Legislative Update

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Hank Stephenson of the Arizona Capitol Times will brief us on the latest from the state legislature in our weekly Legislative Update.

Richard Ruelas: Good evening and welcome to "Arizona Horizon." I'm Richard Ruelas in for Ted Simons. Each week we take a look at what lawmakers are up to at the state capitol in our legislative update. Tonight we get that update from Hank Stephenson of the "Arizona Capitol Times." Back in business at the capitol every day. Diane Douglas, just happened this afternoon, what was going on with Diane Douglas and the Department of Education board, the state board of education?

Hank Stephenson: You know, Diane Douglas was actually at the house of representatives today, got a shout out from the lawmakers as she sat in the gallery. She left. Shortly afterwards, a handful of lawmakers came up to me and say something is happening over there. Apparently she had gone and fired two of her top staffers, executive director and assistant executive director of the board of education. It kind of came as a surprise. But there are a lot of shake-ups when you get a new administration in. Not totally unexpected that she would be firing people, but there is a kind of a question of legal authority here, whether she can fire those people or, as statute seems to indicate, whether that is up to the state board of education to make those hirings and firings.

Richard Ruelas: Or whether the state board of education, maybe she can suggest strongly to the state board that the staffing shaken up, but to actually just do it herself.

Hank Stephenson: It seems like it could be a problem. As I was leaving the office to come here, one of our reporters was on the phone with former attorney general Tom Horne, also former superintendent of public instruction --

Richard Ruelas: And a school board member.

Hank Stephenson: He seemed to indicate that maybe no, you can't do that, so we'll probably some developments of this over the next few days.

Richard Ruelas: She was at the house. Received in the gallery. She was perceived as sort of a mystery candidate, even though she did get out and campaign in her own way. How was she recognized, how was she received among lawmakers?

Hank Stephenson: Standing ovation. The republicans in the legislature, for the most part, are very big fans of her's. They're no big fan of common core educational standards, which was her main talking point on the campaign trail. Do away with common core. They like her over there at the legislature. I did hear from a handful of people, something strange is happening here.

Richard Ruelas: Speaking of shake-ups, what is going on with the department of child safety. Already changed the name. What happened this week there?

Hank Stephenson: They changed the name a while back, and now we have got the second director in, I believe, less than a year that this agency has been operational. The former director, Charles Flanagan, was fired by Ducey.

Richard Ruelas: And if I remember correctly, Charles Flanagan was the man who sort of conceived of how this department would run.

Hank Stephenson: Yeah, he has gotten high marks from people on both sides of the aisle. It didn't seem like there was a lot of controversy surrounding this guy. To see him kind of fired at a moment's notice, it was one of those surprise press conferences where the governor issued a press release saying we are going to talk about something at 2:00 today. Everyone gets on the phone and tries to figure out what that something is going to be, but very tight lipped out of the governor's office.

Richard Ruelas: The former director, was slightly surprised by this, too.

Hank Stephenson: Yeah, there wasn't a lot of notice for him as far as we've heard.

Richard Ruelas: Did the governor explain it or was it just a matter of this is my decision and I'm going forward --

Hank Stephenson: We're moving in a new direction was the talking point. They really weren't going into any specifics, just a new direction was kind of the key. And, you know, the real birds at the capitol have their theories. I think one is that it was purely political. That the governor is really tight with Bill Montgomery, county attorney. He was not so close with Charles Flanagan, but the new guy, Greg McKay, is very close with Bill Montgomery. That is one of the theories out there. Another theory, maybe there was something wrong, something that Charles Flanagan was doing wrong. Nobody seems to have a good grasp on this. Today Mr. McKay issued kind of a welcome letter to the staff and in there there was a line that said any potential law-breaking ends now.

Richard Ruelas: Any potential law making ends now --

Hank Stephenson: Maybe there was some law breaking up until now. We haven't heard any details or anything really about what this might be all about.

Richard Ruelas: Republic had a story over the weekend, saying that the legislature is not going to address gun issues. Of course this week --

Hank Stephenson: They addressed a whole bunch of gun issues.

Richard Ruelas: Do you think it was some sort of Super Bowl hiatus?

Hank Stephenson: There has been that theory floating around the capitol, to lay low on the controversial legislation until after the Super Bowl left town. I don't know if there is a lot of merit to that theory. This week it got busier with gun legislation. Probably the biggest bill we will see this year, at least so far, is going up for a committee hearing tomorrow and that is the guns in public buildings bill that has been tried and vetoed three times in the last four years by governor Brewer, but I think gun right advocates are saying we have a new governor. Fresh slate and we will try again.

