Journalists’ Roundtable

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



TED SIMONS: Coming up next on "Arizona Horizon," "Journalists' Roundtable." The state's private sector shows strong job growth and the Arizona corporation commission decides to delay a decision on higher solar fees. "Journalists' Roundtable" is next on "Arizona Horizon."

VIDEO: "Arizona Horizon" made possible by contributions from the friends of , 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, Howard Fischer of the Capitol Media services and Alia Rau of the Arizona Republic. The state's unemployment rate is up, but so is job growth in the private -sector and that's where all the attention was Mary Jo because unemployment rate reflects summertime -- but the private sector, great guns.

MARY JO PITZL: They are gaining jobs. I think the big question is is that going to be something that will hold and sustain especially as we see some of the public sector issues come back into play like will the schools rehire. Do they have teachers that are actually applying for these jobs since we have a big shortage.

TED SIMONS: Strongest fields were scientific, health care, finance. Those are well paying jobs.
HOWARD FISCHER: Most of them are. The state's manufacturing sector continues to lag. Year over year we grew over 200 jobs in manufacturing and those are the best paying jobs. These are the computer companies, the Intels of the world, the Raytheons. The other industry that has yet to come back also decent paying jobs is construction. We're about 55% of where we were at peak. Some of these scientific jobs, professional jobs, are high paying but within that category you have what are called employment services which are temporary help. That makes you wonder if a lot of the hiring is being done by temp agencies , which suggests that the companies don't really want to put people on their own payroll yet and they're not quite sure that the economy is back all the way.

TED SIMONS: And yet when you see these other fields and construction not doing what it once did, back in the day, everyone was clamoring for a more diversified job portfolio. Sounds like we got it.

ALIA RAU: There was a little spike in construction this month. Nothing compared to what we had seen pre-recession but a little bit. We have got -- hospitality was down, but other fields pretty consistent boost in different areas. We're still below national average.

TED SIMONS: And the unemployment rate did tick up.

HOWARD FISCHER: Yes. This is one of those seasonal adjustment things that drive us math journalists crazy is that you have added private sector jobs and you're supposed expect certain layoffs in the school industry, we went to 6.1% from 5.9% the month before which was 5 8.% the month before that. We asked the folks at the department of administration, so what should we expect? Well, they are not quite ready to say it's going up or down.

TED SIMONS: Again, 13 thousand some odd government jobs lost, teaching positions, seasonal things. 63 hundred private jobs added, so overall, jobs lost but the 63 hundred private jobs, that's the best number since the recession.

MARY JO PITZL: yes. These are signs Arizona was always expected to be slower coming out of the recession because it went down so fast. It's going to take long and deeper, it's going to take a while to come back out. This is starting to be reflected as we have seen in state revenues as well. There was a report that came out from the legislature's budget office this week. That fiscal year that ended on June 30th now they finished with like a $325 million surplus when they thought they would have a deficit of 132 million.

ALIA RAU: And predicting a surplus for fiscal 16, too

TED SIMONS: we had a consumer confidence report this week. If you live in Maricopa county you're a happy camper. Pima County, got some problems, but optimism is there.

ALIA RAU: right.

HOWARD FISCHER: this is really important. This is one of the leading economic indicators. When people feel good, when people people confident about there's going to be money coming in, that they are going to have a job, a raise, they spend money. Companies hire. Which then leads to more confidence. If this holds up and it's the best number in, like, ten years, in terms of the confidence, still not totally pre-recession levels but it really is looking good. If people stay confident and assuming that China doesn't -- the stock market didn't collapse I think we're in good shape.

TED SIMONS: are we seeing a reversal? Is the Arizona economy finally turning around?

MARY JO PITZL: I thought you were going to ask have we come back.

TED SIMONS: Well I'm tired of asking that one, so I tried to ask it in a different way.

MARY JO PITZL: it appears to be turning around. I think you need a few more months of data to put a final point on that.

TED SIMONS: What do you think Howie?

HOWARD FISCHER: It's getting there. We had unemployment rates below 4 % prior to the recession. I don't know if we'll see those again. There may be a new normal coming, particularly in the construction industry, but if next month's data when we're sitting around the table shows the unemployment rate drops again, instead of continuing to creep up, then that's a good sign. It's a good trend line long term.

