>>> POP 123 MEANS MORE MONEY FOR

SCHOOLS.

>> OUR SALARY SCHEDULE FOR OUR

TEACHERS IS SOMETHING THAT, YOU

KNOW, REALLY NEEDS TO BE FIXED

AND OBVIOUSLY IT'S PART OF A

BIGGER PICTURE.

BUT AS A SCHOOL DISTRICT WE NEED

TO LOCK AT THAT, HOW WE

COMPENSATE OUR TEACHERS.

>> BUT SOME THINK THE PLAN IS A

BAD ONE.

>> THE LEGISLATURE HAS NOT

FUNDED THE SCHOOLS SINCE 2011,

MAYBE 2009, ACCORDING TO WHAT

THEY SHOULD HAVE BEEN DOING.

WE FEEL THE LEGISLATURE AND THE

GOVERNOR ARE NOT FOLLOWING THE

LIE.

IF THERE WAS A SUPREME COURT,

THE SUPREME COURT ORDERED THE

LEGISLATURE TO PAY $380 MILLION

A YEAR.

THEY HAVE NOT PAID IT.

THEY HAVE THE MONEY.

THEY'RE NOT FOLLOWING THE LAW.

>>> PLUS A LOOK AT PROP 124

MAKING CHANGES TO PUBLIC SAFETY

PENSION CHANGES.

THIS IS "ARIZONA WEEK."

♪♪

>>> HELLO AND WELCOME TO

"ARIZONA WEEK."

I'M CHRISTOPHER CONOVER IN FOR

LORRAINE.

MAY 17th IS A SPECIAL ELECTION

TO DEAL WITH TWO PROPOSITIONS.

THE FIRST PROP 123 TRIPLES THE

PAYOFF FROM THE STATE TRUST FUND

TO PUBLIC SCHOOLS FOR TEN YEARS.

IF VOTERS APPROVE THE BILL, IT

SETTLES.

>> DAVID, THANKS FOR HAVING US

OUT HERE TODAY.

>> THANK YOU FOR BEING HERE.

>> TELL US A LITTLE BIT ABOUT

THE DISTRICT.

>> UL THAT VALLEY IS 20 MILES

WEST OF DOWNTOWN TUCSON.

MADE UP OF TWO SCHOOLS.

WE'RE A DISTRICT OF 70 0

STUDENTS TOTAL.

PRESCHOOL TO EIGHTH GRADE.

WE HAVE A HIGH FREE AND REDUCED

COUNT, ABOUT 97% OF OUR STUDENTS

ARE ON FREE AND REDUCED LUNCH.

WE'RE RURAL, WE'RE SMALL AND A

REALLY NICE HOW MANYTOWN

COMMUNITY FEEL.

WE HAVE ABOUT 40% OF THE

TEACHERS OR SO ACTUALLY LIVE AND

WORK IN THE COMMUNITY.

SO THEY HAVE A LOT OF TIGHT

RELATIONSHIPS WITH OUR STUDENTS.

>> SO WHAT SORTS OF CHALLENGES

DOES THE SCHOOL DISTRICT FACE?

>> WE HAVE A LOT OF THE SAME

CHALLENGES THAT ANY SCHOOL

DISTRICT HAS.

WE ARE -- IT'S HARD TO GET

TEACHERS AND RETAIN TEACHERS.

ONE OF OUR FOCUSES SINCE I'VE

BEEN HERE, SINCE I STARTED TWO

YEARS AGO IS FOCUS ON TEACHER

RETENTION AND RECRUITING

TEACHERS.

AND WE STILL HAVE TEACHER

VACANCIES THAT WE'VE HAD THE

ENTIRE SCHOOL YEAR.

SO, YOU KNOW, ONE OF OUR BIG

CHALLENGES IS TEACHING.

AND GETTING TEACHERS AND

SUPPORTING OUR TEACHERS.

WE ARE 20 MILES OUTSIDE OF

TUCSON.

I REALIZE THAT PEOPLE HAVE

CHOICES.

SO WE'RE TRYING TO MAKE

ULTRAVALLEY UNIQUE AND SPECIAL.

THERE'S A LOT OF TUNTS FOR OUR

TEACHERS TO DO A LOT OF

DIFFERENT THINGS HERE.

SO WE'RE TRYING TO TURN OUR

CHALLENGES INTO POSITIVES AS WE

BUILD ULTRA VALLEY.

>> WHAT ARE SOME OF THE

POSITIVES?

YOU MENTIONED THERE'S QUITE A

FEW AFTERSCHOOL PROGRAMS.

>> HERE AT THE MIDDLE SCHOOL WE

ARE THE 21st CENTURY COMMUNITY

LEARNING GRANT WHERE WE'RE ABLE

TO PROVIDE TUTORING AND

ENRICHMENT ACTIVITIES FOR OUR

STUDENTS.

WE DO BEFORE AND AFTER SCHOOL

ACTIVITIES.

