Ted Simons: Good evening and welcome to "Horizon." I'm Ted Simons. Joining me tonight are Sarah Fenske of the "Phoenix New Times," Mike Sunnucks of the "Business Journal" and Luige Del Puerto of "Arizona Capitol Times." State Republican lawmakers approve most of the budget plan. We're talking 1.1, 1.2 billion in cuts.
Luige Del Puerto: We're talking about 1.1 billion dollars in cuts. As you know, there are two parts of this budget proposal. One there is a budget plan that presumes that the sales tax referral will pass in May and the other, the conditional budget or plan B presumes if the bill fails that it will take another 866 million out of the budget.
Ted Simons: Over the past couple of years, over two billion dollars in cuts?
Luige Del Puerto: Yes, pretty much. That’s because our revenues have run dry and our economy has not picked up as much as we’d like this year and that’s another reason we’re doing a sales tax referral. It’s obviously like I’ve said before the budget deficit is so steep we only have two choices, raise some revenue (sales tax increase) or do some borrowing or boding or do some cutting.
Ted Simons: What are you making out of all this? The idea seems to be voting along party lines apparently. Democrats nowhere involved in all of this. Democrats saying there are options here, you didn't take them. What do you make of all this?
Mike Sunnucks: Health care took a big hit, "Access." Probably the biggest public hit of everything. They're just stuck. The dynamic down there is not for a lot of tax increases. It took them what, a year to get the sales tax on there. They're not going to let prisoners out. They're not going to do things that they think will hurt them politically, you know. They're doing what they can. Adams, the speaker, put out a statement about the budget. We made some tough decisions. This is what it is. There's no easy answers. You're robbing Peter to pay Paul in terms of these cuts.
Ted Simons: The idea of a provisional I guess in case sales tax fails. If the sales tax fails, you're talking some 800 million more in cuts?
Luige Del Puerto: They're assuming we're going to generate about $918 million for fiscal year 2011. They're cutting in this conditional budget which assumes the sales tax referral would fail, they're cutting 868 million. They still have to do some more cutting. Even though it takes into account it will fail.
Mike Sunnucks: They're talking about a billion dollars in cuts if it fails. Brewer and the folks that back this, laying out and saying, if we don't pass this, this is what's going to happen. It's bad now. It's going to be much worse now. They haven't done a good job at that. This budget they passed, you know, real late. You see the stories everybody wrote. There's not a lot of details that your average Arizonan can grasp. People "Access," you know, it's kind of vague terms. They really need to communicate how bad the cuts will be if the prop fails.
Luige Del Puerto: What comes to mind about this whole budget process, it's March. They will somehow mostly pass a budget. It's so early in the session, if you will. The other thing -- the other point I want to make, though, in this budget that they have, we have a contingency plan in case the sales tax referral fails. They don't have a contingency plan if the repeal of the "First Things First" which they think will generate about $325 million and another item that would basically transfer money from the conservation land trust, basically the fund we use to conserve open spaces and they're scoring it for about 420 million. If those two referrals in November fail, we don't have a contingency plan for those.
Mike Sunnucks: They've been going after the "First Things First" for awhile. The voters approved this thing. It's a cigarette tax to fund preschools. They want to go after something the voters to approve but then they want the voters to approve the sales tax. They don't have the courage to pass the sales tax themselves. They don't have a super majority. I don't know if they can do that. If you get somebody like Jim Peterson, somebody who has money, Sperling, the Bashas, it could stay.
Sarah Fenske: How many people are so devoted to "First Things First" with how many other things have to be cut? When push comes to shove, are they going to put their money where their mouth is to fight?
Mike Sunnucks: It depends. Bashas --
Sarah Fenske: They're in bankruptcy now.
Mike Sunnucks: If they put a lot of money towards it and say you're going to take these children's programs, people like that. It's whatever ballot has the most money.
Sarah Fenske: Absolutely.
