Ted Simons: Good evening and welcome to "Horizon." I'm Ted Simons. Joining me tonight are Mary Jo Pitzl of "The Arizona Republic." Howard Fischer of Capitol Media Services. And Dennis Welch of "The Arizona Guardian." The governor signs an $8.3 billion budget. Mary Jo, apparently, signed it Wednesday, we heard about it Thursday. What's going on with what?
Mary Jo Pitzl: They didn't have a signing statement put together is what I was told and didn't want to release the fact that she had signed the budget until the letter that accompanying to lawmakers was finished. It takes a while.
Mike Fischer: They had had the bills for several days and essentially this was a CYA. The governor trying to figure out, let me see, I can't pay for prop 100, we're going to save education, how do I put a big smiley face on this and took her crack staff of speechwriters and publicists a week to figure that out.
Ted Simons: What happened to her ideas on education and the budget's ideas on education?
Dennis Welch: She got rolled by the Republicans, to Howie's point about education, she campaigned hard for a tax on education and giving a lot of that back. A lot of people might look at it that way with the education cuts she called for a lot fewer cuts then k-12 ended up on signing off on bigger cuts because that's what the Republicans wants.
Mary Jo Pitzl: And I think the whole prop 100, the temporary tax increase that people approved last may is going to come under more scrutiny, the promise was that it would go two-thirds to education and one third to public safety and health. We forgot about health. And public safety well corrections is the only major budget the only that saw an increase. A lot of others took a hair cut.
Howard Fishcer: The argument the governor makes it would have been worse without the hundred million. The only place to cut is education, and comes down to what people's expectations were and it was we're going to leave at least K-12 alone. The university, they're on their own. Community college, yeah, we cut half their state aid. But the belief was leave education alone and yet we're hearing actual evidence out of the classrooms, they're adding more children to the classrooms, programs are disappearing and full day kindergarten has been gone and all of the extracurricular is gone. And now to divert $55 million a year to private schools but that's another story
Dennis Welch: and I think that’s the important part here when you talk about $8.3 billion – when you talk about schools and people's expectations and seeing that their kids are doing with less and teachers are teaching beggar class sighs that's when the budget comes home and affects you personally.
Mary Jo Pitzl: The question is how much that will translate to the state level. Those decisions will be left to the local school boards and depending on what school district, they have different situations, different levy amounts and bonding capacities and perhaps different willingness of the voters to raise taxes, but in the budget, there's a lot of impetus in there on local governments to almost force them to raise taxes. You have the counties at legislature whenever they had an opening, look, don't push these cut ever costs on us. You're pushing -- I think at the end of the day, it was south of $150 million in costs on to the counties and especially in the smaller counties, probably going to force a property tax.
Ted Simons: We had counties on last night and we talked about that issue. The affect on cities as well and the -- we had the speaker on this week and he said this was a structurally sound, honest budget, no gimmicks or tax increases. Got that, but we're going to talk about tuition increases in a second if you have a kid and you look at that increase, property taxes that may go up because of another problem with counties getting hammered --
Dennis Welch: That's what this budget is about. You take a look at it. It's diverted and shifted the burden on the taxing shorts. If you're a taxing authority in the state you have to make decisions whether you want to raise taxes or sell it to people out there. That's what this is about. They can say whatever they want. We balanced the budget without raising taxes but at the end of the day, the people are probably going to pay a lot more
Mary Jo Pitzl: I think weariness about the levels of government, the taking it on their shoulders, we'll contribute and pitch in. There's a requirement that the cities have to help fund the State Department of Water Resources the city of Phoenix it's $2 million they've got to find and they're seriously thinking about tacking that on to your local, water and sewer bill and putting a line on there, just like they do with the EPA requirements, for them to do X, Y or Z state assess and pass the cost on to you but clearly label it's the state and I don't know if that will result to trickle back up to lawmakers in terms of honesty on the budget.
Howard Fischer: Honesty, come on! They're going to run for election in 2012, saying look how much we cut. Never mind the tax bill or local thing or the tuition increase at the community colleges and state universities. But part of this is also the philosophical we're going to starve the beast. They never like the rainy day fund years ago -- their idea was when the economy goes south, and it always does every decade or so, this is the chance to starve the beast. They want smaller government and AHCCCS, they didn't want the expansion that the voters approved. Didn't want all-day kindergarten. This is a excuse to shrink government.
