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January 16, 2013

Host: Ted Simons

Legislative Update

  |   Video
  • A mid-week legislative update with Jim Small from the Arizona Capitol Times.
  • Jim Small - Reporter, Arizona Capitol Times
Category: Legislature   |   Keywords: legislative, update, legislature, ,

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Ted Simons: The Arizona legislature is back in session, which means the Arizona Capitol Times is back with us for mid-week legislative update. And joining me now to talk about the first few days of the 51st Arizona State legislature is Jim Small of the Arizona Capitol Times. Good to see you again and thanks for joining us.

Jim Small: Thanks for having us.

Ted Simons: Let's start with the state of the state speech which got everything kicked off here, general thoughts.

Jim Small: Governor Brewer hit a lot of topics as the speeches often do, you know. It's, basically, sit setting out the agenda and what she wants to see, so she talked about the major focus of the speech, was bragging in a way, kind of looking at what Arizona has done since she took office in 2009 when the state was really just kind of hitting the peak of the financial crisis. And state budget was crumbling, to where the state has a budget that is balanced. Although, you know, with some maneuvers they will have to be taking care of in the next couple of YEAR, but it's a balanced budget. The economy coming back the sales tax, the temporary tax is ready to go away, and you know, and she talked about how all the things that policymakers have done the last three or four years have really put the state into good position to move forward, how we have gone from having hundreds of thousands of job losses to now being one of the top job creators from the nation in the top four entrepreneurial startups, and so, that was a big focus, and she laid out what she want to see to expand in the upcoming year.

Ted Simons: It's, it's universally considered more, a little more substance, a little more gravitas, more in the way of specifics than Governor brewer's speeches?

Jim Small: These speeches are always tough. You have to kind of walk the line, I think, between, you know, giving details, which you don't want to mire it down in details and make is a wonkish speech, but at the same time, you want to paint the picture, here's where we're going to go and my vision of the state in the next couple of years, and that certainly is what she was doing.

Ted Simons: In one place most folks did not expect her to go, were the yesterday of expanding Medicaid, that really was a surprise, wasn't it?

Jim Small: It was surprise, and I think that, you know, certainly, just about everybody in the room was bit surprised to hear, to hear what she said, and not just, did she talked about expanding Medicaid, and this is one of those things that the legislators did during the crisis, where the voters in 2000 had approved a ballot measure requiring the state to expand the Medicaid rolls for our Access program, and legislators put a freeze on that, and said ok, we don't have the money to pay for this. We are going to freeze enrollment the way it is and not let anyone new join on outside of the people required by Federal law. Most people anticipated if the Governor was going to touch this area, she would call for going back to what the voters had said, instead what she called for was spanning it fully under what's required by the federal health care law, the Affordable Care Act, and that's something that, in that I think, that a lot of people had not expected her to do, given how fierce of critic she's been with Obama Care and that whole issue.

Ted Simons: Yet she said, do the math, and the math does suggest that matching funds, enhanced matching funds from the Federal Government makes sense and helps Arizona except you have leadership in the legislature, specifically Senate President Andy Biggs. They are not sure that money going to be there. They are not sure if this is the wisest course of action. How big of a fight is coming up on this?

Jim Small: It remains to be seen. A lot of people are drawing comparisons between what happened in 2009, when Governor Brewer addressed the legislature after taking office can called for a temporary sales tax, and that was an event that was memorable for, for legislators getting up and walking out of the speech for what turned into year-long battle, more in an a year at that point, actually, to get that thing passed and put it on the ballot. This time, Republicans were more reserved, there are, obviously, concerns. But, there is a more nuanced issue; sales taxes are black and white. You either are for them or against them. And this one, you know, the Governor, she talked about the math and the impact this has on Arizona's economy, and the need that we have, you know, even from a moral perspective to insuring the people, and she talked about how it would not affect the general fund, but, no one is seeing the details, and I think that it's going to take those details to present to lawmakers, to Republican lawmakers for her to make her case to say, I know that you are, your natural setting will be opposed to this but here's why you should do it and let me explain why this is a good thing for Arizona.

