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October 29, 2009

Host: Richard Ruelas

State Land Department Self-funding Challenge

  |   Video
  • The State Land Department sells and leases State Trust Lands to raise money for public schools. Now, a new state law allows the Department to keep up to ten percent of those earnings to manage those lands. That’s illegal, according to the Arizona Center for Law in the Public Interest which is asking the Attorney General to stop those payments from continuing. Hear from former State Land Commissioner Mark Winkleman who helped establish the law and Arizona Education Association President John Wright who is supporting the legal challenge.
  • Mark Winkleman - Former State Land Commissioner
  • John Wright - Arizona Education Association President
Category: Government

View Transcript
Richard Ruelas: The State Land Department is required to sell and lease state trust lands to raise money for public schools. But a new state law allows the department to keep up to 10% of its earnings to manage those lands. That's illegal according to the center for law in the public interest, which is asking the state attorney general to intervene. Last month on "Horizon" we asked State Land Commissioner Maria Baier if the department's new self-funding law is legal.

Maria Baier: Legislative council, which is the body that advises the legislature in terms of legality much of certain -- of laws, has opined that it is, and that is how the statute that authorized our self-funding this year was passed. It was considered, it was analyzed, and they determined that it was legal. And so we do -- we do get to take a small share of the proceeds that are generated through sails of state trust land to fund the department.

Richard Ruelas: Joining me to talk about the land department's self-funding law is Mark Winkleman, former state land commissioner, who was instrumental in getting the law passed. And John Wright, president of the Arizona Education Association, which is supporting the legal challenge to the law. Thank you both for joining us. What about the history of the law? Why did the state land trust want this legislation passed?

Mark Winkleman: Agencies in these difficult budget times are looking for whatever means they have to support their operations. And the land department has got a long history of being under funded by the legislature. So you have seen the massive cuts the state has undertaken. It makes it difficult to carry out the missions of all the agencies, not just the land department. This is an idea that's been out there as part of overall trust land reform for the last many years, and so we figured out a way that in the interim that perhaps this could be used to more adequately fund -- I don't want to use the word "adequately" because that's not true, but maybe to minimize or reduce some of the cuts the agency was otherwise going to suffer being dependent on the general fund.

Richard Ruelas: Would the -- what would the money go for?

Mark Winkleman: For the budget, to keep us in a revenue-producing mode. The land department's different than most state agencies, because we don't regulate, we don't license, and I say we as if I'm still the land commissioner.

Richard Ruelas: Tough to get that out of the system.

Mark Winkleman: Forgive me. Anyway, the land department's got a simple mission -- that is to maximize revenues. In other words, make as much money as possible for the beneficiary and education, particularly q-12 is the primary beneficiary of what the land department does. So it's a revenue-producing agency, and the most important activities we do result in revenues for education.

Richard Ruelas: And with these additional funds being able to I guess -- we're talking about things like retaining staff, eventually it would result in more money for -- in the trust?

Mark Winkleman: Absolutely. This is -- you need people to make money. And it's difficult. Real estate, I think some people think it's just a simple process. But for land department that's got massive stretches of land that tend to be unentitled, to create the value so you can get to the point of having some of the auctions we did where we made a huge amount of money, is very time and labor intensive process. So it takes staff, it takes resources to do mapping, studies, the ability to prior professionals to help, sometimes it's zoning, they -- unfortunately it's quite an expensive proposition, but the payoff is hundreds of millions of dollars.

Richard Ruelas: Now for an opposing view. John Wright. Why is it a bad idea to take 10% of the trust funds and sort of reinvest it into that fund?

John Wright: Well, reinvesting proceeds into the state land department is a good idea. The bad idea is this particular bill, house bill 2014, and to do this through statutory means. What mark is describing is 100% accurate. And the Arizona education association and I in particular as well have been working with mark in his role as land commissioner over the past six years to accomplish much of what he's talking about. Representing the beneficiaries of this enormous asset, we want to see that land, that asset, managed as well as possible, to have the value increased as greatly as possible, and to provide that revenue stream into our public schools to meet the needs of students.

