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Arizona Governor Calls for Tax Reform in State of the State

Dated Jan. 13, 2021

SUMMARY BY TAX ANALYSTS

Arizona Gov. Doug Ducey (R) announced in his 2021 State of the State address his plans for tax reform to assist taxpayers during the COVID-19 pandemic and to incentivize individuals and businesses to relocate to Arizona from states with higher taxes.

Governor Ducey Delivers State Of The State Address, Outlines 2021 Priorities

PHOENIX — Governor Doug Ducey today delivered the State of the State address in a live broadcast to the opening session of the 55th Arizona state legislature and the people of Arizona. The Governor outlined his vision for 2021, focusing on the continued fight against COVID-19, the distribution of the vaccine, prioritizing K-12 education, creating jobs and helping Arizonans who have been impacted by the economic consequences of the pandemic.

Highlights from the Governor's 2021 State of the State Address:

Honoring Our Medical Professionals And Lives Lost

“We must be hopeful for the future — but we cannot forget the challenges we face in the immediate. The nurses and doctors, tired and exhausted as they work overtime to save lives. The Arizonans who are grieving loved ones lost. We must all do our part, by doing what we know works: Following public health, wearing a mask, and practicing personal responsibility. With resilience and compassion, we move forward, allowing nothing to get in our way, and showing in the end the best kind of unity there is – the unity of caring about one another.”

Vaccine Distribution

Last week, the Governor announced the state launched a 24/7 vaccination site at the Arizona Cardinals Stadium, located in Maricopa County. The Governor said during his address:

“ . . . we need to work faster. So now, even more resources will be brought to the fore. At my direction, the state has launched a 24/7 vaccination site at a large and notable location: State Farm Stadium, home of the Arizona Cardinals. Everyone needs this vaccine. And the sooner we all receive it, the more quickly we can get on with life as it should be.”

Continued Economic Recovery

Arizona went into the pandemic with a booming economy. This time last year, our state was in the top five for job creation and personal income growth — and it still is today. To ensure continued economic recovery, the Governor is committed to continue lowering taxes to ensure Arizonans and small businesses get to keep more of their hard-earned money. He said:

“My goal has been to make Arizona the best place in America to live, work, and do business – by letting Arizonans keep more of their hard-earned money. And having come this far, as other states chase away opportunity with their new taxes, why on earth would we ever want to follow their failed and depressing example?

“So I propose, in this session, we work together to reform and lower taxes and preserve Arizona's good name as a responsible, competitive state. On tax reform, let's think big.”

K-12 Support

The pandemic has taken a toll on Arizona's students and their education. The Governor will continue to work with community partners and education leaders to get students back in the classroom, and to narrow the achievement gap — which has grown due to distance learning. The Governor said:

“. . . it's time to get our students back where they belong. With every public-health professional, from Dr. Fauci and the CDC on down, saying that the safest place for kids to be is in school, we will not be funding empty seats or allowing schools to remain in a perpetual state of closure. Children still need to learn, even in a pandemic.”

The Governor highlighted the need for policies that protect parental choice, especially in light of the pandemic:

“By necessity during this emergency, many parents have been more engaged than ever in the daily education of their children. Quite a few have found temporary educational options they want to make permanent. It's their right. Public policy should keep pace, and empower them to make that choice.”

He also called for students falling behind to get the resources they need to catch up:

“There's been severe learning loss. Kids have missed out on so much. So let's put our resources on getting them caught up. Before COVID, we had an achievement gap in our schools. And it's only gotten worse. It's a problem detailed in a report just last week from one of the state's leading business organizations — with data showing the gap in student achievement often falls squarely down economic and racial lines.

“Distance learning has not been good for these students, who often don't have wi-fi or a laptop available. So starting now, let's direct resources to helping these children catch up. Summer school, longer school days, one-on-one targeted instruction, tutoring. It should be our goal that every student graduates high school on time and at grade level.”

