Journalists’ Roundtable

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Three local journalists will discuss the week’s big stories.

TED SIMONS: Coming up next on "Arizona Horizon's" Journalists' Roundtable, the board of regents okays in-state college tuition for DREAMer students.

And a new poll suggests that Senator John McCain could be vulnerable in a Republican primary. The Journalists Roundtable is next on "Arizona Horizon."

"Arizona Horizon" is made possible by contributions from the Friends of Eight, members of your Arizona PBS station. Thank you.

TED SIMONS: Good evening and welcome to "Arizona Horizon's" Journalists' Roundtable. I'm Ted Simons. Joining us tonight are Bob Christie of The Associated Press, Mike Sunnucks of the Phoenix "Business Journal", and Luige Del Puerto of "The Arizona Capitol Times." The board of regents reverses a long-standing policy and allows in-state tuition for so-called DREAMers. Bob, what's going on? Was this a bit of a surprise?

BOB CHRISTIE: It was kind of a surprise because a court ruled on Monday that the DREAMers could get in-state tuition at Maricopa County Community Colleges only. It was a superior court judge, and since right after 2006 when the voters banned benefits for people who don't have legal status in the United States, all the state colleges and universities with the exception of a couple of community colleges charged full out-of-state non-resident tuition. That court ruling came down on Monday. Tuesday, by Thursday, boom, they had changed the policy. And it's a huge deal because it's the difference between $10,000 to $12,000 a year tuition to $25,000 to $30,000 a year tuition.

TED SIMONS: And the regents were considering like in-state plus 50% more. Boy, that just flew out the window.

MIKE SUNNUCKS: Yeah they were interested in something in the middle. And this was swift, this was almost like the same-sex marriage, when the judge legalized it here. It just suddenly one day, all this seemed to happen all in one week and they had scheduled the meeting for this right around when the court ruling came out on the community colleges, but yeah, it was swift and fast and kind of a sea change in our immigration policies here.

TED SIMONS: And this is again for students with work visas under D.A.C.A., the deferred action.

LUIGE DEL PUERTO: Right, so this is not for all DREAMers, only those who have qualified for the Obama administration's deferred action program, under which they could get a driver's license and they could get a work permit. And, you know, the judge who ruled in favor of allowing them to get in-state tuition basically said it's the United States, the federal government, that decides who is in the country lawfully or not and therefore, since D.A.C.A. provides them a work permit, therefore they are in the country lawfully and therefore they should be considered eligible to get in-state tuition.

TED SIMONS: These deferred action students, again, because of that lawful presence... Now, deferred is the operative word here. How does the tuition work? Do they have to reapply and the whole nine yards?

BOB CHRISTIE: If they have a work permit, now when they register for college, they'll be able to show, even though it says -- it's a specific number work permit, there's dozens of them under the federal immigration laws, they just show that work permit, that will now qualify as an in-state tuition rate and if they meet other residency requirements, they meet them. This is about 30,000 students who have D.A.C.A. right now in Arizona… about 850,000 across the country.

MIKE SUNNUCKS: It's kind of a perfect storm for the immigration reform advocates, this issue. You had kids that want to go to college or are in college, they're named DREAMers after the Dream Act, it's kind of hard for the right wing immigration hawks to say much against this because they're the types of immigrants we want here. We had two court rulings, the federal court ruling last year about driver's licenses and whether they had status for those and then the local court ruling on the community colleges, and you don't have a governor right now that is an immigration activist on the right. And so everything kind of conspired for this swift change and when you saw this announced, you saw all the Democratic Congresspersons come out, all the Hispanic groups come out and laud this thing, and the conservative folks that have dominated immigration here for the last decade were pretty quiet overall.

