Join us for another edition of the Journalists’ Roundtable, as local reporters recap the big news of the week.
Steve Goldstein: Coming up next on the Journalists' Roundtable, apple opening a Production plant in Mesa was one of many big stories this week. And state lawmakers could be giving up, and the results for Phoenix city council elections, we'll discuss what they mean for Phoenix, the Journalists' Roundtable is next on "Arizona Horizon."
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Steve Goldstein: Good evening and welcome to the Journalists' Roundtable. I'm Steve Goldstein in for Ted Simons. Joining me tonight is Jim Small of the Arizona Capitol Times. Mike Sunnucks of the Phoenix business journal, and Luige Del Puerto, of the Arizona Capitol Times. Apple announced Monday it was opening up a domestic manufacturing plant in Mesa in the old first solar building, Mike, what does this mean?
Mike Sunnucks: It's a big deal for economic development, for jobs out there, for our technology cache, and for that development, the east mark proving ground development, which had a lot of problems, first solar was going to build a big plant out there, and that never happened. They got some help from the city of Mesa, the fast track infrastructure, so it's ready to go, and that's what appealed to apple, which has the turnkey operation. Apple had looked here in 2012, for a back office operations center, and that end up going to Austin, Texas where they got big tax breaks but they came back and they had looked at that building, the first building, last time, and they are coming back fork for, for a glass component manufacturing there with a partner from New Hampshire. It's a big win for, for Mesa, and a big win for the commerce authority and for the Governor.
Jim Small: And how much involvement do they have, and how are they seen at the capitol?
Jim Small: Well, you know, that's one of the reasons it was created. They could partner with the state chamber of commerce or any of the regional business groups, and that they could be the, sort of the unifying factor, kind of uniting all of them, and working towards getting projects like this in there, you know, as to how much work they did in bringing it in, this is one of those things that, it's a victory so everyone claims credit. From the Governor down to the Mayor Mesa, to every, every organization. And I am sure that they had a hand in it, and were all in communication with the apple people, without a doubt. But, I think that at the end of the day it comes down to, a lot of it is the environment and the facilities and the infrastructure, like what Mike was mentioning, in terms of what makes the offer attractive, and makes, makes the location attractive for apple.
Steve Goldstein: And the Governor does like to take credit for some of these, and when we look at it, is this a good thing for her, from a political standpoint? She's not running again, but there was the jobs bill, seen as wait a second, we're giving away too much. And how is this seen over all?
Luige del Puerto: I mean, this is a big win for the Governor. This is one of the things that she, was always aiming for, to attract big business to Arizona, especially the companies like apple, and, and that's the main reason why they created the Arizona commerce authority, which is to attract. That's, essentially, what this, this entity is designed for. To, you know, to make a pitch, to big business and get them to move here, and that's why they have this. To make sure that, you know, if need be, they can offer something to make sure that they come to Arizona and not to Texas or to Colorado, or to California.
Jim Small: Well, and there is a thought that says, really, as a state or as an economic development engine you want to focus on the bigger companies that will bring lots of workers, and especially, higher wage workers because those people will come here so we get 700 new jobs from apple, and a lot of those people will be imported from somewhere else, so those people are going to come in here, and they are going to spend their money in the community, and there will be right back a ripple effect, kind of a multiplier where because those people move here, you will have to have more grocery stores and gas station and is barbershops and dry cleaners and everything else that goes into the small business community, and with the idea being that if you are able to attract large fish like this, or a large employer, that you really have, have a benefit across the entire system.
Steve Goldstein: Are we at the point where incentives still matter? Not just to attract the companies but is there a backlash against incentives?
Mike Sunnucks: It might go against the usual rule. There is a lot of backlash here from conservatives on corporate welfare and subsidies, and you see groups like the Goldwater Institute challenges these things for the hockey teams and the developments. Apple will get money, a $25 million fund at the disposal of the Government and the ACA. They're going to get some property and energy/workforce tax breaks, and apple gets big tax breaks. Look at Nevada, Oregon, North Carolina, Texas, and they get big tax breaks there. You are not going to say no. You want them to come here. So, I don't think that you will see as much opposition. They may use a lot of things existing, so they may only have to come to the legislature for a few things, and if they go for a lower property tax rate they go through the Federal Government and make it into a foreign trade zone, and that's what Intel gets, 5%, instead of 19% on the property tax, and it's a big savings, and I don't think you will see that here, and I think that the problem is the secrecy, the disclosure agreements, Apple is very secretive, so you will see Goldwater, the watchdog groups and the media dig out the information on this.
