Other transcripts

Transcripts

October 3, 2002

Host: Michael Grant
Topics:
Arizona's state budget;
Proposition 304: State Legislators' Salaries
· Learn more about Prop 304 on the Election 2002 Web site
In-Studio Guests:
Arizona Governor Jane Hull;
Dennis Burke of Valley Citizens League

>> Michae:l The state budget is getting worse but governor hull says she'll not call a special session on the budget, and despite all the bad budget news there's a law on the ballot to give lawmakers a hefty pay raise. Good evening, I'm Michael Grant. The news is not good concerning Arizona's budget. Jane Hull says the current deficit has grown to half a billion dollars. The governor says she'll try to trim at least half of that beast without the help of lawmakers. Here now is Governor Jane Hull. Good to see you.

>> Jane Hull: hi, Mike, always good to see you.

>> Michael: we had graphics that may help show this a bit, but how bad is the current budget situation?

>> Jane Hull: we're estimating $500 million for this year and a billion for next year. That's not on new spending but what we have already gotten ourselves into. Court mandates, K-12 funding. It's bad and the economy needs to improve.

>> Michael: A month ago or so the estimate was 400 million what has caused it to go up?

>> Jane Hull: I think some of the charts will show but revenues aren't coming in. I they we all know we were in a recession before September 11. We're just not coming out of this as fast.

>> Michael: Let's call it a sales tax collections change. If I understand correctly here this shows from July of last year to August of this year what has happened to the sales tax collections change.

>> Jane Hull: obviously, you see a budget that has been built on the middle of the year we built it on a 2% or 3% growth and we're way down.

>> Michael: Let's go to the wage and salary net job growth. That is a multiyear slide. Explain this one a little bit. It obviously shows through the 1990s some very hefty job growth but that is dropping off again.

>> Jane Hull: that is dropping off. At this point we've lost jobs for the first time in 30 years in Arizona. We have a net loss of 25,000 jobs.

>>Michael Grant: the final slide that may help illustrate this a little bit is withholding collections. It tracks the last slide. The withholding collections impacts the income tax?

>>Jane Hull: yes. We believe that -- several different things. First of all, people being laid off. Secondly, people not getting the bonuses they would have been getting. Maybe taking a lesser job in a lesser business and somewhat a shift to a service economy. We have lost some high-paying jobs which is to me of real concern.

>> Michael Grant: again, I think about a month ago you ordered across the board cuts in several state agencies. You estimated at that point in time that you could handle in your position as governor, if memory serves, $180 million in the deficit.

>>Jane Hull: about $120 to $150 because of what has to be exempted. The governor in this state has very little power. I pushed real hard to let the next governor do things. I begged, cajoled and ordered. We have been sitting down going over budgets and saying, "we need 10% of your budget. What do you have that is not statutorily mandated, voter mandated? We have begun going through line by line budget area by budget trying to again to protect basic services but basically getting rid of middle managers and any jobs that are nice to do. We're not going to be do those anymore.

>> Michael: How many of the $500 million if that turns out to be the current budget shortfall do you think you can cajole?

>> Jane Hull: I think I can cajole $120 to $150. The courts reasonable being very cajolable. The universities are in the middle of the sessions, but I believe they can take monies from administration. If we can get there it's that $120, $150 million there. Are two more slight of hand tricks. I did not sign last year a $2.6 billion dollar budget. I let it go. Basically $2.6 billion budget at this point, if we take 10%, we can get $150 give or take. They played every game last year that they could in order to avoid cutting so I have two more slight of hands that could be done in the special session or we could get it go to January. One is the additional money on the Lavit case.

>> Michael: That's a $50 million.

>>Jane Hull: we put aside $75 million. The basic settlement is $350 million over five years. That's one of class action suits the state didn't need, and there are probably more fund sweeps that could be done. I'm leaning right now towards not calling them in. I'm going to present them a plan that says this is what I have done. If you would like to come and ratify it or give me a plan, then we'll do a special session. But I'm very afraid having dealt with the legislature that some of the programs I am able to cut because they are not statutory are legislative favorites. I'm cutting things I would prefer not to be cutting either. I don't want to get down into a vote swapping situation where by all of sudden instead of $150 million we're back down to $120 million.

>> Michael: If I'm understanding you correctly, the main thing you see in calling a lame duck a special session because I can assume calling in October --

>> Jane Hull: I don't think they'll come.

>> Michael: You fear that the legislature may be more disruptive than helpful at least as to agencies and certain programs.

>>Jane Hull: these are tough, tough cuts. They have not been easy for me. We have to protect, health, safety, absolute safety, we have exempted the department of correction, probably will end up exempting part of juvenile corrections. For every cut there's an advocacy group. Blame me, don't blame the director. I'm making the tough decision. I know the legislative process. I was there for 15 years. You have advocates saying, "don't cut my program," and all of a sudden I think there could be other dangers inherent. As the agencies have talked to me, we're always worried about court and federal funds, and basically federal mandates that we could get ourselves into trouble with. I don't want to see something like that get into the legislature.