Richard Ruelas: It sounds like there's a "but" coming.

John Wright: There is. This is all constitutionally established. The hundreds of millions of acres of state trust lands set aside at statehood were set aside by the enabling act. And that says very specifically who the beneficiaries of this land are, and that the proceeds from the sale or lease of these lands go to those beneficiaries. Furthermore, the constitution says very specifically that the legislature does not have the authority to appropriate or divert funds that have been set aside by this particular entity, the state land trust, and that any sort of changes to the use of those funds must be done through a constitutional change. And then finally, the voters approved in the year 2002 proposition 300, which was a voter-approval of previously adopted statutes that said all of the additional monies from these state trust land and the proceeds from their sales go specifically not just to K-12 public education, but into the classroom site fund to pay for salaries, programs, and meet student needs directly. I believe we need to find a way for the state trust land to help become a self-funding mechanism and help the land department better manage, because this is the asset belonging to the beneficiaries. And we have worked for a constitutional change, which unfortunately failed at the ballot. But just taking 10% and diverting it in a very unspecified manner to the land department is not in the interest of the beneficiaries, and it sets a bad precedent, because if this legislature can take 10% for this purpose, and that's shown to be ok, then another 10% can be diverted some place else, another 15% could be diverted to fill this budget gap. So the urgent circumstances we're in do not warrant an act that we do believe is in violation of the constitution. Let's do it the right way.

Richard Ruelas: So the theory of what the money would be going for is fine. It's the mechanism. If it had been passed -- I guess was this something that was going to be -- there's been, what, two or three in the last reelection, state land trust? Reform issues. If any of those had passed, has this been in a couple of those?

John Wright: A self-funding component has been in each of the ones that we have worked on advancing and passing, yes.

Richard Ruelas: Not necessarily the 10% number? Is that --

John Wright: I don't believe --

Mark Winkleman: Maybe different mechanisms. I think in the past, there was comprehensive trust land reform, the idea was you were going to have to go to the voters to amend the constitution, amend the enabling act. So if you're going to do that, maybe you look at things differently. As I went through and urged the legislature to pass this bill this past spring, I went to them and said, there may a better long-term solution. And if there's comprehensive trust land reform at this point, you may want to change. This but here's a way to better fund the land department, that is legally, with all due respect, legally permissible, and we'll allow them to continue to produce revenue. And if you don't like it, or it doesn't work, you can amend the law next year. If you have a package you want to take to the voters, you can supersede it. This is not a permanent thing.

Richard Ruelas: How did you arrive at the 10% number? Was that in the previous thoughts of this?

Mark Winkleman: Well, there's been so many versions, it's probably been in something. The idea was to take enough that would give the department a chance to have an adequate budget, and yet -- and put a cap on it, so there wasn't the fear, they're just going to take all the money and build some giant bureaucracy. 10% is a relatively small percentage. Look that the legally, it's a trust. This land is held in a legal trust. And quite a few years ago I used to practice law, and dealt with trusts. Every trust I dealt with paid their own expenses out of what they earned. Which is the same concept.

Richard Ruelas: It's money that would even if it's now not going to education, would go into the trust and the thought is eventually end up multiplying and going to education, but you're saying there's a fear of --

John Wright: That's the thought. But that's not what the language says. As I mentioned before, we have been supportive of the idea of a self-funding mechanism in the past, through constitutional change. But we've been very specific about what that funding would provide for. Our language said the funding could only be spent to enhance the value of the land through management practices. The language of the statute is fairly vague, and talks in general about trust management fund to help manage the land. The land department does pay a lot of land management outside of enhancing value of trust lands for the beneficiaries. Anything from fire suppression, to rangeland management. So what we want to be sure is that it's used for very specific value enhancement purposes, and we want some accountability.

