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June 12, 2012

Host: Ted Simons

Clean Elections

  |   Video
  • Fewer candidates are signing up for Clean Elections public campaign funding in Arizona because of a U.S. Supreme Court ruling two years ago that struck down additional funding for candidates to match spending from those running with private dollars. Todd Lang, Arizona’s Clean Elections Director, will talk about the trend.
  • Todd Lang - Director, Clean Elections Arizona
Category: Elections   |   Keywords: elections, clean, ,

View Transcript
Ted Simons: Good evening and welcome to "Arizona Horizon." I’m Ted Simons. An Arizona supreme court justice will soon be serving as a federal judge on the 9th circuit court of appeals in San Francisco. The nomination of Justice Andrew Hurwitz was confirmed today by the U.S. senate. Hurwitz faced some opposition from pro life conservatives, but Arizona senators Jon Kyl and john McCain both supported his nomination. Governor Jan brewer will now get to select a replacement for Hurwitz from a list of candidates submitted by a nominating committee.

Ted Simons: Fewer candidates are signing up for public campaign funding under Arizona’s clean elections law. That after the U.S. Supreme Court struck down a key part of the law that provided matching funds to clean elections candidates who were outspent by their privately funded opponents. Here to talk about the current trend in public campaign finance is Todd Lang, executive director of the citizens clean elections commission. Good to see you again. Thanks for joining us.

Todd Lang: Thanks for having me.

Ted Simons: Before we get too far into this, give us a back ground. What happened with the court? What happened regarding matching funds?

Todd Lang: Well, the clean elections system is designed to allow people to run without having to raise that money. And what the program did was give Juan 1/3 of the allotment up front and the rest was to be issued in matching funds. More economic efficiency was the idea. Don't waste money where it's not needed. The supreme court struck it down last year, the matching funds system so we no longer have 2/3 of what was intended for candidates.

Ted Simons: You also have candidates, because clean elections candidates, you can be greatly outspent now, can't you?

Todd Lang: You always could be outspent but now it's more likely. With the advent of super packs, it becomes harder and harder to run as a participating candidate.

Ted Simons: Legislative candidates for running clean get how much?

Todd Lang: About $1400,000 for the primary and $25,000 for the general.

Ted Simons: What about state office?

Todd Lang: For the governor it's over $1 million. It's a significant chunk of change and it ranges down.

Ted Simons: What do we have right now for this cycle in terms of how many candidates have signed to run clean elections?

Todd Lang: Well, there are about 71 candidates by my last count earlier today, running clean. That's about 38% of all candidates. And that's a down turn from last cycle. In 2010 there were about 45% of all candidates ran clean.

Ted Simons: Why the down turn?

Todd Lang: It was expected. After matching funds were taken away we lost a lot of incumbents. They are afraid of getting attacked by attack ads and want to be able to raise the money. Without matching funds to respond they are afraid of getting hit.

Ted Simons: With that in mind, with the court order in mind, a decision, I should say, in mind, will fewer candidates overtime run clean?

Todd Lang: No. This is about what we expected. We knew before all this happened in 2006 and 2008, about 2/3 of all candidates ran clean. And we knew with the loss of matching funds it would go down. And we anticipated it would go down to about 40% and that's where it is now and we expect it will say between 1/3 and 12 3/from here on out. It does provide enough money to be competitive and give the voters a choice. That's the essence of what clean elections is all.

Ted Simons: I was going to ask why run clean if the opponents are all locks and chains are off there?

Todd Lang: You get to spend your time meeting the voters in your district. Talking about the issues and not on the phone raising money. And you are not behold be to the lobbyists or insider so you have a lot more freedom. That's attractive to a lot more folks. There are some incumbents because now they are incumbents, people want to give them money. The influence pedalers want to give them money so they can raise money the old-fashioned way. But when they are given a choice, if they have the option, a lot of them still want to run clean but ultimately if you are afraid of getting attacked, afraid of getting grossly outspent you may make the decision to run traditionally.