>> Michael: Let me give you the flip side of that equation. I'm not sure it works this way. This is a working they're theory we can run with. When you have a lame duck legislature that requires some statesmanship or perhaps some difficult decisions, the lame ducks feel braver --

>>Jane Hull: that's true.

>> Michael -- than they otherwise would. Why isn't that a good working theory at this point in time?

>>Jane Hull: that might be. As I say, we'll have a package ready probably the day after the general election and sit dun and talk with leadership about it. I don't think it should be a session whereby we start taking the state budget apart. As a lame duck, you should be a statesman. Many lame ducks have cut programs they really love. If they are the statutory, they may be gone. We'll run it by the leadership. I know they have begun working on programs. We'll see if they have a program that cuts that much. I really feel like at least $200, $250 I ought to be able to see on the end of my watch. We'll attempt to meet with them and see what we can do.

>> Michael: Any tax increases under consideration for a potential special session? No, not -- I think right now that it would be very difficult in this fragile economy. I said that last year. We suggested things we thought could be changed in last year's budget that made a much better situation than the shell games we are playing. But, no, I don't think that would be looked at the special session.

>> Michael: Would you put in a that category-- as you know there's been a tremendous amount of debate in the current gubernatorial campaign about various sale tax exemptions, massage places, dating services.

>> Jane Hull: dating services all of which are worth about 3 cents.

>> Michael: Any of those on the table and following up on the point you just made can you put those together for any sort of revenue number in any event?

>> Jane Hull: not most of those. The easy ones like that, no, they are not going meaningful. We have met with the three candidates to go over the numbers just so say you gotta land on your feet the day after the election and get busy because you have a budget book to print and to decide.

>> Michael: Right.

>> Jane Hull: as I have talked with them, this is again from my budget staff and from my folks, any tax increase and I am not suggesting one nor am I supportive of one. But if you would increase taxes today you wouldn't see those revenues for at least another year. If you were to fill the loophole the situation over at revenue with a computer system you can't be reprogrammed tomorrow. We're already into 203 here. There isn't a statewide property tax and those rates are set.

>> Michael: The longer term because unfortunately this is looking like this is a peskier economic downturn.

>> Jane Hull: much.

>> Michael: Than originally thought. For the longer term for that incoming governor does that incoming governor have to look at tax increases on the understanding that they don't come in until six, nine twelve months.

>>Jane Hull: I think that's what we have tried to make them understand. It's some kind of package. It's very dangerous in this economy, we don't know how long it's going to go on. If you put health care on the table, prop 204, city county revenue sharing and most of candidates have taken a pledge not to do any of those things. You will continue to cut from what is left of general government and the universities and the universities are both part of this 57% that is not protected so those cuts come from universities.

>> Michael: What about Salmon's position that it can be solved period without tax increases.

>> Jane Hull: I wouldn't get into a political discussion. I am supporting Matt salmon. As I said to all of them I don't want to spoil any political rhetoric that's not my job. His job is to make sure you have a team ready to go and working for all the information we have. You'll have to hit the ground running. Maybe some tax decreases might work with increases with some cuts. Somewhere there's a package but it won't come easily and quickly.

>> Michael: Conversely what about your proposal this gets to K-12 but the so-called soft capital area?

>>Jane Hull: + we had talked about a special session that was one on put on the table. In Yuma at one of new high schools totally internet connected, totally each Child has a laptop computer rented from the school. They have a library and they haven't decide what to do with the library. The basic books will come but everything is on the computer now. That soft capital is probably the only thing you could cut in education. I believe it will have to be looked at next year. But I just want to do my part of this at this point.

>> Michael: Sure.

>> Jane Hull: and the districts should be prepared for this.

>> Michael: Remind me again on the value of soft capital.

>> Jane Hull: $118 million something like that. I think we were looking at 30. Like most things that hits a smaller districts. It doesn't hit the big districts that can go buy a school bus tomorrow. Anything you do, you need to be sure that you're look at really not hurting people but taking the money for students.

>> Michael: Governor Jane hull we appreciate the information and wish you the best luck.

>> Jane Hull: thank you.

>> Michael: Despite all the budget problems there's a measure on the ballot to give lawmakers a pay raise. Mike Sauceda tells us more about proposition 304.

>> Michael Sauceda: when Arizona was born, state lawmakers were paid by the day. That increased by there was an amendment that allowed lawmakers to be paid an annual salary for the part-time job that was $1800. Over time lawmakers salaries grew and four years ago they got a raise in a measure approved by voters. This year voters are being asked to up the ante. They are asking voters to approve a 50% increase in pay. The commission was formed in 1970 by ballot measure to recommend legislative salaries it is made up of five members. In making its recommendation the commission did acknowledge the current budget crisis and made the recommendations after finding that state lawmakers are woefully behind in compensation compared to what other states pay. They found Arizona lawmakers ranged 21st in pay.

