Ted Simons: Good evening and welcome to "Arizona Horizon’s" journalists’ roundtable, I’m Ted Simons. Joining me tonight are Mary K. Reinhart of the "Arizona Republic," Howard Fischer of Capitol Media Services, and Mike Sunnucks of the "Phoenix Business Journal." U.S. secretary of homeland security Janet Napolitano announced her resignation today. Was this a surprise?
Mary K. Reinhart: To some extent I think but this has been -- she's been the longest-serving secretary of the department of homeland security. It's only been around 11 years after September 11th, 2001. She's been there four and a half years. It's a ginormous piece of real estate to be in charge of, from border patrol to FEMA. It's a high-pressure job. You get all the blame and very little of the credit. So I don't think anybody can blame her for taking a job like this in California. Although the university of California system is not without its complaints and critics, among them some parents, lots of budget cuts. It's a terrific university system but certainly a big job for her to step into. She went to college in California. Certainly, you know, I think perhaps a way of stepping out of a pretty high-pressure job, but into another one I think.
Howard Fisher: And the fact is where else was she going to go? People serve in the administration. They look for something else in private enterprise. The job she wanted was basically the one Eric Holder got. She wanted to be head of the Department of Justice. That didn't happen. I think in the back of her mind, she figured that was a transition to the U.S. Supreme Court. That also clearly wasn't going to happen so she figures good time to get out. It's a high-pressure time, one of the fascinating things was some of the commentary that we got from both sides of the spectrum, the national immigration law center sent out something saying thank goodness she has been busy deporting people, quota system, and Paul Gosar, bless his heart said she's basically created amnesty and don't let the door hit you on the way out.
Ted Simons: And yet again we're also hearing compliments from both sides. So all over the aisle here.
Mike Sunnucks: McCain sent out a fairly cordial note for the opposition for her. She's had some good relations with some folks. It will be interesting to see how history judges the Department of Homeland Security. It's a huge, massive agency. Reactionary after 9/11, will it get broken up down the road. A lot of people are wondering does she have any political aspirations in California which is the bluest of blue states. There's a lot of people ahead of her to run for Senate there.
Ted Simons: And indeed so much for all the talk we used to hear about maybe a run for the United States Senate from Arizona. She's flying over Arizona for this.
Mary K. Reinhart: It doesn't look likely for her to be doing something like that.
Howard Fisher: But again, that's look at the record and if you didn't remember it, the current governor will tell you: Janet Napolitano left with about $3 billion in the hole in a state with a $10 billion budget. I can't say it was all her fault but she did ignore some of the signs. It was very clear that we were spending more than we were taking in and she was saying the sun will come out tomorrow and clearly, not recognizing the recession. I don't know that while there's Democrats here who still like her and still miss her, I don't know that she's electable in this state.
Ted Simons: That's a good point. And you mentioned Democrats here that still like her, there are some Democrats here who don't like her because she did leave when she did and Governor Brewer was the result.
Mike Sunnucks: We got Senate bill 1070 because Janet left and Jan Brewer, a couple of terms of her, we'll probably have a more Republican legislature. Democrats had made some inroads with Napolitano because her and Terry Goddard won state-wide races that made us seem like less of a red state. So yeah, there is some democratic bitter sweetness about her. On her legacy of homeland security, she doesn't get any of the credit for the foiled attacks and things they did. She gets all the blame for TSA and the pat-downs and stuff. That makes it hard for her to run anywhere if she is interested in running anywhere. The image is she's the woman who ran the TSA.
Mary K. Reinhart: The last time we had a pretty decent bipartisan deal on a budget was with Janet Napolitano as governor and we saw that with the Governor Brewer this year but you have to harken back to Napolitano to see actual bipartisanship with the governor's office. And you want to have a credential to run for higher office, being the president of the university of California system isn't a bad thing to put on your resume. I don't know why in the future if she still has political aspirations she couldn't run from there.
