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TED SIMONS: Coming up next on "Arizona Horizon's" Journalists' Roundtable, we'll review our conversation with Governor Doug Ducey earlier this week. And another legal move to try to remove a Corporation Commissioner from office. 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. Jeremy Duda of "The Arizona Capitol Times." Bob Christie of The Associated Press. And Mike Sunnucks of "The Phoenix Business Journal."
TED SIMONS: Governor Ducey sat down with us earlier this week to discuss the recent settlement of an education funding lawsuit, the governor sharing the credit for getting the deal done.
GOVERNOR DUCEY: Let's give our legislature credit for what they did just this last week, came into special session and in a bipartisan way, put $3.5 billion, millions and billions of dollars into K-12 education. That speaks to education's priority in this state and it also speaks to the focus of elected leaders and what they want to do in public office. This was public servants solving a big problem, and it's something that we should feel very good about, something I feel very good about, and it's a great foundation for what's next in our state.
TED SIMONS: As far as the mood, overall mood among lawmakers over the deal, what are you sensing?
JEREMY DUDA: It seems pretty good. The lawmakers at least the Republicans over there are pretty happy. The Democrats have kind of quieted down and Governor Ducey seems very happy. This was a very big a couple of weeks for him, very big win. He's the one who brought everyone together for the first time actually to sit face to face and talk this out and a five-year lawsuit that resolved in a matter of weeks.
TED SIMONS: Any buyer's remorse at the capital?
BOB CHRISTIE: I think there's buyer's remorse. The Democrats, there were three bills, the Democrats were unanimous on the actual money bill, which is get money to schools. They were not happy with the way it was paid for. I think they begrudgingly went along. Some of them broke. I think there's some buyer's remorse among some of the Republicans who wanted to see more accountability in it but they realized this is the deal we got, we can come back next year with more accountability and they probably will.
MIKE SUNNUCKS: Well, Republicans could have a much worse case scenario if they would have let this go on and lost in the courts and the courts would have had all that $1.7 billion against them. Some folks in the education community, some folks on the left maybe thought we could have gotten a little bit more out of this but I think, considering the dynamics down there, Republicans controlling everything, the conservative governor, they thought they did pretty well.
TED SIMONS: The idea of using the state trust fund. I know there was concern, a couple of Republican, one former, one current treasurer both Republicans, both conservative, expressing grave doubts about this. Other folks down at the capitol, that concerned about it?
JEREMY DUDA: Apparently, not. The governor's office certainly is very keen on pointing out there was a unanimous Republican vote on this and ever since this plan got uninvolved and we've had a few Republican lawmakers express similar concerns talking about the long-term health of the fund, stuff like that. They all came along, kirk Adams, Governor Ducey's chief of staff, explained to me that everyone wondered if this was going to be controversial and in the end, from kind of the beginning of the negotiations, that was baked in, they said this is the only way to do it, we're going to change around some of the numbers and in the end it wasn't very controversial among the Republicans.
TED SIMONS: And indeed we did ask the governor regarding the alarm bells, about using the land trust fund and he just didn't seem to think it was all that big a deal. Here's what he said.
GOVERNOR DUCEY: I think there's been a lot of hyperbole around it. The state land trust will be worth more 10 years from now than it is today. And like I said, that land trust is there to benefit K-12 education. So through ongoing land sales, through appreciation, through proper investment in the market and this is a job I had just not that long ago in terms of state treasurer so to leave the trust better than you found it but be able to resolve the lawsuit and push billions of dollars into K-12 education when they need it, that's a good idea, and it's a responsible idea.
TED SIMONS: And that's an idea the governor originally wanted to take 10% out of the land trust, down to 6.9% for years now and again that seemed to curry favor.
BOB CHRISTIE: It did. What he did is he leveled out the payments. There was concern about a cliff because it was supposed to be 10% for the first five years and then down to 5%. So the schools would get hooked on the 10% then they'd have to go what are we going to do now? They leveled it out, that took a lot of the angst away about the schools dropping off the cliff as far as funding. I think there will still be questions as we go towards the special election in May. Are we tapping too much of the land trust fund? The governor said just a second ago it will be bigger than when we started and after 10 years but it will be --
TED SIMONS: It better be bigger than where we started.
