Journalists’ Roundtable

July 11, 2014

Transcript:

Ted Simons: Good evening, and welcome to "Arizona Horizon's" "Journalists' Roundtable," I'm Ted Simons. Joining us tonight Mary Jo Pitzl of "The Arizona Republic," Mike Sunnucks of the "Phoenix Business Journal," and Luige del Puerto of the "Arizona Capitol Times."

Ted Simons: A couple of major court decisions this week, and they both went against the state. We'll start with today's ruling on inflation adjusted funds for education. And just give us the background here, Mary Jo. We've heard a little bit about it and talked about it on the show, but this is quite the ruling. It piggybacks on a Supreme Court ruling.

Mary Jo Pitzl: It's a big ruling on K-12 finance. During the great recession the legislature did not fund the school formula, they suspended that for four years. The schools sued, went through the court system, the Supreme Court last fall said, hey, you've got to do this, you've got to fund this because that's what the voters directed when they passed proposition 301 in the year 2000. Today's ruling is basically the judge doing the math on how to pay out that money. Bottom line is she said the state needs to adjust the base funding level per pupil by $317 million collectively. Over 5 years, that amounts to about $1.6 billion. We'll have everybody back in court next week and talk about what to do about the $1.3 billion in back payments that are owed to schools because of those four years of no payment.

Ted Simons: So basically you were wrong, Legislature. The voters said inflation adjustment has to be included. Legislature said we're in a recession and can't afford this right now. The courts are saying you were wrong to have done that.

Mary Jo Pitzl: Also the legislature argued it wasn't just a recession. They pointed to an and slash or clause and felt there was a choice there and they chose to just inflate one part of the school funding formula. The bottom line is that the legislature lost, the state has to pay. Now the question all revolves around how and when. What will be the method.

Ted Simons: How in the world is the state coming up with this kind of money?

Mike Sunnucks: This could be potentially devastating to get state's budget. Sales taxes, or mammoth cuts. Their appetite for any kind of tax increases is limited but the reality is they would have to if they owe the inflation. The legislature played this game with the courts. The voters approve something, the legislature doesn't like it or the recession, the boom/bust economy gets in the way and they dare the courts to come in and make them do something. They have gotten some of these through. This is a huge loss potentially for the legislature. They would have to raise taxes to address this without massive Draconian cuts to state government.

Ted Simons: What do you think Luige?

Luige del Puerto: They are really in a very difficult position. However, it's not a complete loss not yet, anyway. The judge said let's get back together and find out if it's possible for you to pay back the amount that you were supposed to fund the schools. That means the state has the chance to convince the judge, and to persuade her that this $1.3 billion is something that we don't have. So there's a slight chance the judge was very clear in her opinion that this is something that needs to be paid. It's just trying to find a way to make sure that this is feasible, doable.

Mary Jo Pitzl: But she did point out that one of the defenses of a mandate you must pay is the impossibility argument. The legislature is saying it's impossible, we can't do this. Judge Cooper of Maricopa County Superior Court seemed to be somewhat sympathetic to that. That will help to set the groundwork as they go back to court and figure out what to do about this $1.3 billion. The schools are saying we're willing to sit down and listen to reasonable arguments over this. Would you take half a loaf, they wouldn't answer that directly. Clearly they feel they are rightly entitled to the full amount.

Mike Sunnucks: They have a big tax cut package, they have expanded Medicaid, they have spent money in other areas. The schools can come back and say, you've made these decisions with big money, you need come up with this money.

Mary Jo Pitzl: Somebody pointed out, look what we went through six weeks ago with the new Department of Child Safety. They found money. Governor Brewer and her budget wizards found ways to convince legislature, we found money here and here, and we're going to be able to fund this new agency at this higher level. They can always find money when they need to.

