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TED SIMONS: Coming up next on "Arizona Horizon," the "Journalists' Roundtable." The state treasurer criticizes the Governor's idea to use more trust land money to fund education. And state Senator Kelli Ward will take on John McCain in the GOP primary for the U.S. Senate. 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, Mary Jo Pitzl of "The Arizona Republic," Bob Christie of the Associated Press, and Jeremy Duda of the "Arizona Capitol Times." State Treasurer Jeff DeWit comes out against Governor Ducey's plans to increase the payout of state trust land money for education. There are so many ways to start the conversation. First sign of life from the new treasurer, isn't it?

MARY JO PITZL: He's been pretty quiet, yeah. As treasurer he's the steward of the state permanent endowment land trust. And he's crunched the numbers, got the same numbers the Governor used, and did his analysis and said this is going erode the trust in the long run. This is not a good idea, this is not sustainable.

TED SIMONS: Emailed his ideas to all 90 lawmakers, correct?

BOB CHRISTIE: That's correct. It hit pretty quickly and it was a decent analysis. Basically the Governor's plan is, let's spend about $2 billion of the $5.1 billion state trust land, most of it in the first five years, some in the next five years. We'll end up with about the same amount of money as we have now when we're done but the schools will have had five years of a lot of extra money and five years of a little bit more money. The treasurer said you're going to spend $2 billion for schools over 10 years, over the next 4 years you'll lose $8 billion in revenue. He says it's just a bad plan.

MARY JO PITZL: He pointed out, he picked up where Ducey's analysis left off and showed us the fiscal cliff created when the Ducey plan expires because the Governor believes in sunsets. His would end after 10 years. When a sales tax voters approved back in 2000 also expires, a big drop-off in money for education. It sort of begs the question then of what next.

JEREMY DUDA: The bigger problem, right before the first half of this plan, where most of the money is coming from. Right before that ends you have a prop 301 sales tax increase voters approved in 2000. That's the bigger part of this fiscal cliff. What do you do then? Are you going to raise -- is the state going to find a billion more for the schools in the General Fund? More likely people will try and re-up this prop 301 tax. Is he setting the stage to replace this trust land money? Because the schools are not going to want to lose $350, $400 million in one fell swoop.

TED SIMONS: You've got the lesser percentage as far as the Ducey plan is concerned, combined with the loss of the 301 , you're talking maybe a billion-dollar hit there. The other argument is this isn't necessarily healthy for the fund.

BOB CHRISTIE: No, it's not healthy. You think about your 401(k), when you retire at age 65 or 67 and start to take money out of your 401(k), you're not supposed take out 5% or 10 % a year for five years. What happens in the out years is your income is greatly reduced. You're not supposed to spend the principle. That's what the Governor is doing for a short term fix. He says we needed money for the schools; I'm against tax increase, so let's look at our 401(k) balance.

MARY JO PITZL: That's the Treasurer's critique, what it does to the fund, the loss of prop 301 money sort of might deepen the hole for schools if you would or lessen how much money they get. His concern is how much this does to the corpus of the trust for the out years. This is a permanent trust. It does not expire. If you cut this deeply into it, I've heard it described to lawmakers as; this is a snowball of accumulating interest and as the snowball goes down the hill it picks up a lot of steam and therefore more money. But this plan stops it, cuts it in half and starts to push it back up the hill so that when it's allowed to start rolling down again, it's much smaller.

JEREMY DUDA: In terms of the long term health of the fund and concerns on that, Governor Ducey's response has basically been, the schools need the money now. Based on forecasts there will still be more money in it by the time this plan ends than there is now. Now, he hasn't really had much of a response to the fiscal cliff issue. The Governor's office put out a memo to lawmakers more or less in response to DeWit's criticism and addressed some of the minor issues and a little bit on the long term health stuff, but really no mention of the fiscal cliff. They mention that prop 301 will expire calendar year 2020 and they say, it'll be up to the voter and legislature if they want to decide whether to renew that.

Governor Ducey's obviously not a big fan of taxes. You've got to wonder which way he'll go on that when the time comes.

