Journalists’ Roundtable 9/4/15

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Three local journalists discuss the week’s big stories.

TED SIMONS: Coming up next on "Arizona Horizon's" Journalists' Roundtable. Educators rally at the capitol to call for a special legislative session on school funding. And a Corporation Commissioner is targeted for alleged conflict of interest. The Journalists' Roundtable is next on "Arizona Horizon."

VIDEO: "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. Howard Fischer of Capitol Media Services. And Luige Del Puerto of The Arizona Capitol Times. Arizona educators rally at the state capitol to push for a special legislative session. What's going on here?

MARY JO PITZL: This is the latest chapter in the long-running saga of Arizona school finance. So last week, seven months of closed-door settlement talks broke down between the legislature and the schools, a court has already ordered that the state owes the schools 330 million dollars adjustment per year basically to their base formula. Not to mention the $1.3 billion in back payments. And this has been tied up in court. It remains a stalemate. These folks are trying to break the stalemate and their timing is very interesting, because state revenues are growing. We have I think a 325 million dollar surplus now, plus our rainy day fund is what, getting close to 500 million, so you've got the money, spend it now. They're not even talking about the land trust.

HOWARD FISCHER: Well, of course, you know, Senate leadership says well number one, you know, the rainy day fund is for rainy days and we don't feel anything. Number two, the 325 million and they won't use the term surplus, it's a cash carry-forward, remember, some of that is one-time money, which is true. And then finally, Senate president Andy Biggs is very adamant in saying wait a second this is a trial judge's ruling we're on appeal, why should we pay up because we believe that when they say fund inflation, it's a whole different number so we're not quite ready to do that.

TED SIMONS: The rainy day fund suggests you use it when you need it. When a court tells you to spend it effective now, it sounds like it's raining a little bit.

LUIGE DEL PUERTO: Well, the argument by the state is that this is not over. This is still in the process. Andy Biggs talked to a reporter a couple of days ago and he said look, when this issue was first brought before the court, the trial court judge dismissed the claim by the schools and what are we supposed to do then? You know, the schools now are saying that we lost, so should we just give up? Still in the process, that's always been his position.

HOWARD FISCHER: But here's the underlying problem. Let's put aside the whole court case. You can look at census bureau figures that came out in June. We are at the bottom in terms of state per pupil funding and even when you add in the local and the federal, I think we're 48th. So regardless of where we owe 331 million or one point whatever billion back, the question becomes do we need more money? Here's where it gets real interesting. Senator Biggs said that assumes that money equals quality. Well, okay at a certain point you need money. Somebody's got to pay for the lights here in the studio and money, you need money to do something.

MARY JO PITZL: And aside from the national rankings, people can dismiss those if they want, the state Supreme Court did rule that the state has shorted the schools so regardless of what a lower court did back in the day, you have the highest court in the state saying you've got -- you have got to fund inflation for the schools. And we don't even get into this rally, it didn't even really get into discussion of Governor Ducey's plan to bring new money into the schools.

TED SIMONS: Or the legislative leader's plan to bring new money into the schools.

MARY JO PITZL: They're looking back.
LUIGE DEL PUERTO: They're offering 5 billion over 10 years and they're saying there will be four sources for this funding. It will be the money that we're putting in for inflation on top of what's mandated. This is the lawmakers' proposal, putting $ million more from the carry-over cash balance. And then we're waiting, first things first, we're going to ask the people to set aside a portion of their funding, and then the final thing could be Ducey's land trust proposal. However if you step back a little bit, here's what we're facing. Had we've got 1.3 billion dollars in back payments, it's still being litigated. If the court said you owe that money so you have 1.3 billion dollars and then, for example, if the schools win this case, the other case, which is the reset, the inflation base reset, which is about 330 million each year, and then you count the years that this case is being litigated, you're looking at what two years, three years? So at the end of the court case if the state loses on all counts, you're looking at around 2 billion dollars in obligations.

TED SIMONS: And we talked about this last week. The irony is there that the legislative plan includes two votes by the public to approve and the public I would imagine, some of the public is saying we approved the inflation adjustment. What happened to that?

HOWARD FISCHER: And this becomes the issue. You've got a skeptical public in the first place. Let's talk about the easier one to talk about. First things first was established with like a 9 cent a pack tax on cigarettes. The money goes to preschool and certain kinds of health, they're saying they're not using it all, we're going to take it away from preschool to fund K12. Public has rejected that already. The issue of the trust land, it depends on who you talk to. The governor's perspective, it's working on Wall Street instead of main street, that's the line he's got, except for the fact that his current treasurer Jeff Dewitt points out if we take this money, it's going to mean somewhere down the road in 2030 it's going to mean less money there for interest and so is that tapping our seed core?

TED SIMONS: So please.