BOB CHRISTIE: It will be slightly bigger,it will be $5.2 or $5.5 billion and if we didn't cap it, it would be $10 billion and spinning off that much more money. You have to consider it will be bigger but it would be a lot bigger if we hadn't done it this way.
MIKE SUNNUCKS: Like any good supply sider, the governor said we'll grow our way out of it, we'll make it up with growth and price appreciations and good stewardship. This comes down to Republicans and conservatives don't want to raise taxes, this doesn't do that, there's a lot of pressure to increase education spending and settle this lawsuit so they did both. They avoided any kind of tax increase and they're going to pump money into education.
TED SIMONS: You talked about increasing education spending. We asked the governor regarding the idea of more funding for education, Arizona still ranks very low on the list. Obviously, this helps a little bit but for that dynamic, here's what he had to say.
GOVERNOR DUCEY: The message should be that we're leading the country in states that are putting new dollars into K-12 education and Ted I think it's important that we don't make spending the measure of success. If that's what is the measure of success, Newark, New Jersey, Detroit, Michigan, Chicago, Illinois, Washington, D.C. would be the best school districts in the country, except they are not. They're among the worst. So what we want to do is take what works, focus on results and outcomes for our kids, third grade reading, eighth grade math, ACT scores, SAT scores, lower dropout rates, more kids matriculating to college, being better equipped to go into the workforce and careers. Those are the measures of success in K-12 education.
TED SIMONS: Message ring true with lawmakers down there, Jeremy?
JEREMY DUDA: With the Republicans certainly. I mean, the Democrats keep saying this is not -- we don't want this to be the end of the conversation about school funding. Certainly it won't be. We're going to hear a lot about it next session and the session after that and at some point we will see increase but there's limited revenues. The land trust allowed the state to do this without taking any general fund revenues, there's about $250 million in ongoing spending that we can increase according to JLBC, that's going to be pulled a lot of different directions so we might see some other increases, I'm sure it will be a hot topic of conversation but we're certainly not going to be seeing a tax hike out of the Ducey administration.
MIKE SUNNUCKS: This thing about how much you spend per pupil and the Republicans, conservatives, these are talking points, Newark, and Detroit and D.C. But if you dig down into the numbers if you look at Fairfax County, Virginia or Montgomery county, Maryland, outside of D.C. which are high attaining school districts, they do spend more money per pupil. There's big city districts that don't do it very well because they have high poverty and demographics. That drives educational attainment. It's a little too simplistic to say sending more money on kids does not translate into better schools. It does in some districts.
BOB CHRISTIE: And, you know, we just had an election on Tuesday. There were 50 some odd school bonds overrides and budget overrides on the ballot, local ballots across the state. In Maricopa county there was 29 I believe. The last county maybe 27 of them passed. This is a Republican county. Some of them passed overwhelmingly. In Prescott which routinely discards them, they passed overwhelmingly up there. Tucson it was a mixed bag but it tells you that people will raise their taxes because they know the schools are in trouble.
TED SIMONS: People will raise their taxes, but the legislature and the governor, they simply will not agree to that and again, critics are looking at the deal saying this is a lot of drama just to avoid paying taxes and I asked the governor about that.
TED SIMONS: Is it more important to say we have a low tax base or we have a real commitment to education?
GOVERNOR DUCEY: I don't think they're mutually exclusive. I think you can have both and that's what I want to have. We have one of the best states in the country to live, work, play, recreate, retire, visit, build a business. The population growth we've had is the best leading indicator of an attractive place to live and the economic opportunity we have here. We also have three of the top 10 public high schools in the country. When I go back to the national governor's conference and we sit at a big table and they point out the governor that has the most high-quality public schools in the country, it's Arizona.
TED SIMONS: So... What does this mean for additional funding for education and what had this mean regarding keeping pledges and we asked the governor about the corporate tax cuts and he's basically says he doesn't want to pull the rug from business by changing that now, he wants to show business that we have consistency so those aren't going anywhere.
