Ducey says no spending sprees as he prepares for second term

Gov. Doug Ducey faces a far rosier budget situation than when we he first took the oath of office four years ago, but as he was sworn in for his second term, he made clear that he plans to hold the line on spending this year.

Following his swearing-in at the Capitol on Monday, Ducey recalled the budget deficit he inherited when he first took office in January 2015. Today, he said, Arizona has the biggest projected budget surplus in a decade.

Nonetheless, he warned against making many big plans for that money.

“We’re not going on a spending spree. We’re going to live within our means. We’re going to fulfill teacher pay raises, and we’re going to be better prepared for the next downturn so it doesn’t become a calamity,” Ducey said.

The Joint Legislative Budget Committee estimates that the state will have a structural balance of $200 million at the end of June, when the fiscal year 2019 ends, and a one-time balance of $900 million in 2020.

The governor last year approved the first round of what he pledged will be a 20-percent pay raise for all teachers in Arizona, a concession he made as the #RedforEd movement gained momentum and paved the way for a statewide teachers’ strike. The first half of the raises were part of the budget that Ducey and lawmakers passed in 2018, while the remainder are to be phased in by 2020.

Ducey’s comment about preparing for the next economic downturn may set the stage for a potentially major fight with lawmakers on both sides of the aisle. The governor wants to use $180 million to $200 million in revenue that Arizona can get by conforming its income taxes to the federal tax code, which would eliminate a host of deductions, to pad the state’s rainy day fund. But many Republican lawmakers view the elimination of those deductions as a tax increase and want to use the money for other tax cuts, while many Democrats want to use it for K-12 education funding.

The governor’s speech also focused heavily on another major issue that’s expected to dominate the upcoming legislative session: water.

Ducey said the states that draw water from the Colorado River are taking more than nature puts back. He compared the situation to 1980, when Arizona faced potentially severe water cutbacks and was forced to implement reforms. The result was Arizona’s Groundwater Management Act.

“For the people in this crowd and many across our state, I don’t have to spell out the parallel circumstances in which we find ourselves today,” Ducey said. “It’s going to mean rising above self-interest, and doing the right thing. It means taking the action our past and future generations demand.”

In several parts of his speech, Ducey struck a bipartisan tone. He noted that two of the other statewide officials sworn in at Monday’s inauguration ceremony – Secretary of State Katie Hobbs and Superintendent of Public Instruction Kathy Hoffman – are Democrats, and said Arizona’s voters made it clear that they want all sides to work together to solve the state’s problems.

“Today, I recommit to be governor for all the people. Civility and collaboration will carry us forward. This isn’t Washington, D.C. Here, we know each other. Name-calling and game playing don’t work. Good faith and good will, do,” the governor said.

Attorney General Mark Brnovich and state Treasurer Kimberly Yee, who was one of three new statewide officials sworn in on Monday, both spoke of the opportunity their families have found in America.

Yee said her grandparents came to the United States from China around the turn of the 20th century, at a time when Chinese immigrants referred to the country as “Golden Mountain” for the opportunity and prosperity it offered. Her maternal grandfather ran a grocery store in Phoenix where all nine of his children worked after school, while her paternal grandfather ran a hand laundry in Pittsburgh.

Yee said her parents told her that she could be anything she wanted in America. And those promises were realized on Monday, as she was sworn in as Arizona’s first Asian-American statewide elected official, as well as the first Chinese-American Republican woman elected to statewide office in U.S. history.

“I am blessed, truly blessed, to live in the greatest country in the world, the United States of America, Golden Mountain, where everyone can aspire to truly achieve the American dream,” said Yee, a former state senator.

Brnovich spoke of his mother’s decision to escape the communist dictatorship in Yugoslavia by coming to America about 50 years ago. He said his family’s history gives it a unique understanding and appreciation for the importance of freedom and the U.S. Constitution. He said America lives by the rule of law, without which constitutions, such those in Venezuela or the Soviet Union, mean nothing.

“One of the things we should celebrate in this country is our laws are not just words on paper. Our Constitution has to mean something. And this applies to every individual, regardless of what office they hold in this country,” he said.

Brnovich recalled some of the highlights of his first term as attorney general, boasting of prosecuting would-be terrorists, drug and human traffickers, and con artists who fleece senior citizens. He said the Attorney General’s Office on his watch returned a near-record $60 million to individual consumers. And he said he spoke of his lawsuit against the Arizona Board of Regents over what he describes as unnecessarily high tuition costs.