Ted Simons: Can the clean elections system be improved?

Todd Lang: Well, sure. We are always trying to improve it either through rule making or statutory changes. We have had some statutory changes this last session. We had some a couple years ago. And the way would be to improve now would be to replace matching funds. There's two ways to do it. One would be to simply restore that total allotment. Give people the full amount, not 1/3, so they can run clean. And be competitive even if they get hit with attack ads, the problem it's wasteful. You are giving money in races where it's really not needed. The other way to do it is a hybrid system where we would have matching funds, we would bring them back but they would be triggered by the money you raise from small donors and we would match that.

Ted Simons: Give me an example of that. Let's say I am a clean elections canceled and you are not. How would that work for me?

Todd Lang: Well, in terms of what the traditional candidate does it would be unrelated because that's what the supreme court's worried about. Basically what would happen is you would go out to your supporters and ask for $100 or less, they would give you the $100 and then the program would match that two or $300, $200 or $300 and that incentivizes donors to give to you because they know it will be matched so the candidates of their choice can be competitive. And the idea is, the studies show those small donation, $100 or not corrupting, and doesn't turn off the public. And so you get the benefit of a clean elections system, and you are still competitive. Ideally we wouldn't have to do that. We would still have matching funds but that's been struck down so we have to find another way.

Ted Simons: For those who say when that was struck down, it basically said that the clean elections system is simply not viable anymore. How would you respond?

Todd Lang: Well, I think we have seen it is viable. We had 40%, 45% last cycle. And we have 38% participation this cycle. That's a lot of folks who wouldn't be running but for clean elections. That's a lot of choices that the voters get, they wouldn't have otherwise. And choices at the ballot box, that's what our democracy is all about.

Ted Simons: How long do candidates have until they need to file as clean?

Todd Lang: Basically the primary. That's the easy way. The rule of enthusiasm the primary is when they have to decide whether to run clean or run traditionally.

Ted Simons: You expect those percentages to grow?

Todd Lang: No. We will lose a few folks because there's always a few folks who don't qualify. So we will lose a few folks but not significant numbers.

Ted Simons: Good to have you here.

Todd Lang: Thanks for having me.

Real Estate Future

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  • As the Phoenix Area recovers from one of the worst real estate markets it has ever seen, will the same mistakes that resulted in the real estate bust be repeated? Mark Stapp, the Fred E. Taylor Professor in Real Estate and director of the Master of Real Estate Development (MRED) program at Arizona State University’s W. P. Carey School of Business, will discuss the possibilities of that happening again.
  • Mark Stapp - Fred E. Taylor Professor in Real Estate, Director of the Master of Real Estate Development (MRED) program at Arizona State University’s W. P. Carey School of Business
Category: Business/Economy   |   Keywords: valley, economy, housing, real, estate, ,

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Ted Simons: Arizona’s real estate market is showing signs of recovery, but do those signs point to a more durable market? Or are we at risk for another free fall? Here with some answers is Mark Stapp, the Fred e. Taylor professor in real estate and director of the master of real estate development program at ASU's W.P. Carey School of Business. Thanks for joining us tonight on "Arizona Horizon."

Mark Stapp: Thanks for having me.

Ted Simons: Is the real estate market recovering?

Mark Stapp: I think it is. I think that we see signs in both residential and the commercial market, most segments of the commercial market, firming up. So we see those good signs where we are moving in the right direction.

Ted Simons: Median home price seems to be up. New home sales seem to be up as well.

Mark Stapp: New home sales are up quite a bit. As the existing home market has firmed up and we have got a very small existing home supply, it's making room for the new home builders to start building again.

Ted Simons: I want to get to what they are building here in a second or what they should be building, the kinds of homes but before we do that, ok, we are on the rebound. Are we on the rebound toward some sort of big skyrocketing situation? Or is it just a gentle climb?

