The two Arizona Republicans who can’t be in the same room together barely missed each other in Tucson on Tuesday.
Gov. Doug Ducey and Treasurer Jeff DeWit both visited the Old Pueblo at a time when they are engaged in a fight for the heart of the state GOP. The resolution could be crucial to Arizona’s future.
Ducey was in town visiting a Tucson charter school, Alta Vista High School, as well as the SaddleBrooke Republican Club and a gathering of business leaders at Golden Eagle Distributors. Ducey and his surrogates are regularly pushing his $2.2 billion plan to use the state land trust fund to pay for increases in education funding over 10 years beginning in 2017.
After starting the morning in Sierra Vista, DeWit gave a luncheon presentation to the Pima County Republican Club and continued his critique of the governor’s education-funding proposal. He says it’s financially unwise because it threatens the principal in the trust fund, not just using the interest, and because other money is available to pay for education.
The issue and surrounding conflict has taken in all the state’s GOP players and is occurring before a backdrop of the high-stakes education-funding lawsuit. That suit argues the state owes $1 billion in back funding to K-12 education as well as an additional $300 million-plus per year, because the Legislature didn’t keep up with inflation as required by a ballot initiative.
The conflict has gotten personal. On Thursday night, DeWit said, he appeared at a function of the Arizona Federation of Republican Women and was told that he needed to leave before Ducey would enter the room.
This was just the latest in a string of ad hominem attacks by the Ducey camp on DeWit since he came out against the governor’s proposal on July 14. In August, a piece appeared on the conservative website Breitbart.com skewering DeWit thusly: “He’s willing to side with unions and liberals … in holding Arizona kids for ransom in order to defeat a conservative plan with strong support from Arizonans.”
The author, Lisa De Pasquale, was an employee of Sean Noble, the dark-money master who is a strong and apparently vindictive supporter of Ducey. Noble also was behind robocalls against Mesa Public Schools Superintendent Michael Cowan in February after Cowan put out calls and a letter to district parents opposing Ducey’s budget.
DeWit has also attacked Ducey. On Twitter, he said a tele-townhall by Ducey, held on Sept. 8, was “loaded with empty promises, misinformation, and fiscal irresponsibility.”
The Ducey camp’s campaign hasn’t just been negative. In addition to the town hall, Ducey has been meeting with officials statewide. And this week his camp has been busily promoting an article about his plan on the Forbes website. At SaddleBrooke, Ducey himself mentioned the Forbes piece during his speech.
This was an embarrassing stunt by Ducey’s team. The article in question, which called Ducey’s plan “an excellent solution to the state’s education funding problem,” wasn’t an article by a Forbes journalist or impartial expert. It’s essentially a blog entry by an ally.
The author is a Missouri lobbyist, Travis H. Brown, who comes from the same supply-side sect as Ducey — the one that seems to believe there is no problem to which cutting taxes is not the solution. He is also a supporter of the American Legislative Exchange Council and in ALEC’s August meeting, interviewed economist and supply-side guru Arthur Laffer onstage.
In other words, Ducey’s people, nationwide, support Ducey’s plan and are prepared to punish Republicans who don’t. Ducey himself seemed in no mood to compromise when I got in a few questions Tuesday.
“We’re the ones who’ve presented a plan and a funding source,” he said after the luncheon. “We look forward to working with anyone who wants to help us get that money to the classrooms.”
But there are other voices in the Republican Party pushing different directions. DeWit agrees that greater withdrawals could be made from the state land trust fund, but says they should be lower than the increases that Ducey proposes. Ducey proposes withdrawing 10 percent of the net asset value of the fund for five years, and 5 percent for another five years.
Instead, DeWit told me Tuesday, that number should not exceed 3.75 percent, which is still significantly higher than the current cap, 2.5 percent. This would only add about $50 million a year, DeWit conceded, arguing instead that the state should use its surplus to increase education funding.
DeWit, a career financial professional, laughed when I told him that Senate President Andy Biggs and Ducey are avoiding referring to this money as a “surplus,” calling it a “cash carry forward” instead.
“It is a surplus,” DeWit said. “We have the money to settle the suit. I don’t care what name they put on it, the money’s there.”
He noted that on Aug. 20, the Joint Legislative Budget Committee reported that at least $250 million of the current surplus “is likely to continue into ’16 and beyond.”
House Speaker David Gowan, who met with both DeWit and Ducey on Tuesday, and Biggs have also presented their own outline of a plan. Superintendent of Public Instruction Diane Douglas, like DeWit, proposes to use the surplus for teacher retention and other facets of K-12 education, but also wants to dip into the state’s rainy-day fund to come up with $400 million per year.
Why doesn’t Ducey want to use the surplus? My suspicion is that he prefers to use the surplus to continue cutting taxes — a commitment he made during the campaign. I hope not, because as I’ve shown before, Arizona already has low tax rates and needs more urgently to spend on its unmet needs than to keep cutting.
The intra-GOP conflict is a result of Republicans winning all the state offices last election cycle, state GOP Chair Robert Graham told me Tuesday.
“That makes it a little tense, but at the same time these are big officers,” he said. “When you have a bunch of smart people trying to solve a problem, ultimately what you come up with is the best solution.”
A compromise is evident — using some of the surplus and less of the trust fund than Ducey is proposing — but I can’t feel so assured they will reach it.
The Republicans with the best ideas — notably, using the surplus for education now — may not be able to prevail over those with the most powerful offices and the access to unlimited dark money for squelching dissent.
