Three local journalists will discuss the week’s big stories.
Ted Simons: Good evening and welcome to "Arizona Horizon"'s Journalists' Roundtable. I'm Ted Simons. Joining us tonight, Mike Sunnucks of the "Phoenix Business Journal." Howard Fischer of Capitol Media Services. And Bob Christie of the Associated Press.
Ted Simons: Governor Ducey signs a budget and proclaims that the state is now on a three-year path to balance. This is a bipartisan balanced budget according to the Governor. Is it bipartisan? Is it --
Mike Sunnucks: They have one Democratic vote and yet a few Republicans opposed it. 9.1 billion. A lot of cuts for Universities, K-12 saw some cuts. They raised $22 million. Community colleges in Maricopa and Pima took some cuts. Kind of an austere measure. Ducey touted himself of a Scott Walker of the west. It lives up to that. A lot of folks from the education community are kind of upset with that.
Ted Simons: Again, the good question. Is it bipartisan? Is it balanced?
Howard Fischer: Well, balanced is constitutionally it's balanced because we have got income. We have outflow. That income includes raiding funds, a little creative bookkeeping, a few things like that. It's structurally thinking I think it's about $250 million in the red. We are spending $250 million more than we are taking in but it's balanced officially. Now, bipartisan, you know, as Mike pointed out, they bought a vote. They went to Carl and said, we don't have enough Republicans in the Senate. Tell you what. We got some money for some roads on the Navajo reservation. We got some money for community colleges on reservations. And by the way, you also have this other bill going through that deals with empowerment scholarship accounts. Wouldn't you like those all to happen?
Bob Christie: It's not bipartisan. And I mean that's pure spin. And I think that's what everybody, there was more -- there was three times as many Republicans who vote against the budget as Democrats who voted for it. So it won. As far as whether it's balanced or not, yes, technically it's balanced. We are on a road to a structural balance by fiscal year 20s 17. Although hidden in there is still a $900 million delay in school funding, which they have used for several years. They delay the last year's payment for a month. And so there's still $1 billion almost structurally out of balance.
Mike Sunnucks: It's a very conservative budget. I mean, it's one. Most conservative budgets we have had in a very long time here. Lots of cuts. Tax cuts for businesses kept in place. Just a very austere budget.
Howard Fischer: This is the more interesting important. It gets to the issue of tax cuts. Hearings the Governor admitting, we've had to make cuts. We cut $99 million from the state Universities. You know, which basically at one point we were supporting state Universities to the tune of $1 billion a year. We are now down to $669 million in state funding even as enrollment is growing. I talked to the Governor the other day and said, so, are you willing to say maybe we shouldn't do any more tax cuts? Oh, no, I am going to sign a bill to index which loses $15 million. He wants to push through other tax cuts. He is so married to the Laffer curve. At what point the idea that somehow you lower the marginal tax rates and we get more money. Well, at some point if we keep lowering the tax rate to zero are we infinitely wealthy?
Bob Christie: The Governor has repeatedly said this. This is what I campaigned on as we remember that was to drive the tax rate to as close to zero as possible. He wants to shrink government. One of the first thing he does is, did when he entered office was freeze hiring for the state. We haven't seen any direct results of that but that is scored in the budget at several million dollars this year. And much more next year. We are seeing some incremental tax cuts. We will, he would probably -- I can speak for him and say he would love to see more tax cuts.
Howard Fischer: That becomes a problem. What do we want from government? This is the problem is we keep talking about, we want lower taxes, we want low are taxings. Do you want a university system? The constitution says, A, you will have a state University system, and, B, that tuition shall be at nearly free as possible. I recognize that's vague. Do you want community colleges? Do you want K-12 or are we just going to privatize everything?
Ted Simons: When you talk about tax cuts and he talks about tax cuts, OK. I'm cutting taxes. But tuition and fees increase. But community colleges may maybe not now but in the near future have to increase. Property tax, what are we talking about here?
Bob Christie: This is a shift. And you are seeing this in various small bills through the Legislature as well where they are pushing, they can't cut state funding so they try to shift to the county. We are already seeing some school districts from Apache Junction. Peoria is going to a four-day school week. Pima college raised their tuition last night.
Howard Fischer: It goes beyond that. Not just a question of fees. I will give you a perfect example. The state has a previously preference primary. The state is supposed to pick up the cost for the parties, why the parties don't pay for it is another debate. They passed a bill, the state will pay $1.25. The real cost is $3 or $4. Guess who has to bear that? The Counties. And the Counties cannot say we are not going to do a primary.
