Ducey: Keep tax cuts, settle education lawsuit

Governor outlines goals with State of the State

Arizona Gov. Doug Ducey

Arizona Gov. Doug Ducey

PHOENIX (AP) - In his State of the State speech Monday, new Arizona Gov. Doug Ducey promised not to delay corporate tax cuts passed by previous legislatures despite a massive budget deficit.

He also said he wants to freeze new state hiring, settle a longstanding lawsuit over school funding and spend more money in classrooms.

Here are some of the items he named as goals for his administration Monday:

Hiring freeze

Ducey said he's freezing new state hiring as he moves to rein in government spending.

The action is needed to help cuts costs as the state faces a $1.5 billion deficit in the coming 18 months, he said. The action won't apply to hiring needed for law enforcement, child safety or other public safety agencies.

Ducey said the step also will help rein in government bureaucracy that he believes is too big. The action is one of several steps he's taking to help fulfill his campaign slogan to shrink a government.

Ducey says reining in the budget is his No. 1 priority.

School lawsuit

Ducey also challenged the Legislature, attorney general and school establishment to settle a lengthy legal dispute over school funding.

The state Supreme Court has ruled the Legislature shortchanged schools during the recession and a judge then ordered the state to boost funding by $331 million this year and similar amounts going forward. That judge is now considering back payments of about $1 billion. The sides are considering settlement talks.

Ducey said the court order is forcing either a constitutional crisis or a budget crisis and it is time to end it.

Classroom funds

Ducey said he wants the state's schools to spend more money in the classroom and less on support services.

The classrooms-first initiative Ducey announced Monday is part of a plan to shift state spending from support to actual classroom teaching.

Arizona schools spent 54 percent of their available operating cash on classroom instruction in 2013. The most recent state Auditor General's report shows that's more than 7 percentage points below the national average.

Schools in Arizona have higher energy, transportation, food-service, counseling and other expenses than the national average. But administrative costs are lower.

Ducey created a team to look at the state's school funding formulas to identify ways to get more money into the classroom.

Tax cuts

In addition to the corporate tax cuts, Ducey also called for income tax brackets to be automatically adjusted for inflation. He says that prevents an automatic tax increase if someone gets a raise that just keeps up with inflation but pushes them into a higher bracket.

Former Gov. Jan Brewer vetoed a bill making the annual inflation adjustment in 2013 because of its long-term effect on state revenue. Instead, she signed a one-time adjustment.

Ducey said the cuts were designed to put more life in the economy and businesses have planned for them. The cuts were passed during the recession and are being phased in.

Waiting lists

Ducey wants the Legislature to change the law to allow unused school buildings to be used by schools that have long waiting lists.

Monday's proposal would fulfill one of his campaign promises. During his election campaign, Ducey often said top-performing public schools had huge waiting lists and that needs to be fixed.

Ducey's proposal would allow regular public or charter schools to apply to use empty classrooms or entire empty schools.