Steve Goldstein: And how is this going to end up different, if it will, from Google's expansion? Big splash, five, six years ago they were coming and then left.
Jim Small: Well, I think that this one is a bit different in the fact it will be manufacturing. They have this facility that, you know, as Mike mentioned, has been built but unused, and Mesa wants to get someone in there, and this whole industrial park there is really a big deal for the city of Mesa, and kind of transforming that area and building it into a Hi-tech hub, and this is going to go a long way towards doing that.
Steve Goldstein: And Luige Del Puerto wrote the announcement was made that Arizona's employment, not bouncing back the way many of us had expected after the recession. And is this a good sign? Can it be construed that way?
Luige del Puerto: It is. If you are adding 700 permanent jobs in addition to the 1,300 jobs that would be created, just to make sure that this facility is supped up, that's a very big debt on our market.
Steve Goldstein: Mayor Scot Smith has been everywhere, as many think he will run for Governor. Is this big coup for Mesa but for Scot Smith, as well? Does this help him in the Republican primary?
Mike Sunnucks: I think it helps him politically. He has not decided whether he will run. They are not sure which side he'll come down on but I think has a lot of outreach to the business community to, moderate to moderately conservative, the Republicans, the folks in the east valley, and grabbing something like Apple makes a good campaign commercial.
Steve Goldstein: Jim, what are your thoughts?
Jim Small: The idea that if he's going to go on the campaign trail and use, this you could say, I helped to bring jobs, helped to create jobs. Through his office as Mayor and through the things that the city was able to do, and not just jobs, not just low wage jobs, we're talking, what's going to be a highly skilled job, and they will pay really well.
Steve Goldstein: I'm speculating a bit here but what if it turns out that more incentives than we initially thought were involved, is Scot Smith and the primary going to be seeing, seen as someone who is picking winners and losers which of course conservatives hate?
Luige del Puerto: There is always the possibility that, that every time that you attract a big company, but you get them here by offering the incentives, and the conservative wing would say, that's a corporate affair but in this case, what his main pitch would be if runs for Governor would be look what I did to the city of Mesa in general. Apple, just one of those things that I have done, but I have transformed this city, it's a great hub, a great place to live and there are lots of jobs here. I can do that, so he can bring that pitch, not just to the party base but also to the general election.
Mike Sunnucks: And he's been behind apple, and in the cub's ballpark, those are two of the popular brands with people, so it kind of gets a pass from a lot of folks, just based on that. And he has a business background; he's a business executive before he ran. He comes across as a reasonable conservative. There is a long way to go, a fractured primary, and a lot of people in there, so even a few points taken off from the subsidy fight could hurt him, but I think that he's a very formidable candidate.
Steve Goldstein: We don't know if Smith is running but Ken Bennett is, at least as of this next week. What about his candidacy? Some were trying to get him to run for something else, Corporation Commission. How good of a candidate and strong of a candidate and where is his foundation support?
Jim Small: The benefits, for Bennett right now, I think you could make an argument he has the best name I.D., amongst the voting public than anyone else in the Republican field. He's been elected to Secretary of State, and I know his camp is fond of pointing out the fact that he has more votes than any other election except for John McCain, and when he ran for election in 2010. So they kind boast about that, and this shows that people like him, and they know who he is, and they are familiar with him. So, I think that's where he starts off. Obviously, he's running clean election, which means his funds will be limited, so the effect of that is going to be really dependent on what the courts do with the new law, and over the campaign contribution limits, and I know that Doug Ducey is really hoping the new law goes into effect and you can raise a lot more money. And then I think that the second factor is whether any outside money, materializes to help Bennett.
Steve Goldstein: Let's talk about the voting issues and rights issues, which Ken Bennett will be attached to. How does that affect him in the Republican primary? Good?
Luige del Puerto: Well, in the Republican primary, that's probably good thing for him. Any time that you can portray yourself as somebody fighting voter fraud, making sure the election is quote/unquote clean, and there are no shenanigans there and that kind of- those actions appeal to the conservative base. And we know that, that is the group of people that vote in the primary.
