Horizon, Host: Ted Simons

November 26, 2008


Host: Ted Simons

Phoenix Budget

  |   Video
  • Phoenix Mayor Phil Gordon talks about the city's budget woes, a buy local plan and other city issues.
Guests:
  • Phil Gordon - Mayor of Phoenix


View Transcript
Ted Simons
>>> Hello. Welcome to "Horizon." I’m Ted Simons. The city of Phoenix like all other governments is facing tough economic times. The city is talking about laying off 1,000 workers to help ease a $250 million budget shortfall. Phoenix Mayor Phil Gordon has asked the federal government to help out with local projects to get the city's economy going. The mayor announces a buy local campaign. Here to talk about all of that is Phoenix Mayor Phil Gordon. Good to see you again. Thank you for joining us.

Phil Gordon
>> Thank you very much, Ted.

Ted Simons
>> This $250 million shortfall is that the worst you've seen?

Phil Gordon
>> It's not only the worst I’ve seen it but according to city managers since we've been a chartered city, it's the worst economic crisis.

Ted Simons
>> 1,000 job cuts. Are we talking attrition here? What kinds of jobs are we talking about?

Phil Gordon
>> The number estimating based last year's reduction. Last year, we ended up as a city cutting $125 million out of our budget and eliminated 700 positions. And this year, we're at estimated -- according to the city manager -- $250 million shortfall. And trying to be creative and hopeful, you know, I’m estimating that means we'll have to eliminate another 1,000 positions. We've had a hiring freeze as a city for over two years now which is a lot except for critical positions like in fire and police and a few others. We've been able to absorb because of the size of our city, you know, 700,000 people a year going into other positions since they retired. If we can manage this $250 million shortfall and better economic news for the next eight months of the fiscal year and with some help on our expenses we hopefully will be able to avoid layoffs.

Ted Simons
>> As far as the jobs that might be targeted, police and fire protected?

Phil Gordon
>> Police and fire are protected, though ultimately the mayor and council will vote on that in probably January to make the cuts earlier but the policy has been and remains and certainly is mine that we won't be cutting police and fire. Non-critical police and fire services, services may be curtailed. The first time ever. The city manager is proposing a small reduction in their budget. Any small reduction certainly affects public safety.


Ted Simons
>> As far as raises are concerned, I know that there's an idea that you have regarding either skipping raises and also taking days off without pay. How's that work into all of this?

Phil Gordon
>> If I can, first of all very quickly, I proposed basically a three-point plan, most of which has already been in effect. Number one, on the revenue enhancement side or new revenue, look at how we can extend existing contracts, say, with the bus advertising shelter company where we can get more money for the next year or two or allow the bus advertising company to advertise in the heart of downtown which isn't done at this point in time and receive more revenue. Ideas like that that are major dollars, not small dollars unfortunately, secondly, new investments that won't require our capital by facilitate new job hirings which is the public works projects which will extend the runway aprons or reclamation projects. Both of which are partners with the feds, will be built and we can pay back and it would employ thousands. The third one, though, we have to look as a city how to further reduce our expenses. Last year, we reduced them by $125 million. We're talking about looking at consolidating. This has been coming to us to in the next couple of weeks that we already asked a month ago to do this. Consolidating departments and functions and also can we go to our labor units? That's what I’m asking. It'll have scheduled contractual raises and cost of living next year which makes up a big part of our expenses and unit by unit and together since we have been a family together and we do what is best for the city and for our employees, can we figure out creative solutions that each unit will then take back to their members saying if we do this, then we won't have layoffs. Those ideas encompass maybe furloughs next year. If they want to where they would go -- not work that day and not be paid for that day. Could be potentially giving back some vacation days. Or any other creative ideas it wouldn't be unilaterally imposed for two reasons, one that's not my belief nor the city's -- management's belief and, two, there's a contract. And if we honor that -- we will honor that contract. But if we do, that new amount that goes into effect next year has to be balanced. We can't -- the federal government print money -- unfortunately, sometimes like the state government, respectfully, where they come down to lower governmental levels and just kind of take some money that the cities have been counting on. So we're going to have to balance that budget.

Ted Simons
>> What kind of response are you getting to the things we've talked about so far? Again, some of this stuff will be voluntary. Some of this stuff will not be voluntary. I’m sure a lot of people are concerned is there a sense of cooperation? What kind of reaction are you getting?