Conducting Ourselves With Integrity

“In the United States of America, violence and vandalism have no place in the people's House. Perpetrators should be prosecuted to the full extent of the law. Let us condemn it and resolve that it never happens again. With that in mind, let us treat each other this year as one of our nation's greatest presidents, Abraham Lincoln, suggested: 'With malice toward none, with charity for all, with firmness in the right as God gives us to see the right, let us strive on to finish the work we are in.'

“And Arizona will do its part to bind up the nation's wounds. Here, we will conduct ourselves with integrity, and respect for each other and for the United States Constitution.”

Other Issues Deserving Attention

“In the coming weeks, legislators and I will have a lot more to talk over. There's general agreement, for instance, on COVID liability protection, so that a statewide emergency doesn't line the pockets of trial attorneys with frivolous lawsuits. There's also an opportunity for a modernized gaming compact that will bring in more revenue for our tribal nations and our state budget. Among other agenda items requiring our attention, let's work on broadband expansion . . . greater access to telemedicine . . . better roads and bridges . . . continuing to be a global leader on water innovation . . . better equipment and training for law enforcement . . . criminal justice reform . . . and guarding against wildfires, so we stay on top of that ever-present risk.”

View a transcript of the speech below. Read it in Spanish HERE [1].

Too see the ASL interpreted version of today's State of the State address, click HERE [2].

* * *

Good afternoon.

This past year we've all gotten used to doing business a little differently, and so it is today. We would have preferred our usual State of the State proceedings, but like so many other recent plans, it wasn't in the cards.

If there's an upside to the unique circumstances, it's that for this year's address we have more people than ever watching us live from across the state. What we've lost in ceremony, we've gained in citizen engagement. And I'm glad to have so many Arizonans listening, because there is much to report.

On Friday, I had the pleasure of meeting with all four legislative leaders — Democrats and Republicans. I want to thank Speaker Rusty Bowers, President Karen Fann and Leaders Reginald Bolding and Rebecca Rios for a serious and cordial exchange.

Our meeting was in stark contrast to the violent and destructive rioting at our nation's capitol, just two days prior. It was a sickening day in Washington D.C., that no American will ever forget. In the United States of America, violence and vandalism have no place in the people's House. Perpetrators should be prosecuted to the full extent of the law. Let us condemn it and resolve that it never happens again.

With that in mind, let us treat each other this year as one of our nation's greatest presidents, Abraham Lincoln, suggested: “With malice toward none, with charity for all, with firmness in the right as God gives us to see the right, let us strive on to finish the work we are in.”

And Arizona will do its part to bind up the nation's wounds. Here, we will conduct ourselves with integrity, and respect for each other and for the United States Constitution.

As for our work here, all agree the pandemic remains the most significant threat we face, and it will require vigilant attention for months to come. The risk is still serious, and so is the pressure on our hospitals and medical personnel.

Even so, we should take encouragement where we find it — starting with the breakthrough that will change everything. If last year was the year of the virus, this year will be the year of the vaccine.

2020 threw a lot at us. It was a time we'll all remember, but not very fondly. Yet in a time of trial, loss, worry, and disruption, we kept our bearings, and never lost heart. It's been one of those turns in life when perseverance makes all the difference . . . when we had to show just how resilient we are.

We've also had reminders — as if any were needed — of why medicine and nursing are so respected among life's great callings.

I think of Edmond Baker, a doctor and Army veteran who for years has cared for patients in the medically underserved parts of Arizona. Like so many other doctors, he has stayed on call and has never relented, so that no matter who you are or where you live, you can get the care you need.

Then there's Regina Villa, a nurse at Valleywise Health Medical Center. The mission, says Nurse Villa, “is truly to care for all people. It doesn't matter who you are.” It's been a time when COVID patients can't even see their families, and nurses can feel like the only friend at their side. Nurse Villa is one of the thousands who have met this crisis with courage, grace, and kindness.

And we can never overlook the incredible service of the Arizona National Guard. Consider just the single example of Will Smith, a medic who in 2019 came home from deployment in Iraq. With the pandemic, Will found himself back in a Blackhawk helicopter delivering COVID testing kits to tribal nations. That was Will's idea of a break from his regular job at Scottsdale Osborn Medical Center.

