Ted Simons: Good evening and welcome to "Horizon." I'm Ted Simons. Joining me tonight on the Journalists' Roundtable -- Jeremy Duda of "The Arizona Capitol Times," Mary K. Reinhart of "The Arizona Guardian", and Howard Fischer of Capitol Media Services. Governor Jan Brewer wants to keep her job. She's formally filed for re-election. Mary K, anyone surprised, A, and B, why now? What's going on now. Why the announcement?
Mary K Reinhart: There was sort of a line behind her, you know, waiting. Are you going, not going? And people had been talking about whether or not to challenge her in the Republican primary and I think as far as being surprised, I think maybe there were a couple of people surprised. She kept saying over the past couple months she was leaning toward it. That's as far as she would go. There were a lot of reasons for her not to do it. If you looked at the polls and the job itself, it's not an easy one at this stage of the game with the kind of deficits we're dealing with. But she had a lot of folks had a lot rolled up in seeing she ran for governor.
Howard Fischer: I don’t see a downside for her, because if she were to leave now with the state in the worst fiscal condition in history, even if she said she inherited it from Janet Napolitano, she's the one who left in the middle of that. We know the economy will get better over the next four years. Will it be great? No. But by 2014 we know the economy is going to be better. We knew she wants to restructure the economy and lower business taxes, and restructure the rest of the government, have government doing less. This is her chance.
Mary K Reinhart: The last two people signed up from the secretary of state’s office to the governor's office, decided not to take the plunge and run for election so there were still some questions out there.
Ted Simons: Anyone really surprised by this?
Jeremy Duda: A few months ago, it seemed like a lot of people thought she wouldn't run. Until she made the statements about leaning toward running and to a certain degree, a lot of people are starting to view her as a lame duck.
Ted Simons: And with this announcement made, what does she campaign on? Policy has been mentioned, what avenue does she take?
Jeremy Duda: She spent a lot of time talking about education. Doesn't want to decimate education, the frequent line. She’s talking about social services.
Howard Fischer: What's she is also trying to do -- the theme we saw last night, was a strong governor for these times. The idea I've cut already or planning to cut a billion dollars. Nobody else has done that. I'm the one willing to downsize government. No one else has done that. I'm willing to say we need a temporary source of revenues and she gets a lot of positive strokes from people in both parties.
Mary K Reinhart: She came out as the tough leader for tough times and also being mom. That being governor was only the second favorite job, But being mom was the first. That strikes a chord as well.
Ted Simons: A tough leader in tough times, courageous in fighting back X, Y and Z, you've got to win over them in the primary before all that comes into play.
Howard Fischer: That's the problem she's got. She survives the primary, presuming Terry and the general, I think it's much easier. But three candidates attacking from the right or three potential candidates. John Munger who says we don't need higher taxes. Vernon Parker who said we don't need higher taxes and Dean Martin, potential candidate saying we don't need higher taxes. The advantage of that, they split the “we don't want the stinking taxes” vote and she can walk away with 30% of the vote, plurality and take it.
Ted Simons: Who is likely to give her the hardest time?
Jeremy Duda: The general consensus is Dean Martin. He's run statewide campaigns before. And he has name recognition. Partly because his name is Dean Martin, but he spent time getting his message out.
Ted Simons: If Martin runs, would he be the roughest contender for her?
Mary K Reinhart: I think Jeremy’s right. Being named Dean Martin and he won a statewide election and he's been hitting the press releases pretty hard of late. You know, and certainly being available to all of us who want to talk to him about the economic situation of the state. So I think he would be her chief competition.
Howard Fischer: Another factor in all of this, which has to do with if there's going to be public financing and we're waiting on a judge to issue the final ruling. If there’s public financing, we know that John Munger is running with private money. Dean Martin suggested he would. The advantage for Jan Brewer and Vernon park, every time these guys spend money, they get more public money but it also means if somebody spends money on behalf of Jan Brewer, John Munger doesn't get matching money. That's how Janet Napolitano undermined her competitor. Gamed the system.
Mary K Reinhart: We were also talking the other day about a bill that may be introduced this coming session to double the amount of money you get if you run public. So instead of $700,000, you get 1.4 for the primary and so forth. If you run public, if they pass that thing, you may end up making twice as much as now.