Ted Simons: So when we keep hearing these were tough decisions and difficult decisions. Were these tough decisions? And difficult decisions?
Howard Fischer: There's people who wished we had a $5 billion budget and get it down to that. And there were people -- what? -- going back to a 2004 spending plan.
Mary Jo Pitzl: tougher decisions will come when revenues start to pick up in the state and probably won't happen for a while and in some quarters, expectations that the programs and services that have gone by the by will be restored. But they've been permanently eliminated from the state statute books.
Dennis Welch: This is going to be a different state government after this year. This is -- these are -- I mean, after the past few years, the way the state operates and runs its services, it's a different place than it was a few years ago.
Howard Fishcer: Ha One-cent sales tax, end of may, 2013, a billion dollars a year goes away.
Ted Simons: And the jobs bill.
Howard fishcer: And those, and well, now we're down to do you believe in trickle down and if we keep cutting the tax rates we're going to grow it. And the whole lafer curve at some point it fall as part. That's like saying if we take the tax rate to zero we'll be infinitely wealthy.
Mary Jo Pitzl:There's a valid argument to be made, hey, we're cutting now because if we wait until the sales tax goes off, we'll have a world of hurt. They're taking this in stages and the next big hit is going to come when the tax expires.
Howard Fischer: And let me back up. This is a good point that Mary Jo brings up. Part of reason we're in this hole is -- reason we're in this hole, we had a former governor off in D.C. spending money there, even as the economy went south in 2007 said, oh, we don't need to cut. We can move the June payments into July. I found $2 million and we can borrow and do a song and dance.
Mary Jo Pitzl: But that unnamed governor also signed off on permanent tax cuts so she expanded spending and also signed off on tax cuts that are permanent and that reduce the revenue coming into the state. A lot of the spending has been brought back in line but we haven't seen a restoration of the income tax levels.
Dennis Welch: But Janet Napolitano --
Mary Jo Pitzl: Who?
Dennis Welch: The homeland security chief. It wasn’t just her. But there was a Republican-dominated that also signed off. When times are good You want to spend money on programs and go back to your districts and tell the voters how good you're doing.
Ted Simons: We've done programs on this to the - of some of our viewers the idea of for income tax rates going down and spending going up like that and those two trains aren't going to meet.
Howard Fishcer: You don't buy the flat tax theory, the flat tax theory we bring the 4% and bring it down to 2.3% --
Ted Simons: It's not a question of what I'm buying. If this is doing this and this is doing this, eventually they'll going to do more of this.
Howard Fishcer: We have to make it up on volume.
Ted Simons: Ok.
Mary Jo Pitzl: We have set the stage to see if we can make it up on volume with the cuts in the jobs bills, most won't happen for a couple more years, we have the formula, we can be a laboratory.
Ted Simons: What happened to transplant funding? [Laughter] We had the AHCCCS we had the director of AHCCCS sitting there and he said transplant funding has been restored. I don't care what anyone says.
Mary Jo Pitzl: Here's the confusion, last year the way they did the budget, they put in a line and said we're going to cut out funding for certain kinds of transplants. A, B, C. very clear, you knew what was being cut. Effective October 1. To restore the funding, the simple thing would be to say, we're now restoring the funding for A, B, C. But you have to read this section and take them in totality and understand the notwithstanding language and they're giving AHCCCS the authority to go in and move stuff if you have to and it's our intent these transplants will be restored and that has left a lot of folks who have been transplant advocates uneasy. They don't see the language we're putting back in funding for bone marrow transplants .Now Tom Betlack the governor, her people, they swear up and down its going to happen. But letters are supposed to be going out to these people but I don't think anyone is going to believe it until they have the letter in hand.
Dennis Welch: I haven't got this story for months. We've been talking about it. I don't know why it's so hard out of $8.3 billion to find $1.2 million to fund the program. It's a fraction of the budget. I don't understand the constitution.
Howard Fishcer: It's like going to and watching the school board deal with a budget. They don't understand hundreds of millions of dollars on certain types of computers but can argue over the 49-cent pencils and whether they should be 39.
Mary Jo Pitzl: If you can put a human face on it, why did it go on for so long and it got caught up with the mandates coming down from Washington that there's no evidence it acts directly transplants. Yes, federal health reform is going to cost the state and other states a big chuck of change, and that puts a strain on the state. You have to look for savings and they decided to get it out of transplants and maybe score point because the state is constantly battling with Washington D.C. over mandates. But it was totally within the state's authority and this budget shows, it remains within the state's authority to restore funding for transplants.