JEREMY DUDA: We've got a governor who last year during his campaign pledged to lower taxes every year he's governor and to try to get the income tax rates down as low as possible, as close to zero as possible he said. He has not ruled that out, some of this is for next session. What that means is if you want a tax hike for education, it's going to have to come from a citizen initiative. It's not coming from the legislature. It's not coming from the governor. There's only one way to do that.
BOB CHRISTIE: Well, you know, the school board association, some of the education community will say listen okay this brings us back to the base funding where we should be out. This levels the playing field to where we should have been. But we've also cut money from the building fund, we eliminated full day kindergarten, there's a lot of other school programs, class sizes are way too high. That brings us to where we should be but we still need more and we'll see if they can get any of that money out of the legislature in the coming year.
MIKE SUNNUCKS: The governor's contention is that we have population growth and part of that is people are moving here because of the schools. Las Vegas has a lot of population growth and nobody is moving there because of the schools. People move here because there are jobs and there is growth and the weather and you do talk to companies, high-wage companies sometimes that don't come here or think twice about coming here because of what they think about our schools overall, and if you talk to people on the ground, parents and stuff, there are concerns about how much we spend on schools. So when you gloss over that, you do a little bit of a disservice.
TED SIMONS: We mentioned everything we talked about so far is all contingent on voter approval. And I asked the governor about that, too.
TED SIMONS: Why should voters okay a settlement to a lawsuit that was brought because the legislature didn't fund what the voters called for in the first place?
GOVERNOR DUCEY: Because it's time to turn the page, and it's time to put these dollars into K-12 education. We have a broad consensus and broad support when you see president Biggs and speaker Gowan and a bipartisan coalition along with business leaders, let's focus on the future and our kids have needs today, Ted, and that's what this was doing was addressing the needs of today through a fashion that we could get done in a legislative format that we can take to the voters on May 17th.
TED SIMONS: And they are set to go for that campaign on May 17th aren't they?
MIKE SUNNUCKS: They announced one of the governor's top staffers will be the campaign manager for this. And what we're seeing so far, very little but what we know is this is going to be a very well-funded, very well organized campaign. Twist told me he thinks it's within the realm of possibility to raise three to $4 million. I don't think we're really seeing much opposition. The most logical opponent would be treasurer Dewit and kind of heard nothing but crickets chirping over there this week. This is going to be a lot like prop 100 in 2010, Governor Brewer, you had $3 million or so raised to support that. About $1,000 raised to oppose it. It was a 2-1 vote in favor.
BOB CHRISTIE: And it's going to be difficult for voters to vote no on this because, you know, anyone who has a connection to schools, parents, teachers, people whose next door neighbors go to school, everyone knows that schools are hurting for money right now. This promises to give them money. And it's going to be a single election in May, it's not a general election so there won't be a high turnout. So those people who will go will be the motivated ones more so than the average voters.
MIKE SUNNUCKS: Well, the folks on the right on these issues, you look at the other ones, they never have any money. They have some libertarian ideas or low-tax ideas, but there's never any money and the governor mentioned business leaders. That's who's driving this I think. He hears that from them, from economic developers that we need to boost the image of how much we spend to keep people here and not have a brain drain.
JEREMY DUDA: We saw a lot of those business leaders stand behind him as he signed those bills and they definitely sent a message that Ms. harper who heads the greater Phoenix leadership, a big business group,she's the chair of that campaign trying to send a message there. Everyone is going to be, you know, basically saying vote yes and I'm not sure who's going to be voting no. Even a lot of the Democrats who opposed this in the legislature are telling us they're going to support this.
MIKE SUNNUCKS: It's a chance for the governor to flex his political campaign muscles a little bit more. If he wants to run for senate or something else down the road, this is a way to bring some supporters in, build upon his successful campaigns last year and show well, I can raise a lot of money. I can get a lot of constituencies behind me,that sends a message to other Republicans and Democrats who might oppose him in the next election for governor or something else down the line.
TED SIMONS: Last point on this. In the next session, could something happen? Could rhetoric hit a certain decibel in which all of a sudden, the game field changes a little bit and people see oh, they used that money that they saved for tax cuts? Could that possibly happen?