MARY JO PITZL: Well, I was going to say that not only these groups that rallied at the capitol are they calling for a special session, but the governor is interested in a special session. He's moved up his schedule a bit from when he first talked about the state trust land proposal, his vision was that it would be on the November 16 ballot. Now, he's open to the idea of doing it sooner in a way that makes a lot of sense, if you had maybe a special election in the spring, you would have some certainty for schools to do budgeting going forward. If it was successful, it would get to the voters a lot sooner but to the schools a lot sooner, but the whole question is what would the special session contain? What would it do? I don't think -- the legislative plan is hardly cooked.

LUIGE DEL PUERTO: Well, the house leadership is going to meet with rank and file members next week and try to brief them about the status of the case and get their input about this 5 billion dollar over 10 years proposal, and what's clear right now is that not all conservatives even are in lock step with leadership about this proposal. I mean, we have representatives from Lake Havasu and he's basically said look we need to settle this lawsuit right now. But, you know, let's get something in return. Let's force the school, compel them to offer full day k. The point is there are lawmakers that are not, you know, completely adverse to the idea of settling this lawsuit right now.

HOWARD FISCHER: And there's a lot of pressure on them. Look, if there's a narrative here in terms of schools, the educators have won. People look at the numbers, we talked 49, 50, 51st if you count Puerto Rico perhaps. The educators have won. They recognize it. And even when you put the rest of it in perspective, let's take the Senate leadership plan, that's 500 dollars per student. Okay. That gets us above Mississippi. We're still 3,000 dollars per student below the national average and so the question becomes at what point, there's a lot of public pressure to say at what point do we take our public schools seriously?

TED SIMONS: Let's take a 50,000 foot view. Let's question, we're going to talk about this next week the state's idea of rebranding Arizona to get a better image for Arizona. I mean, you've got -- and I think earlier, you said we're not going to give up, one of the lawmakers said we're not going to give up. Give up? You're talking about money that a court has said you owed to education. That's not a good image.

LUIGE DEL PUERTO: Absolutely it's not a good image. Howie pointed out that even if you at 500 bucks a student, not going to move it much. That is exactly the point of Andy Biggs. He said we can tax and raise a whole lot of money and it's not going to move our ranking, and it's true, we're hovering near the bottom. But you're looking at, for example, you look at Utah, for example, which is also near the bottom of the states. Now, why is it, here's one question you always hear from lawmakers, why is it they're doing much better than us? That question also needs to be answered but what is before the lawmakers right now is a big decision. If they're to move forward or to in essence capitulate.

MARY JO PITZL:If you're in that camp that believes that governors get what they want, this governor who is a fan of tax cuts and we'll see more proposals from him, he has come out and said look we need more money for the schools. He's acknowledged that. And in his first address to the legislature he said get this lawsuit settled. Now tick, tick, tick, it's September. He said in that January.

HOWARD FISCHER: That's where it's going to get interesting. He made that campaign promise that every year he's in office he's going to cut taxes. Let's say forget the special session, we meet in January we can get something on the ballot in May or June. He comes in with his budget proposal saying I want you to do this, take the trust money and by the way I want these tax cuts. There's an optics problem there when you say how are we going to do this, don't worry it's coming out of a different pot, trust me. The public is going to say no.

TED SIMONS: And again from 30,000 feet, that doesn't look good.

LUIGE DEL PUERTO: No it does not and I don't know how much of a shift in thinking we're seeing from our state legislators, but the fact of the matter is the conversation has moved towards an acknowledgment, not just by Ducey but by offering a plan that would pay presumably 5 billion over 10 years to schools, Andy Biggs and the house speaker are basically also acknowledging that schools do need more money and I don't know how much of a shift of their thinking that is and how much of this is a reaction to the fact that the mediation faltered but they're offering a plan that said schools need more money.

TED SIMONS: And speaking of schools, the superintendent of public instruction, who finds her way on this program every single Friday, recall campaign launched.

MARY JO PITZL: Finally. This is the recall campaign that was promised before she was sworn in, you know, to the office. Organizers said they needed time to get organized and they didn't want to send people out in the heat of summer to be collecting petitions. But they've launched it, they've got 120 days, 4 months, to collect a zillion signatures.

HOWARD FICSHER: We know from history, the petitions that Mary Jo and I have covered that probably one out of every four gets disqualified so you're up in the 400,000 plus range to have a safe thing. So we're talking about 450,000 signatures over 120 days, leaving aside any legal challenges that will happen. Here's where it also gets interesting. Because the law says a recall election has to be held at a regular election, there are four dates, you couldn't even have the election until next August. So we've got another year of Diane Douglas no matter what.