Dennis Welch: People could die -- people have died since this happened. Somebody said it could be a direct relation, that's like a worst case scenario. I don't understand why they're letting it fester.
Ted Simons: It sounds like the festering should stop soon. We'll see.
Dennis Welch: Maybe.
Mary Jo Pitzl: The governor signed a budget, for as much as the issue was inflammatory for almost a year and she made no mention of it in her signing letter.
Ted Simons: Ok. Let's talk about the budget process. By way of the legislature. There's some concern and criticism that all of a sudden, 13 odd bill, read them, sign them. Let's get it moving here.
Howard Fishcer: On one hand that's typical for the last decade or so. It used to be a bottom ups process. The appropriations subcommittees meet and sit down with the agencies and figure out what's going on. Now it's the governor puts out a plan, the leadership looking at it, maybe they put out a plan and go behind closed doors and what is it going to take to get 16 and 31 to get this done and add and subtract and maybe 24 hours before they trot out the finished product and the problem is that the people who got specific elements know what they are, very few people know what's in the budget and it's not just the spending but as you point out, there are budget reconciliation bills where we make policy decisions because somebody needed something to get their vote and it's going to take us weeks to figure out what it all is.
Dennis Welch: A good example of what happens when you do it this way, like transplant funding, nobody ever brought it up last year, it happened. And oh, we don't know that was in there. Next year's transplant funding? Few people know everything that's going on in the budget.
Mary Jo Pitzl: I've been there for a couple years and the budgets have always been done like this. Start working on them in January and have hearings but a whole different budget gets put together. It's built on the base of often what the governor proposed but the mantra, once we get a deal, you got to vote it quick. But that doesn't stand up this year, there are supermajority in both the house and senate. The votes were 40 Republicans yes in the house and 21 in the senate and there were a few that differed on a couple of the bills and they were at no risk of losing the -- you know, the simple majority they needed to pass these things but decided they needed to push this out get this done quickly and I think it had to do with internal deadline, the house finished it and it bled over to the morning of April 1 and that's early -- and they get criticized if they drag it out. It's damn if you do and damn if you don't.
Dennis Welch: You have people protesting every day and scandals that have happened with certain senators and lawmakers. And what not. How much is that motivated everybody to just get out of there?
Howard Fishcer: The third leg on the stool, if you give people a week to find the nitty-gritty details and all of a sudden, somebody says, what about this? And calls Mary Jo and -- have you done a story on this? And a big headline and some lawmakers get cold feet. They don't want everybody to know what's there.
Dennis Welch: Definitely, they were scheduled to work on a Friday, and normally the legislature works Monday through Thursday and wanted to work on a Friday because they didn't want anyone to go home over the weekend and reading this thing.
Mary Jo Pitzl: Someone had a business trip they had to get to on Friday. The budget is the only responsibility of the legislature.
Ted Simons: Before we leave this topic, I know some states have like a requirement that a certain amount of time has to be used for vetting out these things. Any possibility of that happening here?
Mary Jo pitzl: No. [Laughter] There are a lot of government reforms broached last year that got nowhere and wound up with the lieutenant governor provision on the ballot which went bust. Probably not. This is a recommendation out of Arizona town hall and I think you have to look hard and find to find any recommendations out of town hall that actually became public policy.
Ted Simons: We talked about the tuition hikes. Howie, the highest increase and then Arizona university and NAU and Nau and UVA had some sort of rebate
Howard Fishcer: They had the rebate. Which I'm not sure I understand. Telling the in-state students your going to pay over $10,000, but tell you what, then we'll cut you a check back. I've never understood that. I've never understood why you would go to best buy, to you pay and then fill in the form to get it back as free as opposed to giving you a lower price.
Ted Simons: They don't think you're going to take that extra step.
Howard Fishcer: I don't fully understand that. And they're forcing the universities to use their rainy day funds to help to mitigate this, but we're going to have universities that are going to be in the top half of public universities and this is where is gets interesting. There was a lawsuit when the tuition went up 40% several years ago and, wait, the state constitution says instruction needs to be as free as practicable. The Supreme Court looked and said there's no definition but that the regents said lower third of all universities and we think that fits the definition. I don't know what happens if this goes back to the Supreme Court and the court said, wait, you're saying this is the level. It is an interesting question and I don't know what the courts would do with it this time.
