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November 28, 2011

Host: Ted Simons

Arizona Centennial: The Bolo Tie

  • The bolo tie, Arizona’s official state neckwear since 1971, is featured in a new exhibit at the Heard Museum in Phoenix. Collector Norman Sandfried, who co-authored a book that accompanies the exhibit of American Indian-crafted ties, discusses the history and artistry of the bolo tie.
Category: Culture

Debt Committee Failure

  |   Video
  • ASU Economist Dennis Hoffman discusses the failure of the congressional “super committee” to reach a deficit reduction deal and the impact on Arizona.
  • Dennis Hoffman - Economist, Arizona State University
Category: Business/Economy   |   Keywords: deficit, reduction, deal, failure, congressional,

View Transcript
Ted Simons: The congressional debt “super committee” recently failed to meet its deadline to come up with a deficit reduction plan. How will this failure impact Arizona? Here with some answers is Arizona State University economist Dennis Hoffman. Thanks for joining us.

Dennis Hoffman: Great to be here.

Ted Simons: Were you surprised that this thing failed? This is pretty serious business and yet nothing.

Dennis Hoffman: We didn't get much hope leading up. I guess I wasn’t surprised at the end, I was hopeful. There was a little bit of rumbling, say, a month ago. We get teased by this grand bargain here and there, but no agreement at the end of the day.

Ted Simons: Impact on Arizona?

Dennis Hoffman: Well, I think it's important for people to understand, if you look at, say, data from the 2010 report from the federal government, you know, picture $64 billion, $64 billion. That's about 10 grand a head that come flowing into the state from the federal government. It goes everywhere. To procurement of goods and services, social programs, federal programs, healthcare, transportation, it's everyone where.

Ted Simons: And, of course, the concern is, the enforcement mechanisms, because they didn't reap a deal, happening in January, 20 13, how much will we get hit?

Dennis Hoffman: Got to speculate, right? We don’t know how this will come out. But the current agreement that have been put in place, call for cuts to half to defense and half to other discretionary programs. The state is reliant on defense. $11 billion in direct product sales to the federal government financed by the Department of Defense. So that's Raytheon and Boeing and Orbital and even mid-sized and smaller businesses selling products to the federal government to support the defense. $11 billion, Ted.

Ted Simons: That's major. You’re talking aerospace and science and the whole nine yards. What about education?

Dennis Hoffman: Well, the discretionary programs, it's tough to get our hands on where that money is going to come from. We're told we're not likely to see cuts in say, the individual Medicare recipient or individual social security recipient, but I think that's deceiving. What they're likely to do is continue the model of squeezing the healthcare providers and these are private businesses by and large that deliver healthcare services to the elderly and what they're told, “Yeah, you can continue to get support from the federal government and get Medicare reimbursement, but you have to take less and provide the same amount of services and you can only do that so long.”

Ted Simons: The condition that the state is in, we talked about that, trying to find ways to get money, at least federal money to flow in here.

Dennis Hoffman: Betsey’s program depends on the two for one match that the feds offered and offered for years and it's vital and sustaining of private sector. Many of these hospital entities are private sector that benefit from it. But the healthcare industry, one of the industries that's been growing over the last four, five years, and you can squeeze this matching formula. Maybe not two-to-one anymore. Who knows?

Ted Simons: Also, who knows regarding transportation plans. Light rail, freeways, obviously, a lot of federal involvement there. Discretionary as well? Is that included?

Dennis Hoffman: Sure. In my opinion anything would be on the table. It would strike me. Again, the details are going to be worked out. You know, we don't want to be overly alarmist, I guess here Ted, but the details have to be worked out. It's important for people to understand that if we're going to deal with this massive debt issue, this issue that people are concerned about, there's hard choices on both sides of the ledger. Cutting is going to be hard choices. Going to lead to problems and manifest themselves right here in Arizona, because we're quite dependent on federal expenditures in the state

Ted Simons: Could we see something as major as base closures?

Dennis Hoffman: Well, it hasn't been discussed, but if the Department of Defense is going to take you know, I worked out just in terms of procurement, if all of the cuts to defense came in the form of procurement, that would be a 20% reduction. How do you figure that out? If you translate that to Arizona, you're talking about $2.2 billion in cuts in procurement, in the state of Arizona. That's high-end jobs, private sector jobs. Jobs that we've depended upon for decades in this state, so who knows? If it's manufacturers or bases or where it's going to end up, Ted.

Ted Simons: Will we get hit harder, do you think, than other states, other regions?