Howard Fisher: Except for the fact it becomes like the TSA. The successes you have running a massive university system become less visible. It's the failures, it's why did these students fail, why did this sports team get bounced from the NCAA? And there are risks in being in such a high-profile position. I'm not sure that's a good political --
Mary K. Reinhart: The same way she left Arizona as the recession bore down, she comes to the University of California system as things are looking better. All of those cuts and all of the criticism that rightly was leveled at that system for, you know, hiking tuition and whacking programs might be in the rearview mirror now as things start to improve.
Ted Simons: Interesting, interesting. We'll see if we hear her name any time soon. Most folks who can't tell you who the chancellor of the U.C. system is right now. A court decision on medical marijuana that has been seized by law enforcement. Explain, please.
Howard Fisher: This is a little complex so you have to send the facts of the case. A Californian was coming into Arizona, border patrol has these check points, dog alerts, they search the car, they find some marijuana. Not enough for border patrol to give a darn about so they turn it over. She says look, I've got a medical marijuana card, eventually produces it. They say fine we won't prosecute you. She said well where's my marijuana? And the sheriff there said excuse me, I'm not in the business of giving out marijuana. She goes to the superior court, the judge says it shouldn't have been taken from her, everyone said it's hers and return it. The interesting thing is we know this isn't the end because I talked to the current sheriff and he said I've got the problem that yeah, in Arizona, certain people can have marijuana. Federal law says no marijuana, it's a felony, I'm giving something in violation of federal law. Now, this may be the test case we get. We have all these states that have done medical marijuana or Colorado with legal marijuana, we may finally get some judge at the Supreme Court to rule what the conflict is, whether states can proceed.
Ted Simons: This was a court order. This was a return the marijuana court order. This was not a difference between federal law and state law. That's still out there.
Mike Sunnucks: This is what the opponents of the medical marijuana laws have been waiting for. They've been trying to get the law to go to the Supreme Court. A patchwork of state laws, Arizona, California, Colorado have legalization of marijuana. Other states don't. They've brought this up. I'm violating federal law by obliging people with medical marijuana. They're hoping they can get some kind of comprehensive ruling from the court which they may not get.
Howard Fisher: And that's the key. The Supreme Court takes what 90, 100 cases a year? I have a feeling that when they see a petition to review that they didn't even comment on that even just Justice Scalia is going to say this isn't worth our time.
Mike Sunnucks: Federal law obviously prohibits marijuana and you have various states that allow various legalizations of marijuana. So it's interesting that it's kind of a role reversal where you've got conservatives who want state rights on immigration and these things and guns now they're wanting the feds to step in and exert their power on this.
Mary K. Reinhart: Well, yeah, it comes back to the central argument that's been involved in all of these cases since voters in all these states, including Arizona, said they wanted medical marijuana approved and that is federal law says you can't possess it, you can't sell it, you can't use it. State law oh, yes, you can. So the only way to really fix that is to change federal law or repeal the state laws and I don't see us repealing our state laws.
Ted Simons: And real quickly the case that's still out there, that zoning permit case.
Howard Fisher: The White Mountain case. This is the one where Bill Montgomery, the county attorney, said I'm not going to allow my county agencies to provide the necessary paperwork you need to set up your clinic. Again, a judge said yes, you will. This is a ministerial act. We're not asking you to bless marijuana use. The voters have said that. So Montgomery is hoping to take that one up and there are a lot of questions. Back to Mike's point. As long as you have that federal law, can you have a state agency expediting, facilitating is the word essentially somebody getting a drug that's illegal.
Mike Sunnucks: The challenge is when you talk to the administration, Bush or Obama administration, they're not going to go out and arrest the county attorney or an old woman that's on medical marijuana. They have some leeway. When it goes to the court system and you're asking judges to make a decision, they have a hard time finding a gray sense area of this.
Mary K. Reinhart: At the end of the day, you have 20 plus states that have medical marijuana laws. It looks a little bit to me like gay marriage in the sense as our population ages and kids today take over the reins of government, we're going to have legalized marijuana, it's just sort of an inevitable wave.
