Ted Simons: Good evening and welcome to "Horizon." I'm Ted Simons. Joining me tonight are Mary Jo Pitzl of the "The Arizona Republic," Howard Fischer of Capitol Media Services, and Mary K. Reinhart of "The Arizona Guardian." Earlier this month, Arizona voters decided to legalize marijuana for certain medicinal purposes. Howie, is the state ready for this?
Howard Fischer: The short answer, no. The good news, the proponents of the proposition gave the state time to come up with rules. It says you may not smoke marijuana in a public place. We asked, what's a public place? Well, we have a smoking statute you can't smoke in bars and restaurants. Maybe we'll use that. But that means you can stand outside the state senate and get high. Which might be necessary given the upcoming session. They're going to figure out is it a lottery system? Based on qualifications? Again, not yet decided. There's a lot that has to happen between now and the end of March.
Mary K. Reinhart: Before we have a rule, we have a new lobbying association ready to go to help the folks make the rules and make sure that their interests are protected. The proponents of prop 203 announced yesterday they're an association and take whoever wants to join, that's going to be part of the fledging industry -- attorney, dispensary owners -- they don't know what's going to come up but want to make sure they're at the table to give their two cents.
Ted Simons: Mary Jo, the idea of the cost, in the long run, it's supposed to pay for itself. Where is the money coming from?
Mary Jo Pitzl: They're going to have to scrimp and save and find it and get an extra line item to cover the startup costs. I think it will trigger an open question, can the state tax medical marijuana? There was a bill last session that would have required that -- it was proposed by a democrat and shot down because nobody wanted to contemplate it would be legal in the state. Here it is and some folks say it's an open question. Others say we think we can find a way to tax it. If you do that, you can bring in a greater revenue stream.
Howard Fischer: Arizona law says you do not tax prescriptions. And it can't be because of the drug enforcement agency. It's a recommendation. My doctor recommends I take vitamin C. But I pay taxes on it. Is this the equivalent of that? In which case, that's an over-the-counter drug.
Mary Jo Pitzl: We are going into the no-tax cut pledge again, legislature and the governor said we're not going to raise taxes. Would it extend to medical marijuana?
Ted Simons: That's something that I assume this new lobbying group, new organization, would say we're going to fight against this aspect of the law.
Mary K. Reinhart: I think they're going to have to be prepared for a licensing fee. Which makes it a self-sustaining, I think, situation and they're concerned about the doctor-patient relationship. And also mentioned that the drug didn't get sort of -- I think the word wasn't way-layed. But from seedling to patient, there's a stream that we can track and there isn't sort of diversion --
Howard Fischer: And go down the rabbit hole. Because will humble said we ought to be able to weigh it and track it. Wait, you start with a seedling, it grows, weighs more. You take it and hang it upside down and dry it. It weighs less. I know you know nothing about it. You got to get it down to the leaf. How do you track this and make sure the product isn't going out the back door?
Ted Simons: You've got to make sure that the crop is what it is and it's going where it's supposed to go.
Howard Fischer: The other end of the problem that nobody has considered. The law says dispensaries have to obtain their seeds from a legal source. There are no legal sources in Arizona. So are these seeds going to magically fall from the sky? There is -- and you cannot bring the seeds across state lines. Now you're into a federal violation.
Mary K. Reinhart: They have 120 days. In Colorado, a constitutional amendment this long -- I mean, this is a lengthy piece of legislation -- law, that they have lots of questions and they have time to work it out. Right now, Colorado is doing it backward, as I understand it. They're trying to regulate it after the fact. After the dispensaries have sprung up everywhere.
Howard Fischer: The other shoe, which has to do with workplace testing. Because of what's happened in other states where employees had medical marijuana cards testing positive, this one says you may not discipline or fire a employee who has one of these get out-of-jail free cards because they test positive. You have to show they were smoking on the job or impaired. This is not like alcohol. You can't say you have a .08 blood level. What's impaired? This is going to be years in the courts?
Ted Simons: And we should mention we had will humble on the program. $600,000 to $800,000 just to get ramped up for the licensing, which supposed to start in April, or somewhere along those lines and it's got to start somewhere. And that's just the start.
Mary Jo Pitzl: It just adds to the budget pressures. The voters wanted it. But the redistricting is going to start. They have to find money to get that started this year.
Ted Simons: I want to get to sentencing -- we talked about this last week. The concept of sentencing reform as a way of cutting costs and get the corrections department's costs lower. Is this going to fly at all?
Mary K. Reinhart: The short answer is probably not. Given the makeup of legislative leadership and the incoming committee chairman. Eddie Farnsworth in the house and Gould in the senate. He's on the record saying these aren't goes through my committee. Unlikely to get hearings. But doesn't mean people aren't talking about it. Russell ash had a meeting, they heard from family members and the attorney general's office and there's a report that looks at different alternatives to sentencing and the rise of the prison population and continuing to increase in Arizona, and there's a lot of research and reasons to talk about this, not the least of which is the budget. This is a nearly $1 billion agency that keeps growing and we have legislative leadership that really doesn't want to talk about it, giving more discretion to judges and letting people out earlier, if they're in wheelchairs.