Ted Simons: Mary Peters and Grant Woods, campaign co-chairs for the governor. Again, surprise there at all?
Jeremy Duda: Grant Wood has an interesting history. He’s endorsed a lot of Democrats, he actually endorsed the democrat who ran against Jan Brewer in 2002. And endorsed Napolitano in '06.
Ted Simons: What do we read out of this? Is this a centrist Republican saying we've got you covered?
Jeremy Duda: It could be interpreted like that by a lot of people, especially when she gets into the general.
Howard Fischer: Where else does he go? John Munger, Dean Martin. He is a centrist Republican, if you want to call him that. And what are his choices. I don't see him endorsing Terry Goddard. Assuming he's going to stay within his own party, where else does he go? There's no one else who makes sense who can win and perhaps keep the office in Republican hands.
Ted Simons: What about the governor's choice to have Grant Woods as a campaign co-chair? Is that going to be a good move for the conservatives?
Mary K Reinhart: That's the question. When it was announced he was going to be chairing the campaign, she's obviously among the most moderate. And it's a calculation. She's done the math and she’s figured out he's going to help more than obviously hurt her. And perhaps the conservatives, if and when they run against her in the primary, will cancel out that no tax vote.
Ted Simons: Ok, Terry Goddard has created a committee to explore the governor's race. I won’t ask if anyone’s surprised by that. But, expected to announce soon after January as possible, do you think?
Jeremy Duda: Presumably, but maybe he could afford to wait and let the Republicans tear each other part in the primaries. The longer he waits to get in, the longer he has to take a stand on the up popular issues.
Howard Fischer: That's the thing, when I talked to him today. What's your plan for deal with the state? I've got a plan, it’s too early to tell. A simple question, what about the temporary sales tax hike? I'm still studying it and we may need to do something. And as long as he's only exploring, he can say, if I run, I'll have a position. He can hang in there in there for a couple of months, because he can gather up to $51,000 in seed money. Plus he doesn't have a primary.
Mary K Reinhart: There's no down side to hanging around for a couple months?
Howard Fischer: Oh, no, he's got the name I.D. Has experience running for governor -- not successfully, but there's no downside for him to hanging on to the exploratory committee as long as possible.
Ted Simons: You've got a contentious Republican primary and Terry Goddard gliding through on the democratic side. Most folks, conventional wisdom says, a democrat comes out on top of that. Some are saying so much attention will be on the Republican side, once a general comes around, some will go, oh, yeah, I guess Terry Goddard is running too. Does it help or hurt having that contentious Republican primary on either side?
Mary K Reinhart: My view is the conventional wisdom is conventional wisdom for a reason. They're going to spend months and months picking and tearing at each other and stories with negative things they’re bringing out about each other. I don't see how that can hurt Terry Goddard when it comes time for him to jump in.
Ted Simons: So the idea that you come out of that a stronger candidate, you’re not buying that all that much?
Howard Fischer: A lot of that depend he depends on the day after the August primary. Do they all come together and sing Kumbaya? Saying this is the best way to go and find her the support and independent money which doesn't count against her public funding? It depends on the bloodiness. We've got a history in the state – when John Conlan and Sam Steiger bloodied each other in a US Senate race. If it's really bloody, no holds barred, that's great for Terry. If it's a standard, I've got a better policy, I don't think it helps.
Ted Simons: Obviously, very early here. Again, glide along with conventional wisdom here. Who gives Goddard the toughest race from the Republicans?
Jeremy Duda: Well, the recent polling showed that Dean Martin is the strongest challenger, which he's quick to point out if you talk to him about it. But Jan Brewer name I.D. numbers are low for a sitting governor. And she's played to the center so much, that her and Goddard would be going after a lot of the same voters.
Ted Simons: Whoever comes out the Republican primary taking on a Goddard. You've got someone who already won that race, who would be the strongest?
Mary K Reinhart: I think a sitting governor because she's got the opportunity to be out there with mics in front of her.
Howard Fischer: In terms of somebody who can debate and take on Terry word for word, instead of sitting around this table, which will happen during the campaign, I think Dean Martin is a stronger candidate. Jan Brewer is a nice lady but in terms of an actually head on head debate on issues, and getting out a strong point, that's not a strong suit.
