Horizon, Host: Ted Simons

January 8, 2007


Host: Michael Grant

Political Analysis


  • Political consultants Chuck Coughlin and John Loredo offer analysis of the the Governor's State of the State Address.
Guests:
  • Chuck Coughlin - Founder and president, HigherGround, a public affairs and lobbying company
  • John Loredo - Former state legislator and a political consultant


View Transcript
Michael Grant:
Tonight on "Horizon," Governor Janet Napolitano proposes a three-pronged approach in outlining her vision for the Arizona of the future. We will show you the 2007 State of the State Address in its entirety. And a response to the address by the Republican leaders. Good evening. I'm Michael grant. Welcome to "Horizon."

Michael Grant:
The 48th Legislative session begins today, set into motion by Governor Janet Napolitano's state of the state speech. For the fifth time she laid out her agenda before a joint session of the state legislature. In what she called a "roadmap to a successful 21st century Arizona," she listed education, foundation and innovation as the priorities she believes will achieve her goals this year. In this special one-hour "Horizon," we will bring you the State of the State speech in its entirety, followed by the Republican response and then a discussion with a couple political experts on the implications of the address. First, Governor Janet Napolitano and her 2007 State of the State Address.

Janet Napolitano:
It is my privilege today to stand before you to report on the state of our state. And as we reflect on our past, and think about how we build our future, I am pleased to tell you that the state of Arizona is strong! [applause]

Janet Napolitano:
I believe this independent, confident, growing state of ours can be even stronger. It can become the one Arizona that I spoke of at the inaugural. A state and a state of mind that fits the hopes and dreams of our people. A state where our children and our children's children can thrive in an ever more challenging 21st century. We are building this one Arizona of the future during a time of great and rapid change. It demands that we ask ourselves at every turn, why do we do the things the way we do? Is that the best way? Or just the way we have always done it? I believe Arizona has been and needs to be a state of innovation where we don't do the usual or the ordinary. A state where we recognize our problems and find new ways to fix them. So today, I want to focus on where we go from here. Where we will take Arizona in the 21st century. There are three components to this one Arizona plan. The keys to making our state stronger than it has ever been. The first key is education. To guarantee that every young person who graduates from Arizona schools is truly prepared for a world of competition and innovation. [applause]

Janet Napolitano:
The second is foundation. And by foundation, I mean more than bricks and mortar. Foundation includes the entire physical infrastructure of our state, our transportation and water systems, the way we handle the quality of our air and our lands. It also includes the basic requirements our families depend upon -- housing, healthcare, and quality of the places we live. The third key is innovation. Our success will depend upon our ability to innovate and come up with new solutions to old-age problems. Solutions that will empower Arizona to propel itself forward. We need to cultivate and stimulate new technologies, new markets, and new approaches to the way we will grow and change. The heart of my plan is the one Arizona education initiative. Arizona students no longer compete only against each other. To thrive in the 21st century, they must be able to hold their own in the world. Business Horizons are wider than they have ever been. Jobs require more students than ever to be prepared for high-skilled professions and Arizona graduates need to be able to think through challenges and propose solutions that are creative and clear. There are a few standards we must insist upon. Every student must enter school safe, healthy, and ready to learn. Every third grader must read at grade level. Every eighth grader must be prepared to take and pass algebra and every high school senior must graduate prepared for work and post secondary educations in the 21st century.
[applause]

Janet Napolitano: Everything we do in education must be directed toward these goals. So let's begin with entering school safe, healthy and ready to learn. With your support, we have already instituted voluntary all-day kindergarten and extensive reforms in child protective services. This year, we will also begin implementing the early childhood learning programs approved by Arizona voters in proposition 203. Now, in addition to that work, we need to tackle the issue of health insurance for children.
[applause]

Janet Napolitano:
Only five states have a higher rate of children without health insurance. We owe it to our children to do better. We owe it to their futures. Children with health insurance perform better in school, children with health insurance are more likely to get regular checkups and low cost preventive care, which means they are much less likely to visit an emergency room or end up in the hospital, which saves money. It is a good investment. More important, it is the right thing to do. Here is my plan: this year we will make sure that every Arizona child under the age of 19 and whose family makes less than $60,000 per year has affordable healthcare through access and our kid's care program. [applause] 5

Janet Napolitano:
There is one problem. We have an estimated 100,000 children who are eligible for access or kid's care but have never been signed up because their parents don't know about it. Even though the main places uninsured children are found is at school, we have an outdated law that keeps us from doing simple outreach there. That makes no sense. I call on you to repeal the gag rule and let teachers talk to parents so that our children get the healthcare they deserve. [Applause] Once our children are in school and healthy we need to modernize our classroom curriculum. Science and math education are lynchpins of success in the knowledge economy. Business tells us this. Common sense tells us this. So let's listen. Arizona currently requires two years of math and high school. Let's make it four. Let's also increase learning about technology and how to use it. Our science programs teach memorization. Let's teach understanding and analysis. We set the standards so let's set them in a way that enhances our hopes and dreams and gives our children nothing less than the very best. One Arizona education initiative requires four years of math, three years of science, a solid grounding in language arts, civics and the fine arts. Today I ask the state board of education to adopt these standards so that educators statewide bring the 21st century skills into the classroom.
[applause]

Janet Napolitano:
From our educators, we need a new emphasis throughout our school system that encourages curiosity, discovery, and invention. We want technology embedded in our schools. To enhance the learning process and to improve students' understanding of it. We need specialized environments for students who are especially gifted or just especially interested in particular areas of study like advanced math, bioscience, information technology, civics and language. We also need specialized environments for students who need additional help or who do not do well in a standard classroom and we must support out- of-school time for hands-on activities such as science fairs and robotics clubs so that students can apply their learning in an experiential way. And to ensure that we reach a readiness in the high school graduates, we need new ways to engage them in learning, individualize their learning path and make sure what they learn is what is aligned with the job market. To educators, I say we will continue to invest in k-12 education. But you must reinvent what you are doing and ensure that we are not simply repeating things the way we have always done. We must change our learning environment to match 21st century needs, and we must do so quickly.
[applause]

Janet Napolitano: To ensure we know how our students are doing and to detect problems early, we need to change the way we test. It is time to stop testing for the sake of the test. We need to use tests the way they are supposed to be used -- to measure how well a student is doing in a given subject and make sure students who need extra help get it right away. Right now, students tested in the spring don't get results until they are on summer vacation. Well, that kind of testing fails my most important test, the common sense one. There is a better way to do AIMS. We need to get results to teachers, students and parents in real time so we can help students in real time. Nothing else suffices. [applause]

Janet Napolitano:
Next, let's tackle the age for graduation. Today we require young people to remain in school only until they are 16. That is a system that made sense 100 years ago when there were no calculators, let alone computers, when doctors had no x-rays, let alone genetic tests, and when there was no national phone system, let alone an internet. In those days, a high school graduate could expect to find a decent job. Those days are gone. Of jobs that pay a realistic livable wage in Maricopa County, less than 2\% are available to those with only a high school diploma. Less than 2\%. My one Arizona education initiative would raise the dropout age from 16 to 18 and make funds available for tutoring, mentoring, and special services to get the at-risk students back on track. The work force demands better graduates and more of them. Let's keep these young people in school and give them the real skills for a real chance at success in life. Let's do that.
[applause]

Janet Napolitano:
Let's turn now to our teachers. I said last year and I repeat this year, aside from the immediate family, there is no more solid predictor of a child's classroom success than the presence of an excellent teacher. We made progress last year by providing raises for our teachers, but we have much more to accomplish. Nobody is ever going to get rich as a teacher, that is not why people choose public service, but nobody should have to go poor as a teacher. As part of the one Arizona education initiative, I propose that for this year we install a statewide minimum starting teacher pay of $33,000.
[applause]

Janet Napolitano:
That we provide raises beyond that and that we offer additional salary incentives for teachers in areas where we especially need them.
[applause] 9

Janet Napolitano:
These incentives should attract teachers who are sharp in the areas we expect them to teach. And to keep sharp teachers of any subject in the classroom, we need to reward them for their performance, mentor them and provide continuing teacher education statewide. Therefore, I propose in this initiative a package of financial incentives to find, train, and keep teachers who can successfully create a cutting edge learning environment for their pupils, and that environment also includes the buildings themselves. [applause]

Janet Napolitano:
At the rate we are growing, we are going to have to build more schools, build them faster and build them better. School campuses should be approach appropriate settings for students to learn and go. No student should become a lost number isolated from teacher interaction. That is why I have by executive order asked the director of the school facilities board to work with school districts to build schools for the future, thereby providing an educational environment for our children to learn and compete in the 21st century.
[applause]

Janet Napolitano:
Finally, we must raise expectations for our students. As I have said, graduation from high school is no longer good enough. Students need training beyond that. Be it technical education, community college, or university study. Our challenge is to keep that advanced education accessible, affordable and excellent. To that end, in my budget I will propose the highest ever general fund contribution to state financial aid, especially in light of recent tuition increases.
[applause]

Janet Napolitano:
Excellent teachers are as important at the college level as they are in elementary and high school. So I will also propose increased funding to allow our universities to recruit and retain world class faculty and to graduate more students faster.
[applause]

Janet Napolitano:
My budget also will include additional funding for the biomedical campus in Phoenix. This funding will put us in a position to generate more doctors quickly and with the medical school and key medical research and education initiatives including the University of Arizona college of pharmacy, Northwestern Arizona University allied health program, and an expanded telemedicine program for our rural area. We will also create a new college of construction to educate the next generation of construction managers we so desperately need.
[applause]

Janet Napolitano:
With such significant investment in our universities, I expect accountability. Our universities must continue to increase the number of graduates, especially in the areas we need most -- teachers, healthcare professionals, engineers, researchers, and the list goes on. With this one Arizona education initiative, the return on our investment will be profound. In the innovation economy, knowledge is everything and the modern school is its crucible. Our schools must be exciting and driven by new ethic of discovery and curiosity. They must be led by teachers who are highly regarded and well compensated and they will produce graduates who will thrive in an economy where creativity, ingenuity and adaptation are the rules for the game. For this vibrant new education system to flourish, we must have strong communities to support it. We must be vigilant in our work to ensure that rapid growth is smart growth. So let's turn now to foundation. Arizona is growing, developing, and changing at such a rapid pace it would be hard to imagine it if we weren't experiencing it. Since 1990 our population has already grown by 65\% and is expected to nearly double in just over twenty years. By the time I finish this speech, there will be 20 new Arizonans. And population growth is just one part of the change we are experiencing. Our economy is poised for a similar transformation. From one that relies on labor and sunshine to one that runs on knowledge and innovation. To create the bedrock that will support our 21st century communities and economy, I am proposing a series of strategies that will build to protect what we call infrastructure. But I want you to think of that
word in a larger sense. It includes roads, water supply, and land preservation. It also includes housing, healthcare and careful coordinated growth planning. I'll begin with transportation. How we get from point a to point b. And as I have said, Arizona is the fastest growing state in the union. And although we cut taxes last year, there is still one that needs to go. It is the time tax we pay every time we sit stuck in traffic that should be moving. It is an especially onerous price to pay because it cuts into what we value most, our time with our families, our friends, time spent at home and in our communities. Last year we agreed to direct an additional $300 million toward accelerating highway construction. With these new moneys we have been able, for example, to speed up work for new lanes on I-17 north of Phoenix and on I-10 in Pima and Pinal counties. Now, by changing the way we structure existing bonds we can raise money this year for critical transportation projects and do even more. By simply extending the terms from 20 to 30 years, we will free up more than $400 million above our current budget to relieve traffic congestion. I ask -- [applause]

Janet Napolitano:
I ask this legislature to support this idea and cut the time tax.
[applause]

Janet Napolitano:
We also need to explore transportation innovations. Today I am directing the Arizona department of transportation to provide for us within the next 90 days a list of options for mass transit including commuter rail and light rail so that this can be part of our transportation planning as we grow.
[applause]

Janet Napolitano:
With our population growth, water management is essential. This legislature should pass laws giving our counties and cities tools to incorporate more water planning into their growth decisions. You should give local communities the ability to restrict wildcat subdivisions, to limit development where there is no assured water supply and to address the problem of exempt wells.
[applause]

