Jose Cardenas: I'm José Cardenas. Thank you for joining us. Governor Jan Brewer outlined her vision for Arizona in her State of the State address before the joint session of the 51st Arizona State Legislature. this week. The Governor said she will spend her political capital this session fighting for children and the poor. She repeatedly said Arizona's future hinges on its ability to compete in education and economically. Here to talk about the speech and the challenges state lawmakers face is Bettina Nava, partner with FirstStrategic Communications and public affairs firm, Nava worked as one of 11 regional campaign managers for the McCain 2008 team. Also is John Loredo, a Democratic political consultant and former state lawmaker. Thank you both for joining us on "Horizonte" to talk about the Governor's State of the State speech. There were a few surprises. And I think two of them for different reasons, would be her comments about Medicaid, the expansion of Medicaid, and what she had to say about immigration. So your take on that, on Medicaid first.
Bettina Nava: Well, I think what we saw with the Governor is that she's really showing leadership. She is in her second term. She's really thinking about legacy, which is what you tend to do in another term. And really she's very laser focused about what she wants to accomplish. Everything that they are talking about, there is nothing frivolous they are talking about but she's shown she can be very laser focused. I was for one surprised by the Medicaid expansion and pleasantly surprised.
Jose Cardenas: She introduced it rather cleverly when she said you can't wag your finger at the federal government. She said, I tried that. Trust me, a reference to her encounter with the president. But it did seem to be a change, at least in what you would have expected her to do on this issue. Certainly not something her Republican colleagues are likely to support.
Bettina Nava: And I think that's why I was a little, clearer John is going to tell you he knew about it so he clearly has a better inside track than I do but it will be an uphill battle with her Republican colleagues. You original have so many political favors and priorities that you can call in. So I was surprised.
Jose Cardenas: John, you and the Governor talk about these issues frequently? Is that how --
John Loredo: Yeah, I helped her a little.
Jose Cardenas: But overall, it was a surprise, don't you think? Not what people would have been expecting?
John Loredo: Well, I think if you followed the whole AHCCCS issue, there's kind of a time line that we are operating on here. And when state of Arizona got word back that the Federal government was not going to continue the match if we covered 100% of the Federal poverty level, it put Arizona in a position, and Governor Brewer in the position of trying to figure out how to fund it basically. And without the Federal match at 100% of the Federal poverty level it was going to cost the state a huge amount of money in order to fund it by ourselves. However, because of the Federal government came back and said, look, if you fund 133% of it we will Pate overwhelming majority of the cost and you will actually have to pay a lot less than you would just to fund 100%. So it just made mathematical sense to spend a smaller amount of money to cover a lot more people than the other way around. And in you are in the position to do that we need take advantage of that and do that because there are certainly a lot of people in Arizona who used to be on AHCCCS but because of budget cuts and everything else are no longer on AHCCCS. But they still need health care. These are the working poor, people too poor to afford health insurance. It's in everyone's interest to stay healthy.
Jose Cardenas: Speaking of everyone's best interest she was receiving a lot of input from the health care industry for the financial devastation really in their business that would occur if she didn't do this and the big boost if she did. All that said, do you expect her to be able to convince her colleagues in the Republican dominated Legislature that that's the thing to do?
John Loredo: You know, there are lot of people who have absolutely no tolerance or acceptance of Obamacare whatsoever. I think some people confuse the issues as one in the same and they are not. And so I think there are enough people within the Republican caucus who understand that even though you may not want to do this, even though you may not like it, we have got to do something. I mean, doing nothing is simply not a realistic option. And so from Governor Brewer's point of view she's going to have to do something that she has not done before. And that's be willing to work with the bipartisan coalition of votes. You know, we have had in every Governor before her at some point or another has had to put a coalition of votes together in order to get something done on something big. You have to be more dedicated to the issue than you are to the politics in order to make that happen. And in this case, I think for her to go out and kind of on a limb and say we need to do this and it's a priority, whether anybody likes it or not, I think is a good sign. Because the votes are certainly going to be there when she needs them. It's just a matter of who the votes come from. And what the negotiations are back and forth. But it's one of those issues that you have to get done no matter what.
Jose Cardenas: Now, Bettina, another area of departure possibly from her Republican colleagues, are her comments on immigration. She didn't say anything specific about what she would do. But did, at least the tone of her comments seem to be different?
Bettina Nava: I think, look, we can all admit there's been a dramatic shift since the election. I think the writing is on the wall. And I think a lot of candidates came to the realization if we don't tone down, the Republican party doesn't tone down the rhetoric and the hyperbole and really sit down and talk about a comprehensive approach that the party will become the Party of the Whigs. It will be nonexistent and that was one of the many outcomes from the 2012 election.
Jose Cardenas: Well, her message was, to the Federal government, you secure the border and then I will engage fully on comprehensive immigration reform. Do you expect anything concrete to come out of that?
Bettina Nava: I do. Only because I really do think that Obama is going to have to keep good his promise. He wasn't able to accomplish it in his first term. Second term president, it's time for him. He said it's a priority. So it's really going to be driven by the Federal government, per se. It's still a Federal issue. But I think for the first time states are now going to come to the table and really provide some real avenues to get something done. Because it's long overdue. Everyone is exhausted by the issue. It's not getting any easier. And if you put the politics aside you might actually come out ahead.
