Arizona's Own Espresso Pundit

What Part of illegal Don't You Understand?

The Republic is running a series of stories about an illegal immigrant family that is leaving Arizona to avoid the implications of SB 1070.  The family is on its way to Pennsylvania and the Republic sent Reporter Daniel Gonzalas and Photographer Pat Shannahan along to document the journey. 

I can't imagine that the Republic is intentionally trying to make the family look bad, but they certainly don't come off well in the profile.  They are traveling with false IDs; the family is on AHCCCS so the cost of the birth and medical care of their three kids was at taxpayer expense.  Of course, the cost of educating the kids falls on taxpayers as well.  (The Republic likes to quote this cost as about $4,000 a year, but that's much to low.  The cost of teaching children who come from homes in which English isn't spoken is upwards of $10,000--per year, per kid.)  So the state has north of $150,000 invested in this family.  The father makes $10 an hour as a landscaper.  That means that he receives more in state services each year than his entire salary. 

But let's leave that debate aside for a second.  Here's the part of the article that really ticks me off--and which puts the Sanchez family in a really bad light.  Check out this picture from Pat Shannahan together with the accompanying caption:  

Undocumented immigrants Christian Sanchez, 2, sleeps in between his dad Luis Sanchez and Marlen Ramirez while driving through Illinois.

Dude, what part of "Car Seat" don't you understand? They are cheap and they save children's lives.  I realize that you don't have to pay for your kids' medical care, but put them in a car seat anyway.  It's the LAW.  And even if you like to pick and choose the laws you follow while you are here  illegally and traveling with your fake documents, SOME of the laws are actually there for your benefit and the car seat law is a good place to start.

Talking Schtick

If you ever have occasion to drive north on the 101 near Scottsdale, you can't help noticing the Talking Stick resort that has been built to replace the  slot machine filled tents that used to comprise Casino Arizona.  The resort was scheduled to open last December...then the date was pushed back to April of this year.  Now, ten weeks after the April deadline, the resort is complete but unoccupied.  The Talking Stick spokesman claims that the delay has been caused by the "smoke evacuation system" being a "fraction off."

Golly, we just can't open because that danged smoke ventilator just doesn't seem to be fast enough...  Give me a break.  

In January of 2009 I questioned the economics of the Talking Stick Resort.

Indian Gaming has a competitive advantage because it has low transaction costs--locals don't have to travel far to play the games, so the fact that the gaming is not as good as Vegas (no craps, six deck shoes, continuous shuffle) isn't a huge problem.  No one travels to Phoenix to gamble on the reservation.  If they have to fly in, they go to Vegas. 

So what does the resort add?  Headaches.

The economic pattern is always the same--whether it's power plants, cruise ships, 747s or resorts--some power point presentation says that the project can make money and by golly, someone is willing to finance it and after it's about 40% done, things change.  The economics no longer work, but since the project is nearly half done, it doesn't make sense to abandon it. 

So then the project is completed and operates at a loss.  Why would it "operate" if it's at a loss?  That's a classic accounting question.  The project can cover its variable costs (labor, lights, AC) but it can't generate enough revenue to cover its fixed costs (debt service, taxes, insurance).  So the project loses less money when it's operating than when it's shuttered.  That's the current story of Vegas, General Motors, most airlines and about half the cruise lines. 

For a while, I thought that it would be the story of Casino Arizona.  It would bring in enough room revenue to cover the cost of the staff that are required to rent and clean the rooms.  Sure, it would be an economic disaster for the tribe, but things would eventually turn around. 

But since I wrote that post, the economy has continued to limp along and very few people thought that 18 months later, the Greater Phoenix Resort market would still be in a recession...but things have come off even worse than I predicted. 

So what does the delay mean?  It looks to me like the resort can't even meet its variable costs.  It would cost more to rent the few rooms for which there is demand than the revenue that those rooms would generate. 

My guess is that the onset of cooler weather--especially if combined with a stronger economy*--will allow the resort to open and cover its variable costs and at least make some contribution to its debt payments.  But it will still be operating at a loss. 

It's looking like Talking Stick is a financial disaster.  The tribe was much better off with slot machines in tents.  Now they have a pretty building and a huge mortgage.  And the valley has 497 additional vacant hotel rooms.

Footnote:  Don't bet on that "stronger economy" thing. Well, you can bet on it, but you might want to read this first.

Scalia Wins

Last Sunday, Bob Robb raised an issue of statutory interpretation concerning the education funding required under Prop. 301.

However, the provision was inartfully written. It says that “the Legislature shall increase the base level or other components of the revenue control limit” each year by two percent or inflation, whichever is less.

The base level is big bucks. Other components, not so much.

Given the budget squeeze, this year legislators decided just to increase the transportation portion of the state aid formula, an option the law, read literally, permits.

Educators have sued saying that the Legislature has to increase the whole enchilada, which was pretty clearly the intent.

So, what should justices do? Go with the law as written, or read into it something that isn't there but clearly intended?

I'd probably go with the law as written, but I wouldn't feel good about it.

Actually, this is a pretty easy call.  Justice Scalia has literally written the book on statutory interpretation and his arguments have been so persuasive that even his opponents--most notably Justice Breyer--no longer argue the the courts should overturn clear language simply because they believe the language doesn't say what the drafters "really" meant. 

In this case, "or" means "or".  Any other interpretation would have the justices simply re-writing a clear statute. 

 

 

 

Arizona Republic May Go Bankrupt By Year End; Shutdown would cost hundreds of Jobs

Wow, that was fun.  I don't have any actual "information" or so called "sources" to back up that story, but it's clearly true.  The Republic certainly could go bankrupt in the next year and if it did, that would obviously lead to the elimination of hundreds of jobs.   Wow, that's a great way to look like a journalist without having to engage in any, you know, actual "journalism."

