Ted Simons: Good evening, and welcome to "Horizon," I'm Ted Simons. Joining me tonight are Mark Brodie of KJZZ Radio, Howard Fischer of "Capitol Media Services," and Mike Sunnucks of the "The Business Journal." A special session this week at the capitol and the Governor now set to apply for a waiver that would allow for cuts to the state’s to the state's Medicaid program. Mark, let's kind of go through this again step by step here. We have the special session involving the waiver. And were not even sure if the waiver is going to be accepted.
Mark Brodie: That's a good point. The new federal health care law mandates that states can't change their Medicaid eligibility after the date on which the law was signed by the President. So what Arizona wants to do is ask the federal government to give them a waiver from that, which would allow the state to cut about 280,000 people off of Medicaid, the ACCCHS program, here in Arizona. A lot of Democrats and even some Republicans are saying we have no idea if the Feds are going to let us do this.
Howard Fischer: The real key, as the Governor said speaking in Flagstaff, there is no plan B. They are counting on October 1st being able to drop these people and save $540 million come this fiscal year. Well, Governor, what happens if they say no or what happens if they’re not ready?
Howard Fischer: Well, we're very optimistic. No, we will work it out.
Howard Fischer: I'm going to meet with Kathleen Sebelius, we'll work it out. What do you do? I mean $540 million
Howard Fischer: The legislature that adopted the budget for this year, that presumed voters would pass Prop 301 and Prop 302 and the voters told them no. They seem to like this idea of living on the edge.
Mike Sunnucks: They don't want to cut K-12,that’s the thing we don’t want to be stuck cutting, and that’s where they probably have to go if they cut Medicaid, that's politically just not palatable right now. Maybe they sue the Feds if the waiver gets turned down. You kick the can down the road a little bit.
Mark Brodie: But the other issue -- there are two other issues. There are many other issues, but two of them are that, one, this is about half of the billion plus or so in spending cuts the Governor proposed in her budget. That's a pretty big hole if this doesn't happen. The other issue is, even if the Feds grant the waiver, there might be a question about whether or not the Legislature and the Governor had the authority of doing this without going back to the voters. It was a voter-approved initiative that increased eligibility and put all these new people on the ACCCHS roles.
Mike Sunnucks: The push on health care, unless they totally abandon what they did last year, was to cover more people and bring them under Medicaid and Medicare. Not universal but they wanted to do that. Why are they going to grant a Republican governor the waiver to cut 280,000 people off that.
Ted Simons: Not only that, think of the precedent. You grant Arizona this particular waiver, for this particular idea, all of a sudden here come a cavalcade of states.
Howard Fischer: There is a difference. Most states have their Medicaid programs at what the federal government requires. It’s bare minimum, it’s 33% of the federal poverty level, childless adults are not covered at all. Our lives, as Mark pointed out, says when you cover everyone up to the federal poverty level, it's $100,000 a year for a family of three. All we're asking for is to go back to what 44 other states do. You could do this without setting a precedent. We are going to require you to do what Medicaid says, but not require you to keep something, the lawsuit notwithstanding, that is not required under federal law. That's the key.
Mike Sunnucks: You're saying whether this becomes a national issue, and the people on the left who are already disappointed with Obama for going along with the Bush tax cuts and watering down a lot of things, really get after him on this. Okay. You believe in having coverage for folks, and expanding the pool of people recovered this is a step you're going to take.
Howard Fischer: Here's the other part. Even if we get the waiver, it's only until 2014. At that point this maintenance deficit goes away. It covers everyone up to 132% of the federal poverty level. If she's looking for coverage, all we're saying is you have to provide at least basic Medicaid until 2014, and at that point were all going to be at 133%.
Ted Simons: Back to the idea of how much this is cutting from the state budget, again, if Democrats succeed in the legal fight, whoever fights, Democrats would obviously support it, and if the Obama administration says thanks but no thanks, we're not crazy about 300,000 some odd people losing health care, you win. You get to cut more. I mean it’s a bad situation if this waiver doesn’t go through as well.
Mark Brodie: Yeah, it's sort of cut this or cut something else. 5 It's interesting, one of the Republican legislators I spoke with this week about this, I said, what are you going to do if this doesn't get approved? He said, one option is doing it anyway and seeing what the Feds want to do about it. Sort of engaging them in a game of chicken. There are options to do other things. I don't think any legislator would say there are a lot of great options right now as far as how to balance the budget.
Mike Sunnucks: We'll see when the personal stories start to come out. You've got 280,000 people who are on ACCCHS; the roles have obviously grown because of the economy. When the stories start to come out, it's going to say this is what happened to X, Y, Z, it happened with the transplants after the fact. The Democrats usually want to keep this in place; how much they play that card, And how they respond to that. They haven't responded that well to the transplant thing, in terms of P.R. and the image of the state.