BOB CHRISTIE: It's a short-term fix, there's no long-term solution here. that's troubling to DeWit because DeWit's looking at he's supposed to make sure the land trust spins off $50.. 150.. 250.. million a year in perpetuity. Not get a bunch now and lower later and it doesn't fix the schools long term. I think that what surprised me is it took so long for somebody to really look at it and come out and say, you know, this is not really a good plan.

TED SIMONS: Yet we hear a couple of previous state treasurers also now joining in, Dean Martin and Carol string don't like this idea, either.

MARY JO PITZL: They have been in the same seat as DeWit and actually the same seat as Ducey who was treasurer before being elected governor. You have three against one for whatever that's worth. Ducey's analysis is the fund will be okay. That relies on putting a lot of stock in an ever-growing stock market and stock investments.

TED SIMONS: He's counting on a 6-1/4% increase 6-3/4%.

BOB CHRISTIE: The Governor doesn't factor in any down years. You might have a six or eight or a 10% year but you might have a 10% loss in a year.

TED SIMONS: $8 billion hits over 40 years and he takes it out to 2112 that's $175 billion and if you go out that far, it's kind of difficult to put that into a brain, but is this getting traction, this criticism?

JEREMY DUDA: I think very much so, before we've seen Democrats really railing against this plan for some of the same reasons. Now you've got wonder is this going to bring Republican opposition once he puts this before the legislature because they're the ones who are going to have to refer this to the ballot. If you start to peel off Republicans, you only need to take away two in the Senate, presuming the Democrats go against it, which I think is highly questionable. But if the Governor needs Democratic votes, do they get leverage? What do they want out of this? This could be his Medicaid expansion for all we know.

TED SIMONS: But the alternative is the schools don't get the money, so then what?

BOB CHRISTIE: The alternative to this is a tax increase, of which you cannot just say that's not the alternative. You can say the Governor and the legislature won't do it but it is an alternative.

TED SIMONS: Or it's an alternative that's not viable. Let's talk about viable alternatives. What happened, what happens?

MARY JO PITZL: You've got to keep in mind it's July, legislature doesn't come back to work until January. There's plenty of time to work on language. The Governor hasn't publicly released any specific language on how this whole measure would be crafted. So you know, maybe he would talk to DeWit or incorporate some of DeWit's ideas. You've got it out there in the public discussion. There's months before you're going to be seeing a bill drafted.

BOB CHRISTIE: DeWit did say a better plan is to sell off more trust lands, beef up the permanent trust cash balance and then your interest off that will be higher.

JEREMY DUDA: So that's one thing that the governor's office did address in his memo, calling it very unrealistic. To get the same amount of money out to increased land sales, you have to increase that, sell $18-1/2 billion more land over that decade, I think. The problem with that is that the land sales, you can't just put out a For Sale sign. It follows market trends and market forces. They sell land when people want to buy the land. It's kind of hard to say that we're just going to ramp this up and you'll make it happen.

TED SIMONS: Shaping up to be a major issue next session?

MARY JO PITZL: Oh, most definitely. This will be a major issue. But don't forget, the Governor's plan doesn't address anything for the coming year for schools. And we still have the famous lawsuit out there and the negotiations going on with the three-judge panel.

TED SIMONS: Are you sensing among lawmakers that you talk to, maybe a shift in attitude toward education funding? Are we starting to hear folks that we're dead set against tax increases or additional funding, the whole nine yards, saying, The Governor is saying we need more money.

BOB CHRISTIE: I think everybody says, the vast majority of lawmakers I talk to all agree that the schools need more money. And as we've seen in the last few months it's a major issue with the public. The solution is of course the tough thing. I mean, do you raise taxes? As we've talked about? Not likely. This is a plan. And that's the Governor's hope, I think. Here's the money, I can get you the money and not raise taxes.

TED SIMONS: All right, let's move on here. Jeremy, Kelli Ward has announced they will now take on Senator John McCain, waited until Donald Trump left town and everybody, everyone was very excited about that. Talk to us about this.

