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November 26, 2001

Host: Michael Grant
Topic: The Morrison Institute Report
"Five Shows Waiting to Drop"
Parts one and two
A Drain on Arizona Talent and Stewardship
In-Studio Guests: Stephen Beard, Deputy Director of the Central Phoenix East Valley Light Rail Transit Project;
Mary Jo Waits, Associate Director of the Morrison Institute and Principle writer of Five Shoes Report;
Chris Herstam, Former Lawmaker and member of the Arizona Board of Regents;
Naaman Nickell, Former Business Coumnist for the Arizona Republic

>> Michael: TONIGHT ON "HORIZON," ATTRACTING TALENT HIDE TECH WORKERS, ONE OF FIVE MAKER OBSTACLES FACING THE VALLEY AND STATE. A LOOK AT THE MORRISON'S INSTITUTE'S REPORT. GOOD EVENING. I'M MICHAEL GRANT. COST OF BUILDING A LIGHT RAIL SYSTEM IN THE VALLEY IS IN THE PROCESS OF FINE TUNING. PRESENTATIONS WILL SOON BE MADE TO SEVERAL CITY COUNCILS ON SPECIFIC PLANS AND COST TO BUILD A LIGHT RAIL PROJECT WHICH WILL STRETCH MORE THAN 20 MILES FROM WEST PHOENIX TO MESA. EXPECTED TO BE OPERATIONAL BY THE YEAR 2006. HERE TO UPDATE US ON THE VALLEY'S LIGHT RAIL PROJECT IS STEPHEN BEARD, DEPUTY DIRECTOR OF THE CENTRAL PHOENIX EAST VALLEY LIGHT RAIL TRANSIT PROJECT. STEVE, READING THE PAPER THIS MORNING, I GOT THE IMPRESSION YOU GUYS HATE TREES. IS THAT TRUE?

>> Stephen Beard: NO. I DON'T THINK SO AT ALL, MICHAEL. PART OF THE PROJECT WILL BE PUTTING IN A LOT OF ADDITIONAL LANDSCAPE, A LOT OF ADDITIONAL TREES AND DURING CONSTRUCTION, ANY OF THE TREES THAT WE DO HAPPEN TO HAVE TO TAKE, WILL BE REPLACED ALONG THE LINE.

>> Michael: ONE OF THE ISSUES THOUGH IS SHADED STOPS, RIGHT? AND THE EXPENSE OF THOSE, HOW MANY THERE OUT TO BE, THAT KIND OF THING?

>> Stephen Beard: PASSENGER COMFORT IS CRITICAL AT ALL OF OUR LIGHT RAIL STATIONS AND THERE'S REALLY NO CONTROVERSY AT ALL. ALL OF THE STATIONS WILL HAVE A SIGNIFICANT PORTION OF THE PLATFORM SHADED TO PROVIDE A VERY NICE WAITING ENVIRONMENT FOR OUR PATRONS.

>> Michael: WHY DID I GET SUCH A DISTINCTLY DIFFERENT IMPRESSION FROM THE STORY?

>> Stephen Beard: I THINK THE STORY WAS TALKING ABOUT COST CUTTING. WE'RE IN THE STAGE OF PROJECT DEFINITION. OVER THE LAST COUPLE OF YEARS, WE'VE HAD LITERALLY HUNDREDS OF MEETINGS WITH THE PUBLIC, WITH BUSINESS OWNERS, PROPERTY OWNERS, TENANTS, GOVERNMENT AGENCIES ALONG THE LINE. GETTING INPUT SO THAT WE REALLY CAN DEFINE THE BEST POSSIBLE SYSTEM FOR THE VALLEY. AND WE'VE BEEN INCORPORATING ALL OF THAT INFORMATION, DOING SOME TECHNICAL ANALYSIS, COST ESTIMATING AND NOW, WE'RE AT THE POINT TO BRING ALL OF THAT INFORMATION BACK THROUGH A PUBLIC DECISION MAKING PROCESS TO DEFINE THE PROJECT THAT WILL MOVE WITH FROM HERE FORWARD.

>> Michael: IS PART OF THE PROCESS BASICALLY TO HAND TO THE DECISION MAKERS AND FOR THAT MATTER, THE PUBLIC INPUT AND THAT KIND OF THING, ALL RIGHT, IF YOU WANT THIS MANY PARK AND RIDE SPOTS WITH THESE AMENITIES, HERE'S THE COST. IF YOU WANT THIS MANY TREES ON THE REST STOPS, HERE'S THE COST. I DON'T KNOW THAT WE'VE GOT TO HAVE THIS MUCH MONEY TO BUILD THIS MANY MILES OF LINE AND SET UP THOSE KINDS OF OPTIONS.

>> Stephen Beard: THAT'S EXACTLY RIGHT, MICHAEL. WE'RE GOING TO TAKE TO EACH OF THE CITY COUNCILS THE BEST TECHNICAL IDEA OF A BASIC SYSTEM TO PROVIDE A GOOD ALTERNATIVE TO THE AUTOMOBILE AND THEN WE'RE GOING TO GIVE THE COUNCILS THE OPPORTUNITIES TO PICK FROM A MENU OF ITEMS. ADDITIONAL STATIONS, DIFFERENT KINDS OF STATION DESIGNS, DIFFERENT KINDS OF ATTRACTIVE DESIGN, NUMBER OF PARKING SPACES SO THAT THEY CAN ADD AS THEY DESIRE TO THE PROJECT.