Howard Fischer: Well, you talk about chicken; there is an ultimate game of chicken here. We were the last state to join Medicaid. Prior to 1982, the counties were responsible. We got a waiver, this experimental HMO-style program as opposed to traditional Medicaid and now of course we're addicted to it. The ultimate game of chicken in this is, we'll go back to pre-82. You can keep your several billion dollars in federal Medicaid money because we can't afford our match anymore.
Ted Simons: Is anyone seriously considering that? I mean seriously?
Howard Fischer: Again, I don't think anybody wants to do that. 6 I think they recognize that bringing in federal money makes sense. But there also is a certain resentment there that now we have this situation where we have become addicted to it. I went back and I was telling Mark the other day, I have articles from 1985 that suggest we should get out of ACCCHS because it's costing us too much. This has been a perennial issue.
Mike Sunncuks: Think about the impact on hospitals, physicians, providers already facing rate cuts, but if you take all these people off of their, what that does, too. That's one of the few industries that's actually been hiring.
Howard Fischer: But let’s come back to the basics here. Every other state, 44 other states managed to deal with it at basic Medicaid. It's nice to know that the hospitals are doing better because were covering everyone up to 100% of the federal poverty level. Here's the other dirty little secret. A lot of corporations are getting away without having to provide coverage for their low-wage employees; you could just join ACCCHS. Just get on ACCCHS. If they take that away there's going to be a lot of pressure on business, which is part of the reason the chamber hates the idea of scaling this back.
Ted Simons: Which also negates a lot of the tax cuts that are making their way through as far as the governor’s plan. If the Governor wants to expand executive power. Let's talk a little bit about this and exactly what she wants to do. Line item veto?
Mark Brodie: Line item veto and she wants the ability to basically reduce spending if the legislature is not in session. The thinking, I believe, is that the legislature is a more 7 deliberative body, there not in session all the time, it's not the easiest thing in the world necessarily to get agreement among the requisite number of lawmakers to do something. If there’s a deficit like there is now, the governor can just go in and say ok, we’re going to get rid of that.
Mike Sunnucks: This usually pops up when you have an executive of one party, usually Republican, who wants to cut spending, and a legislature that’s Democrat that spends a lot. Arnold Schwarzenegger in California, maybe George H.W. Bush with the Democratic Congress back then. Here, you've got Republicans and they are pretty much in lock step on things. I don't see where they are going to go willy-nilly crazy spending but that Brewer is going to have to step in and say no.
Howard Fischer: The whole balance of power. The Governor technically has line item veto power, in other words, unlike the President, she can look at the budget for the department of environmental quality and say, I don't think $20 million is appropriate, I'm going to zero it out and then we'll come back and negotiate. She could say I'm going to pencil in $17 million, now it's up to you to find the votes to override me. That really changes the dynamics here and creates a much more powerful government which is why many of the Democrats certainly don't like it but the Republican legislators, people like John McComash, who negotiated the budget last year said, where’s our negotiating power if she can just go in and substitute the numbers.
Mike Sunnucks: Imagine that Janet Napolitano was still governor how the reaction would be; you would have that dynamic where it would make an executive very powerful because they would not necessarily have the votes to overrule her.
Ted Simons: And the other idea was, as you mentioned, once the legislature is not in session, the Governor goes over and says, we'll do this, we'll do this, we’ll do this, we’ll do this, and then when the legislature returns, they are then given the option of either accepting what was done, or going ahead and going through it. Which of course kind of gives lead way to the Governor; you don't want the legislature going back saying we need more money. 8
Howard Fischer: If you crafted that properly, you could put triggers on it in a way to say the situation where revenues are 20 percent below projections that for a fixed period, three months, we will allow you to do that. They have been around a lot more than that, more than any of us would like to see these people. This is my Congress, they are year-round that you can make those mid-year adjustments. It may make sense in October you find out again, we didn't get the waiver, maybe you can make some interim cuts until the lawmakers can get back.
Mike Sunnucks: A governor takes an action, vetoes something, it gets publicized. The budget process, one of the faults is the Governor comes out with her plan and then nothing real public happens until it comes out and they have a lot of back room dealings and that kind of leaves the public out. Maybe a watchdog side to see because the governor is taking the action.
Ted Simons: In general Mark, what are you hearing from lawmakers regarding a general reaction to the governor's budget? General reaction, let's get specific now. This one-day loan from first things first. We'll start with that, and maybe roll over into education, these kinds of quote unquote gimmicks, what are you hearing down there?
Mark Brodie: I'm hearing that a lot of people don't like them, but they kind of are resigned to the fact of what are you going to do? You have less than six months now to close a $700 million deficit for the current fiscal year. They have been borrowing and they’ve been selling off a lot of things legislators don't like doing. In a bucket of bad options a lot of people think of these as the least bad options.
