Horizon, Host: Ted Simons

January 26, 2009


Host: Ted Simons

Legislature A to Z: Budget


  • Arizona's budget is $1.6 billion in the red, and that's just for this fiscal year. In the first of our four-part series on important issues before lawmakers, two state lawmakers debate over the best way to solve the budget deficit.
Guests:
  • John Kavanagh - State House Appropriations Chair, Republican
  • Kyrsten Sinema - State House Assistant Minority Leader, Democrat
  • Ginger Lamb - Publisher, Arizona Capitol Times
Category: Legislature   |   Keywords: education,

View Transcript
Ted Simons
>> Tonight on "horizon," we start a four-part series on legislative priorities with a look at the mother of all legislative priorities -- the budget deficit.

Ted Simons
>>> no deficit of football fans as the cardinals get a big sendoff to the super bowl this morning. and think you know a lot about Arizona history? you'll be surprised at what you can learn from a new book on Arizona's times past. that's next on "horizon."

Ted Simons
>> good evening welcome to "Horizon." I'm Ted Simons.

Ted Simons
>>> Arizona lawmakers are working hard to solve one of the worst budget deficits this state has ever seen. for this fiscal year alone, Arizona is $1.6 billion in the red. next year the red ink is expected to be almost double that. I'll talk to two lawmakers about the budget situation as we start a four-part series on legislative priorities, "legislature a to z." but first, here's a quick look at how republicans and democrats have their own ways to solve the budget deficit.

Mike Sauceda
>> Republican lawmakers have put options on the table that would cut the fiscal year budget deficit which is $1.58 billion by $1.85 billion. the proposals would cut the next budget by $3.03 billion, eliminating a 3.01 billion dollar budget deficit. The cuts are larger than the deficit because leaders wanted to provide multiple options, some of which won't face the chopping block. the budget calls for a lump sum reduction for state agencies 10\% this year and 15\% next year. there would also be 4.2\% salary reduction this year and 10\% next year, with agencies free to handle that however they deem best through attrition or layoffs. the savings from these option was equal $758 million this year, and $2.2 billion next year. transfer of funds from excess balances and the rainy day fund would add $668 million toward solving the deficit this year, along with $360 million next year. another part of the solution is lawmakers are anticipating $400 million in federal bailout funds. democrats released their own budget cutting options today. they propose a 2\% lump sum cut to all agencies for a savings of $261 million, democrats have no budget reduction coming from a reduction in the state work force. instead they propose to pass on more of the cost of health insurance to state workers to save $2 million. dems plan $445 million in agency cuts, $668 million in funds transfers, $21 million in other revenue, and $400 million from a federal bailout for a total of just under $1.6 billion for the current fiscal year with the carryover of $17 million for next fiscal year.

Ted Simons
>> here to talk about the budget is house appropriations chair John Kavanagh, a republican, and house assistant minority leader Kyrsten Sinema, who is a democrat. good to have you both on "horizon." Kyrsten, the democratic budget, we got deferred payments, roll years, are these what had been previously referred to as gimmicks?

Kyrsten Sinema
>> well, first of all, let me say house democrats have put forward some option and proposals for consideration. we don't view either the chairman's proposal or ours as an ending road, but a beginning place for us to find some middle ground to solve the problem. our proposal combines cuts, some which are pretty deep and pretty harsh, with options to help reduce our budget deficit, including a short-term deferral of payments to help spread the payment out over the course of a year. other options are actually the same as the republicans' options, like taking advantage of that $400 million from the federal government, and using those fund transfers that we think can help us decrease our revenue.

Ted Simons
>> from what you've seen and heard out of the democratic sighted, are you seeing gimmicks?

John Kavanagh
>> well obviously the deferred payment is a gimmick. it's a gimmick that was used last year and the year before. we deferred or rolled over some much -- so much education funding, we now owe over $600 million in education rollover monies. and this is just one more rollover and it just keeps making the problem worse and worse into the next year. it's like take all your bills and instead of paying them, you put them in a drawer and you don't open the drawer until January 1st. that makes the next year even worse.

Ted Simons
>> is there a sense, though, of maintaining, trying to maintain social services and education through the tough times so that things are easier to pare down and figure out in the good times?

