Senate President Biggs

Jan. 19, 2016

Transcript:

Ted Simons: Coming up next on Arizona Horizon, Senate President Andy Biggs will join us to discuss the state budget and other legislative priorities, and we'll hear from the author of a book on legendary state lawmaker, Burton Barr. Those stories next on Arizona Horizon.

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Ted Simons: Good evening and welcome to Arizona Horizon. I'm Ted Simons. This year's state legislative session kicked off last week with the governor's state of the state address, and later included the governor's budget proposal. Here now to talk about his budget priorities and other issues, is Senate President Andy Biggs. Good to see you. Thanks for joining us.

Andy Biggs: Good to be here.

Ted Simons: And priorities for this -- let's start with just the speed of doing business, as it were. We are going to have another speedy budget and session?

Andy Biggs: Well, I don't know if it will be as short as last time, but it won't be as long as normal.

Ted Simons: Critics last year said that it was a little too fast. They did not have a chance to look over everything, that we did not have enough hearings on everything. That some of the lawmakers, and members were not sure what they were voting on. Ballot criticism?

Andy Biggs: I don't think that it's real valid. There was a member of the house that stood up and said look, we need to just do our jobs, and make sure that we're keeping up. It's a part-time legislature, but when we're there, it's full time. So just takes a bit of extra work, that's all.

Ted Simons: That is, that as far as having enough time to digest, spending bills, maybe all right to err on the long side as opposed to the short?

Andy Biggs: I felt like we went through the normal process, there were public hearings, people got to come in and testify, and there were group meetings within -- we did everything that we normally do, so I just am not sure that criticism is valid.

Ted Simons: Why do you think that we are hearing that? We heard it last session, when the budget was released, and it was -- and you have to admit, that thing came out super-fast. We can talk about that, but why do you think that there were, they were concerned?

Andy Biggs: I think that, well, that concern was mostly, I think, from folks not down there before and didn't realize you have to keep up with it as you go along. One of the things that I try to do in the Senate is keep everybody up to speed, and let them know this is what we are doing, and the Speaker was trying to do that with his body. He has a bigger body to deal with, but, but, you know, what I find interesting is, if we had gone 150 days, everybody would be saying, you know, this is horrible that we're -- we're so long. But, I thought that we were efficient, and I thought that we were open and transparent, and what more can you ask for?

Ted Simons: I think some, also, saw the budget, being released like on Tuesday or something, and a done deal by Friday, and then all of a sudden not too long, we find out that there is more money than some folks had anticipated, and that the budget was rushed to avoid having to deal with a surplus again. Valid criticism?

Andy Biggs: I don't think so. The -- when we went into the start of the last session, we had a massive deficit. We made a lot of tough decisions and calls. And turns out that we have managed to balance the budget a year earlier than we thought we would, and I don't think that it's a problem. I think that we are about right.

Ted Simons: You mentioned tough decisions and tough calls. Whenever I hear that, and especially, coming from a Conservative lawmaker, I think, you know what a tough decision for a Conservative lawmaker would be? Raise revenue.

Andy Biggs: That would be a tough one.

Ted Simons: A tough one.

Andy Biggs: A tough decision. You are right.

Ted Simons: And how is that, is that even considered this go around?

Andy Biggs: No

Ted Simons: Why not?

Andy Biggs: Why should we?

Ted Simons: Is revenue not needed?

Andy Biggs: Ronald Reagan had it right when he said that Government is kind of like a baby. An elementary canal that's insatiable at one end, and uncontrollable at the other end. And that's kind of what we have, sometimes, when people say we need to raise revenue, we need to have more money, I'm not sure that there is really calls out there, although, my friends across the aisle want to spend a ton of money, I am not sure that there is calls to raise taxes at this time.

Ted Simons: But, if the calls are to spend more money, whether it's for you know, CTE, JTED, those sorts of things, for getting a childhood insurance for low income kids, kids' care, which we're the only state that does not have anything frozen, there were a lot of things that are out there that were cut since 2008, and the universities cut more than any other state to get more money, you would have to raise revenue, but that's not even a remote possibility?

Andy Biggs: I don't think so for a couple of reasons. Number one, I think, first, we are still sitting on 2.3 to 2.5 billion worth of unconstitutional debt. So, that's a problem. And secondarily, even as we sit here today, we had budget sweeps in the budget of 200 million to make the budget balance. So, there isn't an appetite to go out there for my members to raise taxes. The second thing you have is an operation of law. It requires two-thirds' vote, a supermajority to raise taxes in the legislature. I think that it's going to be really difficult to see that happen in the future.

Ted Simons: Is that a good thing for Arizona?

Andy Biggs: I think that it's a good thing, yeah. The voters seem to think that it was a good thing. They are the ones who gave it to us, and I agree. It is a good thing. What needs to happen, we need to balance what we should be doing as a government, and then we find a way to pay for it. There are ways to pay for these things.

Ted Simons: You mentioned it feels like it's 2008 and 2013 all over again. Explain, please.

