Horizon, Host: Ted Simons

February 16, 2006


Host: Carry Pfeffer

Phoenix Bond 101


  • A look at the pros and cons of the bond proposal. Proponent Paul Johnson, Chairman of the Phoenix City Bond Election Committee, faces Jeff Greenspan of the anti-bond group "Stop Taxing our Property." Find out more, visit the companion Web site.
Guests:
  • Paul Johnson - former Phoenix mayor and chairman of the bond commission


View Transcript
Cary Pfeffer:
Early voting is underway. The election for the 7 Phoenix bond measures is one month from now. We'll hear from a backer and opponent of the bond and we'll tell you the story of a woman who took a radical step to prevent breast cancer. All that's next on Horizon. Tonight we wrap up our 4-part series on Phoenix's bond election. In the final part of Phoenix bonds 101 we'll give you a recap of the 7 bond measures, then hear from a proponent and opponent of the bond program. First Mike Sauceda tells us about the measures.

Mike Sauceda:
Phoenix voters will be cast on $478.5 million of bonds march 14. Earl voting has already started.

Phil Gordon:
The bond program is about our future, our defining moment. It's about sending a message to the world that the city of Phoenix is not only today a great city but is going to remain a great city for the future. It will create thousands of jobs. It will create great opportunities. And it will provide a sense of being for all of our residents, all without raising taxes.

Mike Sauceda:
There are 7 propositions. The first would build new police and fire facilities and strengthen homeland security at a cost of $177 million. Proposition 2 would improve police and fire response through technology. The $16.1 million bond would also help make voting more accessible and improve Phoenix customer service. Proposition 3 would spend $198.7 million on education, a new downtown campus for Arizona State University would be built with the money. It would also help pay for a University of Arizona College of Pharmacy and high school partnerships. Proposition 4 would spend $120.5 million for recreational opportunities for Phoenix residents with new parks and open spaces. Also money would go to the Phoenix zoo and the desert botanical garden. Proposition 5 is a $133.8 million that would provide libraries as well as facilities for Phoenix's youth and elderly and money for cultural centers like museums and theaters. It would also provide money to help the homeless. Proposition 6 would help revitalize neighborhoods and provide funding for affordable housing. The $85 million measure would also provide funding for state fair redevelopment and a graffiti busting service center. Finally, proposition 7 would provide $147.4 million for basic infrastructure for the city of Phoenix like improvements to a northeast Phoenix intersection, storm sewers and upgrades to pedestrian signal indicators.

Cary Pfeffer:
And here now to talk about the Phoenix bond measures is former Phoenix mayor and chairman of the bond commission, Paul Johnson. Also here tonight Jeff Greenspan of the group "stop taxes our property." the group opposes the bond measures. In terms of full disclosure, 8 Arizona PBS will directly benefit from proposition 3. We'll talk about all the propositions. This television station would receive funding for a new building as part of the ASU downtown campus. Gentlemen, I would like to start with each of you talking about why an individual voter who would be watching this program might agree with your particular side. Paul Johnson, we'll start with you. Why should someone vote yes on the propositions?

Paul Johnson:
Well, the city of Phoenix obviously has experienced a lot of growth over the last 5 to 10 years, maybe over the last 50 years. The only way we've been able to keep up with that from an infrastructure standpoint is to finance it. We financed the building of our freeways, or roadways, or water lines, or sewer lines, or police stations, or fire stations. This is just simply a natural extension. It's an extension that says that we need to keep up with that growth, we need to try to make certain that we're providing for the infrastructure needs for our citizens so that the sewer lines work, so that the streets are paved, so that we have police stations and fire stations not only in growth areas but in areas that now are becoming more dense. We also have a focus on education which I this is, in my opinion, maybe the most important thing in this bond election. Certainly the educational infrastructure is important if we believe economic development is important.

Cary Pfeffer:
Jeff Greenspan, give you a chance to outlight why you feel people should be voting no.