John Kavanagh
>> absolutely, but there has to be cuts. we wish to keep them reasonable, we wish to keep them nonlethal. I would like to say that the options that we came out with last week were simply that -- they were options, as you said in your introduction. they were falsely portrayed by university presidents, and some other people with a invested interest, as our actual budget. and as a result, a lot of people, especially students, became very upset because they thought that we were going to be decimating education, and we're not. the cuts will not be anywhere near the options we could take. they were simply a menu that we're going to select from.

Ted Simons
>> was there an overreaction, you think, to the G.O.P. plan?

Kyrsten Sinema
>> I think that Arizonans all across the state were concerned when they saw the options, because of the potential harm to our state. one thing I think we can both agree on is that this budget crisis is much worse than Arizonans understand. I think as we begin to realize the severity of the problem, we have to talk about what our values are. House democrats have values we believe that it is better to take a short-term deferment of payment and pay a little bit each month, like we do with our house and car payments, rather than cut off the funding now so we don't have it for the future.

Ted Simons
>> I want to get to that but back to the university, why did you not expect that kind of reaction? when those numbers are being thrown about? we've had a lot of protesting.

John Kavanagh
>> the numbers were clearly labeled as options. at the front of the options book it was stated we were not going to take all these options. if you walk into a restaurant, and a waiter gives you a menu, you don't turn to the waiter and say, "are you crazy? how can I eat all this?" it's understood you choose from it. that's what we came out with. we wanted the appropriations committee members to choose, because this year we're committed to appropriations doing the budget. instead, the university presidents portrayed this as the actual budget, said if we took these cuts, which we're not going to take, they would be closing campuses. in the end we won't take all those cuts because we never intended to, and they'll claim victory.



Ted Simons
>> but trying to figure out both sides of the issue, when you came out with your options, were they not obligated to come out with theirs? including close campuses?

John Kavanagh
>> their option were based on us taking all of our options, which we never intended to do.

Kyrsten Sinema
>> for our part house democrats were concerned when we sought option package. not because we don't appreciate the work representative Kavanaugh and others put night, but we believe that option package didn't represent all the options that are available to us. we believe the house democrat plan that we submitted to Mr. Kavanaugh on Friday and talked about the media today represents more of the options. but even we don't believe we have all the ideas. and we're asking for the public to gives more ideas about new options to solve this problem.

Ted Simons
>> I've heard criticism of the democratic plan already saying that it artificially handles the '09 budget without realizing what it's going to do to 2010.

Kyrsten Sinema
>> well, a couple points to that. first, the '09 budget, the budget proposal the democrats submitted, does contain some pretty difficult cuts. there's a 15\% cut to k-12 soft capital, which is fancy language for school buses, books, and materials for math and science. that's a hard thing for a caucus that really supports public education to do. but we understand that everyone has to be part of this budget solution. so while we're asking people to make those hard decisions, we also believe that some short-term fixes like short-term payment deferrals, help us get through the rough times without hurting our future so we can have good times later.

John Kavanagh
>> all right. I've looked at their proposal and I roughly know where we're going to be coming down this week. the basic difference is this -- they want -- we propose cutting $350 million more than they do. they make up this difference by doing an additional $100 million in fund sweeps and by doing $240 million in deferred payments. in other words, paying this year's bills next year. There are two problems. first, on the sweeps, I don't know if you can get another $100 million this year. those funds have to refill. and treasurer Martin believes we're going to run out of money in March or April to make our payments, and he's relying on these funds to be there to help. so it might not be doable. but the bigger problem is, taking $240 million of payments we owe this year, and basically saying we'll pay them next year. that's going to make next year's problem $240 million greater, plus interest. and the Arizona economy is -- still failing. we'll have worse revenue problems next year. so we'll have less money and more debt, and it's going to cause a crisis.

Kyrsten Sinema
>> we think some of the options about deferring payments into next year is smart and reasonable, and it's the same thing Arizonans would do in their own families if they had to make adjustments to their income, which many of them are doing right now. we believe there are more options to be considered in 2010 that we haven't put on the table for 2009. and we're looking forward to a 2010 budget that will allow to us expand those options.