SOME OF THEM ARE AS SIMPLE AS,

YOU KNOW, THE COMPUTER LAB BEING

OPEN OR THE LIBRARY.

BUT THEN OTHERS ARE VERY

SPECIFIC.

WE HAVE COOKING, WE HAVE BAND,

GUITAR, WE HAVE DRAMA THEN WE

HAVE AFTERSCHOOL SPORTS ALSO,

INVOLVED IN ALL THAT.

AND THEN WITH ALL OF THAT COMES

TUTORING AND SPECIFIC

INTERVENTION TO HELP THE

STUDENTS BE SUCCESSFUL IN THE

CLASSROOM.

>> THIS IS A B RATED SCHOOL

DISTRICT?

>> YES, I'M PROUD TO SAY WE'RE A

B RATED SCHOOL DISTRICT.

>> ALSO ONE OF THE FEW THAT'S

GONE FROM UNDERPERFORMING TO

PERFORMING?

>> YES.

THE SCHOOL IS IDENTIFIED AS

BEING UNDER PERFORMING.

AND SEVERAL YEARS BACK THEY WERE

ABLE TO GET OUT OF SCHOOL

IMPROVEMENT, WHICH IT REALLY

GREAT ACCOMPLISHMENT FOR THE

TEACHERS AND STUDENTS HERE.

>> WHAT DO YOU ATTRIBUTE THAT

TO?

WHAT DID THAT?

>> IT GOES BACK TO THE PEOPLE

PER.

THE PEOPLE HERE AND THE KIDS

CARE AND THE ADULTS CARE.

THAT'S REALLY WHAT DRIVES

EVERYTHING.

OUR AFTERSCHOOL PROGRAM IS

GETTING READY TO END IN A FEW

WEEKS BUT THE DRAMA PROGRAM

HASN'T DONE THEIR FINAL

PERFORMANCE.

I GOT 40 KIDS STAYING AFTER

SCHOOL.

I WANT TO PRACTICE UNTIL THE

LAST DAY.

THEY'RE REALLY COMMITTED.

SO WE'LL BE CONTINUING TO BUS

KIDS HOME A LITTLE BIT LATER SO

THEY CAN STAY TO GET READY FOR

THEIR "WIZARD OF OZ"

PERFORMANCE.

>> NEXT MONTH THE VOTERS HEAD TO

THE POLLS TO DECIDE ON PROP 123

TO PUT MORE MONEY IN THE

SCHOOLS.

IS THAT SOMETHING THIS DISTRICT

NEEDS?

>> THIS DISTRICT AND ALL

DISTRICTS NEED MORE MONEY, MORE

FUNDING.

WE'VE BEEN UNDER FUNDED SINCE

2010 AND WE NEED TO DO MORE.

I MEAN, CURRENTLY WE HAVE

TEACHERS HERE IN THE VALLEY

SCHOOL DISTRICT THAT HAVE TEN

YEARS OF EXPERIENCE AND A

MASTER'S DEGREE MAKING $34,000 A

YEAR.

IT'S HORRIBLE.

AND SO, YES, WE DO NEED MORE

FUNDING IN EDUCATION.

I KNOW IF PROP 123 WERE TO PASS,

YOU KNOW, OUR INITIAL THING

WOULD BE TO PROVIDE KIND OF

LOYALTY STIPEND OR BONUSES TO

OUR TEACHERS IMMEDIATELY.

AND THEN GOING FORWARD WITH THE

MONEY THAT'S GOING TO COME OVER

THE NEXT TEN YEARS WOULD BE

REALLY TO LOOK AT WHAT DO WE

NEED, WHAT DO THE TEACHERS NEED.

WOULD WE PUT IT BACK INTO

TEACHER SALARIES OR SOME KIND OF

SOMETHING TO SUPPORT OUR

TEACHERS IN THE CLASSROOM.

>> HOW MUCH MONEY WOULD YOU SAY

WOULD EVENTUALLY COME TO THE

DISTRICT OVER THE NEXT FEW YEARS

IF PROP 123 PASSES?

>> WELL IF PROP 123 PASSES, WE

WOULD IMMEDIATELY SEE 100 -- IN

OUR SCHOOL DISTRICT OF JUST

UNDER 700 STUDENTS WOULD BE

$130,000 TO OUR BUDGET CURRENTLY

FOR THIS YEAR.

AND THEN GOING FORWARD IT WOULD

BE, IF ALL THINGS STAYED EXACTLY

AS THEY ARE, IT WOULD BE

APPROXIMATELY $28,000 A YEAR,

AND THEN AFTER THAT WOULD BE THE

NEXT FIVE YEARS WOULD GO UP TO

OVER AROUND $40,000.

>> DOES THAT MEAN THAT YOU HIRE

MORE TEACHERS OR YOU IMPROVE

TECHNOLOGY OR RESOURCES THAT THE

SCHOOL USES?

>> OUR COMMITMENT TO THE BOARD

AND OUR COMMITMENT IS TO

MAINTAIN LOW CLASS SIZES.