Howard Fischer: The problem started in 1978. There were decisions by judges that people thought were loose. So they put in the mandatory minimums and then we got into something called truth in sentencing. If you sentence someone to 20 years, they'll serve at least 80% of it. I think we had one out of 750 Arizonans behind bars and now we're down to one out of every 150 Arizonans behind bars. And at what point does this not become sustainable?
Ted Simons: This has grown faster than any state in the west as far as prison population is concerned. Is -- it's -- it sounds like a non-starter when you talk about it politically.
Mary Jo Pitzl: I think the tea leaves show that and would strengthen majorities for the Republicans and not that they ran on tough platforms -- I think when you look at what part of the budget is going to get scrutinized, it's going to be healthcare.
Howard Fischer: While they didn't run on that, they know two years from now if they support -- maybe truth in sentencing should be 65%, they're going to get a primary for who says, Charlie was soft on crime.
Mary K. Reinhart: You have liberal states like Texas and Georgia, reducing the percentage of time you have to serve and creating alternatives to incarceration and facilities for parole violators. They're doing things in other states that have a similar partisan makeup to Arizona.
Ted Simons: Any response from the governor's office on this?
Mary K. Reinhart: Not a lengthy -- basically it's probably not going it happen. They don't see any political reality for this. And so she's not going to push it.
Ted Simons: Mary Jo, the idea of changing business property taxes. This has been bandied around about for a while. I think today. What’s going on?
Mary Jo Pitzl: There was a meeting of the Arizona tax research association which attracts lots of lawmakers and others interested in public policy and they got a presentation from the incoming legislative leaders and tax cuts are on the agenda. Business property taxes -- even Democrats agree, this is something of which there's broad agreement but it never happens because it's -- it's the same sized pie. Just reapportioning it. If you cut for business, who picks it up? Residential property owners. When you have stronger democratic minorities in the legislature that might have held that up -- they came out today with a blizzard of different tax ideas and none of which are baked yet or even fully formed.
Ted Simons: How are counties, cities and schools, how are people going to respond?
Howard Fischer: They're screwed. Look, here's the fact as Mary Jo points out. Properties are not a state issue. It's a balloon, you squeeze here and it pops out on homeowners. It means that counties can either raise the property tax on homeowners or deal with less. They're talking about making changes to urban revenue sharing, which means the amount that goes to cities would have -- would be less than it would have been. They've shifted items to cities and counties and school districts. They've changed the way school taxes are raised. We just made them raise more at the local level and this is the state saying we're the sovereigns and the rest of you guys, not so much.
Mary K. Reinhart: I think of what they talked about today was talked about last spring, with the house speaker Kirk Adams and the governor had her own iteration and Kirk Adams countered with another. They’re talking about delaying some of the tax, phasing them in and not starting them. With the idea that businesses want certainty and that kind of stuff. They know their taxes are going to go down, they'll come and create jobs.
Mary Jo Pitzl: The argument for the delayed implementation, surely things by then things will turn around in the economy. And it's a circular argument and it might be certainty for businesses but will it be certainty for the state budget and what do you do if you give away X million in tax cuts in the hopes of bringing in jobs. How does it take care of the budget problem now and next year.
Howard Fischer: I asked Pearce, 2013, we'll lower the property tax and theoretically, others will come in and with new corporate tax and hiring people. What if it doesn't happen? He refused to recognize that as a possibility. He says we don't have a choice.
Ted Simons: When they say homeowners have been getting a break all these years, we have to make it more fair, how does it may out politically?
Mary K. Reinhart: Depends on if you're losing your home. We're going to make the tax breaks and they're going to be free because they're going to create all of this new job growth and it's a circular argument.
Howard Fischer: Here's the other part. It's not acting state revenues, they have to make it so it raises or lowers money. We're just changing the formula. You're right, can you phase it in slow enough for homeowners. They've moved in this direction. Half a dozen years ago, businesses were assessed at 25%. We want to take it to 18%. The shift has been taking place and it's slow enough, like putting a frog in water and turning up the heat slowly until you realize you're boiled maybe too late.
Ted Simons: Let's move from that visual to another story, a transplant story. Cuts to AHCCCS. We have NPR going nationwide with a couple of Arizona residents bumped off the list. What’s going on, here?
Mary K. Reinhart: National headlines. The latest was a case on Tuesday of a fellow, a father from Laveen, prepared and ready to go at banner for a liver transplant, a friend's wife had died and suggested the family wanted to give him the liver. He could not raise the roughly $200,000 in the time. He's an AHCCCS member whose coverage for that type of transplant. Because he's an hepatitis C patient and they typically reinfect the new liver, that transplant and other types, those folks lost that coverage. He's the fourth person we know about -- but AHCCCS says there are about 100 on waiting lists. About 15% of those folks typically will get the transplants. We know a couple of heart transplant people. They're ineligible. Off the list.
Ted Simons: Is there any traction here? What kind of response from the lawmakers and governor's office?
