Ted Simons: Hello, and welcome to "Horizon," I'm Ted Simons. Joining me tonight Matt Bunk of the Arizona capitol times, Mary K. Reinhart of the Arizona guardian, and Casey Newton of the Arizona republic. Hiking licensing fees for childcare centers getting a lot of attention this week, Mary K., obviously due to budget cuts, how much of a hike are we talking about here?
Mary K. Reinhart: 8,000% in some cases, it's exponential for some, especially the larger chains, kinder cares, tutor times, the child care centers in Arizona 2800 and chang haven’t seen a rate increase, fee increase, in about 30 years. So they're acknowledging it's certainly time. But they all pay a flat fee right now of $150 for a three-year license. What the department of health services has done is put them on a tiered schedule so the smaller ones pay less and bigger ones pay more. Sounds sensible, but these fees go into effect in January so if you're a larger facility or even some smaller facilities, it's a pretty quick turnaround for you and it's a huge increase for the facilities.
Casey Newton: Up until now child care facilities have paid about 10% of the cost of regulating themselves. What the department of health services is asking them to do is to pay 100% of the cost and to do it starting in two months. And so for a lot of these small businesses they're saying we don't know where we're going to come up with this money.
Ted Simons: I was gonna say, how many places are threatened by this?
Casey Newton: Among the ones I've talked to they've said they're going to have to think hard about where they're going to come up with this money, particularly for some owners that own six or seven facilities, they’ll have to pay $13,000 a pop to renew their license.
Ted Simons: The interim health director will humble says we're talking 40 cents a kid. Is that what we're talking about here?
Mary K Reinhart: If every facility was full I guess that math would work out but the fact of the matter is now in this economy they're half 3 full, in addition to that these providers have had their rates reduced, there's a waiting list so the folks who are getting subsidies from state are getting less kids and less of the subsidy. So it is a harder hit than that. And Will Humble says though he has no choice the legislature cut his licensing budget essentially in half and said you figure it out. So that's -- there was an auditor general's report that suggested this direction, it's a question of how quickly they're getting there.
Casey Newton: One thing worth pointing out, it's not just child care. If you're a hospital in Arizona 10 years ago you paid $10 a bed for your license. After January 1st you'll be paying $91 a bed. If you're an afterschool program you have to pay the same licensing fees the child care facilities are, nursing homes, assisted living holes, all these industries are being hit by the fee hike.
Ted Simons: Matt, does this get the attention of lawmakers or do lawmakers say we got to do what we got to do.
Matt Bunk: A lot of them will say this is what we had to do, deal with it. A lot of them are saying it won't hurt the providers that much anyway, and frankly at this point I don't see a lot of movement to do anything to change anything down there before January.
Casey Newton: If you're going to make an argument for what they're doing it would be that businesses should pay for the cost of 4 regulating themselves, maybe that's not something the taxpayers should pick up.
Ted Simons: Nothing since 1976 suggests something probably should have been done.
Mary K Reinhart: It's just a matter of degrees. The other piece of this though is that the regulations, the kind of annual renewal in this case every three year renewal they're doing, in some cases I think the providers have a pretty legitimate concern about some of the ticky tacky kinds of things they're getting fined for or and even will humble says, you know, I think we do need to look closely at health and safety issues when we do these inspections and not worry about other things. If that were done, if those regulations were simplified as the providers would like, they can't be right now because there's a moratorium on rule changes and regulation changes, but if they were, that might actually reduce the cost of licensing.
Ted Simons: All right. Something else that looks like it's going to get cut back, rest areas, Casey.
Casey Newton: That's right. Motorists who are planning on passing through Arizona who have to use the restroom may want to try an alternate route. The state had 18 rest stops or has them,that are open right now. They're going to close all but five of them effective next month and the reason is that the department of transportation over the past two years has had
to cut $100 million from its budget. The rest stops are one major area, the public will notice this in, they're also going to see fewer license branches, MVD, talking about closing 12 offices, we don't know which ones yet. But that will happen sometime over the next few months.
Ted Simons: So that means that MVD offices will have longer lines.
Casey Newton: Longer lines, although what MVD told me was check out our website. It's open 24 hours a day and there's never a line. And you actually can get a lot of basic services accomplished there.
Ted Simons: It sounds as if, this is mostly rural stuff? Is Maricopa County affected as much as the rural areas?
Casey Newton: Well, there's a piece of the budget cuts that involves deferring $370 million worth of construction projects that were supposed to happen this year into the outlying years. Because Maricopa county has its own transportation tax and has received certain federal stimulus dollars, most of the Maricopa county projects are going to go forward as planned. It's more the rural areas that are affected on the construction. But when it comes to things like rest stops and MVD branches that very likely will have an effect in Maricopa county.