SO IF WE NEEDED TO, THEN THAT

WOULD BE LIKE THIS GRADE LEVEL

IS GOING UP OR MAYBE WE USE THAT

MONEY TO ADD AN ADDITIONAL

TEACHER OR, YOU KNOW, WHAT ARE

OUR NEEDS.

REALLY JUST, IT'S WHAT OUR NEEDS

AND GOALS GOING FORWARD REALLY

DECIDES WHAT WE NEEDED TO DO.

>> IF PROP 123 DOES NOT PASS,

DOES THAT PRESENT NEW CHALLENGES

OR DOES IT KIND OF THE

CHALLENGES JUST REMAIN?

>> THE CHALLENGES REMAIN.

I THINK IN EDUCATION WE'RE

REALLY GOOD AT GETTING BY AND

UNFORTUNATELY THAT'S BEEN --

IT'S A GOOD THING AND IT'S A PAD

THING.

SO WE WOULD CONTINUE TO SET OUR

GOALS, SET HIGH EXPECTATIONS FOR

OURSELVES AND REALLY WHAT DO WE

NEED TO ACCOMPLISH THEM.

BUT ANY LITTLE BIT HELPS.

AND WE NEED TO MAKE OUR TEACHERS

FEEL VALUED ANY WAY WE CAN.

AND I KNOW THAT'S ONE WAY, BEING

ABLE TO PROVIDE, YOU KNOW, MORE

RESOURCES OR COMPENSATION TO

THEM.

BUT THEN, YOU KNOW, WHAT ELSE

CAN I DO AND MY PRINCIPALS DO

AND THE WHOLE COMMUNITY DO TO

HELP SUPPORT OUR TEACHERS.

>> YOU CAME HERE FROM THE

PHOENIX AREA.

WHAT IS YOUR PERCEPTION OF HOW

ARIZONA VALUES EDUCATION MAYBE

IN SOME OF THESE SMALLER

COMMUNITIES?

>> HAVING COME FROM A BIGGER

SCHOOL DISTRICT IN PHOENIX, I'M

BLOWN AWAY ABOUT THE DRIVE AND

COMMITMENT.

EVERY EDUCATOR I'VE WORK WITH

WITH HAS THE DRIVE.

HERE THEY TAKE IT TO THE NEXT

LEVEL.

WE'RE IN BASEBALL AND SOFTBALL

SEASON NOW AND I FEEL LIKE EVERY

TEACHER IS OUT CHEERING ON THE

KIDS AND GOING TO THE GAMES.

AND INVESTED IN, YOU KNOW, GOING

ABOVE AND BEYOND.

WE HAD THIS ELABORATE EASY

MERIT, AWAKEN THE FORCE ASSEMBLY

FOR OUR STUDENTS.

EVERYBODY IS ALL HANDS ON DECK

EVERY DAY.

>> GOVERNOR DOUG DUCEY AND HIS

ELECTION RIVAL BOTH FAVOR PROP

123 BUT NOT EVERYONE DOES.

WE SAT DOWN WITH THE LEAGUE OF

WOMEN VOTERS WHO OPPOSE IT.

>> WHY IS THE LEAGUE AGAINST

THIS PROPOSITION IN.

>> WELL THE LEAGUE OF WOMEN

VOTERS OF ARIZONA STATE BOARD

VOTED TO OPPOSE THIS BASED UPON

THE FACT THAT THE LEGISLATURE

AND GOVERNOR HAVE NOT FOLLOWED

THE LAW OF THE PROPOSITION 301

IN 2000, WHICH SET ASIDE

INFLATIONARY PROVISION TO AID

PUBLIC FUNDING OF PUBLIC

SCHOOLS.

AND THEY ADDED A SIX-TENTH SALES

TAX.

THAT SALES TAX WILL END IN 2021.

NEVERTHELESS, THE LEGISLATURE

HAS NOT FUNDED THE SCHOOLS SINCE

2011, MAYBE 2009, ACCORDING TO

WHAT THEY SHOULD HAVE BEEN

DOING.

NOW I HAVE TO FOLLOW THE LAW.

WE FEEL THE LEGISLATURE AND THE

GOVERNOR ARE NOT FOLLOWING THE

LAW.

THERE WAS A COURT CASE, A

SUPREME COURT ORDERED THE

LEGISLATURE TO PAY $380 MILLION

A YEAR.

THEY HAVE NOT PAID IT.

THEY HAVE THE MONEY.

THEY'RE NOT FOLLOWING THE LAW.

INSTEAD THEY ARE COMING UP WITH

A WAY THAT'S VERY COMPLICATED

COMPROMISE TO SAY THAT THEY'RE

GOING TO BE FUNDING SCHOOLS.

BUT IT'S DOING AWAY WITH THE

VOTER INITIATIVE.

YOU KNOW, WE FEEL THAT TO

DISINFRANCHISEMENT OF VOTER

APPROVED LAW.

