- Associated Press - Saturday, January 7, 2017

PHOENIX (AP) - Gov. Doug Ducey spent his first year in office grappling with a huge budget deficit and the second focused on resolving a long-running school funding crisis.

On Monday, he’ll try to persuade the Legislature to build on what he views as successes by laying out a 2017 agenda that he promises will add more school funding and boost help to the state’s most vulnerable citizens.

He said in an interview in advance of Monday’s state of the state speech that funding for schools will be a key component while hinting that a big part of that will focus on teachers, whose pay is among the lowest in the nation. That’s despite an infusion of cash from Proposition 123, which Ducey championed and will funnel $3.5 billion in new funding to schools over the coming decade.

“You’re going to see us address this across the board on Monday and you’re also going to see a focus on our teachers in a way that will give us better results and better outcomes in the classroom,” Ducey said.

The governor was circumspect on what that will mean for schools. He’s under pressure to produce big results as he heads into his third year in office.

His focus on schools will help make education one of the top issues in the legislative session that starts Monday. Lawmakers dramatically slashed education funding during the recession and have been getting an earful from constituents who are upset about school spending in the state.

At the same time, Ducey will face pressure to deliver on tax cuts that he promised while campaigning for office, a vow that he’s scarcely addressed in the past two years.

Missing has been the big push to drive income taxes “as close to zero possible” that he promised during his 2014 campaign.

But the new House speaker may give him what he wants. Incoming Speaker J.D. Mesnard said last month that he might revive a failed effort from several years ago to collapse income tax rates and deliver the big cut Ducey promised.

“I’ve made it no secret that I’m interested in a single-rate simplified income tax system,” Mesnard said. “I think that’s conducive for those that want to one day want to go down the road of eliminating the income tax entirely.”

The state’s finances many not be up to that challenge. The Legislature’s budget analysts say there’s only a $24 million surplus available in an expected $9.9 billion state budget. Ducey has different numbers, and said he’ll be careful how he allocates spending in the budget year that begins July 1.

“We measure it differently and we present the budget,” Ducey said. “And where there is available spending we’ll either invest it in improving K-12 education, public safety or child safety, or we’ll cut taxes. But we’re not going to play with the numbers.”

Ducey is also likely to roll out new plans to address the opioid addiction crisis and prison recidivism.

“We also think we have a responsibility to citizens who need a second chance or are on the lower rung of the economic ladder, are affected by addiction or prison. And we want to see us reduce recidivism rates and provide better programs for people that are affected by addiction,” he said.

What that entails will be left to Monday, but last year Ducey pushed a new facility in Maricopa County to help low-level prison inmates reintegrate to society.

Helping with addiction will be costly, and he demurred on whether he would propose spending to provide new treatment options.

Ducey’s budget also will need to address what his own agencies argue are increased costs from a boost in the minimum wage approved by voters in November. The minimum wage went to $10 on Jan. 1, and Ducey and business leaders want the courts to overturn the voter-approved measure.

The state is exempt from having to pay its workers minimum wage, but government contractors that provide services to disabled and elderly residents have to find new money to pay their workers - many of whom earn less than $10 an hour. As a result, the state has had to come up with more money to keep the organizations afloat.

The court challenge that Ducey supports has put him in an odd position. He says the voters have spoken on minimum wage, but wants the courts to throw it out.

“We are going to respect the will of the voters, I’m going to have the agency heads follow the law, our office is going to follow the law,” Ducey said. “But we’re also going to present the facts where needed and there are some constitutional questions that are happening here, so that’s all that been done.”

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