Journalists’ Roundtable

Aug. 2, 2013

Transcript:

Steve Goldstein: Good evening and welcome to "Arizona Horizon's" journalists' round table. The Arizona corporation commission is considering whether or not to shake up the monopolies that public utilities have on producing and delivering electricity and bring competition to the state. To some, that sounds attractive. To others, a little bit dangerous.

Howard Fischer: We've been down this road before. I think we've sat here when Michael grant was still hosting the show years ago and doing this. The issue comes down to the question of is competition good and in general, I think people believe it is. The problem becomes you have the structure out there, you have power plants that are built, you have transmission lines that are built, and you have a distribution system that only belongs to one person, unless you want six or seven lines going to your house. So the question becomes if you were to deregulate, which basically means splitting up generation, one charge for that, one charge for the transmission, one charge for the distribution, would you do better? There's some experience in some states that suggests that competition is good but it seems to be for the folks who can negotiate their own rates. The larger clients tend to do fairly well on that. The experiences we've seen in California, however, with price manipulation has suggested, otherwise that folks can then, you know, jerry rig the system. That becomes a real problem.

Jeremy Duda: Like you've mentioned, we're seeing some of the big power uses or big box stores, they're coming out in support of this and a lot of folks already lining up against, AARP is going against it. A lot of folks in rural areas, including a lot of conservatives, a lot of people are really lining up against this and they're worried about the reliability of that system and what it's going to do for consumers.

Mary Jo Pitzl: I haven't followed this very closely but does this mean that myself as consumer, could I choose between companies?

Howard Fischer: Theoretically you could choose between who generates your electrons. You're still going to have APS delivering and you're going to have to pay them a delivery field. Who knows what that delivery fee will be but it will be probably better if you happen to get aps electrons. It also comes to what Jeremy was talking about where -- you only have situations -- if you're a mining operation, you're already negotiating lower rates and for electrons. Perhaps one of these big independent power producers. The problem becomes you and I with our two, maybe $300 a month summer bills, we're not going to have anybody fighting for our business.

Jeremy Duda: And the corporation commission has already taken some steps here but what I'm wondering is if we're going to see a ballot measure next year because the this is what helped kill this the last time around in the 's and stretched into the 90s is they were going continue regulating the regulating utility, the new ones they were going to let the price float on the open market and the court system said you can't do that, Arizona Constitution says you have to regulate these prices, you can't allow this to float and so some of the advocates like the folks with the Goldwater institute are suggesting we might need to change the Constitution.

Howard Fischer: You definitely need to change the Constitution because you get a rate of return. To get that, you have to determine what is the value of the property. If you have deregulation, all that gets put on its head.

Steve Goldstein: I'm -- let's start it out with campaign contribution limits. They want to make some changes. Lewis Hoffman has filed another suit. Where do we stand?

Mary Jo Pitzl: Here we are in lawsuit territory again. This is basically a replay of a filing that was made a couple of weeks ago to the state Supreme Court. At issue is an elections bill that was passed that significantly raised the contribution limits to people can donate to candidates, that the candidates can receive and the citizens clean elections commission along with the Arizona advocacy network, a couple of lawmakers, think that these limits are unconstitutional because the limits of the higher cap violate the voter protection act. The state supreme court didn't want to take it up, invited them to go to the lower court.

Steve Goldstein: Do we know why the supreme court didn't want to take this?

Howard Fischer: Not really but actually they don't have to accept jurisdiction on anything. They did on another case when we talked about the selection of judges but they would rather have the case developed down below. I mean, there's a whole bunch of interesting issues here in terms of the law itself does not amend the clean actions act, which is the thing that's voter protected. The only thing the clean lakes act said whatever limits are for privately financed candidates, we're going to lower it by 20%. The argument of Lewis Hoffman is the fact you've affected the balance of people put into place and you've affected the clean elections act, now, I think that they would rather have a trial judge say let's hear evidence, let's take a look at what this really means and it will eventually wind up before the Supreme Court, we know that.

Mary Jo Pitzl: We should note that the plaintiffs are also asking for an injunction. They want this put on hold because we do have -- we are in campaign mode, believe it or not, and actually we're a year away from voting in the 2014 primary and they want to make sure that the rules are clear as we go into 2014.

Steve Goldstein: And September 13th, a very important day.

Jeremy Duda: This goes into effect in a little under a month and a half and while most of these candidates probably aren't going to be raise money in $4,000 increments, some people are going to start taking advantage of this immediately and once you start letting people collect that money, a court comes back a couple of months down the road and says it turns out it is unconstitutional, I'm not really sure how you put the cork back in the bottle.

Howard Fischer: Do you force them to give it back? Then you're in the situation well my opponent got $4,000 from a single source, now, I should be able to so the injunction goes the other way.

Steve Goldstein: The U.S. Supreme Court took the teeth out of clean elections, matching funds, many people are worried about of the future of clean elections. How much does the future of clean elections depend on the result of this lawsuit?