BOB CHRISTIE: That could possibly happen and the school folks have said we're watching. You've got $240 million of ongoing surplus right now, a lot bigger than that but $240 million, if they come in with $100 million tax cut and this plan only uses $50 million of general fund revenue, they could get some blowback. If the legislature comes in with big accountability changes, big changes, if the governor's plan to change school funding formulas go through, it could upset the apple cart.
TED SIMONS: All right, we'll see what happens then. Right now, we've got to keep it moving here. Jeremy what is the state employee charitable campaign and why don't they like planned parenthood?
JEREMY DUDA: This is a state program that allows state employees to do automatic deductions from their paychecks for four or five different charities, two people who were on that before but did not make the list were planned parenthood and the Clinton foundation and that left a lot of people scratching their heads saying how's a committee composed of all Republicans going to very blatantly target these two liberal groups? And we've heard from the governor's office that well it's very controversial, you know, Governor Ducey said on your show this week that well we think they do some horrible things nationwide, so they have been rejected.
TED SIMONS: And alliance defending freedom, anti-abortion group, controversial in its own way, even focus on the family which can be considered a political group, controversial, they're still on the list.
BOB CHRISTIE: They are still on the list. It does seem there was some selective culling of the list. The Alliance Defending Freedom group especially which has backed a lot of conservative efforts there, they're a religious freedom group, they if anybody are a political activist group and you would think if you're going to pull planned parenthood, and be equal about it, you should pull all the overtly controversial groups because that is a very conservative group. It's obviously political.
MIKE SUNNUCKS: This all stems from the videos that came out earlier this year about the selling fetal tissue and baby parts and stuff like that. And this is a big thing with a lot of the pro-life community, a lot of social conservatives is to go after planned parenthood at the state level and at the federal level and defund it. And so this certainly will help the governor with that constituency.
JEREMY DUDA: It's worth noting that there's a lot of political groups still on this list but a lot of political groups from the right and the left. Sierra club, national council, friendly house which sued the state over S.B. 1070, they're on the list along with Alliance Defending Freedom, Focus On The Family. They're not doing a whole scale purge of liberal groups but these are two political groups that stood out to them.
TED SIMONS: And we should mention as the governor mentioned himself, if you're a state employee, you can still donate. You can donate to your heart's content. You just can't go through payroll.
BOB CHRISTIE: That argument goes along with the payroll deduction for union dues. It doesn't cost the state anything to do that. You're checking a box. But it's a political statement that you're sending when you do those types of things. This is the general united way efforts and a lot of big corporations have where it goes into a big pot and you can determine where it goes.
TED SIMONS: We have yet another complaint filed against Corporation Commissioner Susan Bitter Smith by the public integrity alliance. This one brings the name Rick Renzi back to stories and headlines.
JEREMY DUDA: They want the department of justice to go after commissioner Bitter Smith on the same laws that were used to convict rick. They had pictures of both of them with guilty stamped across their head but you take a look at what the public integrity alliance is doing and you see what a big part of this is venue shopping, they're looking to keep this in the news as much as possible, they filed complaints with the secretary of state, clean elections commission, both dismissed, they said this isn't our area, there's already an ongoing complaint being investigated by the attorney general's office right now. They're adding the department of justice to the mix.
MIKE SUNNUCKS: It's honest services fraud, rod Blagojevich, duke Cunningham, it's this broad fraud statute that you use your office, usually in bribery-type cases and they're trying to make a leap that her work as a lobbyist she benefited from that and they contends she used that to favor them on the commission. This is a very broad fraud statute that they're trying to get the feds to go after her on.
TED SIMONS: They're claiming she voted 10 times on issues that affected the group that she represents. She says I may represent the group but I don't represent anyone who appears before the commission.
BOB CHRISTIE: Correct, her argument is very simple. She says first, this is an attack funded by the solar industry against me. It's a false attack. And I work for an unregulated side of Cox Communications or contract with them and the cable industry, which is not regulated. So it's completely separate from the telephone side which we do regulate.
