The following is an AZPM Original Production.

From the radio studios of AZPM, welcome to this latest edition of The Press Room.

I'm Steve Goldstein.

Coming up, Congressional candidate Daniel Hernandez got into a scuffle at a recent event in Bisbee, could that affect his chances in the Democratic primary?

Also, there's unprecedented budget conflict at the state capitol.

Is a state government shutdown possible?

A panel of journalists joins me to discuss those stories and more next on The Press Room.

♪ UPBEAT BRASS MUSIC ♪ ♪ MUSIC SWELLS AND ENDS ♪ Welcome to The Press Room.

I'm Steve Goldstein.

Our panel is with me in studio today.

Our Tim Steller of The Arizona Daily Star, Natalie Robbins of the Tucson Sentinel and Katya Mendoza of AZPM News.

Thank you all for being here.

Natalie, I'm gonna start with you because a couple of weeks ago, Congressional candidate Daniel Hernandez got into some kind of a scuffle.

Can you tell us how that started and what the event was like?

Sure.

So based on accounts of people who were there, it was at a Bisbee Pride event, a forum for the Congressional candidates after the parade.

And somebody from the audience had shouted a question about Palestine to Hernandez from the audience.

And people say that his sister Alma, who is a state representative, became very angry at this person.

The person was escorted from the room and Alma followed the person and they kind of had an altercation, a verbal altercation outside.

And the video shows Daniel attempting to kind of separate his sister, his other sister Consuelo, another state representative was also there and he's trying to separate them.

And in the process, he notices the person filming, grabs the phone and the man says, threw it to the ground.

Okay, so Tim, how much of an issue has the Israel-Palestine Gaza situation been for Hernandez during this campaign?

It hasn't come up that much, right?

It's a sensitive issue.

It is a sensitive issue.

It's one that divides him, I think, from most of the other candidates in the sense that he and his sisters have been avid supporters of Israel in general.

And so, and Alma herself is a self-proclaimed strong Zionist.

And so she reacts strongly.

You can see it online whenever there's critiques of Israel that involve her or something like that.

So it's not that surprising that she would react strongly because this is a pattern, I would say.

It's not probably an issue where Daniel necessarily wants to get pinned down or identified because I would suspect that the Democratic Party, the majority of Democratic primary voters aren't necessarily that sympathetic to the Gaza war at this stage.

Right, so Natalie, Daniel Hernandez issued a statement later on that you wrote about.

What was the tone of that or what did he say?

He did.

So this incident happened, I think, two days after, he says there was a shooting at his campaign headquarters, which is also the house where he lives with his sister Alma.

It was, I think, a staffer's car was hit by a bullet.

The motivations are not clear.

It's not clear whether or not it was politically motivated or just kind of coincidence, but still he is, I think, understandably shaken.

And he said, I was, tensions were running high emotions.

It was a very emotionally charged moment.

I regret what happened and I was just trying to protect my family, is what he said.

Katya, what do you make of this?

What stands out for you?

You know, it's just, it's really tough when someone is possibly getting in your face.

Tensions are high, obviously it's a political event.

People will ask questions and expect you to answer.

I did see the statement.

I do find that it is interesting because thinking back to the CD7 debate that we did have here, Daniel actually made it a point to say accountability is very important, speaking on the topic of how democracy is at stake.

He actually went on to call out Ms. Grijalva for repeatedly and illegally shutting people down, referring to her time on the TUSD board, as well as her time on the Pima County supervisors.

He did also say that, quote, suppressing people when they disagree with you is a problem.

Okay.

Yeah, and so that was, we should say though, that it was the person who took the video and kind of finally gave the account was Scott Blades, who is a Grijalva supporter from here in Tucson, who happened to be at that event in Bisbee, and it was his phone that was grabbed and that sort of thing.

Yeah, Natalie finally on this.

What else should we know about Mr. Blades?

Anything in particular?

Yeah, he's the executive director of TIHAN, which is Tucson Interfaith HIV AIDS Network.

And he said in his post that Daniel has his number and he hasn't received an apology.

But he got his phone back.

But he did get his phone back, yeah, I assume.

Okay, Tim, we've talked a little bit about Project Blue on previous episodes of the Press Room.

I wanna turn to you first as it relates to that project at column you wrote about this 14% rate request by TEP, which the timing was not welcomed by most people.

