State Senate President Andy Biggs will give us a recap of the legislative session that ended recently.
Ted Simons: Good evening, and welcome to "Arizona Horizon," I'm Ted Simons. The state legislature just finished one of the shortest session in decades. Governor Doug Ducey credited logic force moving at what he called the speed of business. Joining us now to talk about the session is Senate President Andy Biggs. Good to see you again.
Andy Biggs: Hi, Ted, good to see you.
Ted Simons: Thank you for being here. Your thoughts on the session.
Andy Biggs: I think there were a lot of positives that came out of the session. I was really pleased with it. Was it a perfect session? No. No session is ever perfect. I thought we saw some cohesion there I believe both houses worked well together. I think the Governor worked well with the legislature. I think what you saw was a fairly quick session based on the fact that people from both houses were sympathetic with the governor's intentions and his goals and his campaign promises. I would suggestion most of us probably campaigned on things very similar to what he wanted. I was very pleased with it.
Ted Simons: Fastest session in decades as we talked about. Why so fast? And why was it so important to move bills so fast?
Andy Biggs: Well, you know, I think that -- I don't want this to be lost. People are now saying, you move so fast. Let me tell you, when we don't move so fast, people say gosh, you sure moved slow, what's wrong with you guys? I think we moved fast because we were able to come together fairly quickly on many things. Everything from some of the more -- the things when you and I talked at the beginning of the session I thought would be very controversial, they proves to be potentially very controversial. The Uber/Lyft, the micro-Brewery issues. People came together and worked on them very hard, were very focused. We were able to get those bills done in a manner that perhaps to be quite Frank was a little bit surprised as how those came together.
Ted Simons: Critics will say there was little time for vetting or deliberating or hearing deliberation from the public.
Andy Biggs: Well, I'm trying to understand that. If you looked at the bills that were passed you have probably -- I was looking at the list of bills today. Hundreds of bills passed, hundreds of bills signed by the Governor. Every one of those bills had hearings where the public came and testified on them. This was a normal session. After we passed the budget we went another four-plus weeks. And that's kind of unusual to go past the budget four weeks to resolve bills but we did. And you know, I think we got most of the bills that needed to be done completed.
Ted Simons: But you mentioned the budget. And again, there was a lot of criticism there with just a few days between getting everything to look at and then getting it done. And a perceived rush to get that done. Again, critics will say the reason was didn't want to hear anyway-sayers, didn't want to hear deliberation. Get it done and you did.
Andy Biggs: I welcome criticism. I'm not perfect and people certainly can say whatever they want to say. And some of it, if it's constructive, I think we can learn from it and improve, no doubt. But I think it's a mischaracterization to say there were just a few days to figure out what was in that budget. The Governor announced his budget in early January. We didn't pass it out for, what, almost two months after that, maybe not quite two months after that. The Governor kept saying 99%. I think somebody did a fact check and said it was really 97.5. Almost 98% was what was coming out. When I hear people say I didn't read the budget, I didn't know what was in the budget. I think well shame on you. The Governor's budget had been out for two months. We had hearings on it. We didn't suspend rules to not have committee hearings on it. It was a normal budget process, things always accelerate in the budget anyway. But I think that what you saw was the legislative branch and the Executive Branch were really in tandem on it. That's why it came out quickly.
Ted Simons: Obviously there was closeness between what the governor wanted and what eventually was passed down but they weren't exactly the same. We can talk about University funding, which I'm sure we will in a second or so.
Andy Biggs: I had a feeling.
Ted Simons: But that was different. There were other things that are different. We heard from lawmakers works don't know what's going on here and yet we're supposed to vote on this before the week is over.
Andy Biggs: That's why I say shame on those guys.
Ted Simons: Should they have said, that's exactly what we're going to be doing? That's not very often the case.