>> Michael: EACH MUNICIPALITY INVOLVE CARRYING ITS OWN WEIGHT SO IF PHOENIX SAYS WELL, WE WANT MORE STOPS, THAT'S ON PHOENIX'S NICKEL, RIGHT?

>> Stephen Beard: THAT'S EXACTLY RIGHT. EACH OF THE CITIES -- WE DO HAVE THREE CITY PARTNERS AS YOU MENTION. PHOENIX, TEMPE AND MESA. AND THEY WILL BE SHARING IN 50% OF THE COST OF THIS SO THE DECISIONS THAT EACH COUNCIL MAKES WILL AFFECT THE COST OF THE PROJECT WITHIN THEIR CITY LIMITS.

>> Michael: SPEAKING OF COST SHARING, WHERE IS THE FEDERAL FUNDS EQUATION IN ALL OF THIS?

>> Stephen Beard: THE OVERALL FEDERAL FUNDS WE'RE EXPECTING 50% OF THE MONEY TO FINANCE THIS SYSTEM TO COME FROM THE FEDERAL GOVERNMENT. WE'VE BEEN VERY SUCCESSFUL OVER THE PAST THREE OR FOUR YEARS IN GETTING CONGRESSIONAL APPROPRIATIONS FOR OUR PROJECT. IN FACT, THROUGH THE EARLY ENGINEERING STAGES, THE FEDERAL GOVERNMENT HAS BEEN PAYING BETWEEN 75% AND 80% OF OUR PROJECT. SO, WE'VE BEEN DOING AN EXCELLENT JOB, I BELIEVE, GETTING OUR FEDERAL PARTNERS INVOLVED.

>> Michael: BUT THAT'S STILL ON A YEAR TO YEAR BASIS AT SOME POINT IN TIME, DON'T YOU NEED TO GET A LITTLE LONGER TERM FIRMER COMMITMENT THAN THAT?

>> THAT'S EXACTLY RIGHT, MICHAEL. THAT'S WHAT WE'RE WORKING TOWARDS HERE. AS WE DEFINE THIS PROJECT WITH THE COUNCILS, THE NEXT STEP WILL BE TO BEGIN TO PREPARE THE FINAL DESIGN. WHAT WILL ACTUALLY CONSTITUTE THE BID DOCUMENTS. WHEN WE GET ABOUT HALFWAY INTO THAT, WE'LL BE AT A POINT WHERE WE CAN GO TO THE FEDERAL GOVERNMENT AND ACTUALLY NEGOTIATE A CONTRACT WITH THEM THAT WILL GUARANTEE THE FEDERAL FUNDING FOR THE REMAINDER OF DESIGN AND CONSTRUCTION OF THE SYSTEM.

>> Michael: STEVE, OBVIOUSLY GLENDALE OK'D A MASS TRANSIT TAX EARLIER THIS MONTH. WHERE DOES GLENDALE FIT IN THIS PROCESS IF AT ALL?

>> Stephen Beard: I THINK GLENDALE IS VERY MUCH GOING TO BE A PLAYER. THAT'S THE THIRD CITY IN OUR VALLEY NOW THAT SAYS LIGHT RAIL IS AN IMPORTANT PART OF OUR FUTURE. ACTUALLY, IN THEIR BALLOT REFERENDUM, THEIR LIGHT RAIL WOULD COME LATER IN THEIR PROGRAM, PROBABLY ABOUT TEN YEARS FROM NOW BUT IN THE NEXT YEAR OR TWO, WE'RE GOING TO HAVE TO BEGIN STUDYING ROUTES TO CONNECT THE SYSTEM IN PHOENIX TO DOWNTOWN GLENDALE.

>> Michael: BUT AT LEAST IN THE IMMEDIATE TERM, THE GLENDALE PROPOSITION FOCUSING MORE ON THE BUS ASPECT.

>> Stephen Beard: IT IS A BUS PROGRAM. REALLY, ENHANCING THEIR BASIC TRANSIT SERVICE AND THEN DOING THE STUDIES NECESSARY TO PREPARE FOR RAIL IN THE FUTURE. >> Michael: ALL RIGHT, STEPHEN BEARD, THANK YOU VERY MUCH FOR THE INFORMATION.

>> Stephen Beard: THANKS VERY MUCH, MICHAEL.

>> Micheal: NEW REPORT BY THE MORRISON INSTITUTE OUTLINES FIVE ISSUES ARIZONA NEEDS TO ADDRESS TO BE SUCCESSFUL IN THE FUTURE. CALLED FIVE SHOES WAITING TO DROP. THE FIVE ISSUES THAT COULD MAKE-OR-BREAK THE STATE ARE A TALENT SHAKE-UP, LATINO EDUCATION DILEMMA, A FUZZY ECONOMIC IDENTITY, LOST STEWARDSHIP AND THE REVENUE SIEVE.

>> Rob Melnick: WE BELIEVE THAT INSTITUTE, BASED ON OUR RESEARCH, ARE OBSTACLES TO OUR SUCCESS. AND WE COULD HAVE DONE OTHER SHOES BUT WE CHOSE THESE BECAUSE THESE ARE THE ONES THAT RISE TO THE TOP AS FAR AS BEING THE MOST IMPORTANT TO DEAL WITH FOR BOTH SHORT TERM AND LONG-TERM SUCCESS.