Phil Gordon
>> I think overall, there's a good sense of cooperation. There's certainly -- this is such an uneasy and untrying time. We read every day as a city, as a community, as a state, layoffs within our Valley, within government, not just reductions but layoffs, companies. That stopped people from buying a new car, new house or flying on airlines to visit loved ones that contributes to it. It's uneasy. Until you sit down, rumors spread around. I think through coming to you and asking that we talk about this, I think it calms the water. I talked to most of the labor leaders today of the unions of the city and they're very understanding. They're grateful we're not asking them -- it was misunderstood yesterday by a few people is that I’m asking people to not only give up a day of work and pay but then to come back and work for free. That's, A, not what we're asking. We're asking, are there creative ways that won't reduce the current paycheck but at the same time help on the expenses for next year?

Ted Simons
>> I want to get back to the idea of your own kind of WPA which I think you're actually using those letters --

Phil Gordon
>> Right.

Ted Simons
>> -- what kind of projects are you talking about? And how is the funding going to work with all of this? We're talking state. We're talking federal. Any moneys at all?

>> Well, and, again, there's some people that have looked for an opportunity to try stop what I believe this country wants and this public wants which is to get the economy turned around and people back to work or people to keep their jobs. And the worst economic crisis that this nation ever faced that everyone concurs on is the great depression. The federal government -- in fact, I’m using the name, work projects acceleration -- the federal government trying to stop the hemorrhaging didn't try to go to the top to bail out specific companies and industries but went to families and workers and put people to work immediately by building public infrastructure, roads, highways, parks and in our case, we still have those projects up in South Mountain sometimes retaining walls and trails. The dams up north that brings us our water, that paid people a fair wage that allowed them immediately to pay their rent in those days and buy groceries. Today, if we do that same concept, we can put people to work or maintain people working and they can buy homes or not have their homes being foreclosed. They can buy airline tickets or invest in the stock market. Go to a big box store and buy a computer. All the things that the government is trying to turn around but we can do it directly. It'll have an economic benefit of five to seven times. It'll be loans in most cases. It's not even a handout. And we end up with great assets, specifically, there's that -- at the airport, we have $250 million of already approved, already designed projects that the federal government is a partner on and is putting money into. But for the slow down of the economy would we be building today because we don't have the sales tax or passenger revenue, we can start the projects today.

Ted Simons
>> The odds of getting the federal government and/or state government to help along this project, what are you seeing out there? What are the winds telling you?

Phil Gordon
>> I think this will happen for sure. If you read -- and I do and everyone is listening or reading and seeing on TV -- President-elect Obama, majority of the congress, no matter which party you're on and the majority of the senate and the house are all saying we need invest in cities and states in these types of projects. The question is can it be now where we can immediately save jobs and create jobs or do we have to wait 100 or more days when more people are out of work? For everyone 100 dollars of these projects that we can pay back, we'll create 500 new jobs. Atlanta, as you're aware of, the mayor of Atlanta and Philadelphia and I sent a letter to the federal government, Atlanta stopped over $300 million of air projects, federal projects, that are needed for the feds and for the state, in midstream. So they could start those right away. We can start new projects in 30 days. That means jobs.
Ted Simons
>> Real quickly. We have about 30 seconds left. I know I want to emphasize buying local here in a weakened December. Will that make that much of an impact?

Phil Gordon
>> Today, every penny -- the vast majority of our city's revenue is dependent on sales tax. 60% of our city's revenue comes from the less than 2% that you pay of the 8% plus or minus wherever you buy a car or a computer. The 2% is critical because for every $50,000, we can hire another police officer or keep a librarian employed. So what we're saying is today is an important month after thanksgiving holiday. And it'll be a lot of shopping. We hope from the city of Phoenix residents -- because you're the one receiving most of our services -- that you'll consider if you have a choice to buy in Phoenix so we can keep our employ the city employees that provide the service. We're emphasizing by the way, if you have a choice, also look at local businesses within Phoenix, the return to the community that -- the amount that stays in the community, is even larger than a national chain. Phoenix will take that sales tax no matter what.

Ted Simons
>> I bet they will. Mayor, good to see you. Happy thanksgiving. Thank you for joining us.

Phil Gordon
>> Happy Thanksgiving.

University Tuition

  |   Video
  • Arizona Board of Regent Fred DuVal talks about a pending tuition increase for university students and other university-related issues.
Guests:
  • Fred DuVal - Arizona Board of Regents
Category: Education

View Transcript
Ted Simons
>> Arizona Board of Regents plans to set new university tuition rates next week on its meeting on December 4. In a moment, I'll speak with a member of the board. First, David Majure shows us what students are saying about proposals to raise tuition rates by as much as 14%.

Hosanna Sheeley
>> So if tuition is going to be raised, I want it to go toward things that are going to help me and others like me succeed.

David Majure
>> Concerned about rising costs of a college education.

Christian Vasquez
>> I want to know where my tuition dollars are being spent.

David Majure
>> And proposals to raise tuition rates at state universities.

R.C. Thornton
>> People should be able to attend based their merits on their academic achievements rather than their ability to afford coming to school here.