Luige Del Puerto: They didn't actually pass everything yet, that's true. The House passed all budget measures but the Senate failed to marshall the votes for two of the 15 budget measures. One of them is the repeal of the "First Things First" statutes. Basically one member was missing. Senator Allen who is from Scottsdale, a Republican from Scottsdale. They said she was going to vote for this repeal but wasn't there so they didn't have the votes for that. There's another 20 million in savings. This is basically a tax credit for businesses for their accounting, sales accounting expenses. That also did not pass because they needed 2/3 vote for that, which means 20 votes in the Senate. Therefore, the Republicans who were only 18 members in the Senate, they needed two more Democrats to do that one. They didn't have the votes for those two measures.
Mike Sunnucks: Caroline Allen has been a stick in the mud for a lot of conservatives for the Republican membership there for awhile. Here she comes "First Things First," she was critical of that. She asked them to donate some of their money towards the budget and she talked about this referral and here she is, you know, causing problems again for the leadership.
Ted Simons: We're going to get to the county issues in a second. There's a whole lot going on there. I want to go back to "AHCCCS." You mentioned a lot of people don't understand "AHCCCS." A lot of people depend on "AHCCCS" and a lot of folks are going to lose services regarding "AHCCCS" This is now happening, this eligibility change without straight through the legislature. It sounds like a lawsuit waiting to happen. Is there a contingency plan if the lawsuit succeeds?
Luige Del Puerto: There is none. That's the short answer. There is none. I think they'll deal with the lawsuit when it comes. It wouldn't be the first time that the legislature would be sued. You know, in certain cases they have lost and they have returned money, for example, for the cities last year, early this year. So no, there's no contingency plan if they are sued and the court says, you can't do what you --
Mike Sunnucks: You got more than a million people in the state on "AHCCS." That program via voter mandates, via the bad economy, has grown and grown. It's one of the monsters that they always have to deal with in terms of spending.
Ted Simons: As far as "Kids Care," that cut as well, are there not matching funds for kids 2-1 or 3-1?
Luige Del Puerto: There is. Under the federal stimulus package there's a 3-1 match. It's basically the federal government saying, we're going to give you more money for your financial troubles. What they did in this budget, they eliminated the statute for "Kids Care." Democrats were objecting to it last night because they said assuming that congressional legislation would extend this Medicaid match, assuming it passes, then we're not going to receive those monies anymore because the statute for "Kids Care" wouldn't be in place. So they -- the Democrats, I do want to make this one point, they offered amendments to either restore funds or restore programs. Obviously all those amendments did not go anywhere.
Mike Sunnucks: This will be next year in the governor's race. Terry will come out and say, the Republicans, including the Governor Brewer, cut services for uninsured children. Even your most conservative folks think that uninsured children should have some kind of coverage. He can make just tons of points on this, just kind of a broad political level, people support that. To cut that is pretty perilous for the G.O.P.
Ted Simons: Let's, before we get to county matters, the deal involving juvenile corrections stays around for a year?
Luige Del Puerto: Yes. That has been one of the sticking points in this whole budget process. There was lots of -- there was very stiff resistance from lawmakers, from county officials about the plan to essentially shift the responsibility of jailing juveniles at the counties from the state. That plan has changed. It remained fluid for a time. Yesterday there was a proposal by the governor and they accepted the proposal. Basically instead of shutting down the Arizona department of juvenile corrections, what they're going to do is they're not going to shift for now, for about a year, the responsibility of juvenile corrections at the counties. What they're going to do is set up this commission that would look into pretty much the feasibility of transitioning of the responsibility of juvenile corrections from the state to the county. So, the department's staying for about a year and this commission at some point in the next fiscal year will submit its recommendation to the governor and then they're going to decide from there.
Mike Sunnucks: What is interesting about these budgets. They have a lot of tough cuts, a lot of tough decisions to make. Partisanship doesn't matter. Brewer never seems to come out and say, I'm going to save this. Janet would always come out, this is what I want, this is what I'm going to save. She would and she would horse trade. There would be a story saying the governor did X, Y and Z. Brewer never did that. She said, I support the sales tax increase that takes some courage but she has not said I want to save Kids Care or this program. I think that's going to hurt her in the election.
Ted Simons: Last part about the budget. Final call here. A lot of comments, the sales tax -- forget the budget quickly. Let's talk about the sales tax push and the fact that both Senators Kyl and McCain coming out saying, we're against the sales tax hike.