TED SIMONS: Can you separate that though? Critics say you can't.
JEREMY DUDA: In a sense you can certainly say if a big chunk of your salary is being paid by Cox and even though you're not representing them on the telecommunications side, obviously they've got your ear. But the Corporation Commission doesn't regulate the cable side.
TED SIMONS: Diane Douglas, it wouldn't be a Friday show without her mentioned, and it looks like she's poised, poised now to file another lawsuit. She hasn't done it quite yet but this after the board of education hired a new executive director that she did not recommend.
MIKE SUNNUCKS: That's another constitutional crisis over there. It's really interesting, because it's executive and legislative powers battling each other. They hired someone from Grand Canyon University and I don't think she's necessarily opposed to this person but she didn't get to recommend or rubber stamp this and she says that's her power, the folks on the board again disagree with that and it's a battle over executive power like we see at the White House with executive orders. I mean, it's of that magnitude.
TED SIMONS: Her quote is she would be forced to defend the power of my office. And if she does it will be the third time she's sued the board.
BOB CHRISTIE: And you remember this started in February when she fired the executive director and the governor called up the department administration and said they weren't fired and they've been on ever since and she's sued and she lost to get the power to fire them and so now that executive director who is apparently fed up all of it has got a new job and they had to replace her. So do we end up back in court? We already are there.
MIKE SUNNUCKS: It's all about who holds the microphone over there, well it seems to be.
TED SIMONS: Yes, keep your hands off me by the way!
JEREMY DUDA: The statute says the board has to hire people with a recommendation of the superintendent and that's what superintendent Douglas has been hanging her hat on for quite some time. And she did not take part in these deliberations over hiring this new executive director but they did extend the olive branch, they did ask her to take part in that and my understanding is she declined to because she was worried that could be construed as a recommendation or okay but if you end up in court, maybe the fact this was offered and Douglas said no, that comes into play.
TED SIMONS: Didn't she have two favorites, though? Did she not recommend a couple of names?
BOB CHRISTIE: And they didn't even get interviews over there. Amazingly considering all the controversy, there was a dozen or so folks who applied for the job.
TED SIMONS: No kidding because you're applying for a job that you may well be kicked out of.
BOB CHRISTIE: Exactly, but, you know, get a feather in your cap and you could do good stuff for kids.
TED SIMONS: Last question. We started with the governor and obviously, a successful effort on his part, we'll see what happens next May. But coalescing that with Diane Douglas. Is someone going to clarify the differences, the roles, the responsibilities between the department of education and the board of education?
JEREMY DUDA: One would hope so. There was a bill that went to the legislature last year that the governor and the superintendent both agreed on. It seemed like that was poised to pass and it fell apart at the end. So you know Ducey and Douglas both support it and can't get it through...
MIKE SUNNUCKS: I think if the governor makes it a priority and he has bigger fish to fry this next session, if he makes it a priority, governors rule the day most of the time. If he wants to do that, he can get the votes versus her but it matters if they want to spend the time on that.
TED SIMONS: And much of our conversation with the governor, we talked about image, Arizona's image and our place in the country and how people perceive us and attracting and retaining businesses. If you've got this fuss and this fighting constantly, get it over with!
BOB CHRISTIE: And that's a big deal for the governor. When you listen to him in your interview and he's saying we have to change the image of the state, he didn't say that directly, but the message is there. We've got to move on from this, we've got to fund our schools, we can do both tax cuts and have good schools, those are a real irritant for a lot of Republicans. I was in the Senate when they were debating this education bill and one of the senators stood up and said now my friends, please don't say we're 50th, because you're giving us a bad image. Well, we don't give people bad images, the actions do.
MIKE SUNNUCKS: It's hard for them to do stuff when there's just one party in control down there. I think that works against these reforms.
TED SIMONS: All right. Good to have you guys here. Thanks for joining us. We appreciate it.
Monday on "Arizona Horizon," a report on anti-corruption laws and practices in Arizona and around the country.
And we'll hear about an upcoming event designed to draw women into politics. That's on the next "Arizona Horizon." 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 Eight, members of your Arizona PBS station. Thank you.