Howard Fischer: And the alternative is cuts. This first things first loan is kind of a wonderful accounting gimmick. 9 On June 30th we borrow $100,000 and pay it back on July 1st with whatever’s one day interest is. Why do that? Well because on June 1st we've got $300,000 we didn't have?
Howard Fischer: And then you have to do it every year until you can afford to pay it back after June 30th. The alternative is you’d need $300 million in cuts, so what’s the choice?
Ted Simons: Another question on all this, can first things first legally loan money?
Howard Fischer: They say they can, they are allowed to invest, one of their committed investments is in state securities, if they are getting the market rates of interest, if there’s guaranteed repayment as opposed to when the state simply wants to take it, they can do it, they insist that is an option they can do, as long as they are getting proper interest for it and only losing the use of it for a day.
Mike Sunnucks: You've got the Goldwater out there that might challenge these things, but I don’t know who else might challenge it, maybe some of the child advocates that are worried about what’s happening. But you know they cut a deal with first things first to let up on the proposition. That was kind of obvious that that was a backroom thing that went on between the two sides and so I would see maybe Goldwater challenging this but there’s not a lot of folks out their that are ready to go to court over something like this I don’t think.
Ted Simons: Okay, let's keep it moving here. An idea regarding a shortened school year, in terms of -- well, now is this days is this hours? What are we talking about here?
Mark Brodie: Its fewer days, but no less classroom instruction. Basically this proposed bill, which has a lot of different kinds of provisions in it, one of them is that it would allow districts to go down to as few I think as a 170 days, and we do right now. Every day is a little bit longer because you have the same number of minutes of classroom instruction just over fewer days. 10
Howard Fischer: This man says, I can't keep these kids' attention for the time that I have them now. Are you kidding? Then you get into other issues. Right now the school districts have a bus schedule if you’ve got elementary, middle and high school, they all coordinate. Well if you change everything else, now you’ve got to redo that. Then there’s the issue for the parents, that means your going to have little Junior home two weeks earlier in the summer and have to find child care for them. I think it's a creative idea. For example, schools now do four-day weeks in some districts. Is it a way of saving utility money?
Howard Fischer: Yeah. The good news is, you've got people thinking outside the box, saying look we can’t afford anymore money, but maybe we can give you a way of saving some.
Mike Sunnucks: If you look at the school calendar, it's based on kids going to work on the farm. So it’s good that maybe their thinking outside the box. We have some year-round schools, Chandler and some other districts. Children have learned differently now than we did.
Howard Fischer: And this is an option, it’s a local option. It’s not going to be a mandate from the state.
Ted Simons: The district may cut salaries by way of fewer days, as opposed to looking at the hours.
Mark Brodie: One of his concerns is that districts will say, Teachers, you're working fewer days so we're going to pay you less. The teachers are still in theory working the same amount of time just over fewer days. That's a concern, Senator Rich Crandall seemed to dismiss that saying it would be bad form for districts to do that. It is for sure a concern.
Mike Sunnucks: Kind of a gut Democratic reaction, this will hurt teachers. That’s kind of old school politics. I think it's good that they are looking outside of the box.
Ted Simons: The kind of thing that could pass?
Howard Fischer: I think it could. If it's an option and if it’s not mandated, I think they’d say why not? What's the worst that could 11 happen? We have 200 and some school districts and if they all say no, hey we’ve given them an option There's a few other things in there that decided to create more flexibility. For example, right now, you can give as an individual $200 to a school for extra curricular. Well, maybe we'll let them use it for certain one-time expenses for some supplies and such. Of course the Democrats are saying, okay, that's great, we'll take that away from the obligation of the state -- they are trying to say, look, there is no more money. The state aid is flat. We’re not going to fully fund your inflation formula, we've cut you in the past, here’s the best we can do.
Mike Sunnucks: I think if you let local control and the parents decide, I think you'll have some support.
Ted Simons: Another bill proposed, and this one concerns obviously Congresswoman Giffords -- we should mention that it was encouraging to see her now in Houston and the plane trip was successful. That shooting now has – the idea in the legislature from one lawmaker, this is like a dangerous student database -- you've got a kid where a community college says you can’t come back on this campus unless you get psychiatric clearance. I think the author of the bill says someone else needs to know about that besides the community college.
Howard Fischer: Right now there's a database. If you go in to buy a weapon, then you have to go to at least this background check. That will find out if you are convicted of a felony. For example, if you're on parole for domestic violence. The proposal of the Representative Matt Hines, find who has been found to have some significant psychological episode at a public institution, mainly schools and any sort of public entity. And it's an interesting idea. You point out; Pima College police had something like five dealings with this guy over seven months, finally resulting in his suspension. Is he the kind of guy that you would want to report? Sure. Where do we draw that line? If your talking about crazy activity in college, hello I’ve been there.