Mike Sunnucks: He campaigned on this. He was for getting the taxes to close to zero. There was another alternatives out there for people to vote for in the Republican primary, Scott Smith, much more moderate. Wouldn't have taken this type of budget. Obviously Fred Duvall, the Democrat, and Ducey won pretty easily. Both the primary, a crowd primary and the general election. By wider margins. He had a bit of a mandate to do this and he's got a compadre who is even more conservative and it was a main driver of this.
Bob Christie: There was a thought, though, OK, once the Governor actually becomes Governor, and he realizes,O. I have got 9.1 billion, $3 million has to go to K-12 schools, $700 million has to go to universities. Point some odd million has to go to corrections. That eats up that 9 billion pretty fast. And you are struck saying what do you cut?
Ted Simons: I think that was an argument with Governor Brewer when she was not a Governor, she kind of held certain conservative beliefs. When she got in the office the caucus of one the Governor starts to see she's everyone's representative and she has changed some of her tunes.
Howard Fischer: She's always even in the Legislature she was a bit of a pragmatist particularly on social issues. You look at her and you look at the question, when we were $3 billion in the hole, there were people, Andy Biggs of the world, we will cut $3 billion out of a $10 billion knowledge about. The Governor said no. We will cut 19 billion. We will borrow $1 billion and ask the voters to raise about $1 billion a year with a temporary sales tax. She won. This is the same Governor who said on Medicaid, look, this free Federal money out here to fund the people the voters said in 2004 We should care for.
Mike Sunnucks: The difference she was a professional politician. He is from the private sector and a lot of folks in the private sector think the way Arizona is successful is to grow, bring more people here and more jobs here. They are tied in into that tax, those tax cuts as competing with --
Howard Fischer: But the problem --
Mike Sunnucks: That's their mind-set. Much more than Brewer who has been down there and one more budgets.
Howard Fischer: Understood. But it hasn't worked. We have gone from 35th to 41st in per capita income during the years when Jan was there, during the years when we --
Mike Sunnucks: If you talk to the business folks during this thing, their main priority was to keep those tax cuts. You didn't see them squawking too much about ASU or other universities. That was their main priority. That's where they are coming from.
Howard Fischer: But look at the jobs being created. Department of Administration said 71% of the jobs being created in the next two years will require a high school diploma or next. These are the kind of -- I won't use the word jobs that are being created. This is the success? This is what the tax cuts have brought? Really?
Mike Sunnucks: They're going to stick with it. He's been committed. He want to have more.
Ted Simons: And to that point the other side argues very quickly and very succinctly, you want to balance the budget on the backs of taxpayers?
Bob Christie: The issues are the Governor can't raise revenue. There was one small bit of revenue increase here, a doubling of the vehicle license fee which currently is $8 and would go to $16. It would raise $25 million, $30 million. There's so many numbers in my head I can't remember. President Biggs, the conservatives refused to even consider that. And so if they can't even get that small tax increase through, or a fee increase, they are not going to get their increase. And there are -- what surprised me about this budget is I thought there would be more of the pragmatists among the Republicans.
Ted Simons: What happened there? Last Friday we thought this could go on for weeks. There were so many holdouts especially in the house but the Senate? What happened?
Bob Christie: They picked them off. There was no cohesion in the group. There was five solid votes against the budget among the Republicans on Thursday. And one Democrat everybody thought was going to vote for it. That means you needed to get four people. They picked them off one by one with little buyoffs. Pima, we will take care of the Pinal County guys. We will exclude their County from the community college cuts. We will give, we will deal with the education crowd by giving them a little bit of flexibility in the cuts to school support services so the school districts can mess with it. We will take care of the University supporters by saying, OK, we won't take $104 million off the your budget. We will only take $99 million.
Ted Simons: 20 more than the Governor wanted.
Bob Christie: Exactly. It's pennies on the dollar for what the folks, if they could have been cohesive and if they could have said we are going to stick together, we are not going to move on this --
Howard Fischer: And that goes to bob Thorp. Bob Thorp puts out a press release with Brenda Barton right before the budget, signed also by the president of Northern Arizona University. This is unacceptable budget. I can't accept it. Then, oh, well, you know, we did the best we could. And I said to them, literally, what do you mean you did the best you could? You could have fold leadership no.