Janet Napolitano:
My budget continues the assistance and research provided through the new Arizona water institute. Part of that research should be continued innovation in water conservation techniques and technologies and we will continue to fight for our fair share of Colorado River water.
[applause]

Janet Napolitano:
To make sure our fast-growing communities can afford the water infrastructure they need, I am issuing an executive order directing the departments of environmental quality and commerce to provide longer term 30 year financing through a partnership between the water infrastructure financial authority and greater Arizona development authority. This approach will save communities millions in interest payments while providing safe drinking water and protecting our precious water resources.
[applause]

Janet Napolitano:
We must also protect the quality of our air. More people mean more development and more traffic, which has a bad effect on air quality. In Arizona last year, there were more pollution warnings issued than ever before. Anyone who suffers or who has a child who suffers with asthma knows how bad that can be. Last year, we took several big steps in the right direction. For the first time ever we now have state rules to control hazardous air pollution emissions and mercury emissions. I signed the climate change executive order to fast track Arizona towards reducing greenhouse gas emissions. It is aggressive [applause]

Janet Napolitano:
It is aggressive because we need to be. By 2020, these gases unchecked could easily double beyond 1990 levels. Because of that order, all new state vehicles must now meet low greenhouse gas standards or use e85 fuels. Weights and measures is working on new standards for fuels like biodiesel blends that will help clear our air and my climate change executive committee has been charged with implementing specific steps to reduce greenhouse gas emissions by 2012. Every step we take toward greater fuel efficiency and using different types of fuels also takes us closer to reducing our dependence on foreign oil.
[applause] 15

Janet Napolitano:
To build on that progress, today I have signed a new executive order requiring the state to take further concrete steps to improve air quality. It demands, among other things, that all projects on state property reduce the amount of particulates and ozone causing pollutants they release into the air and now when the state enters into new contracts involving the use of heavy equipment incentives will go to those contractors that use newer cleaner fuel technologies.
[applause]

Janet Napolitano:
In addition to protecting our air quality, we must also protect our access to open space, particularly in our urban counties. Without state trust land reform, our ability to protect these lands for their conservation values may be in question. And we need time to find the answers. In the meantime, let me assure those communities that have reclassified trust lands under the Arizona preserve initiative we will not move the lands to market for other than conservation purposes without local consent. [applause]

Janet Napolitano:
We also must address our healthcare infrastructure. Last year I spoke to you about the need to increase the number of doctors and nurses working in Arizona. The problem remains acute. Particularly in the rural parts of our state. One answer is to grow our own doctors and nurses. We have made a good start with the new medical school and expanded nursing programs across the state. Indeed, Arizona State University now is home to the largest nursing school at any public university in the country.
[applause]

Janet Napolitano:
We have also learned that doctors tend to stay in the place where they train. To attract doctors here, I propose increasing our total investment in graduate medical education to $44 million.
[applause]

Janet Napolitano:
This is a smart way to draw more physicians to Arizona during residencies which in turn should mean more doctors where we need them. There are licensing issues that can be difficult for doctors to navigate when they move here. Today I'm directing access for a physician recruitment office to give them a hand. I ask this legislature to pass prompt pay legislation so we can fund the office with increased fines on health insurance companies who do not pay their claims on time.
[applause]

Janet Napolitano:
It's a good deal. No new money and a great positive payoff. To round out this work on our foundation, we need to offer housing that is within reach both geographically and financially. Strong communities build up around family homes, but for young families getting into the first house is becoming harder and harder to do. We need to put more home ownership within their reach. I have directed the Arizona department of housing to increase financial assistance to first-time rural home buyers through the homes for Arizonans program. I have allocated $1 million to find creative housing solutions at the center of our communities rather than further sprawl at the edges. And we will also double our investment in home buyer education including an online version. For most people, a home is the biggest investment they will ever make. By providing them with home buying and home maintenance skills we reduce the chance of foreclosure by 20\%. We have done a great deal of work to build and rehabilitate homes on tribal land. This year I also set aside another $2.5 million for tribal housing needs statewide.
[applause]

Janet Napolitano:
Collaboration with tribes on growth issues is essential to our success. Not long ago, several tribes AK-Chin, Gila River, Fort McDowell, Salt River, thought of themselves as rural tribes. Today, they face development on all sides. And their decision and ours must be aligned. These growth issues: transportation, water, public lands and more -- are complex issues that need a comprehensive coordinated approach. Last year, I created the growth cabinet, a group that includes the directors of agencies that deal with growth-related issues. Now, by executive order I'm expanding the scope of my growth cabinet. It is now their job to ensure that all agencies of state government are working together on critical growth issues. For example, creating a water development fund for rural Arizona. And ensuring that infrastructure is built in a manner that contemplates the effects of development on our water quality, air quality, and wildlife. More than that, the growth cabinet will work with cities, towns, counties and tribal communities so that our efforts build on each other's. Today, I have directed the growth cabinet to develop within 120 days an implementation plan for a smart growth and development process. Future state discretionary funds will be made available only to local governments hat agreed to participate in this process.
[applause]

Janet Napolitano:
And this condition should apply to the additional $400 million for highway construction I have proposed today. Because as I have traveled Arizona, I have heard from thousands of you expressing the same message -- the way we grow has to change. You live, work and educate your children in communities that are growing so rapidly they do not have the necessary infrastructure to create the quality of life that you demand and that you expected when you made Arizona your home. For example, one community got a new school, what they didn't get was a road to get to the school. This has to stop. This has to stop. And the measures I just outlined are designed to do just that. Face it, Arizona is going to continue to grow. The question is how we grow so that we Arizonans have a high quality of life. Let's turn now to the third key to our future. Innovation. Nothing will be more important to our success than our ability to innovate. Wonder and then imagine. Invent and then to build. We have done a lot to enhance innovation over the last four years. We cut taxes to encourage investment in new businesses and technologies and to encourage existing businesses to expand in Arizona. We invested in research and development that is focused on using technology to make a difference in people's lives. But innovation by definition is a what have you done for me lately discipline. You don't get to stop and rest on your laurels. If you do, somebody else is going to innovate you out of business. In the coming year, our job is to magnify Arizona's innovation capacity. We are going to lay a foundation that will increase our ability to create and lead the industries of the future. To do that, we have to invest in community infrastructure and local business developments so we create an environment that attracts high wage businesses. Allows thinkers and entrepreneurs to flourish and cultivates success. It was my honor recently to be elected by my republican and democratic peers alike to serve as chair of the national governor's association.
[applause]

Janet Napolitano:
As chair, I'm leading an effort by the nation's governors to develop ideas and strategies that will strengthen America's ability to innovate and compete. And the best part about this effort is that it enables us to showcase Arizona and Arizona's innovations because we are doing so much right here at home. But I'm also picking up good ideas from across the country that we can and should consider here. And some of them are part of my plan to take Arizona to the next level. A plan I call innovation Arizona. The cornerstone of innovation Arizona is a global competitiveness innovation initiative that will focus on expanding access to high tech high wage success. First, we need a different economic and job creation strategy, making sure different means better and globally competitive. The essential factors must be integration, coordination, flexibility and strategic focus. We must modernize the department of commerce and develop a coherent investment strategy. The result should be an Arizona that attracts and creates jobs in innovative high growth industries. Expands global investment in trade and supports strategic research and development. Second, we will begin to restore Arizona's innovation investment fund. The commerce and economic development commission has a strategic investment fund that has been used recently to pay for the agency operations rather than to jump start businesses across our state. Product development cycles are moving so much more quickly today than ever before which means startups and existing businesses alike need to train workers just as quickly and modify infrastructure in order to keep up. Small and rural communities in particular are hard pressed to stay ahead of the latest developments as they diversify economies. The right investment at the right time can make all the difference and can literally be the difference between the creation of the next Microsoft and an inventor whose product never leaves the drawing board in his garage. That is why it is time for us to put the C.E.D.C. Investment fund back in business.
[applause]

Janet Napolitano:
let's make sure -- let's make sure every Arizona inventor of small business has access to the capital needed to make sure the birthplace of the next Microsoft is right here at home.
[applause]

Janet Napolitano:
Third, we will launch a global effort to bring new highways jobs to Arizona by attracting non-U.S.-based companies to locate or expand their operations here. Jobs associated with international trade and foreign investment pay more. Arizona has some of the most highly skilled workers in the world coupled with a business climate that is second to none. Our research institutions are leading the way in stem cell research, genomics, optics, water technology and more. Together that makes Arizona a nearly irresistible destination for foreign investment. Right now the international business community doesn't know us very well. And here is what I have to say to the world. It is time to wake up to an Arizona that is leading the nation in innovation. And we will send this message by developing a global brand for our state. We are going to take it on the road and to the air to bring businesses and foreign investment home. Call it in sourcing. Let's do that.
[applause]

Janet Napolitano:
Finally, innovation Arizona is going to continue to build on the work we have begun to transform Arizona into a center of research by continuing the necessary funding to foster science foundation Arizona to success. [applause]

Janet Napolitano:
Education, foundation, innovation -- it is a roadmap to a successful 21st century Arizona. It is more than achievable. It is essential as we continue to move Arizona forward. And every item I have mentioned today, every initiative, every plan can be accomplished without raising taxes one thin dime.
[applause]

Janet Napolitano:
It is my job to present a balanced budget to this legislature, and later this week I will do that just as I have done for each of the past four years. And it is important to remember that as we work on this plan for one Arizona, we must continue the important work we have already begun. We have tightened our border by asking the federal government to pay for National Guard presence there. Today, operation jump start is working. And I thank Congress and President Bush for their support. But don't forget, the security of the international border is the job of the federal government. And Congress has not yet completed the necessary comprehensive reform of our immigration system we so desperately need. And for that reason, we cannot let up on the border initiatives we have begun and that are working in Arizona. There are three things human smuggling rings rely on more than anything else -- stolen cars, fake I.D's and gangs. The department of public safety auto theft and homeland security document task forces have been integral to our success over the last four years and it is time to expand their numbers and their reach. I'm very proud, the state department of public safety has pioneered the use of advanced license plate reader technology that vastly improves our ability to detect stolen vehicles used by human smugglers and to arrest the people who are driving them, often stopping the crime in the process. I propose we expand the reader program so it becomes a tool for crime fighting in every part of the state.
[applause]

Janet Napolitano:
We are also going to use millions of dollars in federal funds to equip our borders and border guards with the latest detection technology including new radars and new sensors. We will continue to expand the reach of GITEM to attack the gangs plaguing our border communities and we are modernizing the crime labs so that the science of DNA will remove any shelter for criminals. Unfortunately, all the work we do to secure our borders will never protect our people from threats inside their own homes. When domestic violence casts a shadow over a home, the first thing we must do is offer its victims somewhere safe to go. Last year --
[applause]

Janet Napolitano:
Last year, I asked all of you to join me in a simple vow, to say that here in Arizona every person who seeks shelter will find a home. Let's continue our work to guarantee that when someone is fleeing the terrible threat of a violent family hand we offer nothing but open arms. For this reason, my budget includes funding to continue to expand our shelter capacity.
[applause]

Janet Napolitano:
Next, we will continue our work to protect Arizona seniors. The number of Arizonans over the age of 85 is going to double in the next 15 years. Already thousands of Arizona citizens receive long-term care because of age or disability. Most of the facilities and caregivers in our state provide wonderful, attentive and compassionate care. Yet, there are still too many incidences of abuse and neglect. Today I have issued an executive order to crack down on long-term care abuse and neglect and reward facilities that provide the best care. We will focus on nursing homes in the first year where the risk of a problem going unnoticed by a family member or friend is greatest. Followed by assisted living in the second year, and community care in the third. We will also make sure the public is informed. By July of this year, we will post quality ratings on my website for every nursing home in the state.
[applause]

Janet Napolitano:
And as we think of our seniors, let's not forget our veterans who have served our country. My budget includes funding to continue to increase the number of veteran benefits counselors so we can ensure that the men and women of our military receive all the help they deserve and have earned. [applause]

Janet Napolitano:
This ongoing work combined with education, foundation, innovation, is my vision for the Arizona of the future. The things I have outlined are not extravagances. They are necessities for a rapidly growing state. And while this plan recognizes strategic investment, it also continues the permanent tax cuts we passed last year and keeps our rainy day fund intact. [applause]

Janet Napolitano:
It is a privilege to be allowed to serve Arizona for another four years. When I was inaugurated to my first term in 2003, the theme of that day was many lands, many peoples, many faiths, one Arizona. Last week, I spoke about reflecting on our past. Building for our future. Today, I see that one Arizona in my mind and believe it in my heart. Like many of you, I made the decision to come here to this extraordinary place of innovation, opportunity, and natural beauty and to make it my home. Many more people are joining us. Let's welcome them and be careful and smart about how we make way for them. We are stewards. This place of exceptional beauty is not ours to own. It is only ours to care for, for the time we are here. Let's do it well together. It is one Arizona. It is our Arizona. Thank you.
[applause]

Michael Grant: Shortly after the governor's address, Republican leadership offered its response.