Richard Ruelas: It sounds like you want to guarantee the money that's going in will eventually find its way back.

John Wright: And benefit the beneficiaries, and the commissioner will be accountable to the beneficiaries as to how that money is spent.

Richard Ruelas: Is there a trust issue there? Is there a danger this money gets sucked into the bureaucracy and don't recycle its way back or doesn't grow itself?

Mark Winkleman: We're going through the same appropriation process that we've done for a hundred years. So you have to come every year and get the governor to allow you to take a budget forward. Do you through the legislature, they go through line by line and tear it apart. So it's not as if the land department gets to grab a bunch of money and do whatever they want. It's subject to the same difficult appropriation that it does every year and historically has always done. The difference is we're bringing our own money. So maybe in the past, the tendency these days particularly is, you've got to cut. The governor just recently asked every agency to take another 15% cut. Well, they're trying to save the money. Here's a way to bring money that you can say, let's think about what makes business sense. Not, ok, we've got a general fund and equitably we'll cut all agencies, because we're not like all agencies.

Richard Ruelas: I guess lastly -- I imagine you've talked to Tim Hogan and had this worry -- is there a danger that lawsuits are expensive. Is there a danger of spending more to fight this than is worth in getting money -- getting this overturned?

John Wright: Well, the cost of the lawsuit from our end in partnership with Tim and the center for the law in the public interest is not going to be state money. So it's a decision we'll make about what kind of investment do we believe is important to support the long-term interests of the beneficiaries. But based on this particular law, house bill 2014, the lush recently took just under $10 million of the proceeds meant to benefit the beneficiaries, meant to support the beneficiary and transfer them into this fund. $10 million that would have been in the permanent fund creating earnings and additional money to the classroom. If that money comes out of the fund into the classroom, we want some guarantee about its use and value.

Mark Winkleman: Just because this is a legal argument, it may end up in court, I don't want to make it sound like we just came up with some creative plan here. He's right. It has to be in consistent with the constitution enabling act. We came into the union at the same time as New Mexico. They have their own land department. It's all throughout their history, they have funded their land department the same way, and the constitution has to be consistent with that. There was a case in 1926 where that was challenged, and upheld as permissible. We had the lawyers look at it as Commissioner Baier pointed out. The legislature's legal team said it was permissible. It will get sorted out if it end up in the courtroom, but please don't have the idea the land department or somebody went out and said, let's be sneaky --

Richard Ruelas: I guess right now -- right now it's in the hands of another lawyer, Terry Goddard, who will look at and it render a decision, and then we'll see what happens. From there we'll have you both back to figure it out from there. Thank you both for joining us.

Valley Fever

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  • Dr. John Galgiani, Director of the University of Arizona’s Valley Fever Center for Excellence, talks about efforts to treat and prevent this growing disease in Maricopa County and the desert Southwest. Learn how you can help fight the disease during events planned for Valley Fever Awareness Week in early November.
    Related Links:
    Valley Fever Center for Excellence
    Walk for Valley Fever (November 1, 2009)
  • Dr. John Galgiani - Director, University of Arizona’s Valley Fever Center for Excellence

View Transcript
Richard Ruelas: This Sunday a march will be held in Downtown Phoenix to raise awareness and money to fight Valley Fever. The disease put Arizona Diamondbacks outfielder Conor Jackson out of commission for much of the season. And it also did quite a number on a man in Prescott, as David Majure shows us.

David Majure: The one in front of us here is thumb butte. Late 2008, Joe was getting sick a lot.

Joe La Barge: Just about thanksgiving. And I felt like I had the flu, headache, body ache, skeletal pains.

David Majure: The 71-year-old who lives with his wife in Prescott was treated for pneumonia with antibiotics. He felt briefly, then the symptoms returned.

Joe La Barge: So I went back to the doctor and he said, "Well, maybe we just didn't catch it all the first time."
David Majure: 10 more days of antibiotics produced the same result.