LUIGE DEL PUERTO: I'm not as surprised as Bob is that the Board of Regents finally decided to provide in-state tuition for DACA recipients. I think, as it was mentioned earlier, they proposed a 150% tuition fee for DACA recently, in fact for all DREAMers in the state, not just DACA recipients but for all DREAMers in the state. I think they had really been trying very hard to find a way to bring down the tuition fees for those young immigrants who are here undocumented, but who want to go to school, and so in a way this is a natural evolution from, you know, what has happened over the months… really, in fact, over the years on this front.

TED SIMONS: And again, it was a unanimous decision by the regents, but the law is the law.

BOB CHRISTIE: Well, you know, it's really interesting. This is a county judge ruling. It has no statewide precedent. You can't go to another county or another court and cite this and have it be precedent. In other words, it's binding on the judges. Now, if it gets to an appeals court, then yes. Right now, it only has value in Maricopa County, the order stands only in Maricopa County, but the regents, on the advice of their attorneys, said "well, we think that's good enough, that's going to be the rule until it's overturned, we can point to this as the rule of the state."

MIKE SUNNUCKS: Most of these folks - the regents - they're mostly appointed by Jan Brewer. They're mostly Republicans, so it was a bit of a surprise that it was so swift and unanimous and quickly done. And, you know, this popped up in Texas and it popped up during Rick Perry's presidential run. You know, the fairness factor… nobody wants to punish the kids that came here but you've got kids from California, other states that are obviously U.S. citizens that are paying $25,000 to $30,000 a year to go to school and you have a family that came here illegally at some point and their child who went to school here gets to go for in-state. But you really didn't see that kind of debate pop up this time on this.

TED SIMONS: As far as the fact that these kids now, they get to go in and we move forward on this. How far forward? Are we going to appeal this? I mean, the Attorney General, is he up for this sort of thing?

LUIGE DEL PUERTO: We haven't directly heard from the Attorney General's office that he's going to appeal. There is an indication that he might appeal, given his position. You know, he's fought driver's license for DREAMers. He's fought this case. He's the one who's litigating this case, and he fought it. So he might appeal. And if he does appeal, though, as Bob mentioned earlier, then, you know, it potentially could become a statewide opinion. If the appellate court, for example, upholds this trial court judge's opinion and it becomes the statewide opinion that's binding on all the community colleges, as well as the universities in the state.

TED SIMONS: Have we heard from the Governor at all on this?

BOB CHRISTIE: Yeah, the Governor put out a statement shortly, within an hour of the meeting, and said "I disagree with the way the immigration law federally has worked but I understand why the regents took this action", which was kind of surprising. I mean, we didn't see, like we might have seen from Jan Brewer, this "This is just another overreach by the federal government and we're paying the price for it." We didn't see that. He agreed with the decision given the ruling that came down this week.

MIKE SUNNUCKS: I think an appeal from Brnovich will have some issues. If they have legal status to get driver's licenses and now obviously the court ruling in Maricopa County - if they have that kind of status and they grew up here and they have the work permits under DACA… the regents, the universities see it within their realm to offer them in-state tuition and the optics just don't look very good. I think that's why you see the Governor taking a more moderated thing. You could complain about the feds and stuff, but do you really want to put yourself up against some kids that want to go to college?

LUIGE DEL PUERTO: Right, I think you made a really good point there. I think politically there's just not really a whole lot of upside to go after these kids and block them if they want to go to universities because, you know, these are kids that grew up in the states. They consider themselves Americans. And it wasn't their fault that they were brought up here, and I think, even at the federal level, there's a lot of consensus that there should be some leeway for these kids.

TED SIMONS: Alright, speaking of the Governor and speaking of college students and tuition, we had a board of regents meeting to vote on the tuition hike. Governor, not there. Why?
MIKE SUNNUCKS: Again, the optics, the politics. I think it doesn't look great because his budget was the reason for these cuts. And if you look back ten years, five years, seven years, tuition has doubled almost. We've seen some major cuts and we're not just talking about tuition increases. The schools are all adding fees to what the kids have to pay, they're looking at all kinds of different revenue streams and stuff. They're in a tough spot and there was no political gain for Doug Ducey to be standing there at that meeting.

