Ted Simons: The new legislative session is starting out unlike any other. The shootings in Tucson prompted Governor Brewer to replace her state of the state address with a shorter speech focusing on public Service and the Tucson tragedy. And the tone at the capitol is viewed by some as being more cooperative, state lawmakers acted with unprecedented speed-to-passing a bill to keep protestors away from the victims' funerals. But the work becomes much more difficult in the weeks ahead. Arizona faces as huge budget deficit, and painful cuts are likely. Here to talk about that and priorities in this new session of the legislature is senate president Russell Pearce, and speaker of the house, representative Kirk Adams. Good to see you both here, thanks for joining us. Real quickly, your thoughts on the Tucson tragedy.
Russell Pearce: Well, it's hard to respond. I can tell you we were at a mandatory meeting on Saturday when we heard about it, about 1300-plus Republicans were at our statutory meeting. The mood was unbelievable. We immediately suspended all actions, had a moment of silence, and we had Dr. Wright come in and offer a prayer. Tears were flowing, I saw many folks with red eyes and tears streaming down their cheeks. It was a sad, sad occasion. An act of senseless violence against good people. And you think about children, it's unfortunate several children, lots of grandchildren, probably the most touching part is to think about this 9-year-old little girl. But the whole thing was sad, and to think about those families, some will never, ever be the same. They were robbed of loved ones, they'll never recover from that instance. Never. What a tragedy for America, for Arizona, for all those victims of the families.
Ted Simons: Speaker, impact on you?
Kirk Adams: Well, very personal impact. I think the similar impact that had on all Arizonans, incredibly shocking. Devastating I think is a word that could appropriately be used. For those of us who know gabby Giffords in any capacity, whether a friend or an acquaintance, or a former colleague, it's been in particularly impactful. And then to think of little 9-year-old Christina Taylor Greene, a young girl who wanted to participate in the political process, and to be gunned down in that manner, it's a horrific crime, one that I think is going to leave a mark on our state for some time.
Ted Simons: You on the opening day, your speech was widely recognized. Among the things -- I guess you stayed up the night before and hand wrote this particular speech. I want to ask a couple of questions here. You asked, what does this bitter experience teach us? What do you think it does teach us?
Kirk Adams: I think any time have you a tragedy in your personal life, in your family, in your community, it's an opportunity for reflection, what can you do better? And I think one of the things that this reminded me of, among many, is that we don't often get a second chance to repair relationships or to ask for forgiveness. And even though the political community down at the capitol, we have our fights and we have our battles, it is still a small close-knit community. We spend a lot of time with each other, and we get to know each other pretty well. Sometimes too well. But when something like this happens, it really really hits home, and for me, it could be different for everybody, but for me it was, you know, in our personal relationships we need to be very careful what we say and how we treat others regardless of how we agree or disagree.
Ted Simons: There's another line with the speaker said that day, I want you to comment on it, and that is the difference between a civil society and anarchy is the ability to respect and value those with whom we disagree.
Ted Simons: Can the Arizona legislature do better at that?
Russell Pearce: It's like relationships at home. Sometimes those you love and appreciate you can have disagreement with, any married person ought to know that. You can do it in an agreeable manner, in a respectful manner. I think that tone -- that attempt has been made as we have an aggressive agenda. There are things we have to do, we're elected to do certain things, but -- I think we get along better than the media would have you believe in most cases. I can tell you during this instance I had many of the most liberal members of my caucus in my office giving me hugs, and had good conversation with them. Yet we have disagreement. But we know there are things that are not partisan that touches all of our hearts, and there's conversations that you can have with disagreement in a respectful tone.
Kirk Adams: If I might just add to that, I think there's a broader context here as well, the community at large has a role in this also. The media can play a role in the degradation of our civil discourse, just today a columnist in the "Arizona Republic" E.J. Montini accused the legislature of condemning a man to die and actually linking our actions on the budget to the mass murder. That type of rhetoric within the media degrades our civil discourse and should be as equally condemned as anything any politician says.
Russell Pearce: It's outrageous comments like that that incite people, and it's done to incite. And it's pretty disappointing that they would use this solemn occasion where we're trying to heal, to demagogue this issue in an inappropriate manner.
Ted Simons: I want to get to patient transplant issue in a second here, but before we do, back to Tucson, this suspect, this fellow, was not allowed to return to a community college campus without psychiatric clearance. Military wanted no part of him. And yet he was able to purchase a handgun with what seems to be just sailing right on through the process. A lot of folks are wondering, how can that be, why shouldn't it change? Can it change? Should it change?
