Horizon, Host: Ted Simons

January 23, 2009


Host: Ted Simons

Journalists Roundtable

  |   Video
  • Local reporters review the week's top stories.
Guests:
  • Matt Benson - Arizona Republic
Category: Journalists Roundtable

View Transcript
Ted Simons:
It's Friday, January 23, 2009. In the headlines this week: Jan Brewer is sworn in as Arizona's new governor and promises to cut spending and shrink the size of state government. Arizona's unemployment rate rose again in December, reaching its highest level since 1992. And a House committee this week approves a bill that bans the use of photo radar on Arizona Freeways. That's next on "Horizon."

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Ted Simons:
Good evening, and welcome to "Horizon." I'm Ted Simons, and this is the Journalists' Roundtable. Joining me to talk about the week's top stories are Matt Benson of The Arizona Republic, Mike Sunnucks of The Business Journal, and Howard Fischer of Capitol Media Services. Jan Brewer was sworn in this week as Arizona's new governor, replacing Janet Napolitano, who was confirmed as the new Homeland Security Secretary. Matt, as far as the inaugural ceremony, describe the atmosphere down there.

Matt Benson:
Well, certainly for Republicans, it was a cheerful event. They haven't had a Republican swearing-in for governor for some time. There were about 1500 people there. The bleachers, a short grandstand, and all of the seats seemed to be filled. At the same time, Brewer's people stressed that it wasn't an extravagant affair. They didn't spend a lot of money: the out of pocket expense they estimated at roughly $2,000. Obviously, they're trying to avoid anything ostentatious, as the state is in this fiscal maelstrom.

Ted Simons:
There's also a concept, though, that this is a governor being sworn in who was not elected to the post.

Matt Benson:
That's true and certainly, when this has happened in the past, the ceremony was a simple thing inside the capitol. Not an big outside affair. What's right and wrong, who knows?

Mike Sunnucks:
It's one of the only places where the Republicans had a good week, probably, since the big festivities with Obama, the world's changing. And of course in Arizona, we're in a bubble and we swear in a Republican.

Howard Fischer:
And of course what's interesting is the content of the speech, which we're going to talk about. The Republicans certainly were happy. The Democrats were busy parsing the speech, looking for things there that they say are happy news. People are saying, we're going to be able to work with her, she didn't say anything that outrageous. The Democrats are whistling in the graveyard saying things will be great.

Mike Sunnucks:
Compared to what the Democrats are facing in the legislature, Jan's probably their best friend. Whether they like it or not. Doesn't matter how friendly she's going to be. Compared to Pearce and Kavanagh, and some of these guys who want to axe the budget, she's the last line of defense.

Ted Simons:
How much of policy was hinted at in the speech?

Howard Fischer:
It was funny, we all went back to the press room and we're reading this economic stimulus plan called "Freedom." Which led to a lot of jokes: free to be you and me, and freedom's just another word for nothing left to lose. The policy was smaller government, and we knew that was coming; we don't have the money. And less regulation, but there were very few specifics on how she plans to do that, and what she's willing to take off the table. The closest thing to a specific? She talked about the freedom to pursue an "authentic education" at research university or community college without going deeply into debt. That could be a signal that she doesn't want to make the deep cuts in university funding that some of her colleagues are talking about.

Ted Simons:
I do want to get to that aspect, and the whole issue of higher education funding in a little bit. But back to what she was saying regarding the stimulus plan named "Freedom." I guess that crowd probably liked it a lot.

Matt Benson:
Of course! One of her biggest applause Lines was when she said government was going to shrink. And that doesn't happen often and folks were happy to hear that. I'm guessing any state workers attending probably weren't clapping. But this idea of low regulation, and lower taxes, and smaller government, these are sort of generic, boiler-plate Republican principles and I don't think it surprised anyone watching the speech that these were the things Jan Brewer was talking about. I don't think they give us a window to where she's going next.

Mike Sunnucks:
But it's a stark contrast with what is happening nationally. We're looking at a trillion dollar stimulus package from Obama, where the government's going to send money to states and other places for public works. We're talking about more regulations because of all the shenanigans that have gone on with Wall Street, more anti-trust enforcements. And she comes out with "freedom," and says we need smaller government. That goes against where the whole country's populace is going right now.

