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October 6, 2004

Host: Michael Grant
Topics:
· Proposition 401;
· Tempe Debate Impact
In-Studio Guests:
· Jay Thorne, Citizens for Maricopa Community Colleges;
· Michael Hunter, Vice President, Arizona Tax Research Association;
· Hugh Hallman, Mayor of the City of Tempe

Michael Grant:
Tonight on "Horizon," voters will decide if Maricopa community colleges can sell nearly a billion dollars worth of bonds for new buildings and equipment. That, plus the last presidential debate here in Tempe is a week away. What are Mill Avenue merchants expecting?

Kate Hastings:
Well, we expect a lot of vibrancy in downtown Tempe. We expect a lot of congestion, but we expect to be open for business.

Michael Grant:
That's next on "Horizon."

"Horizon" is made possible by the friends of Channel 8, members who provide financial support to this Arizona PBS station. Thank you.

Michael Grant:
Good evening, I'm Michael Grant. Those stories in a moment. First, an announcement today for customers of Salt River Project. Rates are going up. The State's second largest utility said it will raise the average residential bill by $6.60 a month to cover increased costs of fuel and purchased power.

> And the late Senator Barry M. Goldwater's name now graces an Arizona mountain. The State Geographic and Historic Names Board voted 5 to 1 to put Goldwater's name on the highest peak in White Tank Mountain Regional Park west of Phoenix. That vote came despite suggestions by four Indian tribes that the peak should carry a Native American name to reflect the region's first inhabitants.

> On November 2nd, Maricopa community colleges will ask voters to approve $1 billion in general obligation bonds. Those bonds would fund construction and renovations of facilities, improve technologies and purchase equipment, furnishings and land for future growth needs in the district. There are ten community colleges in the Maricopa system. In a moment, we will talk with a supporter and opponent of the measure. First, Merry Lucero takes a look at Proposition 401.

Reporter:
Chandler Gilbert community college has the second fastest growing student population of the community system behind Estrella Mountain CC. More than 12,000 students attend here, an enrollment that has doubled over the last 6 years. The main campus is in a high growth area on Pecos Road. Major improvements like revamping this computer lab were funded by a bond passed in 1984 and have been completed. Future development depends on funding. That is where prop 401 comes in. Proposition 401 would authorize the Maricopa community colleges to issue and sell general obligations bonds of nearly $1 billion for capital outlay and education and job training. More specifically, improving computer, educational and institutional technologies, improving safety and security at all campuses and educational centers, constructing new or acquiring existing buildings, constructing additions and improvements or remodeling and modernizing buildings. Equipping and furnishing buildings, removing old buildings when necessary, purchasing or leasing land within specified areas, constructing additional or improving existing parking facilities. Installing new and upgrading existing utilities, and installing new, upgrading or increasing central plant equipment capacity and efficiency. If passed, the bond would bear interest at a rate not to exceed 12% annually and would run for a period not to exceed 20 years from their date.

Michael Grant:
Joining me now in support of prop 401 is Jay Thorne, representing the Citizens for Maricopa Community Colleges. And opposing the measure is Michael Hunter, Vice President of the Arizona Tax Research Association. Gentlemen, thanks for being here. Jay, why should I walk into the voting booth in about four weeks and vote yes on proposition 401

Jay Thorne:
Well, because there is a good chance that maybe, someone in your family, somebody that you know, somebody that you depend on either in health care, public safety, has been trained through or has gotten their education through the Maricopa County community college system. It's one of the best in the country. It is growing faster than any in the country, along with our country, and we need to continue to reinvest in it are, not only to allow it to meet growth, but to continue to provide affordable higher education for people in this community.

Michael Grant:
Michael, my hand is hesitating, why should I draw the line on the no box on 401.

