Ted Simons: Good evening, and welcome to "Arizona Horizon." I'm Ted Simons. Tonight it's "The Journalists' Round Table," moved for this week only to Thursday night instead of its usual Friday night slot. Joining us tonight, Ben Giles of the "Arizona Capitol Times." Howard Fischer of capitol media services, and Mike Sunnucks of "The Phoenix Business Journal." A three-way standoff at the state capitol. Republicans in the house and senate are at odds over budget priorities and the governor suggests any bill sent her way before a budget deal is reached will be sent back with a veto. It sounds like the kids aren't getting along.
Ben Giles: Not at all today, actually, except maybe the house and the governor's office have some sort of agreement. This morning speaker Tobin and Governor Brewer had reached a consensus on a few changes, a couple minor spending increases to the budget that the senate passed on Tuesday, which took a big red pen to what the house had passed last week. They took that to senate president Biggs, understanding and as of the end of the day, there is no deal. There is no commitment from the senate to take this deal although the house did indicate that they have the votes necessary to pass it because they assigned some numbers to a conference committee to get together and settle this once and for all.
Howard Fischer: Well, of course remember the conference committee is in fact pro forma, they actually -- Negotiations go on outside the view of us pesky journalists. Look. This is as close as they're going to get. We're talking a 9.2 billion dollar budget, and the last separation I saw between what the senate was offering and the deal that Ben was talking about is $20 million.
Ted Simons: $20 million, but there are certain things that still separate these folks. Things like -- It seems as though things like charter schools, when are you going to fully fund CPS, if you talk about numbers, you're talking about issues here.
Mike Sunnucks: Yes. CPS, charter schools are the big things. University funding where that's going to come down. Where the governor's at, we're in April, not up against it yet. It's not 100 degrees yet, so people have time for things to fall apart. That's why they're squabbling over little things. You can see a deal like this that's close fall apart at the last second because they're not up against --
Howard Fischer: But let's get serious here. We're talking about egos. We're talking about the senate president saying, literally, I came -- To saying, I haven't exactly seen what they want, I want to see it in writing, I want to see the speaker's 31 votes. The speaker is saying, we've given them most of what we've they've wanted, we've come down in our spending, the governor is concerned about this commitment to CPS funding, and we're talking about who's egos, who blinks, who looks like they've won. That's what this is all about.
Mike Sunnucks: It's motivations, too, right? The governor in her last term, does she have senioritis yet, or is she still the governor, this is one versus the whole legislature? You have a speaker running for Congress who would probably like to get on the campaign trail, and Andy Biggs, who's been probably the biggest adversary to the governor, where Medicaid fits in, and the ego fits in.
Ted Simons: And who has the best leverage. The governor has to think about what she can do the most at what point in time in the negotiations. Correct? Either now or later on, or perhaps even a special session.
Ben Giles: Exactly. And that's particularly the case with this CPS issue, is the governor has a work group meeting on Fridays to create this new division of child safety and family services, there's language they're haggling over in the budget that would determine when exactly after a budget is approved they could revisit the funding for that new agency. Because the governor has said all along we have a estimate for how much money we think we're going to need to sever this agency from the department of economic security. But we don't know exactly what it's going to need to get up on its own two feet properly. The concern is if they don't have enough funding to do it right at the start, it's going to get dragged down and be a failure just as CPS has been for so many kids.
Howard Fischer: And that goes to the issue of her legacy. This is her last term. She does not want to leave with us still writing stories in November about how the new agency has missed this many cases. She wants to make sure it has the funding. Biggs' position has been, before we reform, he calls it a toes-to-nose examination of how CPS, the old agency is functioning. Then we'll talk about the money. Well, the governor is not going to form an agency and say, oh, we'll work out the funding later. So we're down to verbiage, that's what all of us do in terms of coming up with the wording that keeps everyone happy and lets everybody think they've won.