Ted Simons: The question now is those who are older and the kids, can they figure out these competing Medicaid expansion petitions? If you go to a library, it sounds like you're running the gauntlet. What's going on out there?
Mary K. Reinhart: I don't think most people know, much less understand. If you do go to the library, you may see some petition circulators. You have the URPAC, United Republican -- I can think of the acronym in a second. The precinct committee people and grassroots Republican organizations opposed to the Medicaid expansion that the governor and the legislature passed last month circulating petitions to get 86,000 plus signatures by September 11th to put this thing on hold, to put the whole Medicaid expansion on hold and put it on the November 2014 ballot. At the same time you've got restoring Arizona and this coalition of the healthcare industry and Arizona chamber of commerce and the folks that supported expansion using their muscle and their money to pass around a non-legally binding just nice sort of petition that looks like a petition but it doesn't have the legal imprint. It just says we support what the governor and the legislature did. It's a signature of support. And so what the conservative Republicans are saying is these guys are confusing everybody, they're signing their petition when they thought they were signing our petition. At the end of the day, what matters is do they get the signatures?
Ted Simons: The ballot measures, is there a third one, too?
Mary K. Reinhart: There was another group that's also formed, that's also raising money that was circulating some petitions with a little initial in the corner. I don't know why. It was some folks -- it was a question of organization and I think they've reeled those guys in and said don't send those petitions out because we're afraid they'll be invalidated.
Mike Sunnucks: These ballot measures are fought early on. They're not fought on election day now. The groups that are opposed to a ballot measure can run another measure and we saw this with the smoking ban, talking about other issues, they can hire the petition gatherers and they can take spots at the libraries, some of the cities limit how many folks can be there and it confuses voters and the they both get on it, voters vote no.
Howard Fisher: That's exactly the point is the fact is it's not like the supporters are trying to put an alternate ballot measure on the November 2014 ballot. This is just we like Jan Brewer, we like what she did. It is designed to confuse. It's very clearly designed to confuse and it's not a question of trying to hide it. Let's assume that the possession as a referendum gets the signatures. Even if this one were to get 500,000, it doesn't matter. Once you get the 86,000 ballot signatures, it goes on the November 2014 ballot, except for the fact now we know there's going to be a lawsuit, one of the attorneys sent out a letter today to ken Bennett to say, by the way, just so you know, as soon as this gets filed, we're going to challenge it. We think it's part of the support maintenance of the government. So, you know, we will be talking sometime in perhaps early October about what the Supreme Court does.
Ted Simons: In other words, you can't send them out on budget matters?
Howard Fisher: Anything that's designed for the support and maintenance of a state agency. In other words, we're not just talking about Medicaid expansion. They could have challenged a tax hike to expand Medicaid. Part of problem here is that some of the money is going to backfill in the folks who got cut off. The argument by the governor is well we're maintaining a state agency. Well, I don't know if you're maintaining it when you've cut it before.
Mary K. Reinhart: The counterargument is if you can't refer Medicaid expansion, what can you refer? It's not a budget item, which is what the Constitution was intended to prevent. What they are referring in this Medicaid expansion referendum are two pieces, just the hospital assessment, which helps fund it and the actual expansion portion, not the folks we used to have based on the voter-approved under 100% of the federal poverty limit. They don't want the hospital assessment. Those two pieces. That's new stuff.
Ted Simons: Real quickly, how much of a chance if this thing gets enough signatures to get on the ballot and thus stall everything?
Mike Sunnucks: I say very slim. They have too much of an organizational challenge. You've got the hospitals, the Restore Arizona group, the governor and the state kind of working against them and the legal realm, they're going to have a hard time.
Mary K. Reinhart: I think it's a difficult hill to climb and, you know, they won't tell me how many signatures they have. It's just a lot of signatures to gather in a short amount of time.
