April 21, 2011
Host: Ted Simons
Arizona ArtBeat: Phoenix Symphony
- Interim President and CEO Jim Ward is putting the Phoenix Symphony on solid financial ground. Hear his plans to create a collaborative and sustainable future, not only for the Symphony, but for other arts organizations as well.
Category: The Arts
- Jim Ward - Interim President and CEO, Phoenix Symphony
Ted Simons: The economic recession has been tough on arts organizations. Tonight's "Arizona Artbeat" visits the Phoenix symphony, where management and musicians are working together to compose a sustainable future. ¶¶
David Majure: Starting and stopping. Doing it again and again to get it just right. This is a typical rehearsal for the Phoenix symphony orchestra. The current season ends in June. After a brief summer break, it's back to work in September. The 2011-2012 season is going to be a crowd pleaser, according to assistant conductor Joey Young.
Joseph Young: Any concert they go to next season, they're going to hear something, some blockbuster classical works. It's a really can't-miss season. We have Broadway, we have the rat pack, we have even Motown. I think this is a time for anyone to see the symphony. We have something for our patrons who are very supportive of us, or people who are just have seen symphony hall and are afraid to come in. It's not a stuffy place. It's really something great going on here almost every week with the symphony. ¶¶
David Majure: Today symphony hall is alive with music. But earlier this year, financial problems threatened to silence it.
Charles Berginc We know very well what the problems are. We see it all over the country. There's orchestras dying by the second, and many that are hanging on just by a thread. ¶¶ So the effects from a couple years ago with the economy dropping has -- is really rearing its ugly head continuously in the arts.
David Majure: Chuck Berginc has been with the symphony for nearly three decades. He's the orchestra's principle trumpet and he represents musicians in labor negotiations with management. Two years ago, musicians made a significant sacrifice to keep the orchestra from going under.
Charles Berginc Yes, we did. We were asked to take a 19% cut, which we didn't do happily, but we did it as necessity. We knew that that was going to be an issue. So we needed to do something to try to help the situation out. And actually we were told and we had negotiated a settlement that would give us some restoration next season. That took us to the present negotiations that we just had. ¶¶
David Majure: Earlier this year the symphony was in poor financial shape. Its new CEO Jim ward slashed budgets and asked musicians for help.
Charles Berginc: He was very honest and direct with us, and he was a very good listener, and I never felt and the musicians never felt he was going to put us in a position where we needed to then continue to take a beating, that we needed to understand and we did, and we were able to put off that restoration for another year. So we agreed as we had in the past two years to have a wage freeze. We agreed to just continue with the same wages we've been making for another season. What we wanted to make sure was that Phoenix had a symphony. That was foremost to us. We have a fairly large base of fans that really enjoy our music, and we can't do this forever without their support. And so the fact that we provided an ability for us to continue to provide music for them, I'm looking forward to their support in the future that they can step up and help us take care of bills.
David Majure: Berginc says there's a general feeling that the symphony is headed in the right direction. He sure hopes so, because he's not sure musicians can give much more.
Charles Berginc: I don't expect to do this for another year next year. Another wage freeze? I don't believe so. But that remains to be seen. We don't have a contract, and we'll have to sit down and talk about that. But I would anticipate that the management would understand that we're not going to be able to just take the same salary for four, five, six years in a row. We're going to need to see some growth or it's going to be -- we're going to be unable to continue. So I think that they would understand that. That's my guess.
Ted Simons: And joining me now to talk about the Phoenix symphony's finance and the future of arts funding in Arizona is Jim Ward, the interim president and CEO of the Phoenix symphony. How financially sound is the Phoenix symphony?
Jim Ward: Much more than it was when I came aboard. We were basically facing an expense model for next season that we didn't feel that we could meet. And not dissimilar to previous conversations you've had today, we had to decide that we needed to live within our means, make the appropriate cuts to do that so that we could provide music for the Phoenix community.
Ted Simons: When $1.5 million is cut from the symphony, what gets cut?
Jim Ward: It was combination of things. We have a lot of expense levers within our business model. One of them are the musicians. And as you saw on the package previous to this, they took a 19% pay cut two years ago, which was the largest of any American orchestra. My envious job upon appearing was to sit down with them again and I think this community needs to give great credit to the sacrifices of these musicians who agreed to not take back this restoration in their salary. So that was part of it. In concurrence, we needed to restructure on the management side, make cuts there as well, and we made some cuts from a production perspective to the season. That combination created our ability to move forward.
Ted Simons: You mentioned the musicians. How did you get labor and management on the same page?
Jim Ward: I think we're fortunate to have musicians that are very savvy, chuck, for example, has been with the symphony for over 30 years. I think perhaps an approach that I took coming in was being very open and honest and transparent with them. Laying out the financials, agreeing that they were in fact problematic for us going forward. Listening to their concerns, understanding some areas that we could do better with the administrative side. And so working together over a period of time, we came to a model that ended up being the next season.
