A mid-week legislative update with Arizona Capitol Times reporter Jim Small.
Ted Simons: A bill aimed at prompting legal action to change the interpretation of automatic birthright citizenship fails to get out of the senate judiciary committee and house speaker Kirk Adams introduces changes to public employee retirement systems. Here with the latest from the capital is Jim Small A. reporter for "The Arizona Capitol Times" and a regular on "Horizon" mid week legislative update. Jim good to see you. Thanks for joining us. Let's get going now, let's start with the pension program. What speaker Adams is doing here, a variety of changes, correct?
Jim Small: Yeah. This would be a very dramatic overhaul of the way state pensions work. And it important to note while the pensions are managed for the state, this affects government workers at all levels. Counties, cities, everyone from folks who work down in city hall, to police and firefighters, to city street workers, to folks who work for the government, work for say the house and senate or the governor's office.
Ted Simons: Among the ideas, raising the age of retirement. That would be for new-hires only?
Jim Small: Correct. Pretty much all these changes are going to be prospective, going forward. Because the constitution doesn't allow you to change the benefits of people who are already retired, or who are already in the system. So it would be for people who are hired after the effective date of the law, which I think for some is 2012, others, it's a little bit farther down the line. But it would raise the retirement age, make it change the formula for when you're able to retire, which basically means people are paying into the system a little bit longer and drawing out less, because they're retiring at a later age.
Ted Simons: Cost of living adjustments, those things either -- do they go away completely?
Jim Small: Yes, this calls for those to be scrapped entirely. That's one issue I think you'll get -- they'll get a lot of blowback. Even if it were to go through and they would say no more cost of living adjustments, I've talked to a couple people who really feel that is an issue that could be litigated very quickly. You could have retirees who say, look, I worked for 25 years and was promised to get X and now I'm not getting cost of living, so they would take it to court.
Ted Simons: There is a lump sum payout, this is confusing, but if you work past retirement age you have the option of getting these lump sum payouts. Do I get that right? If so, why does that have to go away? What's going on?
Jim Small: The one you're referring to, it's for the public safety officers. It's for police and fire. And folks like that. And what it allows them to do, if they work 20 years they can basically defer their retirement and take a lump sum payment, but promise to work for another five years, and it was instituted as a way to keep some of the veteran firefighters and police officers working a little longer, to help improve public safety. So they weren't rotating them out at an age where maybe they're only 45 years old and they've got another few years, but they qualify for retirement. It is a little bit of an expensive proposition, and I think that's the point that speaker Adams is going after, that this costs a lot of money, and if we just raise the retirement age and say, you can't retire until you serve 25 years, you don't have the need for this extra five-year program.
Ted Simons: How underfunded are the state retirement systems right now? How serious an issue is this?
Jim Small: Well, certainly some of them are more underfunded than others. The one for elected officials, for state legislators, for state officials, city council members, is very much -- that's funded about 60% Of what it pays out. Others are a little -- in a little more healthy shape, the best is about 83%, which is the general state retirement system. Help for retirement systems can be between 100%, some down to 85%. But there's no doubt these are not taking in enough money -- they're paying out a lot more than they're making, some of that is because of the benefits that are being paid, other parts of it are because the economy crashed. So that did hurt some of the investments this money was in.
Ted Simons: So what kind of response now are we getting from public employee groups?
Jim Small: They're clearly not happy with this. These are things that in some cases they'd work hard to get. Certain benefits they worked hard for over the past 20 years, there's going to be a lot of resistance to this idea from the unions. I don't think that's a surprise to anybody. The bigger question is going to be, what kind of resistance is speaker Adams going to find in his own caucus, in the senate, among Republicans and even with the governor's office? This is a plan that he spearheading, and he put this together himself, and he said he's briefed other folks, but didn't gather their input beforehand, and bring them to the table to help craft this.
Ted Simons: Are there rumblings he could be tough sledding here?
Jim Small: I think it's only natural that there probably will be some divisions. There are a number much people who have been looking at the retirement issue in various formats who have their own ideas as to what they want to do with it. And so I think now all this issue - this stuff is all out on the table, so it's a matter of, OK, here's the plan, let's try to work on it see if we can come to some kind of an agreement.
Ted Simons: Speaking of tough sledding, a couple of birthright bills, senate judiciary committee, interesting goings on there, because a lot of folks thought the birthright question was going to come maybe not sail through, but certainly have a more welcoming audience. What happened there?
Jim Small: It was heard, on Monday afternoon, and a hearing testimony, lasted about three hours, and they ended up not voting on the bills because it was clear to those who were paying attention they weren't going to have the votes. It was six Republicans and two democrats, and there were two Republicans who were going to vote against it, which would have made a 4-4 vote and killed the bills right there. So instead of doing that, they went ahead and held them after they did all their testimony, and they recently just moved them out of the judiciary committee and into the appropriations committee, which is also has a high Republican advantage and is probably a little more of a friendly arena for those bills.
Ted Simons: We should mention both bills, one defines -- creates an Arizona citizen and the other requires Arizona to join a compact with other states regarding citizenship for those two birth certificates, and these sorts of things. The two Republicans that asked the most questions, is this the kind of thing that could come back -- was this an indication of courage on their part that could slap them there a little bit later on from the president?
Jim Small: Well, sure, I think any time you go against the president and against leadership on an issue, you run that risk. Certainly. Adam Griggs acknowledged that earlier this week, look, this is something that could hurt me politically, whether it's at the capitol or its at the ballot box, but I think it's important enough that I can't just sit by and let this happen. So that was why you saw him take the stand he did. And it will be interesting to see how it moves forward. Most people expect it will come out of the appropriations committee, but whether it is able to get enough votes to pass on the floor I think is a completely different kettle of fish.
Ted Simons: Last question, real quickly, a choice made now for the redistricting panel, Russell Pearce made his choice, Tucson Republican?
Jim Small: Tucson Republican Richard Stertz, who has been in the news in the past several days, a couple stories both here in Phoenix and in Tucson, about some tax lien issue he had in the past, and some unpaid taxes he currently has right now for some property in Tucson.
Ted Simons: And these are not so much that he had these problems, but he was asked about the problems on his application for the commission and he said there were no problems, and now we find out there are problems.
Jim Small: Right. This was stuff that was omitted from that form, which did ask a lot of probing questions, and asked for a lot of information, and it wasn't there. Obviously it was not an issue that was a big enough flaw for senator Pearce, he decided that Mr. Stertz had the best qualifications and would do the best on the committee.
Ted Simons: And real quickly, there was also some concern that he's very close with Jesse Kelly down there, GOP congressional candidate in the last election and question marks there as well.
Jim Small: Yeah. And he did have -- does have ties to Jesse Kelly, he works for a company that recently hired Jesse Kelly to work for them, and he also was a member of a group that funded some attack ads against Kelly's opponents in both the Republican primary and in the general election.
Ted Simons: All right. Jim,good stuff. Thanks for joining us.