Mike Sunnucks: Thank J.D. Hayworth for that. He's challenging McCain's conservative credentials which has been done before. J.D. came out Monday morning and said I don't support prop 100. A few hours later McCain and Kyl said we respect the right for voters to have it but we think it’s going to hurt consumers and small businesses.
Ted Simons: Did they offer suggestions as to what the state should do to cover that hole?
Mike Sunnucks: I think the suggestion is vote for John McCain in the Republican primary. No, they did not. It's a tough issue. Kyl is an anti-tax guy. It's not a surprise he would be opposed to this. McCain has a lot of pressure to play to the base on this.
Luige Del Puerto: The governor has pretty much married herself to the sales tax referral. I didn't think anyone would say or would have said, would have changed her mind about this one. This is pretty much the hill that she's chosen to die on.
Sarah Fenske: Way to put it.
Mike Sunnucks: I think you're right about that. You're going to stake your political career on a sales tax increase. Whether it's the right or wrong thing to do is beside the point. Politically in this state I don't see how that's a winner.
Ted Simons: Some say she's planting her flag on the hill.
Luige Del Puerto: Right.
Ted Simons: Let's get to, oh my goodness, as far as the counties are concerned. The racketeering suit that caused so much attention, caused so much damage in terms of reputation in terms of consternation. Adios.
Sarah Fenske: It's gone. They clearly are trying to save face on this. There have been some really great briefs filed. Naturally when you're charging county supervisors and judges and top lawyers in town about an enterprise, they're going to go out and get really good lawyers to defend them. There were a number of motions to dismiss on this thing. The legal thinking, the judge would have dismissed this on summary judgment. By Thomas and Arpaio dismissing it themselves, they were able to save face and be able to try to change the debate claiming the feds will look at this. I don't know how effective it was, but that's what they were trying to do.
Ted Simons: Would you want the feds to look at something you've got a lock solid hold on? Would it make a difference the feds looking at something that you --
Sarah Fenske: Particularly both the guys are on the record that they think the feds are the politically motivated agency. Of course they don't like Barack Obama. This is really their Hail Mary. If they thought this suit would have succeeded, they wouldn't have dismissed it.
Mike Sunnucks: People that are anti-Joe or anti-Thomas, does it really change anybody on this or does it move any public opinion?
Sarah Fenske: You mean, will people like Arpaio and Thomas again?
Mike Sunnucks: Yeah.
Sarah Fenske: No. They're trying to do this. Thomas is obviously worried. He's running for attorney general. He's exploring a run for attorney general. A lot of people have turned on him. I think he would like to extend an olive branch. I think it's way too late for that. If the suit hadn't got dismissed, he would have had egg on his face.
Mike Sunnucks: It further gives them ammunition to go after people they don't like.
Sarah Fenske: And they can't complete it when they do.
Ted Simons: And the attorney general made the case, this is what he wants. He always wanted the feds to take a look at this. No matter what, something happens, I'm right. If something doesn't happen, I tried.
Sarah Fenske: That's certainly how he tried to spin this. I frankly don't think his spin is succeeding. Interestingly, I think we just posted on our website a letter today that the head of the public integrity unit sent to Arpaio's lawyer completely objecting to this press conference. They said we have not agreed to take on the investigation. We agreed to review the materials you provided us. That's much different. You're trying to paint this like we're taking this over. We're not trying to take this over. This is dishonest.
Ted Simons: Did the attorney from Washington D.C. at the press conference allude to he had the connections and he's the one that got the feds to go ahead and review. Who is this guy?
Sarah Fenske: Yeah. This is Robert Driscoll. He used to be part of the Department of Justice I believe under the second George Bush. He's a connected guy or would have been if Bush was in office. Arpaio hired him at least a year ago to help him fight off the investigation into the alleged civil rights abuses and also I think now he's handling the abuse of power issue that the feds are looking at. He's the managing partner of a really expensive big deal firm in DC. Bob Dole works for this firm.
Mike Sunnucks: I think the bigger problem for Thomas is in the Republican primary. You're not going to see Republicans say I'll vote for a Democrat now. You'll see Republicans like Horne, there are irresponsible actions. I'm going to form a more responsible AG's office. I think Horne could make more hay out of this than the dems.