>> Michael: OVER THE NEXT FOUR NIGHTS, "HORIZON" WILL TAKE A LOOK AT EACH OF THE FIVE SHOES WAITING TO DROP. TONIGHT, WE'LL LOOK AT TWO. IN A MOMENT, WE'LL TALK ABOUT ARIZONA'S LOST STEWARDSHIP. BUT FIRST, PAUL ATKINSON TAKES A CLOSER LOOK AT A TALENT SHAKE-UP. THE NEED TO RECRUIT AND MAINTAIN A WELL-EDUCATED WORK FORCE.

>> Reporter, Paul Atkinson: THE FUTURE OF ARIZONA'S ECONOMIC WELL-BEING IS NOT NECESSARILY IN THE PRODUCTS MADE HERE. BUT IN THE PEOPLE OR TALENT BEHIND THEM. SO SAYS THE MORRISON INSTITUTE'S EXECUTIVE DIRECTOR ROB MELNICK.

>> Rob Melnick: THE REASON TAL SENT SUCH A KEY ISSUE IS BECAUSE IT IS THE KEY TO ECONOMIC GROWTH IN THE FUTURE. IN THE PAST, IT USED TO BE ABOUT MUSCLE, ABOUT BRAWN. IN THE FUTURE, IT WILL BE ABOUT BRAINS. SO, YOU NEED TO BRING THE BRAINS HERE IN ORDER TO CREATE THE WEALTH THAT YOU WOULD IN A NEW ECONOMY.

>> Reporter: ARIZONA IS ALREADY HOME TO INTEL, MOTOROLA, HONEYWELL AND OTHER HIGH TECH COMPANIES BUT THE MORRISON INSTITUTE FOUND THE STATE AND VALLEY STILL AREN'T DOING ENOUGH TO ATTRACT MORE TALENTED WORKERS.

>> Rob Melnick: ARIZONA LAGS BEHIND OTHER STATES, GREATER PHOENIX LAGS BEHIND OTHER METROS IN BEING ABLE TO ATTRACT THAT KIND OF TALENT FOR A VARIETY OF REASONS. WE BELIEVE BASED ON OUR RESEARCH ON ECONOMIC DEVELOPMENT, THAT THE FUTURE BELONGS TO THE PEOPLE AND THE REGIONS THAT ATTRACT THE MOST KNOWLEDGE WORKERS AND WE'RE NOT DOING AS GOOD A JOB OF THAT AS WE CAN. IT IS A REAL OBSTACLE TO SUCCESS.

>> Reporter: WHY DO TALENTED PROSPECTIVE WORKERS HAVE RESERVATIONS ABOUT LOCATING TO ARIZONA? IN A SURVEY, THE MORRISON INSTITUTE FOUND 52% CITED POOR PERFORMING PUBLIC SCHOOLS. 27% SAID LACK OF WORKFORCE TRAINING PROGRAMS. 15% SAID THE IMAGE OF SPRAWLING COMMUNITIES. 14% SAID ARIZONA NOT BEING CONSIDERED A COOL PLACE. 14%, THE LACK OF CULTURAL DIVERSITY AND 10%, ARIZONA NOT BEING A TOP TIER TECHNOLOGY HOT SPOT.

>> Rob Melnick: SINCE KNOWLEDGE WORKS ALMOST BY DEFINITION CAN LIVE ANYWHERE THEY WANT, THEY'LL PICK THE PLACE OR PLACES, IF YOU WILL, THAT HAVE THE MOST AMENITIES OF THINGS THAT APPEAL TO THEM.

>> Michael: JOINING ME TO TALK ABOUT THE MORRISON INSTITUTE'S REPORT AND THE ISSUE OF A TALENT SHAKE-UP IS MARY JO WAITS, ASSOCIATE DIRECTOR OF THE MORRISON INSTITUTE AND THE PRINCIPLE WRITER THE FIVE SHOES REPORT. ALSO HERE IS CHRIS HERSTAM, FORMER LAWMAKER, MEMBER OF THE ARIZONA BOARD OF REGENTS AND NAAMAN NICKELL, FORMER BUSINESS COLUMNIST FOR "THE ARIZONA REPUBLIC." HELLO TO YOU ALL. SO, MARY, HAS OUR TALENT POOL DRIED UP OR IS THE WATER NOT RUNNING FAST ENOUGH?

>> Mary Jo Waits: IT IS A COMBINATION OF BOTH IN MANY RESPECTS. OBVIOUSLY FOR TALENT, WE HAVE TO PRODUCE OUR OWN, GROW OUR OWN THEN WE WANT TO ATTRACT THE BEST AND THE BRIGHTEST FOR THE KINDS OF COMPANIES WE WOULD LIKE TO HAVE AND THE JOBS IN THE FUTURE. I THINK WE KNOW PRETTY CLEARLY ABOUT GROWING OUR OWN. WE AREN'T PERFORMING WELL ON SOME OF THE STANFORD 9 TEST SCORES. WE HAVE CERTAINLY HIGH ON OUR DROPOUT RATE AND WE'RE - THE NEWEST STATISTICS SHOW WE'RE NOT REALLY PRODUCING A LOT OF PEOPLE WITH B.A.s SO WE HAVE A PROBLEM GROWING OUR OWN SO THE NEXT THING IS ARE WE GOING TO BE ABLE TO ATTRACT THE TYPE OF BRAINPOWER WE WANT AND THAT'S A REAL ISSUE, I THINK.