>> Michael: Here now to talk about the proposition is Dennis Burke of Valley Citizens League, which supports the raise. Efforts to find opposition to appear on tonight's show did not meet with success. Dennis, I guess that means it's you.

>> Dennis Burke: I think the governor did a good job in making the case against us.

>> Michael: Tell me why the Arizona voters ought to vote for a $12,000 a year 50% increase for the lawmakers?

>> Dennis Burke: notes a merit increase. We have seen -- I think the difficulties of the current budget. If you owned a ship and it kept ending up on the rocks, the first question you ought to ask how much are you paying the crew? We pay essentially minimum wage. We have made the case before that if you pay them more you get smart we are people in there. I don't think that's necessarily true but we have gone from the as can to the fuel legislature. If we had one more person in there if this million dollars which is the effect of prop 304 that extra million with buy us one more smart person quo save. The number of loopholes that get through that put us in the position we're in and lack of financial strategy that put us in the fix we're in could be fixed over time with better people in there.

>> Michael: Dennis, one of arguments though that is always made against any pay at all, but any pay increase, is we don't want a professional legislature we want a citizens legislature and to a certain extent we want a legislature that does understand there's sacrifice involved in public service, shows up for the right reasons not the wrong reasons, money and then quickly goes home.

>> Dennis Burke: I subscribe to that and I think most Arizonians do and if we had more of a New Hampshire town hall style government where you could come, do your business and go homes a legislature, that's fine. What we're stuck with now and I will be the first to say we ought to take a broad look at the what the term is and how many there are. We have a legislature and those people, for a big part of the year, work full-time plus there's a lot of 18-hour days down there. You're basically in a position of this. You have probably been in the position, I hope you have, in trying to talk some good person in running for legislature and thinking that if that person was in the legislature that would be a good thing for Arizona. I have been in that position many times. The hardest thing is people ask can I really afford to do that. Most people can't. Over time we ought to try to link what we pay these people with the median income for let's say a family of four in Arizona. And right now we're way below that and even with the success of proposition 304 we'll still be way below that. We'll by paying $36,000.

>> Michael: Salary is not the only part of equation. Legislatures do pick up several thousand dollars in per diem.

>> Denny Burke: they get a per diem which for the Maricopa folks is $4,000 a year. And my understanding is that goes to the restaurants where they spend it. It's not enough. It's $35 a day and an extra $25 for those who live far outside Maricopa County. That's supposed to be the day's living expenses. You can count it as income as you want but particularly if you live in Yuma and are trying to do business that money doesn't go very far.

>> Michael: We attempted to adjust that a while back unsuccessfully to recognize you should be paying a person in Yuma more and perhaps the person in Maricopa County less, but if memory serves, I believe the attorney general upset that.

>> Denny Burke: there's a distinction. What the attorney general in 1999 ruled on was whether or not the pay increase that we approved in 1998 going from $15,000 to $24,000 whether or not that would do away of per dives that was kind of the intent for some people. It did not. The technology says the group that essentially makes the recommendations did not have the able to make the recommendation. She knee gated that part of it.

>> Michael: Why $12,000 given all of these problems, budget uncertainties, unsatisfaction in a variety of other situation Y not go for a modest step, $6,000.

>>Denny Burke: that we would have to get into the minds of the commission. I don't know. I'm not there. Why it's an acceptable number is it's moving us towards the median family income. It's still considered low. Over a period of years we should move towards the median family income in Arizona and hope that one at a tile or two at a time we can attract better people into the legislature. It's a slow process.

>> Dennis Burke of Valley Citizens League, we appreciate you joining us. It's a tough assignment to argue in favor of proposition 304. You did it admirably. At the end of the show, we invite you to go to our web site. We have added much more the election. Here say visual look at www.kaet.asu.edu. One the most visual features you'll find is each proposition on the ballot. First go to the site at www.kaet.asu.edu, when you get there check on the election 2002 emblem, and click on the ballot propositions. If you wanted to find out more about 203, click on that box. You'll get a summary a fiscal analysis and links to pro and con web sites. There's a lot more to the site. Among the other features my ballot a check list of the propositions you can print out and take to the voting booth, a links and resources page that includes sites where you can register to vote, find out the district you live in, request an early ballot and find a location of your polling place. You can find transcripts of all the shows and request an e-mail reminder of upcoming shows. In addition you can view ballots on candidates and ballot measures. Join us tomorrow on "Horizon" for the journalists roundtable to talk about the week's new include the races for governors and the continuing saga of Arizona Cardinals stadium and attempt to refer the measure in the stiff Glendale. Thanks very much for being here on a Thursday evening. I'm Michael Grant, have a great one. Good night.