Luige del Puerto: In fact, part of the argument put forth by the schools is the fact that we do have money in the rainy day funds about $460 million, and we do have carry-forward balances, meaning money we have set aside. We are looking at a deficit in a couple of years here. Our budget analysts have said the money coming in is enough to take care of our spending priorities right now but in a couple years we really are going to face another fiscal cliff. So $317 million in a year, we can probably pay for that. But if we're looking at $1.3 billion we have to pay, that's a sticker shock.

Ted Simons: Basically you're talking in a five-year span the possibility of $2.9 billion. Am I doing my ASU math correctly?

Mary Jo Pitzl: Yes, you did.

Mary Jo Pitzl: So who wants to be governor? Who wants to come in and have this land in their lap the first day in office?

Ted Simons: Yeah, welcome to office, go figure this one out.

Mike Sunnucks: And you have Doug Ducey out there, one of the frontrunners to win this. What did he oppose? The sales tax extension. Hard for him to come back and say, let's go for another cent again.

Mary Jo Pitzl: And what did that one cent raise? About a billion dollars a year. And you can certainly argue the ballot measure two years ago voters rejected was a good one or properly constructed but it would have continued that penny tax and it shows the power of that penny.

Luige del Puerto: What really struck me about that court ruling is that the judge said this idea that the legislature's argument, that the voters cannot tell lawmakers how to appropriate funds, that's just wrong. She said the balance of power tipped in favor of voters when the voters approved the Voter Protection Act. Any program approved by the public since then has to be funded. What happens next is simply an administrative duty on the part of lawmakers to make sure that program is funded. That's big.

Mike Sunnucks: The voters would be the ones that would have to solve it. Republicans have so much pressure from tax pledges and not raising taxes. You can take a two-cent, a three-cent and say it's just for kids and not water it down with all of these other things, and maybe voters would go for that.

Luige del Puerto: And what we have to think about is, we have a $9 billion budget. We're looking at potentially almost a third. That's a huge, huge chunk.

Ted Simons: All right. Another major court ruling happened earlier in the week, so it's kind of gotten lost because of so much else going on. A unanimous decision by the 9th Circuit Court of Appeals blocking the Governor's executive order not allowing these driver's licenses for the Dreamers. Talk about this.

Mike Sunnucks: This was the deferred not deporting them that Obama announced before the election last time for young undocumented immigrants who were brought into the country by their families, really Hispanics, the governor opposes that and doesn't want to enable them to get driver's licenses. This goes to the 9th Circuit Court of Appeals, a very liberal appeals court. They sided with the federal government and immigration activists on this equal protection argument for the folks. It was back to the state versus federal, who has immigration powers. One of the justices wrote that Arizona will create this new category of immigrant status if they are here legally from the Feds, from the deferred action, but Arizona won't give them driver's licenses, they cross the line. This is another case of Arizona versus the Feds. Who has immigration powers? Usually it's the Feds.

Ted Simons: That's interesting. In the ruling, they basically said that the Governor's actions showed animus toward these young people.

Ted Simons: That's relatively harsh there.

Luige del Puerto: That is very acerbic for the appellate court to say. It really shows that the court did not like one bit this executive order by the governor. Basically saying, here's one group of people we are not going to give them a driver's license, just because according to the court or based on the court's perception, the Arizona state does not not like the Obama administration's policy on these young immigrants.

Mary Jo Pitzl: And didn't the Governor, when it was pointed out there were other groups somewhat similar that were able to receive driver's licenses, didn't she then exempt them?

Ted Simons: She did.

Mary Jo Pitzl: Which I think that fuels that conclusion maybe this is motivated by animus.

Ted Simons: Please, go ahead.

Mike Sunnucks: The conservative side will say this is an executive order by a president who doesn't pay attention to the existing statute. He's carving out the exemption for the Dreamers because he doesn't want to pay attention to the law. So the order itself from the white house is not legitimate. Obviously the federal court disagreed with that.

Luige del Puerto: And the governor was expected to be very irate about that court decision. She tried to draw a nexus between this particular policy and what's going on with the immigration crisis at the border. What will stop this. From creating another program giving these new folks a pass, if you will, and we will have to give them a driver's license.