Tim Bee:
Well, thank you all for coming here today. I think that the governor presented a very positive message today that spoke a lot about the growth of Arizona and the things to expect and plan for as we grow. There are many things in her message that I believe we will agree with. Some of those include things such as transportation infrastructure and funding, the need to pay our teachers well and improve education system. We particularly were pleased with the statements about getting AIMS results back quickly for the students. We are pleased to hear things about continuing to work with efforts on border security. And we were pleased to hear about the efforts to attract and bring in business to the state of Arizona. A couple of areas where I think certainly were lacking in details is payment for those. We expect to see those in her budget proposal later this week. We know we are starting off with a structural deficit of about $400 million. And so we are anxious to see how the governor proposes to pay for all of the items without increasing taxes, but we should get the details later in the week. We also notice a lack of discussions about tax reductions. We know that in order to foster a business environment and climate that is healthy for the citizens of Arizona and for small business to develop here as she spoke about it is important to have a tax structure to do that.

Jim Weiers:
I would echo the president's sentiments. The governor's message was pretty much on point it was positive. I don't believe there is a whole lot in there that anybody can take exception for. Everybody wants to see Arizona move forward in a positive way. I guess the devil will be in the details. And only after Friday when we get the governor's proposed budget can we at that point figure out how she is going to do all the wonderful things that she has done. We have quite an extensive shopping list. We just simply don't have the money as presented on how to pay for that list. We are quite anxious. In fact I think myself more than anybody would be very anxious to see how the governor proposes to do all these wonderful things.

Michael Grant:
Tomorrow night on "Horizon," Republican leadership will join us to talk about the republican agenda for this year's legislative session. Joining us now to give their impressions of the governor's address, Chuck Coughlin, the founder and president of HighGround, a public affairs and lobbying company here in Phoenix, and John Loredo, former state legislator and a political consultant for Tequida and Gutierrez.

Michael Grant:
Gentlemen, thanks for being here.

Chuck Coughlin:
Thank you, mike.

Michael Grant:
Well, Chuck, what do you think? I will offer one comment, you know, the governor had been basically doing about 33, 34 minutes. That is ten minutes longer. This is a 43-44 minute speech.

Chuck Coughlin:
Yea, She had quite a laundry list of items, as the speaker spoke to at the end of the remarks there. There was a few policy plant the flag issues, but a lot of smaller efforts, legislative efforts which I think she feels passionately about and see how the legislature responds to those.

Michael Grant:
John what do you think? What was your reaction?

John Loredo:
Well, she really builds upon the issues that made her such a popular governor. They are issues that I think mainstream Arizonans really, they will really support education in children and innovation and those things are exciting for people to hear.

Michael Grant:
Certainly one of the longest applause lines came when she suggested the increase teacher minimum pay from $30,000 to $33,000. That also could, I guess, be one of the more expensive aspects of the proposal. Still, I think there should be fairly good legislative support for the concept. Maybe some messing around with the details.

John Loredo:
Sure, I mean if you raise the bar for student achievement you also have to pay teachers what they are worth. If you expect more from kids, you have to expect more from teachers. And to recruit the good teachers to Arizona and keep them here you have to pay a livable wage.

Michael Grant:
I know one of the things that always comes up is local control. And, in fact, last time when the legislature acted positively on this last time, Chuck, but did not go so far as to tell the districts what they had to do but sort of strongly suggested they do it.

Chuck Coughlin:
Yeah, you have numerous school districts around the state that, you know, you could pour money into the top of the district but it doesn't get to where it is supposed to be going a lot of the time because they have autonomous control at local school district levels. So the devil is, as the speaker said, is in the details. While it may be a great policy goal, as john says, to pay teachers that minimum salary, achieving that on a uniform statewide basis with the current form of governance of local schools is a challenge.

Michael Grant:
I think the second longest applause line was on the $400 million for highway construction. And was that reference to, we are not going to raid the rainy day fund. Was that kind of a slap at Senator Bob Burns' proposal?

Chuck Coughlin:
At least a reference to it. At least a reference to it .Senator Burns has offer a bill that will be heard in senate appropriations tomorrow which has a $300 million price tag on it, but his funding of that transportation called STAN funding to increase the pace at which we build projects around the state would use funds out of the rainy day fund, which a lot of conservatives feel, you know, why do we have a rainy day fund, we ought to be using the funds in state government to be using the important state projects. It was one of the most popular things that the legislature did last year. The governor agreed with it and I think they are going to go back to that well and try to figure out how to do it again.

Michael Grant:
She, of course, suggests that instead of limiting your bonding to 20 years you limit it to 30 years. Kind of like, you know, lowering your house payment by lengthening the length of the mortgage. Those kinds of financing techniques sometimes find an audience over at the legislature, don't they, John, a fairly cheap way to go?

John Loredo:
They do. I can picture the analysts and members scrambling to figure out what she is talking about here. But, you know, if you can push it out a little bit, it may seem a little more attractive because that leaves the other $450 million that Bob Burns wanted to use, leaves it in the rainy day fund, which I think people kind of prioritize, especially ones that can remember four years ago when the economy went south and bad cuts had to take place.

Michael Grant:
Seems one of the most expensive things that she proposed though was the expansion of the access kids care coverage to children who are in families up to $60,000 a year. That can be a chunk of change.

John Loredo:
It can be. You know, the current federal poverty level that we set kids care on it has never been achieved. You have never had the program completely utilized so even raising the bar this much it will be a challenge to get that many people enrolled, but one of the hurdles obviously would be allowing schools to do outreach to try to get more people enrolled, so they kind of go together.

Michael Grant:
In fact, Chuck, that could be one of the most controversial aspects of that proposal, particularly for the conservative base in both houses of the legislature.

Chuck Coughlin:
The governor proposed limiting the gag rule which would prohibit schools from literally marketing those programs. You know, the concern on the behalf of the conservatives is we are not doing enough to stay on the basics of reading and righting and arithmetic and now ask them to do more things in which their continuous response is hey, we got enough to do already. It will be a challenge to see how that works its way through the legislature.

Michael Grant:
Were you surprised that more attention wasn't paid to the immigration issue?

Chuck Coughlin:
Well, no. I mean, man, we have beaten that pony for the last several legislative sessions and I think there is hope on the part of both Democrats and Republicans that the new Congress in Washington and the president will come up with some proposals and some new laws here shortly to secure the border, provide guest worker status and to begin to clarify some of these problems that are just intractable short of movement in Washington, D.C.

Michael Grant:
Pretty short portion of the speech, john.

John Loredo: Well, you know, I think everybody hopes that the new Democratic majority will put this on the front burner and push some type of sensible rationale immigration reform at the national level, and if that starts to move it takes the spotlight off of folks here in Arizona pushing secondary extreme measures.

Michael Grant:
Appreciate it. John Loredo, good to see you again. And Chuck Coughlin, always a pleasure. Gentlemen take care of yourselves.

Chuck Coughlin:
Thank you.

Michael Grant:
The governor gave her state of the state address and now hear Republican legislative leaders respond and talk about there focus for the new session immigration issues transportation and the states budget are a few of the topics they will discuss. Hear from leaders of the State Senate and the House of Representatives Tuesday at 7:00 p.m. On "Horizon."

Michael Grant:
Wednesday we'll hear from democratic legislators about what they are hoping in the 2007 legislative session. On Friday, of course, journalists will be back to wrap up the state of the state and the week's news events. Thank you very much for joining us on this Monday evening. I'm Michael Grant. Have a great one, goodnight.



Republican Leadership Response


  • Arizona's Republican leadership responds to the Governor's State of the State Address.
Guests:
  • Chuck Coughlin - Founder and president, HigherGround, a public affairs and lobbying company
  • John Loredo - Former state legislator and a political consultant


View Transcript
Michael Grant:
Tonight on "Horizon," Governor Janet Napolitano proposes a three-pronged approach in outlining her vision for the Arizona of the future. We will show you the 2007 State of the State Address in its entirety. And a response to the address by the Republican leaders. Good evening. I'm Michael grant. Welcome to "Horizon."

Michael Grant:
The 48th Legislative session begins today, set into motion by Governor Janet Napolitano's state of the state speech. For the fifth time she laid out her agenda before a joint session of the state legislature. In what she called a "roadmap to a successful 21st century Arizona," she listed education, foundation and innovation as the priorities she believes will achieve her goals this year. In this special one-hour "Horizon," we will bring you the State of the State speech in its entirety, followed by the Republican response and then a discussion with a couple political experts on the implications of the address. First, Governor Janet Napolitano and her 2007 State of the State Address.

Janet Napolitano:
It is my privilege today to stand before you to report on the state of our state. And as we reflect on our past, and think about how we build our future, I am pleased to tell you that the state of Arizona is strong! [applause]

Janet Napolitano:
I believe this independent, confident, growing state of ours can be even stronger. It can become the one Arizona that I spoke of at the inaugural. A state and a state of mind that fits the hopes and dreams of our people. A state where our children and our children's children can thrive in an ever more challenging 21st century. We are building this one Arizona of the future during a time of great and rapid change. It demands that we ask ourselves at every turn, why do we do the things the way we do? Is that the best way? Or just the way we have always done it? I believe Arizona has been and needs to be a state of innovation where we don't do the usual or the ordinary. A state where we recognize our problems and find new ways to fix them. So today, I want to focus on where we go from here. Where we will take Arizona in the 21st century. There are three components to this one Arizona plan. The keys to making our state stronger than it has ever been. The first key is education. To guarantee that every young person who graduates from Arizona schools is truly prepared for a world of competition and innovation. [applause]

Janet Napolitano:
The second is foundation. And by foundation, I mean more than bricks and mortar. Foundation includes the entire physical infrastructure of our state, our transportation and water systems, the way we handle the quality of our air and our lands. It also includes the basic requirements our families depend upon -- housing, healthcare, and quality of the places we live. The third key is innovation. Our success will depend upon our ability to innovate and come up with new solutions to old-age problems. Solutions that will empower Arizona to propel itself forward. We need to cultivate and stimulate new technologies, new markets, and new approaches to the way we will grow and change. The heart of my plan is the one Arizona education initiative. Arizona students no longer compete only against each other. To thrive in the 21st century, they must be able to hold their own in the world. Business Horizons are wider than they have ever been. Jobs require more students than ever to be prepared for high-skilled professions and Arizona graduates need to be able to think through challenges and propose solutions that are creative and clear. There are a few standards we must insist upon. Every student must enter school safe, healthy, and ready to learn. Every third grader must read at grade level. Every eighth grader must be prepared to take and pass algebra and every high school senior must graduate prepared for work and post secondary educations in the 21st century.
[applause]

Janet Napolitano: Everything we do in education must be directed toward these goals. So let's begin with entering school safe, healthy and ready to learn. With your support, we have already instituted voluntary all-day kindergarten and extensive reforms in child protective services. This year, we will also begin implementing the early childhood learning programs approved by Arizona voters in proposition 203. Now, in addition to that work, we need to tackle the issue of health insurance for children.
[applause]

Janet Napolitano:
Only five states have a higher rate of children without health insurance. We owe it to our children to do better. We owe it to their futures. Children with health insurance perform better in school, children with health insurance are more likely to get regular checkups and low cost preventive care, which means they are much less likely to visit an emergency room or end up in the hospital, which saves money. It is a good investment. More important, it is the right thing to do. Here is my plan: this year we will make sure that every Arizona child under the age of 19 and whose family makes less than $60,000 per year has affordable healthcare through access and our kid's care program. [applause] 5