Mary Jo Pitzl: I think quite a bit because clean elections purports to try to even the financial playing field and matching funds has been out of the door for a cycle or two. If you allow a much higher limit for private contributions and it's only useful in those basically in those district races that are so heavily dominated by one party that it doesn't matter. You're not going to have to spend a lot of money or in a lower-level statewide race that it's very hard to raise money to run for state mine inspector.

Jeremy Duda: We've already seen clean elections participation going down for 3 years now since the injunction against the matching funds and what's funny is you look at the plaintiff, one of them is a state rep from Tucson, she says well this affects me because I want to run clean but if these contribution limits are higher that makes it harder but she also ran -- she didn't run clean in her election last year. She said I wanted to but I thought I was going to be outspent so I decided to run traditional which tells people aren't viewing this as a viable option to begin with.

Steve Goldstein: If, in fact, clean elections goes away for all intents and purposes, what's going to change? It depends on candidates, on how districts are done. Are we going to see more advantage for one party or another? A different kind of candidate?

Howard Fischer: The speculation is you may see less influence by the Tea Party and the belief is that the quote/unquote moderate to conservative business Republicans are the ones who can get the money they need. The Tea Party folks have gone many of them the public funding route and been able to get a couple of hundred -- $5 donations which then hands them a check and if public financing goes away, then well the Republicans will have to go back through the traditional funding sources which can have the businesses.

Steve Goldstein: About a month or so ago, the three of you got to spend a lot of time in a Medicaid expansion session. How do we know momentum is going so far?

Jeremy Duda: Not too much. These things don't really like to tip their hand on how many signatures they've gotten, no matter whether they're doing well or poorly. There's a lot of skepticism out there and there has been since day one because this group, they have no money, they have no paid signature gatherers, they're relying on this army of volunteers and that's a really difficult way to go. You have to get 86,405 valid signatures by September 13th. We're past the halfway mark here. In reality they probably need about 120,000 to get rid of all the invalid ones and in the meantime, the opposition, while they're casting doubt on their referendum, they're spending money wildly. For a while they had people circulating a fake petition to kind of confuse people, sign here to say you support Medicaid, they've got their lawyers writing letters undermining the effort, talking about all the legal flaws and this won't get on the ballot. They've got a tough road to climb for the last five weeks.

Howard Fischer: And money matters on this kind of stuff. I mean, I'll give you the prime example. There's another referendum out there over some election law changes dealing with who can turn in early ballots, how many signatures the libertarians need, they've got already $100,000 to gather the circulation. That makes all the difference. They're more likely to make the ballot than the -- what is the line? The rag tag group of survivors. To a certain extent, while there are a lot of conservatives who believe very well you still need the energy and the money to go out and gather signatures.

Mary Jo Pitzl: And if that effort falls flat, we'll see in September, it's not the end of the story. Everybody is expecting them, a challenge on whether Medicaid expansion was properly passed by the legislature because there's a school of thought that this requires, it's a tax increase and it requires a three quarters vote of the legislature which it did not have.

Steve Goldstein: So does a referendum effort like this make sense from the standpoint that people have perceptions of Ron Gould, very conservative, deemed by some a loudmouth. Does this get in the way of anything like that?

Jeremy Duda: Probably not, not as much as not having any money and having a very well-funded opponent. If they do get the signatures somehow, a group is taking it to court. The letters are partly meant to dissuade people from signing it in the first place, just to show people that it's an amateur operation. They're going to take these people to court and try to keep them off the ballot if they actually get the signatures.

Steve Goldstein: Another initiative, are we going to be ending up driving on toll roads in Maricopa County?

Howard Fischer: This has been a fight that's been around for years. Folks in west never liked turn pikes and such but there's been experiments in some other cities, you go to San Diego, Denver and there are toll lanes that have been put in. Some of these have been put in independently, they're constructed for that purpose. The question here is do we take the hov lanes we have and put a toll on them as part of a plan to add capacity? The argument is wait a second, we're putting a toll on driving in a lane that we've already paid for. So tell me exactly how that's fair. This isn't new construction. This isn't paying off some bond. This is raising money to expand capacity and there's kind of a gut feeling that unless you're either in a high-capacity vehicle or like my good friend here happen to drive a Prius and get to drive in the lane there, that why should we be paying for that?

Mary Jo Pitzl: This is a referendum. It was filed earlier this week, they've got to gather a bunch of signatures to make a preemptive move against toll roads and one of the biggest interests in this the trucking association, they're not going to fund this. So we'll see if it goes anywhere. It's more an expression of frustration and distaste for toll roads.

Steve Goldstein: Let's look back at history a little bit when governor Napolitano was in office, going to have a great transportation plan, gas tax will not go up, we had a bus strike in the southeast valley, is there talk that there will be some sort of big transportation thing coming down the pike?