How do you think that plays into Project Blue, the perception whether Supervisor Heinz will get his wish to have another vote on this?

Well, yeah, the chronology really matters in this.

What you have to know is that Project Blue, this mega data center project, will probably be one of Tucson Electric Power's biggest customers, if not their biggest customer.

So depending on how big it gets built, it could be from four to 10 data centers on the southeast side.

And it will be constantly just sucking in the energy.

So it's a big potential winner for their business.

And they haven't been, when the Pima County Board of Supervisors was discussing whether to sell the land to the Project Blue developers and to pass a development plan agreement.

TEP was there to answer questions.

They were, I would say, political.

They were not strongly advocating for it, but it's obvious that it benefits them.

So the fact that they then put out a press release and announcement saying that they are seeking a 14% rate increase in the hour or two after the vote came in the way they wanted it, just, well, as I said in the column, jaws dropped among everybody who was watching this because it looked like they waited till they got a favorable vote in the Board of Supervisors and then announced this negative news for the customers, which is this huge rate increase.

From a PR standpoint, it didn't seem like a company or utility that's as experienced as TEP is.

Yeah, I mean, or it's either they messed up and the left hand doesn't know what the right hand was doing, which is what they say, or at worst, it was an extremely brazen act.

But I don't think that was probably it.

And so then Matt Heinz, the supervisor who had voted yes in a three to two vote, let's remember, so his was one of the deciding votes said that he would like to reconsider their decisions, which theoretically could mean it could be rejected instead of passed.

He has since learned that a contract such as the sale of land can't be reconsidered like that, just by asking.

The development plan vote could be, but theoretically, it could subject the county to liability.

I personally question how much liability there could be over two weeks of 4th of July weekend and all that stuff.

But the threat is there.

So now it goes on to the Tucson City Council.

Yeah, so Katya there's talk that the Project Blue, at least the folks behind it are saying it's water neutral, but with data centers, water is really a concern.

So that's a big environmental concern.

I need you to cover some environmental stuff.

What stands out to you about that potentially?

So I believe it is a little unclear about just how much water they will use initially.

They have made promises, they being Project Blue, Buell Infrastructure is the developer of the project, that they will construct an 18 mile purple pipeline that is for reclaimed water use and moving forward, they will only use reclaimed water.

But again, we're in a drought just maybe a few weeks ago, Pima County issued a drought warning.

And reclaimed water of course is drinking water in the future.

That's where we're going with.

So it has only been for golf courses and stuff in the past, but now we're moving toward actually drinking it.

So it's not really something that we wouldn't use anyway.

And if I can add the Arizona Department of Environmental Quality has been really pushing for studies and receiving funding to further the research and practice of drinking reclaimed water.

Yeah, Natalie not to put you on the spot with an opinion, but I'm curious how this could affect the perception of TEP.

And also because in the past weeks and months, we've heard about is the city of Tucson gonna try its own utility as opposed to using TEP.

Any thoughts about that as far as how it affects Tucson?

I think that the public goodwill towards TEP is kind of dwindling.

I mean, the mayor even said it herself right at the meeting.

They have a monopoly on electricity obviously, and there's no one else you can turn to if your bill is too high and they just announced a 14% raise.

And it's also coincidentally time for their franchise agreement to be renewed and they need the public on their side if people are gonna vote for that.

People rejected it two years ago.

And I'll spare you the boring details of a franchise agreement, but I think to be honest, maybe it's that people get their ballot and then they see, TEP, I'm not voting for that, you know what I mean?

So I think that they have a lot of public outreach and education to do if they, I mean, assuming they come to an agreement and if they want it to pass, I think, maybe they have their work cut out for them.

Tim, does this make the idea of a city of Tucson utility any more possible, even though it was very, very scintilla chance there?

I mean, I think it makes it politically more palatable.

I don't think it makes it practically any easier.

It was always gonna be a difficult thing.

It should be remembered though that there were other alternatives that there were proposed other than just taking over the utility in the city of Tucson.

Certainly the city council members and the mayor are in no mood.

Steve, I just wanna mention a couple rate increases.

So 2021 TEP won a 6% rate increase, 2023 TEP won a 10% rate increase, 2025 they're asking for 14% increase.

If you keep going down, that would mean 18% in another two years, 22% in another two years.