>> Michael: CHRIS, I FIND MOST FASCINATING THE BACHELOR OF ARTS POINT BECAUSE YOU'VE GOT TWO LARGE UNIVERSITIES AND A THIRD UP IN FLAGSTAFF THAT IS NOT SMALL BY ANY MEASURE, AND YOU'VE GOT BACHELOR OF ARTS DEGREES DROPPING?

>> Chirs Herstam: WELL, THE STATISTICS JUST LEAP OUT OF THE MORRISON INSTITUTE REPORT AND THEY'RE DEPRESSING. THE BOTTOM LINE IS THAT TEN YEARS AGO, HERE IN ARIZONA, WHEN YOU LOOK AT THE ADULT POPULATION OVER 25, THE PERCENTAGE THAT HAD AT LEAST A BACHELOR'S DEGREE WAS 22.5%. TEN YEARS LATER, THE YEAR 2000, IT IS STILL 22.5%. BUT THE DIFFERENCE IS TEN YEARS AGO, WE RANKED 20th IN THE COUNTRY WITH THAT NUMBER. NOW, WE RANK 37th. SO, WHILE WE HAVE JUST BASICALLY BEEN TREADING WATER PRODUCING COLLEGE GRADUATES IN THIS STATE, THE REST OF THE STATES, MANY OF THEM, HAVE BEEN DOING A VERY GOOD JOB OF IT AND THEY'RE SURPASSING US AND OF COURSE WE'RE NOW MOVING INTO AN AGE OF THE NEW ECONOMY WHEN WE NEED MORE BRAIN POWER MORE THAN EVER AND WE'RE NOT PRODUCING ENOUGH COLLEGE GRADUATES. >> Michael: NAAMAN, WHO ARE WE COMPETING WITH FOR THESE KNOWLEDGE WORKERS?

>> Naaman Nickell: WELL, WE'RE COMPETING WITH PLACES LIKE AUSTIN, BOULDER, BOSTON, ATLANTA, SILICON VALLEY, SEATTLE. ALL PLACES THAT HAVE REALLY WORLD-CLASS RESEARCH UNIVERSITIES AMONG OTHER THINGS. AND WHICH I THINK MAKES THE JOB OF FINDING THE NEXT PRESIDENT FOR ASU MAYBE THE SINGLE MOST IMPORTANT ECONOMIC DEVELOPMENT DECISION MADE IN THE VALLEY NEXT YEAR.

>> Michael: YOU KNOW, I HAVE BEEN TO AUSTIN. I USUALLY DON'T THINK OF AUSTIN AS BEING COOLER THAN PHOENIX. WHAT AM I MISSING?

>> Naaman Nickell: IT DEPENDS WHERE YOU HAVE GONE IN AUSTIN. I SPENT A LOT OF TIME IN TEXAS SO I THINK AUSTIN IS A VERY COOL PLACE.

>> Michael: WHAT DOES COOL MEAN?

>> Mary Jo Waits: WE'RE NOT TALKING ABOUT CLIMATE. EVERYBODY THINKS THAT. IT IS REALLY -- A LOT OF BUZZ, REALLY A LOT GOING ON FOR IN SOFTWARE DEVELOPMENT, BIOTECHNOLOGY, VENTURE CAPITAL, THE SORT OF THE NEW ECONOMY TYPE BUSINESSES WHERE YOU KNOW, THE 20 SOMETHINGS, THE 30 SOMETHINGS WANT TO GO AND THERE IS A VIBRANT NIGHTLIFE 24 HOURS A DAY. THEY WORK SEVEN DAYS A WEEK, 24 HOURS A DAY. THEY'RE INTERESTED IN DIFFERENT KINDS OF AMENITIES. THEY LIKE THE COUNTRY MUSIC SCENE. THEY LIKE THE CREATIVE SCENE. THEY LIKE THE AMENITIES THAT YOU CAN PARTICIPATE IN. THEY'RE NOT REALLY GOING TO FOOTBALL GAMES. THAT KIND OF STUFF. THEY REALLY WANT TO RIDE THEIR BIKES AND HAVE MOUNTAIN CLIMBING OPPORTUNITIES. SO, IT IS COOLER FOR THAT REASON.

>> Michael: CHRIS, DO WE WANT PEOPLE IN THE VALLEY WHO ARE NOT FOOTBALL FANS?

>> Chris Herstam: FRANKLY, I WANT BASEBALL FANS.

>> Michael: ALL RIGHT. FILL IN THE SPORT HERE.

