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Arizona governor says state must save for rainy day

By JONATHAN J. COOPERJanuary 15, 2019
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Arizona Republican Gov. Doug Ducey, center, speaks during his state of the state address as he talks about Arizona's economy, new jobs, and the state revenue as Senate president Karen Fann, R-Prescott, left, and House Speaker Rusty Bowers, R-Mesa, right, listen Monday, Jan. 14, 2019, in Phoenix. (AP Photo/Ross D. Franklin)
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Arizona Republican Gov. Doug Ducey, center, speaks during his state of the state address as he talks about Arizona's economy, new jobs, and the state revenue as Senate president Karen Fann, R-Prescott, left, and House Speaker Rusty Bowers, R-Mesa, right, listen Monday, Jan. 14, 2019, in Phoenix. (AP Photo/Ross D. Franklin)

PHOENIX (AP) — Gov. Doug Ducey on Monday celebrated Arizona’s strong economy, new jobs and the state revenue that comes with it, but he said the state should focus on saving for the next economic downturn.

The Republican governor said his budget, set to be released later this week, won’t include much new spending.

Instead, he’ll look to more than double the state’s rainy day fund to $1 billion. That would help ensure Arizona can weather the next recession without the severe cuts to education, public safety and other services that followed the last economic downturn, he said.

“With revenue soaring, some have suggested loosen up, let the good times roll,” Ducey said in his annual state of the state address. “Ladies and gentleman: We’ve seen that movie before, and we know how it ends.”

A week into his second term after being re-elected handily last year, Ducey spoke to a joint session of the Legislature in a House of Representatives chamber crowded with lawmakers, their families and guests. He did not unveil grand new priorities during his second term, preferring to use his bully pulpit to emphasize themes he’s long pursue — a water deal, school safety, licensing boards and the expansion of shop classes in school.

The governor’s budget proposal will cover inflation increases and make “targeted investments,” including for police officers and counselors in schools, but he said it would be “light reading” considering the extra money Arizona has on hand.

Arizona has a projected surplus of more than $1 billion for the next fiscal year, but most of it is one-time funds that can’t be counted on to sustain programs with an ongoing cost.

Rep. Charlene Fernandez of Yuma, the Democratic leader in the House, said she appreciates that Arizona has a high employment rate.

“But what we’re not talking about is how many people are working two jobs just to make ends meet?” Fernandez said. “How many people in this state are homeless because they can’t rent a place to live.”

Ducey said that the state now owns the Capitol buildings free and clear a decade after they were essentially mortgaged to help get through the Great Recession, when plummeting revenue forced severe budget cuts and unusual gimmicks to get things in balance. The move was roundly mocked around the country at the time.

Arizona netted $1.4 billion in 2009 by selling assets and leasing them back. It’s now restructuring the debt so buildings in the Capitol complex are no-longer used as collateral, including the House, Senate and executive office buildings that house offices for the governor and Legislature. The Supreme Court, fairgrounds, library and archives, and the school for the deaf and blind also will revert to state ownership.

Ducey said striking a deal to conserve water is job No. 1 for the state Legislature, adding “everyone is going to have to give” as the U.S. West contends with a prolonged drought.

It’s a boring issue to talk about but is important to real people, especially in rural areas, he said.

“It’s an issue that deserves your focus and attention,” Ducey told lawmakers.

The federal government has set a Jan. 31 deadline for Arizona to reach a deal to conserve water or the agency will impose its own restrictions.

Ducey said he’ll push again for a school safety bill that would “put a cop on every campus that needs one,” hire more school counselors and improve the accuracy of background checks. It also would allow police or others to seek protective orders preventing someone from buying a gun if they pose a safety threat. It died amid opposition from gun-rights advocates.

Ducey suggested repealing three laws for every new one passed or including an expiration date. And he called on lawmakers to give voters a chance to repeal legislative immunity, which shields lawmakers from prosecution in some circumstances, following recent incidents of lawmakers invoking immunity during traffic stops.

“We are a nation of laws, not men,” Ducey said. “No one — not me, nor you — is above the law.”

He also renewed his aggressive attack on professional license boards that regulate professions such as barbering and cosmetology, calling the people who serve on them “bullies.” He said Arizona should recognize professional licenses issued in other states. The governor has long criticized the boards as a barrier to jobs.

Earlier, Democrats laid out their own priorities for the legislative session, noting the big gains they made in the November election. The Republican majority in the House has been cut to a 31-29 margin while Democrats won the secretary of state and superintendent of public instruction contests.

Democrats want to boost school funding, improve accountability for charters schools and expand access to Medicaid. They also want criminal justice and sentencing reforms to focus on rehabilitation over punishment and automatic voter registration.

“We are preparing for the inevitable day that we will be in the majority,” said Sen. David Bradley of Tucson, the top Democrat in the Senate.

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