Mike Sunnucks: There are conservatives who think governor throws money at problems and they don't think about what they're doing beforehand. So they have that legitimate concern from their perspective that we're going to create CPS, we've talked about this before, a new CPS, and they're going to change the name plate and it's going tonight same problems and we'll put even more money towards it and they still won't answer the phone.
Ted Simons: We know what the senate president thinks about all this. Are there folks in the senate who would like to go ahead and vote on this, would like to go ahead and get this done, but are afraid cross him or the caucus?
Ben Giles: Absolutely there. Are folks in the senate who think there are 16 votes, 16 Republican votes for this budget today. We could have gotten finished today, but for whatever reason, for -- Be it the ego, posturing, this is getting dragged into next week, Monday is the earliest we can come back to address. This maybe then Biggs assigns members to a conference committee and we move forward.
Mike Sunnucks: I think there's still hurt feelings from the mid cade thing. People that conservative, it's pure. You don't cross them on stuff and they still remember that. I think that play as role in the way --
Ted Simons: They crossed Tobin, the speaker of the house, and he's sitting down negotiating and getting things done.
Mike Sunnucks: He wants to be in Congress.
Ted Simons: That's true.
Howard Fischer: Here's the other problem with putting it off. One of the things we've learned from being down there all these years is that once you've got something laying out there, somebody thinks of something else they want. For example, one of the things apparently is out is chiropractic care for Medicaid recipients. Barry Aarons, the lobbyist for the chiropractors is down there trying to work his little magic, we got lobbyists for the podiatrists doing the same thing. Each of them thinking they're going to get something in at the last minute.
Ted Simons: Emergency dental care, don't forget that.
Howard Fischer: What we've got, we know we've got insulin pumping. Again, we're splitting the baby so to speak and trying to figure out how much money can we add to keep the moderates happy, to keep the governor happy, for example, the Universities are getting 2.5 million for ASU and U of A, and half a million for NAU. Is that less than what the governor requested? Sure, but it's twice as much as what the senate said they were willing to fund. We're trying to move toward that center are.
Ben Giles: And the problem with that, this is what lawmakers are telling the governor and trying -- Telling senate president Biggs today, trying to prod him forward and say, the longer you drag this out, there are going to be more complications. And they certainly don't want to be here another whole week haggling over this, haggling over issues like the chiropractic services or over district charter schools, and there were adjustments proposed to the University funding just this morning because Biggs had slashed that a little further earlier this week.
Ted Simons: With that in mind, we saw the picture of the magnificent seven, the moderates, the breakaway group, they were demanding this and that, are they getting -- What came of all that?
Howard Fischer: To a certain extent I think there was more catharsis. They were frustrated. They needed to vent. What better way to vent than come to the press room and say, do you know how we're getting screwed? Look. Most of the charter school money for the district one charter schools is back in there. The language on CPS is probably going to come around to something closer to what McGee wanted. Are they getting everything? No. But there's a lot of other folks who have their own wish list. One of the issues, this whole Prescott fire protection, does Prescott get saved from all the costs because they lost 19 firefighters and how does that affect their insurance? Lots of little pieces.
Ted Simons: Did that wind up in there?
Howard Fischer: I don't think it did. And what's interesting about that is that house speaker is from the Prescott area.
Ted Simons: Exactly.
Ben Giles: Another one of those things that was sent back to the senate in addition from the house that Biggs cut in addition to the chiropractic services and in addition to you said it was $5.5 million for Universities, that was slashed in the Biggs budget. It does get back to egos, particularly with those six holdout Medicaid expansion Republicans in the house. There are a lot of hurt feelings there, and they feel in some ways like they're being attacked by senate president Biggs in this budget.
Howard Fischer: But here's the other half of the equation -- Because of the fact that this house budget is less, this compromise budget is less than what the house put out, that may keep the conservatives that Tobin has happier, say, look, we took some out. There's some people in both the house and senate who want to spend less than last year. Because we do have a structural deficit. We're still spending more than we're taking in. We're living off of what's left over from the sales tax. We're never going to get down to that.