I mean, this is, you know, I'm just saying, but they're, it's something that we're all feeling now.

We're starting to kind of get pushed against the wall on this.

Well, and Phoenix has seen the same thing with APS and there are corporation commissioners, at least one for sure who said, well, isn't it easier to just do 14% right now rather than six or seven every year?

And you kind of think, maybe it shouldn't be hiked every year, but that's above my pay grade.

Katya, let's move on to this sale of public lands.

Utah Senator Mike Lee had proposed including a provision of the federal budget would have required the sale of at least two million acres of public land over five years.

Response to it obviously was not that positive.

What's the progress on it now?

We're hearing that it's out, but is it out for sure?

This is definitely a will they, won't they kind of situation.

You know, once the provision was found to be flawed in terms of it violated the Senate parliamentarian found that it violated the Byrd rule, spark notes version of the Byrd rule is it excludes any extraneous reconciliation legislation.

So for example, selling all public lands, that sort of thing with that, once that was out there, Senator Lee took to X formerly known as Twitter and he said that he was going to revamp his provision among those changes.

He said he would completely cut out the forest service, significantly reduce BLM land that would be sold.

However, if you take a look, for example, we're in Arizona, Arizona is still on that list, Montana is still exempt from that list.

Okay, so what were the spots, especially in Southern Arizona that people were really concerned about?

Yeah, so I'm gonna backtrack a little bit.

I think what really caught the public's attention was I will credit the Wilderness Society for putting together this map.

And it just really showed you where these parcels of land were eligible.

So for example, we saw in Arizona, Madera Canyon, Mount Lemmon, Sabino Canyon, Aravaipa Canyon, Superstition Mountains, all these areas, although they are not specifically wilderness areas or National Monument areas or a National Park, they're right there.

They're right next to those places that people enjoy.

Yeah.

Yeah.

Yeah, I mean, it was really, the parliamentarian thing is what really turned this as Katya was saying.

And so, well, actually though it's true, the wilderness society map is what caught everybody's attention.

And it was both accurate, but also kind of misleading in a way for, in the sense that it made one think that like, all this area in the West could be sold.

I mean, under the terms of the proposed law, could only have been a small portion of that.

But I mean, a place like Sabino Canyon, which has land and flat land, some of it, right at the entrance there near a city, would certainly be a place someone would wanna buy and put up housing, which is what this land is supposed to be for.

Now we don't cover Utah specifically, but it's in our region.

So I know Mike Lee's extremely conservative, but don't most people live in the West because they love the natural resources and the environment?

Would it surprise, it's kinda surprising that Mike Lee, as conservative as he is, would be leading this kind of thing.

I'd think he'd wanna protect the lands in Utah.

I mean, I think there are a lot of people, Republicans and Democrats who wanna do this, but there's also always been this anger that the federal government controls so much of the state land.

I mean, among other effects, property taxes, the property tax revenues are much smaller because we can't tax all this land that nobody owns or that the federal government owns.

So there's many other reason people want the states or cities or whatever to have jurisdiction over this land.

Yeah, Katya your final thoughts on this?

What do you think's next?

I guess we'll find out next week when they vote on the reconciliation bill.

However, I will add again that the land that's being proposed, for example, one of the arguments is that if we open these lands up that are eligible, we can put housing because we're in a housing crisis right now or open them up to mining.

Just one example of that is say they do decide to sell off the land that is by Mount Lemmon, the base of Mount Lemmon, Sabino Canyon area.

So I would ask people to look at the property value of those homes in those areas and then consider would low income housing fit in those areas?

Yeah, not fixing the problem of affordable housing with this plan.

Last topic, I wanna talk about more than 15 house members signing a letter to the Senate saying they wouldn't support changes that would in fact lead to more Medicaid cuts in the Senate.

And Tim, for some people it's ironic to see Congressman Juan Ciscomani's name on there because he initially said he was not gonna support the degree of Medicaid cuts of the house and the house shaved off slightly so it's not over 800 billion, it's a little under 800 billion.

Any irony to you that he would be part of this letter?

Well, for sure.

Okay.

Yeah, I mean, it is ironic that he would first object to Medicaid cuts, then accept them and then object to them again.

But the truth is there's a little nuance to it.

Ciscomani got dug in and helped prevent deeper cuts, especially as I understand it, as it pertains to the funding available for hospitals, especially rural hospitals.