Mark Stapp: I hope it's just a gentle climb. I think there's some factors in the marketplace that are going to keep a damper on this for a while. So you still have a very difficult lending environment so it's not that easy, even really well located, well conceived project, still have difficulty attracting capital. And that's good. That's instilling some discipline in the marketplace and not allowing it, especially in the commercial side to overheat. And I think the other part of this is that the development community is being much more careful about the kind of products they are going to develop.

Ted Simons: That's what I did want to talk about. The idea of looking at customer demand or the users now as opposed to we are going to build it, you are going to live in it. Talk to us about what they are doing when customers look for a certain type of home.

Mark Stapp: I think in the home building environment, home builders are having because it's so competitive, having to be very aware of what buyers want and need. We have got an evolving demographic. The demographic that was the primary driver of new home sales back in the early 2000s and the '90s has shifted. We are seeing a shifting demographic and they have a variety of needs. Builders to be competitive for looking at niching products. In order to deal with lifestyle changes.

Ted Simons: Give us an example.

Mark Stapp: Well, you know, so you are looking at homes that may have more accommodations built into the home for extended families, for nuclear families. So you will have the ability to adapt a floor space more easily to accommodate maybe older adults living in the home with you or children. Older children that are staying longer in a home. And so it's a much more adaptable kind of house. Then at the same time, you have got an aging population that doesn't have the same desire to retire the way that our parents retired. So you are looking at homes that are maybe a little smaller. You don't need the same kind of space as you get older and you have got shifting lifestyle demands.

Ted Simons: Fewer staircase, I would imagine?

Mark Stapp: Fewer staircases. Much more flexibility in the homes to deal with your changing lifestyle may be in place.

Ted Simons: So, it sounds as though developers are taking risks by focusing on this market a little bit and it sounds like cooker cutter mentality that so many critics see may be on the way out or not a part of this particular resurgence.

Mark Stapp: I would say they are not taking a risk. I think in fact, they are mitigating their risk by being much more particular in understanding what the buyer profile is. So they are able to niche their product, looking for white space in the market as they say in the marketing business. And by doing that, they can be mulch more precise in identifying who their buyers is, targeting advertising to them and attracting them. So i think that's a much more intelligent way to approach some of this.

Ted Simons: What about infill?

Mark Stapp: Infill is, I think, part of our rebound. We have got a lot of infrastructure that's been built over the last 10 years. And we are seeing these, some of these changing lifestyles that are now taking advantage of that structure. The light rail, the university downtown, some of the things that are happening as a result of both of those are making it much more desirable to live in town.

Ted Simons: Is it, though, desirable yet for homeowners who may have been battered by the down turn to get that foot back in the market, to go ahead and put their home on the market? A lot of folks are a little gun shy still about this. Is that a major factor right now?

Mark Stapp: Right the single family home market is still not fluid. I think a lot of the recovery that has occurred is the result of a lot of investors that have looked at this community. A friend of mine used this phrase, and I am allowed to use it with her permission and that is Phoenix had been seen as a commodity and not as a community. So you saw a lot of dollars from out of the region pouring in because you could buy cheap real estate recognizing this was a growth community. It's going to be a continual growth community. So seen as a good investment place. That doesn't necessarily build sustainable communities. You have a large segment of your existing home inventory in renter-occupied homes. And those rental dollars, those revenue stream is going out of the marketplace to out of region areas.

Ted Simons: But I have heard that investor activity is very strong. This surge in the new-home market also suggests there might be something happening. Are we headed toward a possibility of something similar to what happened before in 2008?

Mark Stapp: I don't think so. I mean, I think we have seen home appreciation very substantial home value appreciation which is good that helps with this under water problem. And then that helps people who don't have credit problems that want to sell and move to be able to do that. If you can't sell your house, you can't move. And that then locks up the whole market. It's not fluid. We need that fluidity in the market. With the investors so active in the marketplace, homeowners looking to buy are having a tough time outbidding them. That's really making I think some room for the new home builders who are going, you know, we are now able to pick up some of that demand.

