Horizon, Host: Ted Simons

November 16, 2007


Host: Larry Lemmons

Journalists Roundtable


  • Don't miss HORIZON's weekly roundtable where local reporters get a chance to review the week's top stories.
Guests:
  • Mike Sunnucks - The Business Journal
Category: Journalists Roundtable

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>>>Larry Lemmons:
It's Friday, November 16th, and in the headlines this week, the latest on the fight against the employer sanctions law. The state has started using federal enforcement bans to catch speeders on state freeways. And former governor Fife Symington goes to Washington to talk about UFOs. That's next, on "Horizon."

>>>Larry Lemmons:
Good evening, I'm Larry Lemmons, and this is the "Journalists' Roundtable." Joining me to talk about these and other stories are Mike Sunnucks of the "The Business Journal," Mary Jo Pitzl of the "The Arizona Republic," and Howard Fischer of Capitol Media Services. Thank you all very much for being here. You have something brand-new; the state budget deficit is now officially at least more than 800 million?

>>Howard Fischer:
More than 800 million. We've been talking around this table about the fact that revenues aren't coming in. Sales taxes are down, income taxes are down. We already knew we were about 600 million in the hole. Part of what's complicating the matter, the state's economy is soft. People aren't buying things. What happens is, therefore retailers aren't hiring. Therefore people want state services, health care, welfare, other things that cost money. So we've got a situation where now with revenues running 700 million below what we thought, but you're going to need maybe another hundred million for supplementals for the state agencies. Now the governor says, I can easily balance a 600 million budget. And we've got it balanced. Now you have another 200 million, maybe more. Now you've got some real issues here.

>>Mary Jo Pitzl:
I think you'll hear a lot of groans and pain coming out of the legislature. But just today I was talking to Senator Bob Burns, the chairman of the senate appropriations committee, and he fears that lawmakers are close to the point where they don't have the ability to do much to close this budget deficit, because of voter-protected measures over the years, and because of statutory funding formulas. That's a common complaint of lawmakers. It's not stopped them yet or prevented them from closing the budget gap.

>>Mike Sunnucks:
it's depends on how much they want to take out of the rainy day fund, or cutting some spending that they can't get. Tucson democrats are proposing to roll back tax cuts.

>>Howard Fischer:
I talked to the governor about it, and even she doesn't want to do that. They are looking at the governor's office for some things that were a little bit more creative. One of the things they've done in the past is what they've called rollovers. This is a little budget gimmick. Every month the state is supposed to pay $200 million in money to the schools. They change the timing of the payments to allow a larger gap of time.

>>Mike Sunnucks:
All our viewers wish they could do that with their mortgages and student loans.

>>Howard Fischer:
Never mind that the 2009 budget is not looking any healthier, and all we're doing is deferring the problem.

>>Mike Sunnucks:
They probably won't do any tough decisions, they'll do the rainy day fund, smoke and mirrors, and move the cash around, because they can and it's an election year. The next year, 2009, is when we're really going to see the tough times.

>>Larry Lemmons:
They say that they don't want any borrowing either.

>>Howard Fischer:
That technically is borrowing, also. This gets back to Mike's point. Everyone says, we can cut this much out of a $10.6 million budget. 4.4 billion is for the schools, protected, cannot be touched. 1.3 billion is for the indigent care program. That can't be touched. $900 of that is department of corrections. Other than Phil Lopes's idea of letting people out of jail, it's not going to happen. Universities, you may be able to nibble around the edges, but the governor has declared this off limits. The business community says we can't cut the department of commerce or tourism. We're down to the parks.

>>Mary Jo Pitzl:
We're going to say good-bye to state parks. It's not a good time to cut veterans' services. We're not going to do that. So it does create -- like I said, there will be a lot of pain and agony over this.

>>Mike Sunnucks:
Looking at ballot questions that could increase spending even more, and income taxes even more. We have property tax initiatives, universal health care, transportation.

>>Howard Fischer:
But the difference on those is they're actually separate. The state doesn't really have a property tax. It really is only money for education.

>>Mike Sunnucks:
Put the money towards transportation.

>>Howard Fischer:
That's the issue. These things would be outside the budget, but again, they wouldn't become -- it's not like you're funding something that existed. I don't know that voters are going to be in the mood to increase taxes, unless they're really frustrated with being stuck in traffic. A statewide sales tax for roads? Can you see the folks in La Paz voting for that one?

>>Mike Sunnucks:
But the folks in Maricopa County might. And that's where they'll focus it and that's where the votes are.

>>Howard Fischer:
Well, but now it comes down to the same problem they had with the folks in Maricopa County. Once a specific area of town has its freeways, are they willing to vote another half cent, quarter cent or something like that?