Ted Simons: Is this model and these cuts and this financial overhaul, if you will, compare that to what you're seeing in symphonies around the country. How financially sound are they, are they doing similar practices?
Jim Ward: Well, I will tell you it -- I think we exist in stark contrast to what's going on around the country. The Detroit symphony has just come off a fairly acrimonious six-month negotiation. Philadelphia has declared bankruptcy. Louisville has declared bankruptcy. Syracuse has discontinued their season. Honolulu has shut their doors potentially forever. And I suppose in our negotiations we could have ended up there. But to the great credit of our musicians, who put the community of Phoenix and music to that community before Frankly their own needs, they agreed to work with us financially so that we could continue to provide music.
Ted Simons: Talk about the idea of the symphony working with the opera. With the ballet, with other arts organizations out there, first of all, was everyone in their own orbit before, is there more cooperation now?
Jim Ward: Well, I think that is one of the fundamental issues that I'm passionate about. You're right. I believe it's going to be very difficult in good economic times or poor, for all of our organizations to exist in their own silo and to a degree they do today. I think there are opportunities to create economies of scale across our organizations, at least the live performing arts organizations, the ballet, the symphony, and we're currently in discussions exploring that as well. Because if we can continue to reduce our cost structure by creating those economies of scale, not only is that better off for us from a stability perspective, we have a better narrative to go back out in the community and say, we've taken hard cuts just like you have, and let's work together to create a great stable arts organization here in Arizona.
Ted Simons: And there does haven't that be that separation as far as organizations are concerned.
Jim Ward: Not necessarily, in different ways they could, but we haven't cracked it yet, but there are many different ways we can economize right now.
Ted Simons: I’ve got to ask you, how does a Tea Party congressional candidate wind up as the CEO of the Phoenix symphony, what’s going on here?
Jim Ward: Well, that's a great question. It's not very often you get the opportunity to run a symphony. But coming off of the campaign and I lost in the primary, the chair of our symphony board, a gentleman who was a supporter of mine, said, Jim, I don't know if you would ever consider this, would you? And I did, because I was classically trained in piano from the age of 6, I played the Obo and the Bassoon in orchestras through college, my undergrad minor was in music. I'm passionate about music. And although I maybe couldn't serve the community in a political aspect I can certainly provide a service to the community by helping the Phoenix symphony and other arts organizations to provide the great level of art that we have here.
Ted Simons: I ask the question because I think some of our viewers would wonder about the GOP maybe being hostile to the arts. Tea Party in particular. You don't necessarily see those things as symbiotic. Talk to us that, a misconception?
Jim Ward: Yes, I think that's a gross misconception. Look. Here's what anybody fundamentally understands, and you talked about in your last segment. Should the largest arts organization in the state of Arizona, which is the Phoenix symphony, go down for whatever reason, it's just another nail in the coffin of our ability to diversify our economy and track business here. The cultural arts are an economic engine in any thriving community. And I believe everyone understands that. But just the same, these organizations have got to live within their means. They cannot outspend their revenue. And in the case of the symphony, that's what was happening. So we're going to take care of our business, we're going to live within our means, we are going to prove that we can do that. And then we're going to go back out into the community and say, look, let's get behind the arts here.
Ted Simons: Philosophically, government funding, how do you stand on that for the arts?
Jim Ward: Well, I will tell you I can only speak from a Phoenix symphony perspective. Government funding only represents about 4-5% of budget.So – and frankly given-- that's gone down significantly obviously given the current budget situation in the state of Arizona. My personal belief is, I think we first need to figure out ways to live within our means, to create a business model that is sustainable, we need revenue from ticket sales, contributions and of course endowment, there's no reason why we can't figure out that kind of a business model. If at the end of the day we can do that without government funding, I'm fine with that.
Ted Simons: Jim, good to have you here. Good luck with the symphony.
Jim Ward: I thank you so much.
- Two Arizona political leaders look back on the recently-adjourned legislative session.
- Rep. Kirk Adams - House Speaker (R)
- Rep. Chad Campbell - House Minority Leader (D)
Ted Simons: Good evening, welcome to "Horizon." I'm Ted Simons. State lawmakers recently wrapped up a legislative session that saw lots of controversy over a number of issues. Some of those issues found resolution in being passed, others did not. Here to talk about the just ended session is house speaker Kirk Adams and minority leader Chad Campbell. Thank you both for joining us tonight on "Horizon."
Chad Campbell: Thank you.
Kirk Adams: Thank you.
Ted Simons: Let's start with general thoughts on the session. For you, high point of the session.
