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May 8, 2012

Host: Ted Simons

Legislative Wrap-Up: Education

  |   Video
  • Education experts talk about how the State budget and new legislation is expected to impact K-12 and higher education.
Category: Education   |   Keywords: legislative, wrap-up, education, ,

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Ted Simons: The recently adjourned legislative session took up a variety of education issues, ranging from a spending increase for a third grade reading program to a ban on medical marijuana on university campuses. Here to talk about what the legislature did or didn't do for education is Janice Palmer, director of governmental relations and public affairs for the Arizona School Boards Association, Andrew Morrill, president of the Arizona Education Association, and Dr. Tom Anderes, president of the Arizona Board of Regents Administration. Good to have you here.

Guests: Thank you.

Ted Simons: Let's start with an overview of the session from an education standpoint. What did you see?

Janice Palmer: This education budget was not a bad budget. There was new investment. Since 2008 we have had over $1.5 billion cut from K-12 education and at the same time we have had since 2010 major, major education reforms that have taken place, borrowed frankly from Florida with one exception. We have the reforms. We don't have the funding that governor bush had put into those issues. It was a good budget this year but to just talk about that budget really leaves out the major reforms and major economic cuts that education has taken and are struggling to continue to perform.

Ted Simons: what did you see?

Andrew Morrill: I think we left our educators badly confused. For four years they heard nothing but tough decisions. We have to make tough decisions. I wish I had a dime for every time I heard that from the legislature. We could put serious funding back in our classrooms with that. This year not so much. We had a surplus. One doesn't want to be reckless with that, but for all those tough decisions over four years, deep cuts to instructional supplies, technology, access to technology, cuts that left class sizes skyrocketing, cuts deep into salary and benefits for those in our classrooms. There should have been -- it's not an easy answer this session, at least a deliberate one, some plan to put the investments back in over time into our classrooms. Here's the thing. The voters are picking up on the disconnect. The voters have probably had enough of this. Survey after survey, time and time again, voters have spoken clearly that funding public education is their priority.They even indicated that at the beginning of this session.

Ted Simons: what did you see this session?

Tom Anderes: Actually it was pretty good. Part of this is relative. We had $430 million in reductions the last four years. This year we got $21 million, so when one looks at billions of dollars, maybe not looking at this exactly correctly but from our standpoint I think we see that we're going around the corner. Ideally a greater commitment from the state in the upcoming years. But it met our primary priorities in terms of funding and in terms of some of the bills that were out there that we were quite concerned with.

Ted Simons: Let's talk about some of the thanks that were accomplished here. The $40 million for move on when reading, talk to us about that. What is that?

Janice Palmer: Governor Brewer put this in her initial budget. This is part of the 2010 reforms. We had major, major reforms, one of which was every third grader knees to read at third grade level to have success into the future, but again, where does the funding come from? That's what this program does. Every school district will have to submit a plan by October of every year to qualify for those monies, and to help those kids that are struggling, especially in grades kindergarten, first and second. Hopefully we don't go all wait to the cliff before we help these kids out, getting them on the path to success.

Ted Simons: basically paying for what you did in the past in terms of reading in the third grade.

Janice Palmer: Much more intensive interventions to remediate kids that are struggling at an earlier age. Hopefully we don't come up to the issue that we're holding that child back when we could have remediated that child for their success.

Andrew Morrill: The reforms were passed first. In the name of higher performance on the part of students something we can all get behind, but unfairly certainly in the private sector businesses invest the resources necessary toward the out comes they want to realize, so what we got was airtight certainty that we had to have these reforms. The investments necessary to drive them are left in doubt. The thing is the public once again expressing greater doubt that legislature will ever get serious about funding education.

Ted Simons: I thought I saw a new K-12 education formula for funding. Did that go through? What was that about?

Andrew Morrill: The biggest change recently is part of the reform which is the rating, school accountability labels. What we don't have yet are the resources. Some of the reforms are interconnected. The great thing is if you had a sound investment strategy you would be able to really significantly address all the pieces that we passed.

Ted Simons: I guess as far as the board of regents is concerned one of the biggest things is the board is continued.

Tom Anderes: Absolutely. This was an important bill, yes.

Ted Simons: as far as university parity, $15 million went to that. People are confused about the idea of university parity.