Joe La Barge: I was chatting occasionally with my sister in Tucson, who is a retired nurse, and I was describing my symptoms to her and she said "You know, I don't think you have pneumonia. I think you have valley fever." and I thought to myself, well, I've heard the term, but I know nothing about it.

David Majure: After a third bout of pneumonia, Joe's doctor ordered a cat scan. It revealed spots on his right lung. The radiologist said these nodules were compatible with lung cancer.

Joe La Barge: I thought to myself, well, I hope it's not that, and I don't think it is somehow, but given my history, medical history of having had Hodgkins Lymphoma 10 to 12 years ago, and having had complication was the chemo in my lungs, I could not rule that out as a possibility.

David Majure: But to know for sure, doctors had to remove a piece of Joe's lung.

Joe La Barge: They found one lump in the middle of my right lung, and they took a section of that out to send to the pathology lab. At this point it was felt that cancer was not the correct diagnosis. The lung surgeon said he was quite confident that it was valley fever, and when that frozen tissue section came back from the pathology lab, they said definitely Valley Fever.

David Majure: Valley Fever is a lung infection caused by a fungus that grows in soil in the southwest United States. People get the disease simply by inhaling an airborne fungal spore. A blood test is used to diagnose Valley Fever, not the major surgery that put Joe in the hospital for nine days.

Joe La Barge: The doctors probably need to be better educated, or have a heightened sensitivity for the possibility of this disease being prevalent in people who present with symptoms that look a lot like pneumonia or lung cancer. And very often it is pneumonia. Sometimes it is lung cancer, but it's not always pneumonia or always lung cancer. And we need to find a way to arrive at the truth earlier in the process so that people don't go through unnecessary surgeries and procedures when they don't have to.

Linda La Barge: People depend on their physicians to make the correct diagnosis, and I think it could have been done sooner.

David Majure: Joe's wife Linda, a former nurse, thinks his surgery could have been avoided.

Linda La Barge: I really do. And I think at least they could have done a blood type to see if he had valley fever.

Joe La Barge: I don't fault the doctors for presuming that I probably had lung cancer.

David Majure: Given his medical history, Joe says even if he knew he had valley fever, he still might have opted for surgery to rule out any chance of cancer. Joe's been taking an antifungal drug to treat valley fever and has spent a lot of time researching the disease. He believes everyone should become more aware of valley fever, even in places like Prescott, where infections are less common.

Joe La Barge: Which admittedly is on the fringe of the -- on the edge of the area where valley fever is most prevalent, which is southern Arizona, and southern California. But people do travel, and they travel a lot.

David Majure: As it turns out, Joe may have contracted his valley fever during a doctor's visit in Phoenix.

Richard Ruelas: Joining me to talk about Valley Fever is Dr. John Galgiani, director of the University of Arizona's Valley Fever Center for Excellence. Thanks for joining us this evening.

John Galgiani: My pleasure. Thank you.

Richard Ruelas: This disease has been around it seems forever. There's been television campaigns, some awareness in the '70s, I remember. What is the level of awareness now and why does it seems to rise and fall? Why can't this disease get the traction we need?

John Galgiani: Well, I think it's been around actually like we were discussing, the first case was 1893. And the name valley fever comes from the San Joaquin Valley of California. I think actually my friends in the central valley of California have been consistently pushing for vaccine work, and other improvements in handling this disease. It may be because the phoenix area and the Central Arizona has been exploding in terms of its population, that people have moved in from areas that don't really know much about this disease. And so there's a continuous learning curve going on pretty much continuously. And we'd like to change that.

Richard Ruelas: Does that extend not only to residents -- obviously like the piece we just saw, that man if he had been aware of valley fever might have been something he might have raised with his doctor. Is there an awareness in the medical community, with so many doctors moving into the state?