TED SIMONS: And they say that she lacks long-term vision, she lacks honesty and integrity and transparency. Are all of these things enough to warrant a recall?
LUIGE DEL PUERTO: Well, the thing about a recall launch is that you have -- you don't have to have a reason for recalling a public officer. It could be anything, you don't like the way she dresses or whatever her shoes or for whatever reason she's not a good superintendent. You can pick any reason and try to recall a public officer. We tried Gary Grado, who covers education, we started doing the math and it comes down to 40 volunteers or paid signature gatherers every day getting 100 signatures. If you can sustain that for 4 months, maybe you have a chance.

TED SIMONS: Who's behind this? Who's funding this?

HOWARD FISCHER: The funding was the first question I asked and it was basically we'll tell you when we have to which is next February 1st. Hard to know, presumption is there are at least some Democrat operatives out there. There are probably some education groups who support common core. Remember Diane was elected, she had one campaign promise, I'm going to get rid of common core. That hasn't happened. That's been the root of all the fights, she's going to fire the board members, her fight with Greg Miller as the president of the board of education, you know, and so the tricky part is going to be if they get the signatures, who runs against her?

TED SIMONS: Right.

HOWARD FISCHER: Because another Democrat, all of what happened to Russell pierce in Mesa, find another Republican to run and you can find someone who's more moderate and you can oust her.

TED SIMONS: New poll, 46% would sign paperwork, 28% wouldn't, 27% not sure or don't know what they're talking about. Same poll, same poll, 57% say our education system is below average or poor and 60% say education funding levels are below average or poor.

MARY JO PITZL: Well, interestingly, Diane Douglas would most likely agree with those last two points. She came out early on in her first battle with the governor and made the point that the schools are underfunded, that we need to get back to focusing on the district schools. She criticized the governor for being too much in the thrall of charter schools. So those last two statistics, you know, speak to the rally that was held yesterday, speak to the pressure that I think is continuing to mount on lawmakers for lack of, you know, resolving this lawsuit and moving forward on education.

HOWARD FISCHER: And that's the crucial thing. I was at the state of education speech she gave early in the year and she talked about one out of five teachers leaving after five years, she talked about all of that. She never followed it through with the specific proposal. If I'm Diane Douglas's publicist, I send her to these rallies, I have her come out and say we need enough to give every teacher in the state a 1,000 dollar raise immediately. And she could actually end up with this thing coming out smelling like a rose and perhaps even shorting the recall.

TED SIMONS: I was going to say shorting the recall more so than anything else.

LUIGE DEL PUERTO: The fact of the matter is we haven't seen a recall succeed, we only have seen one, in fact, and it's the state legislative level and you only need much fewer signatures in a statewide recall.

HOWARD FISCHER: There's one exception to that. They did get enough signatures to recall Evan Mecum, but he got shoved out the door.

TED SIMONS: Think about the difference between him and most of us were here during those times and Diane Douglas who again, all she's doing is not getting along with folks it sounds like.

LUIGE DEL PUERTO: That's part of it and see the polls will show her reputation is tanking in the state. It's not surprising at all. It's been months and months of negative press on her part. You've got the republic column bashing her every other week or so. It's not surprising that she finds herself in this situation but still the question is does the recall campaign have one, money? And two, backing by major organizations? Unless you have those two, at least one of them, which is money, you're never going to get anywhere.

TED SIMONS: Speaking of removing from office, Susan Bitter Smith from the corporation commission, attorney Tom Ryan who we've had on the show, regarding a former attorney general, Tom Ryan has decided to file a complaint with the attorney general's office. He wants her off the commission.

HOWARD FISCHER: There's an interesting set of laws, two sets of laws, one is a general conflict of interest law, which says what public officials can vote on and can't vote on. Now, it's an unholy mess. It says you cannot vote on anything if you have a substantial conflict of interest. Look up what a substantial conflict of interest is, anything that's not a remote conflict of interest. That's the way the law is built. More specific may be the problem of title which governs the corporation commission, it says you cannot be a corporation commissioner and essentially have a pecuniary interest in any regulated entity. Now, she is the head of a cable TV station, she lobbies for Cox Communications which has a cable arm and a telephone arm. She's also apparently been involved with some efforts to move a substation and working with A.P.S.

TED SIMONS: That's her personal public relations firm.

HOWARD FISCHER: P.R. firm, which is not -- see there's nothing illegal about having outside work. You can have that 150,000 dollar a year job outside your 80,000 a year. The question is at what point are you working so closely with the regulated entities that you've crossed the line?

TED SIMONS: P.R. firm helped a client deal with A.P.S. to move a substation for a golf course. She lobbies for this telecom firm obey seen by the ACC, ACC regulates on telephone, not cable TV and she will say she only deals with telephone issues and she doesn't deal with the cable TV issues. They're not even there. She says she has never tried to hide her activities and there is no conflict because the corporation commission doesn't regulate cable TV. Has she got a point?

