Governor Janet Napolitano

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José Cárdenas talks to Gov. Napolitano about the State of the State address, the budget proposal, immigration issues and issues facing Arizona in the legislative session this year.


José Cárdenas:
Good evening and welcome to Horizonte. I'm José Cárdenas. From the State of the State Address, to proposals on how to reduce Arizona's budget shortfall. Governor Janet Napolitano is here to talk about these topics and more. Next on Horizonte.

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Funding for Horizonte is funded by SRP.

José Cárdenas:
Governor Napolitano outlined her agenda for Arizona's future in her State of the State Address last week. She also unveiled her fiscal strategy for 2009 to help close the gap on the state's budget deficit. Here to talk about these two big issues and other state concerns is Arizona Governor Janet Napolitano. Governor, welcome back to Horizonte. You have done a lot of talking in recent weeks about your State of the State and the budget. Let's talk about some of the chapters in your State of the State that haven't had that much discussion or that maybe need a little more explanation. First, healthcare. And what's the difference between kid's care and kid share?

Janet Napolitano:
Kid's care is the current program, it's health insurance for children whose families are between poverty line and 200% of the federal poverty line. Still low-income families. But it's a health insurance program. Kid's share is a proposal I've made for families who have children where they simply can't buy insurance. A lot of these are children that are born with a genetic condition, a chronic disease, or something of that nature, and they simply can't buy insurance. Well, we can provide that or do that in augmentation of kids care with the parents of the child actually paying for it, so it is cost neutral to the state, but it puts an insurance product out there that they're otherwise not able to get, at least at any kind of a semi-affordable rate.

José Cárdenas:
There were a couple of other health-related matters you discussed; one was raising the age eligible dependents to 25 years. How would that work?

Janet Napolitano:
Well, what that would say is -- right now, under many health insurance policies, if you have a dependent, and the dependent reaches the age of adulthood, but is going to college or is a full-time student, you can keep that dependent on your insurance up to, in some respects, in some cases, the age of 23. What I'm saying is to have more young people insured, let their parents pay for their insurance but keep them on their policies until the age of 25 irrespective of whether they are full-time students or not.

José Cárdenas:
And what power would the legislature have to make that happen?

Janet Napolitano:
They would have it under their legislative jurisdiction over the insurance laws, in general.

José Cárdenas:
Let's talk now about another chapter, and that has to do with public safety. But one of the issues in there you have talked about, but there seems to be confusion between the three-and-one I.D. and real I.D. which I understand is the federal proposal. How do the two differ and how would yours work?

Janet Napolitano:
Right, what I'm proposing is a second optional driver's license for Arizonans. That's optional, voluntary. It would be a license that would have three purposes. Driver's license. It would satisfy -- it would substitute for a passport for U.S. citizens coming back from Canada or Mexico, and the Feds have agreed that it would, I have that agreement now. And employers could use it and rely on it for purposes of the employers' sanctions law. That requires legislation. But that is the three-in-one license. On the third factor it would be a part of the e-verify system. If the legislature approves it and gives us the authority to do it, we could have it up and running by September of this year. Real I.D. is a federal law, for a federal identification requirement. We're still going through it because the proposal regulations read like the phone book. But it is to greatly restrict driver's license and other forms of I.D. I've always said that on real I.D. we have to see exactly what the department of homeland security is asking for and B, are they going to pay for it. My three-in-one license is really irrespective of real I.D.

José Cárdenas:
Now we have to have one or the other in time to meet the federal mandate, don't we? Or we're in serious risk that Arizonans won't be able to travel as freely as other citizens --

Janet Napolitano:
Well, the real I.D. mandate they keep pushing it back, I think they've already pushed it back three or four years. And like I said, they just published the regulations recently. We are still going through them. So, that's kind of a long-term issue that needs to be negotiated between the states and the federal government. The whole idea is homeland security. So let's keep that in mind. But, for this day and age what I'm talking about is an optional driver's license available at a much cheaper cost than a passport that would fit the Western Hemisphere Travel Initiative which does go into effect this year, so you could substitute it for the passport necessary to come back from Mexico or Canada, you could use it for a driver's license and an employer could use it to verify citizenship for employment purposes.

José Cárdenas:
So people who are here illegally would not be eligible to receive this I.D.?

Janet Napolitano:
That is correct.