Howard Fischer: You could have told them that. And he said well, you know, I don't know. So when push came to shove, and they took them into the leadership office and shot them one by one, that's what it came to.
Bob Christie: Or took them up to the Governor's office and cut these deals. It's just, it's frustrating to watch times sometimes because you know they say these things if they're against this budget they don't like these cuts. And they don't like it across the board. But if you can just give me what I want, then I'm OK.
Ted Simons: Let's talk about the process. Appropriations committee, subcommittees, we used to be able to hear a little bit about this. You knew the horse trading going on. We don't see any of this anymore.
Mike Sunnucks: It's all behind closed doors. It's last minute. The rank and file don't get a long time to look at these things let alone the public. That gives more cohesion and allows and the president of the Senate and the speaker to form something and rally the votes to keep this. If this was out with process and having people step aboard about the cuts and the wisdom of tax cuts versus, things would fall apart easier. It's very effective but, yeah, people don't know who the ways and means of the budget committees are anymore.
Bob Christie: How do you saw this budget roll out last week is the play book which is we roll it out on a actuals. We got less information. We knew there was a budget deal on Tuesday but they didn't even give it. Wednesday morning we finally got some details of the budget. Themed it voted on by Friday.
Ted Simons: This isn't new. Remember she lied, Napolitano was Governor. Behind the door, back room kind of things, this is the norm now.
Howard Fischer: Not only become the norm but in some ways it's even worse. I will give you a perfect for example. In the budget, there's about $25 million the Governor wanted to underwrite the borrowing costs for private charter schools so they can refinance their bonds and therefore lower their costs. The Governor promised in January to provide details. We are sitting here on the 13th of March and have yet to see the plan. Yet it's in the budget. That's the kind of stuff they're pulling.
Mike Sunnucks: The rank and file, that 71 the show they continue to elect readers that do this. Biggs is not the first one. They continue to do this. They do not vote against these things.
Ted Simons: And they certainly don't fight it.
Mike Sunnucks: They certainly don't fight it very hard. In the end you don't see anybody asking them. If you go to candidate forums, there's nobody asks about the budget process and reforming that. It comes up after these things and folks --
Howard Fischer: Let's talk about some of the Whys behind it. A lot of whys have become dark money. You have groups out there that are funding campaigns that are sending out messages saying we are watching you. And they know that comes the primary, where they have somebody more conservative put up by some group. That's very nebulous and they get, give them 30, 40, $60,000 they don't want to be battling that in the primary. So the dark money process has tainted it which is why you really only had two groups in support of the budget. The Goldwater institute and Scott Moussi's group. That was it. That's it. Everyone else testified against it but they were so scared of those folks.
Ted Simons: We mentioned Carl Begay and a big factor he was, and we discussed him before and the idea that some see him as a plant, some see he is a Trojan horse, a Democrat in a DINO. This is interesting.
Bob Christie: Carl Begay has been a wild card since he was appointed to a seat that was vacated by senator john Jackson back in mid 2013. He had a Gilbert address. Everyone assumed and there was a lot of whispering that he's, he was put up by Senate president Biggs who is also from Gilbert. There was a challenge to his appointment saying, well, he didn't really live on the Navajo nation like he said, that he actually lived in Gilbert and there was some papers that he filed for an appointment several months before that said, yeah, he lives in Gilbert. That said, last year, I watched him very carefully as I think some of us did and there were just a couple votes where he said, Biggs needs him on this one and, yes, he voted that way every time. And the same this year. I mean, you know, I talk to him at length. He says, no, no, that's not the way it is. I'm protecting my district.
Howard Fischer: That becomes the issue. These became earmarks and for a bunch of Republicans who hate earthquakes including our Governor somehow he got earmarks. They bought a vote. That is fair? Sure. That's how budgets get done in Washington. That's how budgets get done here. But this one was sort of kinds of blatant when it was the night of the budget they're adding mother.
Ted Simons: Was his father rumored to be offered a job?
Bob Christie: There was, the Republican asked him about that. I didn't do the reporting on that. And he denied it. There's a lot of whispering that goes on down at the Capitol. Especially when people, I mean there's a rumor out there he's going to challenge representative van Kirkpatrick as a Republican. I don't know what to believe.
Ted Simons: With that in mind we have to move off the budget here. How long does the session last? Has any divides, fissures broken out or is everybody so happy to get out of there in early April or whatever they are going to do?