Ted Simons
>> so again, when the criticism comes that these aren't solutions, this is -- this doesn't get to the problem, that these are stall tactics in this sort of verbiage, how do you respond? how do you say this is not necessarily some -- I know what one side says -- this is something that has to be cut at a core. it's not just fix it now, it's fix it for years to come. how do you respond?

Kyrsten Sinema
>> house democrats believe the solution should never rest on the backs of children or education. so if their idea of a solution is -- I'm not claiming that it is, but if their idea of a solution is to cut deeply into k-12 and university education, and slash health care for children and middle class families, we think that's wrong. and we believe Arizonans agree with us.

John Kavanagh
>> we're not making draconian cuts in education or health care. in fact, based on the stimulus package, we'll be doing very little health care cutting. the problem with putting $240 million of today's bills into next year, not only makes next year more difficult, but it's going to make 2011 impossible. if we don't begin to actually cut our expenses by cuttings on going programs, when 2011 comes we'll still have less revenue because the economy is not going to stop falling until 2011, we will not have the federal stimulus package that is a crutch this year, and will be a crutch in 2010. we'll be alone in the desert wailing and then you'll see real draconian cuts.

Kyrsten Sinema
>> just in response to, that one of the things I think is important that John brought up is the cuts to health care. the '09 budget options proposed by Mr. Kavanaugh include an $18 million cut to kidscare which is a healthcare program for children in Arizona--

John Kavanagh
>> it's back. Its back Kristen

Kyrsten Sinema
>> well that's good to know. let me talk about why it's so important its back. for every dollar we spend in Arizona we get $3 of federal money so our $1 turns into four. if we cut important things like that, we lose that federal money that's coming from the federal government. so we need to make sure that we're being strategic using a scalpel rather than a hatchet.

Ted Simons
>> when you see protests, whether they're 900 people protesting higher education cuts down in Tucson, or 1500 people protesting education budget cuts are on the weekend at the capitol, when you see people responding like that, does that factor into your thinking?

John Kavanagh
>> of course it does. but it factors more when they're basing their protest on legitimate figures. so I certainly respond to what -- autism groups, but when a bunch of students or educators are brought out because they were basically told a lie that we're cutting more than we ever would, then I feel sorry that a lot of people have been duped and unnecessarily upset.

Kyrsten Sinema
>> I think folks are responding to what they saw. because as of last week, the only document they saw were the list of options. and so while hopefully it will end up with a different number, I think Arizonans were concerned and scared, and I think rightfully so.

Ted Simons
>> are you at all considering increasing taxes?

Kyrsten Sinema
>> in fact, that's -- interests a great question, and one we can agree on. on Thursday in the health appropriations committee we had a unanimous vote, all members present, and I can say for the two democrats that weren't present, all members of the house appropriations committee believe tax increases are not the right solution for Arizona.

Ted Simons
>> and you obviously agree.

John Kavanagh
>> I am a republican.

Ted Simons
>> I got that. next question, why not tax increases?

John Kavanagh
>> because we are in a recession. it's probably going to get worse, and raising taxes during a recession is the worst thing to do. it would cause havoc, especially in small business, and it would actually reduce our revenue in the long run.

Kyrsten Sinema
>> and we have two reasons. one is very practical reason. raising taxes this year would not solve the '09 budget problem whatsoever. it's just not practical. and number two, it's a very real fact of Arizonans and their lives. they're struggling just like our state is. and we don't want to burden them any more.

Ted Simons
>> what about school tax credits?

Kyrsten Sinema
>> that's not on the table for the '09 budget fix. it's something we haven't yet addressed. I'm assuming it will come up in the 2010 discussion, which we'll be starting in a couple of weeks.

John Kavanagh
>> in as much as the tax credits basically take children who would be in expensive public schools and put them into less expensive charter schools, we'd like to keep that because it gives parents choice and it reduces the overall education budget.

Kyrsten Sinema
>> one of the questions we will face about the tax credit is right now, to give a tax credit to a public school, it can only be used for extra curricular activities. So one question I do think we will be facing is do we want money for band uniforms or classroom size? that's a question we'll be addressing in a few weeks.

Ted Simons
>> last question for you, then a last question for john. is there room to cut excess in state government?

Kyrsten Sinema
>> absolutely. and house democrats have offered efficiency measures. we also are looking carefully I think this is something both parties are doing together, to look for ways and opportunities to increase efficiency. absolutely.