>>Mary Jo Pitzl:
I think you have to ask yourself if there will be a transportation measure on the ballot. Where's the plan? Where's the champions for it? The legislative committee studying transportation issues, Andy Biggs, says I think toll roads are the way to go. The presentations they've had are looking pretty heavily at private-public partnerships, something new and different for this state. Where is the leadership coming from on that?

>>Howard Fischer:
If they do a bypass around Tucson through Gila bend, around Phoenix, that makes sense for a toll road, in terms of you can be stuck on a two-lane or get around phoenix. For the kind of things they need, the I-10 reliever out to the west valley, you can't make that into a toll road even with the new technology, because people aren't going to use it. Nobody's going to build it. Therefore they don't want to pay for it, and the private developers don't want to build it, because they're not going to get their money back. The only thing that perhaps makes sense is the double deck on the I-17 with express lanes. That's what they've done in places like Orange County. I bet there are enough people living in Anthem that might be willing to pay three or four dollars a day.

>>Mike Sunnucks:
I've always wanted to model our transportation behind Southern California. I think you might see a little bit of opposition to that.

>>Larry Lemmons:
The photo enforcement radar, in terms of --

>>Howard Fischer:
You're assuming we can go fast enough to actually --

>>Mary Jo Pitzl:
To get a ticket.

>>Larry Lemmons:
Is this even feasible? We were talking about state problems with the budget. Is this going to be feasible in terms of money?

>>Howard Fischer:
Well, the photo enforcement pretty much pays for itself. It's $4,000 per van per month. That does come out of the DPS budget. Their argument is it makes offices more efficient. They will be staffed by officials from red flex. It's the same company that did 101. If you've got DPS officers freed for other things, including clearing accidents, there might be less congestion. The point that DPS is making, we're not doing this to raise money. We've got a situation where people feel with impunity they can speed, because you only have so many DPS cars. We're not only talking on the freeways, but like on highway 85 down to Lukeville. We're talking on the two-lane roads going down to Maricopa. They say we need portable vans to get people to slow down, to avoid the accidents. It's the accidents that tend to tie up traffic.

>>Mike Sunnucks:
Do we really believe a government agency doesn't see any money in that? That's a little naive.

>>Howard Fischer:
There's a certain amount of money there. But I think the belief is, if you in fact reduce congestion, there isn't that much coming in. In a typical $150 ticket, perhaps the state gets $30. You can generate a lot of tickets with photo radar, but in terms of this being a money-maker --

>>Mike Sunnucks:
Tons of tickets on the 101, a lot more than the patrol officers ever could.

>>Howard Fischer:
But the difference in Scottsdale, because of their financial arrangement, it goes to city court. The city court gets some money, the county gets some money. But the state, per se, doesn't get a lot of this money.

>>Larry Lemmons:
Before we get out of the budget, I did want to talk about those job numbers also. Not looking too good.

>>Howard Fischer:
Well, there are certain things we expected. We lost another 4100 jobs in construction last month, big surprise there. Manufacturing continues to lose jobs. But what really was shocking, they only added 1700 jobs between October and November in retail. Normally you add close to 5,000 jobs, ramping up for the Christmas sales, all the seasonal stuff. The retailers are not confident that people, looking at $100/barrel gasoline, upside down on their mortgages, they're not going to be spending a lot of money for Christmas. This has that cascading effect. Lower state sales taxes, 47\% of the budget. If people don't buy the toys and big-ticket items, cars, furniture, that further exacerbates the problem.

>>Mike Sunnucks:
The one thing is, we still added jobs and our unemployed rate is 3.5\%, very low, below the national average. We're still not in the dire straits somebody like Michigan or Ohio is in. With the real estate boom and population growth, it is not good numbers. In comparison to the national picture in the Midwest, we're still doing okay.

>>Howard Fischer:
We are adding jobs, people are moving here, and each of them require services. The funny thing is the one bright spot in all this, copper mining. With copper prices being so high, we have added yet another 200 jobs in mining in just over a month. Copper mining was all but dead a decade ago.

>>Mary Jo Pitzl:
No housing, but whatever.

>>Larry Lemmons:
Employer sanctions law was really huge this week. What was the lawsuit and what came out of that hearing?

>>Mike Sunnucks:
A bunch of business groups and Hispanic groups challenged the law in state court. They claimed it's the federal government's purview to enforce this law. There is a note in the law that says states can go after licenses of businesses. Since the law hasn't come into effect yet, there's the question of who has standing to challenge it. And it looked from the hearing and all the reports on the hearings, that judge was taking a very skeptical view of the plaintiffs and the business argument against it.