Janet Napolitano:
There is one problem. We have an estimated 100,000 children who are eligible for access or kid's care but have never been signed up because their parents don't know about it. Even though the main places uninsured children are found is at school, we have an outdated law that keeps us from doing simple outreach there. That makes no sense. I call on you to repeal the gag rule and let teachers talk to parents so that our children get the healthcare they deserve. [Applause] Once our children are in school and healthy we need to modernize our classroom curriculum. Science and math education are lynchpins of success in the knowledge economy. Business tells us this. Common sense tells us this. So let's listen. Arizona currently requires two years of math and high school. Let's make it four. Let's also increase learning about technology and how to use it. Our science programs teach memorization. Let's teach understanding and analysis. We set the standards so let's set them in a way that enhances our hopes and dreams and gives our children nothing less than the very best. One Arizona education initiative requires four years of math, three years of science, a solid grounding in language arts, civics and the fine arts. Today I ask the state board of education to adopt these standards so that educators statewide bring the 21st century skills into the classroom.
[applause]

Janet Napolitano:
From our educators, we need a new emphasis throughout our school system that encourages curiosity, discovery, and invention. We want technology embedded in our schools. To enhance the learning process and to improve students' understanding of it. We need specialized environments for students who are especially gifted or just especially interested in particular areas of study like advanced math, bioscience, information technology, civics and language. We also need specialized environments for students who need additional help or who do not do well in a standard classroom and we must support out- of-school time for hands-on activities such as science fairs and robotics clubs so that students can apply their learning in an experiential way. And to ensure that we reach a readiness in the high school graduates, we need new ways to engage them in learning, individualize their learning path and make sure what they learn is what is aligned with the job market. To educators, I say we will continue to invest in k-12 education. But you must reinvent what you are doing and ensure that we are not simply repeating things the way we have always done. We must change our learning environment to match 21st century needs, and we must do so quickly.
[applause]

Janet Napolitano: To ensure we know how our students are doing and to detect problems early, we need to change the way we test. It is time to stop testing for the sake of the test. We need to use tests the way they are supposed to be used -- to measure how well a student is doing in a given subject and make sure students who need extra help get it right away. Right now, students tested in the spring don't get results until they are on summer vacation. Well, that kind of testing fails my most important test, the common sense one. There is a better way to do AIMS. We need to get results to teachers, students and parents in real time so we can help students in real time. Nothing else suffices. [applause]

Janet Napolitano:
Next, let's tackle the age for graduation. Today we require young people to remain in school only until they are 16. That is a system that made sense 100 years ago when there were no calculators, let alone computers, when doctors had no x-rays, let alone genetic tests, and when there was no national phone system, let alone an internet. In those days, a high school graduate could expect to find a decent job. Those days are gone. Of jobs that pay a realistic livable wage in Maricopa County, less than 2\% are available to those with only a high school diploma. Less than 2\%. My one Arizona education initiative would raise the dropout age from 16 to 18 and make funds available for tutoring, mentoring, and special services to get the at-risk students back on track. The work force demands better graduates and more of them. Let's keep these young people in school and give them the real skills for a real chance at success in life. Let's do that.
[applause]

Janet Napolitano:
Let's turn now to our teachers. I said last year and I repeat this year, aside from the immediate family, there is no more solid predictor of a child's classroom success than the presence of an excellent teacher. We made progress last year by providing raises for our teachers, but we have much more to accomplish. Nobody is ever going to get rich as a teacher, that is not why people choose public service, but nobody should have to go poor as a teacher. As part of the one Arizona education initiative, I propose that for this year we install a statewide minimum starting teacher pay of $33,000.
[applause]

Janet Napolitano:
That we provide raises beyond that and that we offer additional salary incentives for teachers in areas where we especially need them.
[applause] 9

Janet Napolitano:
These incentives should attract teachers who are sharp in the areas we expect them to teach. And to keep sharp teachers of any subject in the classroom, we need to reward them for their performance, mentor them and provide continuing teacher education statewide. Therefore, I propose in this initiative a package of financial incentives to find, train, and keep teachers who can successfully create a cutting edge learning environment for their pupils, and that environment also includes the buildings themselves. [applause]

Janet Napolitano:
At the rate we are growing, we are going to have to build more schools, build them faster and build them better. School campuses should be approach appropriate settings for students to learn and go. No student should become a lost number isolated from teacher interaction. That is why I have by executive order asked the director of the school facilities board to work with school districts to build schools for the future, thereby providing an educational environment for our children to learn and compete in the 21st century.
[applause]

Janet Napolitano:
Finally, we must raise expectations for our students. As I have said, graduation from high school is no longer good enough. Students need training beyond that. Be it technical education, community college, or university study. Our challenge is to keep that advanced education accessible, affordable and excellent. To that end, in my budget I will propose the highest ever general fund contribution to state financial aid, especially in light of recent tuition increases.
[applause]

Janet Napolitano:
Excellent teachers are as important at the college level as they are in elementary and high school. So I will also propose increased funding to allow our universities to recruit and retain world class faculty and to graduate more students faster.
[applause]

Janet Napolitano:
My budget also will include additional funding for the biomedical campus in Phoenix. This funding will put us in a position to generate more doctors quickly and with the medical school and key medical research and education initiatives including the University of Arizona college of pharmacy, Northwestern Arizona University allied health program, and an expanded telemedicine program for our rural area. We will also create a new college of construction to educate the next generation of construction managers we so desperately need.
[applause]

Janet Napolitano:
With such significant investment in our universities, I expect accountability. Our universities must continue to increase the number of graduates, especially in the areas we need most -- teachers, healthcare professionals, engineers, researchers, and the list goes on. With this one Arizona education initiative, the return on our investment will be profound. In the innovation economy, knowledge is everything and the modern school is its crucible. Our schools must be exciting and driven by new ethic of discovery and curiosity. They must be led by teachers who are highly regarded and well compensated and they will produce graduates who will thrive in an economy where creativity, ingenuity and adaptation are the rules for the game. For this vibrant new education system to flourish, we must have strong communities to support it. We must be vigilant in our work to ensure that rapid growth is smart growth. So let's turn now to foundation. Arizona is growing, developing, and changing at such a rapid pace it would be hard to imagine it if we weren't experiencing it. Since 1990 our population has already grown by 65\% and is expected to nearly double in just over twenty years. By the time I finish this speech, there will be 20 new Arizonans. And population growth is just one part of the change we are experiencing. Our economy is poised for a similar transformation. From one that relies on labor and sunshine to one that runs on knowledge and innovation. To create the bedrock that will support our 21st century communities and economy, I am proposing a series of strategies that will build to protect what we call infrastructure. But I want you to think of that
word in a larger sense. It includes roads, water supply, and land preservation. It also includes housing, healthcare and careful coordinated growth planning. I'll begin with transportation. How we get from point a to point b. And as I have said, Arizona is the fastest growing state in the union. And although we cut taxes last year, there is still one that needs to go. It is the time tax we pay every time we sit stuck in traffic that should be moving. It is an especially onerous price to pay because it cuts into what we value most, our time with our families, our friends, time spent at home and in our communities. Last year we agreed to direct an additional $300 million toward accelerating highway construction. With these new moneys we have been able, for example, to speed up work for new lanes on I-17 north of Phoenix and on I-10 in Pima and Pinal counties. Now, by changing the way we structure existing bonds we can raise money this year for critical transportation projects and do even more. By simply extending the terms from 20 to 30 years, we will free up more than $400 million above our current budget to relieve traffic congestion. I ask -- [applause]

Janet Napolitano:
I ask this legislature to support this idea and cut the time tax.
[applause]

Janet Napolitano:
We also need to explore transportation innovations. Today I am directing the Arizona department of transportation to provide for us within the next 90 days a list of options for mass transit including commuter rail and light rail so that this can be part of our transportation planning as we grow.
[applause]

Janet Napolitano:
With our population growth, water management is essential. This legislature should pass laws giving our counties and cities tools to incorporate more water planning into their growth decisions. You should give local communities the ability to restrict wildcat subdivisions, to limit development where there is no assured water supply and to address the problem of exempt wells.
[applause]

Janet Napolitano:
My budget continues the assistance and research provided through the new Arizona water institute. Part of that research should be continued innovation in water conservation techniques and technologies and we will continue to fight for our fair share of Colorado River water.
[applause]

Janet Napolitano:
To make sure our fast-growing communities can afford the water infrastructure they need, I am issuing an executive order directing the departments of environmental quality and commerce to provide longer term 30 year financing through a partnership between the water infrastructure financial authority and greater Arizona development authority. This approach will save communities millions in interest payments while providing safe drinking water and protecting our precious water resources.
[applause]

Janet Napolitano:
We must also protect the quality of our air. More people mean more development and more traffic, which has a bad effect on air quality. In Arizona last year, there were more pollution warnings issued than ever before. Anyone who suffers or who has a child who suffers with asthma knows how bad that can be. Last year, we took several big steps in the right direction. For the first time ever we now have state rules to control hazardous air pollution emissions and mercury emissions. I signed the climate change executive order to fast track Arizona towards reducing greenhouse gas emissions. It is aggressive [applause]

Janet Napolitano:
It is aggressive because we need to be. By 2020, these gases unchecked could easily double beyond 1990 levels. Because of that order, all new state vehicles must now meet low greenhouse gas standards or use e85 fuels. Weights and measures is working on new standards for fuels like biodiesel blends that will help clear our air and my climate change executive committee has been charged with implementing specific steps to reduce greenhouse gas emissions by 2012. Every step we take toward greater fuel efficiency and using different types of fuels also takes us closer to reducing our dependence on foreign oil.
[applause] 15

Janet Napolitano:
To build on that progress, today I have signed a new executive order requiring the state to take further concrete steps to improve air quality. It demands, among other things, that all projects on state property reduce the amount of particulates and ozone causing pollutants they release into the air and now when the state enters into new contracts involving the use of heavy equipment incentives will go to those contractors that use newer cleaner fuel technologies.
[applause]

Janet Napolitano:
In addition to protecting our air quality, we must also protect our access to open space, particularly in our urban counties. Without state trust land reform, our ability to protect these lands for their conservation values may be in question. And we need time to find the answers. In the meantime, let me assure those communities that have reclassified trust lands under the Arizona preserve initiative we will not move the lands to market for other than conservation purposes without local consent. [applause]

Janet Napolitano:
We also must address our healthcare infrastructure. Last year I spoke to you about the need to increase the number of doctors and nurses working in Arizona. The problem remains acute. Particularly in the rural parts of our state. One answer is to grow our own doctors and nurses. We have made a good start with the new medical school and expanded nursing programs across the state. Indeed, Arizona State University now is home to the largest nursing school at any public university in the country.
[applause]

Janet Napolitano:
We have also learned that doctors tend to stay in the place where they train. To attract doctors here, I propose increasing our total investment in graduate medical education to $44 million.
[applause]

Janet Napolitano:
This is a smart way to draw more physicians to Arizona during residencies which in turn should mean more doctors where we need them. There are licensing issues that can be difficult for doctors to navigate when they move here. Today I'm directing access for a physician recruitment office to give them a hand. I ask this legislature to pass prompt pay legislation so we can fund the office with increased fines on health insurance companies who do not pay their claims on time.
[applause]

Janet Napolitano:
It's a good deal. No new money and a great positive payoff. To round out this work on our foundation, we need to offer housing that is within reach both geographically and financially. Strong communities build up around family homes, but for young families getting into the first house is becoming harder and harder to do. We need to put more home ownership within their reach. I have directed the Arizona department of housing to increase financial assistance to first-time rural home buyers through the homes for Arizonans program. I have allocated $1 million to find creative housing solutions at the center of our communities rather than further sprawl at the edges. And we will also double our investment in home buyer education including an online version. For most people, a home is the biggest investment they will ever make. By providing them with home buying and home maintenance skills we reduce the chance of foreclosure by 20\%. We have done a great deal of work to build and rehabilitate homes on tribal land. This year I also set aside another $2.5 million for tribal housing needs statewide.
[applause]