Sarah Fenske: I think Thomas incited enough people that you could see a fairly prominent conservative. There may be an option for people not willing to vote for Tom Horne.
Ted Simons: You got a name on it?
Sarah Fenske: He hasn't confirmed but Len Munsil is considering. He could do so much damage to Thomas in a primary it's not even funny.
Luige Del Puerto: The relationship between Sheriff Arpaio and Thomas?
Sarah Fenske: I think both of them would like to distance themselves for little bit. It's not good for Arpaio, it's not good for Thomas in the primary. I don't know that they can distance themselves. They've done so much together. The testimony from Sheila Polk about the water Thomas was willing to carry from Arpaio, he can't get from underneath that at this point.
Ted Simons: As far as the state bar is concerned because Andrew Thomas has concerns there as well, sounds like we got someone appointed for the bar investigation. Is everyone -- is there a conflict of interest in every single step of the way here?
Sarah Fenske: You know, Thomas is certainly claiming that. He's tried to make an argument. The more I'm digging into this, the more I'm seeing the conflicts aren't as bad as what Thomas alleges. It will be interesting, the guy that appointed the investigator to this case whether they'll blink. Thomas is good at --
Mike Sunnucks: It's a small town. The attorneys -- this guy is a pretty big attorney here. You donate to people that are running for county attorney and attorney general, it matters kind of how much partisan you look into these things in the end. Just giving money to somebody is not enough. If you're giving money to Democrats and you're a big dem, maybe Andy has juice there. Other than that, it's pushing it.
Ted Simons: We should mention again, this is a state bar investigation. It's not a criminal investigation.
Sarah Fenske: Absolutely.
Ted Simons: Those kinds of things, while important -- apparently, this guy has worked for both Andy Thomas and the board of supervisors.
Sarah Fenske: It's funny they're trying to make this issue. Andrew Thomas used to work at Jennings Straus. This guy has connections with everybody which maybe kind of cancels out the connections ultimately.
Ted Simons: You kind of alluded to this earlier, Mike. Does it seem as though there's a little bit of separation going on between Andy Thomas and Joe Arpaio? And who do you think is doing the pushing?
Mike Sunnucks: I think Thomas would start to distance himself from Joe a little bit. Joe is not up for election. Andy is. You know, there's some fatigue with Joe overall because of all the investigations and things. Joe is still popular. If there was an election tomorrow, he would probably still win, but it might not be 55% anymore. I think Thomas will kind of move away from him and maybe charter his own course a little bit.
Sarah Fenske: At least if he wanted to do it for the best of his career, he'll do that.
Luige Del Puerto: Have we seen that?
Sarah Fenske: We haven't seen it yet. That's interesting. I think Thomas may be choosing to go down with the Arpaio ship, to use your metaphor.
Mike Sunnucks: It's the primary. Joe endorses Andy. Andy is "Law and Order," tough on immigration. That plays from a 30,000-foot view.
Ted Simons: We should mention the Gila County prosecutor still has the cases. That has been farmed out. She now has that. That is still in the news. As far as racketeering, that thing was damaging all the way around as far as Thomas was concerned. It seemed like that was rearing -- especially with the Pima County judge mentioned that numerous times as being a conflict of interest.
Sarah Fenske: He used that a number of times why Thomas couldn't prosecute. If you look at it in terms of political strategy, strictly in terms of political strategy, that RICO suit was a disaster for Thomas.
Ted Simons: We have a minute left, I'll throw a question out here, relatively quick answer. Who is in better shape politically? The Governor or the Maricopa County attorney?
Mike Sunnucks: Andy Thomas.
Ted Simons: He's in better shape?
Mike Sunnucks: I think so politically. In terms of Republican primary which is in September, you know, he can say I'm tough on immigration. I'm still with Sheriff Joe which most Republican core voters like. Jan Brewer is out of step with what the primary voters are now. She's got a tough road against Dean Martin.
Luige Del Puerto: I would say the governor. The reason is she's the incumbent. It has weight.
Mike Sunnucks: I think the one problem for her is most people don't know she's the incumbent.
Sarah Fenske: I think they're both in bad shape. If I were a political consultant, I would be sharpening my knives.
Ted Simons: We'll leave it right there. Thank you for joining us on "Horizon."