TED SIMONS: Well, but is there political loss for Governor Ducey not to be there? To skip this very important meeting?

LUIGE DEL PUERTO: Right but I think it was politically wise for the governor to stay away when they are voting, because there's nothing for him to be gained by being there. And if there's nothing for him to gain by being there, why risk showing up?

BOB CHRISTIE: Right, I mean, he was there a month ago when they rolled out the tuition proposals and he said, you know, I understand you're under some financial stress but find other places to cut, don't raise tuition. But, you know, as we've had hearings over the last few weeks, it became clear that this was the way the board was going to go. He's one vote on a 10-person board. Diane Douglas is also a member by the nature of her elected office. She has not been at any board meetings that I've been to. So it didn't make any sense for him to go there, because it was going to pass.

TED SIMONS: But Diane Douglas wasn't responsible for signing the 13% cut.

BOB CHRISTIE: No, she was not, she did not cut $100 million.

TED SIMONS: No, and $400 million cut here during the recession…since 2008, funding has been cut in half. Deepest cuts to universities in the country, right here in Arizona, and as you mentioned, tuition's doubled in the last seven years. Don't you show up when that kind of a thing is being impacted?

MIKE SUNNUCKS: Well, you know, it's the old Harry Truman saying, right? You want to take the heat, and the buck stops here, so you have that argument. This is going to be the biggest challenge of Ducey as Governor, I think, is these cuts to education, to higher education and how he deals with these going forward. He's a business guy. We talk about economic development all the time with him, workforce development. These are key economic engines in Phoenix and Tucson and for them to be cut like this is an economic issue, it's a business and workforce issue, not just an education issue. Says something about the state's image in terms of a place to locate businesses, places for people to live, whether we're going to keep the brain drain, whether we're going to be able to keep the students here that are high attaining or are they going to go off to California or other places? So this is a big challenge for him and it maybe would have served him to be there.

LUIGE DEL PUERTO: Right - it would really be difficult for the Governor to show up at a meeting and argue against a tuition fee increase when he knows that his action to cut the budget for the universities - the $100 million - has directly resulted in the university's proposal for a tuition fee increase. It's really a tough spot to be arguing to keep tuition fees the way they are.

TED SIMONS: It's a tough job, though.

BOB CHRISTIE: He does have to stand up. But let me tell you, there's a lot of talk behind the scenes - not from the Governor's office, but from some lawmakers and from the university crowd of "we have to find a different way of funding". You know, what they say at the regents is "we need to convince the legislature to fund us well". Well that hasn't worked very well. There are others who are saying, you know, there's got to be a different way, we've got to change the way the universities run, maybe make them more business-like. There's talk about cutting pensions for university employees, cutting healthcare, doing all these things to try to change the funding stream…and maybe some tax increases.

TED SIMONS: But we saw performance funding - that was a big deal a few years ago, and now that's flown out the window.

BOB CHRISTIE: It has. There's been no consistency because when you have a $9 billion budget and when you have a shortfall, you can't cut corrections, you can't cut K-12 very much, but the universities are a big fat target.

TED SIMONS: When you have a shortfall, Luige - what happened last month with tax revenue? Because things don't sound quite as bad as they once did.

LUIGIE DEL PUERTO: No, in fact, it was really a surprisingly very strong showing in revenues in April. JLBC, the legislature budget arm, has been tracking all the revenues that come in every month, was really surprised to see just how robust the collections had been in April. And right now, it stands that if this trend continues, we're going to have at least $280 million more than what we budgeted for, for fiscal year 16 and, of course, JLBC is saying, look, this is tax filing season, things are fluid. We might see more refunds between now and June and so, you know, the gains that we are seeing might not hold. Now I talked to Professor Dennis Hoffman from ASU a couple of days ago and he said "No, this will hold, the revenue gains that we are seeing now, this will stay", and he basically said, by the 1st of April, you don't know a lot about what the fiscal landscape is going to be. By April 30 when, you know, when those revenues come in, we're pretty much sure where we're at at that point. And so his thesis is that this money is here to stay.