Janet Napolitano:
Collaboration with tribes on growth issues is essential to our success. Not long ago, several tribes AK-Chin, Gila River, Fort McDowell, Salt River, thought of themselves as rural tribes. Today, they face development on all sides. And their decision and ours must be aligned. These growth issues: transportation, water, public lands and more -- are complex issues that need a comprehensive coordinated approach. Last year, I created the growth cabinet, a group that includes the directors of agencies that deal with growth-related issues. Now, by executive order I'm expanding the scope of my growth cabinet. It is now their job to ensure that all agencies of state government are working together on critical growth issues. For example, creating a water development fund for rural Arizona. And ensuring that infrastructure is built in a manner that contemplates the effects of development on our water quality, air quality, and wildlife. More than that, the growth cabinet will work with cities, towns, counties and tribal communities so that our efforts build on each other's. Today, I have directed the growth cabinet to develop within 120 days an implementation plan for a smart growth and development process. Future state discretionary funds will be made available only to local governments hat agreed to participate in this process.
[applause]

Janet Napolitano:
And this condition should apply to the additional $400 million for highway construction I have proposed today. Because as I have traveled Arizona, I have heard from thousands of you expressing the same message -- the way we grow has to change. You live, work and educate your children in communities that are growing so rapidly they do not have the necessary infrastructure to create the quality of life that you demand and that you expected when you made Arizona your home. For example, one community got a new school, what they didn't get was a road to get to the school. This has to stop. This has to stop. And the measures I just outlined are designed to do just that. Face it, Arizona is going to continue to grow. The question is how we grow so that we Arizonans have a high quality of life. Let's turn now to the third key to our future. Innovation. Nothing will be more important to our success than our ability to innovate. Wonder and then imagine. Invent and then to build. We have done a lot to enhance innovation over the last four years. We cut taxes to encourage investment in new businesses and technologies and to encourage existing businesses to expand in Arizona. We invested in research and development that is focused on using technology to make a difference in people's lives. But innovation by definition is a what have you done for me lately discipline. You don't get to stop and rest on your laurels. If you do, somebody else is going to innovate you out of business. In the coming year, our job is to magnify Arizona's innovation capacity. We are going to lay a foundation that will increase our ability to create and lead the industries of the future. To do that, we have to invest in community infrastructure and local business developments so we create an environment that attracts high wage businesses. Allows thinkers and entrepreneurs to flourish and cultivates success. It was my honor recently to be elected by my republican and democratic peers alike to serve as chair of the national governor's association.
[applause]

Janet Napolitano:
As chair, I'm leading an effort by the nation's governors to develop ideas and strategies that will strengthen America's ability to innovate and compete. And the best part about this effort is that it enables us to showcase Arizona and Arizona's innovations because we are doing so much right here at home. But I'm also picking up good ideas from across the country that we can and should consider here. And some of them are part of my plan to take Arizona to the next level. A plan I call innovation Arizona. The cornerstone of innovation Arizona is a global competitiveness innovation initiative that will focus on expanding access to high tech high wage success. First, we need a different economic and job creation strategy, making sure different means better and globally competitive. The essential factors must be integration, coordination, flexibility and strategic focus. We must modernize the department of commerce and develop a coherent investment strategy. The result should be an Arizona that attracts and creates jobs in innovative high growth industries. Expands global investment in trade and supports strategic research and development. Second, we will begin to restore Arizona's innovation investment fund. The commerce and economic development commission has a strategic investment fund that has been used recently to pay for the agency operations rather than to jump start businesses across our state. Product development cycles are moving so much more quickly today than ever before which means startups and existing businesses alike need to train workers just as quickly and modify infrastructure in order to keep up. Small and rural communities in particular are hard pressed to stay ahead of the latest developments as they diversify economies. The right investment at the right time can make all the difference and can literally be the difference between the creation of the next Microsoft and an inventor whose product never leaves the drawing board in his garage. That is why it is time for us to put the C.E.D.C. Investment fund back in business.
[applause]

Janet Napolitano:
let's make sure -- let's make sure every Arizona inventor of small business has access to the capital needed to make sure the birthplace of the next Microsoft is right here at home.
[applause]

Janet Napolitano:
Third, we will launch a global effort to bring new highways jobs to Arizona by attracting non-U.S.-based companies to locate or expand their operations here. Jobs associated with international trade and foreign investment pay more. Arizona has some of the most highly skilled workers in the world coupled with a business climate that is second to none. Our research institutions are leading the way in stem cell research, genomics, optics, water technology and more. Together that makes Arizona a nearly irresistible destination for foreign investment. Right now the international business community doesn't know us very well. And here is what I have to say to the world. It is time to wake up to an Arizona that is leading the nation in innovation. And we will send this message by developing a global brand for our state. We are going to take it on the road and to the air to bring businesses and foreign investment home. Call it in sourcing. Let's do that.
[applause]

Janet Napolitano:
Finally, innovation Arizona is going to continue to build on the work we have begun to transform Arizona into a center of research by continuing the necessary funding to foster science foundation Arizona to success. [applause]

Janet Napolitano:
Education, foundation, innovation -- it is a roadmap to a successful 21st century Arizona. It is more than achievable. It is essential as we continue to move Arizona forward. And every item I have mentioned today, every initiative, every plan can be accomplished without raising taxes one thin dime.
[applause]

Janet Napolitano:
It is my job to present a balanced budget to this legislature, and later this week I will do that just as I have done for each of the past four years. And it is important to remember that as we work on this plan for one Arizona, we must continue the important work we have already begun. We have tightened our border by asking the federal government to pay for National Guard presence there. Today, operation jump start is working. And I thank Congress and President Bush for their support. But don't forget, the security of the international border is the job of the federal government. And Congress has not yet completed the necessary comprehensive reform of our immigration system we so desperately need. And for that reason, we cannot let up on the border initiatives we have begun and that are working in Arizona. There are three things human smuggling rings rely on more than anything else -- stolen cars, fake I.D's and gangs. The department of public safety auto theft and homeland security document task forces have been integral to our success over the last four years and it is time to expand their numbers and their reach. I'm very proud, the state department of public safety has pioneered the use of advanced license plate reader technology that vastly improves our ability to detect stolen vehicles used by human smugglers and to arrest the people who are driving them, often stopping the crime in the process. I propose we expand the reader program so it becomes a tool for crime fighting in every part of the state.
[applause]

Janet Napolitano:
We are also going to use millions of dollars in federal funds to equip our borders and border guards with the latest detection technology including new radars and new sensors. We will continue to expand the reach of GITEM to attack the gangs plaguing our border communities and we are modernizing the crime labs so that the science of DNA will remove any shelter for criminals. Unfortunately, all the work we do to secure our borders will never protect our people from threats inside their own homes. When domestic violence casts a shadow over a home, the first thing we must do is offer its victims somewhere safe to go. Last year --
[applause]

Janet Napolitano:
Last year, I asked all of you to join me in a simple vow, to say that here in Arizona every person who seeks shelter will find a home. Let's continue our work to guarantee that when someone is fleeing the terrible threat of a violent family hand we offer nothing but open arms. For this reason, my budget includes funding to continue to expand our shelter capacity.
[applause]

Janet Napolitano:
Next, we will continue our work to protect Arizona seniors. The number of Arizonans over the age of 85 is going to double in the next 15 years. Already thousands of Arizona citizens receive long-term care because of age or disability. Most of the facilities and caregivers in our state provide wonderful, attentive and compassionate care. Yet, there are still too many incidences of abuse and neglect. Today I have issued an executive order to crack down on long-term care abuse and neglect and reward facilities that provide the best care. We will focus on nursing homes in the first year where the risk of a problem going unnoticed by a family member or friend is greatest. Followed by assisted living in the second year, and community care in the third. We will also make sure the public is informed. By July of this year, we will post quality ratings on my website for every nursing home in the state.
[applause]

Janet Napolitano:
And as we think of our seniors, let's not forget our veterans who have served our country. My budget includes funding to continue to increase the number of veteran benefits counselors so we can ensure that the men and women of our military receive all the help they deserve and have earned. [applause]

Janet Napolitano:
This ongoing work combined with education, foundation, innovation, is my vision for the Arizona of the future. The things I have outlined are not extravagances. They are necessities for a rapidly growing state. And while this plan recognizes strategic investment, it also continues the permanent tax cuts we passed last year and keeps our rainy day fund intact. [applause]

Janet Napolitano:
It is a privilege to be allowed to serve Arizona for another four years. When I was inaugurated to my first term in 2003, the theme of that day was many lands, many peoples, many faiths, one Arizona. Last week, I spoke about reflecting on our past. Building for our future. Today, I see that one Arizona in my mind and believe it in my heart. Like many of you, I made the decision to come here to this extraordinary place of innovation, opportunity, and natural beauty and to make it my home. Many more people are joining us. Let's welcome them and be careful and smart about how we make way for them. We are stewards. This place of exceptional beauty is not ours to own. It is only ours to care for, for the time we are here. Let's do it well together. It is one Arizona. It is our Arizona. Thank you.
[applause]

Michael Grant: Shortly after the governor's address, Republican leadership offered its response.

Tim Bee:
Well, thank you all for coming here today. I think that the governor presented a very positive message today that spoke a lot about the growth of Arizona and the things to expect and plan for as we grow. There are many things in her message that I believe we will agree with. Some of those include things such as transportation infrastructure and funding, the need to pay our teachers well and improve education system. We particularly were pleased with the statements about getting AIMS results back quickly for the students. We are pleased to hear things about continuing to work with efforts on border security. And we were pleased to hear about the efforts to attract and bring in business to the state of Arizona. A couple of areas where I think certainly were lacking in details is payment for those. We expect to see those in her budget proposal later this week. We know we are starting off with a structural deficit of about $400 million. And so we are anxious to see how the governor proposes to pay for all of the items without increasing taxes, but we should get the details later in the week. We also notice a lack of discussions about tax reductions. We know that in order to foster a business environment and climate that is healthy for the citizens of Arizona and for small business to develop here as she spoke about it is important to have a tax structure to do that.

Jim Weiers:
I would echo the president's sentiments. The governor's message was pretty much on point it was positive. I don't believe there is a whole lot in there that anybody can take exception for. Everybody wants to see Arizona move forward in a positive way. I guess the devil will be in the details. And only after Friday when we get the governor's proposed budget can we at that point figure out how she is going to do all the wonderful things that she has done. We have quite an extensive shopping list. We just simply don't have the money as presented on how to pay for that list. We are quite anxious. In fact I think myself more than anybody would be very anxious to see how the governor proposes to do all these wonderful things.

Michael Grant:
Tomorrow night on "Horizon," Republican leadership will join us to talk about the republican agenda for this year's legislative session. Joining us now to give their impressions of the governor's address, Chuck Coughlin, the founder and president of HighGround, a public affairs and lobbying company here in Phoenix, and John Loredo, former state legislator and a political consultant for Tequida and Gutierrez.

Michael Grant:
Gentlemen, thanks for being here.

Chuck Coughlin:
Thank you, mike.

Michael Grant:
Well, Chuck, what do you think? I will offer one comment, you know, the governor had been basically doing about 33, 34 minutes. That is ten minutes longer. This is a 43-44 minute speech.

Chuck Coughlin:
Yea, She had quite a laundry list of items, as the speaker spoke to at the end of the remarks there. There was a few policy plant the flag issues, but a lot of smaller efforts, legislative efforts which I think she feels passionately about and see how the legislature responds to those.

Michael Grant:
John what do you think? What was your reaction?

John Loredo:
Well, she really builds upon the issues that made her such a popular governor. They are issues that I think mainstream Arizonans really, they will really support education in children and innovation and those things are exciting for people to hear.

Michael Grant:
Certainly one of the longest applause lines came when she suggested the increase teacher minimum pay from $30,000 to $33,000. That also could, I guess, be one of the more expensive aspects of the proposal. Still, I think there should be fairly good legislative support for the concept. Maybe some messing around with the details.

John Loredo:
Sure, I mean if you raise the bar for student achievement you also have to pay teachers what they are worth. If you expect more from kids, you have to expect more from teachers. And to recruit the good teachers to Arizona and keep them here you have to pay a livable wage.

Michael Grant:
I know one of the things that always comes up is local control. And, in fact, last time when the legislature acted positively on this last time, Chuck, but did not go so far as to tell the districts what they had to do but sort of strongly suggested they do it.