JEREMY DUDA: Ward is a state senator from Lake Havasu City, she's been flirting with this race for a while. Never figured McCain was going to get some sort of challenge from the right just like he did in 2010 with Hayworth. Now, whether or not this is going to be as formidable a challenge remains to be seen. It was up in Lake Havasu, not in Phoenix. She called it a David and Goliath race. David won that one, but I'm not hearing the same optimism among observers. She's very unknown. She's made a reputation in the capitol, She's a pretty serious lawmaker someone who carries some major bills. To the general public very unknown, a lot of skepticism about her fund-raising ability and simply coming at McCain from the right. You know he's had these challenges before. Hayworth beat him by almost 25 points.

TED SIMONS: The impact of organizing a forum on chem-trails.

MARY JO PITZL: This happened last summer and Senator Ward made this happen because she had a lot of constituents, who were very concerned about the con trails, that streak across the sky, or why they believed they came from planes and can just be exhaust. There is a whole school of thought that these are chemicals that somebody, the government, is dispersing on the public. Senator Ward got two staffers from the State Department of environmental quality to come out to her district and hold a forum. She maintains she's agnostic on the issue, but her name is going to be forever linked to chem-trails.

TED SIMONS: Impact of going to the Cliven Bundy ranch and showing support.

BOB CHRISTIE: Another issue that will likely affect Ward's candidacy, I think. This goes along with a lot of stuff she's done. She's from the Tea Party wing of the Republican Party. She's pushed a lot of stuff that are federal push-back, don't trust the federal government, don't trust CNSA, don't let federal people go in unless they check in with the sheriff. All these laws she signed on to, these propose laws which haven't made it through. I think between the Cliven Bundy issue where she went up there and basically cheered him on as he pushed back against the federal government and the chem-trail thing, there's plenty of ammunition for any good committee to attack her.

TED SIMONS: And we've got defending Donald Sterling, the L.A. Clippers' former owner his right to say, what he said which was not good.

JEREMY DUDA: To be clear, she did not defend the actual racist comments that got him banned from the NBA. She did, for someone who is in the run for state office, it's probably not a statement you want to have on the record defending Donald Sterling. McCain and his allies are already having a field day with this stuff. Remember five years ago McCain was very successful at painting Hayworth as an extremist who shouldn't be taken seriously. Very quickly he got to work doing the same thing to Ward, He's even gotten a little bit of help from people you expect to help Ward. Some of the National groups are already saying or hinting that they are not going to do much to help her. One said or told, I believe politico a few months ago, we can't really spend money for her, they are going call her chem-trail Kelli. You don't want your allies making up names for your opponent.

TED SIMONS: Doesn't Matt Salmon look at this and say, she can blaze a trail and I'll come in a little later on and pick up some steam here?

BOB CHRISTIE: I don't think we will see a big name in this race. It's possible Sam or Schweikert could get in. That's the type of name you need to knock off John McCain. What's the upside for them, they are in solid congressional seats, and they are not going to lose.

MARY JO PITZL: Especially with the Supreme Court ruling earlier last month that basically says, leaves, the congressional map intact, both Schweikert and Salmon have very secure districts.

TED SIMONS: Jobs for life.

JEREMY DUDA: Schweikert has ruled himself out early. Salmon hasn't made a final statement on what he is going to do but the general consensus is more and more he's just not going to take that plunge.

TED SIMONS: What about the district race?

MARY JO PITZL: He's been thinking about it for a while. Ken Bennett has been thinking about running up in rural Arizona years back. Things intervened; he was tapped to become Secretary of State and served as Secretary of State. Most recently he was weighing whether to run there or run in district nine, potentially taking on Kyrsten Sinema in the greater Phoenix area. Interestingly he doesn't live in either. Well he does live in district nine currently, but says I've got a lot of rural ties, he's lived in Prescott most of his life. Prescott is not in CD- but it's close. It reflects the rural nature of that big congressional district.

TED SIMONS: He did not do well in the Republican governors' primary, did not do well at all. How much of an impact is that? How much political weight does Ken Bennett have these days?