Andy Biggs: I'll tell what you I've done, this is my 13th session. I read the Governor's budget every year. I know that things are going to be different but I want to know what the governor's proposing. Whether it's Napolitano or Brewer or Ducey, I want to know what the governor is saying. That's my responsibility as a legislator. The second thing I've always done is I watch the appropriations hearings, I want to know what's going on. I read the budget bills and if I don't understand something, I pick up the phone and I call and say, what's going on here. I go to the small groups that are provided by the legislative leadership and by the appropriations committees. I'm instructed what's in there. If I don't understand something, I say I don't understand something. People will tell you, I was a pain in the neck. Why this? Why that? Explain this, explain that. It is incumbent upon us as members to do that. That's what I would say to a lawmaker. They know where I am. Because I try to be very open with my members and they can tell me, I don't like this, I don't like that, I love this, I love that. I want to know and we'll try to do what we can to make adjustments if it's possible.
Ted Simons: But to the public who sees the budget there for however long, and all of a sudden here comes a final agreement between leadership and the governor, you've got three or four days to vote on it. The public sits back and says whoa, wait a second, I'd like to hear more. That's valid, isn't it?
Andy Biggs: It's a fair question, a fair comment. But I would say, what do you think the appropriations committee's hearings are for? They are for that very thing. And so you come on down and most people are concerned about one particular aspect of the budget. You can find that, you can look at it and go down to the hearing and register your pro or con. Especially now. We have a system where you don't even have to be down there. You can register your complaint or your support for something.
Ted Simons: So you're saying those kinds of deliberations do happen, they just happen prior to leadership and the governor finally getting together. Which may or may not be exactly the same.
Andy Biggs: Yes and no. Those deliberations also take place afterwards. For instance, when the governor's put out his budget and we've always done this -- we immediately set up meetings with our members so they can have them explained in small groups. Plus, we have those explained to the public in appropriations committees. So they can come in and hear what the governor's budget is. As we go through and different departments and agencies come in and explain what they think they need or not, there's public -- opportunities for public input there, as well. There is all kind of ways for the public to have input. You know, good grief, in 2009 we were in session for all but 23 days? And I heard complaints of people saying we didn't know what was going on. Good grief, we were in session almost all year. We're going to get it either way.
Ted Simons: Bottom line, you don't think that process, especially the budget process, was rushed in any way?
Andy Biggs: No. I think -- I think it was a normal process. I would say we were efficient but I don't think it was rushed.
Ted Simons: University funding cut $99 million, different from what the governor wanted and actually some lawmakers wanted even more, some much less. We just heard from ASU's board of trustees. They say you're ignoring the constitution which says nearly free as possible. And you're ignoring the Constitution about appropriations shall be met by taxes. How do you respond to that?
Andy Biggs: Let's respond to three things. The first one I think is the picture that really needs to be laid out there. When the governor's budget proposed a $75 million reduction in general fund support for the Universities, that means over about five or six years, roughly $325 million. The University's raised tuition over that same period by $850 million. So this is kind of a red herring I believe on their part. The general fund support has been reduced. They have almost two and a half times that reduction, put the burden bag on their students through tuition. In turn, they are themselves redistributing some of that tuition money within their student body. Some students pay no tuition. I'm not talking about scholars or athletic scholarships. I'm talking within that in and of itself. The aspect that is important to that is, at $75 million, I don't think they were happy. I didn't see the same level of complaint and disgruntlement I've seen at 99. So what you're really arguing over is about $24 million of the reduction. And the reality is ASU's biggest beef was they didn't like the way the reduction was structured. They want it to be based on a formula they had concocted which would have penalized U of A and NAU more than them. It was a straight-up per FUTSI reduction. The courts have generally construed appropriations with a term as vague as "as nearly possible." That means it's up to the legislature. Even when we were talking about prop 204 case, what happened is the court said, look, they don't have the money. They can't pay for it. The legislature makes that determination. As nearly free as possible becomes, that is the interpretation of the legislature. By the way, we're trying to deal with a billion to a billion and a half over two years.
Ted Simons: Quickly, that gets back over to the legislature shall use of taxes, fund improvements and developments of the Universities.