Ted Simons: Will we see the details when the budget is released?

Jim Small: My guess is we'll see some of them. I don't know to what extent we're going to see them. And, some of the details are probably still up in the air. I am sure that there are unanswered questions from the Federal Government. This is, after all, you know, state version of the Federal program. So, if we are going to make changes we need to -- or find different ways to pay for it, we'll have to, you know, doesn't have to be, an effort made to find those answers in the Federal Government.

Ted Simons: The Governor also mentioned education, a performance funding plan, and these things. I don't know how much we know about this, as yet. We do know that, as far as the budget is concerned, a whole new set of dynamics after a court ruling yesterday. Talk to us about that.

Jim Small: So yesterday, the Arizona court of appeals overturned lower court ruling. Again, from a budget decision that stems back to the financial crisis, when Arizona decided to, to not fully fund education under what voters had required and, and I want to say it was 2002, with proposition 301, a sales tax dedicated for education, and the state was supposed to, to, or, you were the argument was, the state was supposed to fund inflation every year, so figure out what the, the, what the inflation was every year, and fund education at that level so at the bare minimum it stayed even, and it did not lose money year over year are because of inflation. The legislature decided that it wasn't going to do that, in an effort to save 60 million, when it was cut, you know, 1.5 billion, and this is one piece of multi-faceted cut to, to state programs. And, and a lower court upheld that and said, voters do not have the authority to tell every legislature from here until eternity that they have to spend this. The appeals court said no, that argument doesn't fly. This is clearly the voters knew what they were doing, and all of this were, was out there, and on top of that, it was the legislature who put this on the ballot, who, who wanted voters to approve this, so the legislature cannot turn around later and say, well, we don't have the money and we think it means something different.

Ted Simons: You cannot pick and choose, inflation is as inflation does, and you have got to accommodate it. And we're talking accommodations here to the tune of, what, 80 some million a year? Something along these lines? That's a budget buster, isn't it? Or close to it?

Jim Small: It's not a budget buster, we're talking about a $10 billion budget, so 80 million is, it's a lot of money, and, you know, especially when the state just now recovering and trying to figure out, you know, not -- trying not to overextend itself, that's one of the concerns not to over-extend the budget so we don't get ourselves right back into the situation if the takes a downturn. Andy Biggs, who talked to one of my colleagues today and said that, you know, if we are going to have to pay for this, then extra funding for education programs, may be out the window because, we're already planning on spending 70 million to increase education just because of an increase in student growth, and so now if we got to put 80 million on top of that, well, all of this money that say the business community and the education community wants for the Common Core Standards, maybe that's not going to be there.

Ted Simons: And I guess, budget busting was a hyperbole, but it changes that balance, and you have got to wonder, will it cancel planned education spending? The Governor talked about the Common Core, and the other things, and is that stuff all in the rear-view mirror now?

Jim Small: There was a huge, a huge meeting today, committee meeting today at the state house where we have three committees who met. They brought in people from the education community to talk about the Common Core Standards, why they are important, and why they are needed to, to properly train Arizona high school students, faculty, and ultimately, do away with the AIMS program that everyone has kind of come to an agreement on, that does not really work. So, this issue is out there, the business community is committed to fighting for this, and which goes a long way, and I think that, that the Governor's office will fight for this, too.

Ted Simons: Ok. And the Governor also mentioned guns in schools, and not wanting to turn a school into a fortress, and yet wanting more money for school resource officers, which I think those are cut by the legislature couple of years ago. With that in mind, Senator Rich Crandall comes out with a school safety plan, Sheriff Paul Babeu at his side. What's this about?