Of course, I'm not the first person to realize that using "may", "could", "might" or "should" allows me to write anything I want.  I pointed out earlier that Republic reporters are using those tricks to scare readers into thinking that lots of bad things--like foreclosures, clogged courts and a failed census--"could" happen as a result of SB 1070.

Now we learn that the Maricopa County Community College Board has refused to raise property taxes and bad things "may" happen to the Community College System. Here's a story by the Republic's Mary Beth Faller.  Check out this scary headline:

Tax-hike rejection may hurt community colleges services

Ms. Faller didn't write the headline of course, but it's a good reflection of her scary lede:

Maricopa County property owners won't face higher taxes to fund the community colleges, but the lack of money could mean students will find longer registration lines and longer waits for services.

Did someone from the College District say that the rejection of the tax increase would hurt students?  Nope.  In fact, the only source quoted in the story actually debunks the main premise of the story.

There will be no big cuts, according to Debra Thompson, vice chancellor for business services, because the $1.62 billion budget has $20.5 million more than last year, thanks to an unexpected bit of growth in revenue from new property.

That's right.  The Community College system has a budget of $1.2 billion which means that the $7.6 million associated with the tax increase is a rounding error.  But notice that even without the tax increase, the total revenue from property tax is $20.5 million higher than last year because of additional growth.  So there's no problem because the amount of money has actually increased.

At this point, the reporter could have written the story straight.  She could have written that property tax revenues are higher than expected so the Board saw no need to increase the tax rate and that services aren't expected to be affected because the district will actually have more money available than it did last year.  Instead she chose to make up a scenario and then write that it "may" happen.

That's not journalism, it's creative writing--and creative writing should at least be funny or maybe even rhyme. 

A Conversation with Terry Goddard.

Ok, so I didn't have a conversation with Terry Goddard 'cause he's probably not a big Espresso Pundit fan.  However, since the Goddard campaign is in complete disarray, I think it would be interesting to get his take on things.  Fortunately,  Republic reporter Casey Newton got a chance to sit down with Goddard. I thought the resulting conversation was pretty interesting. 

Here's how Casey opens:

It had been a tumultuous week on the trail. On June 18, campaign manager Rodd McLeod announced he would leave the campaign at the end of the month. The news hit around the same time that the Arizona Democratic Party's two top fundraisers, Devin Rankin and Vanessa Barrera de Leyvas, announced that they were leaving their posts.

Naturally, I thought this part was interesting. 

 While he waits for his moment, pundits across the political spectrum are beginning to declare the campaign over. The Republic's E.J. Montini called the race for Brewer today, about a month after widely read conservative blogger Greg Patterson did the same.

Even I Don't Drink Coffee All the Time...

Record spending...record deficits, sovereign debt near collapse and the world wide economy is still slow, unemployment is still high and no one seem to believe that the debts will ultimately be repaid.  Is this finally then end of the disastrous recent revival of Keynesian economics?  The Wall Street Journal thinks it might be. 

Today's G-20 meeting has been advertised as a showdown between the U.S. and Europe over more spending "stimulus," and so it is. But the larger story is the end of the neo-Keynesian economic moment, and perhaps the start of a healthier policy turn.

For going on three years, the developed world's economic policy has been dominated by the revival of the old idea that vast amounts of public spending could prevent deflation, cure a recession, and ignite a new era of government-led prosperity. It hasn't turned out that way.

Transition to Televangelist is now Complete...

Al Gore, the morbidly obese jet setting, mansion owning high priest in the church of Global Warming, has been shown to be taking sexual advantage of the true believers.  Shocking.

Welcome to the Party Ed.

Here's a pretty startling admission against interestfrom EJ Montini

Since Gov. Jan Brewer is going to be elected in November . . .

(Yeah, I'm aware that we haven't even held the primary yet. And, yeah, anything can happen. But you know and I know that Brewer sealed the deal when she signed Senate Bill 1070.)

Last May--even before Prop 100 passed by 20 points--I went on Channel 12 and said that the election was "over."  I wrote a longer explanation on Espresso Pundit.

Since then, polls have confirmed that Brewer's lead in the Republican Primary is insurmountable, John Munger has dropped out of the race and Goddard's camp has been shown to be in complete disarray. 

Democrats are complaining privately about Goddard's lack of engagement and it seems clear that he is simply going through the motions on his way to his fourth lost Gubernatorial race.

The End of The Arizona Democratic Party?

I've been getting a lot of feedback from folks who think that if the Obama Administration sues Arizona, the state's voters will reject Democratic candidates en masse.

I agree that there is a serious risk that Obama's actions will be viewed as an attack on the state as a whole and I think that swing voters are likely to be put off by a suit. 

Then I saw that article that's along the same lines. 

Arizona Democrats facing tough reelection races are distancing themselves from the Obama administration as it prepares to file a lawsuit against the state over its controversial immigration law.

Rep. Harry Mitchell (D-Ariz.) on Monday sent a sharply worded letter to President Barack Obama urging him not to sue.

You might want to read the whole thing...

Domino Theory

I thought this article was interesting.

The Obama administration has a lot of fights on its hands. Putting aside real wars in Afghanistan and Iraq, there's the battle against leaking oil in the Gulf, the struggle against 9.7 percent unemployment across the country, and clashes over the president's agenda on Capitol Hill. Despite all that, the White House has found time to issue a new declaration of war, this time against an unlikely enemy: the state of Arizona.

I think we are starting to see other states follow Arizona's example and the Obama administration is trying to adopt a policy of containment.