Michael Hunter:
Michael, I think a lot of voters, once they understand all that's in this bond will have more than hesitation. I think they would be wise to vote no on this. The -- we opposed the Arizona tax research association, opposed the Maricopa County colleges bond in 1992, and 1994 for precisely the same reasons. The -- the $951 million dollars, $1.4 billion, if you include interest, because this is bonded indebtedness, and interest will accrue, there are $300 million earmarked for technology and equipment, and there is the main thrust of our concern. Technology and equipment often has a very short shelf life. Computers like the ones we saw in the piece just now, last for maybe five years or so before the upgrade needs to occur. Inside of this bond, in the technology upgrades that they are talking about is software upgrades. So $300 million, I don't know includes $58 million in interest. Interest that we think is not necessary.

Michael Grant:
Jay, one of the statistics I did not see on the setup piece was impact on a typical residential homeowner. Is there a number available on that?

Jay Thorne:
There is, about $15 a year on a $100,000 piece of property, piece of property valued at $100,000. So for the average homeowner of $100,000 home, about $15 a year, a couple dollars a month, less than a couple of dollars a month.

Michael Grant:
What about Michael's point. Normally -- I can't say never, but normally you don't use long-term bonds to buy depreciable personal property.

Jay Thorne:
Right, well, without driving away your audience by getting into a deep discussion of bonding, which would be over my head and boring, I support this measure because I support what the colleges have done over the past two decades in this community. The plan for the bonds is that there will be a series of bonds issued, the ones that are issued for computers, technology, will be issued over a shorter period of time and paid back over a quicker period of time. There is no other alternative for the colleges to get the money in order to do this. They are not authorized to go seek a tax increase or other revenues.

Michael Grant:
Reading be during this between the lines, I think what Michael is imply-- saying, hold it, don't look to a capital bonding obligation, look to your general operator budget and set aside a percentage of funds to be devoted to that purpose, but on a more current as opposed to a long-term basis.

Jay Thorne:
Sure. There is no way to do that without driving up the cost of education. It's about $50 to $60 a credit hour now to attend a community college. For a very small sum of money, relatively speaking, compared to a university, people in this community can train themselves for better jobs, businesses in this community can train the work force that they need, and the affordability, the access to that education is critical, and if we begin to pay those costs out of other funds, like tuition, we're going to be cutting people off from the system who need it and we're not going to be supporting the economy.

Michael Grant:
A college education as nearly free as possible, those constitutional words are aimed at universities, but I think you could make the same argument for community colleges. If you drive the cost of tuition up for these kinds of expenditures, isn't it more appropriate, maybe to spread that load out across the taxpayers in Maricopa County?

Michael Hunter:
Michael, let me start with something that Jay said about the debt service schedule. Let me get that right off the bat. That's an important issue. The debt service schedule does front load the payments for the technology and equipment. However, you don't start paying on the capital bonds, the bricks and mortar bonds, which are issued right away, they start issuing those right after we vote yes, those are authorized, those get issued. You don't start paying on the principal for that until 2012. Why? They front loaded the technology and equipment bonds. This debt service schedule looks the same as it would if they hadn't structured the debt in that way. Again, you are still paying interest, $58 million. It's also not true -- Jay said there was no other mechanism to do this. We would argue that the college can afford to do this within its nearly $500 million general fund. Year after year, if you are talking about building maintenance, also in this bond, if you are talking about technology, software upgrades, you set money aside with all of the other pressures that you have, you have revenue from the state, revenue from local property taxes, and revenue from tuition, that you just balance your budget in a way so that you are paying for these ongoing expenditures over time.

Michael Grant:
What about the larger societal point, though. Nobody knows where that break point is, but sometimes you make the decision, particularly in an area of education, that okay, we want to extract some money from the user of the system, but we also want to support this larger societal goal with a larger societal contribution.

Michael Hunter:
Michael, that contribution is being made. The local property tax is the largest part of the pie for the colleges' revenue. If the college did have a case that they needed to exceed that revenue stream for these ongoing expenditures, they have the ability to go to the voters with a levy limit override, again paid for by secondary property taxes, just like the bonds are, but you are paying on a cash basis for these computers that are going to be door stops in five years.

Michael Grant:
Good point, Jay, what do you say?