>> Chris Herstam: BUT I THINK THAT WHAT MARY JO IS POINTING OUT TO US IS THE THINGS THEY WANT ARE BASICALLY WHAT WE'RE NOT OFFERING. WE'RE TIED TO AN OLD ECONOMY DRIVEN BY LOW -- A LOW WAGE SERVICE INDUSTRY, BY THE REAL ESTATE DEVELOPMENT INTEREST IN THE VALLEY THAT BASICALLY PROMOTED URBAN SPRAWL, PROMOTED SINGLE FAMILY LUXURY HOMES, THAT THE YOUNG PROFESSIONALS HIGHLY EDUCATED YOUNG PROFESSIONALS THAT WE'RE TRYING TO ATTRACT AREN'T PARTICULARLY INTERESTED IN. IT THEY'RE NOT INTERESTED IN THE SAME THINGS THAT THE AGING BABY BOOMERS THAT I THINK MEAN ALL OF US, ARE INTERESTED IN. THEY'RE INTERESTED MORE IN CONDOS AND LOFT AND REHAB HOUSING AND URBAN ENVIRONMENT. BEING CLOSE TO MUSEUMS AND THEATERS AND WE DON'T OFFER MUCH OF THAT SETTING IN THE STATE OF ARIZONA.

>> Naaman Nickell: ALSO HAVE A LOT OF BUZZ ABOUT THE NEW ECONOMY AND IT LOOKED LIKE WE WERE STARTING TO PICK UP SOME IMPETUS TOWARD NEW ECONOMY TYPE THINGS AND THEN THE DOT COM EXPLOSION HIT AND SUDDENLY, PEOPLE DON'T EVEN WANT TO TALK ABOUT THE NEW ECONOMY VERY MUCH HERE IN THE VALLEY ANYMORE.

>> Michael: IT IS INTERESTING IF I RECALL CORRECTLY, THE NUMBER ONE STATISTIC THOUGH ON THIS WAS A PERCEIVED BAD PUBLIC SCHOOL SYSTEM.

>> Mary Jo Waits: ABSOLUTELY. WE ASKED, AS THEY SAID, THE SURVEY TO COMPANIES WHY DON'T PEOPLE WANT TO MOVE HERE WHEN YOU OFFER THEM A JOB AND THE NUMBER ONE REASON WAS THE PERCEPTION OF POOR PERFORMING SCHOOLS LIKE 50%, PEOPLE WOULD SAY THAT. AND WE HAVE THAT PERCEPTION, THE REST OF THE WORLD THINKS OF US AS HAVING POOR PERFORMING SCHOOLS. NOW, THE STATISTICS SHOW THAT AND IN TERMS OF THAT, BUT FOR SOME REASON, WE CAN HEAR THAT FROM THE CEO OF INTEL, WE CAN HEAR THAT FROM COMPANY CEO AFTER CEO BUT IT JUST NEVER REGISTERS. SO, I THINK IT'S TIME TO TAKE NOTICE THAT THAT'S A REAL IMPORTANT ISSUE.

>> Naaman Nickell: IT IS NOT NEW BECAUSE I TALKED TO A HONEYWELL EXECUTIVE FOUR OR FIVE YEARS AGO AND HE TOLD ME QUITE CLEARLY HE WAS HAVING TROUBLE HIRING MID-LEVEL ENGINEERS AND THAT SORT OF THING BECAUSE THEY DIDN'T WANT TO COME TO PHOENIX. THEY HAD HEARD ABOUT -- OR HEARD RIGHT OR WRONG THAT EDUCATIONAL SYSTEM FOR THEIR CHILDREN K-12 WAS NOT AS STRONG AS IT WAS OTHER PLACES.

>> Chris Herstam: MICHAEL, WHAT IS ALSO INTERESTING IS AFTER A DECADE OF PROBABLY THE GREATEST CAPITAL WORTH CREATION IN THE HISTORY OF THIS COUNTRY, THE 2000 FIGURES FOR ARIZONA SHOW THAT OUR PERSONAL PER CAPITA INCOME IS ONLY 84.9% OF THE NATIONAL AVERAGE. WE ARE STILL THAT FAR BELOW THE NATIONAL AVERAGE WHICH IS THE WORST WE'VE BEEN SINCE 1967. SO, WHILE WE HAVE AN ECONOMY THAT'S BEEN DRIVEN BY REAL ESTATE AND DEVELOPMENT, BY A TREMENDOUS HOUSING CONSTRUCTION INDUSTRY ET CETERA, WHAT HAS HAPPENED. A LOT OF THE OVERWHELMING MAJORITY OF ARIZONANS HAVE STILL BEEN LEFT BEHIND FROM THIS GREAT WEALTH CREATION THAT HAS EXISTED NATIONALLY. AND I THINK IT IS A SIGN THAT WE ARE LIVING WITH AN OLD ECONOMY. WE DO NEED TO CHANGE AND CHANGE OUR ECONOMY SO THAT IT WILL PROVIDE JOBS FOR THOSE HIGHLY EDUCATED YOUNG PROFESSIONALS AND SOMEHOW TRY TO ATTRACT THEM INTO THE STATE OF ARIZONA.

>> Michael: MARY JO, HOW MUCH OF THAT IS ATTRIBUTABLE TO THE SO-CALLED FARM CLUB BACK OFFICE PHOENIX NOT A CORPORATE HEADQUARTER PHENOMENA? BECAUSE WE'RE GOING TO GET TO THAT IN MORE DETAIL IN JUST A MINUTE BUT JUST OF WHAT CHRIS WAS TALKING ABOUT.

>> Mary Jo Waits: ABSOLUTELY. I THINK THE REALITY IS WE HAVE A LOT OF TOURISM. THE DATA CALL CENTER TYPE JOBS. THEY'RE GOOD JOBS. THEY'RE IMPORTANT TO HAVE THAT PART OF YOUR ECONOMY. BUT I THINK WE'RE RECOGNIZES YOU BETTER GO FOR THE HIGH END JOBS AND THE KNOWLEDGE JOBS IN THE FUTURE. OR YOU REALLY WON'T BE COMPETING.

