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PHOENIX (AP) — Arizona Gov. Doug Ducey on Monday called for tax cuts and fewer regulations on emerging businesses like Uber, an enhanced effort to cut red tape and licensing, and issued an explicit threat to cut state funding to cities and towns that boost minimum wages above the state minimum.
The Republican governor threatened to "use every constitutional power of the Executive Branch and leverage every Legislative relationship to protect small businesses and the working men and women they employ" to stop efforts to raise the minimum wage — "up to and including changing the distribution of state-shared revenue."
Ducey's threat comes six months after Attorney General Mark Brnovich acknowledged in a court settlement that a 2006 voter initiative that amended the state Constitution allows cities to raise their minimum wages.
"To me that borders on blackmailing, and I think it's unfortunate that Gov. Ducey feels that what voters intended needs to be curbed by his executive power," said Eva Putzova, a Flagstaff city councilwoman who backs a higher city minimum wage.
Flagstaff's City Council is studying whether to ask voters to raise the minimum wage but hasn't made a decision.
Shawn Aiken, a lawyer who represented the Flagstaff Living Wage Coalition in that case, said he "can't comprehend" the threat.
"Why would our governor penalize our citizens for exercising their right under the state Constitution," Aiken said. "It's stunning to think about a threat like that when the executive branch capitulated on the lawsuit."
Ducey said allowing cities and towns to raise wages would create "California-like chaos" — one of several times he mentioned California as a foil for his pro-business, lower taxes agenda.
The priorities laid out by the Republican governor in his second State of the State address also included a promise to cut taxes this and each year he's in office, but no details of how he plans to do so.
The governor also pledged to remain tight-fisted on spending, even as the state treasury swells with revenues as the economy rebounds and pressure mounts to restore cuts to government spending made following the Great Recession.
"Someone needs to be the voice of sobriety. So when they bring out the punch bowl, I will be here to say ... once again... Not on our watch," Ducey said. "On Friday, I will release my budget, and the big spenders and special interests aren't going to like it."
Still, the address was a stark contrast to Ducey's 2015 speech, which came as the Republican governor faced a $1.5 billion budget shortfall in his first 18 months in office.
The state's rainy day fund is maxed out at $460 million and by the time the new fiscal year begins on July 1 there is expected to be $555 million in general fund surplus. Only about $218 million is ongoing revenue, so one-time spending is likely. The state's budget tops $9 billion.
Ducey did call for some increased spending, an effort to cut future prison population growth by shifting some parole violators to a new community correction facility in the Phoenix area. That plan copies a pilot program in Pima County that has cut costs and repeat prison stays by getting drug abuse treatment for convicts.
"Let's give them a second chance so they stay clean and never end up back in prison," Ducey said.
That won the backing of some Republicans, including Rep. John Allen, R-Scottsdale, who said it was a good step to lowering incarceration rates.
"I think it's important to find a way to convert people from prisoners to citizens, and keep them out of the system permanently," Allen said. "And drug rehabilitation is going to be key to that."
Ducey also called for making the state's controlled substances database mandatory. Currently, doctors aren't required to report prescriptions they write for opiate drugs and addicts can doctor-shop and get multiple prescriptions. That's led to addictions.
Ducey also said he's creating a team a team of substance abuse experts, recovering addicts and health care providers to find the best treatment and care options.
The governor also touted his plan for a state police border strike force. That plan was announced late last year but still lacks details.
Ducey also wants to revamp the Arizona Commerce Authority and wrap in powers currently given to other economic development agencies so the state is speaking with one voice.
On education, he is asking the Legislature to focus more state money on college preparation classes, especially in low income schools where such classes are rare. He wants more money for the state's school building renewal fund and to use money in last year's school achievement district budget to allow charter and public schools to lower the cost of borrowing money to expand.
The governor faced pushback last year by proposing that privately owned charter schools be allowed to tap the state's credit to expand. But he's moving ahead with the plan.
He also plans to boost funding cut last year from technical high schools known as JTEDs. Those schools took a hit in last year's budget. He also hinted at increased spending for universities and community colleges, with details to come when his budget plan is released on Friday.
The governor also urged Democrats to join him in supporting Proposition 123, the plan to boost K-12 funding by using the state land trust cash, on the May ballot.
But there was no sign Ducey planned more wide boosts to school funding, something Democrats have been pushing for.
"Like the governor said, I hope it's just a first step," said Rep. Eric Meyer, D-Paradise valley, the House minority leader. "It moves us from 49th in per-pupil funding to 49th in per-pupil funding. And while it's not all about money, we can't hire teachers without money, we can't reduce class sizes without money and we can't bring technology and books into the classroom without dollars.
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