David Majure
>> Students from ASU, NAU and the U of A linked by video conference addressed the Arizona Board of Regents November 17th.

Jeremy Kaplan
>> I worry for the students that need to take second jobs. I worry about the students whose parents are facing layoffs and have to take loans out just to afford their in-state tuition.

David Majure
>> The public hearing on the tuition gave the students the chance to share their opinions with the board before it sets new tuition rates in early December.

Hosanna Sheeley
>> I’m a first semester freshman here. Already I had to take out $10,000 in student loans. I want to graduate and go into governmental services. That'll be difficult with all the debt I’ve acquired here.

R.C. Thornton
>> I see tuition as an investment. And like with any other investment, the money that you put in, you need to be able to see where that is going, what the outcome is. So I think that when the Board of Regents makes this decision on tuition in December, if they choose something that is affordable to students and shows high degree of accountability to students, people will be a lot more comfortable with that. And I implore the Board of Regents to take those steps. Thank you.

David Majure
>> Currently, tuition and mandatory fees for resident undergraduates enrolled at ASU is 5,659 dollars. ASU president Michael Crow is proposing a 10% increase for new students enrolling next fall. Tuition would go up $591 to $6,250. However, continuing students would see a 5% increase. For them, tuition and fees would go up $273 to $5,932. This reflects ASU’s commitment to its guaranteed tuition program that limits increases to 5% annually for a student's first five years at the university. It offers a measure of predictability, something students and families say they want.

James Alling
>> I'd like to see that predictability model and these to be applied to other costs, tuition as well as program fees, as well as university fees, as well as parking and transit as well as room and board.

David Majure
>> Like ASU, Northern Arizona University has a guaranteed tuition plan. As a result, NAU is requesting a 3% increase for continuing students. New students would pay almost 14% more than they do now. U of a, on the other hand, doesn't yet guarantee tuition, so both new and continuing students may see an increase of nearly 13%.

Student
>> Model of predictability has been used at other campuses and proposed to be used here at the university of Arizona. It's one that would help students and families of Arizona really understand and be able to afford their degree and their education.

Chris Gast
>> On another note, I would like to talk about fees. There's a lot of them. The university is getting a little fee happy. I'll ask you to be -- to have some restraint.

Ted Simons
>> Joining me now to talk about university tuition is Fred DuVal, member of the Arizona Board of Regents. Thank you for joining here on "Horizon."

Fred DuVal
>> You're welcome.
Ted Simons
>> What factors into considerations for tuition increases?

Fred DuVal
>> Sure. A lot of things. Um, first predictability. It's got two parts. Predictability for the institutions trying to keep their spending limit as predictable as possible so you don't go through big cuts, big increases, etc., and when you have a big cut at the legislature, of course, that puts pressure us on to raise tuition to try keep the predictability in place. Predictability for the students so we can tell them as much as possible, here is the cost of your degree over four years. Two of our -- third, adequacy. What the institutions need. They're growing. 6,000 new students in the system this year and, fourth, probably most importantly, affordability. What -- you know, what's the right balance for the students that are struggling? Taking on two or three jobs to get through and what's affordable? We try to deal with that in two ways. The first is we have a threshold policy our tuition won't be higher than the top of the bottom third of our 50 comparable institutions around the country. So we're a comparatively better deal, not withstanding that we're expensive, and secondly, we move a percentage of tuition into financial aid so we can stay to students, net tuition is really reasonable at $2,000 a semester.

Ted Simons
>> Is the concept of affordability that you mentioned, is that not, though, a moving target especially when you look at what we were like a year ago today and what students now face?

Fred DuVal
>> Yes, it's very, very painful. To have the twin combination of a bad economic time, jobs are already hard to come by, families are struggling and exactly the same time that the legislature is facing, you know, historically high budget deficit and inevitably will cut the universities, that creates terrible pressures for us and makes this the most difficult decision we make every year.

Ted Simons
>> With the considerations in mind, have the regents ever said, "no" to a tuition request?

Fred DuVal
>> Yes. And that's a question that has a couple different parts. I can't recall if there's ever been a zero year but there are several many years, and I’m not going to predict this year whether it'll be one of them or not where we take the requests made by the presidents and trim them back based upon other factors we're trying to balance.

Ted Simons
>> I think some folks are concerned because we hear about how ASU especially wants to increase students. More students. More students, more students. More students. That would suggest more tuition money. More tuition money. More tuition money. Why do the rates have to keep going up?

Fred DuVal
>> Tuition only covers 1/3 of the total cost of the students' education. The balance comes from the state in part and from outside sources, research money, foundation money, etc. So the tuition only covers 1/3. So what ends up happening is the growth does get some state support, in most years, not every year and we'll see what happens this year. And the rest of the system, the financing system, has to make up for the difference when legislature is in the position that they can't, the state has more -- the university has more stress.