Ted Simons: Stay on campus. Guns on campus. I don't know if I want to mix guns with rising tuition.
Mary Jo Pitzl: It makes you wonder if tuition is going to be in the realm of $10,000 a year, will that affect the caliber of gun that a student can legally carry on campus. Oh!
Mary Jo Pitzel: The bill on the governor's desk will allow guns to be carried on Universities campuses if they're on public rights-of-way. And therein, lies the debate.
Ted Simons: What are we talking about here?
Howard Fishcer: That's the problem and it's clear, for example, if you go through the ASU campus on lemon street, one of those streets that goes through there, the street, the adjacent sidewalks are public rights-of-ways. What we don't know, what about the sidewalks that go off to the buildings? Who maintains it? Is it that it's open to the public? And it becomes tricky because what you're essentially saying, you can take your assault rifle and walk around the campus and the police can't do anything to you until you approach the door of the building and they say, oh, no, now we can stop you.
Dennis Welch: This gave a lot of Republicans some heartburn the other day. Robison from Chandler expressed a lot of concern. The Virginia tech Massacre. Do you want somebody to be able to take their AK47 assault weapons up to the door?
Howard fishcer: And the counter-argument, and there's a certain merit. The people who are going to break the laws aren't going to keep guns off campus in the first place. So do you have a right to self-defense? The perspective from the campus police, rather than one guy with a gun, they have 12. Who is the good guy, who is the bad guy?
Dennis Welch: If the people were -- with Gabrielle Giffords, there were people armed in that situation and that didn't stop anything.
Ted Simons: Quickly, a question -- not much of a question. Answer it anyway. Is the governor going to sign this?
Howard Fishcer: Hell, yes.
Ted Simons: All right.
Howard Fishcer; She's the darling of the NRA and gave a speech to the NRA talking about the good old days, a saloon girl would always have a Derringer in her garter belt.
Ted Simons: We cant leave without talking about the fiesta bowl story, Terry Goddard thinks Tom Horne should recues himself from the investigation.
Dennis Welch: Some of the people they contributed to Mr. Horne's campaign and recently helped to organize a fundraiser for him. Terry Goddard held the position for eight years before Horne took over and, look, that’s not good, this doesn't appear right. Maybe he should give it off to another organization with fewer ties to the Fiesta Bowl to avoid any appearance of conflicts of interest.
Howard Fishcer: That's the shall. Appearance. Look, can Tom Horne segregate it out. As journalists do we have opinions on things? Sure. But if you just took a check from someone, maybe you shouldn't be the ones investigating. There are 15 county attorneys, there's got to be one who could do the job.
Dennis Welch: This is a no win. I thought that Terry was actually doing Mr. Horne a favor here. He was giving Horne A way out of the investigation. I don't think there's an upside for Mr. Horne investigating the Fiesta Bowl on any of this stuff. I don't see where he benefits.
Howard Fishcer: If there's going to be indictment and I think there will, he can beat his chest. Much the same way when Andy Thomas indicted the lawmaker from Yuma about certain campaign stuff and says, look, I've indicted somebody from my own party.
Mary Jo Pitzl: But that all fell apart at the end of the day and the flip side, yes, I think Horne could benefit if there are indictments. Look, I'm coming down hard on these people. But if the investigation for very valid reason can't yield, people aren't going to buy it.
Dennis Welch: When he runs for governor in a few years, you're going to see a lot of the same donors pop up. Maybe they avoided an indictment because of this.
Ted Simons: We've got 30 seconds. Sticking with the Fiesta Bowl. President Pearce, is he going to comment on his association and whether he paid for the tickets, or didn't?
Mary Jo Pitzl: When he gets the receipts --
Dennis Welch: He promised a roundtable discussion once he gets the receipts.
Ted Simons: Once he gets the receipts in?
Howard Fishcer: He said there's one trip he took that wasn't paid for and some other receipts he can’t find. Russell's problem, he hasn't gotten in front of it. Kirk Adams got out in front of it. This is one of those stories that you have to be proactive on you need to be out there even what Rich Crandel said -- oh, my god – I was a moron for taking it.
Ted Simons: We'll stop with Howie is a moron is that is what you just said? o no Rich Crandel said it [Laughter]