Jeff Greenspan:
Absolutely. We don't necessarily oppose all of the programs that former mayor Johnson spoke about. We formed the stop taxes our property committee for a couple reasons. Basically after attending several city council meetings back in November and December we learned some things. First of all, the actual proposition questions are asking voters to authorize the city to spend this money, to bond for this money, at a rate of up to 12\% interest and up to 25 years. Now, I understand that the argument is that it may not be for that much, but I would have to ask why they're asking us to authorize it for that much. Also, you know, again we're not necessarily opposed to the programs. We believe as the county does, for example, that these programs can be paid for on a pay as you go basis. For example, the county has a $700 million capital program that they're pursuing on a pay as you go basis. We see no reason necessarily that that can't be done in this case. And probably I'd say lastly is there's some concern in the community that we've seen that city taxpayers are being asked to finance state educational institution which is typically funded through state funds.

Cary Pfeffer:
Let's start with that point. Paul Johnson, talk about the ASU connection. In one of the propositions specifically there is mention about higher education and education in general. But in addition to that there are -- would be moneys that ASU would also benefit from. Talk about what seems like a mixing of tax situations here.

Paul Johnson:
First, as far as ASU is concerned the state is still putting in money. The state puts in about a third of the overall funding for all of our universities and they would continue to put money into this in the operational costs. Another portion of the costs of this are paid for by tuitions, a big portion of it. What's important to look at is, every site that ASU is located on today, the site in Tempe, the site on the west side and east side, all of those sit on donated properties. The universities have never been in a position where they've actually gone out and purchased the property. What we're looking at is trying to build something in downtown that not only is significant for downtown but more importantly is significant for the valley. Because the connection that we help create between science and the new jobs that are being created through technology and downtown Phoenix, trying to create an environment that's focused on education as well as focused on technology is something that I see as being very important for our long-term economic growth and development. What ASU does is it gives us a lever into that. It gives us an ability to begin focusing our resources and the city's efforts on trying to make this the type of community where jobs can be a priority.

Cary Pfeffer:
And Jeff, just the idea that they're sort of providing seed money? is that not a valid argument for now?

Jeff Greenspan:
I've heard these arguments before. I think it's all a very nice idea. But I think there's a lot of speculation involved. And with regards to actually financing the projects, ASU is going to get -- they got $340 million from the state legislature. They'll get well over $400 million this year. They've increased tuition rates the year before last, last year, this year, they're increasing them next year. We also have a RSP they -- asking people to bid on $200 million in operating cash. They own a piece of Los Arcos. Now they're asking property owners in the city of Phoenix to come up with $250 million just from the city of Phoenix to benefit an establishment which is a state institution. So I think there comes a point when we have to draw the line and say, either we're all going to share this burden or maybe it shouldn't be done at all or maybe it should be just done a little piece at a time.

Cary Pfeffer:
What about the idea of pay as you go which kind of picks up where Jeff was talking about, that this might be a good idea but at the same time it doesn't necessarily have to be handled in one fell swoop.

Paul Johnson:
If we did a pay as you go program and we started that 15 years ago there wouldn't be a third of the amount of miles, a fifth of the amount of freeways and roads we have out there today. We wouldn't have nearly the amount of police stations. You know, this is like a home mortgage. It's understandable for people to say, gee, I want to own a home and pay for it as I go and not have a mortgage to pay for it. But the cost of real estate increases every year. And I can promise you the cost of real estate is going to increase faster than the inflation rate, which relates to the interest rate that we're paying today. The interest rate that we're looking at is whatever the market has which is about a 5\% interest rate today. The city of Phoenix is AAA bonds. The 12 percent that was applied has been used in every single bond election we have had in a past. They always have a cap that you can level bonds in between. But the city as long as they maintain their AAA plus bond rating is going to be significantly below the market. You can borrow at 8\% the city can borrow between 4.5 to 5. To me, that confuses and somewhat -- and dilutes the overall issue of how it is that we pay for this infrastructure. And the best way to pay for it is to pay for it on a bonding type of program. Because if you don't, again not only would we have less freeways and roadways, the inflation cost that relates to real estate by itself would wipe out other ability to build most of these programs long term.

Cary Pfeffer:
Just one last question about interest rate. Why then is that 12\% in there? Because obvious we're enjoying low interest rates now, why does it end up being in the paperwork?