Dennis Hoffman: The data I've looked at recently, if you look at our procurement receipts from the feds, divided by, you know, something relevant, either purchases that we send out of state, or GDP or GSP numbers, if you scale it, it appears we're reliant, there are other state like Alabama, Virginia, also very reliant on the Department of Defense. But in terms of competitors, we're up there.

Ted Simons: Last question: Do you think it's likely, considering what you're saying about Arizona and every state of the union, the same thing on those program, perhaps, with this being there on the table, are these cuts going to go through or come back, we can't afford this kind of?

Dennis Hoffman: It depends on good honest dialogue, I think. I'm not saying that tax increases are easy to swallow. Tax increases have their own pain. But if you're going to deal with this debt problem, you're going to have to deal with it both on the expenditure side and on the tax side and perhaps we need to understand it's not just certain individuals that are going to get hurt on each side of the ledger.

Ted Simons: All right. Dennis, good to have you here. Thanks for joining us.

Dennis Hoffman: Thank you, Ted.

Governor’s Health Care Initiative

  |   Video
  • 19-thousand kids would be enrolled in Kids Care and hospitals would get help covering costs of care for the uninsured if the federal government approves a plan to allow Phoenix Children's Hospital, Maricopa Integrated Health System, and the University of Arizona Health Network to use their own money to draw down federal matching funds. Betsey Bayless, President and CEO of MIHS, discusses the details of the proposal.
  • Betsey Bayless - President and CEO, Maricopa Integrated Health System
Category: Medical/Health   |   Keywords: Maricopa Integrated Health System, federal matching funds,

View Transcript
Ted Simons: Good evening and welcome to "Horizon." I'm Ted Simons. The mother of a missing 5-year-old Glendale girl has been released from jail. Jerice Hunter, the mother of Jahessye Shockley, was released because prosecutors failed to file charges on time. A spokesman for the Maricopa County attorney's office says they're waiting for more information from police. Hunter was booked last week on a felony child abuse charge. Governor Brewer today announced a plan to get more federal healthcare dollars flowing into Arizona at no cost to the state. Three health care organizations have agreed to put up a combined $113 million a year, for two years, in order to secure twice that amount in federal matching funds. The Maricopa Integrated Health System, the University of Arizona Health Network and Phoenix Children's Hospital are participating in the plan. It's designed to help them cover uncompensated costs of caring for the uninsured and to make improvements to their own healthcare delivery systems. Some of the money will also be set aside to provide KidsCare health insurance coverage to 19,000 children over the two-year life of the program. At today's press conference, Bob Meyer, president and CEO of Phoenix Children's Hospital, explained where the seed money will come from.

Bob Meyer: The answer to, “Where does the money come from?” is it comes from the individual institutions, we will put up our operating dollars, which is then matched with federal dollars and returned to us as part of the safety net care pool.

Ted Simons: Here with more on this healthcare partnership is Betsey Bayless, president and CEO of the Maricopa Integrated Health System. Thanks for joining us.

Betsey Bayles: Thank you for having me tonight.

Ted Simons: Did I get that right? Give us more information on this plan. How it works and the logistics and such.

Betsey Bayles: AHCCCS has been cut a number times in the past few years and there's been two rate cuts, there has been the whole issue with people covered under prop 204 and those people were eliminated from AHCCCS and so last legislative session as they were again taking more cuts on AHCCCS, the senate and house passed S.B. 1357 and the purpose of 1357 was to enable healthcare systems using government money to go out and to make a match with federal funds and draw down money into their systems to take care of some of these people who had lost their health insurance. So we needed to come up with some creative ways to address the situation, so that we could cover more people. We came up with a safety net care pool, and in this safety net care pool, a healthcare system that had a government partner could put up a match and draw down funds from the federal government. That's assuming that the federal government approves this. They've seen it, repeatedly, and at this point, we're cautiously optimistic this will be approved.

Ted Simons: Talk to us about how your group will be involved. We have the children's hospital and the U of A group as well. Individually, same amount or different amounts of money thrown in, how does it work.

Betsey Bayles: My system, Maricopa Healthcare System, is a government, so we would put up our own governmental match to the federal government. We also have a much bigger investment in uncompensated care, so our match is about $51 million, and the match of the Phoenix Children's Hospital and the UA healthcare is considerably smaller. But we have in our system, $90 million of uncompensated care and as people come off of AHCCCS, and we've got 62% of our patients are AHCCCS, that dwindles down and people come off, the amount of that uncompensated care goes up.