Ted Simons: Let’s keep it moving here. A special session possible? Coming up November --
Mary K Reinhart: 17th, which is a Tuesday. Gives people Monday to make the travel plans. A three-day session unless Democrats agree to suspend the rules. They could do it in a day. It looks at this point pretty promising for a pretty in-and-out quick special session that fixes those seven agency budgets left in limbo when the governor issued one of her vetoes in September to do away with the state property tax repeal and it takes a bite out of the $2 billion deficit to the tune of $450,000,000.
Howard Fischer: And the real key is what's not going to be done. $144 million coming out of soft capital. Another $148 million coming out of the department of economic security and they're not going to deal giving voters the opportunity to say, we want to make up for that with sales tax. It takes 90 days after you vote to get it on the ballot. The longer you wait, another month gone and another $80 million you can't collect.
Ted Simons: And she's talking about another special session before this one has even started.
Mary K Reinhart: She did, indeed. She talked to reporters the other day and suggested maybe the legislators are going to need to come back again before the regular session and if you think about the dynamics, it makes sense. If you really want to get the thing on the ballot. She's got 90 days, she's got to get it out by the 2nd, the end of the second week in December. If they come in January for a regular session -- I don't see them hurrying up and getting anything through with the kind of magnitude and vitriol that accompanies a sales tax referral.
Ted Simons: The fact that we're talking about special sessions and sounds like folks are getting deals done and talk to each other. How much has this been prompted by a change in the governor's staff. Let’s talk about the chief of staff here. I know you did a big story on Eileen Klein. Talk about her, and maybe the impact she brings to all this.
Jeremy Duda:I don't know if this has been prompted by the change in chief of staff. They would have do it anyway. Some agencies are running out of money but there seems to be a lot of optimism that change at the top will help move things along. I've talked to a lot of legislative Democrats who spent a lot of time dealing with Eileen. They like dealing with her. She's a hardcore policy wonk and knows what she talks about. They feel like she listens to them.
Howard Fischer: And that's the big difference. I'm not taking anything away from Eileen. She’s good at what she does. The issue is who she replaced. Kevin Tine was the co-dependent of Jan Brewer. Going back to her days on the board of supervisors. They were the YIN and YANG in terms of finishing each other’s sentences, which is nice if you want somebody to be there and be the soft, warm fuzzy person for you and filter things. Which is nice but when you're the governor and need the policy debates and need to understand the real policy, and not be shielded from that, that's what you don't need and getting rid of Kevin was a big change. The fact that Brian McNeal, who is an excellent policy person, and then when Kevin left, he said you know, I think I'll stay. That shows the difference.
Ted Simons: Are you sensing that as well? Something had to be done as far as the agencies were concerned but there wasn't a hurry and now it seems things are moving along swimmingly. At least for now.
Mary K Reinhart: Also the fact that they're taking a bite out the deficit says something. All along, there was discussion about fixing those agencies. The fact they're even getting agreement and relatively quickly. I think it was a couple of days. There were lots of phone calls that preceded it but came to agreement with Republican leaders and governor's office and I'm sure Eileen Klein had a big hand in that.
Ted Simons: What about rank and file. Sound like something that the regular folks will go for as well, or is this leadership marching one direction?
Mary K Reinhart: They seem to think they've got the votes in both chambers right now. It -- chambers right now. There may be a little wrinkle in bringing in science foundation, $18 million that the state owes to science foundation and the judges agreed. The state has lost that suit. They're talking about taking it from an unencumbered liability fund. That’s really threatening to raise a little bit of a tussle.
Howard Fischer: Here's the other part. Talk about the $144 million they want to take from education, the original budget Jan vetoed, the Republicans agreed to take more from that. The Dems are not going to be happy with any of this, but even they recognize you have to make cuts. If you limit the cuts to $144 million, if you're protected by the fact you can't more without run ago foul of the maintenance of efforts provision, even the Dems are going to say this is as good as it gets.
Mary K Reinhart: That's close to the number they suggested for cuts, whether or not they're voted, I don't know. But that 144 for education, we're not going to jeopardize our federal stimulus money, and it’s something even the Democrats had agreed to.
