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July 13, 2011

Host: Ted Simons

AIMS Test Results

  |   Video
  • Arizona’s Superintendent of Public Instruction John Huppenthal discusses the results of the 2011 AIMS test.
  • John Huppenthal - AZ Superintendent of Public Instruction
Category: Education   |   Keywords: tests, AIMS,

View Transcript
Ted Simons: Good evening, and welcome to "Horizon." I'm Ted Simons.

Ted Simons: The state department of education today released the results of the 2011 aims test. Here to tell us how Arizona students measured up is state superintendent of public instruction, John Huppenthal. Good to have you here, thanks for joining us.

John Huppenthal: Ted, it's always great to be here.

Ted Simons: Before we crunch some numbers here, your overall thoughts and impressions of what you saw from the results.

John Huppenthal: Very modest improvement in reading and math, not nearly what we need to do to meet of needs of our students. But headed in the right direction. And we saw that increasing the standard in writing resulted in a lower pass rate, but we think increasing that standard for writing skills is exactly what we need to do for the future of these kids.

Ted Simons: I want to get into that later, but first of all, who took the test?

John Huppenthal: Well, we are talking about third graders through high school, am the way through the senior year. And at the high school level, all the high school sophomores take it, or first-time test takers if they entered our school system at a higher level, and fewer students take it through their senior year in an attempt to pass it.

Ted Simons: Let's get to some numbers. We'll start with the reading results. It looks like we see an improvement.

John Huppenthal: We've seen -- since we adopt a phonics-based curriculum, we've seen a steady improvement over the years, when we saw that again just a couple percentage points. Right direction, but not nearly what we would hope for the future of our kids.

Ted Simons: 76% pass doesn't sound that great, except it was 73% a year ago. You want to see more.

John Huppenthal: We need to see more, and that's a standard that we're considering increasing, too.

Ted Simons: Let's look at the writing numbers. This one is not encouraging at all. But there's a reason for this, and let's try to figure out what's happening here?

John Huppenthal: Well, we brought some of our very best teachers together to look at our previous writing standard, and they said, look, this doesn't cut the grade, so we've dramatically increased the writing standard. And that's -- that was passed by the state board, and we saw as a result significant reduction in the number of students that passed it. But still, what we're trying to do here is critically important. These writing skills are exactly what our kids need in the 21st century.

Ted Simons: Was raising that cut -- first, you said you talked to teachers about this. Which teachers?

John Huppenthal: Well, we brought in some of our very best teachers in the writing area, and they took a look at what kids need to do, what standards need to be in place for them to do well as they move into the college and career readiness, and that standard was significantly increased this year.

John Huppenthal: Was a mistake to raise it knowing so many kids haven fallen off?

John Huppenthal: Absolutely not. That's now a bar, we now have that benchmark, and we know that a little less than 60%, more than 50% passed it, so now it's a striving point.

Ted Simons: Let's look at the math numbers. We see a slight increase there, but nothing too exciting, but it could have gone the other direction.

John Huppenthal: Well, it's headed in the right direction, but not nearly enough. And the fundamental problem that we have, and this is a national problem, you get to the eighth grade, have you almost 70% of your kids that don't know fractions. So we need to create an educational system in which kids mathematically can move up to the higher level skills.

Ted Simons: 59% passing is obviously -- that's not going to cut it. That’s not good. How many -- what is the percentile of kids who don't know fractions in high school?

John Huppenthal: Well, I'm talking about national data. You have a reasonably difficult fraction problem, and you have in the neighborhood of 70% of the kids who can't -- we see that in national tests. That's a fundamental problem with all of education nationwide, to get kids on a path, and that's part of why we move into these coalitions of states that are trying to set standards and to get a consensus on what you need to do to get these math skills.

Ted Simons: Before we talk about this new test that's coming in 2015, as far as the results we're seeing now, do we know how many kids will not be able to graduate?

John Huppenthal: We don't know that data. The reason is it's not -- we know -- we have a rough estimate for the percentage of kids who didn't pass the test, but they have -- they can augment that with good grades, As in their classes, and still pass. So we don't have all that data yet.