Ted Simons: The Governor's response, she called it outrageous, she mentioned the three appointees there at the 9th circuit that made this decision were all Democratically appointed. Very political in her response, almost to the point where she didn't much talk about the case on its merits, she talked about the political aspect of all of this.

Mike Sunnucks: Well I think, like Luige said, a lot of conservatives are worried about this recent influx on the unaccompanied minors and the folks from Central America and they're going to get a pass, too, they are going get some kind of amnesty much like the Dreamers did.

Ted Simons: Something like this and the kids coming across, does this mean immigration is now again top shelf as far as the campaigns are concerned?

Mary Jo Pitzl: Top shelf or very near to it. Even in legislative areas where we expected Medicaid expansion to be the big issue, and it is, but immigration, when you talk to the candidates themselves, they are saying nobody's asking us about Medicaid expansion but boy, they are asking about these kids coming across the border, people being dropped off at the Greyhound station. Look what the gubernatorial candidates are doing. Christine Jones is going, mass the National Guard at the border. Doug Ducey is going, put up every kind of barrier that's conceivable. I don't know how you're going to do that and pay $2.9 billion.

Ted Simons: That's after the $2.9 billion.

Mary Jo Pitzl: This is all evidence that immigration is way back up on the list of issues.

Luige del Puerto: I'd also like to point out there is another case before a trial court in the state that has to deal with tuition rates or in-state tuition rates for the daca recepients. The same universe of illegal immigrants. Basically the case is about whether the county colleges and the Universities, post-secondary institutions in the state, are they able to provide in-state tuition to this group of people? And I've talked to lawyers who represent both the county district and on the one hand, and then the Dreamers on the other hand. They both agree, basically they have the same goal by the way, but they both agree that the 9th Circuit opinion could have a potential impact on this case.

Ted Simons: Let's keep it moving here. We had a ruling this week regarding medical marijuana for post-traumatic stress disorder. Sound like the state director reversed his course a little.

Mike Sunnucks: He had an administrative law judge rule against him. He had originally said no to PTSD for medical marijuana users, they took it to a hearing. The judge told him well you need to think about it a little more. I think we're one of nine states that now offer this. It's kind of iffy on the medical research and what kind of benefits and detriments you might have. There are a lot of activists that say it helps. I think this was a big win for the medical marijuana advocates. They keep wanting to push the envelope and get more things to marijuana in general.

Ted Simons: And humble basically said he was looking for at least one study that said medical marijuana would be beneficial to patients. He found that study along with anecdotal evidence, as well.

Mary Jo Pitzl: You wonder if this will be the end of the expansion of the application of medical marijuana, or if this just opens the door further.

Luige del Puerto: I think it does open the door for more. The way they set up this law, the supporters of this proposal, were very smart in setting it up in a way so that it can only expand and never shrink.

Mike Sunnucks: The measure like Colorado, Washington state legalized it.

Ted Simons: Is that going to happen in Arizona?

Mary Jo Pitzl: If it's a ballot measure, it will.

Ted Simons: But the measure passed.

Mike Sunnucks: The country in general, including Arizona, has changed on some of these social issues. I think we have a good chance. Young folks who support it, a very activist campaign, and you didn't feel that opposition last time.

Ted Simons: It's interesting with this particular ruling by Mr. humble, didn't hear a lot one way or the other. A lot of people saying it's about time and not a heck of a lot of dissention.

Mike Sunnucks: Remember back when Matt Salmon and Jan Napolitano and the drug czar came out and fought the 2002 one? We're a long ways from that one.

Ted Simons: The Governor came out today -- or not today, this week -- and endorsed a candidate for attorney general. Of course she would endorse the sitting Republican attorney general, correct?

Luige del Puerto: Of course she did -- no. That's not the case. As far as we know, this is the first time that the Governor has endorsed a challenger to an incumbent who is sitting in statewide office of the same party. And that really is very interesting. We've heard lots of reaction, people saying that, you know, basically she's just piling on. And the fact of the matter that is she saw the writing on the wall, Tom Horne is on the way out. She wanted to make sure that a Republican, in this case Mr. mark Burnovich would have a chance to defeat a very strong contender in Democrat Felecia Rotellini.