Paul Johnson:
They have to set a type of cap. The cap was higher in 1988 when we had higher interest rates. But it's generally based on what the city can float a bond from. Because they won't float this bond all up front. They'll do a fifth of it next year, a fifth of it over every year during the next five. And as they're issuing those bonds interest rates may float up or down. The city doesn't determine that. What they do have the ability to do, though, because they're tax-free bonds and because they're bonds that are in an institution that is considered to be one of the best-run institutions in the country, the city of Phoenix, they're able to get an exceptional interest rate that is better than what the market has.

Cary Pfeffer: Jeff, part of the argument that Paul and others make is that there's been a history of pretty strong management on the part of the city of Phoenix and basically what they're saying is, we've handled things reasonably well in the past. Trust us to do this on an ongoing basis. How do you respond to that?

Jeff Greenspan:
I heard Paul talk about financing the roadways via bonding. That is a typical way that you finance those kinds of things. He also brought up about mortgages, that we mortgage to lock in the prices and rates and things like that. But if we talk about the traditional way of financing these kinds of infrastructure projects, I don't know if we've ever financed a -- in fact I've never heard of it before, financing the state university using city property taxes. That's the first time I've heard that.

Paul Johnson:
We're only one of three states that doesn't have the ability to use property taxes.

Cary Pfeffer:
but I think what he's saying is have we done that before.

Paul Johnson:
Has the city of Phoenix ever done that before? The answer would be no. But also the question here is, should the city focus on education. It's not just about ASU. There are seven other high schools that the city is going to get involved with. I spent a series of years, the last three years as the chairman of the Arizona technology council. I can tell you our ability to focus on education is directly related to our ability to get high technology jobs and to be able to ensure that this is a place where our kids one day have the opportunities that we've had. Focusing on education is a city responsibility. The best part of this bond program in my opinion is what's going on with ASU and those seven other high school campuses throughout the valley. Is it a change? Yes, it is a change.

Jeff Greenspan:
With regards to the mortgage, what Paul brought up, is, yeah, there are some things that you might take out a mortgage for, long-term capital projects and such. But this is the first time also I've ever heard of taking bonds out to support nongovernmental organizations, special interests and charities. Various things.

Cary Pfeffer:
I'll let you respond to that.

Paul Johnson:
I think the nonprofit issue is one that you have to think through what your philosophy is. The boys and girls club, they provide programs. Those programs we used to find in the past, the city of Phoenix that they would go out and compete with them. Parks and recreation would set up a program in a neighborhood, the boys and girls club would set up one and joining it. We've made the decision that why should the city go out and run a program when they can give a little bit of money to the nonprofit to help them on the building of their facilities and then allow them to operate it from private sector dollars. I would think from a taxpayer standpoint that's a fiscal thing to do.

Jeff Greenspan:

I would think I wouldn't like to pay the interest because I think you could get two to three times the amount of money on a pay as you go basis.

Cary Pfeffer:
Let's talk about the issue of taxes and whether taxes are actually increased because of this. We've seen the signs that are all over along the highways that provide that comforting message that you don't have to worry about taxes going up. However, I understand your organization might have a cause to differ?

Jeff Greenspan:
Well, I'd just like to ask the question to Paul and to you, Cary. Do you guys really believe that there's no new taxes involved in this?

Paul Johnson:
Absolutely. There is no new taxes involved with this. Unless you take the same position that George Bush has increased taxes because my income taxes have gone up. The reality is there were a group of people in this process that wanted more. There are a group of people like your group who effectively want none. Effectively what they are saying do a pay as you go program, which would mean this program would be down at a very small dollar amount that we could actually fund. We came up with a program that said we're going to limit the existing tax rate to today's number. We did that without increasing taxes. Now, there was pressure too. Believe me there was pressure in this process to increase the amount of taxes, to increase the rate so that we could fund more programs. There's no doubt in my mind we didn't do that. And you also have to look at what's the only thing that the city controls. The answer to that is the rate. They don't control the assessment, they don't control inflation, they don't control whether homes are going to go up in value or down in value. They only can control what's the rate that you've going to apply to that property tax.