Jose Cardenas: John, do you expect to see anything in this legislative session that deals in an affirmative way with immigration?
John Loredo: I don't expect to. There are a lot of people that would hope that they would deal with the driver's license issue for the Dream Act students who are here under the deferred program. But, you know, I think that if looking at last year as kind of an indication of the mood, a lot of these bills just didn't go anywhere. They made it through maybe a committee or two and then they just died.
Jose Cardenas: These are the anti--
John Loredo: The an "Immigration bills and there's simply not a lot of appetite there. And the opposition now is finally being pushed by the business community that is simply saying we can't sustain another boycott. We can't afford to look bad. We need to improve our image, not take a step backwards. They have got enough people listening to them now that makes it very difficult and with Russell Pierce gone, that time of hateful rhetoric simply isn't heard as much as it used to be.
Jose Cardenas: Now, there are were a couple of particular areas in this speech. One was her comments on child protective services. She says she wants 150 new people there, for that department, and then she wants an additional 50 right away. What do you see coming of that?
John Loredo: Well, again, I think, there would absolutely be enough votes to get those bills out if you approach it in a bipartisan manner. You could get it done very quickly. Whether or not she chooses to do that, who knows. But there are going to be people within the Republican caucus who are probably more receptive to that than they are for other things that she mentioned. Such as AHCCCS. I would expect them to go ahead and move forward on that. What will bog it down as if people start trying to attach conditions on it. They start trying to attach various experimental ideas to do CPS and this and that and it becomes what's referred to as a Christmas treatment everyone starts hanging or Ma nets on it until it gets so heavy it falls down. If they are serious about protecting kids they can get a funding bill out pretty quickly.
Jose Cardenas: speaking of funding the Governor also emphasized she is going to put money in education. In fact, she talked about having the nation's first comprehensive performance funding package. Where's all the money going to come from?
Bettina Nava: That's the interesting part. I think she was very clear in her State of the State. She has Channel 3 really focused areas: K-12 funding, medication expansion and CPS. I think right now we are in decent shape to make those things happen. The interesting question is, what do you do starting next year? Because really right now, we have the funds to get things done. We have a rainy day fund, so to speak. What happens in 2014, '15, and '16 in are those spending elements? Are they sustainable?
Jose Cardenas: That will start feeling the effects of the expiration of the sales tax.
Bettina Nava: Correct. So that's the real question. It's sustainable now but is it sustainable by 2016 when we are expected to have a $1 billion deficit and be at that cliff again.
Jose Cardenas: John, the only thing she said about revenues as I recall, she pointed out that the 1 cent sales tax was going away. And she talked about reforming our state sales tax. She didn't say in what fashion but certainly no suggestion that we are going to raise taxes or come up with some other sources of revenue. Where's the money going to come from?
John Loredo: The dangerous part of reforming the sales tax is always that reform can mean anything to anybody. And for the folks pushing this hard, typically means some type of a tax cut. And that means even less money to pay for things like school books and everything else that are a priority. So you do have that cliff that's coming next year. And it's not just the expiration of the sales tax. It is a massive corporate tax bill that kicks in full steam next year that just sends us right over the edge in terms of having any money to do anything. And so they do have to figure out another way. Governor Brewer and the Republicans in the Legislature have not uttered one word about any new revenues coming in. So they are going to -- they are going to have to pull a rabbit out of a hat to avoid massive cuts next year and I think everybody is waiting to see what their plan to do that is. And certainly that is something that they can take into consideration when they are funding these programs now but hopefully the economy will continue to improve, and as it does, revenues will pick up. But not enough to match the fiscal cliff that's happening next year.
Bettina Nava: But here's something really, really interesting. She took the health care exchange off the table. Thus she didn't tinker with the general fund. Does that mean that the Governor is going in the direction of really trying to leave the legacy of essentially fixing the Arizona tax code? Which is one of the most confusing -- I have no idea every year. It's one of the most confusing in the country. I really wonder if that's going to be one of her next legacy pieces. That was --
Jose Cardenas: What she wanted to do with the sales tax which was to simplify it. Couple other things real quick. Guns. Obviously a topic of great discussion in the country these days. Her only comment was that she would provide funding for training school resource officers. Do you expect anything else?
John Loredo: I think that's the one thing that people should be able to agree on. After Columbine I was in the Legislature when Columbine happened, and the response was to increase funding for school resource officers dramatically. That funding has since been dramatically cut. So they need to restore that funding. And they need to bring it back up to where not only where it was but even more now. And so I would hope that that would be the one thing that they would pass as a separate issue, not bundle everything together because nothing will pass. But that is the one thing that they can do. In terms of universal back ground checks, everything else, you also have to look and see what the feds are going to do as well. But certainly closing the gun shield loophole is another option that they should be looking at.
Jose Cardenas: Bettina, we are almost out of time. One last summary question. How would you assess the Governor's performance on this State of the State presentation?
Bettina Nava: You know, I thought she showed real leadership and real compassion. And she's definitely moved into legacy mode. It was incredibly, incredibly bold. So I really foresee a lot of bipartisan efforts, whether it's on gun control. I really do -- or protocol for school safety. I really do see that coming down. Whether it's immigration, leadership really kind of shunning bills that are problematic and it's been a black eye on Arizona in the past. I see a real bipartisan movement ahead of us.
Jose Cardenas: We will know soon enough. Thank you both for joining us on "Horizonte."