TED SIMONS: what do you think Alia? We didn't even mention new housing starts. Up big time considerably over last year. That's going on as well. That should be reflected in construction shortly. Are things finally -- we have been lagging for so long.

ALIA RAU: I think we're getting a lot of cautious optimism as everyone likes to say. Even JLBC in their report this week put out a note saying this looks really good but remember this is one-time money, don't get crazy and try to start spending it. So I think we need to wait a couple more months. We'll see what happens with sales revenue, jobs. It's a possibility.

HOWARD FISCHER: There's a few caveats including the election coming up next week which are major heavy construction jobs in terms of light-rail, road construction. There's certainly the question of the federal highway tax. If federal highway tax goes away all the heavy construction jobs also go away. That's a big picture.

TED SIMONS: All right, there's a big picture going on regarding those who are interested in solar panels. Those who have solar panels and those who think those who are using them aren't paying their fair share. Corporation commission, they are looking at a solar fee increase. We had a hearing this week. What happened?

MARY JO PITZL: This was a request from Arizona public service. They wanted to raise the rate on solar to the solar customers arguing that the current rate that they pay does not fully compensate the cost of using the grid and all the services APS supplies to distribute power. They put it off. They delayed it, but decided that we'll wait, we'll do a cost benefit analysis and see how the numbers work out on how much more do the solar customers really need -- how much are we subsidizing them, we meaning nonsolar customers. It was a 3 to 2 vote what. Disappointed the solar supporters, they wanted it put off until next year when the formal -- when APS's formal request for overall rate hike is considered. They think it should be folded into that discussion. The three of the commissioners including two who were elected last year with what is believed to be a fair amount of APS money said, no, let's do the study and get this done.

HOWARD FISCHER: What's fascinating is years ago, the commission tried to unbundle rates. You should be able to tell without a lot of math -- again, that horrible word -- here's the cost of being connected to the grid, which everyone should pay. Then there's a usage cost and perhaps a demands cost and it should be real simple. I don't understand why APS thinks we need a separate solar fee. It's very simple. If you're connected to the grid everybody pays , 20, 30, 40 dollars a month. Now you get into the side issues if you're buying back power should it be at the cost you're paying for three cent a kilowatt hour nuclear or should it be some other retail cost and that's where you go down the rabbit hole.

TED SIMONS: the idea is if I have solar panels that I'm selling back or not paying as much -- you don't have solar, good for me, rotten for you, and it's not fair to you.

ALIA RAU: right. That's the argument. They are charging them five bucks or so right now. They want to up it to about $21. SRP did this last year and their customers are paying a $50 fee. So it's an ongoing conversation.

MARY JO PITZL: Part of that argument is if your meter is running backwards, good for you, because it's your solar customer. You're not paying but you're putting that electricity back into the grid. Helping APS with some of its power production.

HOWARD FISCHER: More to the point, power plants are damn expensive to construct. Coal, nobody is going to build new coal fired plant with the new rule. Nobody is building nuclear plants. Natural gas tends to be peak load plants, because of the way they're set up, they're not base load plants, you would think that it makes sense for the utility as an avoided cost to have what Kris Mayes used to call distributed generation. Have everybody generating a little bit. That way you can avoid some $100 million power plant.

TED SIMONS: That's always the argument, the more conservation that's going on out there, the less the need for the power plant yet you still need to maintain the grid there are still infrastructure costs. Were you surprised that Stump, Little and Forice all voted as a block considering all the attention on Stump, Little and Forice?

ALIA RAU: there's been so much attention pre-election and post election. They are still there. They seem to be bullet-proof when it comes to that.

MARY JO PITZL: Perhaps more interesting the no vote were the two commissioners up for election next year. Bob Burns and Susan Bittersmith. Just observing.

TED SIMONS: Just observing. So what's next in all this? Do the cost benefit analysis, come back, what, in June. The overall rate case is going to be probably in June. Why not just wait for the overall rate case?