Steve Goldstein: Mike, Ken Bennett, and we have got Doug Ducey, the treasurer. Andrew Thomas is in, Al Melvin is in, whatever effect that might have, and Scot Smith. So, let's handicap. It's early but let's handicap.
Mike Sunnucks: The folks in, Ducey and Bennett are probably the odds on favorite, if you put Smith in there, that's the top three. The advantage of Bennett, he's a Veteran. He's been around, run for office. All his dirty laundry is kind of out there. The voting rights stuff could help him in the Primary, and Ducey and Smith are unknown quantities to a lot of people. And there could be stuff that comes out about them, and pitfalls where Bennett has been through this. A lot of people look at him and he's kind of the said a second place guy, and that may benefit him if one of the other guys implodes or doesn't do well, Bennett could be the default choice to a lot of folks, so I think those three, Smith, Bennett and Ducey are top.
Steve Goldstein: He has run a statewide office, Ducey has as well. But Bennett, he's been the state Senate President, he's also a guy from Prescott. Is there an advantage for Smith or Ducey, fact that they are Maricopa county folks?
Mike Sunnucks: I think that's an advantage. Ducey has lined up some of the business folks that jumped on his bandwagon. He's going to be tough to beat, he'll have more money if, Smith gets in there, what does that do? Split up Ducey's coalition? Bennett could benefit, so yeah, Bennett has a challenge waterfront rural component.
Jim Small: One of the wildcards in this is Christine Jones, she goes willing to spend a lot of money, solid seven figures out of her pocket to run, to play in this race, and if that's true, and depending on how that works out, someone with money, even as an outsider, especially as an outsider, someone who is well funded, can really make a dent in the race, and whether she wins or not, she may play spoiler at the end of the day, if she has got a few million dollars to toss around, and you can go after and target the top of the heap, like Mike said, whoever in second place might be the person who takes advantage of that.
Mike Sunnucks: We still have such a long way to go. We had had Buzz Mills last time, ready to spend all this money, and does anyone remember Buzz Mills now and Jan signed sb-1070 and it was over. So it's a long way to go.
Luige del Puerto: And that's true, and certainly, she may have a steep learning curve trying to learn the things that she needs to say, for example, present herself as a serious candidate, but Arizona is a state that has a history of voting for women in top leadership positions, so, even if you have six, seven, male candidates, and you have lady who has money, who is willing to spend a lot of money from her own pocket to get her name I.D. up, and she could be a very, a formidable candidate.
Mike Sunnucks: I think her go daddy background, and being in that commercial, really hurts her in the primaries. I think that, you know, that's going to have -- with women voters, especially. Because of those racy ads, and, and the Republican primary voters, that women are conservative, and I think that's going to be tough thing for her, to overcome.
Steve Goldstein: So we're going to weigh business background against racy ads, which wins out?
Jim Small: It depends on who has the money to make their case better, if she spends more money, effectively on business background, that wins but, if Doug or Bennett or Smith or whoever spends more money, does a better job communicating, that's going to win.
Mike Sunnucks: And I think you are going to see a lot of people go after Ducey, just like Andre did, talking about the business background, franchise business, and I think people will look at Ducey as the one to go after.
Luige del Puerto: And that's why being in second place might not be a bad place for anybody. As you get the number one guy, you know, the front-runner, everybody is going to be gunning for that person. And so, if you are second in place, and that's a pretty good spot.
Steve Goldstein: People were trying to get at least one person, particularly Ken Bennett to run for something else, and Hugh decided not to run for Governor in favor of treasurer. Now we're hearing Michelle Reagan, don't run for Secretary of State Michelle, but for something else. Have we seen anything like this before?
Jim Small: Well, you know, I think that there is always an attempt to clear the field and make things easier for favorite candidates, and I think that's what's going on here. I think that there is a slate of candidates, you know, there is some Republican operatives working hard to try to grease things a bit for their favorite candidates, and that's what we're seeing here, it's why Holman dropped down to treasurer and not the A.G. That was big part it. It's part of the whole effort, without a doubt.
Luige del Puerto: What's interesting to watch, is that everybody who has gone for statewide office has said, most of the time, go and run for the Corporation Commission. Seems like if you are a Republican, or a Democrat, and you are running for statewide office, somebody is going to come do you and say, hey, why do, don't look at the Corp. Comp. That's what's interesting.