Ted Simons: A two-to-one match here. How much does that help?

Betsey Bayles: Well, it would certainly help us. That would result in $155 million to us. And we put up 51 and we get about $155 million if this is all approved and right now, we're facing these increasing number of people with no insurance whatsoever coming to all parts of our system, especially our emergency room and we've been losing $5 million a month.

Ted Simons: Yeah, as we get 44,000 childless adults lost AHCCCS coverage since jewel. You're expecting 100,000 by July of next year. KidsCare is affected by this. Is this affected by this through choice or did the feds say, “This will work better for us if you get KidsCare involved?”

Betsey Bayles: That's it. There was encouragement on the part of the federal government for those of us participating proposing this program to include KidsCare, because KidsCare has been frozen since December 2009.

Ted Simons: Quickly, describe KidsCare.

Betsey Bayles: KidsCare is healthcare for children. And they come through the AHCCCS system, they're put into different health plans and they get healthcare. In December 2009, that was frozen. And so a great many of the children have gone off KidsCare. It's been cut to about 15,000 children. And I know the federal government was very unhappy about that. And they're very concerned about the children. So they encouraged us to include that. We can take a hint. We came back, and included that on our proposal and each one of these three group, Maricopa, Phoenix Children's and UA Healthcare, we each have a match for KidsCare.

Ted Simons: Ok. Some are looking at this and saying, “Good for you and good for UA Health Systems and Phoenix's Children Hospital. But there are still a lot who are in great need. Can there be a way to make it or something else more universal?

Betsey Bayles: Well, other healthcare systems can find government partners if they like. But they would have to put up the match to draw down the funds. Now, that has not happened, at least not until to this moment.

Ted Simons: What about things like taxing districts? We keep hearing that could be an idea. Compare this with that.

Betsey Bayles: Well, this is a bridge to 2014. Now, in 2014, there is on the horizon a federal healthcare reform. We don't know if that's really going to happen or exactly what it will look like. But this is a two-year program that would bridge a good part of our uncompensated population to 2014. Now, if there's no federal healthcare reform, you probably will see some other ideas come forward, like taxing districts and so forth. My system operates under a governmental district and there's a small amount of tax that we're allowed to levy. And you may see different ideas about this in the future, but my guess would be that there would be an effort to wait and see what happens in 2014.

Ted Simons: Even the idea of the bed tax. That particular assessment? That's getting a lot of attention and notice. And it sounds like it's still rumbling out there. Is that something that competes with something like this? Complements or two different tracts altogether?

Betsey Bayles: It's two different tracts. There's a lot of talk about the bed tax. In reality, it's a provider assessment. Because the healthcare systems would voluntarily put up money in order to have it matched by the federal government and to draw down those federal dollars. But it's been talked about as a tax. That puts the legislature into a higher qualifying vote than if it were something else. So that did not go last year. My belief is that there will be an effort once again to introduce it into the legislature. Any time there's a tax on a bill, though, it takes a lot more votes.

Ted Simons: It sure does. Quickly, timetable for all of this? When do the feds say okay and then things start rolling?

Betsey Bayles: The feds have been looking at this for months, and we did everything we were asked, now, it would appear that the center for Medicare and Medicaid is okay with this. And then they have to go to the congressional budget office and a variety of other places. So we're told that it's probably not going to be until January or February. Meanwhile, October 1st, we had another cut and so there's a lot of anxiety to get this done, so we're hopeful that at least by January. That it will done.

Ted Simons: Very good. Good to have you here. Thanks for joining us.

Betsey Bayles: Thanks so much.

State Parks

  |   Video
  • Arizona State Parks Director Renee Bahl is leaving the agency next month to pursue other career opportunities. Before she leaves, we ask her about the current state of Arizona’s Parks System.
  • Renee Bahl - Director, Arizona State Parks
Category: Environment   |   Keywords: State Parks Agency, Renee Bahl,

View Transcript
Ted Simons: Renee Bahl, executive director of the Arizona State Parks Board, is leaving her post for a position in California. This, after two years of trying to keep Arizona's parks open and operational during times of budget cuts and fund sweeps. Here to assess Arizona's parks is Renee Bahl. Good to see you again.

Renee Bahl: Thanks, Ted.

Ted Simons: Why are you leaving?

Renee Bahl: Well, it's a great opportunity for me to go to Santa Barbara County. I’ll be an assistant county manager, which provides professorial opportunity but what's more important is what opportunities I've had here, what a hardworking staff, tried nothing but try and keep the parks open. It's been a great privilege.