Tom Anderes: What it means is that university state and northern Arizona grew substantially over the four years of decline. So they were losing 40% of their budget and they grew 20% in total. So the idea was how do we get funding back to them, funding per student is the lowest in the country. How can we do that on some rational basis? Where we came up with at least one of the ideas had been how did the University of Arizona do? They also had reductions in their funding. But they didn't grow nearly as much. So we started to look at parity relative to the University of Arizona. That then drove a sort of long term plan relative to additional funding so they could support the growth.

Ted Simons: we also had $6 million for medical school.

Tom Anderes: Yes. The college of medicine in Phoenix for the increasing the class size from 80 to 120.

Ted Simons: Okay. So there was some as you mentioned things did move forward certainly as opposed to years past.

Tom Anderes: absolutely.

Tom Anderes: As I mentioned earlier, there are a couple of important bills that could have been very damaging.

Ted Simons: One of them dealt with the $2,000 required payment.

Tom Anderes: additional tuition. If you didn't pay any tuition and there are a number of people that don't because they have grants and so forth. They said you should pay at least $2,000 because you're getting a free education. What our simple approach was those people are paying for room, board, transportation, fees, actually costs that exceed tuition. When we went into that in any depth we were able to say, most everybody who didn't pay something for tuition was still in debt by the time they were done with their college career.

Andrew Morrill: What we have to be careful about really is that we don't -- good friend of mine says life is a norm reference test. We have to get over the idea because a budget comes without deep cuts to education it's a good budget W. veto keep in mind the trajectory we're on. Over the last four years we have made appalling cuts and slid back in education funding.

Ted Simons: Are we looking at the new normal, though, especially when you have legislators, lawmakers looking ahead to next couple of fiscal years seeing the proverbial cliff coming up, $50 million rainy day fund. Somebody is thinking there's problems ahead. Are we seeing a new normal?

Janice Palmer: I think Andrew brings up good points there have been targeted -- we're starting to get on a better trajectory but there's a huge disconnect between what the legislature sees as priorities versus what the normal public looks at. Here's a case in point. While there were targeted investments and good things in the budget, just two decades ago we rectified a court case based on adequate school buildings. The state spent $1 billion to get all the buildings up to standard. Now we haven't had any investment in order to keep the buildings up. I think you can make the case, is that really fiscally prudent to make that kind of investment not provide the upkeep and then we'll be in the same scenario where we're not only having a fiscal issue we'll have safety concerns for our kids. As far as is this the new normal I don't think you can say that's the new normal. You have to ensure that you have buildings and a safe environment for kids.

Andrew Morrill: voters are going out on an initiative, community leaders, parents, voters got together and orchestrated an initiative that will in effect continue the one cent and into our classrooms into higher education into scholarship opportunities. The answer is they are not satisfied.

Ted Simons: you got the continuing 1 cent but it already was passed and we're seeing $450 million being saved.

Andrew Morrill: That 450 million is a contingency fund for tax cuts that are going to roll out.

Ted Simons: But the point is you get people to pay the 1 cent tax you still have lawmakers saying we're not going to spend it, we're going to save it, prepare for gloomy times ahead. What do you hear from lawmakers? As far as the university funding is concerned, you guys have been hit awfully hard. What do you tell lawmakers?

Tom Anderes: What we have frequently told them has been we know times are tough. We understand all of that. But we have given $430 million in tuition has gone up by about 45, 50% in the last two, three years. I think where they are coming from, we said we want a new mechanism to be funded by. We want to be funded based on at least some of your priorities and ours based on performance. They have supported that. I think the rubber will meet the road when we say we are meeting your goals. We're meeting your objectives as it relates to degrees awarded, specific degree areas for new jobs by 020. Educational research and economic development. So I think time will tell. Because I guess I have a feeling that this isn't the new normal either. That they have to understand as there's more reductions or we're dealing with 20, 30, 40% growth in students they have to make more of a commitment. We cannot continue to raise tuition.

Andrew Morrill: And the voters have options.

Janice Palmer: I agree. A budget is a set of your values. Here's a case in point with education. One of the first bills, chapter 3, passed was an expansion of tax credits scholarships for private schools that are not accountable to the same standards that the public schools are. It was a $4 million price tag. That was passed. So I think it's really a reflection of values where you want that investment, what you feel are priorities. You saw another tax credit bill go through near the end of session to try to stimulate. Those cost money. Some would say bad investment.

Ted Simons: I go back to the whole new normal argument. That seems to be the focus of this particular legislature in the past few years. How do you convince folks that that can't be the norm?