HOWARD FISCHER: Because APS doesn't want it tied up with the overall rate case because you get into a whole bunch of other issues in terms of their rate of return, what is a fair rate of return? Are they doing what they need to do to conserve? You know, the other way you deal with it you can generate more through solar or forced conservation, which is the other alternative. Are they doing enough on that? Now you get into issues of people are buying less maybe we need more per kilowatt hour to keep our profits up.

TED SIMONS: Back to the scheduling, if you're looking at this in early June and later June you'll open up an overall rate, isn't this we're going to hike it here, hike it there. It's a double chance, isn't it?

ALI RAU: Could be.

TED SIMONS: but no one seems all that hot and bothered about it.

HOWARD FISCHER: Oh yeah, there are plenty of people --

TED SIMONS: Well, I'm not hearing about it.

HOWARD FISCHER: The problem becomes until we see -- look. They got really upset the fact that they are going to segregate the solar from the regular rate case but we need to see what the study looks like. Is it garbage in, garbage out or based on something? That's where we're going to tell did they do a fair job on this.

TED SIMONS: All right, the clean elections commission also decided to not decide I guess this week regarding dark money in this rule -- explain what's going on here. This is pretty complicated.

MARY JO PITZL: It does get complicated. To try to keep it simple the legislature passed a law that attempted to define what is a political committee. It said if you are primarily spending on campaigns you're a political committee. Well, then the clean elections commission, which is a separate entity, looked at that. They are trying to come up with their definition of that is. We don't have any clear definition from the legislature nor from the Arizona Secretary of State's office on what primarily spending is. The commission is trying to work on that. This has gotten a lot of push-back because the proposal says if you spend -- if you're a political committee and you spend 500 bucks on a campaign you're a political committee. Doesn't matter if you're doing good works funding orphanages you're a political committee and therefore subject to campaign finance laws which means you have to disclose your donors. That's how you get to the dark money angle of this. They were scheduled to vote on this last month. They postponed because of some changes. We thought Thursday was the big day of reckoning. The room was packed and the commissioners decided to wait again because another proposed rule comes in and another request from the Secretary of State's office.

TED SIMONS: I should say, speaking of hot and bothered, the Secretary of State is hot and bothered over this idea of clean elections having this kinds of authority.

HOWARD FISCHER: Well, this is the fascinating part. Mary Jo and I were here when you hosted the debate in the primary. Michele Reagan ranted about dark money and talked to us extensively afterwards on how evil this was. She's going to do something. Well, she took office and apparently nothing. Now she contends politically or legislatively she can't do anything. Well, the clean elections commission said, wait a second, if you're not going to do it it's not like we're trying to duplicate what you're doing, give us a chance. She said, this is my turf and you will not touch my turf and if you do you can pretty much assume you'll be hearing from my lawyers.

TED SMONS: I was going to ask, I know she said it was extremely troubling precedent and clean election has no authority to do this, but earlier her office announced that -- quote was you just bought yourself a lawsuit if you go this direction. I didn't hear quite that kind of commentary.

ALIA RAU: she seemed to back off that a little bit this time. She didn't say no, no, no, we're not going to do that, but she was a little more tempered I think in her answers, some of her conversation, but I think that threat is still out there.

MARY JO PITZL: Definitely. I think what happened is in the July meeting the Secretary of State's office came out with a lot of bombast, imminently quotable inflammatory comments which we love to pick up. The tone this time was more measured, more diplomatic. You know, you can argue that the commission somewhat responded in kind. You've given us other proposals. We'll slow this down, take another 60 days because this new stuff all needs -- requires 60 day review and we'll come back and maybe bring this back up again in October.

TED SIMONS :The thing with the clean elections commission is they are saying this is exactly what we're supposed to be doing, making things more transparent so people know exactly who is putting money into what. Obviously back in 1998 or whenever the clean elections was voted on we didn't have Citizens United and the landscape was a little bit different, but do they have a point when she say you can rattle your chains all you want, this is what we're here for.

