By Andres Guerra Luz
The Cronkite School
Arizona leads the way in fostering a favorable environment for businesses to operate, Gov. Doug Ducey told audience members at the Society for Advancing Business Editing and Writing’s spring conference in Phoenix.
The second-term governor made the comments at a session on Friday titled “One-on-One with AZ Governor Doug Ducey,” during which Ducey sat down to speak with Arizona Republic state government and politics reporter Maria Polletta.
During the talk, the governor fielded questions from Polletta and audience members on a variety of topics, ranging from Arizona’s trade relationship with Mexico to economic development incentives, education funding and Arizona’s pro-life policies in light of recent state abortion laws.
Ducey focused on areas in which he said the state was excelling, saying that he didn’t think there were any in which Arizona lagged.
“I think we are leading in terms of business climate,” Ducey said during the talk. “When I look across the board in terms of policy … I don’t think there’s any category in which we’re falling behind. I think in many ways, you’ll see people try to replicate the policies that we have here in the state of Arizona.”
The comments come at a time when the state continues to grow and its fiscal position becomes stronger.
Over the past four years, Arizona has gone from having a $1 billion budget deficit to being projected to enjoy a $1 billion surplus by the end of the legislative session, Ducey said.
All the while, Maricopa County – the state’s largest county at an estimated 4.4 million people, according to the latest numbers from the U.S. Census Bureau – continues to be the “fastest growing county in the country for three years running,” he said.
When asked about areas on which the state is leading, Ducey pointed to examples like HB 2569, a new law that loosens Arizona’s occupational licensing restrictions to recognize licenses for out-of-state workers.
The law, which the governor signed in April, made Arizona the first state to establish universal recognition of occupational licenses.
“We want to make this the best possible place to live, work, play, raise a family,” Ducey told the audience. “I think you’ll see a flood of other governors try to match that type of legislation that passed on a bipartisan basis.”
In response to criticism about Arizona not investing enough in education, Ducey said he thinks the state needs to do more, but pointed to the $2.7 billion that has gone to K-12 education since 2015 and described some of the considerations involved in funding increases.
“As any business leader or owner understands, you just don’t write a blank check,” he said. “You try to determine where the needs are, where the return will be.”
Following the conversation between Polletta and Ducey, the floor was opened up to the audience for questions. Bernie Kohn, editor at large at Bloomberg BNA and a former SABEW president, asked Ducey about where the governor draws the line on giving companies tax incentives to attract companies.
While Ducey said he believes there should be no trade barriers, tariffs or subsidies on the national level, he said it’s a different story at the state level.
“I’m in a dynamic competition with other states,” he said. “Businesses make decisions, and if other states are going to do things or have tools in their toolbox, I can’t show up at the table unarmed.”
In the talk, the governor was also asked about Arizona’s ties with Mexico, which he said is the state’s “number one customer.”
Data from the U.S. Census Bureau show Mexico made up 34.2% of U.S. exports from Arizona in 2018, far exceeding the 9.6% for Canada, the second-highest trading partner in that category. Arizona’s exports to Mexico were $682 million per month from November 2018 to January 2019, according to March Arizona-Mexico Economic Indicators from the University of Arizona.
Ducey addressed rising tension between the U.S. and Mexico by qualifying a comment he made earlier in the year after meeting with President Donald Trump.
The governor said in April that he would support Trump if the president opted to close the border, but hoped that any closure would be “as short as possible,” according to an article Polletta wrote.
“I want to be crystal clear on this, I do not want to see our border shut down,” Ducey said during Friday’s talk. “Our relationship with Mexico is important. The importance to our economy is critical, along with theirs.”
The governor said that his comment last month came from “a standpoint of national security.”
“The president, the Department of Defense has a much wider view of what the situation is on the border, across the entire border,” Ducey said. “So I am going to put public safety and national security above avocados, all day long.”
He also said he supports efforts to reform the country’s trade relationship with Mexico, backing the U.S.-Mexico-Canada Trade Agreement “100 percent.”
“NAFTA is a rotary phone agreement, it was written 25 years ago,” Ducey said. “Our economy has changed dramatically since then and so has Mexico’s economy, so this is an improvement.”
Ducey came to the world of politics with an outsider’s perspective, he said, having graduated from Arizona State University with a degree in finance and being the CEO of Cold Stone Creamery before taking any role in Arizona’s executive branch.
He said he views his role as a politician not as someone who creates jobs, but someone who can create the right environment for job growth to occur.
“You know as business reporters that politicians don’t create jobs, it’s risk-takers and innovators,” he told the audience. “But what a governor can do is they can create the environment in which jobs can be created, and that’s what I want Arizona to lead the nation in.”