Ted Simons: Give us a current assessment of the Arizona state parks.

Renee Bahl: In 2012, if all goes as signed, as the agreements go as signed, only one park will be remained close. That's San Rafael. We’ve never had intent to be opening that one. We'll be opening Oracle State Park with an agreement with a non-profit friends group for six months a year. We should be opening Lyman Lake up again next summer, like it was this summer and all of the other parks are open or turned over to others to open.

Ted Simons: Talk about these agreements. Mostly with communities, correct?

Renee Bahl: Mostly with communities or nonprofits or one with the tribal government, the Hopi Tribe.

Ted Simons: Are they bridges or band-aids.

Renee Bahl: They are bridges and band-aids, but important band-aids because some allowed us to make management changes and keep the parks open on their own.

Ted Simons: Days and hours of operation, that changes?

Renee Bahl: Some are closed two days a week, reduced the hours. Some certain seasons. Years. We're acting like a business.

Ted Simons: How about the maintenance of the parks? Where are we and heading here? I know that's always a concern.

Renee Bahl: The deferred maintenance is a big problem. Probably one of the biggest this agency will face in the next few years. We have $170 million of a deferred maintenance backlog. From the water lines to the roof, to roads. We have problems at every single park and that's a hard one to fix.

Ted Simons: Is privatization an option to fix that?

Renee Bahl: Privatization could be an option. Interestingly, we put out a request for information for the private sector to operate Tonto Lodge, and one of the common themes and reactions from the private sector is you have to fix your maintenance there first, before we'd be interested to come in. It costs a lot of money and that's a risk for the private sector to take.

Ted Simons: We keep hearing about privatization in a variety of aspects of government. What does privatization with the state parks actually mean? Does it mean capital, maintenance, supervision, what does it mean?

Renee Bahl: It depends on who you talk to. But oftentimes, the area that the private sector is interested, those area that make money. So it's basic operations and very basic maintenance. Typically, your capital needs are still taken care of by the public sector. Your lawmaker and wastewater treatment and EMTs and emergency and first aid, all of that would still need to come from the state. So the private sector is interested in those areaa that make money. They're great value-added. We have fantastic concessions at many parks. They rent boats and you can take equestrian rides and they run general stores and that's value-added for the customer and Arizona state parks.

Ted Simons: But the big picture stuff?

Renee Bahl: More problematic. You have your environment issues and habitat monitoring and your environmental education and things that you don't generate revenue from.

Ted Simons: So much is because of budget cuts and fund sweeps out of what should have been yours but not anymore. Is there anything being done that money that you generate at the gate stays with you?

Renee Bahl: Yes, Representative Karen Fan from legislative district one is sponsoring legislation that allows state parks to keep the revenue it earns and protects the state park funding. The gate fees and camping fees and the other things, the majority of our recreation land is owned by the federal government, the federal government says you need to show state parks that that money you generate at the gate won't be used for anything else. Protect the fund. If you protect it, you can add more private partnerships on the land.

Ted Simons: Good chance to go through?

Renee Bahl: I'm completely optimistic it's going to pass. We were challenged to act like a business, we made a 17% rate of return. A 17% positive margin last fiscal year on our direct operating costs to what we brought in. Met every challenge and this is just a tool that costs nothing.

Ted Simons: High points, low points of your tenure?

Renee Bahl: High points are definitely the communities, the tribes, and nonprofits, the people stepping up and saying state parks are important. Not because of the intrinsic values because the rural economies understand state parks are an economic engine that maintain jobs. 3,300 jobs. They get it, we need all of the leaders in this great state to get that.

Ted Simons: What about a low point?

Renee Bahl: Well, we're not going to go out with a low point. We're going to say we have strong relationships and it's an interesting ride the last years.

Ted Simons: That sounds like a lot of low points that you don’t have time to pick one? All right. Try this one: Advice for the incoming director?

Renee Bahl: One: Maintain the relationships with the local communities. They're the only reason that the majority of our state parks are open today. I wouldn't let that go. I think this legislation is key to pass and we have just the most talented dedicated staff and don't lose sight of that. We're at half staff. Less than 200, we should have 400 and they're keeping all of the parks open.

Ted Simons: What do you take to California?

Renee Bahl: I take a very open mind and it's not a bad thing to ask for help. People step up.

Ted Simons: There you go. Good luck to you.

Renee Bahl: Thank you.

Ted Simons: Thanks for joining us.

Renee Bahl: Thanks.