Jay Thorne:
His facts are incorrect. We are not authorized or provisioned to go for an override election. It's not a societal benefit argument. In fact -- well, I respect his right to oppose this. In fact many good community organizations oppose this take a prudent look at fiscal policy in this state, support the approach that the colleges are taking, and they do it in part because the colleges are providing work force development that businesses all over this county need and depend on.

Michael Grant:
Jay, let me lay technology to one side, and focus more on the bricks and mortar, maybe the growth component aspect of this. Where does this take -- how much does this buy, the county in terms of capacity out to X-years, those kinds of issues?

Jay Thorne:
What you have to understand, there is an amazing demand in this community for access to the community colleges as a resource for higher education. And depending on what part of the county you live in, whether you are in the central part of it or around some of the older colleges like Glendale, Phoenix and Mesa, they have needs of older campuses. There are other campuses in the outlying areas, campuses like Gateway which are expanding that have different needs to meet the demand in their particular area or of the kind of student that they are now receiving.

Michael Grant:
And how long does this handle those varying needs? Does this get us out to 2015? 2020?

Jay Thorne:
This is a 20-year look at what the colleges need to do. It was a plan that was developed over the course of two years. It actually started out higher than the $591 million that they are requesting, and they trimmed it back. As it a projection to meet the growth and demand that is here and coming.

Michael Grant:
Michael, again, take the assumption that we're laying the arguable mismatch in bond and technology to one side. Is arguing the basic premise that yeah, there is a demand for more community college, you need more bricks and mortar, you need more hard assets in place to handle I surging demand?

Michael Hunter:
Michael, I think it's probable, in fact, that there are a lot of areas in the community college system where the student growth is putting demands on new construction, on new classroom space for students. $550 million of this bond is earmarked for providing that new square footage. About $1.6 million new square feet will be added. Another 1.6 million in new square footage, though 39% of that is for classroom space. If you look at the distribution of these funds, it was more of a political calculation to ensure that every part of the valley gets their piece of the pie. It's not necessarily just related to where the growth is occurring. And they will be -- need to be back in 10 years, just like -- in '94, now they are coming to us now, because of the dependency they've created on the ongoing expenditures that are a part of this. I think it would be defensible if it were only for square footage.

Michael Grant:
Did you base this up based on politics instead of need?

Jay Thorne:
It's based on growth in the valley is happening everywhere. It's happening in every single direction, every part of this valley. The plan accommodates the growth throughout the valley and all of those different areas. There is a sense of balance and fairness from one side of the valley to other that's incorporated in this but the amounts from one college to the other are different because they are different from Mesa then they are at Glendale or Estrella. Older campuses one kind of need, newer campus, new kind of need. Balance throughout the region, you bet. That's why there is support throughout the region to.

Michael Grant:
Gentlemen, we're out of time. Jay Thorne, thanks for being here. Michael Hunter, good to see you.

> Michael Grant:
There may be some congestion to deal with but downtown Tempe merchants are hoping that people will take part in a history-making event. In a moment, we'll talk about what the City of Tempe is expecting in terms of economic impact, security issues and logistical matters. First, Merry Lucero takes a look at what merchants on Mill Avenue are bracing for.

Reporter:
On any given business day in downtown Tempe, Mill Avenue is busy and merchants average about $560,000 in business income. When there is a significant event in town, that figure goes up. The presidential debate on October 13th is a significant event. Thousands of people will be in town for the occasion.

Kate Hastings:
The influx of people and according to the state tourism board's per capita spending for those could equal an additional day of income for downtown merchants, but, if that business only mitigates what a normal day is here, then it could help keep us flush or even with the day.

Reporter:
Some people might stay away for fear of traffic or parking problems. Merchant Vic Linoff who owns memorabilia store "Those Were the Days" remembers when that happened.

Vic Linoff:
When the Super Bowl was on, there was such anticipation that the downtown would be filled to capacity. There was a lot of marketing and media attention given to that issue, and people were discouraged from coming down unless they were interested in the Super Bowl or something of that sort. And it wound up being a ghost town. This was the quietest area amidst Super Bowl activity because people were discouraged from coming down to Mill Avenue.