Ted Simons: I'm already writing it down, I have a phone call after the show.
Howard Fischer: But that becomes the question. You have a decision of who makes the decision. It's not made by a psychologist, it's made by a college professor, it’s made by an administrator, number one. Number two, there's no notice that you would put on the list. Number three, there's no right to appeal. This is a bill that needs work.
Mike Sunnucks: This is well intended and it’s because of Loughner. Imagine, you know, who decides, guidance counselor, teacher, what kind of appeal process do they have, in college or high school, do their employers get to see this? What kind of privacy do you have? I think you know maybe some of these proposals should take six months or a year after this horrible thing in Tucson and come back later and see what makes sense to everybody.
Ted Simons: I would hope the difference between a rabble-rouser and a guy acting as he's been acting, certainly there can be some line of demarcation.
Mark Brodie: If you have a college administrator or a guidance counselor -- they can't know, is this somebody who's trying to cause trouble, is this somebody who has some kind of mental illness that hasn't been diagnosed. It's a tough thing to have people who don’t how to differentiate that.
Mike Sunnucks: Obviously he was disturbed, we know that now. Did he make any specific threats against anybody? He was annoyed with the college, he acted erratically, he acted weird, he acted disturbed. He didn’t make any threats
Ted Simons: But if it’s enough for a community college to say you can’t come back unless you do X,Y or Z, it’s not as if he gets a star or have to wear some sort of arm band or something, but get that information out there.
Howard Fischer: Again, we're down to where do you draw the line. The Army wouldn't take him and they’ll take anybody who's got a pulse at this point.
Mike Sunnucks: I think it’s just dangerous for us to base these policies based on his case. Because obviously what he did in hindsight and we look back on it and all these warning signs, but those are all in hindsight, and so being a rabble-rouser, being weird, being disturbed, how much do you mark somebody?
Howard Fischer: We passed a Patriot Act that nobody looked at, and when we legislate in this kind of haste in response to a specific thing always end up finding, oh, we didn't mean that.
Ted Simons: So, does it pass?
Mark Brodie: I would be surprised if it passed in its current form.
Ted Simons: Just from the mood down at the capital, do you think people are amenable to this right now or is it again, take a step back for a second.
Mark Brodie: I think they are amenable to the discussion, I don’t know they are amenable to putting their names up on the board.
Mike Sunnucks: I think it has a good chance of passing. Look what they did with the Westburg Church. They all joined together and restricted their rights to protest, as tasteful as it was. They all joined together with that. If there's somebody that really wants to push it on the Republican side and it's not going to restrict guns, which they don’t want to do.
Howard Fischer: You hit the nail on the head. I talked to some lobbyists from the National Riffle Association. They say that there is some version of the language they can live with and if you think that doesn’t move votes. We’re talking about more guns on campuses, more guns in more places. So if the NRA signs off on this and says, with this language we can live with it, its law.
Ted Simons: We've got a couple of minutes left here, the Supreme Court decided on that redistricting panel, that particular fight. Of course the situation continues but two gentlemen who were on an irrigation panel considered public officials audios.
Mike Sunnucks: One was a farmer, an irrigation panel tied in with the Republicans; I think you’ll see this throughout the whole process both sides trying to get people disqualified.
Howard Fischer: I think this is it. Today the Commissioner on the public Court Appointments with the screening 14 panel did choose two replacements. I don’t think you can go anywhere else with this. I think they are not going to be happy with who gets picked, but now Kirk Adams…okay you’ve got a full list of ten Republicans, pick. Got ten Democrats, five independents, that’s it. They said that Paul Bender, despite being a part-time tribal judge, was not a “public officer.”
Mike Sunnucks: You're going to see litigation and fights over the whole process all the way through, not just who’s on there, the priorities they use, how they meet everything, every step of the way.
Howard Fischer: As you know, we had a decade of litigation after the first time. We pretty much know what’s allowed. Competitiveness is not as important as communities of interest. The Supreme Court has ruled. Now, I’m not saying nobody will sue but your not going to have anywhere near the litigation you had a decade ago.
Ted Simons: And let’s wrap it up really quickly with how we started with this waiver. This is big stuff here, as far as the budget is concerned. Just gut feeling; you think the administration is going to allow for this waiver?
Mark Brodie: I would guess even if the administration says yes, I don't know that it would be in time to make the cuts on the date that the Governor wants to make them.
Howard Fischer: I think they will grant some flexibility, they may not grant this waiver, but they may allow for some other form, whether it’s co-pays for this additional tool for the population, or something like that. They will do something. It'll not be, go away and never darken our door.
Mike Sunnucks: I think they can do co-pays but I think everybody will be in court and they’ll fight it out in the federal courts.
Ted Simons: So no matter what happens, this all ends up in court?
Mike Sunnucks: Yes.
Ted Simons: All right safe enough, thank guys.