Mary Jo Pitzl: I think that's going to be Prop 204 Money flowing for education, that fell flat. Part of that effort included money for infrastructure, I.E. roads and transit. I think we're going to see a big push from that infrastructure sector saying we don't have enough money to do what we need to do.

Howard Fischer: That's the key. The gas tax has been at 18 cents. There was a point where they said let's make it a percentage of the cost of gas and people said oh, my god you can't do that. Well, that was when gas was 75 cents a gallon. I'm showing my age here but the fact is that flat 18 cents, a flat 18 and change for federal tax so the highway fund there hasn't generated it. The proposition 400 in Maricopa county dependent on sales tax, we know what's happened to sales tax revenues and they're somewhere like 40% short of where they should be in funding.

Mary Jo Pitzl: I think this happens, it will be something that will be brought before the voters and it does just create the question, they're not going to have the money to take care of their needs. There's things we're not doing enough for education including apparently, the superintendent. Now, increasingly we're going to be hearing this from the infrastructure folks and we've already heard CPS saying we don't have enough money for child welfare.

Jeremy Duda: We probably are going to see some kind of toll roads. Remember that the department of transportation, the Maricopa association of governors, they've been working on this for a few years, the legislature passed a bill in 2009 that authorized them to start looking at this. They've now, they've been working on this study for two years now going, that's one of the things they're considering, they're not sure if it will be new roads and new lanes or if they can convert existing roads.

Howard Fischer: The problem becomes that if you're going to do a toll road, there's a sense that there ought to be an alternative to it. The South Mountain Freeway isn't being considered a toll road other than some logistical issues. What does that leave? The proposed I-11 on the way to Las Vegas or something? There aren't a lot of opportunities for big toll roads here, unless you want to construct entirely new elevated lanes on I-17 but the structural cost of that for an express lane there is just phenomenal.

Steve Goldstein: Many people are giving low grades to Arizona's transportation system. The new grades came out for schools as far as test scores but I want to talk a little bit more about what the superintendent had to say. Very conservative former state lawmaker and he and the house speaker.

Howard Fischer: The former state lawmaker who for years said money doesn't matter to schools, we just do more with less. What was fascinating is he talked about the fact there's a slight increase in school scores. He said that's pretty good given the money we've gotten and the financial problems which led to the question, of course, of so why aren't you at the legislature? And he has been conspicuously absent. We said we should back fill the money we're giving to them and he took a slap at corporate giveaways, special interest legislation, special incentives calling them corrupt. Well, Mr. Tobin was less than amused. He said if he wants to set policy, let him come back to the legislature and even the governor's office said the way to get your revenues is by building jobs. But it suggests that all of a sudden John who's been hiding is suddenly interested in raising his profile.

Mary Jo Pitzl: Right and it also suggests that a couple of things, things look differently when you move into the department of education building. Also, there is an election coming up next year and he is going to stand for re-election and wants to be seen as a champion for schools. To have that voice, we did not hear that during the big campaign, do we keep the penny tax going for education? He reduced to take a stand, the highest elected education official in the state, he figured he couldn't win either way. Is this about winning or is this about education?

Steve Goldstein: Fred Duvall is considered by many to be the frontrunner to the democratic gubernatorial nomination. Apparently Republicans don't find him to be especially interesting?

Jeremy Duda: Apparently not. Well, first they kind of crowned him as the democratic nominee about a week ago, even though he may be facing a primary challenge from house minority leader chad Campbell but they sent out an e-mail dubbing him the most uninteresting man in the world. This is based on an informal focus group. He worked for the federal government, he's a federal bureaucrat, he actually does have a pretty extensive resume. He used this to his advantage and actually ended up raising almost $12,000 off of this and they sent a thank-you card along with a case of dos equis.

Howard Fischer: They had some fun. Well, not exactly a ball of fire, sorry fred, but it will develop. You know, he'll get into it. He's going to have to get into it if he wants to be seen out there and raise his name I.D.

Steve Goldstein: Briefly, Chad Campbell, is he still testing the waters?

Mary Jo Pitzl: Increasingly we're not hearing much from Mr. Campbell who keeps saying he'll be making a decision so I think if you read between the lines, I mean, it's really hard to predict but I think if you were going to have a campaign going, you would probably be jumping in real, real soon.

Jeremy Duda: Republicans are complaining about what the Republican party said why are you giving this guy name I.D. and media attention almost a year and a half before the race? There's no need for that.

Howard Fischer: And the other half of it, of course, is well the Republicans do have some interesting candidates. You've got Al Melvin, who was into basically getting rid of federal laws. You've got Andy Thomas who was disbarred. So interesting better?

Mary Jo Pitzl: Do they fit in an ad?

Howard Fischer: I like it.

Steve Goldstein: Very interesting discussion. Thank you very much for watching "Arizona Horizon" tonight. Have a great weekend.