Chuck Coughlin:
Yeah, you have numerous school districts around the state that, you know, you could pour money into the top of the district but it doesn't get to where it is supposed to be going a lot of the time because they have autonomous control at local school district levels. So the devil is, as the speaker said, is in the details. While it may be a great policy goal, as john says, to pay teachers that minimum salary, achieving that on a uniform statewide basis with the current form of governance of local schools is a challenge.

Michael Grant:
I think the second longest applause line was on the $400 million for highway construction. And was that reference to, we are not going to raid the rainy day fund. Was that kind of a slap at Senator Bob Burns' proposal?

Chuck Coughlin:
At least a reference to it. At least a reference to it .Senator Burns has offer a bill that will be heard in senate appropriations tomorrow which has a $300 million price tag on it, but his funding of that transportation called STAN funding to increase the pace at which we build projects around the state would use funds out of the rainy day fund, which a lot of conservatives feel, you know, why do we have a rainy day fund, we ought to be using the funds in state government to be using the important state projects. It was one of the most popular things that the legislature did last year. The governor agreed with it and I think they are going to go back to that well and try to figure out how to do it again.

Michael Grant:
She, of course, suggests that instead of limiting your bonding to 20 years you limit it to 30 years. Kind of like, you know, lowering your house payment by lengthening the length of the mortgage. Those kinds of financing techniques sometimes find an audience over at the legislature, don't they, John, a fairly cheap way to go?

John Loredo:
They do. I can picture the analysts and members scrambling to figure out what she is talking about here. But, you know, if you can push it out a little bit, it may seem a little more attractive because that leaves the other $450 million that Bob Burns wanted to use, leaves it in the rainy day fund, which I think people kind of prioritize, especially ones that can remember four years ago when the economy went south and bad cuts had to take place.

Michael Grant:
Seems one of the most expensive things that she proposed though was the expansion of the access kids care coverage to children who are in families up to $60,000 a year. That can be a chunk of change.

John Loredo:
It can be. You know, the current federal poverty level that we set kids care on it has never been achieved. You have never had the program completely utilized so even raising the bar this much it will be a challenge to get that many people enrolled, but one of the hurdles obviously would be allowing schools to do outreach to try to get more people enrolled, so they kind of go together.

Michael Grant:
In fact, Chuck, that could be one of the most controversial aspects of that proposal, particularly for the conservative base in both houses of the legislature.

Chuck Coughlin:
The governor proposed limiting the gag rule which would prohibit schools from literally marketing those programs. You know, the concern on the behalf of the conservatives is we are not doing enough to stay on the basics of reading and righting and arithmetic and now ask them to do more things in which their continuous response is hey, we got enough to do already. It will be a challenge to see how that works its way through the legislature.

Michael Grant:
Were you surprised that more attention wasn't paid to the immigration issue?

Chuck Coughlin:
Well, no. I mean, man, we have beaten that pony for the last several legislative sessions and I think there is hope on the part of both Democrats and Republicans that the new Congress in Washington and the president will come up with some proposals and some new laws here shortly to secure the border, provide guest worker status and to begin to clarify some of these problems that are just intractable short of movement in Washington, D.C.

Michael Grant:
Pretty short portion of the speech, john.

John Loredo: Well, you know, I think everybody hopes that the new Democratic majority will put this on the front burner and push some type of sensible rationale immigration reform at the national level, and if that starts to move it takes the spotlight off of folks here in Arizona pushing secondary extreme measures.

Michael Grant:
Appreciate it. John Loredo, good to see you again. And Chuck Coughlin, always a pleasure. Gentlemen take care of yourselves.

Chuck Coughlin:
Thank you.

Michael Grant:
The governor gave her state of the state address and now hear Republican legislative leaders respond and talk about there focus for the new session immigration issues transportation and the states budget are a few of the topics they will discuss. Hear from leaders of the State Senate and the House of Representatives Tuesday at 7:00 p.m. On "Horizon."

Michael Grant:
Wednesday we'll hear from democratic legislators about what they are hoping in the 2007 legislative session. On Friday, of course, journalists will be back to wrap up the state of the state and the week's news events. Thank you very much for joining us on this Monday evening. I'm Michael Grant. Have a great one, goodnight.



The State of the State Address


  • A special one-hour program features the Governor's State of the State address in its entirety.
Guests:
  • Chuck Coughlin - Founder and president, HigherGround, a public affairs and lobbying company
  • John Loredo - Former state legislator and a political consultant
Keywords: Napolitano,

View Transcript
Michael Grant:
Tonight on "Horizon," Governor Janet Napolitano proposes a three-pronged approach in outlining her vision for the Arizona of the future. We will show you the 2007 State of the State Address in its entirety. And a response to the address by the Republican leaders. Good evening. I'm Michael grant. Welcome to "Horizon."

Michael Grant:
The 48th Legislative session begins today, set into motion by Governor Janet Napolitano's state of the state speech. For the fifth time she laid out her agenda before a joint session of the state legislature. In what she called a "roadmap to a successful 21st century Arizona," she listed education, foundation and innovation as the priorities she believes will achieve her goals this year. In this special one-hour "Horizon," we will bring you the State of the State speech in its entirety, followed by the Republican response and then a discussion with a couple political experts on the implications of the address. First, Governor Janet Napolitano and her 2007 State of the State Address.

Janet Napolitano:
It is my privilege today to stand before you to report on the state of our state. And as we reflect on our past, and think about how we build our future, I am pleased to tell you that the state of Arizona is strong! [applause]

Janet Napolitano:
I believe this independent, confident, growing state of ours can be even stronger. It can become the one Arizona that I spoke of at the inaugural. A state and a state of mind that fits the hopes and dreams of our people. A state where our children and our children's children can thrive in an ever more challenging 21st century. We are building this one Arizona of the future during a time of great and rapid change. It demands that we ask ourselves at every turn, why do we do the things the way we do? Is that the best way? Or just the way we have always done it? I believe Arizona has been and needs to be a state of innovation where we don't do the usual or the ordinary. A state where we recognize our problems and find new ways to fix them. So today, I want to focus on where we go from here. Where we will take Arizona in the 21st century. There are three components to this one Arizona plan. The keys to making our state stronger than it has ever been. The first key is education. To guarantee that every young person who graduates from Arizona schools is truly prepared for a world of competition and innovation. [applause]

Janet Napolitano:
The second is foundation. And by foundation, I mean more than bricks and mortar. Foundation includes the entire physical infrastructure of our state, our transportation and water systems, the way we handle the quality of our air and our lands. It also includes the basic requirements our families depend upon -- housing, healthcare, and quality of the places we live. The third key is innovation. Our success will depend upon our ability to innovate and come up with new solutions to old-age problems. Solutions that will empower Arizona to propel itself forward. We need to cultivate and stimulate new technologies, new markets, and new approaches to the way we will grow and change. The heart of my plan is the one Arizona education initiative. Arizona students no longer compete only against each other. To thrive in the 21st century, they must be able to hold their own in the world. Business Horizons are wider than they have ever been. Jobs require more students than ever to be prepared for high-skilled professions and Arizona graduates need to be able to think through challenges and propose solutions that are creative and clear. There are a few standards we must insist upon. Every student must enter school safe, healthy, and ready to learn. Every third grader must read at grade level. Every eighth grader must be prepared to take and pass algebra and every high school senior must graduate prepared for work and post secondary educations in the 21st century.
[applause]

Janet Napolitano: Everything we do in education must be directed toward these goals. So let's begin with entering school safe, healthy and ready to learn. With your support, we have already instituted voluntary all-day kindergarten and extensive reforms in child protective services. This year, we will also begin implementing the early childhood learning programs approved by Arizona voters in proposition 203. Now, in addition to that work, we need to tackle the issue of health insurance for children.
[applause]

Janet Napolitano:
Only five states have a higher rate of children without health insurance. We owe it to our children to do better. We owe it to their futures. Children with health insurance perform better in school, children with health insurance are more likely to get regular checkups and low cost preventive care, which means they are much less likely to visit an emergency room or end up in the hospital, which saves money. It is a good investment. More important, it is the right thing to do. Here is my plan: this year we will make sure that every Arizona child under the age of 19 and whose family makes less than $60,000 per year has affordable healthcare through access and our kid's care program. [applause] 5

Janet Napolitano:
There is one problem. We have an estimated 100,000 children who are eligible for access or kid's care but have never been signed up because their parents don't know about it. Even though the main places uninsured children are found is at school, we have an outdated law that keeps us from doing simple outreach there. That makes no sense. I call on you to repeal the gag rule and let teachers talk to parents so that our children get the healthcare they deserve. [Applause] Once our children are in school and healthy we need to modernize our classroom curriculum. Science and math education are lynchpins of success in the knowledge economy. Business tells us this. Common sense tells us this. So let's listen. Arizona currently requires two years of math and high school. Let's make it four. Let's also increase learning about technology and how to use it. Our science programs teach memorization. Let's teach understanding and analysis. We set the standards so let's set them in a way that enhances our hopes and dreams and gives our children nothing less than the very best. One Arizona education initiative requires four years of math, three years of science, a solid grounding in language arts, civics and the fine arts. Today I ask the state board of education to adopt these standards so that educators statewide bring the 21st century skills into the classroom.
[applause]

Janet Napolitano:
From our educators, we need a new emphasis throughout our school system that encourages curiosity, discovery, and invention. We want technology embedded in our schools. To enhance the learning process and to improve students' understanding of it. We need specialized environments for students who are especially gifted or just especially interested in particular areas of study like advanced math, bioscience, information technology, civics and language. We also need specialized environments for students who need additional help or who do not do well in a standard classroom and we must support out- of-school time for hands-on activities such as science fairs and robotics clubs so that students can apply their learning in an experiential way. And to ensure that we reach a readiness in the high school graduates, we need new ways to engage them in learning, individualize their learning path and make sure what they learn is what is aligned with the job market. To educators, I say we will continue to invest in k-12 education. But you must reinvent what you are doing and ensure that we are not simply repeating things the way we have always done. We must change our learning environment to match 21st century needs, and we must do so quickly.
[applause]

Janet Napolitano: To ensure we know how our students are doing and to detect problems early, we need to change the way we test. It is time to stop testing for the sake of the test. We need to use tests the way they are supposed to be used -- to measure how well a student is doing in a given subject and make sure students who need extra help get it right away. Right now, students tested in the spring don't get results until they are on summer vacation. Well, that kind of testing fails my most important test, the common sense one. There is a better way to do AIMS. We need to get results to teachers, students and parents in real time so we can help students in real time. Nothing else suffices. [applause]

Janet Napolitano:
Next, let's tackle the age for graduation. Today we require young people to remain in school only until they are 16. That is a system that made sense 100 years ago when there were no calculators, let alone computers, when doctors had no x-rays, let alone genetic tests, and when there was no national phone system, let alone an internet. In those days, a high school graduate could expect to find a decent job. Those days are gone. Of jobs that pay a realistic livable wage in Maricopa County, less than 2\% are available to those with only a high school diploma. Less than 2\%. My one Arizona education initiative would raise the dropout age from 16 to 18 and make funds available for tutoring, mentoring, and special services to get the at-risk students back on track. The work force demands better graduates and more of them. Let's keep these young people in school and give them the real skills for a real chance at success in life. Let's do that.
[applause]

Janet Napolitano:
Let's turn now to our teachers. I said last year and I repeat this year, aside from the immediate family, there is no more solid predictor of a child's classroom success than the presence of an excellent teacher. We made progress last year by providing raises for our teachers, but we have much more to accomplish. Nobody is ever going to get rich as a teacher, that is not why people choose public service, but nobody should have to go poor as a teacher. As part of the one Arizona education initiative, I propose that for this year we install a statewide minimum starting teacher pay of $33,000.
[applause]

Janet Napolitano:
That we provide raises beyond that and that we offer additional salary incentives for teachers in areas where we especially need them.
[applause] 9

Janet Napolitano:
These incentives should attract teachers who are sharp in the areas we expect them to teach. And to keep sharp teachers of any subject in the classroom, we need to reward them for their performance, mentor them and provide continuing teacher education statewide. Therefore, I propose in this initiative a package of financial incentives to find, train, and keep teachers who can successfully create a cutting edge learning environment for their pupils, and that environment also includes the buildings themselves. [applause]