José Cárdenas:
Even though as I understand it, police have asked for some kind of I.D. And at least in the past when proposals have been made to restrict driver's licenses and to prohibit issuing them to people here illegally, the police have said some I.D. is better than no I.D. How would you deal with that issue?

Janet Napolitano:
Well, this doesn't say that you don't have no I.D. What this says is this particular form of I.D. would also verify citizenship.

José Cárdenas:
Governor, chapter one of your State of the State was education. You had a number of proposals there. One of them was centennial scholars. How would that work?

Janet Napolitano:
What I said is look, we don't have a lot of money this year to put in this year. But we can begin planning. And what I said is look, this year's eighth graders will graduate from high school in the year 2012. That's the year that Arizona turns 100, it's our centennial year. How about we make our plan so that by the year 2012 any student who graduated from high school whose maintained at least a B average and stayed out of trouble would be able to go to community college or university free and any class thereafter. It's a way to really focus young people, and families, at an early age on what they need to do go on for higher education. And of course, my challenge to our universities is to double the number of bachelor's degree recipients they are granting by year 2020. So this is also part of the process of getting us there.

José Cárdenas:
Now, on the latter, and I do want to go back to the centennial scholars. But on the latter, the Goldwater Institute came out this week with a criticism of that, saying A, it'll lead to great inflation and B, we really don't need to double the number of graduates because there's so many jobs that don't require a college degree.

Janet Napolitano:
Well, yes, if you want to have a bottom minimum wage economy. The Goldwater Institute, that's not really a research institute, it's kind of an ideological thing that puts out papers and you can't rely on that as saying, "Is this a good future for Arizona?" One of things we do know is -- one of the key factors of economic wealth and generating a higher economy, more wealth for everybody -- is the number of college graduates that you have per capita. And that's why you want to keep increasing those. Why? Because they keep generating higher wage jobs and higher wage jobs, in themselves multiply into other higher kinds of jobs. So, for us, if we're really planning on how we lift and diversify the Arizona economy, one of the key factors to focus upon is the number of graduates.

José Cárdenas:
Going back to centennial scholars, how much would that cost the state?

Janet Napolitano:
Well, there are varying numbers. But I can tell you with confidence it is affordable. One of the things we're calculating now is how many of those students already receive some sort of financial aid. So you have to net that out. But it is certainly affordable and particularly so for planning for the next four years to put it into the system.

José Cárdenas:
Do you also propose freezing tuition for the four-year period that people are in school?

Janet Napolitano:
Yes.

José Cárdenas:
What's the cost there?

Janet Napolitano:
Well, it depends on the institution, but NAU and ASU are already planning to do this. So really the only institution that needs to make changes is the U of A. But beginning this fall, what this would say, if you're beginning at NAU, ASU or U of A this fall and your tuition is X, your tuition will remain X for four years. The class after you may be another X, a higher X or so forth. But it gives two things. One, stability, so you know what you're planning for and families know what to expect and students know what their obligations going to be to get the really high value university education. And it also encourages students to get out in four years and I think there are many parents out there who would appreciate that.

José Cárdenas:
I'm sure they would. On the other hand, kind of the flip of this, you have proposed increasing to 18 the age at which students can dropout of high school.

Janet Napolitano:
Right, a student who drops out at 16 is not going to be an economic producer. There's no real future for that student. If you know you can drop out at 16, you check out at 14. And so, what I have proposed, for the second year in a row, is we raise the dropout age. I've also proposed, however, that we provide alternative schools or other schools for students who really cannot succeed in a regular, traditional classroom. The chief argument made against raising the dropout age is you're going to have all these disruptive students in class. Well, that's over-said, because other states have raised it and you deal with a troublesome student by a variety of mechanisms. But it's no solution to just say, "Well, we'll let you drop out at 16." I'll tell you what happens, that high school drop out at 16? We're going to see him somewhere else, we're going to see him in the corrections system, we're going to see him on the welfare role. They are not going to be able to be fully productive in Arizona without a better education. So we need to fight to keep those kids in school.

José Cárdenas:
And I take it those costs outweigh the added costs of keeping them those kids in school for another couple of weeks.

Janet Napolitano:
That's right, that's right. It's kind of a little difficult to calculate. When you just think about it, what's the right thing to do? Of course we're much better off if we have a student who stays in school, is not on the streets, is not out there doing nothing, unemployed and unemployable. And of course it's better if we get more of our students going on to college, or community college or university, of course we're going to be better off if we do that. So, forget editorial comments from the Goldwater Institute, or whatever it is. Just think of your common sense and what you're common sense tells you. And the common sense tells you, "Of course this is the way we need to go."