Howard Fischer: I think there's a feeling, OK, we got the budget behind us. We have got a few potential sticking points. We got to get those last gun bills out of here because lord knows we haven't done enough of those. We have some abortion bills. We are all waiting for the version of 1062 about discrimination against gays. Haven't seen it yet but the amendments are possible. And there are always little things that tend to slow the process up. Things that nobody knows about whether it's rental tax or something else. But there's always something that will blow up before the end of the session.
Bob Christie: You know, I think we could get out of here before Easter possibly but the real wild card for me is what's the Governor going to do? The Governor had a vague line just the other day, a week ago frilled we said, once we get the budget out then I can focus on the more optimist I can part of my agenda which is education and economic development. What does that mean? We do have to fill in the gaps as he said on the education funding for the charter schools.
Ted Simons: Would he consider gun bills to be the more optimist I can?
Mike Sunnucks: I think he would like to avoid the gun bills. He want to talk about economic development to come out of the job growth. It's the traditional jobs witch gotten in the past, the call centers, the back office, the warehouses serving L.A. But this budget is reflective of who the people the voters have put in office. It's a very conservative Governor, very more conservative Senate president. And a conservative Republican caucus and they run the show down there. And I think the people are going to have the buyer's remorse are the business community because they put their all their chips on the tax cuts and the Universities and K-12 and those things are as important to training folks and attracting people to the state.
Bob Christie: I know back in the budget again and I hate -- but the Governor, like I said, on message. The other thing he said that it protects the vulnerable. If you look they cut the general welfare maximum benefit from 24 months to 12 months. These are people who are, a lot of them are young mothers with babies and they get $225 a month to buy diapers and food. I mean, that's it. Medicaid, a big cut to Medicaid. Just there's several of them.
Howard Fischer: I want to talk about that gun bill. This is interesting. Balls the fact is I think the Governor as you say the Governor doesn't wan it because it sends the wrong message to the business community. There are a bunch of lawmakers who would vote against it. They told me, he want to be the hero, I'm going to vote for this thing. Let him take the heat.
Ted Simons: OK. You got two bills. Unless of course you spend $100,000 per entrance with security armed guards or metal detectors. Another which gets us into some kind of group --
Howard Fischer: You will love this. The theory is this is another Bob Thorp special brought to him by the citizens defense league that says, if we enter into a contact with at least one other state we will agree that we cannot amend our laws, that the voters cannot amend our laws. That the voters can't amend our constitution if they want to put in let's say person to person transfer rules, back ground checks. Now, somehow, it is escaped people, excuse me. Why would we want to tie our own hands when all we talk about is our sovereignty and yet we want to give it up to another state?
Ted Simons: Does Governor Ducey sign those bills?
Bob Christie: We don't know. I don't know. I just don't know.
Howard Fischer: He talks about when I asked him about it, I am a strong supporter of the second amendment.
Bob Christie: As Governor Brewer did, but Governor Brewer vetoed the public buildings bill three times.
Mike Sunnucks: The public buildings one there's precedent for that and I think so about the image -- and those gun bills have an effect on our image because people around the rest of the country see us talking about legalizing silencers and that sends a bad message.
Howard Fischer: You don't understand. If we pass both of the bills you can bring your guns in the library but you have to use a silencer. They all work together.
Ted Simons: It all makes sense. I hate to do this but Victoria Still, very emotional announcement.
Howard Fischer: This was the bill dealing with abortion, some restrictions on insurance coverage. She came up and she talked about being molested as a child by her grandfather who was a priest. And a very tearful testimony to say, why are we monkeying with the fact that abortions are legal? You talked about the fact while she didn't get pregnant this is pre-Roe V. wade, other people did. They had botched abortions and very tearful testimony. Represent Kelly who chairs the committee said she was very sympathetic and they voted for the bills.
Ted Simons: Didn't make any difference.
Howard Fischer: No. The abortion bill will pass and will go to the Governor's desk.
Ted Simons: That testimony, though --
Bob Christie: That testimony is key. The context is --
Ted Simons: Really quickly. We got to stop you there. We will stop you there. We are running out of time. Really good stuff. Good to have you here. Thanks for joining us. That's it for now. I'm Ted Simons. Thank you for joining us. You have a great weekend.
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In this segment:
Mike Sunnucks:Journalist, Phoenix Business Journal; Howard Fischer:Journalist, Capitol Media Services; Bob Christie:Journalist, Associated Press;