>> Michael: THE LACK OF LEADERSHIP, ANOTHER ISSUE IDENTIFIED IN THE MORRISON INSTITUTE'S REPORT. FIVE SHOES WAITING TO DROP, REPORT DEPLORES ARIZONA'S LOST STEWARDSHIP OR ITS LACK OF BIG PICTURE THINKING BY POLITICAL AND BUSINESS LEADERS. A POLL OF 400 ARIZONANS CONDUCTED FOR THE MORRISON INSTITUTE FOUND 33% THINK POLITICAL LEAD VERSE A NARROW VIEW. 20% ARE WEAK POLITICAL LEADERS. 16% CARE DEEPLY ABOUT THE FUTURE. 11% ARE VISIONARY POLITICAL LEADERS. AND 10% ARE SINGLE ISSUE DRIVEN LEADERS.

>> Rob Melnick: I THINK THAT IT IS NOTABLE IN THE REPORT THAT WHEN WE DID A RANDOM SAMPLE SURVEY OF ARIZONANS, WHAT THEY SAID ABOUT OUR LEADERS. THAT THEY TEND TO THINK OVERWHELMINGLY, IF YOU WILL, THAT WE HAVE A DEARTH OF PEOPLE -- A DIRT OF PEOPLE WHO HAVE A BIG PICTURE VISION, THAT PEOPLE ARE IN ARIZONA BELIEVE THAT BOTH THEIR BUSINESS AND THEIR POLITICAL LEADERS TEND TO BE ISSUE-ORIENTED. ONCE AGAIN, THAT SAID, THERE'S NOTHING WRONG WITH ISSUE-ORIENTED LEADERS. WE THANK THEM FOR WHAT THEY DO BUT YOU HAVE TO HAVE A BIGGER PICTURE, A QUILT, IF YOU WILL TO KNIT THE WHOLE THING TOGETHER OTHERWISE WE'RE GOING TO PULL ON THE BALLOON ON ONE SIDE AND IT WILL POKE OUT ON THE OTHER.

>> Michael: NAAMAN, YOU WERE MAKING THE POINT BEFORE WE WENT ON THE AIR THAT YOU WEREN'T QUITE SURE WHAT STEWARDSHIP WAS CAPTURING.

>> Naaman Nickell: CORRECT. MARY JO IS GOING TO EXPLAIN THAT TO US.

>> Michael: ALL RIGHT. STEWARDSHIP.

>> Mary Jo Waits: ALL RIGHT. WELL, THE NOTION WAS, REALLY, THE MOST POPULAR GAME IN ARIZONA THESE DAYS IF YOU GO ON A COCKTAIL CIRCUIT IS WHATEVER HAPPENED TO OUR LEADERS? THE QUESTION IS IS IT THAT THEY'RE SITTING ON THE SIDELINES? ARE THEY -- WE NOT LOOKING IN THE RIGHT PLACES? ALL THE QUESTIONS WE HAVE TO ASK. NAAMAN SAYS WHAT HAPPENED TO THE FOLLOWERS? THERE ARE A LOT OF QUESTIONS WE HAVE TO ASK BUT I THINK THE SURVEY POINTS OUT THAT WE ACTUALLY HAVE A LOT OF LEADERS. WE HAVE A LOT OF LEADERS ON SINGLE ISSUES AND THOSE ARE THE ISSUES OF TRANSIT, TAX CUTS, NEIGHBORHOOD LEADERS, BALLOT ISSUE LEADERS. THEY'RE ALL IMPORTANT AND THEY'RE IMPORTANT TO A COMMUNITY. BUT THE REAL ISSUE IS IF YOU'RE A STEWARD, YOU ARE RESPONSIBLE FOR A PLACE. YOU'RE INTERESTED IN MAKING A PLACE GREAT. AND IT IS REALLY MUCH MORE PLACE FOCUSED RATHER THAN A STEWARD OF A POLITICAL PHILOSOPHY, A STEWARD OF A SINGLE ISSUE. AND NOT REALLY CARING ABOUT WHAT THE WHOLE PICTURE LOOKS LIKE. >> Michael: TO A CERTAIN EXTENT THOUGH, NAAMAN, ARE WE MORE FACTIONALIZED THAN WE USED TO BE, THEREBY DEMANDING MORE SINGLE ISSUE LEADERS? >> Naaman Nickell: WE MAY BE A LITTLE BIT MORE FACTIONALIZED BUT IT WOULD BE HARD THAN WE WERE 10 OR 12 YEARS AGO WHEN THE ECONOMY WAS REALLY, REALLY BAD. AND EVERYBODY WAS RUNNING FOR THEIR OWN COVER AND TRYING TO COVER THEMSELVES. I'M NOT SURE THE FACTIONALIZATION IS ANY WORSE BUT I DON'T THINK WE HAVE ANY LEADERS WHO ARE TRYING TO TAKE ALL OF THE ISSUES AND BRING THEM UNDER ONE UMBRELLA AS WE DID IN LATE 1988 AND 1989. >> Chris Herstam: THINK YOU FIND THAT CHARITABLE ORGANIZATIONS, EDUCATIONAL ORGANIZATIONS, CORPORATE ORGANIZATIONS THAT ARE TRYING TO FILL SPOTS ON BOARDS OF DIRECTORS, OR ADVISORY BOARDS ARE HAVING A HORRIBLE TIME FINDING PEOPLE THAT WILL INVEST THEIR TIME AND ENERGY ON THE BOARDS. I THINK A LOT OF IT GOES TO THE FACT THAT JUST IN THE LAST DECADE, 40% OF ARIZONA'S POPULATION IS NEW. WE'VE HAD THAT INCREASE AND I THINK WHEN PEOPLE DON'T HAVE ROOTS IN A COMMUNITY, THEY DON'T TEND TO WANT TO VOLUNTEER THEIR SERVICES AND PUT FORWARD THAT PUBLIC EFFORT AND I THINK THAT'S PART OF THE PROBLEM. ALSO, WITH THE BUSINESS COMMUNITY, I THINK IT IS MERGERS AND IT IS ACQUISITIONS THAT HAVE BASICALLY REDUCED THE POOL OF CEOs AND OF INVOLVED BUSINESS PEOPLE. ALL YOU HAVE TO DO IS LOOK AT BANK ONE, MIKE WELLBORN CALLED TO THE HOME OFFICE IN THE MIDWEST AND JOHN OPPEDAHL, "THE ARIZONA REPUBLIC" PURCHASED BY GANNETT, NOW HEADING UP A NEWSPAPER IN SAN FRANCISCO.THE LACK OF CORPORATE HEADQUARTERS HERE IN ARIZONA PRODUCES LESS LEADERS.