Mary K Reinhart: The reason is fund shift. Some of the fund stuff the legislature's been doing over the last couple years.
Casey Newton: That's right, one of the ways they fill the budget is by sweeping funds out of the agencies, so over the past couple of years ADOT says they've lost $500 million to these fund sweeps.
Ted Simons: So let's see now, we got fund sweeps, we've got lower gas tax revenue, we've got not as much vehicle registration fees and such, microcosm of what's going on down there as far as the budget's concerned.
Matt Bunk: It is, and we're going to lose a lot of ADOT staff, 10 or 20% of their staff will have to be laid off as well. And I think some of the cuts will be offset by some federal stimulus money available, but like casey said I mean 500 more than 500 million in cuts over the last year and a half, two years, so yeah, it's going to be, you know, pretty devastating. People will see the MVD offices close and that could cause some problems.
Ted Simons: Another problem corporation commission funding there seems like they're going to close an office and that's not the kind of thing you want to see when you want to drum up business.
Matt Bunk: Exactly, and that's the kind of irony in this whole thing is that the legislators in control of both houses right now have been saying for the last nine months, we need to be business friendly and increase -- bring businesses here to Arizona so that we can eventually see some tax revenue increases. Well, the problem with that really is that we're looking at anywhere from two weeks to six weeks to get a business processed through the corp-com, when they go to start a new
business here. These cuts, they’re closing a Tucson office, they're having to move people around in divisions to keep things open. It's just going to make the wait longer for any business that wants to open here.
Ted Simons: You're talking about the division that approves LLCs and allows out of state corporations to do business here at a time when everyone is saying we need more jobs, we need people to move here, incentives, etc., they're closing it, basically because of the fight between the governor and legislature.
Matt Bunk: Absolutely. It really has nothing to do corp-com except they had the misfortune of being involved, basically their funding mechanism was placed into the same piece of legislation as the push to repeal the equalization tax which, you know, governor vetoed that and so really it's a matter of paperwork. The money is there for these guys to use. They just can't access it right now.
Ted Simons: Let's talk about other budget fallout. Today I thought was the day that we were at least supposed to hear a little bit about agencies with the 15 to 20% budget cut scenario the governor wanted to have them submit. Did they submit?
Mary K Reinhart: Presumably today was the deadline for agencies to submit 15 to 20% scenarios for the current fiscal year. We already know that we're about $1.5 billion short and will be by the end of the year, the agencies essentially are sort of punting to the governor's office 8 if you will and asking us to go ahead and check with them for those budget cut scenarios and the governor's office says it will be a few more days, not sure what they're doing with them but it will be late next week before we see what they look like. We did the same exercise last year when we were in the middle of cutting the current year budget in '09, the governor used those scenarios and had if you recall an last year we had a, a day long series of panel discussions for people saying yes, indeed this will hurt us this will be awful, we'll have lots of people to lay off, so forth and so on and it was a way to shore up her argument for a sales tax increase.
Matt Bunk: That's exactly what she's trying to do again according to her spokesperson they're hoping this list will show how devastating the cuts will be and it will prompt some action from legislators to look at the revenue side of things without just cutting. We talked to some lawmakers, however, earlier this week who said bring it on basically, if you don't think we want to make these cuts, you're totally wrong, we'll be happy to do it.
Ted Simons: Didn't the representative Cavanaugh basically says thanks for the list. This just shows us where we need to cut.
Matt Bunk: Right. He also said this isn't real leadership. You're giving us a menu, tell us where you want us to cut from. Don't just throw a menu out there. I think the house majority with Andy Tobin basically he was the one that said it more straightforwardly, he just said hey, you don't think we want to make these cuts? You're totally wrong.
Ted Simons: Your impression of the public hearing about these cuts again, a 15 to 20% scenario, worst case scenario here, is the public going to rise up as one and say enough, or what happens when they hear about these possibility of these cuts?
Matt Bunk: Well, I think that for the public there are going to be some really hard choices, just to take one example, think of the department of corrections. Now, this year they were able to cut their budget without having to change legislations so they let offenders out early. That's a very likely consequence of cutting their budget by 15% this year, letting inmates out early. I've even heard there may be talk of having to close a state prison at a 15% cut level. So is a lawmaker going to be willing to be seen as being soft on crime just for the sake of protecting the budget? I think there are going to be hard choices there and when the public starts to hear about closing prisons and letting offenders out early, they may want to support a sales tax.
Ted Simons: With the state of the budget as it is, the governor has gone ahead and warned Congress that healthcare reform at least as she sees it, especially on the senate side, would be I think her quote was devastating to the states. Other governors joining this on this letter too I believe,correct.