Richard Ruelas: Any indication that -- Brewer had the policy I don't comment on legislation before it hits my desk. Do we know what Ducey's policy --

Hank Stephenson: No, not really. He hasn't given any real strong indications. I talked with the gun lobby as well and we don't really know what he is going to do with these things. This year will be a good test for him to see where he draws the line on the second amendment. Jan Brewer certainly drew her line in the sand and Ducey will have to take a stand one way or another saying some of these proposals are good or bad.

Richard Ruelas: Anything new that might strike us as different?

Hank Stephenson: There's a handful of new stuff. A lot of it is retread stuff, stuff that was passed through the legislature without problems but that governor Brewer put her foot down on. I think those are the main bills that you are going to be seeing, big headlines, things we have seen in the past.

Richard Ruelas: You seem -- there seems to be something about internet sales and we're all about to do our taxes, if not filed already, but there is a provision where we have to mention to the state how much we spent on the internet?

Hank Stephenson: Yeah, it is kind of -- right now it is on the honor system that you tell, you know, the state how much you spent on Amazon products, for example.

Richard Ruelas: Right, which you and I report everything.

Hank Stephenson: Of course.

Richard Ruelas: We should make that clear.

Hank Stephenson: I keep these receipts, certainly. There is something going through Congress, or maybe not quite going through Congress, but that has been proposed in Congress, marketplace fairness act which would allow states to actually tax internet sales, if you buy something off Amazon, Arizona would get the sales tax out of those things. Republicans in the legislature want to ensure if that comes online, it does not increase the revenues coming to our state. Their proposal was to whatever amount of money that internet sales tax brings on, we will cut the income tax by that same amount. And that was actually the first bill of the year to go down on the house floor to actually fail. Handful of republicans balked at the idea. Said you, know, this is years down the line. We don't need to make this policy now. It will be back for a second vote. Try again tomorrow.

Richard Ruelas: And, so, if this was the -- why such a virulent opposition to it? This is preliminary, so far down the road --

Hank Stephenson: I think that is part of it. Lawmakers don't want to say we don't want any new revenue. Look at our state budget and say we have cut and the real problem on the revenue side. There is not the political will to increase taxes in the legislature, but this might be one way in the future the state might be pulling in more money and I think people, handful of republicans who voted against this and democrats who also voted against it, say that is just not a smart way to craft policy to bind the hands of future legislatures and say we're not going to take this money.

Richard Ruelas: Beer, and this hearing went on for a long time it seemed over -- and there was a debate here on horizon set over the caps on microbreweries. What was the result of all of that?

Hank Stephenson: This has really been one of the bigger issues of the year at the state capitol. It goes back to Four Peaks, one of the big microbreweries in Arizona. Hitting its cap on how much beer it is allowed to produce and still maintain that microbrewery designation. So, there were two competing proposals. One brought by the craft brewers association, and one brought from -- from the opposing side. The craft brewers, won big. They got their bill through committee. A committee where they heard both of the bills or at least scheduled to hear both bills, when the craft Brewers bill passed through the committee, the sponsor of the opposing legislation kind of read the writing on the wall and said, hey, I'm going to not offer this bill today. And we will go back to the negotiating table and see if we can find some sort of compromise.

Richard Ruelas: Is that -- you know the machinations -- how unusual is that -- he is a fairly high-ranking person, Steve Smith, how unusual was that for him to pull his bill?

Hank Stephenson: It is not unheard of. I think a lot of times they will do it well before a committee hearing if they know they don't have the votes, they just won't put it up. But there was so much confusion over who was going to vote for what. It really -- a lot of lawmakers are not taking strong stances on the craft brewers bill or the other bill. I think he was hoping and then kind of realized, well, they approved the other one. They are not going to approve basically the opposite proposal.

Richard Ruelas: Hearing was running late. It was running into happy hour.

Hank Stephenson: It was hours.

Richard Ruelas: Last few seconds. Any sign of smoke signals on a budget?

Hank Stephenson: I'm hearing some rumors that we may see something in a few weeks. Budget is done, it's just the numbers, as some people say.

Richard Ruelas: Excellent. Thank you for joining us.

Hank Stephenson: Thank you for having me.

Hank Stephenson:Journalist, Arizona Capitol Times;

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