Howard Fischer:
And the other piece of it, of course, is the difference between her and Napolitano. She mentioned the former Governor by name only once, thanking her for service. And then she went on to say, I feel like somebody who was invited to a party, showed up late, the guests are gone, and I'm handed the check. She's saying I inherited this mess, so be aware, this isn't my fault.

Ted Simons:
The concept of businesses either moving here or not moving here, I want to ask you this, because I'm sure at the Business Journal you look at stuff like this: simply because of tax structure, are there studies that look at that, because we hear this over and over. We've got to make the economic climate attractive to businesses to get them out here. How much do we know that that actually works?

Mike Sunnucks:
It depends on the business, and it depends on the tax. Traditionally, our commercial property taxes have been higher than other states, but we have lower property tax. But when it comes to a big manufacturer, say like a Toyota, which landed in Texas, they look for specialized tax breaks and incentives. So in a general sense, low taxes certainly don't hurt Businesses coming here but when you're trying to get the big Fish, they'll play states off Each other. We're seeing this with solar: New Mexico, Oregon, California, Texas are offering incentives. Arizona isn't, and we lose out on some of those.

Howard Fischer:
But there are some larger public policy issues here, which have to do with the fact that in Arizona, businesses pay tax not only on their land and buildings, as do homeowners, but on what's called personal property. So every piece of machinery, every mill, every typewriter, all is paid, and that works against manufacturers who have a lot of expensive equipment but tends to get us those call centers and things like that. If you want the manufacturers and the high-paying jobs, you have to adjust it. But they also come here because of an education system. They want to train the employees. And that gets to the argument the university presidents are making.

Ted Simons:
And that's kind of where I was leading to. Because the idea of Tucson Electric Power coming out, and Raytheon coming out and saying do not cut higher education. We need these trained workers. Howie, we've got this tentative plan put out by the appropriations chairs, and boy oh boy, the lid is off. You know what has hit you know what.

Howard Fischer:
Exactly. And they put these out as options. But it's clearly one set of options -- cut, cut, cut. To be fair, their argument is that for years, we've been collecting less in taxes than we've been spending. And we've done that with some gimmicks. We took certain things off the books like school finance. We also did these reversions where we take the bills that are due in June, at the end of one fiscal year, and push them into another fiscal year. Even Janet proposed before she left, borrowing up to 15 years in the future on lottery proceeds. You can't keep doing that, so they were only looking at cuts. You're right, it's severe. If we're talking about -- even, assuming we get $800 million in a stimulus package over the next two years, you're still talking about cuts that have to be over $2 billion over two years and that means education has to be a part of that.

Mike Sunnucks:
Universities are a big one, because K-12 is voter-protected, a lot of healthcare is voter-protected. The university is kind of a big one they're looking at, obviously, and city revenue --

Howard Fischer:
But actually, that's not true, because the fact is that universities -- first, they were talking K-12 cuts of $900 million. So they're counting on the stuff that's not voter-protected. The second part is, while the universities are talking about these 40\% cuts, what they're not factoring into that is getting they're getting $1 billion a year in tuition, even at the current rate.

Ted Simons:
Well, not only are they are factoring that in -- we had the university presidents on Wednesday and I asked them, will tuition have to be increased because of this and all of them said, of course.

Howard Fischer:
Yeah, they're talking about almost doubling it. But what I'm saying is, the difference is when you see those signs on the evening news about the 40\% cuts, the actual cut to university budgets including all of the sources of revenue, are smaller. But is it crippling? Yes, of course it's crippling.

Mike Sunnucks:
But you look at all the things government does. Obviously, they've got to build roads and put people in jail. But if you look at all the things the government does, the universities have a big payoff for this state. They train workers, they're a big economic engine, they create jobs, they do a lot of research that spills out to entrepreneurs and into innovation, and we're behind California and these other states in funding this already. And like Crow said, if we do this, we're going to put ourselves decades behind.

Matt Benson:
I think the question is, how do you maintain these universities that have grown and expanded? This continues to be a growing state and certainly the expectation is the residents are going to be flowing in again once the economy recovers somewhat. How do you maintain these resources and keep the tuition low, as the new governor wants to do? How do you do it all? How do you have your cake and eat it too? I don't know what the answer is to that.

Howard Fischer:
And part of the problem is that we have a constitutional provision that says instruction in the state should be, quote, as nearly free as practicable. Nobody, including the State Supreme Court, has been able to define that. We've been at the top end of the bottom third. So students here, while they've been complaining about the rates of tuition, are getting a relative bargain compared to other states. Students are going to need to absorb more of this.