Kirk Adams: Well, there are really three home runs from our perspective. We passed the historic jobs package, we passed a bam answered budget and we pass add very important pension reform package. And the fourth thing would be we completed our work in 100 days, which is the first time that's happened in a very long time, only the fifth time in about 30 years. So all in all, we think had a very successful session.
Ted Simons: Low point for you in this session.
Kirk Adams: I think the low point was perhaps a lot of controversy, particularly surrounding the senate and senate protests and so forth. We are fortunate in the house that we didn't have a lot of that type of RANCOR, I think a lot of the credit goes to the minority in helping keep a collegial atmosphere within the house.
Ted Simons: High point and low point from how you saw it.
Chad Campbell: The high point was actually the end of session or us. And you know, I appreciate the speaker's willingness to work with news terms of keeping the civility. So I do appreciate that from the speaker. But the big rush in the hundred days, while that's nice we got in a hundred days, I think we should be looking at the quantity or the quality, not the quantity. I can be the first one to finish a test, but if I got every answer incorrect, I’m still going to fail that test. And we finished in a hundred days but what we did was unproductive and I think destructive in the long run for the state of Arizona.
Ted Simons: There were a couple of concerns throughout that things were not properly vetted or could have been vetted better or rushed through. Pick your term. How do you respond?
Kirk Adams: You know, state statutes from the constitution contemplates we finish session around 100 days. When we go longer than that, the legislature is criticized for not getting its work done, being there too long. I think it's appropriate when you consider we have a part-time legislature, a citizen legislature, that we get done as quickly as we can get done, with the high quality of work. I think we've done that. There was a lot of heavy lifting in this session. A lot of heavy lifting. We tackled some very big problems. A huge economic problem we have in our state, the long-standing budget problems we have in our state, and some long-term spending issues like our pension system. So to be able to tackle all of that in a timely manner, we think is very successful, and we count it as high accomplishment.
Ted Simons: What do you say about that? We heard complaints something was rushed through, properly vetted, wasn't properly investigate. Talk about that. It sounds like a lot was done in that period of time.
Chad Campbell: But I think many things were rushed, and the thing that stands out is the jobs bill, I call it the corporate tax cut bill. That was rushed through, basically in about 24 hours. That has a $540 million hit to our revenue here in the state when we can't pay the bills. And I that I was very problematic that we didn't discuss that bill for a longer period of time in a more public way. I think this problem with the session was that a lot was done but it wasn't done in the long-term interest of the state. We got an -- gutted education again, we gutted health care, I think we jeopardized public safety with shifting burdens on to the local governments, counties and cities. And really we didn't tackle the long-term problems, which is economic reform, creating a long-term vision for our educational system in Arizona and creating the climate we want to attract families and businesses. And it's not happening right now.
Ted Simons: Address those concerns.
Kirk Adams: This is the debate we've been having throughout the session. Will Chad and I simply disagree. We think state government needs to live within its means, and you need to bring fiscal stability to state government, we have accomplished that. We also believe the best way to turn around the economy is to have -- allow small business owners and big business owns to keep more of what they earn to save and invest, to higher people, which creates jobs and tax revenue. And then we had our long-term spending issues we took care of as well. If you talk about specifics of this, for example, the jobs bill. You and I have talked about the jobs bill on this program on several different occasions for almost the last two years. The bill that was passed in the house and senate and signed by the governor at day 40 of session was not something that just appeared overnight. It had been debated extensively over a long period of time with input from economists, from policymakers, and from the business community.
Ted Simons: What's something like the jobs bill, what else was there to learn? What else was there to know when you say it was rushed through, what else did you need to know?
Chad Campbell: There were better twice lower the corporate tax rates. I've said it time and time again. I am a democrat who is -- I consider myself very pro business. I've said for many years the tax rate on businesses is too high. And I had a bill this session that would have lowered the corporate tax rate, would have eliminated – all together eliminated the business personal property tax, and it wouldn't have cost the state a dime because would it have ended all the tax credits and loopholes we have in our tax code. And I said this time and time again, I said this the last time I think I was on the show here, Bob Robb, who is a very conservative columnist for the Republic, compared my plan side by side with the speaker and the governor's plan and he said my plan was better. It was better for the long-term stability for the state and better tax policy. We should have had a debate about overall economic reform, not just more handouts to corporations and special interests.
Ted Simons: Did we have that debate, have we had that debate?
Kirk Adams: We had a very robust debate about that. We continue to have that debate. But what you see is, we disagree on the best direction for the state. The voters installed two-third majority Republicans in the house and the senate, we believe for a reason. We have acted upon those priorities and we've done it in a successful manner, and we believe along with by the way the entire business community came out in support of that jobs bill. The entire business community. They recognize how important that was for the success of this state. Everything starts first with someone holding a job. When we have that state revenues will improve and that bill was a huge step forward in that direction.