Kate Hastings:
What happened during the Super Bowl when people were afraid of coming downtown because of the congestion and they stayed away. Well, Tempe is open for business, and downtown is open for business. You can get here, and we think it's going to be a rather festive atmosphere.

Reporter:
And Tempe is accustomed to festive atmospheres from a visit by the Pope to the downtown arts festival. The difference with this event is what to expect.

Vic Linoff:
Don't know. If the city is involved, the city has proven to be probably the best in the region at handling large crowds. When the stadium is full, the police and other officials can clear that stadium and traffic in less than an hour, which is rather incredible. We have these large events, and they are managed very well. In this case, the City is not the prime enforcer of what's going to happen down here. That's out of our hands. That's the secret service.

Kate Hastings:
The secret service is the wild card in these issues, because they are not going to announce in advance all of their plans. So we will discover at the very last minute, probably what the final secret service plans are.

Reporter:
Potential presidential motorcade closures aside, merchants are hoping that people coming to watch the debate at Wells Fargo arena will spend time on Mill Avenue.

Vic Linoff:
If I was going trying to strategize about getting down there, I might come do downtown, park and walk to the arena and maybe have dinner or a drink afterward and talk about it. And that might avoid the big crush of people that will be trying to get directly to the arena. Come down and have a good time. Share in the history.

Michael Grant:
Joining me now is Hugh Hallman, Mayor of the City of Tempe. You know, Hugh, that's a point actually that has not had a real high profile, but that's the Wells Fargo aspect to this thing. Do you have an attendance expectation out there?

Hugh Hallman:
We really don't know what the collateral activity is going to be like. We know that we're going to have a few hundred people inside Gammage auditorium. The bigger impact comes from the two to three thousand members of the press corps who will be in the city for a several days. We'll have the kind of draw probably that one would expect for a basketball game, maybe 8,000-10,000 people total. The big economic impact for not just Tempe but the entire valley and Arizona State University as well, this will be seen worldwide. This is an event that many people thought would fall in its profile after the first debate. The projections were that the debate that would be watched would be the debate about international issues, which this one was originally intended to be. When the international issues got moved forward to the first debate, folks figured that this is the third debate would fall off the radar screen. Just the opposite has happened. Precisely because the race is tightened up, because Kerry and Bush were a little closer in hand to hand combat, it has emphasized the import of this debate. Folks will be on the edge of their seats. This is the one where everything or anything could happen.

Michael Grant:
In fact, it was interesting with last night's vice presidential debate. There was much more attention on the vice presidential debate in my memory than there has been before for precisely that reason. Now, given the baseball playoffs, I'm not sure it completely materialized, but still, the interest factor was much stronger.

Hugh Hallman:
Well, you can remember back to the Quayle/Benson buildup of the debate. It was tough to get anybody to care. It was afterward where Benson got off his remark about Quayle not having been Jack Kennedy that folks remember the import of that debate. In this instance, because the presidential candidates were much more well matched, it put a great deal more emphasis on the debate. That's certainly building to the upcoming debate this week and again, the final debate in Tempe.

Michael Grant:
Is it possible to extrapolate economic and other impacts from prior venues? George Washington University, Florida, obviously, they happened before.

Hugh Hallman:
If you stack economists end to end, they will eventually still not reach a conclusion. We have some guesses using economic models that have been pretty reliable in the valley. The guess is that the direct impact from the press corps will be in the million-dollar range. That doesn't sound like much, but throw in the activities at Wells Fargo, this will probably be more like a typical event for ASU in terms of immediate direct economic impact. But that's not really what's going on here. I think to steal somebody's notion earlier in the day, this event has a level of gravitas to it that really pulls in some substantial continuing value. In addition, the two to three thousand members of the press corps who may only be here for two or three days, but if they have a good experience here and we in the valley spend our time making sure that they have a pleasant experience, they'll be bringing that experience back into their writing for a very, very long time to come. That's a value of economic impact that we really have no idea how to calculate yet.