John Galgiani: That's right. We're trying to educate patients, but also the medical community. The actual numbers are in the United States are about 150,000 infections every year. Two-thirds of those occur in Arizona, and almost all of them occur in the corridor between here and phoenix, and where I live, in Tucson. And that sort of frames the idea of a valley fever corridor up and down i-10 between Maricopa, and into Pima counties. I think that the physicians in that area as well as the rest of the country really need to identify and diagnose this a lot more frequently than they r the disease most of the time looks very much like pneumonia, and many doctors treat it as such. Whether they make a diagnosis or not depends sometimes on their age, because older individuals are more likely to get this diagnosis. And part of that reason is because they think it looks a lot like cancer. And you heard this piece here, I was noticing in the news, Suzanne Somers is actually -- was on Larry King talking about her being told that she had cancer, but it was only after a biopsy they discovered it was really valley fever. So that's actually a very common theme.

Richard Ruelas: What is the treatment for valley fever? Say, different from pneumonia? Obviously drastically different than cancer, but --

John Galgiani: Yeah. And this is a fungus. Most pneumonias people think of a bacterial infection, but this doesn’t react to the same drugs prescribed for pneumonia. Fortunately the immune system, three-quarters of the time, will control it. It may take weeks or many months to eventually get over this, but it's a self-limited process. A small percentage of people end up having much more complicated disease, Meningitis, life-threatening Pneumonia and other problems, and that's a small percentage. But there are about 100 deaths a year from this.

Richard Ruelas: With no real treatment options, it sounds like it's not a matter of if it's misdiagnosed, the trouble is any harm that the drugs to treat --

John Galgiani: Those drugs have their own toxicities. But there are treatments for fungal infections, and some patients benefit from that. So an earlier diagnosis would get improvement. But I would also emphasize that telling the patient what's wrong with them has enormous benefit to the patient. For example, if someone is telling you, I think you have cancer, when in fact it turns out you don't, finding that out as soon as possible and thinking of that diagnosis, or even at the beginning saying, you might have cancer or you may have these other things, it's a very different kind of way of managing a patient's problem.

Richard Ruelas: This is a very Arizona disease, and it sounds like outside -- outside of essentially Arizona and southern California, there are virtually no other cases in the United States.

John Galgiani: Most of the disease is in Arizona, California runs half as many cases as we do. And if you take them all together, it would be considered an orphan disease. That is, less than 2,000 ill people at any one time. And if you spread that over the whole united states, that's a pretty small problem, but as you see, it's condensed down to this 150-mile portion of Arizona for so many of them, that it's an intensely important problem to our state.

Richard Ruelas: Which is the reason the board of regents has authorized the valley center for excellence in Tucson, and who is having the inaugural walk to fund-raise. How much do you hope to get, and where would the money go?

John Galgiani: The walk is the 1st, and it will be Sunday morning from 8:00 to noon. Down in Central Phoenix. And it's hopefully will be mostly raising awareness. There is a registration fee, and some other funds. And those monies will be used for a project we're calling the valley fever corridor project to increase education, and also to develop a network amongst clinicians so that when people have really serious problems with this disease, the clinicians themselves will know who else has the specialty areas of expertise to help fit a specific case it.

Richard Ruelas: Sounds like there's a possible drug, maybe a vaccine?

John Galgiani: Well, at the Valley Fever center we're developing -- working on a vaccine which I think is a long-term play. It would be wonderful if we could eliminate the problem with a vaccine, but there's a drug which actually the University of Arizona is acting as a sponsor for at the FDA. It's in clinical trials, and we hope to continue its progress and commercialize it.

Richard Ruelas: Is there a prevention message? We keep our windows up as we go from Phoenix to Tucson? Is it avoid dust?

John Galgiani: It sounds like a good idea, but if you live in Arizona, I think you have a risk.

Richard Ruelas: Ok. Doctor, thanks for joining us. We hope the walk is successful this Sunday.

John Galgiani: Thank you very much. My pleasure.