Ted Simons: This happened one day after the Secretary of State's office said we're going ahead with our investigation because there is evidence something might be wrong here.

Mary Jo Pitzl: Right, so the investigations of Tom Horne continue, you're going need two hands to count them on. And then you have the highest -- the Governor of the state coming out saying, vote for this other guy.

Mike Sunnucks: And the timing, too, this is well before early ballots go out, well before the primary. A lot of times you see these endorsements at the last minute, they don't really matter. This timing very much helps mark in his race against Tom Horne.

Ted Simons: Is this the Republican party, governor in particular but, the republican party in general just thinking Horne cannot beat Rotellini.

Mike Sunnucks: I think there's a lot of that among republicans. That she's strong. She can be the strongest state-wide candidate for Democrats this time. You can see a lot of Democratic money go to her. If she wins that race, Rotellini, she could run for governor, she could run for Senate after that. So I think they see that and obviously Thomas very wounded. And Burnovich is very conservative. So that appeals to kind of the primary voters.

Luige del Puerto: I think some of the fear among Republicans is if a Democrat were to become the next attorney general, then Rotellini may not be so enthusiastic in fighting for some of the laws that we have passed, for example the voter I.D. laws we have passed. The immigration proposals we do almost every five years or so.

Ted Simons: The impact, though, on the primary, of having the Governor endorse one of these -- and I say this, it may have more impact on the general than the primary, considering the primary is very conservative. Lots of conservatives aren't happy with the governor right now.

Mary Jo Pitzl: Correct, correct. And Tom Horne appears -- you said everybody's piling on to Tom Horne and they see the end. This might be because they don't see an end and you get the Governor out there to sort of stoke that anti-Horne feeling. He's got a base out there.

Ted Simons: He does, and the base is probably not too surprised the Governor went ahead with this.

Mike Sunnucks: Arpaio is back and tom is very conservative and blames the media and talks a lot about immigration now and goes on Fox News. I do think is there a split there. Even conservatives, you've got the Goldwater Institute fiscal conservatives that really like Burnovich, and Thomas more of immigration time setback. I think Luige is right. What the difference would be in some of these things, the 1070 and the approaches and stuff.

Luige del Puerto: We are still hearing from people that Tom Horne is still probably the more likely to win in the primary. But we are also hearing from the same group of people that he will lose in the general election. I think that's the fear that, at this point he's still the dominant candidate. Still the incumbent. He has his own base. Mark Burnovich really hasn't raised a whole ton -- he is raising some but many people are saying it may not be sufficient within the next few weeks or so to defeat Tom Horne.

Ted Simons: Why is that? Cash on hand, Horne has $390,000. Burnovich $88,000. Why is it still like that considering everything Horne's going through?

Mike Sunnucks: I think the Governor's race has sucked up a lot of the money and contributions out there, I think a lot of people weren't sure if mark had a chance because a lot of this Tom Horne stuff has progressed. And frankly, the hit and run resonates with people. But a lot of this other stuff is campaign finance stuff staffers are working on. I think a lot of folks think that's just politics. That's how all of these people act and he happened to get caught. So I think a lot of money folks were still seeing if mark had a chance.

Mary Jo Pitzl: Also those figures are now about six weeks old. A lot has happened since then. And you know, again part of the rationale for the governor's endorsement is to help Mark Burnovich with fundraising.

Ted Simons: Yes. We'll see if that does indeed help. Speaking of Attorney general Tom Horne and investigations. The secretary of state's office does decide to investigate, Maricopa County attorney Bill Montgomery decides to investigate. And I don't think any eyebrows were too much raised by the Secretary of State's office. But the county attorney's office? I mean, we know that Mr. Montgomery doesn't like Mr. Horne. I mean, he's supporting Burnovich. What's he doing investigating?