And so again, as I understand it, he was pretty essential to sparing them from some cuts in the house version.

That doesn't mean that millions of people wouldn't be cut from Medicaid in the house version, but some specific ones that he wanted to avoid were avoided and are now back in the Senate version, which is probably what he's writing about here.

Natalie, I hope I'm not pulling back the curtain that much, but you're gonna be moving to New Mexico soon, a state that really relies on Medicaid coverage.

What do you make of all this?

The fact that this is gonna affect a lot of people, Congressman Ciscomani has a chance to vote against it, votes for it, and then writes a letter like this.

How do you unfurl all this?

It is a bit confusing and it's something that I have spoken to Congressman Ciscomani about myself.

And he is of the belief that in the budget, particularly the cuts will not be to essential services.

He said, I worked on exactly what he told me.

He said there are a lot of improper payments, a lot of waste, abuse, and in some cases fraud that will be cut.

And he is of the belief that people who need it will continue to receive Medicaid.

It's about a minute left, Tim, so that sounds a lot like DOGE language, doesn't it?

Waste, fraud, and abuse, that's the trinity, yeah.

Yeah, so it becomes one of those things where, what does it take, don't you need more government workers to figure out how much waste there is and then figure it out later as opposed to make these massive cuts?

I just wanted, a political question as we wrap up.

How does Ciscomani thread the needle on this and not offend conservatives but also get those swing voters that he's probably gonna need for reelection?

Oh, I don't know, I don't know if he does.

I mean, I've said before that it's a choice between who you wanna offend, whether you wanna offend somebody, if it was a primary election voter or a general election voter, and generally he's taken a tact that's gonna make him more vulnerable in the primary, more vulnerable in the general, less vulnerable in the primary.

Okay, Tim Steller of The Arizona Daily Star, Katya Mendoza, AZPM News.

Natalie Robbins, thank you and good luck.

It was great to have you all with us.

Stay tuned for more of the press from coming up.

We'll find out about the chaos at the state capitol.

Will a budget get done before June 30th?

Stay with us on The Press Room.

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Welcome back to The Press Room.

I'm Steve Goldstein.

There's been unprecedented conflict over the budget at the state capitol just a few days before the end of the fiscal year.

With me for a few minutes to put it all into context, a lot of pressure there is Jeremy Duda of Axios Phoenix.

Jeremy, thanks for being on The Press Room.

Thanks for having me.

Let's put this in context.

Obviously, we're taping on Thursday afternoon, so I'm not gonna go into what meetings could happen today, what votes could happen today or tomorrow.

How did we reach this point where Senate Republicans negotiated with Governor Hobbs, but House Republicans didn't?

How did we reach this stage?

It's kind of hard to say.

It's kind of an unprecedented situation.

I've never really seen anything like it down here.

Usually, we're used to seeing, since Katie Hobbs has been governor, we're used to seeing her kind of a raid against the Republicans, and you're kind of a unified front by the Republicans against her, which you would expect and divide a government.

This time, we've had some kind of discord between the Republicans and the House and Senate, and it's still kind of unclear how it got as bad as it did for according to the Senate.

They invited the House to budget negotiations with them and the governor in his office.

They say the House did not accept the House as not really given, House leadership as not really given an explanation for why that is, but eventually, the clock was ticking.

They came up with a budget deal.

There had been some disagreements between the House and the Senate about certain spending items, about pots of money they were going to give each Republican lawmaker for kind of the projects of their choosing, but it seemed like a relatively small amount.

The original Senate budget they negotiated with the governor was $17.6 billion.

The House budget, they passed unilaterally, was $17.3 billion, so it was not a lot of difference in terms of the dollar figure, but folks in the House were kind of pressing the issue that they thought it was too much spending, and everything kind of got deadlocked until we got a few days until away from a potential shutdown.

Over the years, there's been discussion because there are 30 senators and 60 members of the House that maybe the House, and this happens at the federal level as well, maybe the House is gonna be a little bit more conservative on the Republican side than the Senate would be.

Was there any indication going into the session that there were some more firebrands in the House that might make this process more difficult than in the Senate?

I wouldn't really think so.

There's plenty on both sides.

There's plenty of the Freedom Caucus got their factions in both chambers, and that's, especially in the House, that seems to be where a lot of the discord is coming from a lot of the opposition to more spending.