Russell Pearce: First let's recognize there's over a million background checks done a month. A month. In gun purchases. This is a very isolated incident that people will use inappropriately to talk about those things. We have bad guys in society, and the reason they're called bad guys is because they're bad guys. They don't follow the laws. They would have people that would disarm law-abiding citizens and put them in harm's way because they have no ability to protect. You know, when you need help in just seconds, law enforcement is just minutes away.
Ted Simons: Those are -- those are arguments we hear a lot in gun control debates and such. But I'm talking about an individual who is not allowed on a community college campus unless a psychiatrist or psychologist says you've got to be cleared, yet he's able to sail through the gun purchase. Again, a lot of folks are wondering about this.
Kirk Adams: This is part of the problem of prematurely trying to analyze the public policy impact so close to a tragic event. I honestly believe that there needs to be some time and distance put between ourselves and policy decisions or else we're never going to have a rational intelligent discussion about these issues. For example, I don't know that it's clear that this individual, this murderer was ever brought to the notice of state mental health officials. Or what type of agencies or services were notified of his apparent problems that he had at Piedmont Community College. We don't have a lot of facts here, and there's a lot of emotion right now, and it's natural for people to want to explain why, how did this happen. It's hard for us to accept randomness in acts like this, but that may be what we have here.
Ted Simons: I guess my question is -- real quickly, my question would be, it's not so much I've got the answer or the people that are questioning, or anyone here has the answer, but is it something to look at again? Is it something to reexamine?
Russell Pearce: We have good laws. I mean you're always going to have exceptions. We have good laws. We have laws against bad guys, and bad guys are going to do what they do anyway. I have little concern we would rob good people of their constitutional liberty and rights. So I always get concerned, we always reevaluate almost everything. I want to make mention here, I checked, I had staff check the records in our behavioral health records, there's never a record of him applying or being turned down or even applying. No record of it at all. So you can't deal with what you don't have. That's information.
Ted Simons: I guess the question would be, is there a way to get that information out there and get that information --
Russell Pearce: if he was being treated, maybe, but this man had never been treated. Should he have been, maybe, but --
Ted Simons: this brings to mind now seriously mentally ill in Arizona, to services, a lot of folks get lack of Services, diminishing services for seriously mentally ill. How is that going to -- how does the budget impact that particular issue?
Kirk Adams: The same way the budget will impact all areas of state government. The biggest challenge that we have with the legislature is balancing all of the needs of the state and balancing the needs of our citizens. And there is no magic formula on how to make these decisions. They're hard and they're tough decisions, and we first off do our very best to protect the public safety. That is, our number one priority, our number one responsibility always. And so there will be lots of time to discuss in a rational way what happened, did he fall through the cracks, which apparently right now it appears like he didn't. Because he was never in the system ever at any point. But we'll have a chance to discuss those things and see if there's room for improvement. And if there is legitimate areas for improvement, I think you'll see the legislature act.
Ted Simons: Worthy of discussion?
Russell Pearce: Everything is worthy of discussion. There's nothing -- it's like legislation. There's never been a bill that couldn't be improved on and be a better bill. There's never a process that can't be improved upon and make it a better process. And not rob people of their constitutional liberties and rights. So your right, we have good laws, but I want to correct something, maybe he should have been treated, clearly this kid should have been treated and off the streets. But he was not in the system. And that's pretty sad. But you know, I submit there's lots of folks out there that need help that haven't ever asked for it. And that's difficult to deal with what you don't know.
Ted Simons: Let's get back to the transplant issue and regardless of what columnists, what cartoonists, what people on both sides of the issue are saying, the fact remains, that there are folks out there who need transplants by way of state aid, and they're not getting them, and they may not be getting them, and it's 1.2 million dollars. And the question that a lot of folks are asking is, can't we find $1.2 million to help these people?
Russell Pearce: Difficult issue. Needless to say. And the governor has been berated I think unfairly for making consultation with doctors decisions that were the best of the choices we had. We have an $800 million deficit. Maybe $900 million this year that’s half left. We have a $1.4 billion deficit coming for the year that starts July 1st. We have our hands tied by the federal government with stimulus’ that says you can't do this. And let’s look at things, could there be better spent money? Yeah, take the handcuffs off. We spend $8 million a year. We were told we can’t change and loosing all the AHCCCS money and look at the title, nonemergency transportation. The title alone ought to tell you something. So these are difficult times that we're facing. We have no money in the checkbook, we have handcuffs on us, strings, demands on us that we're not able to do without violating some MOE, or without violating prop 204. We have the fifth most richest program in the nation on AHCCCS, we spend $750 million above Medicaid requirements, so there are -- there is room to move, there's lots of -- but again, this governor made a tough choice, and I -- my heart goes out to her. There's nobody I know with a bigger heart than this governor. It's inappropriate the cheap shots have been taken at her.