Cary Pfeffer:
Jeff, apparently your organization feels there's reason for debate on that particular question.

Jeff Greenspan:
Right. There's two quick points. Number one is, at the end of the day when you write your property tax check it is going to be higher as a result of this bond. And number two is, Paul said that if we get our way, if the bonds are defeated that the level of programs that would come out of a pay as you go basically would be very low. I would say that that's not correct. Because if you look at an amortization schedule which is just like a mortgage, whether you use anywhere between 5 and 10\% you plug in as an interest rate, there's a certain annual payment that comes out of that. Half to two-thirds of that depending on the rate being used goes to interest payments. And we could use that --

Paul Johnson:
If you buy a piece of land today for a police station and you pay a 5\% interest rate on buying that piece of land and that real estate goes up by 47\% as homes did last year, believe me, the 5\% was a good deal. Believe me. You won't be able to afford as much two years from now when you get that cash in as you can by financing it today. This is also an approach, if we're going to compare it to other cities and other places, there isn't a city in the country that doesn't fund infrastructure this way. This is the traditional way. Now what they won't allow us to do -- and I agree with this, I think it's prudent -- they won't allow us to use these dollars to fund operations. In other words we can't use it to pay for a police officer's salary or firefighters salary. There's a small amount that you can take out. But it's basically limited to capital infrastructure. Those types of products that over time will inflate in value. And from what we've seen in Arizona's real estate market, generally much faster than the interest rate.

Cary Pfeffer:
I'm going to ask that each of you say -- give a final statement because we're wrapping up our period of time here. Paul Johnson, I'll have you start.

Paul Johnson:
First I would say that we appreciate seeing Jeff and his group involved with this for a variety of reasons. One is I think it's really important that citizens be involved in the process and they take part and let their voices be known. I also think it's important because it gives people a chance to learn, gives some exposure. Without opposition I think often times that doesn't take place. There were 700 citizens who were involved in this process. They came up with I think a very good bond program. This wasn't decided by the politicians and its ultimate fate will not be decided by the politicians. It's decided by the voters. If the voters think this is the right thing they will vote for those 7 bond elections. If they don't we'll go back to the drawing board. But either way it's not going to reduce your tax.

Jeff Greenspan:
I appreciate the fact that 700 people were involved in this process. However, our research shows that most of the large ticket items were predetermined such as in the ASU capital development plan, well before those people even convened. I disagree that under our approach there would be a low amount of programs. That would go through the normal budgeting process. That would be up to the people as well. The taxes are going up. In fact Maricopa County just issued a press release today saying that in Maricopa County assessments are going up between 35 and 70\%. I had said 23\% on average in Phoenix. It looks like it's going to be higher than that. If you keep a fixed rate you're going to pay 35 to 70\% more as a result of the assessment.

Cary Pfeffer:
Jeff, thanks very much. Paul Johnson, appreciate your being here.

Jeff Greenspan:
Thank you.

Cary Pfeffer:
On to other things now, breast cancer is a fear for many women. One Arizona woman decided to do something to prevent breast cancer. She had a double mastectomy. She now is working to raise awareness of breast cancer and is raising funds for the Arizona cancer center's high-risk breast and ovarian cancer clinic. The story from Pam White.

Pam White:
It took some time to realize it was more than just a coincidence. Judy Rosen says the nightmare began when two aunts died of breast cancer at a young age. Then her two sisters developed the disease and also died.

Judy Rosen:
Still, nothing was catching on. Nothing was thinking that any of this could be related. And it was 7 months after my second sister's death from cancer that my third and final sister was diagnosed in advanced stages of cancer.

Pam White:
Although she grew up in Tucson, today Judy lives in Colorado with her two sons and works for the forest service. She still comes here to visit her mother. She says because cancer was so prevalent in her family, she decided to be tested to find out what her risk was.

Judy Rosen:
I had a 86\% chance, given my family history which they asked me for on the spot. Given that it could have even been greater than 86\%. And but really she just stared at me and she just said, you just better have both of those breasts removed because you're a time bomb ticking. And I just remember those exact words. And she was just sitting there staring at me as close as I and to you and I just wanted to shrink back and you know, just run away and not face it.