>>Howard Fischer:
That's really the key. Mary Jo and I sat there through hours of testimony only lawyers could love. The issue becomes standing. You have to show some proximate harm. So the judge at one point said, which one of your clients are actually hiring illegals? So the argument is that somehow they are being burdened by having to enroll in this e-verify program. Which means they have to buy a computer. I'm guessing most businesses have one. They need internet access, maybe some don't have that. You could go to the library. And it takes time to run the checks, all of 90 seconds.

>>Mike Sunnucks:
They are supposed to be doing all this stuff already. It's federal law for them to check.

>>Howard Fischer:
The law is to look at certain documents called an I-9 form. I have this, this, and this, I'm done. E-verifying is voluntary, but -

>>Larry Lemmons:
A new load for the employers.

>>Howard Fischer:
If you do it, you get what they call rebuttable presumption that you, in fact, have complied with the laws and the people you're hiring are not here illegally. I think it's enough of an incentive for the folks to do it. The judge made the point, tell me how the I-9's work? He said 7 million illegals, I think it's closer to 20 million illegals, so tell me that these people aren't working because this I-9 form works so well.

>>Mary Jo Pitzl:
It was really denounced. He talked about it being a spectacular failure. That's why the Arizona legislature, after years of trying to pass a law that targets employers. This one's being watched closely by lots of states. At the end of this month the national conference of state legislatures brings together folks from across this great nation, and they will have a whole seminar about what Arizona's doing about employer sanctions. I guess the mountain is coming to Mohammed.

>>Mike Sunnucks:
The best argument they have is that it's the Federal Government's job to sanction people and say, you violated immigration law. And then the states can step in. If ICE comes in and says, Capitol Media Services hired illegals, the state would bypass that.

>>Howard Fischer:
Here's the problem with that whole argument that's seldom presented. The judge looked at them and said, tell me exactly where that law says that. He said, I can read the law. I'm an attorney. You're asking me to put words into the law that are not there.

>>Larry Lemmons:
He's smarter than congress.

>>Howard Fischer:
Somehow the judge was supposed to say, I'm smarter than what congress actually wanted.

>>Mike Sunnucks:
They can say it's a federal power to come in and say a business has hired illegals. Then the state can take your license away.

>>Howard Fischer:
The judge's point is it doesn't say here that the feds have to find you guilty first for you to act on the license.

>>Mike Sunnucks:
It's a question of whether it gives the states the power to do that. They can take the license away, but can they sanction you the first time?

>>Mary Jo Pitzl:
There was one little surprise; it went on three and a half, four hours with breaks. Dave Seldon, A representative of some of the business groups, he says this applies to every worker in every workplace across the state. The judge said, no, it's just new hires. Selden said, no our argument says that anybody who is employed --

>>Larry Lemmons:
No one's grandfathered.

>>Mary Jo Pitzl:
And we define employ as someone on your payroll. Today I bumped into the representative Russell Pierce, prime sponsor of this legislation, and he said, no, no, we didn't make this retroactive. And only hires as of January 1 are subject to scrutiny and the employer to prosecution under this.

>>Howard Fischer:
Under this. But they're still subject to prosecution under federal law. And you can tell, again, how well that works. We've got half a million undocumented people in this state, and I'm sure none of them are working.

>>Mary Jo Pitzl:
What's interesting on this will be the timing. This is a pretty heavy-duty case. The judge has promised he will have a ruling out before the law is scheduled to take effect January 1. A lot of observers expect a ruling in early December, an early Christmas gift to somebody.

>>Larry Lemmons:
There was another point brought up that the lawsuit is against the governor, and attorney general Terry Goddard. Whereas Andrew Thomas, the Maricopa county attorney, would actually be enforcing it.

>>Howard Fischer:
That's another real key provision. He's a very strict constructionist. You're asking me to enjoin the governor and the attorney general from enforcing the law. He said to them, because the state had filed a motion saying they didn't name the right people, they said to the attorney, why didn't you amend your complaint? They sort of sat there and looked at their shoes and said, we didn't think it was necessary. They're creating a place for the judge to decide he doesn't have to deal with the issue of federal preemption and all of that stuff and he can bounce it solely on standing.

>>Mike Sunnucks:
Don Goldwater and Russell Pearce will take a no-strikes. I think voters will approve that, and we'll be in a worse position than we are now.

>>Mary Jo Pitzl:
Mike, I'm not so sure that Pierce and Goldwater won't go ahead regardless of the outcome of this lawsuit.

>>Howard Fischer:
In fact, if the judge concludes that he's not going to throw out the law, my guess is Dave Seldon will seek and the judge will grant a stay to allow them to take it to the 9th circuit. Now whether the 9th circuit extends to stay while they consider it in June, July, next August remains to be seen.

>>Larry Lemmons:
One thing, too, that's related to that, and perhaps maybe to the budget shortfall, is the fact that there are many businesses that have a very large Latino clientele. They're actually starting to get hurt. Retail damages.