Ted Simons: The president has mentioned we're not out of the woods yet. He used that quote -- When do you get -- When do the woods stop?
Mike Sunnucks: I think folks on the right want to starve the beast. They don't -- They're inherently against a lot of spending. No matter when it's about. I think it comes down to how long they can hold out for on this. And how long the governor waits. The governor has the biggest ticket, no matter what the legislature says, she has -- She can stop any other bills. There's a lot of bills people want to pass, so she has the power. She wants to exert that power, Biggs can hold out, but I don't think he can hold out much longer.
Howard Fischer: There's another piece to this equation. Everybody has been saying we're going to grow our way out of it. We've cut corporate income tax rates by 25%. Just today the house approved 10 million in tax breaks for manufacturers and what they're paying in utilities. Now, if all that works, and all this wonderful incentives work, we'll grow our way out of it, so by FY '17, maybe we'll have 12 million in revenue and that will be the end of it. The democrats are saying, not until you star addressing some of these tax cuts and whether they make sense are we going to have a balanced budget.
Ted Simons: The democrats are also saying taxpayers have made it known, they want things like state subsidized child care, they want things like highways to be improved. They want spending on at least certain things and what they're saying is, the senate president especially, but this budget in general, doesn’t address that stuff.
Ben Giles: Certainly not child care subsidies whatsoever. There's $130 million in the baseline for that working poor subsidy. But only $9 million of that comes from Arizona's general fund. The rest is federal grants. And the point that senate president Biggs makes, and he mentioned to me this week, the initial budget he introduced before it was amended even in his own chamber, spent $21 million less than the baseline. So you do still have these Republican lawmakers who as Mike said, starved the beast. They think that's one of the best ways to get us out of the woods. Maybe that's some -- A lack of confidence in some of the cuts that have been made already, that maybe haven't worked back.
Howard Fischer: Are you suggesting that they've decided the coif doesn't work?
Mike Sunnucks: We could have a $5 billion surplus and they would not put money toward child care. Because the Republican caucus and Republican primary voters aren't for those things.
Howard Fischer: But that's exactly contrary to what people like -- You want people to go to work, there are people who are working just above welfare, you want them to work, you don't want them to leave kids parked in the car, or at home. You need to provide them with a little bit of help. From the perspective of Kate Mcgee, this is a Republican program, because it gets people to work and gets people paying taxes.
Ben Giles: And it helps get CPS, the new CPS off on the right foot, because instead of actually sending children into the CPS system when, for example, that mother the other week who left her kids in the car to go in for a job interview, if she had had some of this subsidy, she could have sent her kids to day care instead. That will help reduce this ever --
Howard Fischer: So what mike is saying, there are people believe this, is not the role of government, we have churches, we have charities, we have first things first, and they can be doing that. Look. They're right to the extent there's never enough money to take care of everyone's needs what everyone wants to do. Medicaid expansion is part of that. We're at 138% of the federal poverty level, but we have to decide what is the role of the government?
Ted Simons: There are concerns out there from folks in the social service agency, they're saying you keep worrying about CPS or whatever you're going to call it next, why not address the issues that lead people to having to go to a CPS? That lead children in this direction, as opposed to always fighting something after the event.
Ben Giles: I think we got some indication of house senate president Biggs feels about this, and -- In a little philosophical debate that occurred on the senate floor on Tuesday, he and senator Farley were talking about what the role of government is. And you had the senate president say government is not compassionate, government does not have empathy, that's left up to the individuals. And that's why you hear the arguments for religious institutions to sort of pick up the slack and help provide --
Howard Fischer: It goes beyond that. Part of that debate was government takes money out of your pockets to give away to someone else. Well, OK, that's what -- Do you want a road, do you want a fire department?
Ted Simons: We're discussing social contract. It's like we're in a high school civics class.
Mike Sunnucks: It is cultural too. A lot of members are LDS, and they have their own social welfare system set up. They have pantries, you're part church, you can go there and take advantage of that. They come from that perspective. They see their church and their community doing that. I think that impacts how they view some of the social spending from the public sector.