>> Michael: OR, NAAMAN, THAT CERTAINLY IS AN ELEMENT BUT JUST THE LACK ANYMORE OF VERY MANY HOMEGROWN INSTITUTIONS. HEADQUARTERS OR NOT.

>> Naaman Nickell: WE LOST OUR BANKS. WE LOST OUR S & Ls.

>> Michael: EVERYBODY LOST THEIR S & Ls.

>> Naaman Nickell: BUT THEY PLAYED A FAIRLY BIG ROLE HERE AND WE LOST HEADQUARTERS THAT HAVE GONE. A NUMBER -- IF YOU LOOK AT THE SMALL HEADQUARTERS IS JUST SCARY HOW MANY WE'VE LOST. AND SO WE'RE GOING TO HAVE TO FIND ANOTHER SOURCE OF LEADERS.

>> Mary Jo Waits: AND I THINK THAT'S AN IMPORTANT POINT. MAYBE WE AREN'T LOOKING IN THE RIGHT PLACES. MAYBE WE HAVE A TRADITIONAL VIEW OF THE USUAL LEADER, THE CORPORATE CEO BUT WE'RE ALSO FINDING THAT WE HAVE A LOT OF NEW ECONOMY COMPANIES. WE HAVE THE LATINO POPULATION. WE HAVE THE GENERATION X. WHAT DOES IT TAKE TO GET THEM INTO THE MIX IN TERMS OF LEADERSHIP. BUT I ALSO THINK IT IS IMPORTANT TO POINT OUT THAT IF WE SAY LEADERSHIP IS A PROBLEM OF LACK OF CORPORATE CEOs, WE MADE IT SOMEBODY ELSE'S PROBLEM. IT IS THEIR PROBLEM. THEY'RE NOT LEADING AND I DON'T THINK WE CAN AFFORD TO FALL INTO THAT TRAP. AND THE LEADERSHIP ISSUE IS VERY COMPLEX. IT INVOLVES CEOs, IT INVOLVES NEW ECONOMY. IT INVOLVES LATINO COMMUNITY, GENERATION X. IT INVOLVES A POLITICAL LEADERS. IT INVOLVES THE BALLOT MEASURES. THERE ARE A LOT OF THINGS THAT ARE GOING ON AND TO MAKE IT VERY SIMPLE ABOUT A CEO CHURN, REALLY DOES US A DISSERVICE TO UNDERSTANDING WHAT TO DO ABOUT IT.

>> Michael: CHRIS, IS ANOTHER ELEMENT OF THIS IS THE LEANER, MEANER ECONOMY. FEWER COMPANIES WILLING TO DEVOTE, AS THEY WERE IN THE PAST, TWO OR THREE OR FIVE OR EIGHT PEOPLE WHOSE BASIC MISSION WAS LEADERSHIP IN THE COMMUNITY IN MANY RESPECTS.

>> Chris Herstam: ABSOLUTELY. I MEAN, FROM THE TOP TO THE BOTTOM. MORRISON INSTITUTE REPORT SAYS THAT BOARDS OF DIRECTORS ARE MOST LIKELY TO FIRE A CEO, 30% MORE NOW THAN THEY DID TEN YEARS AGO. THAT CONTRIBUTES TO THE TURNOVER BUT YOU'RE RIGHT. BUDGETS BEING CUT BACK. LEANER, MEANER. LESS PEOPLE ENCOURAGED TO PARTICIPATE IN SCHOOL DISTRICTS AND CITIES AND COUNTIES AS WELL AS THE STATE CAPITOL. SO, IT ALL HAS A VERY DIFFICULT NEGATIVE IMPACT ON TRYING TO FIND LEADERS.