José Cárdenas:
You've made several references to the economy. Chapter two of your State of the State was making Arizona a world tech leader, economic independent so to speak. How hard is that going to be as we continue to see the decline, both in Arizona and nationally, of the economy?

Janet Napolitano:
I actually think the decline in Arizona illustrates my point. Which is to say that we've been too housing dependent for too long and we need to diversify. And as we diversify, we want to diversify into high wage, high benefit jobs. That's why education has to be the first chapter. But that's why, for example, investments and basic research makes a lot of sense because they, too, lead to the creation of those kinds of jobs over time. Not immediately, not in one year, two, three or four, but over time. That's what happens. And that's what we need to keep our long-term vision on in Arizona.

José Cárdenas:
Now, one of things you did talk about in this segment of your State of the State was protecting home buyers who are some of the victims of the problems we're having right now. How would you do that?

Janet Napolitano:
Well, one is that I met with the major lenders, and for home buyers in the sub-prime market who are going to see their interest rates really jump, the lenders have all recognized that foreclosing on those homes doesn't make sense and kicking people out of homes doesn't make any sense. So, they are willing to negotiate those people back into prime rate mortgages. And so we're working on that and we have a hotline set up and people working on the hotline and the like. But then we need to prevent this from happening in the future. And two ideas there that I have proposed is the Home Equity Theft Prevention Act and licensing of loan officers so that we get better control of who is sitting across the table from a potential home buyer.

José Cárdenas:
And would that have anything to do with brokers, for example, representatives of buyers, a relatively new phenomenon, but now they're being sued by buyers who say they were misled as to the value of homes?

Janet Napolitano:
I don't know, I can't answer that right off the top of my head because I don't know exactly what they are talking about in that situation. I saw the article today about that --

José Cárdenas:
Brand new piece of litigation that's going to trial right now. Well, Governor, trade is part of this obviously, and you talked about Congressman Colby's role in leading the efforts to establish a CANAMEX trade quarter. What else can you tell us about that?

Janet Napolitano:
That's right. And he's got a two-fold charge that he's accepted. And we're grateful for that. Because, of course, trade and foreign trade were really sort of areas of expertise he had in the United States Congress and he just knows that whole area so well. But, I've asked him to take the lead on developing the CANAMEX quarter, a trade and tourism quarter from Mexico through Arizona and four other states up to Canada and there's a lot of work that's been done on that already. But the second is to lead our charge to get federal resources to improve the ports of entry, the land ports of entry, Douglas, Noco, Nogales, San Luis, where we continue to have long lines both for people coming back and forth across the border, have to, often times, at the end of a weekend wait for hours to come through the port and also for goods. And we have billions of dollars of legal commerce that go through the ports and they are not big enough to handle them all. And those are federal ports. So I have asked Congressman Colby to help lead the effort to improve and enlarge those ports.

José Cárdenas:
And you dealt with other kinds of border-related issues elsewhere in your State of the State Address and those have to do with employer sanctions. Where do we stand there? What do you foresee happening in this legislative session?

Janet Napolitano:
I don't have a good prediction. I said when I signed the bill that some things needed to be clarified and that should be clarified so that, without really diminishing its strength, but it's easier to comply with quite frankly because the vast majority of employers want to do so. And we want to also make some clarifications so that our investigative resources are really focused on employers who intentionally and consistently hire illegal labor. Intentionally evading our nation's immigration laws. So I made those recommendations when I signed the bill. There are some pieces of legislation now that have been offered at the legislature that reflect those changes, some other changes. I've also recommended that we limit the use of RICO Funds, those are funds we get for prosecuting organized crime, for the core functions of law enforcement, like hiring investigators, buying body armor and enforcing employer sanctions.

José Cárdenas:
And some have taken your comments about that to be a shot at Maricopa Attorney Andrew Thomas…was it?

Janet Napolitano:
I'll let people interpret what they want.

José Cárdenas:
Governor, several other issues going on here. One of the concerns of the business community is that our employer sanctions law and just the whole atmosphere may deter companies from coming here, not because they would necessarily be in violation of the law, but because they are fearful of some wild prosecutor who might be less than judicious in terms of bringing prosecutions. Is the state doing anything to reassure companies that might be thinking of Arizona that they will be treated fairly here?