Ted Simons: But those things still exist in a wider view. They don't exist in a vacuum. They do use the roads, they do use the services.
Howard Fischer: Though you have people -- Look. There are folks who say, maybe all highway should be toll roads. User fees. Of course I would make the argument the user fees isn't that what my gas tax is paying for? You mean the gas tax they're siphoning off to balance the budget and pate DPS salaries. You can go down a rabbit hole.
Mike Sunnucks: The first place they raid money is the highway fund. That's the first place they go. Even something like that, which a lot of conservatives believe, roads, public safety are things government should be doing. That's the first place they raid.
Ted Simons: One of the big headlines was all of a sudden $9,000 for private prison that no one, even prison were surprised. Is that still possible?
Ben Giles: That has been cut out of the senate version of the budget that passed on Tuesday. That was an addition I believe it was from representative Stevens in the house, that stuck, and that was swiftly removed in the senate budget.
Howard Fischer: What you had is this group, the state has a contract for emergency beds. Everything has been an emergency since we don't have enough private prisons. John Kavanagh's argument is look, they agreed to a cheap rate back when we started running into problems in 2009. If we had to pay the full rate it would be $4 million, $5 million. So this is a great deal. Except for the fact the department of corrections didn't ask for the money, and is this the way we negotiate contracts? If they want something different, come and negotiate.
Ted Simons: Where was the debate on this?
Howard Fischer: Debate? You've obviously been reading too many civics books. This is how the whole budget gets put together. If you take a look at the package of the bills, you not only have these line items in there, you have these budget reconciliation bills they put in these policy lines, and that's how things happen in the state. It's very much like happens in Congress. We say how do we get this?
Mike Sunnucks: You'll likely see private prison money in the next budget. But you'll have a new governor. Who knows who that governor is going to be. You see this in the budget process, these conservative experiments. Charter schools, private prisons, obviously they go down the social issues with the other bills. And this always is part of the budget debate, these kind of moving the conservative experiments forward.
Ted Simons: The right kind of charter schools, make sure they're not district-run charter schools or the money could be spread somewhere it's not supposed to go.
Mike Sunnucks: Of course.
Ted Simons: Monday you think something could break here?
Ben Giles: Perhaps. At least that's when we're scheduled to come back to work. But Monday, I think by the end of the weekend Biggs should have some idea, hopefully maybe a list of names if speaker Tobin hasn't given it to him yet, of here's 31 the people who are going to vote for this budget as I've proposed.
Howard Fischer: The only thing that I'm afraid of is folks are going to go home for the weekend and wake up Monday and say, you know, I need a little more in the budget. And that's what scares me.
Ted Simons: That's what happens when you wait too long. Quickly, there seems to be as the Republicans are simply just fighting amongst themselves and the democrats are watching from a distance, apparently democrats didn't have enough to do.
Ben Giles: No, they got into a nice little fight of their own this Tuesday. Right after the budget was passed on the senate floor, they held a closed-door caucus meeting. That was supposed to be a kumbaya session, where you had one lawmaker upset over accusations that he might vote for a Republican budget, he wanted to talk about that. They wanted to talk strategy about why once again are we in this position where we have no say in the budget whatsoever. And it kind of snowballed into this discussion about Republican leadership. Which is pretty new, five months ago you had a vote that ousted senator Taylor and her leadership team, that was a contentious vote, and there's still hurt feelings from that. So you had that same contingent, Bedford, Bradley, Taylor, voting to try and get rid of senator Tovar and her leadership team. And I think senator Gallardo said it best, it was silly because they didn't have the votes to do it.
Ted Simons: I think the concern was, Taylor might not be around because he's running for state office, and Gallardo apparently has been absent because he's running for congressional office and they're saying, what's going on?
Howard Fischer: And now Tovar is running for the board of supervisors because Mary Rose is going out. Look. You're always going to have folks running. It's going to sound snarky to say, it doesn't matter. They're the democrats. It's not like -- There were days years ago where you formed coalition governments there. Were enough crazy Republicans so Republican leadership would work with the democrats. They don't matter.
