Legislative Update

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An Arizona Capitol Times reporter will join us for a weekly update on news from the state legislature.

Ted Simons: Good evening and welcome To "Arizona Horizon." I'm Ted Simons. The governor yesterday held a press conference to unveil Her draft legislation for the expansion of the state's Medicaid program. Here now with our weekly legislative update is Jim Small of the "Arizona Capitol Times." Good to see you again. Any surprises on the press conference?

Jim Small: The one thing most people were looking for ways to see which lawmakers would be with the governor at this press conference. There were six republican lawmakers. Some from the Senate and some from the statehouse who were standing beside her and behind her and several of them spoke and said this is what we need to do with the state. This is the right thing for us to do. In a lot of ways that sets them apart from a lot of their colleagues. There is -- republicans seem to be divided into three groups. A handful openly supportive like these folks were. You've got several who are openly hostile to the idea, and you have a group in the middle, which in most people's estimations is the largest group in terms of what are they going to do. They want to see more information from the governor's office, access health care community and from the other side, too, critics, and try to figure out what is the best path forward.

Ted Simons: Former Senate president Steve pierce I believe was up there, Bob Worsley was up there as well. Who is Heather Carter? It sounds like she will be major player in all of this.

Jim Small: I think she is a second term republican from the cave creek area, northeast Phoenix, northeast part of the valley. She is, you know, primarily an educator. That is her background is education. She is the chair of the health committee in the house. This has been a big issue for her. She was one of the early supporters of this program, of this idea, this plan to expand access and to draw down the federal money. And she stepped up and she is going to be the one who is spear-heading this legislation, certainly in the house at least. Her committee will hold an informational hearing on what the governor's office is proposing. It will not be an actual bill that will move forward at this point. At some point it will. Right now, legislative informational hearing on the actual proposal that the governor is making.

Ted Simons: We don't know as yet if this is going to be a stand-alone bill or part of the budget, do we?

Jim Small: No, we don't. It will be tied to the budget in some way. A lot of assumptions made in the budget depend on the money that is tied up in this access program. Whether it is a bill that travels by itself or a bill that travels by itself at the same time as the budget or it is rolled into the budget, it is really just kind of a matter of semantics at that point. It is definitely going to be connected to the budget one way or another.

Ted Simons: Another argument, semantics notwithstanding, is whether or not this will need a two-thirds vote of the legislature. Talk us through this. I suppose they can go ahead and do a straight-up vote. If it passes, then someone could file some sort of suit saying no, no, you need two-thirds, correct?

Jim Small: Yes, they could. And that's, you know, quite possibly what will happen if that is the route they go. And all indications that the governor's office that they don't believe this needs two-thirds majority. Constitution, as a voter -- voter approved constitutional amendment, requiring two-thirds approval in the legislature for anything that raises taxes or revenues, except that it has a giant loophole in it that says you can let a state agency director raise fees as long as you don't tell him how much he needs to raise. You can suggest it to him but you can't -- if you put it in there specifically how much to raise, yes, you need two-thirds. If you believe it -- leave it open, this does not trip the idea you need a two-thirds majority to do anything.

Ted Simons: And opponents are saying yes when the fee is 10,000 here, 70 ,000 there, no when we're talking hundreds of 100's of millions here and 100's of millions there.

Jim Small: Except that the constitution doesn't say that. The constitution says as long as the amount is not specified, whether it is a dollar or $ 100 million, it doesn't matter.

Ted Simons: That will be quite the tug of war down there. Before you go, we talked about this so much when it was higher in the headlines. Mortgage settlement transfer. Transferring money that some say was designed to help folks having problems in the housing industry. Arizona got money, and yet a lot of that money was transferred other to the general fund, suit was filed. And we had a ruling on that, didn't we?

Jim Small: Yeah, we did. The ruling was essentially that the state was in the right to transfer that suit -- transfer that money. It was about half of the money. About $ 50 million that got transferred into the general fund to help bridge the budget deficit, and the court said that that was an acceptable use of that money because the state was harmed in the mortgage crisis, I think was the argument that the attorney general's office made.

Ted Simons: The other argument was, this money should have been put into a trust and doled out to individual homeowners or groups helping individual homeowners because they were the ones targeted for this -- the judge didn't buy that.

Jim Small: Some of the money did go into programs like that. But for this amount of money, judge said that the state -- it was given to the state and the state had the authority to decide how best to use it and this was the way they chose.

Ted Simons: Something with vindication for attorney general Tom Horne.

Jim Small: It was. He was the one taking the most flak over the issue, as well in some ways vindication for the legislature which included this in the budget and the governor as well. This was a component of the budget and a key component. They would have had to find $50 million elsewhere had this not been allowed.

Ted Simons: Is this the kind of thing that could likely go to the supreme court or is it pretty much a ball game here?

Jim Small: We will have to see what the plaintiffs want to do, how far they want to challenge it and what sort of grounds they feel they have for an appeal.

Ted Simons: Back quickly to the Medicaid fight. I call it fight, a battle. Will there be a fight, a battle at the legislature over this --

Jim Small: I think we -- we can all remember back to 2009 when the governor was pushing for a sales tax increase for $1 billion to help balance the budget and the log jam that ensued when republican legislators were not going to go along with that. I can see us going down that path if republican legislators will not go along with the governor. She has nothing but time on her hands and she has shown in the past that she is willing to be just as stubborn as they are and she will wait them out.

Ted Simons: The whole idea of a 100 day session goes flying out the window.

Jim Small: Talk to the Senate president today and he had been confident that he would be having a budget by the middle of the month, maybe the end of the month. No so much anymore. Less optimistic about that and even raising the possibility that we could be here well into the summer.

Ted Simons: It will be interesting to see how both sides present their issues and their particular sides of the issue. Good to have you here.

Jim Small: Thank you.

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