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ICYMI National Affairs: The Arizona Miracle

Government and Politics

September 22, 2022

From: Arizona Governor Katie Hobbs

The Arizona Miracle

GOVERNING PRIORITIES
When Ducey leaves office, writes Max Eden of the American Enterprise Institute, a major part of his legacy will include "cementing his state's position as the nation's leader in school choice."

Ducey views school choice as a way to increase the options available to families and to imbue the state education system's near monopoly with the discipline of competition. He also sees it as a means of boosting Arizona's economy by improving its workforce and attracting new residents and businesses to the state.

Another means of boosting the economy, from Ducey's perspective, is cutting taxes. When he entered office, he announced that he wanted the state's personal income tax rate, which stood at 4.5%, to be "as close to zero as possible." He started by indexing brackets to inflation, then chipped away at the rate with dozens of specific reductions. Finally, last year, he signed into law the largest tax cut in the state's history, which will achieve a flat tax of 2.5% within three years.

On regulatory policy, Ducey took a two-pronged approach. First, he put a halt to new rulemakings and eliminated old regulations, from restrictions on microbreweries to obstacles to apartment-sharing businesses. "My aim," said Ducey, quoting his personal hero Barry Goldwater, "is not to pass laws, but to repeal them." In total, he axed or modified more than 3,000 regulations.

AN ECONOMIC MAGNET
Arizona has also become a magnet for high-technology manufacturing companies, many of them leaving California. When Ducey became governor, the Arizona Commerce Authority (ACA) had fewer than a half-dozen "mega projects"?—?new businesses or expansions representing at least 1,000 jobs or $500 million?—?in the pipeline. Now, the ACA tells me there are 57 such projects, representing 73,000 projected jobs and $100 billion in capital investment.

During his last term in office, Ducey led state lawmakers in passing two major water bills?—?the first since Bruce Babbitt was governor in the 1980s. The bill he signed in May 2021 helps protect the quality and cleanliness of Arizona's surface water, while the one signed in July appropriates $1 billion to import water into Arizona, reuse current resources, institute conservation measures like drip technology for farms, and secure a de-salinization deal with Mexico. But again, as with housing, there is only so much government can do in this regard. Coping with water shortages is a function of both public and private investment; for Ducey and like-minded governors, the only real solution is a booming economy that attracts top employers and generates additional tax revenue.

AN ACTIVE EXECUTIVE
While there is no way to measure such things, I would venture to say that Ducey is the most successful governor in the United States today. When I asked him for the source of his ideas, he told me his family was apolitical, and that when he arrived at Arizona State University, he didn't consider himself a Republican or a Democrat. One day in the mid-1980s, he was watching Ronald Reagan on a black-and-white television in his dorm. "Do you like that guy?" a friend asked him. "I don't know," Ducey replied, "but I like everything he says." The friend handed him an issue of National Review and a paperback copy of Atlas Shrugged. In those early days, Ducey says he was also deeply influenced by Milton Friedman's PBS series, "Free to Choose."

Ducey's legislative achievements are, at least in part, testimony to his skill as a salesman. He comes across as a polite Midwesterner who uses tame language but also knows how to persuade. He won't take the bait when the media try to get him to bash political opponents. He doesn't sound like a talk-show host. He has a quiet, friendly single-mindedness about him.

GOVERNORS HAVE TO GOVERN
Under Ducey's watch, Arizona has become a kind of policy mecca for the states. One political strategist told me that if a controversial issue comes up at an RGA conference, someone inevitably asks, "what's Arizona doing?"