Ted Simons: Interesting. I want to keep it moving regarding stimulus money. I know it's something you were interested in in regard to jobs. 10,000 jobs created or retained because of stimulus money. Is this something -- talk to us about the report.
Jeremy Duda: It's a quarterly report all state have to submit. And 9700 jobs created or saved. The overwhelming majority in education. About 6,000 of those. Or maybe more.
Ted Simons: And we’re eligible through 2011 for the stimulus money. Are we spending it? Coming in and we’re spending it or waiting for more? What's the status of all of this?
Jeremy Duda: We've been allocated about $1.9 billion of $6 billion we've got coming. There's a certain percentage that take a bite out the deficit though, and that's expected to be gone by the end of the fiscal year.
Howard Fischer: That’s the key. The education money was $832 million spread out over two fiscal years. We've used a bunch for state aid to education to help balance in current budget. We're going to have some left next year. F.Y. '11, when the economy is not going to be better, that's going to be gone and that's why I think there's going to be a push in terms of what we’re going to talk about in town hall recommendations.
Ted Simons: The fact that the governor was initially reluctant, skeptical, not necessarily embracing of the stimulus money, can that hurt her in the campaign?
Jeremy Duda: I don't know that it will hurt her. Ever since she's accepted that, said positive things about it. And pretty much every other governor in the country, the realization they came to, you really don't have too much of a choice.
Ted Simons: It doesn't hurt when somebody drags up the sound bite where people are reluctant to take the money and now taking it --
Mary K Reinhart: I think she said we're going to look at it carefully and at the end the day, quickly said if we don't take it, somebody else will.
Howard Fischer: There were things that required major changes to unemployment law and the decision was made, while we would benefit in the short term because we have to keep those changes long term, it didn't make sense. She picked through them carefully.
Mary K Reinhart: It was the creating new programs that they were pretty skeptical of.
Ted Simons: We talked regarding the Arizona town hall and, boy, this thing comes out with all sorts of recommendations and granted, it's a bunch of folks getting together kicking the can down the proverbial road. Lots of cans kicked raising taxes, Howie. Everything from reinstating property tax to sales tax to getting rid of tax credits and a lot of ideas that sound like a democratic blue print.
Howard Fischer: Let's understand what's happening. Leaving aside they were at the 8,000-foot level and maybe the air was thin there. Everyone agrees, on all end of the spectrum that Arizona's budget is out of whack. And the reason is we have a system highly dependent on sales taxes. Right now close to 50% of our revenues, followed by personal income taxes and everything else. We had gotten rid of the property taxe in small fashion this year-- and that resulted in rollercoaster ride of revenues. Now, we've been down this road before. I think that I was sitting around this table in 1990 with your predecessor talking about the fiscal 2000 report where they said we need to expand the sales tax base and even us off. That went nowhere. 2003, citizens' finance review committee, we need to expand the sales tax base. Went nowhere. Everyone agrees we need to do something. Does this go farther? I don't know. They interesting plans and the idea of limiting constitutional convention, I don't see this being the call at the legislature.
Ted Simons: It's interesting as well, making things like prop 105 more flexible. Getting rid of clean elections and term limits and we talked at length about this during "Horizon" but it was an interesting set of recommendations coming out. I did want to talk about the local elections. Lot of school override votes actually made it. Does that say anything to you regarding the electorate? Tough times, the legislature doesn't want to raise a tax no matter what the situation is. And yet most say, give us a reason, show us what it's for and a reason and we'll vote for it. Does that play to what people are looking at for the election next year?
Jeremy Duda: That's obviously the message that Jan Brewer is trying to push for a while. People voted numerous times they want more spending for education and she's banking on the fact they're willing to do it again.
Howard Fischer: When I talked about the race coming up and said one of the things that's going to work in her favor in the race in November, she said I was the one out there saying we want to save the programs and 17 out of 21 bonds issues or overrides passed. The tricky part for running government, nobody wants to pass a bond issue but the department of education. It's for smaller class, it’s to keep band, keep counselors, they'll vote for this.
Mary K Reinhart: I think people have already felt this. They've lost band and seen their class sizes go to 45. There's impact that's happening and I think that has a lot to do with it.
Ted Simons: You've got a lot of votes regarding raising taxes and bonding, whatever the case will be, and folks -- all right. Got to stop it there.