Horizon, Host: Ted Simons

December 10, 2009


Host: Ted Simons

State Budget


  • The Governor’s Chief of Staff, Eileen Klein, provides an update on the $1.6 billion state budget deficit and a possible special session to deal with the shortfall.
Guests:
  • Eileen Klein - Governor's Chief of Staff -
Category: Government

View Transcript
Ted Simons:
Good evening and welcome to "Horizon." I'm Ted Simons. A Maricopa County detention officer jailed after taking documents from a defense attorney is now out of jail. The Arizona Court of Appeals released Adam Stoddard from custody pending an appeal of his case. The court will consider Stoddard's case January 5th. Maricopa County sheriff's deputies today served a search warrant on the Phoenix office of Chicanos Por la Causa. The warrant was served in connection with an investigation of county supervisor Mary Rose Wilcox. She's accused of perjury and forgery in connection with loans she received from the nonprofit organization. A November special session erased about $450 million from the state's budget deficit. But Arizona is still facing a current year shortfall of $1.6 billion. Next fiscal year, the deficit is expected to grow to $3 billion. Earlier tonight, I spoke with Governor Brewer's chief of staff, Eileen Klein, about the budget and the possibility of another special session. And thank you for joining us tonight on "Horizon."

Eileen Klein:
Thank you.

Ted Simons:
Special session possible for next week?

Eileen Klein:
It is possible. Governor Brewer's been pressing really for months for the legislature to come back and continue the work that needs to be done on the remaining deficit of a billion and a half for fiscal year 2010 and take a look at what needs to be done for the $3 billion that faces us for 2011.

Ted Simons:
A referral for temporary sales tax increase, governor still pushing it hard?

Eileen Klein:
She's eager to have the legislature send something to the voters so they can contemplate whether they want to provide additional revenues.

Ted Simons:
I know talking about a full penny.

Eileen Klein:
What is under discussion is a full penny for each of the next three years to help us temporarily bridge the gap.

Ted Simons:
Is there concern that even this is not going to be nearly enough to make a dent in the problem?

Eileen Klein:
Well, certainly Governor Brewer called for a comprehensive solution back in March. So when she took office in January, the deficit -- excuse me, the budget situation, the -- the problem with the budget had been under way for at least two years already and when she came in she called for a comprehensive solution that would call for additional cuts and use the additional debts and the size of the problem is so great that the solution can't be found in any one single approach. For instance, there's so much protected in the budget currently that you could eliminate all services not protected by the voter protection act of the state or the government and still not be able to solve the deficit.

Ted Simons:
Does the governor support the idea of referring to the voters a way to get around it?

Eileen Klein:
She does. As part of her comprehensive plan, she has recommended that the voters reconsider certain portions temporarily so that some relief can be provided. Instead of having monies going into special programs that may be are not as essential -- important, but not as essential right now, that the monies be diverted so they can be used for K-12 education, daily classroom instruction and public safety.

Ted Simons:
Does that include programs like first things first?

Eileen Klein:
It is. And in part because they have a large cash reserve. Certainly that's one of the areas and while people value early childhood education, right now, we believe we need to be focused on the essential services of government.

Ted Simons:
As far as a temporary sales tax increase and referring it and getting the legislature to go along with that referral, should it be linked, if necessary, can it be linked to tax cut, the permanent repeal of the state property tax for example. Thoughts there?

Eileen Klein:
Well, Governor Brewer called for comprehensive tax reform as part of what the state needs, so that we can propel the state not future and make sure we have a very vibrant business climate. A good economic environment so all businesses can succeed and it's not necessary that these items be linked, but they are important long-term component of economic vitality.

Ted Simons:
I know as far as linkage, there's talks of future tax cuts, maybe starts in 2011. Critics, Democrats mostly, say what sense does it make to raise the sales tax if you're going to cut income and corporate taxes.

Eileen Klein:
Understood and while it may seem that way on the surface, clearly we need temporary revenue of some sort to help us bridge the gap and that's why that was a temporary proposal. But the long-term success of the state depends on us making fundamental adjustments. Governor Brewer called for regulatory reform right out of the gate so that businesses could not be encumbered by rules and regulations of the state. Likewise, business told us that they need reforms to the tax codes so they can be more competitive and we're out of sync with our western states and if we want to attract new business and retain businesses we have --

Ted Simons:
That could be in the future as opposed to now?

Eileen Klein:
I'm not sure it should wait for the future. The time is now to attract jobs and we're focused on what we can do to attract jobs and retain the jobs we have and we're seeing the statistics and employers are shedding jobs and we need to stop that and businesses need to welcome at out and see the beacon we're sending and they'll want to come and locate here and we need to start that now.

Ted Simons:
The concern of cuts, you're getting close to effort of maintenance requirements for stimulus money. How close are we and what can the legislature do from now on?

Eileen Klein:
The -- we're already at maintenance of efforts requirement for the federal government in order to secure the federal funds and Governor Brewer was back in Washington D.C. to say with the release the federal government has provided so far, the state cannot make it through fiscal year 2011 with the current strings attached to the federal stimulus plan. Around the Medicaid program, Governor Brewer went to the delegation this week and provided data that not only can we not afford the stimulus plan going not future but we can certainly not afford to have any expansion the way congress is contemplating for the Medicaid program. Having relief from the federal government and continuing the federal funds will be essential.

Ted Simons:
I know that treasurer Martin said the governor should apply for a waiver as far as the maintenance of efforts requirements are concerned. Is that what the governor did?

Eileen Klein:
Not at all. The governor went back and began to make the case that we need relief from the federal government. We are in the middle of calculating whether we qualify for a waiver, what would that gain us in terms of the budget and what would be the sanctions from the federal government if we went below maintenance of effort. We want to weigh those things and ask congress outright to provide the relief we need now from all of the eligibility requirements attached to the dollars that we simply cannot sustain.

Ted Simons:
Last question: The governor said she will not decimate education and human services. Is that possible the way things are right now?

Eileen Klein:
Certainly, the state's budget situation is so bad that every area is going to need to face reductions and we need to be thoughtful. Governor Brewer has taken a great stand to protect education. So -- and that remains. That's why it's so important we have relief in other areas of the budget. And that we use other tools to help us manage through.

Ted Simons:
All right. Thank you very much for joining us.

Eileen Klein:
Thank you.

What's on?
  About KAET Contact Support Legal Follow Us  
  About Eight
Mission/Impact
History
Site Map
Pressroom
Contact Us
Sign up for e-news
Pledge to Eight
Donate Monthly
Volunteer
Other ways to support
FCC Public Files
Privacy Policy
Facebook
Twitter
YouTube
Google+
Pinterest
 

Need help accessing? Contact disabilityaccess@asu.edu

Eight is a member-supported service of Arizona State University    Copyright Arizona Board of Regents