Ted Simons: Do you like that idea, augmenting the aims test scores with other things?

John Huppenthal: Very much so. I've always felt for a number of years, we studied policies in other states and other countries, and what's happened when you get a test score alone, or class work alone, it doesn't work well. It's a mixture that makes best policy. So -- and I think we moved augmentation from way too high to just the right amount. 5% is the right mix, and so we're very comfortable with our current policy.

Ted Simons: You refer to this new test or states getting together to get national standard going, we have a national exam coming to replace I guess our state exam in 2015. I keep hearing this is going to be a tougher exam or at least the cut scores will be higher than what we're used to now. Are we ready for this?

John Huppenthal: Well, we have a number of policy challenges that are going to go through. We have a consortium, I wouldn't call it a national test, it's 27 states. And the superintendents in those states are the ones who are getting together and doing the work. It's going to be a high quality test. I think it's going to be a little more accurate at the upper and lower end for our advanced students, so we'll be able to more accurately track academic gains at the upper level and lower level, which is critically important. But as far as being a tougher test, a tougher test is where the state board of education and the legislature set the hurdle. Whether you're measuring witness a new test or the AIMS, that's not necessarily going to decide whether it's tougher or not. It's going to be policy that decides.

Ted Simons: Is the political will there to set that bar, that hurdle high enough to make a difference?

John Huppenthal: Well, to be blunt about it, when I was in the legislature it was all we could do to hold the standard at that level. There was a lot of political pressure to do away with the standard completely. So it's not clear to me. I'm not that uncomfortable with where our standard is set right now. I'd like to have it a couple -- a little bit higher, but we're in the ballpark. That's a minimum standard, and we want to be careful about not taking wayR away opportunity for youth who need that diploma to get into the armed force and other occupations.

Ted Simons: All right superintendent, good to have you here, thanks for joining us.

John Huppenthal: Great to be here.

Cutting Taxes

  |   Video
  • Do government revenues increase when taxes are cut? It’s a claim often made in congress and the state legislature. ASU Economists Dennis Hoffman Dean Robert Mittelstaedt from the W.P. Carey School of Business will discuss the issue.
  • Robert Mittelstaedt - Dean, ASU W.P. Carey School of Business
  • Dennis Hoffman - ASU Economist
Category: Government   |   Keywords: taxes, revenue,

View Transcript
Ted Simons: Republican lawmakers often promote cutting taxes as a way to increase government revenues. It's a topic of much debate, a debate we continue this evening with Robert Mittelstaedt, the dean of ASU's W.P. Carey School of Business, and Dennis Hoffman, an economist with the school's Seedman Research Institute. Good to have you both here.

Dennis Hoffman: Nice to be here.

Robert Mittelstaedt: Good to meet you Ted.

Ted Simons: The topic on the table is, do government revenues increase when taxes are cut?

Robert Mittelstaedt: I think there's lots of politician who's would like to have a simple yes-or-no answer to this. But the best I can come up with is, yes, sometimes. Maybe but. And it all depends. So it's the kind of thing -- I think the fundamental issue that you have to ask is, what do people do with their money if they get extra money they didn't expect? And rich people do different things than middle class people, than poorer people. So it's not an easily answered question.

Ted Simons: Not an easily answered question. But a question nonetheless. What say you?

Dennis Hoffman: Generally no, because of the laws of arithmetic. That just doesn't happen. There's certain circumstances that I can think that it could happen, and Bob is alluding to one, certainly if you -- if you provide incentives for more work, for more investment in the economy by lowering a tax burden, one could envision an economy churning along, increasing rather robustly in response to that, and having some revenue generated. But it's really going to be tough to generate based upon the new tax rate, literally more tax revenue than would you have otherwise.

Ted Simons: So the idea that a tax hike hurts business, fewer dollars for folks to spend, that particular idea disagree?

Dennis Hoffman: Well, look. It depends on what you're going to do with the money. Most of the arguments that you hear in the political arena today suggest, Ted, that the only thing we want to think about is the negative of this tax. Taxes by themselves are certainly a drag on the economy, they're a leakage out of the spending strain, OK? But we don't typically take those dollars and fly them out over the Pacific Ocean and dump them. We put them back in the economy.