>> Michael: IF I CAN COIN A TERM, THIS IS COOL. WE'VE ADEQUATELY DEFINED THE PROBLEM NOW. DO WE HAVE ANY SOLUTIONS FLOATING AROUND?

>> Chris Herstam: THE MORRISON INSTITUTE HAS THREE CONTROVERSIAL OPTIONS.

>> Mary Jo Waits: OPTIONS. WE HAVE OPTIONS. I KNOW. TERM LIMITS. WELL, WE RECOMMENDED FIRST OF ALL YOU GET THE PEOPLE A - THE STATE GETS THE LEADERS THAT THEY EXPECT. SO, IF YOU WANT A DIFFERENT KIND OF LEADER, START ASKING FOR A DIFFERENT KIND OF LEADER AND START DEMANDING A DIFFERENT KIND OF LEADER. THAT'S NUMBER ONE SOLUTION.

>> Michael: HOW AM I GOING TO DO THAT PRACTICALLY?

>> Mary Jo Waits: THE WAY YOU CHOOSE YOUR LEADERS WHETHER YOU'RE VOTING OR WHAT YOU ASK A CEO TO DO. SURVEYS IN AUSTIN, SILICON VALLEY WOULD SAY HOW DO YOU GET INVOLVED IN ISSUES? WELL, I'M EITHER ASKED OR I HAVE A PERSONAL INTEREST IN ISSUES WHAT CEOs WOULD SAY. THE SECOND THING THEY FOUND OUT WAS CEOs WOULD SAY I THINK I'M DOING MY PART BUT EVERYBODY ELSE ISN'T. BUT THEY DON'T HAVE ANY WAY OF MEASURING HOW THEY DO THEIR PART. SO, ARE WE REALLY SURE WE'VE SET THE EXPECTATIONS OF WHAT YOUR PART IS.

>> Michael: SO, THIS IS APPROACHING THE LEADERSHIP INFRASTRUCTURE, IF YOU WILL, AND DEMANDING MORE.

>> Mary Jo Waits: DEMANDING MORE OR SAYING WHAT YOU WANT OR WHAT WE NEED IN A LEADER AND BEING REALLY CLEAR ABOUT IT.

>> Chris Herstam: BUT YOU DIDN'T GET TO THE CONTROVERSIAL OPTIONS. YOU'RE DODGING THAT ONE.

>> Mary Jo Waits: THE CONTROVERSIAL ONE WAS PUT ON THE TABLE THE IDEA OF ENDING TERM LIMITS. THE REASON BEING I THINK THERE IS A CLEAR NOTION THAT TO HAVE A STEWARD, YOU'RE GOING TO HAVE TO CARE ABOUT A STATE AND NOT A POLITICAL PHILOSOPHY, SO TO SPEAK AND MAYBE -- HOW WOULD WE GET AT THAT? COULD WE GET THERE IF WE GOT RID OF TERM LIMITS? I WAS ONLY WILLING TO SAY PUT IT ON THE TABLE IF THERE WAS A TRADE-OFF. YOU COULD GET RID OF TERM LIMITS IF YOU RAISE THE PAY AND THEY HAD AGREED TO NONPARTISAN ELECTIONS AND SO THAT WAS MY TRADE-OFF WHICH ISN'T REALISTIC AS NAAMAN AND CHRIS TELL ME BUT IT WAS A GOOD IDEA TO PUT IT ON THE TABLE. THE INTERESTING THING IS IT'S CREATED A LOT OF DISCUSSION. AND I'M NOT SURE WE'RE READY TO DO AWAY WITH TERM LIMITS BUT IT IS SOMETHING WE NEED TO START DISCUSSING. WE CAN'T JUST ASSUME OLD SOLUTIONS FIT AND THIS NEW WORLD AND HOW DO WE GET SOMEBODY WHO REALLY CARES ABOUT THE STATE AND KEEPS TRACK OF WHAT'S GOING ON.

>> Chris Herstam: AND FORCING THE ARIZONA LEGISLATURE TO BE ON A BALLOT WITHOUT REPUBLICAN AND DEMOCRAT AFTER THEIR NAME, CAN ONLY BE DONE IN AN INITIATIVE SITUATION WITH A LOT OF REGISTERED INDEPENDENTS SUPPORTING HER.

>> Michael: CHRIS HERSTAM, THANK YOU. MARY JO WAITS. YOU'LL BE BACK. NAAMAN NICKELL, GOOD TO SEE YOU. IF YOU WOULD LIKE TO LEARN MORE ABOUT THE MORRISON INSTITUTE'S REPORT, PLEASE VISIT THE CHANNEL 8'S WEB SITE AT www.kaet.asu.edu. MOVE YOUR CURSER TO THE LOWER LEFT SCREEN AND CLICK ON "HORIZON." JOIN US TOMORROW AS WE CONTINUE OUR LOOK AT THE MORRISON INSTITUTE'S REPORT. FIVE SHOES WAITING TO DROP. TOMORROW, WE'LL EXAMINE ARIZONA'S UNBALANCED REVENUE SYSTEM. THEN ON WEDNESDAY, WHY LATINO EDUCATION IS IDENTIFIED AS ONE OF THE FIVE SHOES WAITING TO DROP. THANKS VERY MUCH FOR JOINING US ON A MONDAY EVENING. I'M MICHAEL GRANT. HAVE A GOOD ONE. GOOD NIGHT.