Mary K Reinhart: This is a letter she wrote, but other governors have voiced their concerns about the health care reform legislation making its way through Congress. This won't start until 2014. But the governor's concern is even by 2014 they'll be in no position to pay the -- our share of expanded Medicaid, there are 11 million people nationwide that would become covered under the Medicaid program and here in Arizona, as she pointed out in the letter we can't even afford the program we have. We have one out of five people in Arizona currently on AHCCCS.
Matt Bunk: I believe she wrote to U.S. senator Max Baucus, Democrat from Montana, I believe there are a dozen governors who submitted similar letters, you know, governor brewer also mentioned in her letter one of the problems is that Arizona sort of gets the short end of the stick on this deal. One of the things is extending Medicaid coverage, the federal government would give the money to states to extend Medicaid coverage up to 100% of the poverty level. Arizona already does that. And so we wouldn't receive any of the money to do some of those things.
Ted Simons: And yet critics, Casey, will say yes, the state would get hit hard, but failing to act, the state's going to get hit hard as well, because employers won't be able to cover people and when you're not covered where are you going to go? You're going to go to the state and AHCCCS.
Casey Newton: Yeah, absolutely. That's the argument they're making. It will be interesting to see whether the governor's letter has much impact in the senate. This is one of the first times we've seen her in the role as a states woman, you know, it hasn't been too often since she's taken office she's weighted in to national affairs but she made a pretty strong statement here that Arizona can't afford the programs on the table.
Mary K Reinhart: I think it's maybe her first time to weigh in on this issue, too, you know. I think one of the concerns has to do with just the woodwork effect, not only the new folks that will come in, but because there will be a mandate and you have to be insured there's about 200,000, we think, people in the state of Arizona who could have qualified for access but aren't trying for whatever reason. That cost alone about $2 billion.
Casey Newton: I have to explain the woodwork effect, because I just learned what this is today. This is the idea that when you expand a program and make it really attractive, people come out of the woodwork. I learned today apparently there are 200,000 people in Arizona that qualify for access and aren't on it. So hint, hint, people of Arizona.
Ted Simons: O.K. We talked about the governor acting as states woman here and in kind of going above and beyond state borders. She has been criticized for not doing enough of that and on both sides of the aisle and now I've got John Munger among the many names running for governor, Symington says he's going to endorse him. Is that a surprise?
Matt Bunk: It didn't surprise me that Fife Symington wasn't going to run. I don't know that a whole lot of people took that seriously from the beginning. He did the same in 2006 when Janet Napolitano was running for election, he said he was going to then a few months later said he wasn't going to. But what this does for Munger, rather than shoring up votes for him, I'm not sure Symington has that pull with voters but Symington has some connections that he's a good fundraiser and he has access to a lot of the big money in the Republican party, so this might help monger raise the kind of cash to mount a viable campaign.
Ted Simons: And it certainly gets that campaign going, it's certainly a kick start relatively early in the process.
Matt Bunk: That's right.
Ted Simons: The idea that Symington's polling numbers when different polls came out and showed he wouldn't do all that well against Terry Goddard, obviously way before the action really starts, but do you think that affected this decision at all?
Mary K Reinhart: I don't know. He said at the time as Matt said, he's sort of half threw his hat in the ring a couple years ago and to say you're thinking seriously about something, it's fun. I think, though, that you get to get some publicity. I think though that, you know,
the most significant part of this is kick starting it, sort of raising and getting a couple headlines here for john monger in this race against prass a fellow republican. Now the question sort of becomes what's the governor going to do.
Matt Bunk: The interesting thing is they both claim to be political outsiders and neither one of them really is, so, you know, it may, you know, raise some conservative credentials of John Munger a bit if Symington has those credentials and monger had been criticized in blogs recently for being sort of a moderate. Which I'm not sure that's true either, but this might help.
Ted Simons: What does it say for the relationship between Symingtoning and brewer and relationship between Symington and Governor Brewer's staff, many of whom worked for Fife Symington? What's going on here?
Matt Bunk: That's one of the reasons I sort of thought Symington was just, you know, making some noise in from the beginning. A lot of governor brewer's staff and people pushing for her to run again, you know, they weren't -- they haven't changed their tune really and they would have been the same people that Symington would have relied on.
Ted Simons: The-let’s get to sheriff Joe Arpaio now, feds have gone ahead and stripped some of his immigration authority as far as the 287g program is concerned. Apparently it's O.K. to look into immigration status booked into jail, in the booking process, but not out on the street, correct?