MARY JO PITZL: Perhaps. But I don't know how you split up that wire that comes into people's houses that carries in the phone line, the cable line and the Internet as well, under the bundled services, and it's all intertwined. So how do you separate that out? You can separate out your vote and say yes this is just a telephone issue so, you know, I'm not going to touch it. But it's close to the same corporate entities.

LUIGE DEL PUERTO: And she has always said that if there's a vote that deals with a potential conflict of interest on her part that she would recuse herself. She has also admitted in the story that she has voted on something that potentially could have a conflict of interest, she said she voted out of accident, it was inadvertent. And that's part of the question. When do you know? And should you know that there's a conflict of interest?
HOWARD FISCHER: This gets really tricky. Let's talk about the other side of the wire, if you will, CenturyLink, which is offering phone service and cable TV or fiberoptic TV. If you're voting on something that deals with the rates for CenturyLink. And you're a registered lobbyist for someone else who's a direct competitor, now, it gets very tricky and you've really got to be purer than pure on this kind of thing.

MARY JO PITZL: Go ahead.

LUIGE DEL PUERTO: The other thing is it's not even insofar as when you vote. I think the question that's hanging over her head is the fact that she's an executive director of the cable TV group, a member of that group is COX communications and basically, you have a member of that group that potentially you regulate that pays for your salary, also. And, you know, that's a big question. How do you deal with that?

MARY JO PITZL: But, you know, I will say, I mean this has been known. I mean, she ran, when she ran for office three years ago, this was known. It just didn't get picked up, nobody --

TED SIMONS: Why didn't it get picked up? You're standing awfully close to the fire when you have this many interests surrounding this regulatory agency that you are running for.

HOWARD FISCHER: I'll plead guilty. I covered that race and I went back after we talked about this a couple of weeks ago and looked at my coverage and I didn't specifically point out, so I'll take that on, it's my fault, same thing with my colleagues. What's going to be real interesting in this is what Tom Ryan is asking for is something the lawyers call holding office illegally and by law he can't file one himself, it has to be the attorney general. However, there is precedent and this goes back to Tony West, that if the attorney general doesn't take action, then you sue the attorney general for not doing his job and we're going to end up in court and eventually the state Supreme Court will rule on this.

LUIGE DEL PUERTO: And commissioner Bitter Smith has always maintained that this is part of some sort of a grand conspiracy, a leftist conspiracy, if you will, this checks and balances project, so it's based out of D.C. That group is going after Bob Stump's cell phone messages, and now she's saying they're shifting their sights on me.
HOWARD FISCHER: So what? Look all of us, I've been in this business 45 years. If I believed that everyone who called me with a tip was pure of mind and heart, I wouldn't have any stories. People have a reason for going forward with this.

MARY JO PITZL: And while all this is playing out, she's up for election in '16 and this will have complications for that race.

TED SIMONS: Do you think it will?

MARY JO PITZL: Well, I can't name names but I've heard that there are people that hadn't really thought about corporate commission before.

HOWARD FISCHER: And there are Republicans running for the open seat so you can bet, Al Melvin, former state senator, do you think Al is not going to ignore Susan bitter smith's problems in a Republican primary?

TED SIMONS: Do you think people won't look into Al's idea of turning Arizona into a nuclear dump site?

HOWARD FISCHER: This is about the issues. What do people care more about? Nuclear dump site, that's jobs for us!

LUIGE DEL PUERTO: And corporation commission is typically a low key race but that's changing. There's a lot of interest in what's going on at the corporation commission and assuming there's dark money involved next year and you'll have hundreds of thousands of dollars, potentially millions of dollars involved in that race next year. Who knows what's going to happen? Who knows what kinds of messaging and narrative will emerge next year?

TED SIMONS: Well, who knew that the corporation commission could hold such intrigue?

MARY JO PITZL: Well, I don't think we knew and perhaps you know, a small percentage more of Arizonans is becoming aware of what the corporation commission is and what it does.
HOWARD FISCHER: And it becomes one of those issues that comes up every so often. Back in the 80's it was high-profile because they wanted to build five units at Palo Verde and how much were they going to raise the rates and the telephone companies were going crazy. When rates go up, then people get interested.

TED SIMONS: We've got to stop it right there. Thanks, guys, great stuff. Monday on "Arizona Horizon," a replay of our interview last month with former president Jimmy Carter who joined us in studio to talk about his political career and his new book. Our discussion with former president Jimmy Carter, Monday at 5:30 and 10:00 on "Arizona Horizon."
Tuesday, we'll hear about efforts to improve the state's brand. Wednesday, a look at plans to increase state land-trust money to schools. Thursday, NASA chooses ASU to help map the moon's water deposits. And Friday, it's another edition of the Journalists' Roundtable. That is it for now, I'm Ted Simons, thank you so much for joining us. You have a great weekend.

Mary Jo Pitzl:Arizona Republic, Howard Fischer:Capitol Media Services,Luige Del Puerto: The Arizona Capitol Times

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