MIKE SUNNUCKS: Well there's some evidence the economy is improving. Car sales are up statewide, home sales are doing better, real estate is doing a bit better, tourism has done better. So there are some better consumer sentiments there a little bit, maybe a little bit more capital spending from companies, a little more hiring going on. But that gets back to education - why did you rush this budget through and make all these cuts when maybe we could have waited a little bit and seen what happened?

TED SIMONS: I want to get to that in a second. I'm hearing that capital gains taxes kind of came in, dividend taxes kind of came in…this was kind of a one-shot storm here. Don't depend on it, they're saying.

BOB CHRISTIE: Well, that may be true, but, you know, the stock market has rebounded, we're at 18,000. All these losses from the real estate market are now off the books so you can't have carry-forwards. So we're seeing a normal, robust capital gains environment where when people sell their stocks, they make money instead of losing it. When people sell their houses, they make money or when they sell their apartment building complex, they make money. So we're seeing more normal capital gains revenues and corporate taxes.

LUIGE DEL PUERTO: Right, and you have to know that last April's numbers, I mean not this year, but last April's numbers were really dismally low. They were very low, and if that is the base where you're coming from, I mean, these numbers that we are seeing now will seem normal compared to what we saw last year.

TED SIMONS: Did we have those one-time changes in capital gains and dividends last year?

LUIGE DEL PUERTO: No, no, not last year. What happened was that, and it's a bit technical, but basically the revenues that were supposed to show up last year were held back and showed up in the 2013 revenue numbers. And so we saw the dip in 2014, and now, maybe we're seeing the more normal rebound this year.

BOB CHRISTIE: They do caution that we can't rely on these numbers, but the bottom line is we cut $450 million out of the budget, $100 million from universities, a bunch of others, and here we have these real rosy projections that, you know, some people say if we would have just waited a month, we wouldn't have had to make the cuts.

MIKE SUNNUCKS: Well, if you look at it from the conservatives, they kind of get both - the tax cuts have worked, right? Those ones from Brewer and the chamber of commerce have worked - and they get to shrink the size of government. So there is that sentiment down there, that they always want to shrink the size of government. But I think if you talk to business people around town, across sectors, there's some tempered optimism that things are improving, that sentiment is improving overall, and this is translating into better tax rates.

TED SIMONS: How does this money play into that K-12 education funding suit, the inflation funding suit?

LUIGE DEL PUERTO: Well, you know, that's a very good question, Ted, because even with this amount that we're seeing now, it's not enough to pay off, assuming, for example, the state lost that case in court, that's not going to be enough. $280 million, I mean, if the school districts won the lawsuit, we are going to have to pay them $330 million or within that ballpark annually and, you know, that's a pretty big amount. We're not even talking about the money that was owed to the school districts during the recession years and that's about over $1 billion more.

TED SIMONS: Right - that's the other shoe that has yet to fall.

BOB CHRISTIE: I think it'll give us a little bit of a bump. Because what they're projecting is that we were supposed to take $150 million out of the rainy day fund for this year, the year that ends June 30th. That looks like it's going to be backfilled by this excess money. So now we still have the $450 million rainy day fund, and that's a nice little pot to dangle to settle that lawsuit.

TED SIMONS: So are we hearing questions from folks saying "why did you run so fast?" or maybe you knew these numbers were going to come in and that's why rushed so fast?