BOB CHRISTIE: I don't think he has a huge amount. You have to understand CD-1 is a big sprawling district. He has some upside that he's from Northern Arizona or as Andy Tobin would say, I can see the district from my back porch. He's been up in the area, knows the players, he's worked that hard. That's the part of the state he worked hard as a gubernatorial primary candidate, the North and Eastern tier, all those little towns. He's known up there. He might get some traction.

JEREMY DUDA: I think one of the problems is once again, fund-raising. He was a Clean Elections candidate in the governor's race and it definitely hurt him considering the big money all the other candidates are raising. Now he's got to hit the fund-raising trail and you need money for that district. You got to run ads in the Phoenix and Tucson media markets. Phoenix is one of the most expensive media markets in the country. We haven't really seen any demonstrated fundraising abilities. It's been a long time since he's urged people to write a check. You've already got one of his opponents will be Gary Kiehne, who very narrowly lost the primary last year. He's a veteran guy, he's got some money, he can raise some money. We might see other focuses getting into the race, possibly Paul Babeu.

TED SIMONS: Let's talk about that. A recent poll showed him leading Bennett, that poll done by Paul Babeu. So throw that in there. If he gets in, all bets off?

BOB CHRISTIE: He's got a national presence; He's on Fox News talking. They like to pull him in to talk about immigration so he's got some national presence. He's got some baggage as we all know from a few years ago, the selfie picture that became published, so that may be an issue. He's very smart, very outgoing and people like -- I mean, they have a connection with him. This may be an interesting race. The question is, how do we get -- who do you find in the Democratic Party? You have Barb McGuire, a senator from Kearney. I don't know if she's got 3 or 4 million dollars that she can raise to win that race. Miranda is considering getting in but I haven't heard much since said she might think about it. Begay, state senator from up in the Navajo Nation told me this week I'm not interested, I'm staying in the Senate, this is what I'm doing, so who else can get in?
TED SIMONS: That's a good point because this is a Democratic seat.
JEREMY DUDA: Maybe if Kirkpatrick had won the seat by the skin of her teeth two elections in a row. Everyone figured she was done for. She came back and surprised everyone on election day. Are the Democrats going to be able to find someone else who can replicate that? It's hard to say right now. There is no big name really looking at the race. K.C. Clark, Sheriff of the Apache County for Navajo, we've heard of a couple of names, no real big names. I don't think anyone has really turned their head and said, wow, what a good candidate.

BOB CHRISTIE: It's the national money that's going to really matter. If you get a legitimate viable candidate and they start to get traction, the national party is going to come in and say this is one of only 40 seats in the country that can go either way out of 400 and some odd. It's one of a few and there's going to be a battle over it. It's too early to see how it's going to coalesce.

MARY JO PITZL: Former Flagstaff Mayor Sarah Pressler might be looking at it on the democratic side as well. She's got the Democratic heart of that district, but yeah, she's said nothing yet publicly.

TED SIMONS: A judge has ruled that Diane Douglas cannot hire and fire Board of Education staff. Diane Douglas is the Superintendent of Public Instruction. She can't hire or fire Board of Education staff. Judge has ruled this. Diane Douglas apparently today said, oh, yes, I can.

JEREMY DUDA: The judge simply dismissed the lawsuit. Douglas sued and wanted the judge to say I have authority over these people and I can tell you who to hire and who to fire and where you can have your offices. The judge said she felt like this authority rested with the board. There's no issue here for me to decide, I'm going dismiss the case. Mary Jo's colleague reported that she put out a letter to the state board saying, the two vacant spots you're trying to hire for, I have control of that now. Maybe that's the next lawsuit.

TED SIMONS: What's going on here? What's happening?

MARY JO PITZL: Superintendent Douglas, her suit didn't get anywhere with the judge in the lower court. Her attorney has already indicated they are going appeal that. With today's action she feels very strongly she is the person with the authority over the staffers for the Board of Education. She says she's trying to stop the hiring process. I don't know what this is going to lead to, if it's another fight or another lawsuit over this. But she's going to stop this hiring process, does not want these people coming on until she finds somebody that she wants to hire and that she can control.