Ted Simons
>> Talk about the dynamic between the state legislature and the universities. I know the idea of predictability you mentioned before is something that everyone in the university system would like to see.

Fred DuVal
>> Yes.

Ted Simons
>> Are we going to see that?

Fred DuVal
>> I sure hope so for a couple of reasons. First is that when you take entitlements and statutory form lake programs, you take voter-protected mandates in the state budget, universities are disproportionately the largest remaining part of the discretionary part of the budget, the part where the legislature could increase, decrease, etc. That puts huge problems on us in terms of big increases one year and big subtractions the next year when 80% of the costs are factored into personnel and faculty. It makes the institutions unmanageable. We'd be a better system if we had predictable revenue flow we can build long-term five-year or ten-year plans on.

Ted Simons
>> 50-million-odd or so were already cut as far as the budget. It looks as though -- who knows when this will happen -- it could be midyear. It could be later, the legislature could come back and very well take more. What happens?

Fred DuVal
>> Very tough set of choices. We'll absorb the first $50 million cuts. There's been a lot of press here and, of course, in central Arizona about the ASU cuts. What's that mean for cutting nonfaculty personnel and other forms of reductions and for the nursing program? Really high-stress subtractions from these institutions. Taking more cuts. You know, your choices, do you close the campus? Do you close ASU West? I hope not. Do you cap enrollment and say to students who have the gifts and the GPA's to perform in the universities, there's no place for you? Terrible choices. These are the stresses that we're dealing with. We hope the legislature doesn't put us in that predicament.

Ted Simons
>> We just saw the students voicing their concerns. Students, obviously, are very concerned about the concept of having to pay more. Is the university doing -- is the system -- the regents in general, the university system overall, doing a good enough job of explaining why the tuition increases are necessary?

Fred DuVal
>> I appreciate being on your program to try to do that. We work really hard on that. We work really closely with the students that do a great job in working with us on the tuition dynamics. There are misperceptions to think about it. The first is, gee, tuition is going up, enrollment is going down. People can't afford to come. In fact, enrollment is going up. You pay a price at diversity. You lose your opportunity to expand your base. Diversity statistics are going up. It's tough on the kids that can't afford to come. As tuition goes up we set aside more money for financial aid and net tuition, the natural average cost is remaining stagnant at 2,000. That doesn't justify the tuition increase. There are painful stories, real every day stories the students have that are absorbed by us and we're mindful of. It's a much more nuanced picture in terms of what the actual cost of coming to universities is.

Ted Simons
>> I can't let you get away without talking about the tuition increase, the tuition money that now lawmakers are saying belongs to the general fund as opposed to the university system. What's that all about?

Fred DuVal
>> Well, we had an unusually good enrollment year ironically, even following last year's tuition increase. 6,000 new students. It was more than projected. There's a bit of a tuition windfall from the perspective of the state legislators. Some are suggesting what we should do is tap into the windfall and let the students -- emphasize "the students" -- pay for the costs of state government. Roads, highways, access and the rest and needless to say, the Regents don't find that an attractive idea.

Ted Simons
>> Is that a horse trading going on? Give us a little here so we don't take as much there?

Fred DuVal
>> I wouldn't want to project with the no doubt good intentions of our legislators.

Ted Simons
>> I know the Regents boycotted a meeting regarding capital projects and such. Tell us about that?

Fred DuVal
>> You'll recall the last time I was on, we talked about what was called the speed program. We had this idea we're successful at passing through the legislature last year, that we take outyear revenue from the lottery, not the next couple of years where we had a bad budget. But the outyear revenue of the lottery and we dig dirt against it to build classrooms and rehabilitation of unsafe buildings and the College of Medicine which Arizona critically needs and use that as economic stimulus. The construction sector is so hard hit by the economy. It was passed and signed by the governor. The JCCR has the role to review our bond issuances. They decided not to review them in so doing stopped our ability to move forward on what otherwise was enacted.

Ted Simons
>> Real quickly, we had the Speaker on the show. I mentioned that to him. He basically said these unusual times that call sometimes for unusual measures is this something that you'll continue to fight or is this something that, again, has to go back and sometimes you wheel and sometimes you deal?

Fred DuVal
>> Times are changing. We're mindful of that. Would happy to give ideas to legislators on what ideas should go forward and which shouldn't go forward. The notion a single committee could decide in action to stop something that was passed is a terrible precedent in the short term for sure. Who knows what the future legislators will be and pitting one university against another. It's a bad precedence. We hope to win on the merit and then talk through the program.


Ted Simons
>> Fred, thank you for joining us. Happy thanksgiving.

Fred DuVal
>> Thank you. And to you.

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