Jim Small: It's a hybrid of different ideas that we have seen around, it would increase money for, for school resource officers, for, for armed and licensed police officers, to be on campus. It would also increase money for school counselors. With the idea that, that if you have more school counselors, who are not overworked and overburdened, that, that maybe they will be able to stop the problems before they become problems, and deal with these kids and give them the treatment and identify problems, identify, you know, kids who may be have a mental illness before it becomes serious issue, and you know, you also talked about allowing teachers to carry, to carry weapons in the classroom. And, you know, to be, to, to allow more guns, just into the school area in general, and, which was something that we heard from others on the right. It’d be curious to see what we end up, what we end up getting. The Governor still has to -- she talked about that in her state of the state speech about wanting to make sure schools are safer, we have not seen her plans or plans for, for, from the leaders, either, and I can only imagine that those are going it be out there, and at the end of the day lawmakers are going to have plethora of options to choose from.

Ted Simons: And we have seen plans as you alluded to, so again, you could probably see a bunch of stuff on the table, and that might be one of those deals where compromise rears its head.

Jim Small: Either it rears its head or they decide to do nothing. I think that that's also distinct possibility.

Ted Simons: Last question, quickly, first week at the capitol, collegial, no, fussing and fighting too much, quite yet?

Jim Small: Not yet but, they are not doing too much right now. They are all, you know, you have a crop of 30 new lawmakers, 29 new lawmakers, so this is really the introductory week, like the first week back to school where you go to the classes, you get introduced to the teacher, and you get the syllabus. You don't get a lot of homework and you are not writing papers yet. That will come, and we're going to have those issues and those fun scraps without doubt.

Ted Simons: And you are not looking at a lot of cuts and serious decisions made, where in the previous years a lot of glum faces.

Jim Small: In previous years, opening day was the day you started talking about the budget from the current year that was already in the red, and you had to go back and fix it.

Ted Simons: Good stuff. Looking forward to hearing from the capitol times every Wednesday.

Technology & Innovation: Arizona Bioscience Roadmap

  |   Video
  • The 10th anniversary of Arizona’s Bioscience Roadmap was celebrated recently. The Bioscience Roadmap led to development of the Arizona’s bioscience sector. Find out more about the roadmap, its development and the status of Arizona’s bioscience sector from Martin Shultz, Chairman of the Bioscience Roadmap Steering Committee, and Brad Halvorson, of the Flinn Foundation.
  • Martin Shultz - Chairman, Bioscience Roadmap Steering Committee
  • Brad Halvorson - Flinn Foundation
Category: Technology   |   Keywords: AZ, Technology, Innovation, ,

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Ted Simons: December, marked the tenth anniversary of the Arizona bioscience road map, it's a long range plan to make Arizona's bioscience sector globally competitive. Here to talk about the progress made is Marty Shultz, chairman of the Arizona Bioscience Road Map Steering Committee and Brad Halvorsen, of the Flinn Foundation, which launched the road map back in December of 2002, good to have you here.

Both: Thanks.

Ted Simons: Let's define the terms, bioscience road map, what are we talking about?

Marty Shultz: What we are talking about, about bioscience, and bioscience can be defined as health, science for health and research. It can be defined as bio agriculture, the scientific and the technical aspects of agriculture, and what this is, is an encouragement over the last ten years, and an investment over the last ten years, and some serious money to grow an industry that will help improve the health of Arizona, personal, of course, the world, and also, grow the economy, very specifically, grow the economy.

Ted Simons: When it was first developed back in 2002, what were the original goals? Have they changed over the years?

Brad Halvorsen: The bottom line goals, two of them, one is to improve the economy. One is to diversify our economy, and help us to get away from the economic cycles of downturns by adding high wage jobs. And another one is health care. And we wanted to, to bring to Arizona first access to the latest health care innovations.

Ted Simons: And as far as the original intent, and the first development, this was after, a study was conducted, and recommendations were offered, something along those lines.

Brad Halvorsen: Yes, the Arizona bioscience road map was a study that the Flinn Foundation commissioned, and it was done by Battelle, the largest nonprofit research and development organization. So what they did was they took stock of what Arizona had, and as bioscience's sector, did a SWAT analysis, and came back with a comprehensive plan of recommendations about what Arizona can do to be competitive region in the biosciences.

