Join us as three local journalists bring you up to date on the news of the week.
Ted Simons: Coming up next on "Arizona Horizon," Journalists' roundtable. The latest on the last hours of the legislative session including the passage of KidsCare. The journalists roundtable is next on "Arizona Horizon."
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Ted Simons: Good evening. Well come to "Arizona Horizon" "Journalists' Roundtable." I'm Ted Simons. Joining us, Jim Small of the Arizona Capitol Times, Joanie Lum Di da of the airs Capitol Times and Mike Sunnucks of the Phoenix business journal.
Ted Simons: So much to discuss. Start with the state budget. That's the biggie here. Agreement reached early Wednesday morning. 9.some 6 spending plan. Over all impressions.
Jim Small: it took about two weeks longer than they expected, but I think the one big take-away there was a group of Republican legislators who identified about six or eight weeks ago things that they wanted to make sure were in the budget, said we won't vote if they don't. Those weren't in the original budget plan and they showed the power of numbers at the capitol. They banded together and said here are the things we need. It was in K-12 spending primarily. We need these things addressed. Until they were addressed the budget didn't move forward. Once that happened it broke the log jam. It was just a matter of procedure about having the debate and having the votes.
Ted Simons: they got what they wanted. They move forward. From a distance it looked like there was a bit of a punt. Didn't they just kick the can down the road on the education funding business?
Jeremy Duda: What is really important, especially for governor Ducey on the side of the group of Republican lawmakers, not to have anything that could even be theoretically construed as can cut to K-12 education. In two weeks we have an election on prop 123. One thing that a could look that if they look like they are cutting the budget then asked them to cut the land trust for more money, that would look bad. For that reason the governor wanted that.
Ted Simons: But again, the cuts were not necessarily cutting now. Just from stuff passed previously.
Mike Sunnucks: oh, yeah, but the governor -- we have talked with this before, he's always balancing between the business wing of the party, hard core conservatives, then the folks in the middle who want to see more education spending. The timing comes obviously next month we have the prop 123 folks. He was maneuvering around those things at the same time. I think from a distance like you said people are saying we have the surplus, why aren't we spending more, but I think he's trying to get what he could out of the Republican caucus as he could.
Jim Small: we talk about maneuvering, there were basically four education issues three are in Ducey's budget. For governor Ducey to recognize the potential effect this could have on the narrative surrounding proposition 123 was really the turning point. It was again I think it really signified how important these coalitions can be at the legislature that even though it's not a majority it's a large enough minority that it was something that these Republicans were able to change the dynamic and change the tone of the conversation.
Ted Simons: quickly again, the impasse dealt with current year funding for attendance as opposed to previous year. Something argued and settled last session.
Jeremy Duda: As Jim mentioned four issues, this was the biggest, about $31 million. Instead of calculating schools get paid per student. Instead of calculating on previous year they would change it to how much they expect this year. For schools with declining populations they lose out. For some schools that's a cut.
Mike Sunnucks: it does feel like throughout the whole process because of 123, the locality of the opposition, folks who wanted to restore some of the cuts to universities -- we got this big surplus, they seemed so muted from a distance because you have all those folks, Democrats, teachers unions, the chambers of commerce, more moderate folks are all in the same camp with the governor on 123, so it's like they don't want to spoil the whole meal. All this money is sitting here and I didn't see a lot of calls towards the ends to, hey, we should spend some of this. They don't have the votes and they are on the same camp in the proposition.
Jim Small: they did spend -- they are going from close to $500 million surplus down to 60 million. They are spending it, just not on new programs. Not on restoring cuts made over the past five or six years. A large chunk went toward paying back the universities in particular and child protective services, child safety, money essentially delayed during an accounting trick, making them whole she they don't have to kick a month's worth of funding off to the next year.
Ted Simons: everyone thought KidsCare, such a major thing, health insurance for working poor families, 30 to more thousand children involved here. The though was maybe we could do something in the budget. Didn't happen but it still lives. What happened?
Jeremy Duda: people supported this program were riding high. They thought this was going to get into the public. You had a Republican in each house, they had their amendments ready. They were going to introduce them on to the budget bills. Got the Democrats on board with these groups of Republicans, you have the votes. Didn't happen. A lot of discord in the house. Conservatives didn't want to support this. The governor's office was urging not to blow up the budget. The Democrats tried to amend it on, failed on both counts, but a day or two later it's back. You have a group of Republican holdouts joining with the Democrats much like Medicaid expansion three years ago, suspending the rules overruling the speaker of the house,the Senate, ramming it down the throats of the majority of the Republicans but they succeeded.