Janet Napolitano:
Well, first of all there's a lot of speculations about that bill. Most of them have yet to come to pass by the way. And certainly -- nobody has given me a single instance of a company that I could talk to about the employer sanctions law who says they're not coming to Arizona because of the employer sanctions law. And by the way, other states are now following suit. So that's where that is. Ultimately, we need a federal fix here. We need a federal immigration reform, but that's going to have to wait for a new president and a new Congress. But some of the changes that I have suggested I think would help provide that assurance. For example, an anonymous complaint would not suffice. It would have to be a real complaint that you sign and so forth. So that if somebody is merely filing a complaint to interfere with your business, say, for example, your competitor accusing you of using illegal labor so you have to go to the expense of showing no you're not, blah, blah, blah, blah, well so we know who that complaint came from and go after them for that sort of interference. So there is some things we can do to make the law more workable in that regard.

José Cárdenas:
Governor, one of the fixes you said this legislation needed even when you signed it into law was something to prevent discrimination against people based upon their national origin or their appearance and ethnicity. And there does seem to be a sense that employer sanctions and everything else that's going on has created an atmosphere here that encourages more racial prejudice. What are the prospects for having something effective in new legislation to deal with that issue?

Janet Napolitano:
I don't know. Of course we have non-discrimination provisions elsewhere in our state constitution and our state law. And so some of the opponents of that amendment to our employer sanctions law say, "Hey, well we already have a nondiscrimination provision." But I think given the newness of the sanctions law and the potential for undue damage that it could harm to legal Arizonans who are here that reaffirming nondiscrimination is an important value to express within the context of the law itself.

José Cárdenas:
And you have expressed your opinion that you don't think immigration laws should be enforced on the back, so to speak, of the young kids that were brought here. I was in the audience when you got a question at a forum about that. You expressed your views on that. What else can you tell us in that regard?

Janet Napolitano:
I just think, you know, you hear this, you know, to amend the United States Constitution to get rid of the provision that is interpreted to being that if you are born in the United States you are a United States' citizen.

José Cárdenas:
These are people who are already citizens under the U.S. Constitution.

Janet Napolitano:
Right. And to me, to make them non-citizens, where would they be citizens of? And to me, all this reflects the basic need we have. And the basic need we have is to amend our nation's immigration laws to reflect what is going on in the world, to reflect quite frankly what is going between Central America and Mexico and the United States. This is basically an economic migration. We need to increase the number of lawful visas that are given out so people can come through lawfully, through the ports with the right documentation. We know who they are; we know where they are going. And unless you deal with some of those issues, you cannot fix this simply with a law enforcement approach. Sure you need security at the border, we've done more than any other state in that regard and we continue to do that. We need more technology, we need interior enforcement. All of those things have to happen. But they cannot fix the fundamental immigration law because they don't address the fundamental labor issues that are going on. And that has to be really done at the national level.

José Cárdenas:
Governor, last chapter and then I want to talk about the budget and political endorsements. State transportation and state trust lands, do you really think we're going to see anything dealing with those issues this legislative term?

Janet Napolitano:
Oh, yes. I'm very optimistic. State trust land, we're working very hard with the bipartisan group of legislatures, have been for several months to see if we can arrange a bill that would be both a statute and a constitutional amendment so there'd be something ready for our voters this year. Transportation we need the legislature to get moving. No pun intended. We have all these studies. They are all due to be pretty much done and completed by March of this year. It's time to quit studying and start acting. Really the legislature should be the first body who takes all of this and puts it in a package so that it's something for Arizona voters to consider.

José Cárdenas:
And the issue of course will be dollars which is the subject of the debate right now between your budget and what's being proposed by the legislature. First of all, where do we stand in terms of the size of the deficit for this current fiscal year?

Janet Napolitano:
Well, our estimate is the current deficit is probably in the $850 million range, out of a budget of about 10.6 billion in general fund revenues. For next year's budget, which would be the fiscal year the begins July 1, 1.3 billion plus is our estimate. Now, we arrive at those estimates by using a revenue number we get from a group of economic forecasters that I've been using the last five years that were used by Governor Hall, that have been used by the governors before her. They're based here at ASU. And they give us pessimistic baselines and optimistic projections. And so the numbers I have used are the baseline numbers. They do not presume or include any federal stimulus or economic stimulus from the Feds although it's clear now that we're going to get one in the next month. So that the baseline numbers as things stood a month ago.