Ted Simons: Marty it, sounds like the report suggests the essential elements were there. Everything just needed what, push?

Marty Shultz: Well, it needed more than push. If needed to have an investment. So there were investments from, from proposition 301, which was sent to the voters, from the private sector, from the Arizona legislature in a number of areas. For example, when the Government funds the roads, it, actually, facilitates stimulating the economy. So, the Government helped to fund research labs. It helped to fund T-GEN, helped to fund the University activities, but what this did is spun a lot of private sector research and a lot of private companies, which we enjoy today. Those private companies, of course, employ thousands and thousands people, and as Brad said, we wanted an economic focus that would be stable over a period of time. So, while nothing is recession proof, we've been able to grow jobs in the bioscience and the sectors that are the biosciences, and at a greater level than, than other sectors, number one, and number two, when we have the downturn in the economy in the last five years, the growth of the biosciences has been up about 6%.

Ted Simons: Interesting. And one last history question here, back when the policy issues were pushed and Government leaders went for them, how receptive initially were they? Was there a lot of, I don't know, how difficult was it getting these ideas across?

Marty Shultz: It was a challenge because it was new thing. On the other hand, there were a lot of early adopters. Governor Jane Hull was an early adopter going back to the ten-year period, the leaders of the legislature, local Government officials, and in fact, thinking of the current Mayor, Greg Stanton, he was an early adopter when he was on the city council in Phoenix. So, and by the way, that's the Phoenix story. You have got stories in Flagstaff with a major investor, Gore manufacturers. You have got stories down in Tucson and southern Arizona with, with the Ventana Medical Systems. You have got major universities that have created bio design centers. We are really on the field, and we're playing an international game.

Ted Simons: And Marty has led us to this idea of improvements. How are we doing as far as science, as far as business, as far as policy, as far as collaboration between different organizations?

Brad Halvorsen: Doing well. The first five years of the road map was focused mostly on building the research infrastructure, and helping us to become more competitive for national grants from the national institutes of health, and other activities along those lines. And then as the road map continues, the focus is turning more towards commercialization, and turning this research into new products and new firms and to high wage jobs for Arizonans.

Ted Simons: It's interesting in a sense that Arizona kind of got this going. You were young state, everything we try is relatively new and we're the new kid on the block, if you will. And how do work that into bioscience and technology? It has to be a moving target because there are other areas, whether it's the bay area or back in the northeast or San Diego, even, that were up and running were we started walking.

Brad Halvorsen: It's right, and what the bioscience road map tries not to do is to replicate what San Diego is, what the Bay Area is, what Boston is. And they have been at it longer, and they have a concentration of research institutes, and companies long before we really got in the game. So, what we're trying to do is pick what the road map focus on is picking our niches where we excel in a national and international level, and really leveraging those niches. So, that would be cancer, neurosciences, personalized medicine. Those areas where we already excel and we're trying to help that drive Arizona forward.

Ted Simons: Is that how you see it, these are established areas, because we were not established we could do what we wanted to do?

Marty Shultz: I think first of all, we recognize that it was a very competitive environment. We are talking about these other centers around the country and around the world. So what we did, when we say the road map steering committee, what we're really talking about is 100 individuals who might be University presidents, rock star researchers, business folks. You name it. And we put them all together and say, based on the data from Battelle, let's look at this road map ahead of us and see what we need to do it improve investment: public investment, private investment, and venture capital. What do we need to do in research? Research labs and that kind of thing? So, yeah, we, actually, created our own fortune, and now we are competitive now. Are we as big as San Franciscos, the San Diegos and the Bostons? No. We competitive? Dr. Michael crow in our tenth anniversary celebration, made a comment that his analysis was that we were on the field. Well, that's pretty good because we were nowhere ten years ago, and now, being on the field play on an international competitive area, that, that improves the health status of not only Arizona, but also, of the nation, because of the areas that Brad talked about, and others. I would like to point out Alzheimer's because of the number of individuals who are the senior level, the work that, that Banner Alzheimer Center is doing, this is, actually, international level research to, to end Alzheimer's Disease in a generation. We have so much to be thankful for, and so much talent that this talent is focused on the criteria that, that was established ten years ago, and it's, everybody involved is making a difference.