Mike Sunnucks: Same game plan, same cast of characters, same people losing in the end.
Ted Simons: really, they did get rolled, didn't they?
Jim Small: yes.
Ted Simons: president Biggs is dead set against this thing. His folks in the Senate said we're going to vote on it anyway whether you like it or not.
Jim Small: they did. It came down to a numbers gape. -- game. Biggs acknowledged that during his concession speech for lack of better word. He was talking about the vote, he talked why he didn't like the program, made many of the same arguments he made on this program. But he said, look, at the end of the day, we have rules for our system. The rules are that 16 of you can determine what the rest of us do. This is all by the rules. This is the way our system works. It's the way our democracy is supposed to function in this way, there's checks and balances on this stuff. Essentially was gracious in defeat. This certainly didn't have the same kind of high charged emotions that that Medicaid expansion did. There's a lot going on, months of buildup to that. This was maybe similar in a lot of ways in terms of the mechanics but in terms of just that collateral damage caused by the just the fighting over it, not nearly as big.
Ted Simons: the governor sounds like he was pleased that he signed it or not? He signed it.
Jeremy Duda: He signed it and with quickness as well. The governor does not like most golfers let you comment until he acts on them. Within five to ten minutes of the Senate giving final approval he tweeted that he would sign it. A few hours later he signed it. Ducey has been I think aggressively neutral on KidsCare for months really. This debate has been raging all session. He said I'm open to it but certainly there are questions. Let the legislature decide. Rumors he was trying to keep it out of the budget. Once this goes to his desk, P.R. wise there's not a choice. He spent a long time carefully cultivated his image and reputation, what his administration is about. It costs the state nothing for a couple of years to give free health care to 30,000 people. That becomes your image. I don't think he was willing to do that at all.
Mike Sunnucks: that tweet was almost as fast as the freeway shooter tweet. Very much a chamber of commerce Republican. He ran as a business conservative, but he's moving more toward that chamber of commerce mold. You see it with the education proposition. The business crowd of the Republican party once their tax cut, wants low regulations but they want good investments and good P.R. for the state. More money for schools. We were the only state that didn't have it, for us to stand out like that bothers them.
Ted Simons: it was good P.R. for the legislature to maybe didn't admit they did something wrong but to change its mind and put through something that didn't look like it had a chance?
Jeremy Duda: Certainly good P.R. for a number of them. When this was supposed to be amended out of the budget the Republicans pulled back and this core group of Republicans especially in the house trying to pass this, most of them just left the chamber. They didn't vote yes or no they just left. Mcgee was over in the Senate lounge, democratic lawmakers taking pictures and tweeting them out. In there's a tough Senate race this November. Democrats were going to bludgeon her with this. This is redemption on that end.
Ted Simons: all right, you were talking about business and such and the governor being a chamber of commerce sort of politician. Business tax cuts, made it through the budget.
Jim Small: yeah. There were, what, 26 million carved out? Couple of tax provisions in the budget then space left for other bills moving through the legislature basically placeholders. They could pass those bills and it wouldn't be taking money out of the budget.
Ted Simons: $8 million business tax cuts this year, doubling to 16 million in 2018. The governor said he was going to cut taxes in some way, shape or form every year.
Mike Sunnucks: that's something to run on for extra terms or other things. It's for equipment write-down. Something business folks have been pushing for in various incarnations for years. You're in business, you buy a truck, machinery, computers you want to able to write that off, get some tax breaks. That will encourage businesses to buy new equipment they say and have a trickle down effect.
Ted Simons: speaking of tax breaks there was much discussion a tax break for Grand Canyon university was on the fast track. What happened?
Jeremy Duda: What happened is a lot of conservative groups that are very hawkish on taxes didn't like it and that carries a lot of Republican votes with it in the legislature. This bill that would change the property tax classification for Grand Canyon university, for any for-profit higher education institution, massive, about 3.6 million next year passed the Senate by one vote, killed in the house last night. Only 17 votes for it. Everyone else against it. You have -- they have done a lot for this area of Phoenix. There's a lot of -- they have a lot of arguments where they felt this was right, but big tax breaks, there are so many conservatives that don't like this. When you have the Arizona tax research association against it, Goldwater Institute. These people command loyalty. People listen to them and didn't want anything to do with it.