Robert Mittelstaedt: Beyond being a drag on the economy, the real problem is that most folks -- most economists would agree that giving more money to government is not an effective way to produce jobs or to grow the economy. The government was created to do things that the private sector can't do for itself. And we've expanded that definition so far that now that we end up having big arguments about what the tax rates ought to be when we ought to be talking about what do you want government to do? So the complexity here is you can't pick any one variable like taxes alone, or benefits alone, or services alone and say, let's just turn this dial and see what happens. I think the biggest problem isn't what the tax rate is, it's the inconsistency over any uncertainty surrounding whether it's businesses or individuals over constantly changing all kinds of variables. And whether you're an individual or a company, you end up saying, how do I know what's going to happen next? And if I want to make a long-term plan or even a near-term plan, do I change my behavior because I heard this today about something that's going to change? So all these things where we're changing lots of things under lots of circumstances, becomes very difficult for people to understand what's going to happen.

Ted Simons: I hear that a lot, that business needs confidence, business needs stability in order to do X, Y, or Z. But as a business, knowing that X, Y, or Z equals profit? Will they not do that simply because they think a tax hike is coming or they're may be some stain built or they're not quite as stable as they would like? It seems to me if a business think as profit is coming, this other stuff shouldn't matter that much.

Robert Mittelstaedt: It shouldn't matter except to the extent that you have choices. And so in this country, within the borders of the United States, don't even talk about offshore, one of the big issues is, do you build a new plant in this state, or in an adjacent state or someplace else.
Ted Simons: Right.

Robert Mittelstaedt: Even do you set up separate corporations, so one big thing is, you set up a corporation in Delaware where there's no little or no tax, and you license all your own intellectual property from them so you pay revenues into that state's bank, bring them back out again, and you pay less state tax. This is the complexity.

Dennis Hoffman: We get caught on tax rates, I think the uncertainties over obligations for health care and benefits, meeting regulations and rules about who I can hire, and whether or not I'm culpable if I hire somebody who is illegal. Those are things and uncertainties I think that are far bigger barriers to business than small changes in tax rates.

Ted Simons: The idea of austerity equaling confidence and confidence equaling growth, do you agree with that?

Dennis Hoffman: Sure. Sure.

Ted Simons: That would suggest that you would agree with the other position.

Dennis Hoffman: I'm sorry, restate -- I heard the second part.

Ted Simons: If austerity --

Robert Mittelstaedt: OK. OK.

Ted Simons: That equals confidence, and confidence equals growth, we --

Dennis Hoffman: You gave me the "if" there. You gave me an “if”. The first thing true. I don't know how austerity equals confidence in my way of looking at things. I don't -- I don't understand exactly the -- how that public finance calculus would work. Austerity initiatives, it's going to mean a massive deleveraging on the part of government now. What have we had over the last three years? Massive private sector deleveraging. It was time, we had overindulged. And this economy is going to take a lot of years to come back because the private sector has to deleverage. Rid itself of too much debt. Now we're asking government to do the same thing. I think you can make a very strong case that one of the things that's actually sustained us over the last couple years, there was one segment of our economy that continued to spend. We may think it's too much, but in a time of crisis, it was very useful.

Robert Mittelstaedt: So the sector of the economy that I think Dennis is talking about that continued to spend was government.

Dennis Hoffman: Absolutely.

Robert Mittelstaedt: And now --

Dennis Hoffman: that's not going to --

Robert Mittelstaedt: It's not that austerity is good, it's a question of when does government take too big a share of the economy what is so big it hinders the growth of the country. I heard a stat the other day I haven't verified yet, but I saw in print in one of the newspapers that in the last 20 years, 25% of all jobs created in the United States were created by government. That strikes me as crazy. At some level you ought to be able to say, wow, the economy grew, but government jobs shouldn't grow in proportion to the economy. Government ought to have economies of scale like you gain in industry, so it's not austerity per se, it's this balance.

Ted Simons: Last question, if cutting taxes is so good for the economy, why did the bush tax cuts and the years preceding -- what we've seen, from when President Bush took office, and that particular idea, why did we not see a boom economy? Why did we see the slowest growth really I've heard slowest growth in decades, maybe back to World War II?