Ted Simons: Is Battelle still involved? Are they assessing the progress?

Brad Halvorsen: Absolutely. Yes. Since the beginning, we put in a requirement, really, that every year the progress of the bioscience road map would be measured. And the Flinn Foundation reports that progress back to the community on an annual basis. So, we want to bring numbers and metrics to this to see how we are doing.

Ted Simons: And how are we? Marty alluded to this but how are we doing, not only nationally, but on a global scale?

Brad Halvorsen: We're doing -- well, very well in terms of job creation, firm creation, and Arizona is now one of the fastest growing bioscience states in the nation. And new bioscience jobs, jobs here in the biosciences are growing about four times faster than they are across the rest of the nation. Bioscience firms are also outpacing the rest of the nation in terms of growth. So, we have added about 235 firms since the road map began back in 2002, and thousands of jobs in the biosciences, as well -- More than 30,000.

Ted Simons: So, jobs and, and businesses, and startups and these things. Are those the metrics you look at? How do you know and what do you measure?

Marty Shultz: We are, actually, measuring the number of jobs, the number of firms, and the investment about 30 billion a year worth of, of investment; that means investment in the ground, infrastructure, and salaries, and that kind of thing. And I also like to look at the other side, the early stage, what's the early stage of developing these jobs and these research capabilities. Is what we have called in education, STEM Education: Science, Technology, Engineering, and Math. And those kinds of skill sets, coming out of our, our elementary schools, ultimately, high schools and community colleges and through the universities, give individuals like my kids, grandkids, the capability of going into these, these relatively high paying jobs because the average salary starting is in the neighborhood of $45 to $55,000, significant dollars, plus the opportunity to grow, and then to do good things to deal with these diseases of, of, that have been mentioned, plus others. And make, a real difference.

Ted Simons: So, we're ten years down the road here, and what are the challenges? What are, what do we see in the next ten years?

Brad Halvorsen: Capital is always a challenge. There is always need for, for more money, and resources, public and private. And that's an ongoing battle that, that Arizona has, San Francisco, San Diego, Boston, and they have that, too. The Venture Capital is hard to come by these days after the recession. And that's true in Arizona, it's true nationally. And I think in Arizona what we're really focusing on from here is continuing to build the critical mass of the bioscience firms. We have come a long way since 2002. We want to attract the top talent from other states, and keep creating the high wage jobs that Marty was talking about.

Ted Simons: You know, we hear about Venture Capital all the time here in Arizona. Why is it so tough? It's tough all around but it seems like in Arizona we have a hard time. Is that an accurate figure there?

Marty Shultz: That is an accurate figure. Actually, we were doing a lot better in the last several years, but as the continue turn occurred, Venture Capitalists, individuals focused in this area decided to pull back and be a little more selective so we, actually, have a squat of, a squad of our group of the bioscience road map committee that is working on developing new Venture Capitalists, and a new focus, and frankly, a new, a new cache of cash for Venture. One thing about investments of this kind, they are, they are somewhat risky in the early stages because you have an idea to, to help cure kind of cancer. To help eliminate or at least stage Alzheimer's Disease. These kinds of investments do cost money. Then in the later stages, as they become proven and closer to clinic trials, you could see the payoff in health and in profit. And people will jump in, so, we need to be very strategic, and we have been and continue to be.

Ted Simons: Very good, good to have you both here and thanks for joining us. We appreciate it.

Both: Thank you.

Ted Simons: And that is it for now. I'm Ted Simons. Thank you so much for joining us. You have great evening.