Mike Sunnucks: This is the old 5% argument. Grand Canyon, pays the same as that. ASU, public schools don't pay anything, but folks in free trade zones pay 5%. You always have this pursuit by various business sectors to get the 5% rate. Last time they tried to get it for the Mesa campus. That doesn't pass muster. They expand it so other for-profit schools in there -- it barely passed the house. You had real estate groups coming out against this, even some folks in the area around west Phoenix were skeptical.
Ted Simons: Higher property taxes for others. Were you surprised this went down the way it did?
Jim Small: yes and No. Seemed like it had a little momentum. It was a signal to people that this thing was really going to get some steam behind it, but at the same time you look at the groups opposed to it and it's the laundries list of groups that, you know, support a lot of Republicans and that Republicans try to Curry favor with. So seeing them all come out against it I think kind of shifted the winds a little bit on this bill. Obviously at the ends of the day like Jeremy said, only 17 votes for it out of the 60-member chamber, it was a resounding defeat.
Ted Simons: when you mess around with somebody's property taxes, if you lower someone's property taxes that much it goes up for others.
Mike Sunnucks: It's over on camelback, 35th avenue. They put a lot of investment into that area. that's a working class area. their argument is they are actually building things, creating construction jobs. We give other tax breaks to companies to come in here. They are already here but it's a tough go with conservatives down there that want flat or fair taxes. We have had so many tax breaks over the years for certain industries, certain companies that it's a tough sell for anybody.
Ted Simons: So what happened with this special tax district for developers that speaker Gowan was pushing?
Jeremy Duda: Gowan got a second bite of that apple and it passed. Lost nearly this. They left this voting open for like an hour T.
Ted Simons: What does it do? Give us a brief synopsis.
Jeremy Duda: this would allow large developers -- developers are already allowed to create a community facilities district, issue bonds, levy taxes to pay for infrastructure improvements. Much easier to do that for very large developers if you have 600 acres and the all the property owners agree you can create this without the permission of the city. It would allow developers to stack the board so they control all the decision making. This was being especially pushed by Eldorado holdings. They have a big project near Benson.
Ted Simons: speaker Gowan country.
Jeremy Duda: Yes. His district.
Ted Simons: This made it but it made it barely? They really had to work on this?
Jim Small: They did. First time it was on it had 28, 29 votes. They got it to 32. They did flip three or four people on the bill. Obviously it was a priority issue for the speaker as I think most issues are that the speaker carries are priorities for the speaker. The fact that they left the voting -- normally voting on a bill even a contentious won where there was a lot of talking, you may see it run an hour. This one no one was talking. Literally sitting there with the votes up, the board opened and everybody kind of confined to their seats waiting for something to happen.
Ted Simons: something must have happened because votes changed.
Jim Small: eventually. On the second go round.
Mike Sunnucks: There's a Republican lawmakers who changed their votes. The real estate lobby still has a lot of power both at the local level and at the legislature. They get tax breaks all the time.
Ted Simons: Cities and towns didn't want this.
Mike Sunnucks: Which had big developers for that. Master plan developers. One thing that came up, master planning communities big, sprawling subdivisions are a thing of the past after the bubble burst. People want infill. You're seeing more stuff in towns, not big, sprawling suburban ones. Even Gowan said they can't get financing on the stuff. It's always been a Republican argument let the marketplace decide this. This kinds of goes against that.
Ted Simons: Bill expanding the Arizona Supreme Court. Are we going to see more Supreme Court justice?
Jeremy Duda: I would bet on it. This bill has gone to governor Ducey's desk. He hasn't acted on it yet. I defy you to show me in the history of this country a governor who would not love the opportunity to expand their Supreme Court and make two new appointments just like that.
Ted Simons: From five to seven. The reasoning for this was --
Jeremy Duda: The sponsor of this bill, we haven't expanded the size of the court in about 50 years. Arizona's population has grown a zillion times since then. Pretty much every other state our size has courts of seven or nine. He believes it's better to diffuse this among more people. Critics find this court-packing. [speaking simultaneously] So maybe --
Mike Sunnucks: I'm sure our Republican friends at the legislature would have approved this if Janet Napolitano was still governor. Gives them more votes for the governor to appoint. The court building itself is outfitted for seven. It's like empty offices, might as well fill them. [laughter]
Ted Simons: The negotiations for this. Talk about the horse trading.