>>Mike Sunnucks:
There's some anecdotal evidence of some Latinos leaving the state because of the issue. If they get a job in Las Vegas, Houston, or Tulsa why not go if you're going to get hassled here or deported here, you might as well go. A lot of the undocumented economy here is under the table. They're paid under the table; don't pay any taxes other than maybe sales taxes. The businesses that cater to them are basically under the table, the contractors don't pay any taxes at all. So we'll see in the next maybe year or so what that impact is.

>>Larry Lemmons:
Yet another group holding on to their money. The future's uncertain.

>>Howard Fischer:
If people aren't spending, if I'm here illegally, I'm not planning big Christmas gifts. I want to find out if I've got a job after January 1. And if in fact there are 500,000 illegals out of a population of 6.6 million in the state, that's a big chunk of the state's economy.

>>Mike Sunnucks:
One interesting thing, you saw construction kind of flatten out earlier this year. That's when they were getting rid of some of the undocumented folks. They weren't hiring anybody. The numbers you're seeing now, they're getting rid of undocumented people that are on the payroll. There was a time when undocumented folks were being let go.

>>Larry Lemmons:
And politically, too, do you want to say a little bit about, I think there are seven candidates to be the new Maricopa County Treasurer?

>>Mike Sunnucks:
Yes. There are three or four republicans running for that seat, and I think the most notable name is Tom Liddy. There's been talk about tom running for congress previously, and talk about him running again or for AG at some point.

>>Mary Jo Pitzl:
All you have to do to be county treasurer at this junction is be a republican. The seat must go to republicans, and Dave is a republican.

>>Howard Fischer:
That gets a whole larger question, which has been fought in this state since statehood. Should certain offices be elected? These are largely ministerial functions. While Dave thought, I am setting policy -- no, you're not, you're sending out tax bills.

>>Mike Sunnucks:
Martin has been very active as state treasurer, putting out all kinds of reports and giving people consumer advice this week.

>>Mary Jo Pitzl:
Tips for how to stay out of debt for the holiday season. Coming from the state treasurer, you think maybe he should send it across the mall to the legislature.

>>Larry Lemmons:
Controversy for McCain

>>Mike Sunnucks:
There was a report about a McCain function in Hilton head in which an elderly woman used the b word to describe Hillary Clinton. There was a CNN report that kind of questions that, whether he stood up enough. They tried to tie the comment to the campaign, but McCain's camp took umbrage to this, and sent out a note accusing CNN of being pro Clinton. He's still third most places, but still plugging away and fighting. I could see if Thompson or Giuliani or Romney stumble, he could step in. It's still a question whether he could recover from his past.

>>Howard Fischer:
He's doing better on states that don't have early primaries. That becomes the issue. If he were doing six months ago what he's doing today, retail politics, the idea of going, shaking hands, kissing babies, talking to people, there wouldn't be any question. Fred Thompson admitted he wouldn't have gotten in the race. Rudy Giuliani wouldn't have emerged as, who do we have left for the conservatives. He thought he was going to do what George Bush did eight years ago, which is sort of overwhelm the field I'm gonna buy the whole thing and I'll be the heir parent. You can see how well that worked.

>>Mike Sunnucks:
The CNN report took it with some video, this very small event in South Carolina. It was one of those George Allen moments, the Youtube thing where he used a derogatory term towards a web supporter and it snowballed. It was someone at a campaign event, it wasn't a staffer. McCain has always said he respects the senator from New York and disagrees with her on many issues.

>>Larry Lemmons:
I saw a report, and you might argue this was kind of made-up news. I saw the report on CNN about that report on CNN, and it was kind of a wall of mirrors. We want to talk about former governor fife Symington going to Washington and talking about the Phoenix Lights.

>>Mary Jo Pitzl:
He spoke at the national press club this week and moderated a panel where they talked about UFOs. His experience stems from, he saw a delta shaped object in phoenix about ten years ago when he went out to look for the famed Phoenix Lights. A lot of people laugh at that, and he brushed it off when he was governor. But ten years out of office, this could be some publicity perhaps.

>>Mike Sunnucks:
He's a former air force pilot. He's not a cook, but a Harvard grad.

>>Howard Fischer:
Wait a second,

>>Mike Sunnucks:
That was a meeting of mostly former pilots and military officials. So all those guys have a little more credibility than Howie going out there and pointing at the sky.

>>Howard Fischer:
That has to do with my medications, but that's another thing. Most people believe we are not alone in the universe. Whether they're visiting us, I always find it interesting that the people they visit tend to be out in farmlands.

>>Larry Lemmons:
That's all we have time for. Mike Sunnucks, Howard Fischer, Mary Jo Pitzl, thanks so much for talking to us today. I'm Larry Lemmons, have a great weekend.

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