>> THERE ARE PEOPLE WHO ARE

HEARING THIS AND THINKING WHY

NOT JUST PUT MONEY INTO THE

SCHOOLS.

THIS IS HOW IT'S HAPPENING EVEN

THOUGH THE LANGUAGE IS NOT

CORRECT.

AND YOU'RE A FORMER EDUCATOR.

>> YES.

WELL I THINK THEY SHOULD PUT

MONEY IN SCHOOLS.

THEY'VE GOT ENOUGH MONEY RIGHT

NOW TO PAY WHAT THE COURT

ORDERED THEM TO PAY.

THEY'RE NOT DOING IT.

I'M NOT SURE WHY THEY'RE NOT

DOING IT.

BUT THEY'RE NOT DOING THAT

FUNDING AND THEY'RE SETTING UP

AN ARRANGEMENT WHERE THEY'RE

GOING TO GET MORE MONEY OUT OF

THE LAND TRUST, WHICH HAS

PROVIDED MONEY FOR PUBLIC

EDUCATION AND UNIVERSITIES, BUT

GOING UP TO 6.9% WITHDRAWAL FROM

THE LAND TRUST, WHICH IS SPECIAL

HERE, WILL MEAN ACTUALLY IN TEN

YEARS THAT THE LAND TRUST WILL

NOT HAVE THE SAME CORPUS IT HAS

NOW.

I'VE BEEN TOLD THEY'D HAVE TO

MAKE 10% INTEREST A YEAR OFF OF

SELLING LAND OR LEASING LAND TO

BE ABLE TO HAVE THE SAME AMOUNT

OF MONEY IN TEN YEARS.

THEY'RE GOING TO DIMINISH THE

LAND TRUST BY TAKING MONEY FROM

IT AND USING SOME GENERAL FUND

MONEY.

WE THINK THEY'VE GOT GENERAL

FUND MONEY.

THEY HAVE NOT PAID.

COURT ORDERED THEM.

THEY'RE NOT FOLLOWING THE LAW.

ARE THEY GOING TO FOLLOW ANY

OTHER PROPOSITIONS IN THE FUTURE

THAT WE PASS HERE IN ARIZONA?

I MEAN, THAT'S -- THAT SEEMS TO

ME THE LEGISLATURE IS SAVING

THAT MONEY OR THE GOVERNOR AND

LEGISLATURE WANT THAT MONEY FOR

OTHER THINGS AND I THINK

EDUCATION IS ONE OF THE MOST

IMPORTANT THINGS THE STATE DOES.

>> WHAT ARE YOU SUPPOSING THOSE

OTHER THINGS ARE, IF IT'S NOT

EDUCATION WHICH YOU SAY IS

IMPORTANT?

>> WELL, IT APPEARS, FROM WHAT I

HAVE READ, THAT CORPORATION

BUSINESS TAX CUTS WILL PUT IN

EVERY YEAR, MAYBE $100,000 LESS

INTO THE GENERAL FUND.

THERE WILL BE LESS MONEY THERE.

AND OTHER THINGS -- WELL, WE

HAVE A LOT OF PRISONS IN

ARIZONA.

THE GOVERNOR HAS TALKED ABOUT A

SPECIAL BORDER STRIKE FORCE, I

THINK.

I'M NOT SURE ALL OF HIS

PROVISIONS OR DESIRES.

BUT A STATE SHOULD FUND PUBLIC

EDUCATION.

THAT'S PART OF THE BASIS OF OUR

COUNTRY ACHIEVING, HAVING PEOPLE

COME IN AND ACHIEVE AND BECOME

CITIZENS THAT PAY TAXES.

>> THIS IS A SPECIAL ELECTION.

DO YOU THINK THAT MANY VOTERS

ARE UNCLEAR AS TO THE ADVANTAGE

LAJ AND PERHAPS --

>> IT'S VERY COMPLICATED.

WE DID A FACT SHEET, JUST A LIST

OF FACTS.

IT WASN'T EVEN PRO AND CON.

IT WAS A LIST OF FACTS AND IT

TOOK ABOUT EIGHT OF US AROUND

THE STATE TWO WEEKS TO TRY TO

GET THIS TOGETHER AND STILL IT

LEAVES OUT INFORMATION.

THE PROBLEM, BIG PROBLEM WITH

THIS IS IT GOES AGAINST WHAT THE

VOTERS HAD DECIDED AND THEN IT

PUTS IN A LOT OF TRIGGERS OR

PROBLEMS.

FOR INSTANCE, IF THE LEGISLATIVE

PART OF PAYING FOR SCHOOLS GOES

TO 49%, THEY CAN STOP THIS

INFLATIONARY.

RIGHT NOW IT'S GOING TO BE 41%,

59% FROM THE TRUST FUND MONEY.

BUT IT MAY HIT 49% IF LESS MONEY

IS COMING IN FROM THE GENERAL

FUND FROM BUSINESS TAX CUTS

BEING LESS.

THEY SHOULD RESTORE SOME OF THE

BUSINESS TAX CUTS.