Mike Sunnucks: Once in a blue moon they matter.
Howard Fischer: You're right.
Ben Giles: But the point that democrats were making, and I think any Republican would tell you as well, the whole reason democrats had a voice in the budget negotiations last year wasn't because of leadership. Wasn't because of Democratic leadership and their strength. It was because of the Medicaid expansion issue and because of Governor Brewer reaching out to them.
Mike Sunnucks: It's hard to herd cats like that. They're like Civil War reenactors. It's all fake. They don't really do anything, and you're right, it's all about issues. They might come together -- They don't have enough critical mass to block anything, and there's nobody -- That could change next year if you have a Scott Smith who is more moderate winning the governor's race, if Fred Duvall wins you could see democrats have a place. But right now they don't have anything.
Howard Fischer: The other issue is, there have been times, democrats have been the minority in the house since '66. They've taken over the senate a few times. The issue is, how do you present your program? The problem is the democrats have spent too much time in the minority all they're doing is shooting. What we need is somebody say, OK, here's a plan. And the democrats haven't figured out, they're fighting with themselves, they're trying to figure out what their message is, you've got people who enjoy the sound of their own voice, getting up on the senate and house floor and nobody is saying, here's the democrat plan.
Ted Simons: Yet you say that after you say it really doesn't matter all that much. If it doesn't matter that much, what are you holding the meeting for to say how can we become more involved when it's quite obvious you're not going to be involved?
Ben Giles: Let's remember that the meeting was called by a pretty rookie senator at this point, senator BeGay was appointed to replace Jack Jackson last year, so this is his 1st session and maybe he has some cock eyed operate similar is what has been said.
Howard Fischer: There is a history in the house and senate of the Navajo representative, sometimes being bought off for certain things, new buildings, new roads. So maybe that was part of what he needed to do.
Ted Simons: We've only got a couple minutes left. Charles Keating Jr., Howie, we had -- We talked about this for a little bit yesterday. Michael Manning was on, and -- What a character this guy was.
Howard Fischer: Certainly. This is a guy who came out of Ohio, was known for forming citizens of decency for law, came out here, and made a name for himself in a couple ways. Lincoln savings. This is the days when there were such things as savings and loans which were not governed by the same pesky rules. And we're selling -- They were selling if you will worthless securities. The other thing he did is he managed to push his will on how water law and real estate development is in this town. Do you want to know why we have lakes at Estrella even though we have a ground water code? Charlie Keating. It's all his. That of course the politics of it, we all remember, the Keating five. McCain, thought he was doing a favor for a nice local developer until it came out, what exactly are you doing for this, and how are you getting paid back?
Mike Sunnucks: And it ended Diconcini's career and it brought us Jon Kyle. McCain vacationed with him. He came out the best, it changed his tune. He became an advocate for campaign finance reform. And Cranston and John Glenn saw their careers -- He was 6'5".
Ted Simons: People are talking, they saw him at cardinal games. He went to cardinal games. And you could recognize him immediately. He was the tallest guy in the crowd. Is Charles Keating a major figure in this day and age if he arrives now, or just another face in the crowd?
Howard Fischer: I think it's harder because you don't have -- There was a much smaller group of players. Even going back to days of the Phoenix where you had a few business leaders, valley bank, first interstate bank, a few major developers, now it's much more spread out. Obviously if you come in here with a lot of money, it's amazing what you can do.
Ted Simons: All right. Gentlemen, great conversation. Good to have you here. Thanks for joining us. Friday on "Arizona Horizon," it's a literary special featuring best seller Bill Bryson, talking about his latest work which chronicles the eventful summer of and we'll speak with "Care of the Soul" author Thomas Moore who discusses his new book on creating a religion of one's own. That's Friday on "Arizona Horizon." That is it for now. I'm Ted Simons. Thank you so much for joining us. You have a great evening.