HOWARD FISCHER:Tthey have two points. One is the legal point that in the clean elections statute it says that they get purview over independent expenditures. This was meant in the day when independent expenditures were used for public funding. The Supreme Court did away with that matching funds. What they also have is what you're talking about, the philosophical issue, that the intent was to promote transparency and remove the appearance of corruption. How far you can go with that, what does that mean when the case gets to the state Supreme Court, I don't know, but you could say public clearly wanted something. Now, the business community is siding Thomas Paine and all this stuff, saying anonymous speeches is good. Well, we're not talking about somebody putting out a pamphlet. We're talking about somebody spending two or three million under a nice sounding name, Americans for America. And you don't know where it's coming from.

TED SIMONS: The business community is also saying 500 dollars and all of a sudden you're making me explain myself as opposed to the fact that I'm just trying to run a business here and I like candidate X.

ALIA RAU: They fought hard to protect this. They are definitely using this program. APS has not denied the millions of dollars that went into that campaign with the corporation commission. They haven't said they did, but they haven't denied it. They are taking full advantage of the program and this would change it dramatically.

MARY JO PITZL: I would say yesterday you had the business community in full coming out, Glen Hammer speaking he said only on behalf of the Arizona Chamber of Commerce, an industry which had heads, but also numerous business groups, greater Phoenix leadership, greater Phoenix chamber of commerce. Then interestingly a representative from the Attorney General's office stood up and said we're not here to talk to you as your attorney because they are the attorney for the commission, but basically we just want to say this isn't really a good policy move.

HOWARD FISCHER: This is the politics of it. You have a Republican Attorney General, a Republican Secretary of State. You have a commission that's actually made up of people from both parties. We're saying, what is the purpose of why we're here? You know, I love how they talk about small businesses will be hampered. This is not about small business. This isn't about whether capital media services wants to spend 500 dollars to get a candidate elected. This is about large quantities of money and we saw it in the last campaign, in the Secretary of State's race, in the corporation commission race, the governor's race, that ability to say, you don't need to know where that's coming from. Just trust us.

TED SIMONS: we'll see how far that goes. Obviously there are still decisions to be made. I'm going to ignore Howie on this next story for as long as possible.

ALIA RAU: oh, great.

TED SIMONS: I know. Marijuana backers came out with a big, old check that looked like it was dreamed up in a fog, and it had 40 million dollars on it and basically they say if we legalize marijuana through an initiative in , 40 million a year will go straight to education.

MARY JO PITZL: and all is wonderful and bluebirds will sing. That's the pitch for people pushing for legalization of marijuana. It's interesting that you always point to education. It's always for the children. There's two points there. It seems to acknowledge that there's a recognized need for more money for education dollars in the state. But you wrap it around this feel-good thing we're going to help the kids, and 40 million, that will hire you some teachers but that doesn't really get you real far like what is it -- a billion in back money --

TED SIMONS: we can mention, Howie, hold off for a seconds -- We should mention this was not an independent analysis. This was something --

ALIA RAU: No. This group running this campaign and their numbers we haven't seen any number from JLBC, we haven't seen any numbers from any independent saying whether this is legitimate number. Basically this is very conservative.

HOWARD FISCHER: Even if it is conservative or liberal, total spending, state, federal, local on education is 10 billion dollars. Now, of the 40million half of that goes to full day kindergarten, so we're talking 20 million dollars. Two tenths of one percent. I think there's a good philosophical argument about whether people should be able to smoke marijuana since they can go out and drink and drive, they do that. They're not supposed to be driving, but they do. Look, you keep talking about me being a child of the 60's. I've inhaled. What am I going to tell you? The question becomes rather than fight it on the philosophical question of libertarian, freedom, everything else, they're doing as Mary Jo pointed out, oh, it's for the children. I can see the bumper stickers now. I'm getting high for the children.

TED SIMONS: The fact is -- God bless you, Howie, for doing that. The fact is, the tax money will be going somewhere. If you're going to legalize it and tax it, that's what the initiative calls for, it's not going for garbage pickup or something.

MARY JO PITZL: this is more of budgeting by ballot. If you earmark it for K12, lawmakers can't get their hands on it, which some people, a lot of people might think that's a good thing, but if it's not earmarked it goes into the general fund and guess what, half of that goes to education. I don't know why you would pass up 20 million for schools, Howie, if it's available.