Luige del Puerto: He has asked Mr. Horne to resign his position, not run anymore. If I'm not wrong about that. There is this conflict of interest that people are raising about the county attorney saying, hey, let's investigate this guy, he has asked to resign and who his opponent in supporting. But the interesting thing about this one is that there are now three active inquiries against Tom Horne. I think five offices have investigated him. That's a lot of offices to be investigating the state's top law enforcement official.

Mike Sunnucks: That makes for a pretty good campaign commercial. The problem is it makes a better campaign commercial for Felicia Rotellini because she has the money to do it and it will be in November when people are paying attention, not in August. But Bill Montgomery came into power when he was elected after Andrew Thomas, the most political county attorney, everybody was sick of those shenanigans with him and Sheriff Joe doing that. Bill has been thrust into numerous political cases, some of them his own doing. Russell Pearce, his son running in the fatal accident, the Fiesta Bowl, and Montgomery has been a very political animal as a prosecutor, I think much to the surprise of some people.

Ted Simons: And we should also mention, Tom Horne, this week decided to go ahead and tell clean elections, one of the many looking into his activities, have you no business looking into my activities. You have no business looking into my activities.

Mary Jo Pitzl: Right, so Horne filed a lawsuit saying the clean elections commission saying that they have no standing to investigate him because clean elections exist to police publicly funded candidates. Tom Horne's not running the public campaign financing and this is an unnecessary investigation. There was a court hearing this morning, just to schedule things on the case, it's scheduled for an August 11th date in court. So we'll see where that one goes. There's more than just Tom Horne at stake here, it's sort of the future and the fate of the Clean Elections Commission. Which, it points to state statutes and the supreme court ruling. We've got the authority, voters gave us the authority to investigate campaign finance violations no matter who, whether you're running publicly or privately.

Ted Simons: And not only investigate, go ahead and penalize with fines and or removal of office. Not that we're expecting this sort of thing.

Luige del Puerto: That is the authority that the elections commission is claiming over nonparticipating candidates. We have seen the commission throw out of office participating candidates, I think two of them in the last several years or so. And this issue has been simmering for several years. There was a law that was passed this year by the state legislature, basically saying that we are stripping away the authority for the Clean Elections Commission to investigate non-participating candidates. Of course the commission is saying, even if you think that's what it does, that's not what it does. We have this authority because we are voter protected and that didn't pass with the necessary votes that would allow to you amend a voter protected program.

I think it all comes down to for voters, they're eventually going to say, You're the attorney general, you're supposed to be prosecuting people, you're not supposed to be the defendant in all these cases. We keep waiting for the tipping point. I think the Governor's endorsement really will move --

Ted Simons: You think that's a major factor?

Mike Sunnucks: Will she endorse this guy, not the sitting attorney general, he's in all these fights with everybody, every other agency, I think it's just the odds are improving for Burnovich.

Ted Simons: The next hearing is August 11th regarding this particular aspect? That's two weeks before the primary I mean, you get two weeks before the primary and you're what, you're sitting there with attorneys in court trying to explain why someone, an independent overseer shouldn't be looking at you?

Luige del Puerto: That's not Horne's only problem. His problem is that he's looking at the early ballots. They are going out in about three weeks here or so. That means that first rush of voters are going to make up their mind about who they want to be the next A.G. They are seeing, reading and digesting all of this news against Tom Horne.

Ted Simons: Alright, we will stop it there interesting week, good to have you here, thanks for joining us. Monday on "Arizona Horizon" we will hear from Democratic candidates running for the Superintendent of Public Instruction, Monday evening 5:30 and 10, right here on "Arizona Horizon." Tuesday the Republican candidates for Superintendent of Public Instruction will debate the issues. Wednesday, new research suggest the possible housing shortage in the Phoenix area, Thursday, another debate, this time between Democratic candidates running for Congressional District 7. And Friday, it's another edition of the "Journalists' Roundtable." That is it for now. I'm Ted Simons, thank you so much for joining us. You have a great weekend.