Ted Simons: $1.2 million for a bunch of folks that really could use the help. What do you think?
Kirk Adams: This is an incredibly difficult situation and our heart goes out to the individuals that are impacted by this. And $1.2 million may not sound like a lot of money in an $8 billion budget. But the fact is, is that everything we do within Medicaid is incredibly complicated. And we need to look at this from a holistic standpoint in terms of how we treat all of Medicaid. If we pull money from one area to address this issue, then we're going to have problems over here. So the whole thing needs to be looked at holistically, and that's what I think your going to see in the governor's proposal that she releases, is a comprehensive relook at how we do Medicaid in the state of Arizona.
Ted Simons: At core here is -- I think you mentioned, there's no money left in the checkbook. If a family has no money left in the checkbook, they either get a job or try to find a way to get money into the checkbook. There's a line of reasoning that says that the state simply cannot cut itself out of this mess. We're talking everything from AHCCCS to education. We'll get to education in a second here. But again, if -- is it time to look at tax reform in the sense of broadening the tax base, which has been mentioned before, other kinds of reform? Obviously revenue, no one wants to see us turn into -- Illinois, which just ratcheted up their tax base to an alarming degree. Yet, a lot of folks are saying that we've had a lot of tax cuts over the years and at a time of trouble right now, maybe it's time to look at revenue.
Russell Pearce: You know,that’s an interesting concept. And those are the folks who never have enough government. They don't think they've stolen enough money from the taxpayer. During the Napolitano -- just the facts, ma'am. We grew government 12% a year, 12% a year while revenue -- while population, plus inflation was only six. You can't sustain that. We don't have a revenue problem, we have a spending problem, there ought to be a seven-step program for those legislators who continue to spend money they don't have.
Ted Simons: But tax cuts also occurred during that time.
Russell Pearce: That's right. But even john F. Kennedy understood if you want to grow the economy, you create an environment conducive to productivity. Lower taxes, lower regulation. That's how you grow the economy. You got 10% unemployment officially, maybe 17% unofficially. So the best thing you can do is create an environment where you can grow jobs. Create jobs. That's the private sector. And our job is to get government out of the way, like Ronald Reagan said in this time of crisis, government is not the solution, it's the problem. Get government out of the way, we're overtaxed, overregulated that’s our problem.
Ted Simons: We also got 300,000 folks that are about to lose AHCCCS coverage, we’ve got Services that are on the line, we’ve got K-12 and universities are trying to figure out what's going to happen to them. We still have those transplant patients out there and a lot of folks are saying -- again, no one wants a catapulting increase, but revenue, we've had a lot of economists on this program, and a lot of them are saying revenue enhancement needs to be looked at. Will it be looked at?
Kirk Adams: Two things. First off, Illinois did not increase their tax base. They increased their tax rates, which will actually cause the tax base to be reduced because they're going to run off tax payers and tax paying businesses to other states by their actions. We certainly don't want to do that. And when you talk about broadening the base, you're really talking about taxing Services. It's very easy to talk about this in sort of this 30,000-foot level of tax reform. What you really mean is, do you want to get taxed when you go see the doctor, do you want to get taxed when you pay your tuition, do you want to get taxed when you get your haircut or get car repaired or buy your car insurance? That's the real question that we need to be asking. The devil is always in the details when you talk about tax reform. Any way you slice it, it will be a tax increase to somebody. Furthermore, I would reject the notion that the legislature or the state of Arizona has not addressed any type of revenue issues. The fact is, that the voters did approve a sales tax increase, those revenues are coming in, they'll be included as part of the budget projections and so forth. We have gone down that route of revenues. What is left for us to do is to simple strategic priority decision making that we have to do. There are some things that state government can no longer do because we can't afford it. And we have to look at the main areas of state expenditures and decide which ones of those are the most important to us, and therefore which should be protected the most, and what other areas must be cut more? And that's the stage we're at. There's no more of this sort of pie in the sky, low-hanging fruit of a pot of revenue somewhere. That doesn't exist and it's not going to happen.
Russell Pearce: You talk about taxes, you're right, the tax -- expand -- broadening the tax base is absolutely a red herring. It's simply more revenue, attacking taxpayers and it's wrong. We just increased taxes, sales tax by 18%. How much farther do you want to go? When you talk about economists, Dr. Prescott of ASU, a Nobel prize winner on the economy who studied every session in history, not only the United States but abroad the last hundred years, he says the worst thing do you in a recession is raise taxes. The worst thing you could do. It's never a good idea, but it's the worst thing to do. It takes jobs and it takes revenue out of the system.
