Governor: Arizona Must Solve Deficit Without Tax Hike

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DALLAS — In his first state of the state address, Arizona Gov. Doug Ducey announced a hiring freeze, the firing of the state's lobbyist in Washington and other measures designed to overcome a $1 billion budget deficit in the 2016 fiscal year.

"With all the care and debate the people expect of us, and with as little delay or complaint as possible, let's put this budget in balance — and let's keep it there," Ducey told the Legislature in Phoenix Jan. 12.

While Ducey said he would work with lawmakers to cover shortfalls in the current fiscal year and the next one beginning July 1, he added that, "I am just not persuaded by appeals to raise taxes so that we can spend more."

Stopping short of calling for an end to the income tax, Ducey urged lawmakers to index the tax rate to the rate of inflation.

The governor, who was inaugurated Jan. 5, said he continued to support tax cuts made by previous legislatures. Ducey was scheduled to deliver his spending plan to the legislature Jan. 16.

"My budget doesn't just give the appearance of spending discipline," Ducey said. "It offers the reality of spending discipline — with decisions that are timely, real and permanent."

Ducey also announced a "Classrooms First Initiative" designed to put more money into classrooms.

"Right now we spend far too much on administrative costs - on overhead - and that's got to change," he said. "So this morning, I signed an executive order assembling a team of education and finance professionals charged with scrubbing every dollar in every formula in statute in order to identify ways to get maximum dollars into the classroom, where it can do the most good for our children."

The state Supreme Court has ruled the K-12 system was denied constitutionally guaranteed inflation increases for four years. A lower court is trying to decide how that money should be distributed.

"The court order is demanding money we don't have," creating a "fiscal versus constitutional crisis," Ducey said.

"I say to the Legislature, settle this lawsuit," he said. "It's time to stop paying lawyers and start paying teachers."

While promising to close the office of Arizona's lobbyist in Washington, he said he planned to hire an inspector general as "a watchdog for the taxpayer" who would also investigate corruption.

"This public advocate would be equipped with a badge and subpoena power to go in, ask the tough questions and be a watchdog for the taxpayers," Ducey said.

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Arizona
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