Michael Grant:
Now, is there any possibility, however, of the reverse happening? People being intimidated by the possibility of road closures, secret service protection and those kinds of things, and they say, well, on second thought, I think I'll just watch it on TV?

Hugh Hallman:
Well, again, this is not a spectator sport, so you'll have one event, the major event at Wells Fargo arena where spectators can come and watch as a group. That's not really the value of the impact here. We're going to have a worldwide audience with all eyes trained on Arizona State University and the City of Tempe. We'll have had these two to three thousand people who will have spent two or three days here. If we do well, if our weather is good, I think it can have a substantial impact. Yes, we get 100,000 people here for a Fiesta Bowl. And yes, people watch that. In this instance, you compare that to millions of people watching the event, and they specifically target the audience, the two to three thousand reporters who will carry that out. That's an economic impact that's substantial.

Michael Grant:
Red, white and blue going up a lot around Gammage. Other of those kind of community trappings more broadly from the site of the debate or not?

Hugh Hallman:
Well, there are still, I think both major parties are seeking to hold special events that will bring together the supporters of their various candidates, and those I think are being arranged even as we speak in and around Tempe. What Arizona State University has done, I think is absolutely amazing, having turned Gammage auditorium into an international television studio with very little sort of notoriety about it. It's just come together brilliantly. There will be, you noted there will be a little hiccup here and there, that is to say Apache Boulevard will be closed in the area immediately adjacent to Gammage auditorium. That will begin on Tuesday and continue until just shortly after the debate. Other than that, most people won't notice road closures. Most people will not be inconvenienced, and the few people who decide to watch it on television, miss Mill Avenue on a Wednesday night, but frankly, the number of people who would be expected to come down for the event, even in maximum number, it's about what we would get and what we do on Mill Avenue on a Friday night and Saturday night. So it's not that immediate impact that anybody is really focused on, and immediate sort of community connections. Certainly what ASU has done and certainly what other community members have done to build the event for our local audience and for our residents here, there is some substantial events. There will be events taking place in Tempe Beach Park by community organizations. The major parties are trying to put together kinds of events that would draw 6 or 8 or 10,000 people to each of those as well. Those are harder to do on short notice, but I think efforts are underway not withstanding that hurdle.

Michael Grant:
Secret service obviously playing its cards close to its vest and appropriately so, but there may be some detours?

Hugh Hallman:
We're going to have two presidential candidates, one of them a sitting president coming into town, and there will be substantial security surrounding that, that's true, but that's a fairly short term event. It happens day to day across this country. We forget that the president is traveling regularly, John Kerry is traveling regularly, and those kind of activities are taking place, remember when the Pope was here, there were the occasional road closures, but it's a short-term event.

Michael Grant:
Hugh Hallman, mayor of Tempe, thank you for the information and best of luck.

Hugh Hallman:
Thank you very much.

Michael Grant:
The web site is a good resource for information on the event-related activities, traffic, parking, several other details. That address is www.asu.edu/debate. You can link to that from our web site, that address is www.azpbs.org. You can view transcripts of "Horizon" and find out about upcoming topics. "Horizon" and channel 8 are your home for the presidential debates. You can see the two final debates live. Here's the schedule, Friday, October 8th is the town hall debate format covering all issues, and the final match up which we've been discussing between President Bush and Senator John Kerry, a week from today, Wednesday October 13th. That's the one here in Tempe. It covers domestic issues. Both debates begin at 6 p.m. And tomorrow Governor Janet Napolitano joins us on "Horizon." You can send us a question for the Governor via e-mail at "Horizon" at asu.edu. Here's a look at what the Governor probably will talk about.

Reporter:
The third and last presidential debate will be held at ASU next week. We'll talk to Governor Janet Napolitano and get her take on the previous debates. We'll tell you about a web site that can provide you an unbiased look at the amount of mud thrown by each presidential candidate. That's Thursday at 7:00 on "Horizon."

Michael Grant:
Thanks for joining us on a Wednesday evening. I'm Michael Grant. Have a great one, good night.

 

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