Ted Simons: Interesting.

Mark Stapp: Because the cost of producing that house is now coming close to that home appreciation price.

Ted Simons: So bottom line, are we seeing a little more in the way of discipline? A little more in not so much irrational exuberance here as far as this turn around is concerned?

Mark Stapp: I think we are seeing a tempered recovery and i think that's a very good thing.

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

Mark Stapp: Thanks for having me.

U.S. Airways Merger

  |   Video
  • Adjunct Professor of Global Marketing for the Thunderbird School of Global Management Rick Baer talks about the potential impacts of a merger between US Airways and American Airlines from a marketing perspective.
  • Rick Baer - Adjunct Professor of Global Marketing, Thunderbird School of Global Management
Category: Business/Economy   |   Keywords: US, airways, merger, discussion, airplanes, travel, ,

View Transcript
Ted Simons: There's been a lot of speculation about a potential merger between Tempe-based us airways and American Airlines. Here to share his views about the impact of such a merger is Rick Baer, adjunct professor of global marketing for the thunderbird school of global management. Thank you for joining us tonight.

Rick Baer: I’m really excited to be here.

Ted Simons: That's good to hear. Are we excited, how excited are we of the possibility of this merger? Is it possible?

Rick Baer: I think it's possible. For sure. However, I think it depends on whether you are in the business world or whether you are a traveler. In the past, when there's been mergers of big airlines, frequent flyers have suffered and there's been snafus when reservation systems don't quite click. And so from a traveler's perspective, fares go up and that's not a great thing.

Ted Simons: So business travelers, frequent travelers, these sorts of folks are impacted by something like this.
Rick Baer: Oh, absolutely. And in March, United and Continental merged their two systems and there are big complaints from, especially the highest level of frequent flyers.

Ted Simons: As far as the companies are concerned, though, what kind of branding challenges are afoot here? Before such a merger, after such a merger.

Rick Baer: That's a great question. The history of the airline business, though, there's been lots of takeovers. Think back American airlines purchased TWA and TWA sort of disappeared. US airways and America West, and America west brand name disappeared, although I have a tiny story to tell. I was taking a flight on us airways and we landed in charlotte, and the folks at the desk says, we are very sorry but your current plane is not available. We have to bring in an old America West plane. So from a branding perspective, from my marketing heartbeat didn't do well. Perhaps those people were old us airways employees and not America West employees. So there sometimes is an issue. You get used to flying the hometown airline. America west becomes U.S. air and then becomes American. It costs a lot of money to paint an airplane. Maybe millions of dollars.

Ted Simons: Why would, if this merger were to happen, why would the American name stick and the US Airways not?

Rick Baer: I think without having the data in front of me, us marketing folks like to have data to prove this. I would think both Doug Parker and Mr. Horton, head of American, must have done some serious research to find out which brand has got better brand awareness, which brand has got a better feeling from consumers about, do I trust this airline? Do I think they are going to treat my baggage well? Do I think I’m going to get there on time? And my sense of it would be that the American name must have proven much stronger.

Ted Simons: As far as headquarters are concerned, again, the reports are that if such a merger would happen, headquarters would leave Tempe and go to Dallas-Fort Worth. Likely?

Rick Baer: Yes, most likely. I think that's one of the things that America West-US Airways that is dangled in front of American airlines. We would move the headquarters to Dallas. I think it's not good for Phoenix.

Ted Simons: Why would they move, make the move?

Rick Baer: Yeah, I think it's one of the enticements to make this merger happen. Although if I was an American airlines executive I would be a little nervous. Whenever there's a merger between companies, the company that takes over, the US Airways folks, they probably look to reduce staff and head count and maybe some of the American airlines folks would go away

Ted Simons: What are the variables that are considered when you look at where, when two companies meet, we are going to go here as opposed to there?

