Ducey announces hiring freeze, efforts to shrink government

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By Mike Gertzman By Mike Gertzman
By Mike Gertzman By Mike Gertzman
By Mike Gertzman By Mike Gertzman
By Mike Gertzman By Mike Gertzman
By Mike Gertzman By Mike Gertzman

PHOENIX (AP) -- New Arizona Gov. Doug Ducey moved Monday to make good on a campaign promise to shrink state government, announcing a hiring freeze and promising new systems for cutting waste and inefficiencies in schools and state operations.

The Republican also promised in his first state of the state address to reject tax increases and not delay previously approved corporate tax cuts that have yet to be phased in.

Ducey took the steps despite a projected $1.5 billion state budget deficit in the coming 18 months, an amount that exceeds 10 percent of current spending.

"Instead of demanding more revenue from the people, I suggest we demand more fiscal responsibility from our government," Ducey said.

He said delaying planned tax cuts would be bad for business and go back on a promise that has helped expand the economy by bringing in more jobs.

"If we change our plans, they'll change theirs," Ducey said. "It's a high price to pay for going back on your word and that is why I say: Not on our watch."

Ducey also called for a long-running school funding lawsuit to be settled. The state Supreme Court has ruled that schools were shortchanged by the Legislature during the recession, and a judge then ordered the state to boost funding by $331 million this year and similar amounts going forward.

The same judge is now considering back payments of about $1 billion. The two sides are considering settlement talks and planned to meet on Monday with a panel of appeals court judges.

"Here's the short of it, elected leaders acted in good faith during the Great Recession to keep statutory commitments to education, while also keeping this state afloat," Ducey said. "And now the courts have given us a choice - between a fiscal crisis or a constitutional crisis."

Ducey drew the largest applause of his 30-minute speech when he criticized court decisions that interpreted a voter-approved law as requiring all school funding components to be increased each year, not just a portion that the Legislature funded.

"The words of the statute are clear. `And' means `and;' `Or' means `or,'" Ducey said.

Sitting just feet in front of Ducey were the five state Supreme Court justices who upheld a lower-court ruling disagreeing with his analysis.

Ducey spokesman Daniel Scarpinato said the governor is focused on the settlement, although he asked the attorney general in his speech to review the case law that led to the unfavorable decisions.

Three other major parts of Ducey's speech dealt with schools. One called for the immediate passage of a bill requiring a civics test before high school graduation.

Another proposal would eliminate waiting lists at the state's top-performing schools, a key Ducey election theme. Ducey proposed a new authority that would allow those top schools to use empty classrooms or schools.

"These are educational assets, funded by the taxpayer, meant to benefit our children, and they are going to waste," he said. "It's time to put these assets back to work."

Another component of that proposal would allow schools to use state resources to finance their expansions. That could include charter schools that are considered public schools but owned by private companies.

Ducey also said he believes state schools spend too much money on administration and support services and too little on classroom instruction. He said he appointed a team of educators and finance professionals to look at school funding formulas and identify ways the state can trim overhead.

House Minority Leader Eric Meyer of Scottsdale, who served on a school board for eight years, said schools have laid off teachers, support staff and others to cut costs, but the expense of maintaining buildings and getting students to school remain static.

"We've made those efficiency changes, and administratively we spend the least of almost any state in the country, so we're left with these fixed costs," Meyer said. "These are kind of re-hashing of old Republican policy talking points but not a lot of substance in how that's going to save a billion dollars in our budget."

At least one Republican questioned the amount of savings that could come from trimming schools' administrative costs and the number of empty school buildings available. Ducey said there are as many as 400,000 empty seats in the state.

Arizona schools spent 54 percent of available operating cash on classroom instruction in the 2013 budget year, more than 7 percentage points below the national average, according to the most recent state auditor general's report.

The remainder of the school money goes to administration, which is lower than the national average, transportation, food service, building maintenance and IT systems.

"I don't know that's really the case that there's a lot of empty school buildings out there," said Rep. Bob Robson, R-Chandler.

The governor has promised to provide more details when he releases his budget proposal on Friday.

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Raw video: Gov. Ducey state of the state address

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Gov. Ducey vows not to roll back tax cuts

PHOENIX (AP) -- Arizona Gov. Doug Ducey is vowing not to delay corporate tax cuts passed by previous legislatures despite a massive budget deficit.

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 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 rejected delaying the tax cuts in Monday's state of the state address. He says they 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.

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Ducey announces plan to shift school funding to classrooms

PHOENIX (AP) -- Arizona Gov. Doug Ducey says he wants the state's schools to spend more money in the classroom and less on support services.

The classrooms-first initiative Ducey announced in his first state of the state address 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 less.

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

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Ducey says no new state hires for state government

PHOENIX (AP) -- Arizona Gov. Doug Ducey says he's freezing new state hiring as he moves to rein in government spending.

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

Ducey says the step also will help rein in government bureaucracy that he believes is too high. 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 if his No. 1 priority.

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Ducey announces plan to cut school waiting lists

PHOENIX (AP) -- Arizona Gov. Doug 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 during Ducey's state of the state address will 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.

He's also proposing a plan to allow top schools to borrow from the state to pay off debt. He says lowering debt-service costs will allow more cash to be spent in the classroom.

Half the funding would be reserved for schools in low-income areas.

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Ducey wants school funding lawsuit settled

PHOENIX (AP) -- Arizona Gov. Doug Ducey is challenging the Legislature, attorney general and school establishment to settle a long-standing legal dispute over school funding.

Ducey called in his state of the state address Monday for all parties to be reasonable and come up with a settlement that is fair.

The state Supreme Court has ruled the Legislature shortchanged 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 and plan to meet with a panel of appeals court judges Monday.

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

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