Mike Sunnucks: We should just expand it. We were talking about that before, and every legislature could run for that at some point. It's a default position, and there is a lot of stuff to do with state pension funds for public figures, and why people run that, and so that's an enticing thing, and you get to sell the solar policy.
Luige del Puerto: It is an underreported beat, there is not a lot of focus, and before this year on the Corporation Commission, but it is a huge agency, and it has lots of power and it's constitutionally mandated to set the rates. That affects everybody.
Steve Goldstein: And the Justice of the peace, I thought that was the default commission. Let's talk about the Corporation Commission. You wrote about Alec and how APS was involved. First of all Luige, can you remind people what that is and where APS is involved?
Luige del Puerto: The American legislation Exchange Council is a conservative organization that crafts modern legislation. It has the conferences and invites lawmakers from all the states. They come in and they have this subcommittee that focuses on topics, and they craft legislation, and those legislators can go back to the states and introduce their proposals. A number of Alec's many model legislation has become law in Arizona. And last year, and the weeks following the controversy, over the fatal shooting of Martin in Florida, there was a lot of criticism and scrutiny by liberal organizations of Alec. As a result, several companies decided that they were going to pull out of their organization, and one of those that decided to add a membership is the Arizona peptic service. So they said that in April, they look at their priorities, and they look at how much they are spending on the organizations, and they decided they were not getting a fair value for the money they are putting into Alec, so they decided to end their membership. In November, we found out this week that in fact, they had rejoined the conservative organization.
Steve Goldstein: Ok. And aps, and a lot of fights, and a lot of ads, and a lot of money related to solar, related to metering. How does this make APS look?
Mike Sunnucks: They are in bed with the very conservative organization. All these anti-regulatory pro-gun, very conservative bills that we have seen at the legislature, a lot of them come from Alec, them and aps are teaming on this, and again, from the solar net metering thing, the solar folks are outgunned on this. Money-wise, and politically power-wise, APS has so much power with the chambers and the business groups. Now they have, they are picking up with a right wing policy group which has a lot of friends on the commission. They go to the conferences, which happen to be in nice places, and craft these bills, and take them back to red states like Texas and Arizona, and try to pass them. The solar folks are fighting this really uphill battle.
Steve Goldstein: What about APS? They are involved in all these things; it's a legendary Arizona company? Does this make them look bad or are they appealing with Alec? Does that help them in the long run in terms of legislative support, etc.?
Jim Small: Well, clearly they believe that it's going to help them. And that's the explanation that they told us yesterday was this is something that, that helps us, we need to build relationships with these people, and they have public policy goals that we can be involved in and help to shape and things that are going to be beneficial for us, so that's why we are involved. I think that the bigger problem is, it's a P.R. issue because they say we will leave Alec and then seven months later they join up with Alec again for reasons that seem to fly in the face of what they said six months earlier. So, I think that's the bigger issue. It's a bump in the road, and not going to be something that brings down APS.
Mike Sunnucks: It helps them at the legislature. It's a big power play at the legislature, and these conservative groups like Alec and other folks posing these solar subsidies that they call them. Teaming with APS is good for them. Publicly with the general public, it does not help them. Down the road, what this does to our image as a solar state, we have tried to craft ourselves as this solar state and it may hurt us, but certainly at the State Capitol it helps them.
Steve Goldstein: And Russell Pearce some involvement with Russell in terms of writing an anti-immigration related bills. It doesn't look like a lot of money was raised to build this border fence. Where do we stand on that?
Jim Small: So 2011, the state pass legislation to allow the collection of private funds to build a border fence. It was touted as raising between $50 million and $250 million that they thought they could get people to chip in on, given the idea that the Federal government has authorized the building of the fence that has somehow not been able to find the money to actually build that fence. So the state says fine, we'll do it ourselves and take it on ourselves and do it. So they have raised $265,000 in the two years since, which certainly is no small chunk money. But, when it cost $1.5 to $3 million to build a border fence, do the math and realize they cannot build anything. I think that realization is setting in with the committee members and the people who spearheaded this. So now they are in a position where they have to decide what do we do with this money and how are we able to claim some kind of a victory, and not hang our heads in defeat.