Andy Biggs: Yeah. That's a different provision than I'm just talking about right now.
Ted Simons: You don't see a connection between the two?
Andy Biggs: No.
Ted Simons: Why not?
Andy Biggs: Well, because first of all, we do use tax money and we give it to the Universities. They in turn use to it build buildings or whatever they need to use it for. We let them have that flexibility. But the point is, we are taxing our citizens. They are receiving taxpayer money. That's what the funding is we give them from the general fund, taxpayer money. We are meeting those needs. I think we're also meeting the constitutional obligation.
Ted Simons: But again, the idea that because of those kinds of cuts, the long term health of the economy and Arizona's just educating the citizens is not -- we've heard this before from Greg Barrett and others -- it's not apparently a priority in Arizona. That's a rough message to be sending to the rest of the country when we're trying to draw business out here, isn't it?
Andy Biggs: I think it's the wrong message and it's also inaccurate. Let's talk about the overall funding. Let's go back five or six years. If you count funding from all sources, they have never taken a reduction of funding from all sources. Next year they will be well over $5 billion in total funding from all sources. The fuss they are really upset about is the extra $24 million in reduction. They don't want to take contextually what we are dealing with in the entire budget with a billion dollars plus the budget in structural deficit. What they are really fussing about is about $24 million.
Ted Simons: I think Michael Crow was fussing about the 75 to begin with, wasn't he?
Andy Biggs: I don't believe he was fussing so much about the 25. I try never to bring in my private conversations with Michael Crow. He was beefed at the formula at the beginning. When he couldn't get the formula changed, that's when he went ballistic.
Ted Simons: Corporate tax cuts hitting in July, $112 million on the first go around here. When do we hit the point of diminishing returns with this? Again, we've had financial people on here, Colorado is going gang buster, California is going strong, and we are not performing up to our past levels or their levels. When are we going to see results from these kinds of tax cuts?
Andy Biggs: Let's talk about it. You just asked what I call a compound question and I've got time for a simple answer. The first part is this. You're talking about the overall economy and I agree with you, we're not where we want to be or where we ought to be. But our -- two things happened. We got hit on a per capita basis far more than any other state, even California, we were well -- we got hit harder than any other state in the country. Number two, traditionally what's let us out of our economic problems in a normal business cycle or kind of a grander recession has been construction, home building and construction. We had saturated the market. What had happened was the impetus for the grand recession was the housing bubble. Well, when you're economy has been traditionally dependent on housing, and you hit a housing bubble, you really take it on the chin. We had a surplus of housing. We had hoped by the end of last year it would finally be -- that the surplus, the inventory of housing would finally be meeting a level with the demand. What we see, though, when people couldn't afford to be in housing, they had so many foreclosures, they changed their lifestyles. Many went to living in apartments and rental units. Our drive for single family dwelling is still not anywhere near enough to drive our rebound in the economy. That's a big problem. The corporate income tax is -- Arizona's is on a percentage of our overall income, I think it's below 10% of our total revenue anyway for general fund revenue. It's fairly on the low end of our totem pole, so to speak.
Ted Simons: About 30 second left. This will not be a compound question. Do you feel there is a disconnect between the legislature and the people you serve?
Andy Biggs: No, I really don't. Let me explain why. Governor Ducey campaigned on a balanced budget, and said he would do what he would do. He said we'd make hard decisions the first year in order to lay a foundation going forward. Most of the people who ran in the Republican Party, who also won and are the majority party, ran on those same things. There's a vocal group of people who feel were mischaracterized what happened in the budget, who are out there trying to mischaracterize and stir trouble up, they didn't get what they wanted in the budget. But in the end I think you would find, if we went out and talked to people and we had -- ours is not a 30-second message. It's a 30-minute message. If we explained it I think people would say, you did what you said you'd do. You promised us you would do it, you did it, we are with you.
Ted Simons: President Andy Biggs, good to see you again.