Pam White:
With the odds against her and at the urging of her family, she had prophylactic or preventive surgery to remove both breasts.

Judy Rosen:
It was like, who would go in and mute late your body if you don't have evidence you have cancer? It was the most incredible thing I ever encountered in my life. I couldn't imagine it, I couldn't fathom it.

Molly Brewer:
The key things we look for is patterns in family, early onset cancers, bilateral cancers, two breast cancers.

Pam White:
Doctor Molly Brewer specializes in ovarian cancer but to help women with dilemmas like Judy Rosen she's part of an one of a kind clinic at the Arizona cancer center. The team's made up of other doctors including Christina Kim, a breast cancer expert. There's also a psychiatrist, nutritionist and genetic counselor.

Molly Brewer:
Usually you have a breast clinic and you have an ovarian clinic. And they don't necessarily overlap. And what's unique about this is that this is really geared towards both. It's also geared towards other genetic diseases that effect women. We actually see some syndromes where women are at risk for colon cancer but also ovarian breast and ovary. This actually addresses these women's concerns also.

Pam White:
Called the high risk breath and ovarian cancer clinic, the purpose is to target women who are at high risk of cancer and hopefully prevent it.

Molly Brewer:
We can actually, particularly in this high risk group we can remove a woman's of ryes and prevent about half of the breast cancers. Not only do we prevent ovarian cancer but breast cancer.

Pam White:
Doctor Brewer says it's now possible to detect certain women's cancers by looking for a genetic mutation.

Molly Brewer:
I'm sure there's more. We see high risk families that don't express this jean and it doesn't mean they're not at risk. We do know that there are two genes and both of these confer a very high incidence of breast cancer and a pretty high incidence of ovarian cancer. The general population is about 1.4 to 1.8\% for ovarian cancer. This gene will confirm up to a 40\% lifetime risk. The lifetime risk of breast cancer is about 11 to 12\% right now. These mutations give a woman about a 80\% life time risk.

Pam White:
Seeing three sisters suffer from the side effects of chemotherapy helped Judy decide to proceed with the difficult surgery. She also knew she'd be setting an example for the next generation of family members.

Judy Rosen:
Now they know that there's choices. They don't have to make that particular one but they have information. And I just feel like having crossed that threshold, I don't know if I ever carried around the fear that it would ever happen to me. I was too busy grieving over the loft of my sisters and in denial about it. But I feel that I made the right decision for my children and for my nieces and nephews.

Pam White:
The surgery was a little more than a year ago in Colorado. And Judy says her biggest regret, she didn't have access to a resource like the cancer center's high risk clinic.

Judy Rosen:
All I got was word that I was a time bomb ticking. You know, so I feel that the holistic approach, the fact that you have somebody concerned from the very beginning to deal with it from a preventive level and to make you aware and to walk beside you and help you make those decisions and then they have the state-of-the-art techniques for screening for cancer. And apparently the physicians and the oncologists and the surgeons to do work if you ever get to that stage, which I'm sure a lot of their patients do. I just think that the holistic approach would have been something that would have benefited me on my journey but maybe we wouldn't have even gotten to that point had we known about these things.

Molly Brewer:
What I hear is women are really relieved to find someone who will take them seriously. They're relieved to be able to get more information. Because there's this fear, you know, that nobody can really tell them, you know, what's the chance that they're going to get cancer. And what can they do to prevent it.

Pam White:
Now in honor of her sisters and to raise awareness and funds for women's cancers and the cancer center's high-risk clinic, this December, Judy hopes to reach the top of Mount Kilimanjero in what she calls a climb for life.
Judy Rosen: I guess what this journey is get together mountaintop, really beginning to heal and to get to the other side. I think it's going to be really important. And if I can raise funds for such a great cause and give other people information that I didn't have, then it's a success even if I don't make it to the summit.

Cary Pfeffer:
And that will do it for our program tonight. I'm Carry Pfeffer. Have a good night.

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