Mike Sunnucks:
But getting back to your question before about our competitiveness, one the things that makes us competitive is that we're a low-cost alternative to California, to Chicago, to the east coast. They need to consider, if we're raising college tuition or anything else to where it's going to make our cost of living much higher, it's going to reduce our competitiveness and attractiveness.

Ted Simons:
Real quickly. Kavanagh, Adams, were these folks taken back by the immediate push by -- it seems like higher education kind of led the charge, here -- but I'm already hearing Adams say, people need to not overreact, this is just a float here.

Matt Benson:
Of course, that's what he's saying. Frankly, I don't know how they could be surprised by the reaction. These kinds of cuts, $600 million between the three public universities, that's pretty jaw-dropping. Frankly, the math overall is pretty amazing. I don't know how you close a $4 billion shortfall over this fiscal year and next without either looking at cuts of this magnitude, raising taxes or getting into the stuff Governor Napolitano was talking about.

Mike Sunnucks:
One of the things that worries everybody is, the universities and all the spenders before, they had Janet there as a stopgap. They knew Pearce and these mediators down there, they just want to cut the government to the bone. They'll propose these things every year no matter what. They want to starve the beast. There's no stopgap there. So all of the university chiefs and everybody else is wondering who is going to stop this.

Howard Fischer:
And this is where we come down to what Matt mentioned, the availability of taxes. You could theoretically say if you want to be intellectually honest with voters, say we have a real deep problem, deeper than we ever thought. If you want to preserve some these programs, if we were to levy one penny for one year and have it self-destruct we could raise $1.1 billion. Nobody seems to be willing to do that. Kavanagh told me it would be a campaign funded by all the special interests and we wouldn't be able to combat it. Well, all campaigns are that way! That's how lawmakers get elected!

Mike Sunnucks:
And the thing about sales tax: it does raise a billion dollars and they could expand it, and get rid of all the exemptions for pet groomers, and nail salons, and business services. The two things, they're not going to be temporary. It's very hard to get government to do something temporarily. So they would get a billion dollars, and then, wow! We're getting used to that in our checking account. The second thing is the reason they go after sales tax is that it's this low-hanging fruit. You don't have the hospitals and the corporations down there pushing for their various tax agendas. Consumers don't really have a lobby.

Ted Simons:
I want to go back to what you had referred to earlier. Governor Brewer talking about -- she didn't single out much but did seem to single out higher education and wanted to make sure students weren't debt-ridden trying to go to college.

Howard Fischer:
Now remember this woman's history. This is a woman who, on one hand, said she didn't support borrowing, but supported borrowing to build ASU West, which happens to be...what city could that be in? Could it be where she lives? So she is attached to ASU, certainly to ASU West, and she's afraid this is going to affect things that were hard fought for back in the '70s and '80s, and she wants to make sure that's protected. I think when push comes to shove, she's going to tell Kirk Adams as the Speaker and Bob Burns, the Senate President, this is all very nice, we're not going to do this, and you cannot cut university budgets in the middle of the year since everyone is on contract. You cannot cut K-12, because even people like Rich Crandall, a Mesa Republican, said it's a political non-starter.

Mike Sunnucks:
He wants to run again and the Republicans want to stay in power. If they come out and kill universities and try to get rid of all-day k, that's a disaster for them.

Matt Benson:
At the same time, conservatives in this state see this -- I mean, they have put up with year after year after year of double-digit spending increases and program increases and expansions of every variety. They see this, as Brewer says, as the rarest of opportunities when government is going to shrink. And if that doesn't happen for real, there's going to be hell to pay.

Howard Fischer:
It's got to happen. It will happen. The question is can you make a $9.9 billion operating budget shrink by $3 billion and not affect the basic services? If you've decided that constitutionally you've protected basic K-12, if not some of the other things, like soft capital and books. And if you've decided that healthcare for the poor is constitutionally protected, okay: that's $5 billion right there. We're not opening the prisons, we're not taking DPS officers off the road. Even if we're going to make a couple million off photo radar, which we'll talk about later, you're going to have to shrink the budget. I don't know you can do it with the kind of cuts they want.