In so many ways, an extremely tough year brought out the best in us. And yet sometimes, despite all, our best wasn't enough. It's a vicious virus, taking some 10,000 lives in our state alone, and has left nothing but grief in its path.

With the vaccine, however, we aim to cut off that path as quickly as possible.

We started with vaccinations of medical personnel, since they're the ones we count on to deliver it far and wide. The logistics of putting the vaccine within reach of everyone will be complex and demanding. But Arizona is going to do it fast, we are going to do it right, and I assure you that we'll do it with a real sense of urgency and purpose.

Today, our state's largest county begins vaccinating teachers and cops. And while local public health officials are working hard, we need to work faster. So now, even more resources will be brought to the fore. At my direction, the state has launched a 24/7 vaccination site at a large and notable location: State Farm Stadium, home of the Arizona Cardinals.

Everyone needs this vaccine. And the sooner we all receive it, the more quickly we can get on with life as it should be.

From the very outset of COVID-19, there have been disagreements about how to deal with it. And in my fifty-plus meetings with the press, I've heard endless variations of the same question: Why not more and longer lockdowns? Why not more aggressive lockdowns? Schools, businesses, parks, weddings, funerals, church services — why not ban all gatherings and just lock everything down?

It's a question that only makes sense if you forget about everything else — all the other troubles that lockdowns set in motion. The rest of life doesn't stop in a pandemic, least of all our basic responsibilities. People still have bills to pay, children in need of schooling, businesses to run and employees who depend on them. There are lots of men and women who don't have the option of remote work and don't receive uninterrupted direct deposits. To make a living, they have to show up somewhere. And if the doors are closed, then at a certain point they are never going to open again.

If we're really all in this together, then we have to appreciate that for many families “lockdown” doesn't spell inconvenience; it spells catastrophe . . . zero income, inability to make a payment, eviction, foreclosure, and real personal anguish.

Often these past ten months, likewise, I met in this office with public-health experts who were describing the broader impacts of COVID-19, beyond the disease itself. Opioid abuse, alcoholism, addiction, mental-health issues, the sheer loneliness of isolation, suicide: there has been no daily count of these human costs, but they are real and they are devastating. And extreme measures by well-intentioned people have unintended consequences that actually do far more harm than good.

We never did a “lockdown” in Arizona. We were targeted and thoughtful. So some have asked: Why not end the public health emergency? It's simple . . . Because we are in a public health emergency. I've been entrusted by the people of Arizona with this responsibility. I'm not going to hand over the keys to a small group of mayors who have expressed every intention of locking down their cities.

And by the way, look at the experience of the other states that did lock down. What do they have to show for their strict mandates and orders? They're still dealing with the worst of it. Just as we are.

I'm well aware that taking the measured, steady, responsible approach will continue to invite criticism from all directions that we're doing too much or not enough. The critics can say what they want, but the path I've outlined is the right path for Arizona.

Here's the short of it: Arizona has taken the measured course, and all the same strengths that carried us through our worst days will carry us forward. All fifty states are focused now on saving lives, distributing the vaccine, and adding jobs. And in meeting these challenges, no state is better prepared than Arizona.

In this new session, the Legislature and I have some big pieces of business to complete. And I'll soon be sending the details of my proposals for 2021. But today, I know that many Arizonans are especially concerned about their kids and about their jobs, so let me begin there.

It's been a small mercy of this pandemic that the virus is least likely to harm our children, although there are exceptions. Of course, their teachers are a different matter, and that's why we're making sure that teachers receive the vaccine as quickly as possible.

Across our state, students have been kept out of their classrooms for long enough. They've lost out on childhood experiences that can't be duplicated on a computer screen. In strange, difficult circumstances, parents and teachers have done their resourceful best. But it's time to get our students back where they belong. With every public-health professional, from Dr. Fauci and the CDC on down, saying that the safest place for kids to be is in school, we will not be funding empty seats or allowing schools to remain in a perpetual state of closure. Children still need to learn, even in a pandemic.

By necessity during this emergency, many parents have been more engaged than ever in the daily education of their children. Quite a few have found temporary educational options they want to make permanent. It's their right. Public policy should keep pace, and empower them to make that choice.