LUIGE DEL PUERTO: We have. We have. In fact, I've talked to several democratic legislators who have this theory, and the senate minority leader Katie Hobbs said this may be a conspiracy theory, but the theory is that they rushed the passage of the budget because they - Republican lawmakers and the Governor's office - had an inkling that revenues would be better than expected, and had they waited until May, it would be very tough to justify the cuts that they have made. And again, the operative word is "conspiracy" - that's what some people think. The Governor's office talked to Jeremy Duda, a reporter who covers the Governor's office, and said "No, no, we had to do what we needed to do at the time. We were facing more than $1 billion in deficits. We couldn't let the deficit fester and wait for how many months hoping that the fiscal situation would get better. We didn't know that three months ago."

TED SIMONS: Does that suggest a weakness in forecasting?

MIKE SUNNUCKS: It's easier to make those cuts in a short time frame. The longer it festered out there, the harder it is to keep some of the Republican caucus in line. It was easier to do it, to bum-rush them through and get the vote through. So I think it's more of a broad kind of strategy rather than a conspiracy.

LUIGE DEL PUERTO: You're talking about the accuracy of the forecast. Both JLBC, OSPB, the Governor's budget office, and the other economists that do this annual forecast, they basically said "Look, it's an art, it's not a science. It's really tough to predict how things will turn out. A 1% error in our forecast would result in a $500 million, either plus or minus, in the budget". That's how precarious budget forecasting is.

BOB CHRISTIE: And things can change in a month. I mean, if in November, something happens, the stock market goes down, then all those projections go out the window. You've got to give them credit for getting close.

MIKE SUNNUCKS: It will be interesting to see, if we have this pot of money, what we do with it. You know, if there are calls to backfill some of the university stuff, I don't know how much support there is there. Do we hold it for K-12, do we put it in the rainy day fund, do we do something else with it?

BOB CHRISTIE: Well I made calls on that and there's none of that among the Republican leadership. Republican leadership says "Nope, nope, nope, pretend that's not there. We have set our course."

TED SIMONS: They're saying it's not -- you can't depend on that and it's not going to be sustained.

LUIGE DEL PUERTO: And it's really tough, if it's from capital gains from this year, then therefore that money may not show up. It could, it could not, it really depends on what the national economy is. If we get really good, you know, jobs nationwide, it's great. If the national economy is cranking up, then that's very good for Arizona.

MIKE SUNNUCKS: Maybe the business community can step forward and say "Why don't you backfill some of the university stuff?" We'll see if the business community has any stance on that.

TED SIMONS: Alright, where have I heard this before: a polling firm has come out and suggested that Senator John McCain is vulnerable in the GOP primary. Deja vu all over again?

MIKE SUNNUCKS: It's fool's gold. We've seen these polls before. It's similar to when Republicans try to win the presidential race and they go through Wisconsin or Pennsylvania or Michigan and it never works out. We saw this poll the last time when Hayworth challenged the senior senator, and now we've got the public policy polling, which is a democratic firm and they do a lot of polling in Arizona and they show all kinds of potential challengers for McCain - Republican and Democrat - close to him in the primary. What, 42-40, 40-39.

TED SIMONS: Matt Salmon 42-40 McCain, David Schweikert 40-39 McCain, I mean…

MIKE SUNNUCKS: Fred Duval, 42-38.

TED SIMONS: Yeah, do we take this seriously this early?

LUIGE DEL PUERTO: No, you would not take it seriously because it's more than 1 ½ years away from the election day. It's just a snap shot of a specific time period and the poll, really the lifetime of a poll, is limited to when it was made. So, you know, don't take it that seriously. However, we have been hearing all this time that the Republican -- the Tea Party wing of the Republican Party -- isn't happy with John McCain. That poll sort of validates or confirms the level of disenchantment, if you will, that that wing of the Republican Party feels about John McCain.

TED SIMONS: Survey 51% wanted someone more conservative. Now we had Rand Paul here today, we had Marco Rubio here I think earlier in the week. I mean, Rand Paul, McCain called him a "wacko bird" and Rand Paul said he was "some old guy." These guys don't get along. He and Rubio aren't the best of pals here. What's going on out there Bob?