Andrew Morrill: You start with what voters say they want. We have gotten so used to the orientation from the legislature the voters are trying to reconcile what their priorities are with legislative actions. It's a lot more simple than that. The legislative agenda is coming from out of the state by groups like Alec, remanufactured and retooled by Goldwater. Then voters have a problem with that but when you ask voters what they want they want a well funded public education system. They want infrastructure to balance with business and promote business growth and jobs.

Ted Simons: they can say that all they want and from your perspective you watch them say that and then put it to the state legislature people who simply don't want those kinds of things. How do you get your message out to those voters to change?

Andrew Morrill: Through conversations again identifying the priorities of voters. When you ask voters what they want they are crystal clear. It's true candidates run on a variety of issues that sound good. They begin to look a great deal more deeply and they have options around who they elect and they have options around the ballot pieces they support.

Ted Simons: Do you see that as realistic and viable considering -- sounds like voters are putting into office people that don't necessarily have those same ideas.

Janice Palmer: we have a great opportunity. This next decade we're just in the redistricting process. I think there's more emphasis on competitiveness and hopefully with more competitiveness we can have education rise to the level that is a decision making ability. I agree. I think there's a huge disconnect. Andrew talks about it. There's a disconnect between what voters talk about versus the legislative action that takes place. Unfortunately what you're seeing is that you're getting the grass roots folks mobilized because they are upset because of that disconnect and I think it's incumbent upon all of us to have education a top priority which right now it isn't. Legislators don't necessarily feel a consequence for not investing in education like they do on other issues.

Tom Anderes:::: we have been doing extensive surveying as had K-12 and what we're finding without a doubt and we have done it in many different levels is that K-12 is if not the top priority of most of the public and universities are second and third on many key issues. It's how do we match that up with the elected officials. That's the key because that's what -- that's what the population is saying.

Ted Simons: great discussion. Good to have you.

Guests: Thank you.

Selling the Phoenix Coyotes

  |   Video
  • The NHL has announced a preliminary agreement to sell the Phoenix Coyotes to a group of buyers led by former San Jose Sharks CEO Greg Jamison. Phoenix Business Journal reporter Mike Sunnucks explains what must happen to formalize the agreement.
  • Mike Sunnucks - Reporter, Phoenix Business Journal
Category: Sports   |   Keywords: Glendale, coyotes, sports, ,

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Ted Simons: Good evening, and welcome to "Arizona Horizon." I'm Ted Simons. It's a great time to be a hockey fan in Arizona. The Phoenix coyotes won their NHL western conference semi-final series against the Nashville predators last night, and a deal to keep the coyotes in Glendale could soon be Finalized. Here to talk about the latest preliminary agreement to keep the coyotes in town is Mike Sunnucks of the Phoenix business journal. Mike has been covering this story forever it seems like. Let's talk about this latest wrinkle here. NHL commissioner says a deal has been reached.

Mike Sunnucks: they are in the due diligence stage. Compare it to a house being under contract. They are comfortable with Greg Jameson's group, his bid. They are crossing the Ts, dotting the Is, still has to go through the board of governors, NHL owners, still has to go through the city of Glendale, an arena management fee and some financial around the with Jameson, but it was a public show of support. Like an endorsement. They were on the same stage at a press conference before the coyotes-predators game. Probably a good sign.

Ted Simons: we have seen this kind of thing, preliminary deal, agreement, measure of understanding, in the past. Numerous times. Where is this one along in that process?

Mike Sunnucks: A lot of folks are asking those questions. Where is Jameson getting his money from. He hasn't said that. That's been not dissclosed -- disclosed. He's the former CEO of the Sharks. He's a former sports executive. He's probably not a poor fella but not a guy with a suitcase of cash and pays for a team at the signing. So he's go the got to get his money from someplace else. Glendale still has to do a deal with him for the arena. That's been a hiccup before. They are not going to do bonds. They are trying to avoid all that. Looks like they are getting their ducks in a row for a deal but we have a ways to go.

Ted Simons: This time Jameson. Jameson further along in the process?

Mike Sunnucks: I would say it's an eight or nine. Hotels highser was a six or seven. They are trying to avoid a Goldwater Institute threat or lawsuit. I think the Jameson is an NHL guy, with the Sharks, served on the board of governors, knows Bettman very well. I think the NHL has helped his bid along, maybe put him in the right room with the right people to talk about money. I think on that stage he's more of an insider.

Ted Simons: What is his bid?