José Cárdenas:
The University of Arizona's economist though has a much more conservative or pessimistic outlook.

Janet Napolitano:
Dr. Doom. He always does. I'll say with all respect, he funnels numbers into the joint legislative budget committee. If I had to hold up who's been more correct over time, I would say the governor's office of strategic planning and budgeting. Nonetheless, we have to come to agreement on this. We can have a fight between the economists, and this and that, and there are some unknowns here, let's be honest about this. We're in some new territory. But we have to resolve our budget issue for '08. One of the things we started hearings on the '08 budget fix the week before the session started. I gave them every chapter and verse on that the week before that. The idea that we had agreed on with legislative leadership was what really, by the end of this week, we would have some approach, some agreement on '08. We're not close to that yet. I'm not sensing that sense there at the legislature that they need to really grapple with this. I'm hoping over the next few days and maybe the end of this week, beginning of next week, to see some movement, because we really need to get '08 finished so we can turn to '09.

José Cárdenas:
Governor, you talked about gloomy outlooks this week. The State Treasurer Dean Martin said we're going to run out of money in May.

Janet Napolitano:
[Laughs] I saw that. I was like -- you know, I gave the legislature a plan for this year back in September. And I don't know where he's getting his numbers or what have you. But he's awfully late to this discussion. Look, we have a plan to balance the '08 budget, it's before the legislature. We need to get to the table and deal with it.

José Cárdenas:
Governor, a few other things, a couple of them before the courts. But first, abstinence-only sex education, you had some things to say about that this week

Janet Napolitano:
There's federal money that's for abstinence-only education that we have to pair with state money and it turns out it doesn't work. Of course we want our young people to abstain. So an abstinence message, in and of itself, is a good message. But it can't be an exclusive message. You also have to be able to teach young people about birth control. Because we're dealing with the real world here. And my ultimate goal is to reduce the amount of teenage pregnancy in Arizona. And to draw down those federal funds, we have to agree not to talk about any other form of birth control other than abstinence, and it doesn't work. The studies are conclusive on that. And so, we are now the fifteenth or sixteenth state that has said, "You know what, we're going to do our education of our young people our own way, with our monies, but we're not going to artificially limit what we're going to tell young people."

José Cárdenas:
Governor, two pieces of litigation that may have an impact on the budget. One was argued this week and it has to do with vouchers and donations to religious-related school institutions. Your position on that?

Janet Napolitano:
Obviously I have signed a budget that includes all of those things. But I have felt that ultimately the courts will need to address some of these things. And we've always known that these pieces of litigation are on-going. So while I have signed budgets including these contributions that end up, really, in the hands of private and parochial schools, the courts ultimately need to decide whether that infringes on the separation of church and state.

José Cárdenas:
In the Flores lawsuit, which I should note I'm involved in, this week there was an announcement that the cost, the incremental cost, required by the court might be as much as $300 million. How are you going to deal with that?

Janet Napolitano:
You know, I don't respond to statements. First thing we need to do is have the court rule, so we're waiting for what the 9th circuit decision is. We've held some money back, for example, my proposed budgets for '08 and '09 hold several hundred millions of dollars back in the rainy day fund for contingencies and Flores could be a contingency. So let's see what the courts rule. We need them to act.

José Cárdenas:
Governor, we're almost out of time. So, let's end on the super bowl. First, what does it mean to Arizona, and second, who are you picking to win?

Janet Napolitano:
Oh my heavens. Well, it's a good thing for Arizona. It showcases us, a great time of year. Anybody that's been watching those really cold, snowy Green Bay games, they'll see a different climate and different aspect of things when they get to Arizona. And it's not just the football game, it's really a gala. There'll be lots of activities for Arizonans who can't get a ticket or can't actually get into the game. It's a good thing. Hundreds of millions of dollars of economic impact. Who am I picking?

José Cárdenas:
Yes.

Janet Napolitano:
Oh my heavens. The pressure's on! I have to say I like the streak the Giants are on but on balance and assuming Tom Brady's leg is okay, I'd have to go with the Patriots.

José Cárdenas:
We'll have you back to talk about that. Governor, thanks for talking with us on Horizonte.

José Cárdenas:
That's Horizonte for tonight. Thank you for joining us. I'm José Cárdenas. Have a good evening.

Janet Napolitano: Arizona Governor;

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