Janet Napolitano:
At the rate we are growing, we are going to have to build more schools, build them faster and build them better. School campuses should be approach appropriate settings for students to learn and go. No student should become a lost number isolated from teacher interaction. That is why I have by executive order asked the director of the school facilities board to work with school districts to build schools for the future, thereby providing an educational environment for our children to learn and compete in the 21st century.
[applause]

Janet Napolitano:
Finally, we must raise expectations for our students. As I have said, graduation from high school is no longer good enough. Students need training beyond that. Be it technical education, community college, or university study. Our challenge is to keep that advanced education accessible, affordable and excellent. To that end, in my budget I will propose the highest ever general fund contribution to state financial aid, especially in light of recent tuition increases.
[applause]

Janet Napolitano:
Excellent teachers are as important at the college level as they are in elementary and high school. So I will also propose increased funding to allow our universities to recruit and retain world class faculty and to graduate more students faster.
[applause]

Janet Napolitano:
My budget also will include additional funding for the biomedical campus in Phoenix. This funding will put us in a position to generate more doctors quickly and with the medical school and key medical research and education initiatives including the University of Arizona college of pharmacy, Northwestern Arizona University allied health program, and an expanded telemedicine program for our rural area. We will also create a new college of construction to educate the next generation of construction managers we so desperately need.
[applause]

Janet Napolitano:
With such significant investment in our universities, I expect accountability. Our universities must continue to increase the number of graduates, especially in the areas we need most -- teachers, healthcare professionals, engineers, researchers, and the list goes on. With this one Arizona education initiative, the return on our investment will be profound. In the innovation economy, knowledge is everything and the modern school is its crucible. Our schools must be exciting and driven by new ethic of discovery and curiosity. They must be led by teachers who are highly regarded and well compensated and they will produce graduates who will thrive in an economy where creativity, ingenuity and adaptation are the rules for the game. For this vibrant new education system to flourish, we must have strong communities to support it. We must be vigilant in our work to ensure that rapid growth is smart growth. So let's turn now to foundation. Arizona is growing, developing, and changing at such a rapid pace it would be hard to imagine it if we weren't experiencing it. Since 1990 our population has already grown by 65\% and is expected to nearly double in just over twenty years. By the time I finish this speech, there will be 20 new Arizonans. And population growth is just one part of the change we are experiencing. Our economy is poised for a similar transformation. From one that relies on labor and sunshine to one that runs on knowledge and innovation. To create the bedrock that will support our 21st century communities and economy, I am proposing a series of strategies that will build to protect what we call infrastructure. But I want you to think of that
word in a larger sense. It includes roads, water supply, and land preservation. It also includes housing, healthcare and careful coordinated growth planning. I'll begin with transportation. How we get from point a to point b. And as I have said, Arizona is the fastest growing state in the union. And although we cut taxes last year, there is still one that needs to go. It is the time tax we pay every time we sit stuck in traffic that should be moving. It is an especially onerous price to pay because it cuts into what we value most, our time with our families, our friends, time spent at home and in our communities. Last year we agreed to direct an additional $300 million toward accelerating highway construction. With these new moneys we have been able, for example, to speed up work for new lanes on I-17 north of Phoenix and on I-10 in Pima and Pinal counties. Now, by changing the way we structure existing bonds we can raise money this year for critical transportation projects and do even more. By simply extending the terms from 20 to 30 years, we will free up more than $400 million above our current budget to relieve traffic congestion. I ask -- [applause]

Janet Napolitano:
I ask this legislature to support this idea and cut the time tax.
[applause]

Janet Napolitano:
We also need to explore transportation innovations. Today I am directing the Arizona department of transportation to provide for us within the next 90 days a list of options for mass transit including commuter rail and light rail so that this can be part of our transportation planning as we grow.
[applause]

Janet Napolitano:
With our population growth, water management is essential. This legislature should pass laws giving our counties and cities tools to incorporate more water planning into their growth decisions. You should give local communities the ability to restrict wildcat subdivisions, to limit development where there is no assured water supply and to address the problem of exempt wells.
[applause]

Janet Napolitano:
My budget continues the assistance and research provided through the new Arizona water institute. Part of that research should be continued innovation in water conservation techniques and technologies and we will continue to fight for our fair share of Colorado River water.
[applause]

Janet Napolitano:
To make sure our fast-growing communities can afford the water infrastructure they need, I am issuing an executive order directing the departments of environmental quality and commerce to provide longer term 30 year financing through a partnership between the water infrastructure financial authority and greater Arizona development authority. This approach will save communities millions in interest payments while providing safe drinking water and protecting our precious water resources.
[applause]

Janet Napolitano:
We must also protect the quality of our air. More people mean more development and more traffic, which has a bad effect on air quality. In Arizona last year, there were more pollution warnings issued than ever before. Anyone who suffers or who has a child who suffers with asthma knows how bad that can be. Last year, we took several big steps in the right direction. For the first time ever we now have state rules to control hazardous air pollution emissions and mercury emissions. I signed the climate change executive order to fast track Arizona towards reducing greenhouse gas emissions. It is aggressive [applause]

Janet Napolitano:
It is aggressive because we need to be. By 2020, these gases unchecked could easily double beyond 1990 levels. Because of that order, all new state vehicles must now meet low greenhouse gas standards or use e85 fuels. Weights and measures is working on new standards for fuels like biodiesel blends that will help clear our air and my climate change executive committee has been charged with implementing specific steps to reduce greenhouse gas emissions by 2012. Every step we take toward greater fuel efficiency and using different types of fuels also takes us closer to reducing our dependence on foreign oil.
[applause] 15

Janet Napolitano:
To build on that progress, today I have signed a new executive order requiring the state to take further concrete steps to improve air quality. It demands, among other things, that all projects on state property reduce the amount of particulates and ozone causing pollutants they release into the air and now when the state enters into new contracts involving the use of heavy equipment incentives will go to those contractors that use newer cleaner fuel technologies.
[applause]

Janet Napolitano:
In addition to protecting our air quality, we must also protect our access to open space, particularly in our urban counties. Without state trust land reform, our ability to protect these lands for their conservation values may be in question. And we need time to find the answers. In the meantime, let me assure those communities that have reclassified trust lands under the Arizona preserve initiative we will not move the lands to market for other than conservation purposes without local consent. [applause]

Janet Napolitano:
We also must address our healthcare infrastructure. Last year I spoke to you about the need to increase the number of doctors and nurses working in Arizona. The problem remains acute. Particularly in the rural parts of our state. One answer is to grow our own doctors and nurses. We have made a good start with the new medical school and expanded nursing programs across the state. Indeed, Arizona State University now is home to the largest nursing school at any public university in the country.
[applause]

Janet Napolitano:
We have also learned that doctors tend to stay in the place where they train. To attract doctors here, I propose increasing our total investment in graduate medical education to $44 million.
[applause]

Janet Napolitano:
This is a smart way to draw more physicians to Arizona during residencies which in turn should mean more doctors where we need them. There are licensing issues that can be difficult for doctors to navigate when they move here. Today I'm directing access for a physician recruitment office to give them a hand. I ask this legislature to pass prompt pay legislation so we can fund the office with increased fines on health insurance companies who do not pay their claims on time.
[applause]

Janet Napolitano:
It's a good deal. No new money and a great positive payoff. To round out this work on our foundation, we need to offer housing that is within reach both geographically and financially. Strong communities build up around family homes, but for young families getting into the first house is becoming harder and harder to do. We need to put more home ownership within their reach. I have directed the Arizona department of housing to increase financial assistance to first-time rural home buyers through the homes for Arizonans program. I have allocated $1 million to find creative housing solutions at the center of our communities rather than further sprawl at the edges. And we will also double our investment in home buyer education including an online version. For most people, a home is the biggest investment they will ever make. By providing them with home buying and home maintenance skills we reduce the chance of foreclosure by 20\%. We have done a great deal of work to build and rehabilitate homes on tribal land. This year I also set aside another $2.5 million for tribal housing needs statewide.
[applause]

Janet Napolitano:
Collaboration with tribes on growth issues is essential to our success. Not long ago, several tribes AK-Chin, Gila River, Fort McDowell, Salt River, thought of themselves as rural tribes. Today, they face development on all sides. And their decision and ours must be aligned. These growth issues: transportation, water, public lands and more -- are complex issues that need a comprehensive coordinated approach. Last year, I created the growth cabinet, a group that includes the directors of agencies that deal with growth-related issues. Now, by executive order I'm expanding the scope of my growth cabinet. It is now their job to ensure that all agencies of state government are working together on critical growth issues. For example, creating a water development fund for rural Arizona. And ensuring that infrastructure is built in a manner that contemplates the effects of development on our water quality, air quality, and wildlife. More than that, the growth cabinet will work with cities, towns, counties and tribal communities so that our efforts build on each other's. Today, I have directed the growth cabinet to develop within 120 days an implementation plan for a smart growth and development process. Future state discretionary funds will be made available only to local governments hat agreed to participate in this process.
[applause]

Janet Napolitano:
And this condition should apply to the additional $400 million for highway construction I have proposed today. Because as I have traveled Arizona, I have heard from thousands of you expressing the same message -- the way we grow has to change. You live, work and educate your children in communities that are growing so rapidly they do not have the necessary infrastructure to create the quality of life that you demand and that you expected when you made Arizona your home. For example, one community got a new school, what they didn't get was a road to get to the school. This has to stop. This has to stop. And the measures I just outlined are designed to do just that. Face it, Arizona is going to continue to grow. The question is how we grow so that we Arizonans have a high quality of life. Let's turn now to the third key to our future. Innovation. Nothing will be more important to our success than our ability to innovate. Wonder and then imagine. Invent and then to build. We have done a lot to enhance innovation over the last four years. We cut taxes to encourage investment in new businesses and technologies and to encourage existing businesses to expand in Arizona. We invested in research and development that is focused on using technology to make a difference in people's lives. But innovation by definition is a what have you done for me lately discipline. You don't get to stop and rest on your laurels. If you do, somebody else is going to innovate you out of business. In the coming year, our job is to magnify Arizona's innovation capacity. We are going to lay a foundation that will increase our ability to create and lead the industries of the future. To do that, we have to invest in community infrastructure and local business developments so we create an environment that attracts high wage businesses. Allows thinkers and entrepreneurs to flourish and cultivates success. It was my honor recently to be elected by my republican and democratic peers alike to serve as chair of the national governor's association.
[applause]

Janet Napolitano:
As chair, I'm leading an effort by the nation's governors to develop ideas and strategies that will strengthen America's ability to innovate and compete. And the best part about this effort is that it enables us to showcase Arizona and Arizona's innovations because we are doing so much right here at home. But I'm also picking up good ideas from across the country that we can and should consider here. And some of them are part of my plan to take Arizona to the next level. A plan I call innovation Arizona. The cornerstone of innovation Arizona is a global competitiveness innovation initiative that will focus on expanding access to high tech high wage success. First, we need a different economic and job creation strategy, making sure different means better and globally competitive. The essential factors must be integration, coordination, flexibility and strategic focus. We must modernize the department of commerce and develop a coherent investment strategy. The result should be an Arizona that attracts and creates jobs in innovative high growth industries. Expands global investment in trade and supports strategic research and development. Second, we will begin to restore Arizona's innovation investment fund. The commerce and economic development commission has a strategic investment fund that has been used recently to pay for the agency operations rather than to jump start businesses across our state. Product development cycles are moving so much more quickly today than ever before which means startups and existing businesses alike need to train workers just as quickly and modify infrastructure in order to keep up. Small and rural communities in particular are hard pressed to stay ahead of the latest developments as they diversify economies. The right investment at the right time can make all the difference and can literally be the difference between the creation of the next Microsoft and an inventor whose product never leaves the drawing board in his garage. That is why it is time for us to put the C.E.D.C. Investment fund back in business.
[applause]

Janet Napolitano:
let's make sure -- let's make sure every Arizona inventor of small business has access to the capital needed to make sure the birthplace of the next Microsoft is right here at home.
[applause]