HOWARD FISCHER: No, well, you have some interesting questions there. First of all, I think the legislature should come to terms with the fact that we're either49th or50th on state funding and deal with it that way. Please don't give them an excuse to say, oh, but we passed the marijuana initiative, we don't have to fund schools anymore and that's my other fear.

TED SIMONS: you honestly think that's going to happen any time soon?

HOWARD FISCHER: I think this one could fail because what happened back in 2010 with the medical marijuana is the proponents outspend opponents like a factor of a thousand to one.

TED SIMONS: We should mention critics are saying million is swell, the damage done whether by way of treatment, accidents, hospitalization, whatever they find will far surpass 40 million dollars.

ALIA RAU: yes. Remember they don't have the signatures to get it on the ballot yet too.

TED SIMONS: That's true.

HOWARD FISCHER: Again, what's the damage from alcohol?

TED SIMONS: The group is called the committee to regulate marijuana like alcohol.

HOWARD FISCHER: that's exactly my point. If we're going to talk about social cost, what are the social costs of alcohol in terms of drunk driving and lost days and everything else? If we want to treat these similarly, then maybe we should make alcohol illegal.

MARY JO PITZL: don't you reckon maybe this committee will come up with numbers on that as welshing the social cost of alcohol?

TED SIMONS: I would think opponents don't want to treat them similarly saying we have enough trouble with alcohol, we don't need marijuana.

HOWARD FISCHER: let's be truthful. People who drink get boisterous, loud, they drive, they do child abuse, they abuse their spouses. People who smoke sit home and order Domino's. Now tell me which is the dangerous drug?

MARY JO PITZL: or maybe they take Uber.

HOWARD FISCHER: that too.

TED SIMONSL Okay, Russell Pearce we haven't mentioned in quite a long time. Salvador was kicked out of the Senate by Russell Pearce in 2011 because of some protests. He went all the way to the courts and the courts are siding with him.

ALIA RAU: It's taken awhile. This was back in 2011. 2010 was 1070 passing. In there was a slate of additional legislation they were trying to do, checking identities for being in the hospital, all kinds of things. Schools, kids in schools, checking their legal status. There was a big late-night Mega vote on all these bills and he was among the group that was there that got rowdy. It's unclear and I wasn't in there, I was in the main room, but whether he was actually one of the ones who got rowdy or not.

HOWARD FISCHER: this is overflow room.

TED SIMONS: right. Yes. They can hear this in the other room.

ALIA RAU: right. Got loud enough that it got distracting in the hearing room. So he after the fact basically got banned from the Senate. He came back I think next day or couple days later to have a meeting with a lawmaker and they said you have been banned from this public building. You're not allowed in despite having a scheduled meeting with another public official. He put up a fight and got arrested.

TED SIMONS: what was it, 9th circuit said First Amendment rights?

HOWARD FISCHER: Yes. The court essentially said, look --

TED SIMONS: Initially the court dropped it.

HOWARD FISCHER: Essentially the court said Russell Pearce and the police and the state are immune for these kinds of acts. What the 9th circuit said is, wait a second here, the cops were just following orders, excuse the expression, but they said Russell Pearce, if he wanted to have Sal kicked out for some issue no problem. But to ban him based even assuming the fact are correct and the facts are in dispute, you cannot do that. You cannot interfere with his First Amendment right to petition his own lawmakers. This sends it back to the trial court to decide will there be badges against Russell Pearce, which if there are will probably be paid for by the taxpayers of Arizona.

MARY JO PITZL: Meanwhile, has Salvador been allowed into the senate building?

HOWARD FISCHER: They lifted the ban against him. But he said, look, I was -- he spent five hours at the County jail because of this.

TED SIMONS: All right, good stuff. Good to have you all here. Thanks for joining us. That is it for now. I'm Ted Simons. Thank you so much for joining us. You have a great weekend.

VIDEO: "Arizona Horizon" is made possible by contributions from the friends of , members of your Arizona PBS station. Thank you.

Mary Jo Pitzl:Arizona Republic, Howard Fischer:Capitol Media Services,Alia Rau :Arizona Republic

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