Howard Fisher: I think that they might get the 86,000. I think then the first challenge is can it be on the ballot. The second challenge is well this circulator was properly registered. So I think they will get the 86,000, how many more I don't know but how many of these are declared valid?
Mike Sunnucks: Such a short window, weather works against them.
Mary K. Reinhart: Ted Nugent giving them a shout-out on Sunday.
Ted Simons: He's coming?
Mary K. Reinhart: Yeah.
Ted Simons: Speaking of not him but the affordable healthcare act, $2.3 million, in town to present the check. What's the money for?
Mary K. Reinhart: The money goes to community health centers and other support organizations to essentially train and hire outreach and education workers. Because while we're trying to refer Medicaid expansion to the ballot, the train's already left the track. So we've got this October 1st enrollment begins for the healthcare exchanges and for Medicaid expansion and the Obama administration and a bunch of national nonprofit groups want to make sure that folks know about it, that folks are educated and enrolled.
Ted Simons: Educated is the big part. 45 workers per clinic or something along these lines?
Mary K. Reinhart: Only getting 45.
Ted Simons: The whole state.
Mary K. Reinhart: You're talking about 1,500 nationwide. This is the Obama administration funding. You also have a separate, completely separate Enroll America funded by hospitals and pharmaceuticals and nonprofits that are doing similar work. It's really about outreach, letting people know this exists because the survey shows most people don't know what is happening.
Ted Simons: Do people understand what's going to happen come October 1st? And do they understand the choices, the options?
Mike Sunnucks: Heck, no. The business owners don't know, there's lots of surveys. Regular voters, they don't know. It's very confusing. People aren't sure whether it was going to be upheld, there's different dates. It's obviously -- it was a pretty big bill. I don't think most people in Congress knew what was in it. So it's very confusing. Conservative folks just hate these things because they see it as some kind of propaganda machine to bring more people into the welfare state and make more democratic voters because we're offering you all these things. There's a lot of confusion out there about it, even amongst business folks.
Howard Fisher: I think people understand access, Medicaid. I think it's not hard to explain that where the family of three is at $19,000 a year, it's going to go up to 24,000 25,000 as an eligibility. I think the exchanges, I think the up to 400% of federal poverty level in terms of getting subsidies, that's where it gets tricky. With the personal mandate if you're not covered by an employer.
Ted Simons: Does cousin Jim know where to go?
Mary K. Reinhart: There's just people that doesn't know and once you do know and you go to the appropriate person or the appropriate website or whoever, it isn't going to be that complicated. You're going to have the -- navigators, these folks --
Ted Simons: The $2.3 million, that's to pay for people to tell you what to do.
Mary K. Reinhart: You qualify for Medicaid or you go on the exchange.
Ted Simons: The Goldwater institute said it's not going to fight this hockey deal between the city of Glendale and Renaissance ice, whatever they're called. Why not?
Mike Sunnucks: They've got a lot of blowback from the previous ones. They opposed previous deals to Greg Jamison and they got a lot of heat for that. And I think Glendale and the latest group tried to craft this to stay away from a lawsuit, to abide by a kind of our gray area of gift clause rulings. There's a stipulation in the Constitution that kind of restricts excessive subsidies, government subsidies to businesses and the court rulings have not been very black or white. I think the folks at the coyotes group thought they could withstand a legal challenge on this, and I think, you know, Goldwater, you know, looked at the tea leaves, kind of the politics out there, and opted against it. That's a big win for the sale moving forward.
Howard Fisher: And I think that your point about the politics is exactly correct. Goldwater tends to be on the side of the little guy. Whether it's somebody who's fighting the board of cosmetology or barber board or somebody else who wants to set up a sign, you've got questions about what can you have on bus billboards and such and these become the little guy things. Now, we're down to so who exactly are we helping here? What little guy is really involved? And I don't know that there's a win in this for Goldwater.