Andy Biggs: In both those years, we had Governors who came out and said, we have a lot of money to spend, and so, they did exactly what you are talking about. They -- we had seen a retrenchment in 2003, and so there had been some constraints on government spending, and they came and they blew the doors off of spending in 2008. And they did the same again in 2013 where it was falsely advertised that we had a billion dollars surplus. What happened is we immediately went the other direction, and so now, you have -- we had to make really difficult decisions. We mortgaged buildings for Pete's sakes. We have rollovers that -- which is kind of a technical way of, we're just working with an accounting mechanism to make it look like we're balanced when we are not. And we did all of those things, trying to prevent cuts, and we had to make tremendous cuts. Nobody wants to go back there again. I don't want to go back there again. We even provided a mechanism to raise taxes during that time, which was enough for someone like me. And we don't want to go back there again, and that's why you have to be cautious with this budget cycle.

Ted Simons: Prop 123, obviously, the voters coming up in May, lots of legislative activity, before may, and how much of an impact will that vote have on what you do to capital?

Andy Biggs: Well, I think what you are going to see is that even though there are people who think that just the morace of K-12 funding needs to be solved, simplified and streamlined. I don't think people are going to tackle those reforms or anything like that as long as Prop 123 is out there, so I think that has an impact over us, and that we're saying look, we can't -- we don't want to jeopardize the passage of 123. We want that to pass, so we're going to be a bit more measured in some of the calls for reform, just as I know the other side of being measured in their calls.

Ted Simons: And as far as the universities are concerned, the Governor's budget has $8 million. Your thoughts on that, especially since 99 million was cut last year, and no other state has cut more, and we have seen no higher tuition increases in any other state than this one.

Andy Biggs: Yeah. Two things about that, Ted. That tells you that perhaps our tuition, which it was, for many years, was in the lowest, probably 10th percentile, so only probably 5% to 10% in the states that were in the same range as us, so we're back up. We got higher, probably higher than I would like it to be, but we're talking about three enterprises that have total revenue package in excess of 5.2 billion a year. Think about that, the state trust land, by the way, and that is their annual revenue package. The -- they were fine with the $75 million reduction. They got upset on the $24 million so they were upset over 24 million, which the University like ASU might be $12 million. If you take that $24 million, and plug it in on a racial basis with that $5.2 billion, you are less than about one-third of 1% of their total revenue. So, they're kind of upset over nothing. And I will tell you one other thing about the tuition increase, their tuition increases total, something like twice the amount of the reductions that were made to the University over time. So while they want to blame it on the legislature all the time, there are probably some internal things that they need to look at, as well.

Ted Simons: Does the legislature not have to look at increasing student attendance, increasing population at these universities?

Andy Biggs: Yeah, but that's tangential to the argument that they had to raise tuition because of this.

Ted Simons: How so?

Andy Biggs: One of the things that they are doing is taking 50% of the tuition money and they are redistributing it within their own tuition, their own rate payers, so that becomes a bit of an interesting question.

Ted Simons: So again, the fact that attendance, at the three universities has increased so much, does that play a factor?

Andy Biggs: I don't think so. Look, if you take -- if you go back and watch the trajectory of their revenue package, you will see that it exceeds the inflation plus growth in average daily attendance or full-time student equivalency. I think that you will see that exceeds that.

Ted Simons: What about the career in technical education, the joint technical education district and these things, cut 30 million, the Governor says, maybe three years at $10 million, but with a whole lot of strings attached by way of grants. A good idea?

Andy Biggs: It's an interesting idea. I would need to see the particulars of that, and I have not seen that flushed out just yet. I've been told it's an interesting concept. I have not really seen how it would operate yet. I am interested to see it. I am kind of a different mind, but what I do think is that there needs to be reform, needs to be accountability and some transparency there, as I said, when we spoke before, there isn't even any mechanism to have a regular audit like we have every other K-12 unit gets audited on a regular basis. We get to go in and see what's going on financially and performance-wise. There is not anything going on there with in that.

Ted Simons: There are no audits at all with --

Andy Biggs: That's correct. The last audit was 2004, and that was the request of the legislature. So, you are talking 12 years without an audit. So where he need to get one and find out what's going on, and it also is a complex funding deal, so you get a central -- if you are a central campus, you get 1.75, if you are a satellite, 1.25, but by the way, there is going to be a big one that goes -- did I just say big? There will be a percentage amount that's going to go to the central campus even though they are probably not doing much of anything.

Ted Simons: Last question before we go, state budget reflects estate's values, and I think most would agree to that. Regarding what the Governor has proposed, regarding what you would like to see, what does that say about Arizona, and if I'm a corporation looking to relocate to Arizona, what is it telling me?

Andy Biggs: Well, I'll tell you what, it's telling you that this state is great for business. That's why Forbes said, we're going to be the number one in job growth for, or in the top five for job growth for the next five to ten years. And why we have grown over the last 30 years, from, or I should say, yeah, 1980s to 2010, the Phoenix metro area created more jobs than any other large metro area in the country. It's because of our tax structure, our regulatory environment, and contrary to what people say, our educational environment is solid, we provide the support.

Ted Simons: Do you understand when people don't think it's solid? Do you understand that argument?

Andy Biggs: I do. I think it's wrong headed. I think it's inaccurate. The reality is, and I have mentioned this before, I've been asked this, and I said, I can't name one CEO or executive who said, we're not coming to Arizona because of education, not one. I have never been told that. I have met with lots of them. We just brought in Apple; do you think they would be here if they thought that we had a bad educational environment? The answer is no. And I think that we are more solid on education, as people would be willing to agree, if you want -- if the money is your deal, and you are betting a lot. I would say that you probably disagree with me.

Ted Simons: All right. With that, we'll say thank you very much for joining us. We appreciate seeing you.

Andy Biggs: Good to see you, Ted.