But still, other kids have fallen behind. There's been severe learning loss. Kids have missed out on so much. So let's put our resources on getting them caught up. Before COVID, we had an achievement gap in our schools. And it's only gotten worse. It's a problem detailed in a report just last week from one of the state's leading business organizations — with data showing the gap in student achievement often falls squarely down economic and racial lines.

Distance learning has not been good for these students, who often don't have wi-fi or a laptop available. So starting now, let's direct resources to helping these children catch up. Summer school, longer school days, one-on-one targeted instruction, tutoring. It should be our goal that every student graduates high school on time and at grade level.

This is consistent with the education innovation for which Arizona is known. At the heart of that movement is the idea that every child, regardless of background, is entitled to a great education and all the opportunities that come with it.

Our independent spirit, after all, is one reason why so many people feel drawn to Arizona. They see that spirit as well in our respect for hard-working taxpayers. And for Americans tired of living in states with high taxes, heavy regulation, low-growth, and fading opportunity, Arizona has become the destination.

And they're still coming to Arizona in 2021 because during the pandemic, we never took our small businesses or their workers for granted. As bad as things got, we're recovering fast. New businesses and residents have been added by the thousands. At this time last year, we were ahead of 45 other states in job creation and personal income growth. Today, we're still top-five. But some Arizonans are struggling. And it's got to be our priority to help them with a growing economy and more jobs.

Every year I've been governor, we've improved income taxes in the taxpayer's favor. We've simplified the code, lowered all rates, protected them against inflation, and eliminated an entire tax bracket. In all of this, we've proven that our government can fulfill every obligation, and answer the unexpected needs of a growing state, without raising taxes.

My goal has been to make Arizona the best place in America to live, work, and do business — by letting Arizonans keep more of their hard-earned money. And having come this far, as other states chase away opportunity with their new taxes, why on earth would we ever want to follow their failed and depressing example?

So I propose, in this session, we work together to reform and lower taxes and preserve Arizona's good name as a responsible, competitive state. On tax reform, let's think big.

In the coming weeks, legislators and I will have a lot more to talk over. There's general agreement, for instance, on COVID liability protection, so that a statewide emergency doesn't line the pockets of trial attorneys with frivolous lawsuits. There's also an opportunity for a modernized gaming compact that will bring in more revenue for our tribal nations and our state budget. Among other agenda items requiring our attention, let's work on broadband expansion . . . greater access to telemedicine . . . better roads and bridges . . . continuing to be a global leader on water innovation . . . better equipment and training for law enforcement . . . criminal justice reform . . . and guarding against wildfires, so we stay on top of that ever-present risk.

With remote working by many state employees, we also have the chance to further limit the size, cost and footprint of government. Let's truly “shrink” government, by eliminating unnecessary state buildings and saving taxpayer dollars, so we can prioritize areas of need, like educating our kids, taking care of our sick, and keeping our neighborhoods safe.

We can complete all this and more in 2021, and I am ready. Our whole state is ready to get back on a rising path. Through the trials of 2020, we kept our balance. We met every test. And even in an election year, we showed the best of our state's bipartisan tradition. If Arizonans are looking to this year with a feeling of accomplishment and optimism, it is because they've witnessed the strength of their fellow citizens.

Despite everything 2020 threw at us, in the face of a global pandemic, everyday Arizonans have demonstrated the true state of our state — from our frontline medical workers; teachers, moms and dads; public safety and first responders; small business people; election day workers; grocery store employees, and national guard — we've seen heroism, sacrifice, service and acts of kindness, large and small. The state of our state is not only strong — it's resilient.

So let us act in that spirit. We must be hopeful for the future — but we cannot forget the challenges we face in the immediate.

The nurses and doctors, tired and exhausted as they work overtime to save lives. The Arizonans who are grieving loved ones lost. We must all do our part, by doing what we know works: Following public health, wearing a mask, and practicing personal responsibility.

With resilience and compassion, we move forward, allowing nothing to get in our way, and showing in the end the best kind of unity there is — the unity of caring about one another.

Thanks for listening, and God bless.

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