Mary K. Reinhart: The win that they make is the little guy is every low-income, you know, middle-income citizen of Glendale doesn't get a bajillion dollars.
Ted Simons: You've been covering this story. Is Glendale, the fight has been for so long, is Glendale now -- the fight's over. Is Glendale ready for this?
Mike Sunnucks: They've got to close on the sale by August and we've seen these sales get derailed but things seem to be moving forward. You're spending all this money, they approved at least six or seven deals out there for different owners. They worried about the arena going under. You could spend this money elsewhere, you're giving it to wealthy guys to try to buy a hockey team. They were just a watchdog group. They got into the litigation arm and maybe that cost a lot more money. That's a lot more of a commitment than being a think tank.
Mary K. Reinhart: They've got to save up because they're representing the folks passing the referendum petitions.
Ted Simons: You can only stretch yourself so thin. Valley foreclosure rates, we did this story earlier this week on "Arizona Horizon." Back to what it's called normal history lows, it sounds like things are simmering down and prices are going up.
Howard Fisher: Things are simmering down but remember that if you're a student, I know the same way Michael's followed this, there is no normal in Arizona housing. For example, you've got the question are a lot of the houses that are being bought up being bought up again by the investors or the investors the ones selling them off? They're going to want to pump them up. So the question becomes we can pump up the values for a while. And when all these investors dump the houses, what does that do? Does that put more people underwater and the interesting thing to note is despite the fact that prices are going up, we still have a large percentage of people who are still underwater, which shows how bad it was when they bought their homes in '06 and '07.
Ted Simons: It sounds like investors are backing off a little bit and those investors that had invested are not necessarily turning them. They're sitting on them for a while. That does provide some stability.
Mike Sunnucks: It has calmed down but Howie's points are very valid. Scottsdale's done a lot better, the west side, still a lot of stuff underwater, still a lot of folks struggling. There's still some foreclosures out there. There are still people walking away but the banks have move forward with a few more modifications than they have in the past, pressure from the Obama administration, mostly for that. So things are improving but there's still a lot of questions, housing starts are still low. There's some uncertainty out there.
Howard Fisher: And the other big question and we all sit here and we read the tea leaves every time Ben Bernanke opens his mouth. If you can get a fixed rate, there are people thinking that but there are people who still have adjustable rate mortgages, folks who can't qualify so they end up with one of these, you know, five or 10 year arms and it's a fixed rate for them and then what the heck is it going to be in 10 years!
Ted Simons: Your neighborhood, are you seeing changes in the past year or so?
Mary K. Reinhart: Stability, I see fewer for sale signs. It appears things are more stable.
Ted Simons: What do you think?
Mike Sunnucks: Still a few walkaways but yeah, more stability, more people, less for sale signs, prices are a little better, they're up but it's still gradual on the west side. It was hit pretty hard.
Ted Simons: Any more or less in terms of rental signs?
Mike Sunnucks: A lot of those investors bought things, they're renting them out. And the hope is the people that are in those can eventually maybe buy them but that is a challenge.
Ted Simons: What are you seeing?
Howard Fisher: I'm seeing the same sort of thing, a lot of rentals but so much of this is situational depending on employment. We're still waiting for to drop below 7.7%.
Ted Simons: We have to go away. Good to have you all here. Thank you for joining us. Monday on "Arizona Horizon," we’ll hear about the metropolitan revolution, which calls for the nation’s cities to fix broken politics and fragile economies, and we’ll discuss the status of Arizona’s retirement system for state workers. That’s Monday evening, 5:30 and 10:00, on "Arizona Horizon." Tuesday, we’ll look at the Morisson Institute’s new report on comprehensive immigration reform. Wednesday, famed physicist Lawrence Krauss will discuss the complex nature of time. Thursday, we talk with world-renowned fire expert Stephen Pyne about wildland fire policies. And Friday, it’s another edition of the journalists’ roundtable. That is it for now. I'm Ted Simons. Thank you so much for joining us. You have a great weekend.