Mike Sunnucks: We don't know yet. 170 is the number the NHL has been talking about. They bought the team out of chapter 11 bankruptcy couple years ago for $140. We'll see what the number is on paper. There's been franchises that have gone for less. They do have an interesting in trying to maintain price stability because there's other teams for sale. If the coyotes come in way down on the list that's going to hurt the league's values much like the Dodgers helped everyone's values in baseball by their $2 billion price. I think what you will see is them come up with some decent looking price, weather that's the realty of things we probably will never know.

Ted Simons: how long would the team stay in Glendale?

Mike Sunnucks: They are talking about ten years. That's not set in stone. What Glendale gives to them in terms of arena fees and other payments hinges on how long he's committed to staying there. That's the best deal they have been offered. Brian wanted to cut bait fast if things weren't working for him.

Ted Simons: The arena management fee has been a sticking point in a variety of ways. First we have to figure out what arena management really involves. Arena management. What are we talking about here?

Mike Sunnucks: It would operate the arena, order popcorn, do the contracts with all the concession airs, all the providers. Run it day in and day out, book concerts, bring in extra revenue. So that's kind of a strange fee and term for it. They are paying the NHL 25 million to do that, so there's a lot of questions, well, is that to run the arena or is that to help the NHL deal with the coyotes' losses. Little bit of scrutiny when the deal comes out.

Ted Simons: how much would Glendale look to be paying? Obviously it's not finalized.

Mike Sunnucks: $17 million has been thrown about recently. Other coyotes owners came in with 20 million. Why not 25 like the NHL. Elaine Scruggs say maybe 11. 17 is what Jameson has said he would be willing to go for. I think you'll see it come in someplace around there.

Ted Simons: I heard at least the early discussion was over 20-year lease the average would average outback into maybe 14 or $15 million.

Mike Sunnucks: they would adjust it based on the lease term. There might be some performance measures in there. The team makes more money they can reduce it. People question does it really cost that much to run an arena? I think it's a way to build in some financial stability for the new owner. The team loses 20, 25 million a year. They may do better this year because of the playoffs. If you build that in that gives them time to try to turn it around, get closer to breaking even.

Ted Simons: The Glendale city council has to approve the arena deal which hasn't been put up yet. Good that's approved the NHL board of governors has to agree to the sale what. Timeline are we talking about?

Mike Sunnucks: People said last week at the would get done right away. Yesterday Jameson and Bettman said we're looking at weeks, not months. That led to skepticism, especially from folks up in Canada. They think it's another kick the can move. I would think that they would try to get something done by the time the playoffs are over. If something isn't done we're looking at a dire situation.

Ted Simons: I would think Glendale would want something done before they get their budget finalize.

Mike Sunnucks: June is when Glendale does that I think. Trying to figure that out. They have allocated some space in the budget now for next year's payment, so they have guestimated that. It seems Bettman's words were parsed. It wasn't as aggressive as maybe some folks hoped. That led people to wonder how far along this is.

Ted Simons: One of the quotes, we see light at the end of the tunnel. Is that the S.S. Goldwater Institute coming the other direction?

Mike Sunnucks: They are on the sidelines. They are watching this carefully. One thing that's caught on this time is the city of Glendale and the NHL and Jameson have not produced any public disappointments because the Goldwater Institute gets their hands on the documents. They have sued the city of Glendale, they have an order for them to turn those things over. Once it shows itself Goldwater can look at this and cause problems, maybe scare off investors or some of the money involved with this. The NHL and Glendale folks have been very careful about making sure Goldwater doesn't see these things. Goldwater is in the dark now. They have a very short time to react.

Ted Simons: Their concern is illegal subsidies to a private corporation.

Mike Sunnucks: that's why this arena management fee, there's a certain number I think the Glendale and NHL people are trying to find that says this is a legitimate fee and Goldwater can't challenge it.

Ted Simons: If this falls apart for any reason, is that pretty much it? Doesn't Horne blow and the coyotes leave town?

Mike Sunnucks: I'm going to say yes. I think people are kicking the tires, looking at buying a sports team happens a lot. There's a rich guy that says, that's a good idea. I think Jameson is their guy. I think their money is on him. He's the known quantity. That's the one thing they liked about Jerry Reinsdorf. He's owned other sports teams. Jameson is in the same camp. He's run a team in a nontraditional market. I think all the chips are on him. He seems legitimate. The question does he have the financing and can Glendale come up with an arena financing fee to match that.

Ted Simons: Thanks for joining us.