: This is an idea that's backed by Justice O'Connor and the group that Justice O'Connor assembled to look at these issues. And it was an idea that really came out of there. It's gotten through a house committee. It still has to go through another House committee or be withdrawn from that committee which is more likely at this point. And that is in the mix of dozens of items that are jockeying for position on the ballot. And Republican leaders are going to sit down I think in the next week or two and decide which ones are going to move forward. I think this one ranks high for a lot of people.

Ted Simons: Very good. Jim, thanks for joining us.

Jim Small: Thank you.

Jim Small:The Arizona Capitol Times;

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