Ted Simons: A lot of folks are saying that the budget equates to a lot of jobs lost. Harmful to education, harmful to health care, impacting those industries in ways that the complaint is a lot of state leaders simply don't understand and it's going to be a lot of price to pay down the road. How do you respond to the idea that education, health care, the harm has been immeasurable?
Kirk Adams: I think it's completely inaccurate. For example, the cuts to education represented less than 4% of all education spending in the state. You cannot tell me that is gutting education, particularly when the cuts to education as a percentage were significantly less than most other areas all other areas of the state budget over the last several years. So what we've done as a majority is we've been very careful to minimize the damage to education, for example, but also recognize that you cannot achieve stability in state finances unless you balance your revenues with your expenditures. We've been willing to make those tough choices. We made them over and over and over again while some still have not made those choices.
Chad Campbell: This is just one year you're talking about over the last three years, this governor and the majority in the legislature, the Republican majority, have made the deepest cuts to education in the history of this state. We already came in to this administration spending less money than any state in the country did on education. And now we're so pass past the bottom of the barrel, I don't know how we recover. And on top of that we did gut health care, the one sector that's been growing, we pulled the rug out from underneath them. I talked to hospital administrator in Yuma the other day who is probably going to have to lay off 150-250 people from that hospital. Yuma has about a 20-25% unemployment rate. One of the highest of any locality in the state and the nation. And we are decimating our economic recovery, we're not allowing our economy to continue growing, the education system especially the University system, they are economic engines. We have hurt them with this budget and over the past several years and you see it downtown, you see it at the ASU campus. When I was walking in this building I heard students complaining about the fact their tuition is going up again, their housing is going up and even the bus and transit rides are going up because everybody is having to take or -- everybody is having to raise their rates and taxes because of the decisions being made bite Republicans.
Ted Simons: Quickly please.
Kirk Adams: I want to say, with all of that, Chad might have a point if it were not within the context of the worst recession in state history, and the worst budget deficit in state history. There seems to be a disconnect in my opinion with the reality of the situation we have faced. The fact of the matter is, under Governor Brewer and Republican leadership, we have veered the state off of the cliff of bankruptcy and put it back on to stable footing once again.
Chad Campbell: But it's easy when you're not paying for anything. We're not investing in anything any longer. This state is not going to be competitive, moving in the future if we don't have a strong education system, if you don't have quality infrastructure, if you don't have a strong health care system, and we do not. It compares to other western states, yes falling behind. The rest of the nation is turning around, jobs are growing, we're still losing jobs.
Ted Simons: I got a question for you, but I have a question on that. A lot of folks are saying you can't get any kind of advancement in Arizona without some sort of stability, without some sort of guarantee the future will be stable financially.
Chad Campbell: And again, you're stable when you're not spending money. And we're not spending money. We're not investing in anything anymore. And that is a problem for businesses who looking to move here and families looking to move here. You need to see stability, but you also need long-term investment and long-term vision for a strong competitive state and we're not seeing that from this current leadership.
Kirk Adams: I recognize that's a rhetorical point he's making, but it's also a gross exaggeration. To say we're not investing or spending money on anything. As a matter of fact, over half of our budget still goes to education and higher education. So those are the top -- that is the top priority of state government, is education. As reflect by where we spend our dollars.
Ted Simons: I got to get -- you mentioned something regarding higher tuition, some folks are saying costs are being shifted on to the counties, and such, you're saying this is an honest budget. It's balanced, it's structurally sound. Others are saying it's just shoving the costs off to other areas. How do you respond?
Kirk Adams: It's a gross distortion of the budget. When you look at the budget numbers, less than 1% of this $8.5 billion spending plan has any impact whatsoever on local governments. Less than 1%. Where most of these cuts have come from frankly is from all across state government. All across state government. And so the plan is a balanced budget. As a matter of fact, it's the first structurally balanced budget in at least five years if not 10.
Chad Campbell: And the speaker can deny this, but it's simply the truth of the matter. They have shifted the cost of all kinds of services, including housing dangerous prisoners into the counties, into the cities, the schools themselves, the property owners --
Kirk Adams: I have to correct your record on that.
Chad Campbell: It is true. I want to say this is the third year in a row the Republicans have raised property taxes on individual homeowners in the state, as I've said time and time again, I've never voted for and tax increase anytime in my legislative career.
Kirk Adams: Those are inaccurate statements.
Chad Campbell: no, they're not.
Kirk Adams: We're talking about prisoners sentenced to less an year which is I think what he's referring to, those are not your hardened criminals or hardened murderers, those are typically first-time DUI offenders which have traditionally been under the care of the counties, not state government.
Ted Simons: Alright gentlemen, there's just so much more to talk about. Thank you both though for joining us.
Chad Campbell: thank you.
Kirk Adams: Thank you.