Jim Small: So the Supreme Court was not a fan of this proposal. They basically said, we're doing fine. We're not overworked. We don't have bag logs. We're doing fine. Thanks for enquiring. But they realized that there was political forces behinds this bill, that it was going to get a serious hearing. Good chance that it would move to the point where it would land on the governor's desk. The chief justice school Bales kind of got involved early on the process. Okay, we think this is probably going to pass. We want to make sure if we're going to have to deal with something we don't like we want to get something we do like out of it. The idea of give a kid to eat broccoli and covering it with cheese. We're going to give you something you like but to eat the broccoli you get to the cheese. They were working on pay raises for judges. Judges haven't had a pay raise since 2008. They wanted two years of 3% pay raises, extra money for I.T. work, for adult probation services, extra money for juvenile cases. The negotiations broke down essentially. Senate president Biggs wasn't willing to do all of that spending. They were looking for about $10 million. End of the day they threw them a bone, gave them about half what they were looking for. Pay raises instead of 3% for two years they got 1.5% for two years. They got some money for adult probation, some money for juvenile corrections. They got about --
Ted Simons: A little win-win?
Mike Sunnucks: Bigger fridge for the break room at the Supreme Court. This is part of the conservatives trying to get an advantage at the court. It goes back to let's vote, have popular election of judges. You got a Republican governor very Pro-life, very conservative. We can add two more votes and those people will be in there for a long time.
Ted Simons: we have not heart much of superintendent of instruction Diane Douglas for a while. There was a bill that seemed to clarify the duties that support Douglas on one side and the rest of humanity on the other. Do we know who gets to boss around the board of education employees?
Jeremy Duda: It will be the board of education. That fight has been going on for a long time. Diane Douglas has raged over the board of education overt authority she believed she had over employees. There's lawsuits, wild, angry press releases, repeated failed attempts to get a bill through that would clarify this. Now we have it. Just last week I remember saying to my colleagues, Diane Douglas has been pretty quiet lately. She's been negotiating with the board of Ed over the final language and they reached an agreement. The board of Ed will have the authority they always claimed they had over their own employees.
Mike Sunnucks: everything has calmed down? Things will be hunky-dory from now on with them. I think they will finds something to fight about. She gets oversight over the investigators of teachers. She got that. They were fighting over that. I think she will find probably something to fight with them over. She wants the microphone.
Ted Simons: keep your hands off me. Before we go I do want to mention Christine Jones. She announced she's going to run for Congress, wants to succeed max salmon in congressional district 5. Were you surprised?
Jim Small: No. There had been prelude to it. We fir heard the it rumors not long after Matt salmon announced he wouldn't seek reelection. That has picked up esteem the last couple of weeks, talk about exploratory committee, what they were doing, having meet and greets. Seemed to be setting the stage for her to run. It's obvious she has a big desire to be involved in Arizona politics and really wants to find a way to affect public policy. Governor's bid obviously didn't go the way she hoped for. This is a different kettle of fish. It's become an interesting race.
Ted Simons: doesn't live in the district or work in the district but wants to represent the district.
Jeremy Duda: she considered briefly running in CD-9, where Republicans are desperate for a strong challenger against Kyrsten Sinema. Now she's running to CD-5. I don't live there but we have ties in this valley. We go to church in the valley. The church and lie school are still in CD-9 but east valley nonetheless.
Ted Simons: she's driven through there. [laughter]
Mike Sunnucks: She's changed the dynamic. She put in her own money, she was counsel and vice president, executive of go daddy. That changes the whole dynamic. That forces Andy Biggs and others to raise money, to think about more TV ads, more spending and fund-raising.
Ted Simons: she got a shot?
Mike Sunnucks: I think so. It's crowded. Interesting to see what name I.D. Biggs has. He has great name recognition at the state capitol and with folks like us.
Ted Simons: Got to stop it there. Great discussion. Good to have you here. Monday our coverage of profession 123 continues as we hear from a supporter and we'll discuss recent advancements in the treatment of prostate and colorectal cancer. That's Monday on "Arizona Horizon." Tuesday we hear from those opposed to proposition 123. Wednesday physicist Lawrence Krauss will join us. Thursday, funding for the arts in the state. Friday, it's another edition of journalists' rounds table.
Ted Simons: 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 Arizona PBS, members of your PBS station. Thank you.