Rick Baer: I would think probably on the top would be cost of labor. I would think that people would want to look at the number of variables like landing rights perhaps, maybe if you are going to increase the amount of traffic through Dallas, maybe it's cheaper to land in Dallas than it is in phoenix. I wish I had the facts but I don't know. But those are the sort of things you look at. Labor costs, operational costs, maybe even fuel costs might be lower. I am not sure.

Ted Simons: Interesting. All right. So the impact now of a headquarters move out of the Phoenix area to Dallas-Fort Worth, the impact on us in terms of our image, our viabilities as a corporate headquarters location? What happens here?

Rick Baer: I think we take a hit. I really do. Having a big well-known global company like US Airways here, leaving town, obviously, less revenue, less income tax, all those employees that might be moving. Less participation by companies in charities because a lot of the leadership and the people who are at the headquarters, they are very active in the community. As an image, though, I think it also hurts. We like to have as many companies headquartered here. We are very proud of our city and if someone picks up and leaves, I think we do take a hit.

Ted Simons: I was going to ask about the branding and the image aspect of this all. Obviously, Arizona wants to get headquarters here, wants to attract companies and corporations here. When, obviously, no one is going to say no just because US Airways has left, but it becomes a bit of a scar.

Rick Baer: People want to know why. What was the driving factor? Was it the unavailability of getting high-quality employees? Was it something else? Was it the cost of living? Was it climate? Who knows why some corporations make a decision to move to Cincinnati or move to Chicago. Boeing moved from Washington to Chicago and that was a big shock. Same thing with Phillip Morris when they moved from North Carolina to Atlanta, it was a big shock for those cities who were used to having a champion, if you will.

Ted Simons: Especially a home-grown champion. It's one thing, something if you move here and move away but America West was born here. So what do we look for in terms of knowing that something like this could possibly happen?

Rick Baer: Well, two things. I think you are going to see a lot of activity, a lot of poaching of customers from the competition. It's sort of like when you have a shark circling some wounded fish. American Airlines is in bankruptcy. US Airways is having some negotiations with American Airlines. Boy, if I was United, Continental, if I was Delta, I would be poaching their top tier frequent flyers by making them superb offers, I would be coming into the marketplace and lowering my prices in order to try to poach away customers, thinking that these companies have taken their eye off the ball. They're working on a merger, they are struggling through bankruptcy and negotiations, and so I think the competitors see the blood in the water and they're going to dive in. Southwest, I wouldn't be surprised if they increase their advertising to convince local consumers, flyers, to change.

Ted Simons: With that in mind, what we are doing right now, even talking about the possibility of such a merger, the reports that are out there, the rumors, the hearsay, whatever you want to call it, that in and of itself drives this market.

Rick Baer: Absolutely. You are right. It also creates some sort of uncertainty in your employees. Right? That's something from a branding perspective you never want. Your brand, the face of your brand, especially in the airline business, is right in front of you with the flight attendants, with the folks at the desk, and if they are nervous about whether they are going to keep their job or not, especially since they have been doing a really good job recently, US Airways has been getting better and better and better in customer service rankings and lost baggage rankings and they have been making some real, real progress. This is still a moment uncertainty.

Ted Simons: Don't want to be a dying fish in the water. Too much blood. It's good to have you here. Thanks for joining us.

Rick Baer: Thank you very much for having me.

Ted Simons: You bet.

Ted Simons: Wednesday on "Arizona Horizon," we'll take a look at the outcome of today's special election to fill Gabrielle Gifford’s' congressional seat. And meet the ASU dean who has been named a 2012 united nations champion of the earth. That's Wednesday on "Arizona horizon," 5:30 and 10:00 right here on 8hd. That is it for now. I'm Ted Simons. Thank you so much for joining us. You have a great evening.