Janet Napolitano:
Third, we will launch a global effort to bring new highways jobs to Arizona by attracting non-U.S.-based companies to locate or expand their operations here. Jobs associated with international trade and foreign investment pay more. Arizona has some of the most highly skilled workers in the world coupled with a business climate that is second to none. Our research institutions are leading the way in stem cell research, genomics, optics, water technology and more. Together that makes Arizona a nearly irresistible destination for foreign investment. Right now the international business community doesn't know us very well. And here is what I have to say to the world. It is time to wake up to an Arizona that is leading the nation in innovation. And we will send this message by developing a global brand for our state. We are going to take it on the road and to the air to bring businesses and foreign investment home. Call it in sourcing. Let's do that.
[applause]

Janet Napolitano:
Finally, innovation Arizona is going to continue to build on the work we have begun to transform Arizona into a center of research by continuing the necessary funding to foster science foundation Arizona to success. [applause]

Janet Napolitano:
Education, foundation, innovation -- it is a roadmap to a successful 21st century Arizona. It is more than achievable. It is essential as we continue to move Arizona forward. And every item I have mentioned today, every initiative, every plan can be accomplished without raising taxes one thin dime.
[applause]

Janet Napolitano:
It is my job to present a balanced budget to this legislature, and later this week I will do that just as I have done for each of the past four years. And it is important to remember that as we work on this plan for one Arizona, we must continue the important work we have already begun. We have tightened our border by asking the federal government to pay for National Guard presence there. Today, operation jump start is working. And I thank Congress and President Bush for their support. But don't forget, the security of the international border is the job of the federal government. And Congress has not yet completed the necessary comprehensive reform of our immigration system we so desperately need. And for that reason, we cannot let up on the border initiatives we have begun and that are working in Arizona. There are three things human smuggling rings rely on more than anything else -- stolen cars, fake I.D's and gangs. The department of public safety auto theft and homeland security document task forces have been integral to our success over the last four years and it is time to expand their numbers and their reach. I'm very proud, the state department of public safety has pioneered the use of advanced license plate reader technology that vastly improves our ability to detect stolen vehicles used by human smugglers and to arrest the people who are driving them, often stopping the crime in the process. I propose we expand the reader program so it becomes a tool for crime fighting in every part of the state.
[applause]

Janet Napolitano:
We are also going to use millions of dollars in federal funds to equip our borders and border guards with the latest detection technology including new radars and new sensors. We will continue to expand the reach of GITEM to attack the gangs plaguing our border communities and we are modernizing the crime labs so that the science of DNA will remove any shelter for criminals. Unfortunately, all the work we do to secure our borders will never protect our people from threats inside their own homes. When domestic violence casts a shadow over a home, the first thing we must do is offer its victims somewhere safe to go. Last year --
[applause]

Janet Napolitano:
Last year, I asked all of you to join me in a simple vow, to say that here in Arizona every person who seeks shelter will find a home. Let's continue our work to guarantee that when someone is fleeing the terrible threat of a violent family hand we offer nothing but open arms. For this reason, my budget includes funding to continue to expand our shelter capacity.
[applause]

Janet Napolitano:
Next, we will continue our work to protect Arizona seniors. The number of Arizonans over the age of 85 is going to double in the next 15 years. Already thousands of Arizona citizens receive long-term care because of age or disability. Most of the facilities and caregivers in our state provide wonderful, attentive and compassionate care. Yet, there are still too many incidences of abuse and neglect. Today I have issued an executive order to crack down on long-term care abuse and neglect and reward facilities that provide the best care. We will focus on nursing homes in the first year where the risk of a problem going unnoticed by a family member or friend is greatest. Followed by assisted living in the second year, and community care in the third. We will also make sure the public is informed. By July of this year, we will post quality ratings on my website for every nursing home in the state.
[applause]

Janet Napolitano:
And as we think of our seniors, let's not forget our veterans who have served our country. My budget includes funding to continue to increase the number of veteran benefits counselors so we can ensure that the men and women of our military receive all the help they deserve and have earned. [applause]

Janet Napolitano:
This ongoing work combined with education, foundation, innovation, is my vision for the Arizona of the future. The things I have outlined are not extravagances. They are necessities for a rapidly growing state. And while this plan recognizes strategic investment, it also continues the permanent tax cuts we passed last year and keeps our rainy day fund intact. [applause]

Janet Napolitano:
It is a privilege to be allowed to serve Arizona for another four years. When I was inaugurated to my first term in 2003, the theme of that day was many lands, many peoples, many faiths, one Arizona. Last week, I spoke about reflecting on our past. Building for our future. Today, I see that one Arizona in my mind and believe it in my heart. Like many of you, I made the decision to come here to this extraordinary place of innovation, opportunity, and natural beauty and to make it my home. Many more people are joining us. Let's welcome them and be careful and smart about how we make way for them. We are stewards. This place of exceptional beauty is not ours to own. It is only ours to care for, for the time we are here. Let's do it well together. It is one Arizona. It is our Arizona. Thank you.
[applause]

Michael Grant: Shortly after the governor's address, Republican leadership offered its response.

Tim Bee:
Well, thank you all for coming here today. I think that the governor presented a very positive message today that spoke a lot about the growth of Arizona and the things to expect and plan for as we grow. There are many things in her message that I believe we will agree with. Some of those include things such as transportation infrastructure and funding, the need to pay our teachers well and improve education system. We particularly were pleased with the statements about getting AIMS results back quickly for the students. We are pleased to hear things about continuing to work with efforts on border security. And we were pleased to hear about the efforts to attract and bring in business to the state of Arizona. A couple of areas where I think certainly were lacking in details is payment for those. We expect to see those in her budget proposal later this week. We know we are starting off with a structural deficit of about $400 million. And so we are anxious to see how the governor proposes to pay for all of the items without increasing taxes, but we should get the details later in the week. We also notice a lack of discussions about tax reductions. We know that in order to foster a business environment and climate that is healthy for the citizens of Arizona and for small business to develop here as she spoke about it is important to have a tax structure to do that.

Jim Weiers:
I would echo the president's sentiments. The governor's message was pretty much on point it was positive. I don't believe there is a whole lot in there that anybody can take exception for. Everybody wants to see Arizona move forward in a positive way. I guess the devil will be in the details. And only after Friday when we get the governor's proposed budget can we at that point figure out how she is going to do all the wonderful things that she has done. We have quite an extensive shopping list. We just simply don't have the money as presented on how to pay for that list. We are quite anxious. In fact I think myself more than anybody would be very anxious to see how the governor proposes to do all these wonderful things.

Michael Grant:
Tomorrow night on "Horizon," Republican leadership will join us to talk about the republican agenda for this year's legislative session. Joining us now to give their impressions of the governor's address, Chuck Coughlin, the founder and president of HighGround, a public affairs and lobbying company here in Phoenix, and John Loredo, former state legislator and a political consultant for Tequida and Gutierrez.

Michael Grant:
Gentlemen, thanks for being here.

Chuck Coughlin:
Thank you, mike.

Michael Grant:
Well, Chuck, what do you think? I will offer one comment, you know, the governor had been basically doing about 33, 34 minutes. That is ten minutes longer. This is a 43-44 minute speech.

Chuck Coughlin:
Yea, She had quite a laundry list of items, as the speaker spoke to at the end of the remarks there. There was a few policy plant the flag issues, but a lot of smaller efforts, legislative efforts which I think she feels passionately about and see how the legislature responds to those.

Michael Grant:
John what do you think? What was your reaction?

John Loredo:
Well, she really builds upon the issues that made her such a popular governor. They are issues that I think mainstream Arizonans really, they will really support education in children and innovation and those things are exciting for people to hear.

Michael Grant:
Certainly one of the longest applause lines came when she suggested the increase teacher minimum pay from $30,000 to $33,000. That also could, I guess, be one of the more expensive aspects of the proposal. Still, I think there should be fairly good legislative support for the concept. Maybe some messing around with the details.

John Loredo:
Sure, I mean if you raise the bar for student achievement you also have to pay teachers what they are worth. If you expect more from kids, you have to expect more from teachers. And to recruit the good teachers to Arizona and keep them here you have to pay a livable wage.

Michael Grant:
I know one of the things that always comes up is local control. And, in fact, last time when the legislature acted positively on this last time, Chuck, but did not go so far as to tell the districts what they had to do but sort of strongly suggested they do it.

Chuck Coughlin:
Yeah, you have numerous school districts around the state that, you know, you could pour money into the top of the district but it doesn't get to where it is supposed to be going a lot of the time because they have autonomous control at local school district levels. So the devil is, as the speaker said, is in the details. While it may be a great policy goal, as john says, to pay teachers that minimum salary, achieving that on a uniform statewide basis with the current form of governance of local schools is a challenge.

Michael Grant:
I think the second longest applause line was on the $400 million for highway construction. And was that reference to, we are not going to raid the rainy day fund. Was that kind of a slap at Senator Bob Burns' proposal?

Chuck Coughlin:
At least a reference to it. At least a reference to it .Senator Burns has offer a bill that will be heard in senate appropriations tomorrow which has a $300 million price tag on it, but his funding of that transportation called STAN funding to increase the pace at which we build projects around the state would use funds out of the rainy day fund, which a lot of conservatives feel, you know, why do we have a rainy day fund, we ought to be using the funds in state government to be using the important state projects. It was one of the most popular things that the legislature did last year. The governor agreed with it and I think they are going to go back to that well and try to figure out how to do it again.

Michael Grant:
She, of course, suggests that instead of limiting your bonding to 20 years you limit it to 30 years. Kind of like, you know, lowering your house payment by lengthening the length of the mortgage. Those kinds of financing techniques sometimes find an audience over at the legislature, don't they, John, a fairly cheap way to go?

John Loredo:
They do. I can picture the analysts and members scrambling to figure out what she is talking about here. But, you know, if you can push it out a little bit, it may seem a little more attractive because that leaves the other $450 million that Bob Burns wanted to use, leaves it in the rainy day fund, which I think people kind of prioritize, especially ones that can remember four years ago when the economy went south and bad cuts had to take place.

Michael Grant:
Seems one of the most expensive things that she proposed though was the expansion of the access kids care coverage to children who are in families up to $60,000 a year. That can be a chunk of change.

John Loredo:
It can be. You know, the current federal poverty level that we set kids care on it has never been achieved. You have never had the program completely utilized so even raising the bar this much it will be a challenge to get that many people enrolled, but one of the hurdles obviously would be allowing schools to do outreach to try to get more people enrolled, so they kind of go together.

Michael Grant:
In fact, Chuck, that could be one of the most controversial aspects of that proposal, particularly for the conservative base in both houses of the legislature.

Chuck Coughlin:
The governor proposed limiting the gag rule which would prohibit schools from literally marketing those programs. You know, the concern on the behalf of the conservatives is we are not doing enough to stay on the basics of reading and righting and arithmetic and now ask them to do more things in which their continuous response is hey, we got enough to do already. It will be a challenge to see how that works its way through the legislature.

Michael Grant:
Were you surprised that more attention wasn't paid to the immigration issue?

Chuck Coughlin:
Well, no. I mean, man, we have beaten that pony for the last several legislative sessions and I think there is hope on the part of both Democrats and Republicans that the new Congress in Washington and the president will come up with some proposals and some new laws here shortly to secure the border, provide guest worker status and to begin to clarify some of these problems that are just intractable short of movement in Washington, D.C.

Michael Grant:
Pretty short portion of the speech, john.

John Loredo: Well, you know, I think everybody hopes that the new Democratic majority will put this on the front burner and push some type of sensible rationale immigration reform at the national level, and if that starts to move it takes the spotlight off of folks here in Arizona pushing secondary extreme measures.

Michael Grant:
Appreciate it. John Loredo, good to see you again. And Chuck Coughlin, always a pleasure. Gentlemen take care of yourselves.

Chuck Coughlin:
Thank you.

Michael Grant:
The governor gave her state of the state address and now hear Republican legislative leaders respond and talk about there focus for the new session immigration issues transportation and the states budget are a few of the topics they will discuss. Hear from leaders of the State Senate and the House of Representatives Tuesday at 7:00 p.m. On "Horizon."

Michael Grant:
Wednesday we'll hear from democratic legislators about what they are hoping in the 2007 legislative session. On Friday, of course, journalists will be back to wrap up the state of the state and the week's news events. Thank you very much for joining us on this Monday evening. I'm Michael Grant. Have a great one, goodnight.




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