ANY SURVEY OF CEOs IN THE STATE

INDICATED THAT WE NEED TO HAVE

GOOD EDUCATION FOR BUSINESS TO

THRIVE.

AND IT SEEMS TO ME TO BE AN

UPSIDE DOWN THING TO SAY YOU'RE

GOING TO KEEP CUTTING THE

BUSINESS TAXES AND YOU'RE GOING

TO BE THRIVING WHEN YOU HAVE

LESS MONEY FOR SCHOOLS.

SCHOOLS SHOULD BE FUNDED.

THEY'RE FUNDED AT SUCH A LOW

RATE RIGHT NOW, WE'RE ABOUT 50th

IN FUNDING OF SCHOOLS.

>> AGAIN FOR THE VIEWERS WHO ARE

WATCHING SAYING THIS DOES FUND

THE SCHOOLS WITHIN YOU'RE SAYING

THIS IS NOT THE RIGHT WAY?

>> IT FUNDS A LITTLE.

MAYBE 70% OF WHAT THEY MIGHT

HAVE GOTTEN IF IT HAD BEEN DONE

AT THE RIGHT TIME.

BUT THEY'RE GOING TO HOW PART OF

THAT TAX BIT IN 2021 AND IN TEN

YEARS THEY'RE GOING TO HAVE

TAKEN A LOT OUT OF THE LAND

TRUST.

IF THEY DO THIS, THIS DOES NOT

SEEM TO BE A FAIR THING TO DO

WHEN THE LEGISLATURE HAS THE

MONEY RIGHT NOW THAT THEY COULD

PAY WHAT THE SUPREME COURT HAD

ORDERED THEM.

IT'S BACK TO THE LOWER COURT.

IF THIS FAILS, I GUESS THAT

WE'LL GO BACK TO MAYBE

ARBITRATION WITH THE COURT ON

BACK TO COURT CASES.

IT SEEMS TO ME THAT LEGISLATORS

IN MANY STATES, EVEN WHEN

THEY'RE CONSERVATIVE, THEY'VE

WANTED TO IMPROVE PUBLIC

EDUCATION.

THEY'VE WANTED TO IMPROVE

UNIVERSITIES.

THEY HAVEN'T WANTED TO EXTRA

KINDS OF THINGS BY HARMING THE

PEOPLE THEY SERVE.

>> OKAY.

>> WE REALLY, WE REALLY ADVISE A

VOTE NO ON 123 AND SEE WHAT WE

CAN FIGURE OUT AFTER THAT.

>> OKAY.

SHIRLEY, THANK YOU SO MUCH.

>> YOU'RE WELCOME.

THANK YOU FOR HAVING ME.

>>> ALSO ON THE MAY 17th BALLOT

IS PROP 124.

IT'S PART OF A RESTRUCTURING OF

THE PENSION PLAN FOR

FIREFIGHTERS AND POLICE

OFFICERS.

JIMMAN WITH THE FRATERNAL ORDER

OF POLICE SAT DOWN WITH US TO

EXPLAIN WHY POLICE AND

FIREFIGHTERS SUPPORT THIS

CHANGES.

>> FOR THOSE WHO ARE JUST

STARTING TO REALIZE THAT WE'VE

GOT A SPECIAL ELECTION COMING

UP, PROP 124 IS THE ONE THAT

DOESN'T GET TALKED ABOUT MUCH.

EXPLAIN, IF YOU CAN, IN LAYMAN'S

TERMS WHAT PROP 124 DOES.

>> PROP 124 IS RELATED TO THE

PUBLIC SAFETY PERSONNEL

RETIREMENT SYSTEM THAT PROVIDES

BENEFITS FOR POLICE OFFICERS AND

FIREFIGHTERS.

PROP 124 MAKES ONE CHANGE AND

ONE CHANGE ONLY TO THAT -- TO

THE PENSION SYSTEM.

AND SIT A CHANGE THAT HAS TO BE

APPROVED BY THE VOTERS.

AND THAT IS TO EXCHANGE THE

PORTION OF THE BENEFIT THAT

CURRENTLY PROVIDES INCREASES TO

RETIREES IN RETIREMENT AND

CURRENTLY THAT BENEFIT IS TIED

TO INVESTMENT EARNINGS.

THE PROPOSAL, IF APPROVED BY THE

VOTERS, WOULD ALLOW THE EXCHANGE

OF THAT BENEFIT FOR ANOTHER ONE

THAT WOULD BE TIED TO INFLATION.

AND IT'S VERY IMPORTANT BECAUSE

OF THE OTHER CHANGES THAT ARE

BEING MADE BY THE LEGISLATURE.

IT ALL FITS TOGETHER.

AND IT GIVES AN OPPORTUNITY FOR

THE RETIREMENT SYSTEM TO BE

BEGIN TO START ON A PATHWAY TO

RECOVERY.