Ted Simons
>> is there not a feeling among G.O.P. lawmakers that with governor Napolitano gone, much of what she championed, much of what she proposed and pushed is now open season on that stuff? is there not -- or line of thinking that runs through a lot of these cuts?

John Kavanagh
>> well, to the extent that she promoted fiscal gimmicks like rollovers, and securitization of future revenues, absolutely. we're glad those are gone, because that's what put us into the current crisis, or contributed to putting us in the current crisis.

Ted Simons
>> so it's not necessarily ideological, it's pragmatic?

John Kavanagh
>> this is simple math -- you can't spend more than you bring in, and gimmicks just delay the problem to future years and make it worse.

Ted Simons
>> we're going to have to stop there. thank you both so much for joining us on "horizon."

Kyrsten Sinema
>> thank you.

John Kavanagh
>> thank you.

Ted Simons
>> lots of red was visible this morning at sky harbor airport, but it wasn't red ink, but excited cardinal fans sending their team to the super bowl. a first for the red birds.

Fans
>> go cardinals! [cheers and applause]

Jan Brewer
>> on behalf of the great state of Arizona, to congratulate the cardinals and certainly the Bidwells! Arizona is immensely proud of them. aren't we? this is a great day! [cheers]

Phil Gordon
>> good morning, everyone! hey, I don't know, there is something on the end of the runway I found. [booing] big red, come here! big red, do you know what this is for? What are we going to bring back, Super Bowl. do you believe, Arizona? do you believe, phoenix? we're going to win the super bowl, and we're going to bring it back here!

Michael Bidwell
>> I want to tell you a little bit about what it's been like around the training facility. it's been awesome. the great amount of attention that's being put on your team, the Arizona cardinals, it's also been awesome because the intensity of the players, the focus of the coaching staff, and the work ethic throughout the whole week, they have not taken their foot off the gas. they got their foot to the -- pedal to the metal and they've been working hard all week, because they want to go out there and take care of business in Tampa Bay.

Bertrand Berry
>> we want to thank you guys for coming out. this has been an unbelievable ride, an incredible year. you've been there every step of the way. we're getting on this plane today, we got one more game until we do what we came to do, and that's to get that ring!

Kurt Warner
>> we're going to get on this plane and try to do something else for you. we're going to try to bring back a championship to Arizona! [cheers]

Ted Simons
>> since 1982, the Arizona capitol times has run a weekly feature called "times past," which contains a short story from Arizona's history and a picture to company it. 1500 times past stores have appeared, 120 of those stories are featured in a new bing tiles "times past: reflections from Arizona history." here to talk about the new book is Ginger Lamb, publisher of the Arizona capitol tomorrow times. good to have you here. congratulations on the book. that's a hoot to read.

Ginger Lamb
>> thank you. it -- we're so pleased to finally have it produced. it was something that had been in the making for about 20 years and finally happened.

Ted Simons
>> again, you've got the picture and the story, so it's easily digestible, and you can always refer to what you're talking about. You're not four pages down the line looking at a picture 5 pages away.

Ginger Lamb
>> well, I'm sure you know Barry Gartell, he is our legislative report editor and he took the project under his wing, got some of our staff together to work on it, and they sifted through all of those years of "times past" features and categorized it the way you see in the book.

Ted Simons
>> let's start with kind of an interesting scenario back in the old days. the saloon, which was pretty much almost a town hall on frontier days. talk about some of the saloons in early Arizona.

Ginger Lamb
>> it's really interesting, there are a couple of saloons in the brewery gulch area in Bisbee, and as you know, with Arizona being a mining community, that was really the focal point of the town. that's where you went to play cards, to unwind, that's where all the action happened. and at one point in Phoenix there were only 1,000 people that lived there, but there were 15 saloons.

Ted Simons
>> wow. and this is a shot here of brewery gulch in business buy. a lot of folks who visit know the area, but to see it in these photographs in its glory days, its fantastic stuff. I think we have another photo of a saloon closer to home in Gila Bend. it was called the road to whis with a little key underneath it.

Ginger Lamb
>> yes its called the road to whiskey ruin.

Ted Simons
>> this was where I guess a lot of business got done? a lot of town business? and just a lot of socializing. it really was the center of town.