BOB CHRISTIE: Well, you know, the right wing of the Republican Party in Arizona and among especially Senator Rand Paul and some others don't like John McCain, and John McCain doesn't like them very much. Now, whether that translates into an election loss or not for John McCain in the primary, I would find highly suspect. The polling numbers, I mean this poll, the sample size is too small to meet our parameters to even mention. I always say that on your show that most of these polls we talk about I can't even write about because the sample sizes are wrong and the methodology is bad. However, it's clear that John McCain faces a backlash from the right wing of his own party in Arizona. And I think people are going to try to take advantage of it. It comes down to a candidate. You need a rich, well-funded, very charismatic, statewide-known candidate.

TED SIMONS: And we should mention, the same survey, they asked about Kelly Ward who has got the exploratory committee. I mean, he trounces her 44-31 even this early, and Christine Jones - who I don't even know if she's interested in doing this - it's 48-27. So it's not all Republicans doing well.

MIKE SUNNUCKS: Right, Schweikert and Salmon were much closer. It's extremely unlikely either of them is going to give up a safe congressional seat to go run against McCain. He likes a fight. He was energized when he fought against Hayworth. He likes a fight, it gets him out there. I don't see the parallels between places like Indiana or Pennsylvania or Utah where you had older, incumbent, more moderate Republicans lose. We don't have the medium markets, we don't have the charismatic guy that's going to put a bunch of money in there, and I think the electorate, even though there's the Tea Party folks against McCain, he benefits from veterans, older voters, he does pretty well in Maricopa County. I don't see the tea leaves really working against him, especially because he's going to out-raise anybody in there by a lot still.

LUIGE DEL PUERTO: Right, and, you know, the key point in that poll is that it has to be the right candidate. And when I say ‘right candidate', it really means it has to be either Salmon or Schweikert. It can't be anybody else, because nobody else has the charisma or the ability to raise an amount that would be enough to at least compete with John McCain. I mean, remember, in this last quarter, he raised $2 million.

TED SIMONS: Yeah. Okay. Before we go - Diane Douglas, doesn't she care about the children? Why did she disrupt this test in such a violent manner?

MIKE SUNNUCKS: Oh, we love this story. We love this story. In Kingman, where they were taking a test - and she of course loves standardized tests - and so she stepped into this third grade room and wasn't supposed to do that and disrupted the test supposedly, according to some of the folks up there. One of the students wanted her autograph. So this kid has some political knowledge if he knows who the superintendent of public instruction is.

TED SIMONS: She stood in the doorway for 30 seconds. Are we buying the fact that third graders want her autograph and are chasing her down the hall like a rock star?

BOB CHRISTIE: There's a good deal of skepticism on the reports out of Kingman. However, she did enter the room, the proctor did report it as per the rules and kerfuffle occurred.

LUIGE DEL PUERTO: A that's the funny thing - if there's a disruption in a test, you're supposed to report it to the superintendent. And, of course, she's the subject of the report.

TED SIMONS: And there were signs everywhere saying ‘please don't walk into the door' and she walked in.

BOB CHRISTIE: Yeah, she probably should have known better, and she does now.

MIKE SUNNUCKS: I want Diane's autograph now.

TED SIMONS: Alright, well, we'll do our best to get that for you. Thank you very much.
Monday on "Arizona Horizon," we will hear about a hotel booking scam that's been causing consumer problems. And we'll learn about Arizona's first certified sustainable community. That's Monday at 5:30 and 10:00 here on "Arizona Horizon." That is it for now. I'm Ted Simons, thank you so much for joining us. You have a great weekend.

"Arizona Horizon" is made possible by contributions from the Friends of Eight, members of your Arizona PBS station. Thank you.

Bob Christie:Associated Press;Mike Sunnucks:The Business Journal;Luige del Puerto:Arizona Capitol Times

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