BECAUSE THE RETIREMENT SYSTEM AS

IT STANDS RIGHTS NOW HAS ABOUT

HALF OF THE ASSETS THAT IT NEEDS

TO BE ABLE TO PAY FOR THOSE

BENEFITS THAT HAVE BEEN PROMISED

TO POLICE OFFICERS AND

FIREFIGHTERS IN THE FUTURE.

AND WE BELIEVE PROP 124 IS THE

BEST WAY TO GO ABOUT MAKING THAT

CHANGE TO ALLOW THE RETIREMENT

SYSTEM TO START TO RECOVER.

>> SO OFTEN WHEN IT COMES TO

THESE BALLOT QUESTIONS WE SEE A

LOT OF BACK AND FORTH, STRONG

SUPPORTERS, STRONG OPPOSITION.

IT SEEMS LIKE NOBODY WHO DOESN'T

LIKE THIS.

WHY IS THAT?

>> WELL, CHRIS, I BELIEVE IT'S

BECAUSE WE'VE SPENT ALMOST TWO

YEARS WORKING ON THIS PROPOSAL.

AND LET ME TELL YOU HOW IT

STARTED, IS THAT THE

FIREFIGHTERS STARTED LOOKING AT

THIS ABOUT TWO YEARS AGO AND

THAT RESULTED IN THE PRESIDENT

OF THE STATE SENATE, ANDY BIGGS,

TO APPOINT A LEGISLATIVE WORKING

GROUP TO EXAMINE THE RETIREMENT

SYSTEM, ITS BENEFITS, ITS

FUNDING LEVELS.

AND HE CHOSE SENATOR DEBBIE

LESKO TO CHAIR THAT COMMITTEE.

WHAT SENATOR LESKO DID OVER THE

PAST YEAR AND A HALF IS TO

INVITE EVERY STAKEHOLDER THAT WE

COULD THINK OF TO COME IN AND

SIT DOWN AT ONE TABLE TO DISCUSS

PROPOSALS, TO DISCUSS HOW IT

COULD BE DONE AND TO GET A

PROPOSAL TOGETHER THAT COULD BE

PRESENTED NOT ONLY TO THE

RETIREES BUT TO THE VOTERS TO

MAKE THIS CHANGE.

IT'S IMPORTANT TO RECOGNIZE THAT

THE STAKEHOLDERS THAT CAME

TOGETHER TO MEET ON THIS

REPRESENTED EVERY AREA OF THE

COMMUNITY THAT'S BEEN IMPACTED

BY THOSE RISING COSTS IN

PENSIONS.

>> SOME PEOPLE MAY LOOK AT PROP

124 AND THE LEGISLATION THAT WAS

PASSED ALONG WITH IT THAT MAKES

MORE CHANGES TO THE SYSTEM AND

SAY, WAIT A SECOND, WHY WOULD

POLICE OFFICERS AND FIREFIGHTERS

SUPPORT THIS.

IT LOOKS LIKE THEY'RE GOING TO

HAVE TO PUT SOME MORE MONEY IN,

THE COLA, THE COST OF LIVING

CHANGE, THE PROP 124 DEALS WITH

MIGHT NOT BE SO BENEFICIAL.

BUT IN THE LONG TERM THIS IS A

GOOD DEAL FOR POLICE,

FIREFIGHTERS, PUBLIC SAFETY

WORKERS.

>> THAT' TRUE.

AND YOU ALSO HAVE TO REALIZE

THAT NOBODY HAS MORE INVESTED IN

OUR RETIREMENT SYSTEM THAN THE

EMPLOYEES THAT PARTICIPATE IN

IT.

THE OTHER PART OF IT IS THAT THE

DEFICIENCIES THAT HAVE CAUSED

RISING COSTS TO CROWD OUT OTHER

SERVICES, HIRING, THE DEPLOYMENT

OF PUBLIC SAFETY RESOURCES, YOU

KNOW, WE LIVE IN THOSE SAME

COMMUNITIES TOO AND THAT'S WHERE

YOUR FAMILIES LIVE AND IT IS

VITALLY IMPORTANT TO US TO

ENGAGE IN THAT DISCUSSION.

WE FELT THAT WE'VE REACHED A

GOOD CONCLUSION TO THIS.

AS YOU SAY, IT LOOKS LIKE IT'S A

PRETTY GOOD DEAL OVER A LONG

TERM.

IT'S IMPORTANT TO RECOGNIZE THAT

THIS IS NOT A TAX INCREASE.

IT IS NOT SOMETHING THAT IS

GOING TO PUT SOMETHING NEW IN

PLACE.

WHAT IT DOES IS IT ACTUALLY

RESTRUCTURES AND ALLOWS THE

RETIREMENT SYSTEM, OVER THE NEXT

THREE DECADES, TO SAVE TAXPAYERS

$1.5 BILLION.

AND THAT'S QUITE AN ACHIEVEMENT

FOR WORKING GROUP TO COME TO

THAT KIND OF A SOLUTION.

>> ALL RIGHT.

JIM, YOU ALL HAVE A TV AD

RUNNING, NOT MUCH OPPOSITION.