Ted Simons: We've had other ASU economists on who will say just exactly the opposite. So there obviously is a debate here --
Russell Pearce: I don't know they have the credentials that Dr. Prescott does --
Ted Simons: Well, some would argue that they do. They certainly are nobel prize winners but some will argue that they do. But again, the idea that – and you mentioned the one cent sales tax, we've already gone down that road. Voters approved that. And so my question is, is the -- the criticism on that particular vote was the legislature is out of step with the voters. The voters want certain things protected, they're willing to pay a little, not a lot, but a little more for that. Would a little more be considered?
Russell Pearce: Just raise taxes 18%. That's pretty hefty. And I guarantee it’ll have its impact. And the revenue isn't what they thought it would be, but again that was a special election with a very small percentage. And the most folks that turned out I believe those who benefit from more taxes who live off the government in some way or another. So let's get real, when you do the polls that have recently been done by several organizations, the voters want government reform. They want less government, they want more efficient, they want a balanced budget, they don't want to increase taxes. And that's the challenge we have, to balance revenues with expenditures and set priorities. And it's a tough call. But that's what we intoned do this session.
Ted Simons: K-12 and universities, what are you seeing out there? Because it just seems like, again, without more revenue, it's going to get hit pretty hard.
Kirk Adams: We'll know more tomorrow when the governor releases her budget proposal. I'm a strong believer that the Arizona constitution gives us two primary areas of responsibility -- education, both K-12 and higher ed, as well as public safety. And so those are two areas where we have to prioritize. And you know what? We've done that so far. If you look at the reductions that have been done to state government to date, those two areas have been the most protected in budget cuts. Compared to the rest of the state government. That's appropriate. And that was the earlier point I was trying to make Ted. There is no silver bullet, easy solution. There's no pot of money somewhere. We have to -- we're now at the point that we have to make those strategic priority decisions. Those are the toughest decisions to make, even in our own lives. If I have to decide between a used car or a new car, because I can't afford it or I have to downsize my house because I could no longer afford the pavement on the house I'm in, those are tough decisions. Imagine making those decisions for a enterprise as large as state government that affects as many people as it does. That is the point that we're at now.
Ted Simons: The concept of AHCCCS cuts and getting those, and that's complicated in and of itself, just getting the federal approval to go ahead and do that, which would lose the $7 billion, some folks I'm not sure about you, think it would be wise to go ahead and lose the $7 billion and go back to what we had with county municipalities providing health care Service. You're not on board with, that are you?
Russell Pearce: There's a good report on Medicaid and federal government running it that needs to be looked at. But the issue isn't whether you lose $7 million, the issue is whether you're out to make the reforms you need to make when the state is out of money. And the Obamacare, for example, will cost the state of Arizona over a billion dollars a year. We can't pay our bills now, so all that we're look for is reform. In fact, what's really funny is the press would have you believe that we're really doing some egregious acts in terms of trying to align Arizona AHCCCS, which is our Medicaid program, with other states. Just to bring it down to the average of other states.
Ted Simons: But to do that affects people who are getting coverage and who will lose the coverage.
Russell Pearce: Like John Stossel said, if you think Shannon Beck expensive today, wait until it's free. The courts are even blocking premiums, copays, it's freezed up. Somebody is paying for it, and it's the taxpayers. One out of five Arizonans are on AHCCCS. It's a richer program. I'm just talking about reforms. Bring it in line with some reasonable reforms. The taxpayer pays that bill, it's not free.
Ted Simons: Gotcha. Also we understand that a lot of jobs could be lost if AHCCCS is rolled back. Lots of jobs, trickle down into other industries as well. It's got to be a concern.
Kirk Adams: Of course it's a concern. There's going to be some impact in the community. No doubt about that. And we wouldn't be here arguing otherwise. But we have a reality that we are facing. We have to have the courage to make these tough political decisions. State government needs stability in its finances. And until we address this entitlement, which we can no longer afford, we will not have short-term or long-term stability. And we have to make those choices and those decisions. And I'll tell you, you look at the results of the election, this last November, where two thirds of the legislature, the governor won overwhelmingly, campaigning on a platform of reducing government and getting it to live within its means. I think the legislature is prepared to make those decisions. I think those are the type of decisions the voters want to us make.
Ted Simons: All right.
Russell Pearce: I agree.
Ted Simons: Gentlemen, thank you so much. Good to see you. Thanks for joining us, we appreciate it.