Robert Mittelstaedt: Because we had a bubble. Because we had other things wrong in the economy. Juan Salvador Acevedo the problem with the economy wasn't the tax rate, the problem in the economy was lax lending standards, the problem was excessive borrowing, the problem in the economy was my kids' generation that doesn’t understand by things you can pay for.

Ted Simons: Do you agree with that?

Dennis Hoffman: He's right in one sense, but I think what this tells us, Ted, is that modest and minor increases in taxes in D.C., along with cuts in government, can be a good solution to this deficit problem gone forward.

Ted Simons: OK. We need to stop it right there. Gentlemen, thank you so much for joining us. And that is it for now. Thank you for joining us. I'm Ted Simons. You have a great evening.

Greater Phoenix Economic Council

  |   Video
  • GPEC CEO Barry Broome is no longer planning to leave Phoenix to lead an economic development effort in San Diego. Find out why he’s staying and how he hopes to grow and diversify Arizona’s economy.
  • Barry Broome - GPEC President and CEO
Category: Business/Economy   |   Keywords: GPEC, Broome,

View Transcript
Ted Simons: In nearly seven years of leading the greater Phoenix economic council, Barry Broome has, according to GPEC, helped the valley recruit 160 companies and grow more than 30,000 jobs. Last week it was reported that Broome would be leaving Arizona to lead an economic development effort in San Diego, but those plans changed, and Broome is now staying in Arizona, and with GPEC. Here to tell us what kept him here is GPEC president and CEO Barry Broome. Good to see you again. I thought I'd have to go to San Diego.

Barry Broome: No, no, right here in the valley.

Ted Simons: What happened?

Barry Broome: Really it was just a great opportunity, and I just -- my heart's in Arizona, and here in the community, and the ties, I've been here long enough now to where all my emotional ties were in the community, and it just felt right to stay. The board was amenable to that and excited about it, and I got great support from the community, so it was a one-day turnaround, and I'm glad to be home.

Ted Simons: Usually on things like that, something hits you, whether it's a punch in the gut or something that doesn't feel right. Was it a moment or an overall feeling?

Barry Broome: It was a punch in the gut. Like a classic story. Got announced, got off the plane, walked home and said, ’Gee, I need to call my chairman, this doesn't feel great’. And it really just came out of nowhere, and a lot of people said its butterflies. I think I know the difference. And it was just -- when you do what I do, GPEC is a great organization, Rick Weddle went on the research Triangle Park, Rio Varna went to Baltimore. Actually it was funny, I talked to Rio Varna. Rio Varna was named the state economic development director in Rhode Island, and had a similar circumstance where she chose to stay here. It's a great organization, people are always seeking the GPEC talent, but to me, I really want to be somewhere where I live and where I'm a civic leader and a community leader in the next four or five years at GPEC I'll be able to work hard with my colleagues to bring the economy back to recovery. And actually, at that point I might do something completely different on education, or some other civic initiative, and just was a decision for me and my family that we love it here, and we're -- we've gone through some challenges, but this is a pretty great place. It’s the fifth or sixt biggest cities in the United States. We're one of the top nine markets, Forbes just came out and ranked us as one of the top hottest cities in America, and they meant that economically, not at 113 degrees. There was a report that came out, we almost have a 22,000 job clean technology cluster here. So we've taken some lumps, but I still think our fundamentals are good and there's an exciting future here and am glad to be a part of it.

Ted Simons: I want to talk about that future, but I want to know what attracted you to the San Diego position? Because I know as what you do with GPEC often times you are talking to companies and saying, we're better than them. What attracted you to them?

Barry Broome: Well, we actually -- our California strategy is a lot more about having – first off, we don't compete with California because of California's overall economic challenges. It's not really Arizona versus California, it's someone is leaving California, its Arizona versus Texas. We actually go head-to-head every day against Texas for a California company. But professionally a lot of people -- I got a science background, and when I was in Michigan, I developed the science corridor with the University system, and John Angler, and a lot of the work I did in Michigan had some legs in the San Diego market, and it was really, take a look at this, here's a chance for you to go back and focus on science, and then that got offset by the heart and stomach saying, I think this is my home.