IT SOUNDS LIKE WE NEVER CAN

PREDICT THE VOTE OR VOTERS.

WE'VE LEARNED THAT.

BUT IT SOUNDS LIKE THIS SHOULD

BE A PRETTY EASY CHANGE.

ARE WE GOING TO HAVE TO SEE

OTHER PENSION CHANGES AS WE GO

ALONG?

>> WELL, WE BELIEVE THAT THIS

HAS BEEN COMPREHENSIVE.

THE ONE PIECE OF THIS PENSION

REFORM PROPOSAL THAT HAS TO BE

APPROVED BY THE VOTERS IS IN

PROP 124.

BUT IT'S ACTUALLY BEEN A VERY

COMPREHENSIVE LOOK AT THE

PENSIONS.

ONE OF THE THINGS THAT I'M

HOPEFUL IS THAT WE HOPE TO HAVE

THIS PENSION REFORM WORKING

GROUP THAT HAS BEEN SUCCESSFUL

TO CONTINUE TO STAY TOGETHER AND

LOOK AT THINGS THAT CAN BE

BENEFICIAL FOR ALL OF US.

SO YOU KNOW, IN THE SHORT TERM I

DON'T BELIEVE THAT THERE'S GOING

TO BE ANOTHER REFORM EFFORT THAT

IS GOING TO PROP UP.

I THINK THIS ONE HAS BEEN VERY

COMPREHENSIVE.

>> ALL RIGHT.

THANKS SO MUCH FOR SITTING DOWN

WITH US AND EDUCATING OUR

VIEWERS ABOUT PROP 124.

>> WELL, THANK YOU VERY MUCH.

APPRECIATE THE OPPORTUNITY.

>>> NO GROUP IS ACTIVELY

OPPOSING PROP 124.

AS UNIVERSITY OF ARIZONA

ECONOMIST JUNE PING EXCHAINS, IT

WILL HAVE AN ECONOMIC IMPACT

WHETHER OR NOT IT PASSES.

>> WHEN IT COMES TO PROPOSITION

124, THERE'S SOME ECONOMIC

ISSUES HERE.

CAN YOU EXPLAIN WHY THIS IS

NEEDED?

WE HAVE AN UNDERFUNDING ISSUE.

>> YES.

TO DEFEND PROP 124, YOU HAVE TO

THINK ABOUT IN TERMS OF BOTH A

NARROW CONTEXT OF THE PROP

ITSELF.

BUT ALSO THE BROADER CONTEXT OF

THE FUNDING ISSUE FOR THE PUBLIC

SAFETY PERSONNEL RETIREMENT

SYSTEM.

SO WITH A NARROW COMPLEX OF THE

PROPOSITION ITSELF, IT IS ASKING

VOTER TO AMEND A STATE

CONSTITUTION SO THAT THE STATE

LEGISLATURE CAN CHANGE THE POST

RETIREMENT PENSION BENEFIT

INCREASE FORMULA FOR PUBLIC

SAFETY EMPLOYEES AND RETIREES.

FOR THE CURRENT FORMULA IT'S

UNSUSTAINABLE.

IT'S CALLED PERMANENT BENEFIT

INCREASE.

AND IT IS FUNDED WITH AN EFFORT

OF 9%.

SO IT'S UNSUSTAINABLE BECAUSE

THIS EXCESS RETURN IS ONLY A

ONE-TIME THING AND IT IS UP TO

FUND A PERMANENT BENEFIT

INCREASE.

SO YOU'RE ALMOST ASKING

YOURSELF, LIKE, CAN YOU USE THE

ONE-TIME TAX REBATE TO

PERMANENTLY INCREASE YOUR

SPENDING COSTS.

SO YOU CANNOT DO THAT.

AND THEN SECONDLY, IT IS ALSO

NOT FAIR TO THE RETIREES

THEMSELVES BECAUSE THERE'S

UNCERTAINTY IN THIS.

SOME YEARS YOU WILL HAVE AVERAGE

RETURNS BUT OTHER YEARS LOWER

THAN AVERAGE RETURNS.

THEY DON'T KNOW IN WHICH YEAR

THEY MAY BE ABLE TO GET A

BENEFIT INCREASE.

>> WHEN IT COMES TO RETIREMENT

SYSTEMS, PUBLIC RETIREMENT

SYSTEMS, ARIZONA IS NOT ALONE IN

THIS, THOUGH THE PUBLIC SAFETY

SECTOR IS WORSE THAN THE OTHERS.

BUT WE'RE NOT ALONE IN THIS.

>> YEAH.

THAT'S GETTING BACK TO THE

BROADER CONTEXT OF THE FINANCIAL

CONDITION OF THE PRS.

CURRENTLY IT IS FUNDED AT ONLY

50% LEVEL, WHICH MEANS THEY ONLY

HAVE 50% OF MONEY THEY NEED TO

FUND ALL OF THE BENEFITS.