BOB CHRISTIE: I think the board is going to ignore that pretty much. Christine Thompson is the board executive director right now. Her deputy is leaving at the end of this month and another staffer is leaving. Thompson said a couple weeks ago, I'm going to hire Christina as Sabrina's replacement. As far as the executive director is concerned, she's going to hire who she wants to hire. I can't see Diane Douglas going back to the same judge in the same court and saying stop. Wouldn't they just tell her to go away?

TED SIMONS: The judge dismissed the case. The judge did say the Board of Education seems to have the power to hire and fire, not her.

JEREMY DUDA: The ability to hire and fire --

TED SIMONS: Douglas is just one member of the board.

JEREMY DUDA: It's employees are employed "at the recommendation of the superintendent." Does it mean the superintendent has veto power, which seems to be what Superintendent Douglas feels. Or does it mean do you have to consult, like the redistricting commission has to consider the recommendations of the legislature as kind of a pro forma thing?

MARY JO PITZL: This might rattle on until we get back to the legislature and somebody once again runs as bill. I don't know why the one last session fell apart. There was an attempt to clarify it and make it very crystal clear, who has authority over what. This issue begs for a solution. Somebody better bring a bill forward to resolve this.

BOB CHRISTIE: A lot of legal fees being paid, otherwise.

JEREMY DUDA: Last year Douglas and Ducey both supported this, but no one gave much effort to support it. It just kind of collapsed under its own weight.

BOB CHRISTIE: What happened with that bill, it passed the Senate with only one no vote, it came over to the House, and there was a whole group over in the house, a Townshend led group that remembered what had happened in Wyoming a few years ago where the governor tried to throw out the Superintendent of Public Education. They drummed that up to -- that's a bad phrase. They used that as an example of what they did not want to see in Arizona. They did not want to see the superintendent of public instruction stripped of her power and so they blocked it and it ended up dead 37-20 in a vote. They brought it back to reconsideration and never even put it up.

TED SIMONS: All right. Before we go, we have to talk about the Dreamers, the licenses for Dreamers back in court at the 9th Circuit here. Arizona wants to span reinstated. Sounded like the judges were tough on both sides. but it sounded like they were pretty tough on the Arizona side. One judge even said, so what are we talking about here, racism?

BOB CHRISTIE: Yes. That's Harry Pregerson that's one of the oldest members of the 9th Circuit, He's 91 years old, sharp as a tack from what I was watching. They did not -- he turned to the lawyer for the State and says, you know, this is all about -- this sure does appear to be about racism. Let's talk about it. And the state's lawyer said, no, I wish you hadn't said that, Judge, and tried to move on. He pressed him on it. Another judge said, well, the argument the State is putting on is that the director of the department of transportation who's now been replaced, is one who made the decision to not give driver's licenses. It wasn't the Governor. So it wasn't a political issue. And the argument is that the director of the department of transportation should be given leeway to interpret the law. Well, that lasted about 30 seconds until Judge Bergen held up the declaration from Jan Brewer which told everybody, don't give them driver's licenses. It looks pretty bad for the State.

TED SIMONS: What do you think here Jeremy?

JEREMY DUDA: What they were saying at the hearing sounds like this did not go well for the State at all. I'm not sure how they get past the District Court ruling from Judge Campbell saying you give driver's licenses to some people with this document. If you do that, why deny it to these others. They say well it's because we believe President Obama acted illegally or unconstitutionally, but they are not asking the judges to rule on that. They're saying because we think this, we should be able to do this. So far the judges haven't bought that.

TED SIMONS: Alright we'll see how the 9th rules on that. Hey, great conversation, thank you so much, we appreciate it. Monday on Arizona Horizon, forecasters are already warning of an especially strong El-Nino weather pattern for this winter and we'll hear about a plan to help reduce the price of algae based biofuels. Those stories and more Monday on Arizona Horizon. Tuesday we'll update teh state's tourism numbers. Wednesday the latest on the Pluto fly-by with physicist Lawrence Krauss. Thursday, state treasurer Jeff Dewitt explains his opposition to the governor's plan to help fund education and Friday, it's another edition of the Journalist's Round table. That is it for now, I'm Ted Simons. Thanks so much for joining us. You have a great weekend.

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