Ted Simons:
Are you seeing cracks now within the caucus GOP? Are folks down there all of a sudden starting to get a little queasy?

Matt Benson:
We have started to see that on the Republican side, we started to see that in the hearing yesterday with folks saying -- stressing -- I think it was Crandall who came out and said, woah, this plan is not cooked yet. We haven't all signed on to this. This is not a done deal. And I'm sure that's partially a reality of -- a result of the some of the pushback they're getting from the constituents, powerful constituents. University presidents and folks of that sort.

Ted Simons:
Last question on the budget. Regarding the business community, what are you hearing? Is it a loud cry? Is it a rising cry? Is it no word at all?

Mike Sunnucks:
I think it's rising. You'll see the university boosters. There's a lot of economic development that comes out of the universities, especially ASU. They have their crowd. The hospitals are going to fight against any kind of reimbursement cuts. They already don't make money or cut even on Medicaid and they say they can't take anymore. And their regular customers aren't paying the bills because of the economy. So you're going to have niches of the business community coming out and fighting for things -- I think universities, all-day K they'll really get behind. The property tax repeal, the $250 million equalization rate they might have to delay that. That could be a trade-off.

Matt Benson:
One of the interesting things to look at will be, will the business community put up with things they wouldn't have in the past? For example, delaying the elimination of the equalization tax. Possibly, God forbid, any kind of a tax increase, if things got dark enough. And the other one being something that Napolitano suggested -- the securitization of the lottery revenue and the tobacco tax settlement, which would, again, bring in almost a billion.

Howard Fischer:
But it's a payday loan, that's the problem! I love all of these Democrats saying we should borrow for today's current needs. Income, we're going to get over 15 years. These are the same people who opposed payday lending, who said it was unfair and misleading. That's exactly what Janet's plan was, it's payday lending!

Mike Sunnucks:
Sales tax could get business support because it doesn't impact businesses that much. It impacts consumers. We'll pay it. In terms of the securitization, I don't think that's going to get anywhere. In fact, the gimmicks that we all deride, they don't cost anything! The bonding costs us plenty. The gimmicks of the rollovers, and just moving money around, that didn't cost anything.

Ted Simons:
Okay, as we try to figure out the payday loan and budget scenario here, well, we've still got to work on that one. Photo radar. It sounds like we've got at least one bill now dropped regarding highway cameras and all sorts of new information on photo radar.

Howard Fischer:
Well, that's the thing, this bill started out as being -- photo radar was approved as part of the budget last year. It was kind of snuck in there as part of the massive budget and did it in a way to get the people to pay the money rather than challenge. A lot of lawmakers weren't happy about the way it was done. What we're now finding out is, the cameras are not only snapping pictures of those going 11 miles over the limit. Each of those cameras has a video camera and a video recorder that's recording 24 hours a day, 7 days a week, everyone who passes. And they're keeping that for 90 says. That came as a shock to some lawmakers, who said, wait a minute, what part of big brother do you not understand?

Matt Benson:
It came to a shock to Governor Brewer as well.

Ted Simons:
I'm sorry, but why is that a surprise? Are we really surprised by that?

Howard Fischer:
I think everything understands there's monitoring. You drive down those streets and look up at the lights and you're going to see cameras. The assumption is those are there for traffic monitoring. I think the fear is that Redflex technology, which has the contract, admits they have the technology not only to keep the stuff, but to license plate read, and do what they call distance tracking. So they get your license plate when you leave Phoenix, they get it when you get to Flagstaff, and if you've gotten there too fast, issue a ticket on that. Once you can read the license plate and put that into a database, you can track where Mike is every time he passes this thing.

Ted Simons:
Who would track where Mike is? That's my question.

Matt Benson:
But once you have that technology, anyone could track it. The government could track it. I think that's the fear from a civil liberties standpoint. Now what's interesting about it to me is, when Governor Napolitano installed License Read technology in DPS vehicles, that was trumpeted as a good thing, a way to prevent or reduce auto theft and vehicles traveling south to Mexico.

Howard Fischer:
But the promise was made that we weren't going to keep that, and we weren't going to store it for any length of time. And so we're finding this mission creep from DPS, the same thing with that License Reader technology. Look, I understand you go on the street and there's no expectation of privacy. Maybe I'm too much a child of the '60s. But the fact is, if you're paranoid, it doesn't mean the government's not out to get you. I don't want the government being able to build a database of where I am and when I've been there.