I would not have expected it to be worse in the Senate than in the House.

Both have a kind of veteran leadership over the House.

Steve Montenegro, a speaker, he's been around for a long time.

David Livingston is the Appropriations Chair who's been around for years negotiating budgets, who's very much taken a hard line on the spending issue.

What about the intra-party squabble aspect of this?

There have been some harsh words, I know things are stressful, but the Senate President Warren Peterson, even T.J. Shope, who's also in Senate leadership, did not have kind things to say about the House.

Do you think that's the kind of thing that is just in the heat of the moment and blows over, or could that linger?

I mean, it could linger.

I mean, Warren Peterson, Senate President, is a very conservative lawmaker.

He's been under a tremendous amount of pressure, taking a lot of heat from conservatives, explaining, calling him a RINO for negotiating this budget with the Hobbs Administration.

There definitely seems to be some bad blood.

That's the interesting to see how that affects the next year since, you know, Warren Peterson's running for Attorney General.

He's got a contested primary.

I have to see if there's some blowback from that.

And he certainly is kind of feeling the pressure based on what he said the other day on the Senate floor had some pretty harsh words for folks who don't want, who think they don't have to negotiate a bipartisan budget when you have divided government.

He said, lawmakers are being hoodwinked by charlatans and they need to end the chicanery, which is a much harsher language than we're used to hearing Republicans level at other Republicans in the legislature.

Well, there were some too who even had used the term that Senator Warren Peterson, the Senate President had become almost the adult in the room.

And John Kavanaugh, who both of us have covered for a very long time is always interesting but tends to be a lot more conservative.

He seems to be also saying, hey, this is practical.

This is how this works.

I don't think I would have expected John Kavanaugh to have said that a few terms ago.

So what are you making of sort of the powers that be in there?

Because it does seem like some of these senators are quite conservative yet they have been willing to work with the governor.

Did that surprise you at all that these are two of the leaders who then ended up saying, hey, let's get this done?

Not really.

I mean, they understand these are two people who understand how the process works.

John Kavanaugh, as you mentioned, very conservative lawmakers, been there for almost 20 years, been involved in budget making for most of that time, Warren Peterson, very conservative.

The budget is obviously not what they would like it to be.

It's not what it would be if you still had, Doug Ducey up in the governor's office or if Kari Lake had won a couple of years ago, but they understand the reality of the situation.

The reality is you have a Democratic governor and a Republican legislature.

Remember a couple of years ago during Katie Hobbs first, first year as governor, on her first budget, there was a lot of grumbling from legislative Democrats who thought she gave too much to the Republicans, didn't get enough in return.

And I kind of read the same thing.

People saying, myself included saying, well, you have divided government and you have to make a deal with the other side.

And that's just the way the system works.

If you want Democrats wanted a more democratic budget, they need to win the legislature.

If Republicans want a more conservative budget, they've got to win the governor's office right now.

They've got to work with each other and Warren Peterson and John Kavanaugh and so other folks very much understand that and are imploring their fellow Republicans to understand it as well.

Jeremy, about 30 seconds left, give or take.

Anything you've learned about Governor Hobbs during this process?

She's obviously gotten out the veto stamp a lot.

Does it say anything about how she's matured into the job at all?

Anything picked up on how she's handled this?

I mean, so she's helped the line.

She's put her foot down on vetoing the so-called continuation budget that the House Republicans sent over.

It definitely, I think, helps for her that Senate Republicans have pointed the finger at the House, the House Republicans saying, "Hey, you guys are the reason it's gotten as bad as it has."

We saw, you know, Warren Peterson's chief of staff put out an email last weekend and put on Twitter talking about, "Hey, we invited the House Republicans "to join us, they didn't."

And I think that has definitely helped the governor is that she has some backup from the right.

She has some backup from the Republicans.

It's not just her against legislative Republicans.

It's her and Senate Republicans against the House Republicans, which is a very bizarre dynamic, but it's been very interesting to watch.

That is Jeremy Duda of Axios Phoenix.

Jeremy, thanks as always for the update.

We appreciate your time.

Thanks for having me.

And that's all for this edition of the Press Room from the Radio Studios of AZPM.

We'll be back again next week with another edition.

I'm Steve Goldstein.