AND THAT COMES OUT TO ABOUT $6

BILLION UNFUNDED LIABILITY.

OF COURSE AS I SAID, IT'S NOT

JUST ARIZONA PROBLEM.

IT'S REALLY A NATIONWIDE.

ON AVERAGE, NATIONWIDE STATE

RETIREMENT PLANS FUNDING ABOUT

70%.

SO CERTAINLY 50% IS MUCH LOWER

THAN THE NATIONAL AVERAGE.

AND AS A COMPARISON, THE BIGGER

ARIZONA RETIREMENT SYSTEM,

ARIZONA STATE RETIREMENT SYSTEM

IS FUNDED AT ABOUT 76% WHICH IS

A MUCH BETTER CONDITION.

>> FOR PEOPLE WHO DON'T FOLLOW

THIS DAY TO DAY AND DON'T

UNDERSTAND NECESSARILY PENSIONS,

WHEN YOU SAY IT'S FUNDED AT 50%

OR THE LARGER SYSTEM IS FUNDED

AT ABOUT 76%, THAT MEANS IF

EVERYBODY IN THE SYSTEM RETIRED

TODAY THEY HAVE ENOUGH MONEY TO

PAY FOR 50% OR HALF OF THE --

>> YES.

OF COURSE 50% IS AS OF TODAY.

AND OBVIOUSLY THEY HAVE MONEY TO

PAY FOR THESE BENEFITS FOR MANY,

MANY, MANY YEARS TO COME.

IT'S ONLY THAT IN THE LONG TERM

IS THAT WHEN PEOPLE RETIRE AND

OVER TIME THEY WILL RUN OUT OF

MONEY TO PAY FOR THEIR BENEFITS

OVER TIME.

>> AND OF COURSE THOSE ARE

BENEFITS THAT HAVE TO BE PAID.

YOU CAN'T TELL PEOPLE, SORRY, WE

DON'T HAVE THE MONEY.

IT HAS TO BE PAID.

>> THAT'S THE POINT OF PROP 124.

BECAUSE STATE CONSTITUTION

GUARANTEES BENEFITS PROMISED TO

THE EMPLOYEES AND RETIREES.

SO YOU CANNOT DAMAGE OR IMPAIR

THESE BENEFITS.

SO IN ORDER FOR THE STATE TO GO

BACK AND CHANGE THE BENEFITS,

THEY HAVE TO ASK THE VOTERS TO

AMEND THE CONSTITUTION TO ALLOW

THE STATE TO DO THAT.

>> YOU'VE LOOKED AT THIS.

DOES IT FIX THE PROBLEM

COMPLETELY?

WE'RE FINISHED, DON'T HAVE TO

TOUCH IT AGAIN, OR IS THIS THE

BEGINNING OF A FIX?

>> YOU'RE ACTUALLY RIGHT.

THIS IS REALLY ONLY THE FIRST

STEP.

AND THIS IS A LONG TERM.

AND IT DOESN'T MEAN THE PROBLEM

WILL BE SOLVED.

AND THEY SAY THAT.

THE PROP 124 IS ONLY PART OF A

BROADER PACKAGE OF REFORMING

RETIREMENT PACKAGES.

AND RESEARCH SHOWS THIS WILL

SAVE THEM ABOUT $1.5 BILLION

OVER A 30-YEAR PERIOD.

BUT NOW THEIR FUNDING SHORTAGE

IS $6 BILLION.

THAT'S WHY THIS IS ONLY THE

FIRST STEP.

>> AND OF COURSE THIS ISN'T JUST

STATE GOVERNMENT IT HITS.

I ALSO HITS COUNTIES AND CITIES

AND TOWNS THAT HAVE POLICE

OFFICERS AND FIREFIGHTERS

BECAUSE THEY PAY INTO IT ALSO.

>> EXACTLY.

THE REASON WE EVEN HAVE THIS

BALLOT AND PROP 124 IS BECAUSE

EVERYBODY, EVERY STAKEHOLDER IS

VERY MUCH ON BOARD WITH THIS

ISSUE.

AND THE LOCAL GOVERNMENT ARE

EMPLOYEES.

THEY'RE PAYING FOR ALL OF THE

PENSION BENEFIT.

NOT JUST STATE GOVERNMENT.

SO THEY WANT TO SEE THIS BE

RESOLVED OVER A LONG PERIOD OF

TIME.

>> BECAUSE IT HITS THEIR BUDGET

ALSO JUST LIKE IT HITS THE STATE

BUDGET?

>> YES, ALL OF THE LOCAL

GOVERNMENT, INCLUDING CITY OF

TUCSON, THEY'RE ALL PAYING FOR

INCREASING PENSION CONTRIBUTION

TO THE SYSTEM.

>>> AND THAT'S OUR PROGRAM.

LORRAINE IS BACK NEXT WEEK.

I'M CHRISTOPHER CONOVER.

FOR THE ENTIRE "ARIZONA WEEK"

TEAM, THANKS FOR WATCHING.