Mike Sunnucks:
I think big brother stuff is there too, but I think people see it for what it is. It's a big revenue generator. It may help reduce traffic accidents and speeding. But people see it for what it is: it's for them to get money from us and to soak us as best they can. I don't think people had a big problem with the Scottsdale ones, because they knew they were coming and they could prepare for it. These other ones seem to be aimed at -- kind of like a speed trap.

Ted Simons:
Are there enough people who are opposed to radar cameras in general, recording radar cameras -- are there enough people that if this thing got on the ballot, that the majority of Arizona would say let's get rid of it?

Mike Sunnucks:
I think yes, because we have a very libertarian state. The 9/11 fallout, people are starting to question all this surveillance that's going on.

Matt Benson:
I think that's very much an open question. I think the polls have been all over the place in terms of public support for this program. I think it depends on how you word the questions. And I don't trust anything that I've seen so far. Certainly, that would be quite a campaign if it actually did get on the ballot. And we're talking, again, about $100 million a year at a time when the state is absolutely swimming in red ink. That's a lot of money.

Mike Sunnucks:
But part of the money goes to the clean elections fund, and anybody that's against that should point that out, that these tickets go to help our legislators run for office on the public dime.

Howard Fischer:
But here's the other piece. The contract is for two years. The state can walk away. But if you walk away, you have to pay Redflex's cost in the first two years. Each of those stationary cameras, where they've torn up the pavement? Perhaps $250,000 for each of the cameras' installations. It would cost us at this point so much money to get out that it may not be worth it. Redflex is counting on the $20 million a year in revenues.

Ted Simons:
Are we getting all the revenue we're supposed to get from these things? It sounds like up to a third of people that are caught speeding are paying and the rest of them are saying, I'm not following the instructions!

Howard Fisher:
It's a little premature. This is a very unusual procedure. Because this is not being issued by an officer, what you get in the mail from Redflex is a "notice of violation." What does it mean? Nothing. Get rid of it. Doesn't mean anything. The question is, when they get the citation, when they're actually served, will they pay it or challenge it? And that's where we are. Many of the things have not gotten to the citation stage, we're not seeing who's responding to that. But you're right. At the moment, it's something like one out of four people are bothering to pay.

Mike Sunnucks:
When they did the Scottsdale thing, there were a lot of bad accidents on that stretch of the 101. It was played up as a safety thing and now it's part of the budget deal and part of closing the budget deficit. If they took short sections of I-10 and said there are bad accidents there and did it along some isolated spots instead of making it a revenue generator, I think more people would go along with it.

Ted Simons:
Are enough people upset at the revenue generating aspect of this? Because, again, I hear from a lot of people, and I'm not hearing anywhere near the negative reaction to the photo radar as you would imagine if you read the comments section in the Arizona Republic online.

Howard Fischer:
And you're right, I think people recognize -- look, I have a lead foot. I admit it. I am driving slower. Other people are driving slower. Now, to get to Mike's point about speed traps, there are two signs. There's a sign half a mile out and a sign 300 feet out. I'm sorry, if you don't see the both of them, then you deserve to get the ticket.

Ted Simons:
I just don't know. I'm kind of with Matt here. I think you put the thing to a vote, I'm not quite so sure if it's going to go down. Anyway, we'll have to stop it right there. Howie, can you clean up the studio? You can't just be throwing papers all over the place.

Howard Fischer:
What can I say?

Ted Simons:
We're tightening our belts around here, Howie! You're going to have to clean up that mess.

Matt Benson:
Well, you know, he's a child of the '60s.

Ted Simons:
That's right. Hey, guys, thanks a lot. We appreciate it. Coming up Monday on "Horizon," we start a four-part series on the legislature's top priorities with a debate on what lawmakers should do to balance the state's budget. That's Monday at 7:00 on "Horizon." Tuesday, we talk about education, and education budget cuts being proposed by lawmakers. Wednesday, a look at how lawmakers want to reform the initiative process. We wrap up our legislative series Thursday by looking at a bill to ban photo radar. Friday, it's another edition of the Journalists' Roundtable. Coming up next on "N.O.W." A look at the boomers and seniors caught in the financial meltdown. Those children of the '60s. That's next on "N.O.W." That's it for now. I'm Ted Simons. Thank you so much for joining us. You have a great weekend.

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