Mary Jo Pitzl: There's a lot of -- lawmakers are saying we'll look at this when we get back in legislative session in January. The governor is saying show me a way to pay for it. She's in a war of words with the legislature. You have a way to pay for this -- if you can give stimulus dollars for algae research, certainly you can spare $800,000 to spare people's lives and provide transplants but it's also drawn national attention and there's a consortium of transplant associations reaching out to the governor since late October trying to get a meeting and apparently a phone interview early next week with one of the governor's staffers. At least they're getting through. I don't know what that will result in.
Howard Fischer: You've got a situation where AHCCCS covers anyone below the federal poverty level. $18,000 a year for the family of three. If you make $19,000, none of this applies and you don't have the money. Money does matter in these things. It was funny because the Republicans kept talking about the death panels, under the Obama care. Well, there are decisions like this made every day. Does someone have a likelihood of survival? Insurance companies make these decisions. I appreciate these are real people and they're all heart-wrenching stories, but at what point, at $200,000 a piece and you are not funding classrooms, do you decide this?
Ted Simons: Another aspect of the story, there are hospitals saying no to these folks because they don't have the money, correct?
Mary K. Reinhart: That's true. For every transplant patient eligible to receive a transplant, there was a hospital refusing to do the work because there was no money there. The NPR story made an interesting point about the ethical issue involved in getting somebody to the point of being on a list and have your insurance company, right, a provider which works for AHCCCS, six or so different providers, telling you -- you are eligible, you're on this list. It's a promise that this insurance company has made to you that you're going to get a transplant and then yanking you off the list. That's different than an insurance company changing its coverage at enrollment time. You know what I'm saying? That's what people are struggling with. This is an ethical issue for physicians around the state.
Mary Jo Pitzl: And with that kind of broken promise which is what has happened with these folks, once you know you're on the list, most people stop doing the bake sales or whatever they do to privately raise the money to cover their surgeries and now at a greater disadvantage than the person who makes $19,000 and can't get coverage anyway.
Ted Simons: The boycotts of S.B. 1070, discussed and we had the Elliot Pollack group. The economist gave numbers and the client says it's X and the economist goes it looks more like Y to me.
Howard Fischer: You're dealing with journalists, and remember, numbers are not our strong suit. But wanted to send a message to not enact -- they hired Elliot Pollack and associates, and to figure out the lost conventions and we know there were. They came back and said here's numbers on what we think are losses in conventions. Based on that, Americans for prosperity said we're going to extrapolate this out and make assumptions and say it's due to, in fact, 1070. And Jim rounds looked at the report and said, wait, we did not say that. You've made decisions. You had the fact that the legislature -- and in the past three years has taken away something like $25 million away from the department of tourism and you have the economy being done. He said if, in fact, other states are going to enact 1070-like bills it won't be a boycott of just Arizona, but 25 other states. So Arizona won't have that focus on it.
Ted Simons: You have a very small part of the general fund as opposed to what the group said an impact that needs to be address. I think they used the word "naive" if you don't think it's affecting the state and the economy.
Howard Fischer: $45 million people might have spent on rooms and food and clothing and visitation. And he said, that sounds like a big number. The gross domestic product of Arizona is like $250 billion. Like 6/100 of one percent – so you can’t say its brought Arizona to its knees.
Ted Simons: Something that could be bringing Arizona to its knees is redistricting. How is that for a segue?
Mary Jo Pitzl: Ding, ding, the next round. This is the every 10-year exercise to redraw political boundaries and there will be an independent commission that will draw those lines and the process has begun to figure out who will be the five commissioners.
Ted Simons: Any familiar name, curious names?
Mary Jo Pitzl: Well, the list started off with 79 applicants and narrowed to 40 and there's 15 Republicans and 15 Democrats and 10 independents. Paul bender is on there as one of the independents. And Phoenix city manager, another independent. The list goes on and on. One of my colleagues said it's the whole street system in the east valley --
Howard Fischer: It says you can't be a sitting official, you can't have been a sitting official --
Ted Simons: And you can't be one for -- what? -- three years after the thing ends but it's going to end in -- years.
Howard Fischer: It took the entire decade. Why would you want to do this? This is not some lucrative sexy board. Even the central Arizona water board, you've got control over tax dollars. This is hours and hours of mind-numbing map drawing and trying to figure out we have to comply with equal voting rights and make sure we don't dilute the voting stream and respect the communities of interest and if we have the chance, we're supposed to create competitive districts which led to nine years of litigation.
Ted Simons: And bulletproof districts and you have to work around that. We have a minute left. But Randy Pullen is out as the GOP chairman. What does that indicate?
Mary Jo Pitzl: It indicates Randy -- it indicates the turf battle happening within district 11. Which is an east and north central Phoenix and a struggle between the more moderate part of the party and the grassroots. Randy was of them and the other side won in some elections and that denied Randy a slot on the state committee coming up and without that slot he cannot run again for party chairman. Who knows if he wanted to. He hasn't talked.
Ted Simons: The treasurer of the Republican national committee and not even making the state committee here in town.
Mary Jo Pitzl: He won't be eligible to run for the state one. He can still run for the national one if he wants.
Ted Simons: Out of time. Thanks, guys, appreciate it.