Matt Bunk: That's right. Largely what the 287g stripping of his authority will not allow him to do those crime suppression sweeps anymore. You know, I think 32,000 of the illegal immigrants that he deported were people that had already been in jail on other crimes, a few hundred of them were people he found on the streets, so, you know, this -- he's making a lot of noise about it, but largely, you know, when you look at the numbers might not have a huge effect, although he's saying I'm going to continue my sweeps, do another one in two weeks, so, you know, go ahead and stop me. I'll figure out a way to make this work.
Ted Simons: Any reason why the feds did this now? You know, the justice investigation, is anything going on here?
Matt Bunk: Well, he says this is a conspiracy that started against him two years ago because of the- when the rumbling started for justice investigation. This is just now the fallout that he's seeing. Something interesting from his press conference the other day, you know, he had sent out a piece of paper that he was saying was a piece of federal statute that would allow him to go ahead and do these crime suppression sweeps without alerting INS, well, INS is gone to begin with, but this piece of paper actually was just an overview he found on anti-illegal immigration website, wasn't actually federal statute, and, you know, it doesn't even address local authority's ability to do this.
Ted Simons: This particular headline, the Stapley case where we now have a couple of high profile prosecutors coming in at tremendous cost to go after a county supervisor, that particular headline, is the public being swayed, Casey, in any way differently than they have, I mean, we talk about the sheriff and we talk about to a lesser degree the county attorney, and almost every week. And there's always something. Is it always something that could hurt anyone? Or is this actually helping the political profile of both of these gentlemen?
Casey Newton: Well, it certainly gets their name in the paper and I think that critics of the Stapley prosecution would say that it has been a very media driven prosecution from the start. That's why they arrest Don Stapley in a parking garage and frog-march him by the cameras. I'm not convinced that this particular case is something that the public is paying a whole lot of attention to, and they risk backlash, they've tried to prosecute him a couple of times. They keep getting various charges thrown out for a variety of reasons. Now they've brought in a couple of high profile prosecutors that try to nab him on something. I think you may start to see some sympathy generated for Stapley.
Mary K Reinhart: Especially when you look at the cost of these folks, I mean, it's what was it? Travel alone is $150 an hour.
Ted Simons: Yeah, and it looks like it's 295 an hour, 475 an hour for trial. Again, good work if you can get it, and I imagine there will be a lot of prosecutors, attorneys in general that would want to get this kind of work and yet these are high profile D.C. folks that have done John Hinckley and Jonathan Pollard and Marion Berry and this kind of thing. It doesn't seem like -- could there be a backlash for something like this?
Matt Bunk: Well, I think what Maricopa county attorney's office was trying to do was show they were bringing in somebody very, you know, competent, somebody that could handle the case very well. Prior to that I think that the idea was that Yavapai county attorneys were going to handle this, and might have even come as a surprise to the Yavapai county attorney's office that they were no longer doing this. It certainly did come as a surprise to Stapley's attorney.
Ted Simons: Yeah, critics are saying we can't afford this kind of thing. But then the county attorney's office is basically saying Stapley's got Charlton as his attorney, that's relatively high profile, you know, why can't we go high profile as well, so we'll see how that works out. All right, you ever ridden a bullet train?
Mary K Reinhart: No, but I'd like to.
Ted Simons: Would you like to? You think you ever will, from here to Los Angeles?
Mary K Reinhart: Well, it could be maybe with my grandchildren.
Ted Simons: A lot of talk about this, the idea that -- the talk, Casey, isn't so much there's a plan in the works to make it, it's that 17 there are all sorts of plans with all sorts of money out there and we're not included.
Casey Newton: That's right, there's a lot of money out there in search of a project, so the question amongst some here is how we might get it. But as we suggest, the federal planning process for interstate transport typically takes on the order of, you know, 50 or 60 years, so the train may move like a bullet but this process will not.
Ted Simons: Especially if there are 10 plans looked at already and we’re not in any single one of them. Is this a failure of the state to say hey, look at us, or failure of the state to push for this kind of thing?
Matt Bunk: Right now from what I understand there's a lot of different cities across the southwest and actually just across the west that feel like they've been left out of this high speed train plan, so we're not loading the whole thing, you know, I think there's been some talk about a train from Phoenix to San Diego, this one would be from Phoenix to Los Angeles.
Casey Newton: The real question is why you would want to take a bullet train from Phoenix to Los Angeles when in the car you can experience the beautiful drive that is interstate 10 through miles and miles of gorgeous desert.
Ted Simons: Yeah. Yeah.
Casey Newton: Tonopah. What is this going to do to Tonopah.
Ted Simons: Before we just alienate our Western Arizona audience, thank you all for joining us on "Horizon."