Ginger Lamb
>> absolutely.

Ted Simons
>> ok. let's move on now, we've got some other historic avenues of Arizona. the town of Sedona, I think a lot of people know it was named after a woman. talk about that family.

Ginger Lamb
>> that's a fascinating story. The Snuply's, T.C. and Sedona moved to oak creek and built a home, and they were originally from Missouri. and what you're seeing in this picture here is the two story frame house they built, and it became the focal point of that small farming community at the time. and what our book recounts is how they were trying to figure out what to name the town, and they wanted to come up with a post office, because all the mail came through Cornville. so they couldn't figure out a name that would fit on the postage stamp for cancellation, and then they decided why not Sedona? so that's how Sedona came to be. on the picture on the screen right now that's T.C. and Sedona Snuply .

Ted Simons
>> didn't they leave for a long time, and did they ever come back.

Ginger Lamb
>> they left for about 25 years and they finally came back to Sedona, but they went back to Missouri.

Ted Simons
>> we also had in your book the first secretary of state, which is a fascinating story as well.

Ginger Lamb
>> that's really I think appropriate, given the inauguration of secretary of state Jan Brewer as our new governor, because this secretary of state, he really wanted to one day become governor, and after serving as secretary of state, he left politics for a little while and came back and was victorious as governor.

Ted Simons
>> Sydney Osborn, which I guess -- is that Osborn road?

G Ginger Lamb
>> I believe so.

Ted Simons
>> we also had a much more familiar name coming through phoenix, I believe twice, Buffalo bill.

G Ginger Lamb
>> Buffalo Bill, believe it or not.

Ted Simons
>> and that was a big deal. that wasn't just a show, that was a carnival, that was a parade, the whole nine yards.

G Ginger Lamb
>> it sure was. it went on for quite some time. but it was -- he was quite the showman.

Ted Simons
>> back in those days, was he still ride 'em and rope 'em, or was he getting a little long in the tooth?

G Ginger Lamb
>> probably a little bit of both.

Ted Simons

>> there's buffalo bill for you. big stories recently involving Arizona and the border. and we think this is a new story. this is not necessarily new, is it?

G Ginger Lamb
>> it's not.

Ted Simons
>> this has been going on since statehood, and even before.

G Ginger Lamb
>> that's what's amazing about this book, you can look back and it's reflections on Arizona history, and a lot of it is really relevant to what's going on today.

Ted Simons
>> I know there's stories in there regarding national guard troops at the border, and we don't think of this, but they were down there to protect against poncho villa, for goodness sake.

Ginger Lamb
>> I know, it's amazing. after their work on the border, and some of the wars that were going on overseas, they ended up becoming known as the 158th infantry division. so there were so many things when you look back and reflect back on Arizona history, to know they were protecting the border, I don't think we think about that.

Ted Simons

>> and Arizona, correct me if I'm wrong, wasn't there not the first all-Indian military unit, American Indian military unit stationed at the border?

Ginger Lamb
>> right.

Ted Simons
>> going through this book, going through all this stuff, what surprised you guys the most?

Ginger Lamb
>> I think just how rich the history of Arizona is, and just all the fascinating stories. one story you brought up tonight when I walked in was called his last shot. and it was about a gentleman that was at a bar in Winslow and he decided to hold up the bar. and on the way out got shot and killed, and they ended up digging him out of his grave because they weren't sure whether he had his last shot of whiskey. so we wanted to make sure he could have it.

Ted Simons
>> we don't have time to show that photo, but trust me, it's a weird photo. this is a great book. thanks so much for joining us to talk about it.

Ginger Lamb
>> thanks Ted.

Ted Simons
>>> proposed cuts to public education ignite a protest outside the state capitol. the organizer says he'd rather raise taxes than harm education. hear what members of the house education committee have to say. Tuesday at 7:00 on "horizon."

Ted Simons
>>> Wednesday we'll talk about how the legislature is considering reforms to the initiative process. Thursday we wrap up our legislative sear business a look at a bill that would ban photo radar. Friday, journalists recap the week's top stories on the journalists roundtable.

Ted Simons
>>> that is it for now. thank you so much for joining us. I'm Ted Simons. you have a great evening.

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