Mike Sunnucks: You have seen the immigration bills that have been just Hyperbole. The possess, the border core that they wanted to have, and this is one of those things it, made for good debated, and got the issue out there, and for the folks on the far right, it highlighted the Federal Government is not building these things. But they are not going to spend the money to do this. And there are other things that have impact things, the things the sheriff has done, and sb-1070 things that would have affected people. But a lot of this was rhetoric.
Jim Small: And so what they need to do or plan to do, this past week when they had a meeting, was to meet behind closed doors and talk about it and get advice from their attorneys as to what they could do with the money. They had to call off that because they did not give public notice of a closed door meeting, so they are going to come back and do that. But, it will be interesting to see what they come out of that meeting with because if you look at the statute, it's clear that this money has to go for a secure border fence and can only go for a security border fence. So it calls into question whether the proposals that they are talking about, such as giving the money to the border sheriffs and letting them use it to help interdict people. Whether that's legal without the legislature coming back and basically, giving them permission.
Steve Goldstein: In the macro sense what does this say about where illegal immigration is?
Luige del Puerto: The fact of the matter is that border security and illegal immigration, these are topics that remain to be very important in Arizona. Polling after polling after polling saying, well jobs are number one, and then border security or some other issue. But there is border security and illegal immigration, and those are two things that are always on top of the voters' minds. That's why you still see this kind focus on even projects like this one which I think, from the very get-go, when you need hundreds of millions of dollars to build a real fence, that's tough to do.
Mike Sunnucks: I think for the most part, both nationally and here, it's easier for the politicians and elect officials to talk about immigration to talk about border screening, than to actually do things. You are seeing the clock run out on immigration reform and they may still get it but a lot of people think the odds are slim. It's much easier to talk about these things than to actually spend the money and to do these things sometimes.
Steve Goldstein: Jim, money was spent on city elections and turnout was really awful, and even for the Phoenix city council, and does that mean we're going to hear anything at the legislature again, potentially in the next session about saying, we've got to have these, it has to be the same, we cannot have these off-year city election?
Jim Small: Well, they cannot. They tried and Phoenix and Tucson sued and had they won in court. The court said, they have the city charter and are given authority by the state constitution to decide things of local importance. Elections are things of local importance. So that battle has been really won, and been fought, and then won initially, and now lost by the legislature and the Goldwater institute. So where they go from here is- obviously that case is still on appeal. The final chapter hasn't been written yet, obviously. But, where they go from here in terms of increasing voter turnout, I'm not really sure. It's tough. And plus, when you look at the fact that the districts, the district is where we have the City of Phoenix elections, that were competitive elections, and those are the lowest turnout districts from the city anyway. They comprise the parts of the state that have among the lowest turnout anywhere.
Steve Goldstein: Final thoughts? District 8 has been represented by an African-American for a long time now, but that won't be the case. Do you see that as an issue? You covered Leah Landrum losing her position. African-American politicians?
Luige del Puerto: I think that's an issue. Whether that's the focus, that remains to be seen. But the fact of the matter is that, basically, two African-American leaders, who have been ejected from their positions, and two weeks ago, was ousted by the caucus and now we have another African-American is gunning for a seat in the city council, and not getting it. That's a big loss to the African-American community.
Steve Goldstein: And a few seconds.
Mike Sunnucks: Well, the African-American community is dispersed now. The districts that won, Laura Pastor won and the majority won, are majorly Hispanic districts. You are seeing Hispanics expand their power within the Democratic Party so we don't have a concentration of African-Americans like we used to. They are spread and it disperses the power.
Steve Goldstein: Thanks for a great discussion. Appreciate it.
Steve Goldstein: Monday on a special Veteran's day "Arizona Horizon" we'll hear the stories of three Veterans recently honored at the 11th annual heroes Patriotic luncheon and author Kyle Longely will discuss his book about the Morenci marines, and Tuesday, hear from both sides on a plan to reduce emissions at the Navajo generating station, and Wednesday board of regents President Eileen Klein, and Thursday, an update from the organizations helping people sign up found health insurance, and Friday, another edition of the Journalists' Roundtable. That's it for now, and I am Steve Goldstein. Ted will be back on Monday. Thanks for watching. Have a great weekend.
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