Ted Simons: Your home has still some as you mentioned, lumps to get through. You've been recently quoted as saying we're still too reliant on real estate and construction, and retail, and you don't want to go back to that economy we had in '04, '05, and '06. What are you going to do to change that? Can you see that changing, or is that just what Arizona is?

Barry Broome: It can't be what Arizona is. It shouldn't be. And I think probably the most exciting -- there's two things that excite me most about the recent data. One is the amount of foreign and direct investment that's come into Arizona. If you look at this year, GPEC's had really the greatest year in the history of the organization. And 31 companies have come here. And a lot of those were from foreign markets. That's a new trend. The second thing that really excites me, first Solar Sun Tech is this clean technology space. There's already been 500,000 clean technology jobs created in the last five years in the United States. So I think the key to this is we really have to become masters at what it takes to build this economy, and as a region we're going to work very hard on the clean tech space. I also think we need to pay attention to health care. We've done very little from a systemic standpoint to really take advantage of our health care position, but if you look at what's happening in the last year, we've had 500 million dollars worth of health care announcements in Downtown Phoenix. That doesn't count M.D. Anderson and the east valley at Gilbert, and it doesn't count Patrick Sushuang, the founder of Abraxis Building a Data, personalized medicine tracking system. I don't completely know the dynamics of that. And our health care sector is the still growing, even during this economy. Clean energy, health care, I think information, communication, technology, materials, and we're going to have to defend our base on the aerospace sector because I am concerned about the defense cuts.

Ted Simons: You mentioned health care and a lot of health care professionals are concerned regarding state policy, specifically with the AHCCCS cuts. Dealing with the legislature, you managed to get through this incentive deal for solar companies in '-09, you got through tax credits for bringing in high-quality jobs. Didn't quite get to speed up that particular bill, it sped up the process, didn't quite get that passed the governor, but you worked with the legislature, you know what's going on down there. Is what's going on down there encouraging or does -- is there more work to do?

Barry Broome: There's more work to do. But one of the things I always -- our government, sure, wove probably have to really look at what we're not investing in publicly; obviously we need to make a systemic, moral, generational commitment to Arizona's education system. And of course the challenges of having the University raise tuition rates, probably the biggest concern I have to Arizona over the next 10-15 years, and I'll be here to work on it with my colleagues, is our K-12 system is declining due to economics, and our higher education system, though it's holding steady, is starting to get more expensive. And I worry about that, especially for the working Latino population that is the backbone of our children. Give the legislature credit. We're going in the black this year. We're projecting at least right now in the early projections, we're going to have more money than expenses, and we're going to be one of the few states to be able to stay that. Also what Governor Brewer did and speaker Adams, now Speaker Tobin and senator Pearce on the leadership package last year, low aring corporate income tax, sales factor, putting in a 9,000-job tax credit, closing front,restoring job training. A pretty good body of work.

Ted Simons: This new commerce authority, which you were supportive of?

Barry Broome: Very supportive…

Ted Simons: How does that dynamic work with a GPEC?

Barry Broome: Well, here's a perfect example. If you look at where Arizona has probably lost its guidance over the last 20 years, it's because it hasn't had a state economic development entity consistently giving advice and counsel to the government. And I think the most important thing about the commerce authority its consistent economic message to the policymakers. The second thing, and GPEC's done that, but we should be a contributor to that, not leading it. That's got to come from the governor's office with a team that we support. Secondly, even though we work very hard on the greatest Phoenix brand, the national press hasn't been completely kind to us. The commerce authority -- also, if you look around Arizona, Yuma is at 23% unemployment, we don't work on that. We support them, but the commerce authority will work on that. We have 70-some communities that are sitting on 20% unemployment and the commerce authority will have that body of work as well. So fixing Arizona's brand, helping us internationally, and I have a lot of respect for Don, collaborating seamlessly. We can't have enough people selling Arizona for jobs, not when we're sitting at 9.2% unemployment nationally.

Ted Simons: Very good to have you here.

Barry Broome: Thank you.