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Doug Ducey Prepares to Lead Arizona Into the Post-Pandemic World

Given its location and the tax and deregulatory policies the governor has pursued, Arizona looks well-positioned for the economic recovery. The state still suffers one of the highest coronavirus caseloads, however.

Arizona Gov. Doug Ducey wearing headphones and speaking into a microphone for a radio broadcast.
Arizona Gov. Doug Ducey recently stopped by a Phoenix-area studio to share his views with the radio audience. (Darryl Webb)
It’s been 40 years but Doug Ducey still remembers the thrill when his high school hockey team made it all the way to the state championship. He says he now receives the same kind of adrenalin rush from leading the state of Arizona. “I feel like that every morning as governor, putting on my wingtips,” he says.

Ducey concedes that the post has provided less of a fun ride this past year. “You realize that crises and natural disasters are part of the job description,” says Ducey, a Republican. “Really, what you don’t have in mind is a natural disaster that hits all 50 states and the entire globe at once.”

He’s taken his share of knocks for the policies he’s pursued during the pandemic. But if 2020 was the year of the virus, Ducey believes 2021 will be the year of the vaccine. Ducey got his own shot earlier this month at a mass vaccination site set up at the football stadium in Phoenix, which has dispensed more than 500,000 doses. This week, he announced all residents over 16 are eligible for shots as of Wednesday. “I’m very much looking forward to the post-pandemic world,” he says, “but we’re not there yet.”

If the pandemic is a marathon — as indeed it has been — Arizona might still be around mile 24, Ducey says. While the end is not yet in sight, it’s clearly coming. Along with a number of other governors, Ducey this month decided to lift a number of restrictions on businesses and gatherings. He contends that his state is uniquely well-suited to take advantage of the economic rebound about to occur.

Ducey inherited a large budget shortfall when he took office back in 2015, but the state is now running a surplus. It was already big enough for Ducey to call for a sizable income tax cut — $200 million per year for three years — during his State of the State address in January. That was well before the feds decided to send Arizona $4.7 billion in direct aid as part of the latest stimulus package (along with $2.5 billion for Arizona localities). “He’s cut taxes every year, had a regulatory moratorium in place since day one, and cut hundreds of regulations,” says Glenn Hamer, who just stepped down as president of the Arizona Chamber of Commerce.

Arizona’s population has grown by a million people since the 2010 census. Under Ducey, it’s been a welcoming place for individuals and companies looking to relocate. He led the nation with a 2019 occupational licensing law that has since been copied in 10 other states. Arizona recognizes professional licenses issued in other states in nearly all cases, meaning that when people move to Arizona, their license comes with them. “He genuinely was ahead of the curve,” says Shoshana Weissmann, a senior manager at the conservative R Street Institute.

With roughly a quarter of all jobs requiring a license, that makes a big difference in terms of encouraging mobility. “The things he’s done have made a definite impact on people’s lives,” says state Sen. T.J. Shope. “My wife’s cousin moved here from Seattle and she got a permit to do a job in nuclear medicine in a day.”

Before the pandemic, Arizona ranked among the nation’s leaders in job and wage growth. The state unemployment rate is still close to 7 percent, due largely to job losses in leisure and hospitality. Fields including trade, transportation and utilities, however, are all employing more people than they were in February 2020. A state that struggled to recover once the housing bubble popped back in 2007 is now home to more jobs in manufacturing than construction, one sign of its increasingly diversified economy.

To the extent companies and individuals are ready to relocate from neighboring California or from more distant states, Arizona is well-positioned to receive them, thanks to its tax and regulatory environment, says Stephen Slivinski, an economist at Arizona State University. “All those policy actions help Arizona attract new workers, new businesses and new members of the population,” he says. “Coming out of the pandemic, I’m viewing Arizona as better poised to reap gains better than other states.”

ducey-02a.jpg
 

Ducey bumps elbows with state House of Representatives Minority Leader Reginald Bolding Jr. before a meeting at the state capitol. (Darryl Webb)


From Ice Cream to Policy Salesman

Like a number of his peers, Ducey came to the governorship after a long career in business, having co-founded the Cold Stone Creamery ice cream chain. Some governors with business backgrounds have done fine but others have failed, finding that legislators and the rest of government don’t necessarily jump upon command the way corporate underlings do.

Ducey brought a couple of advantages to the job that not all former CEOs have. For one thing, he served for four years as state treasurer, gaining a grounding in the state’s business prior to his first election as governor back in 2014. Also, Cold Stone Creamery is a franchise operation, meaning Ducey had to get buy-in from independent owner-operators all over the country before bringing ideas to market. “That background prepared me perfectly for partnership with the Legislature,” he says.

Ducey’s admirers describe him as level-headed and a good listener, not someone prone to making rash decisions. He’s considered a fair but demanding boss, seeking out as much information possible in every conceivable policy area. Shope, the state senator, describes Ducey as both well rounded and well grounded.

“He scolds me sometimes for not disagreeing with him enough,” Weissmann says. “He said, ‘I want you to be able to push back.’”

When Ducey took office, Arizona was facing a $1.5 billion shortfall, which he managed to close without raising taxes. “Something that doesn’t get covered is how efficiently he runs a state government that’s north of 10,000 people,” says Hamer, now the head of the Texas Association of Business. “In terms of the boring but important stuff of running government, this is a governor who runs a good, tight, customer-friendly government.”

Not everything Ducey touches has turned to gold. In 2018, Ducey had to pull the plug on Uber’s experiment of running self-driving cars on Arizona roads after an autonomous vehicle struck and killed a pedestrian. Ducey was also a big cheerleader for Theranos, the Silicon Valley startup that promised to revolutionize blood testing but now faces felony fraud charges

Ducey’s critics complain he had to be pressured to raise teacher pay substantially in 2018, following large-scale “red for ed” demonstrations. He also favors killing Proposition 208, passed last fall, which increases income taxes on top earners to pay for education. But the governor had previously championed Proposition 123, a ballot measure voters approved in 2016, which increased education funding by $3.5 billion over 10 years, settling the state’s long-running school finance lawsuit.

During Ducey’s tenure, Arizona has remained a hotbed for school choice policy. Last month, the state Senate passed a bill that would more than triple the number of K-12 students eligible to receive vouchers. “Gov. Ducey recognizes that not everyone learns the same way,” says Jake Logan, president and CEO of the Arizona Charter Schools Association. “He’s created a regulatory environment that’s made it easier for parents to find the best fit.” 

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 A budget surplus, income tax cuts and federal stimulus funds mean Arizona is ripe for economic recovery. (Darryl Webb)

 


The Arizona Approach

After Ducey took office, he made tending and repairing Arizona’s reputation one of his top priorities. Legislators had passed a number of controversial bills in prior years, including attacks on gay rights and SB 1070, which drew international attention in 2010 for requiring law enforcement officers to demand proof of immigration status from individuals they had reason to suspect were in the country illegally. The U.S. Supreme Court struck down parts of the law in 2012. “When he came into office, he wanted to do some reputational repair,” says Sen. Shope.

That involves not just passing good bills but blocking bad ones. “It’s not only the things you want to get done,” Ducey says. “It’s the things you say no to: ‘That’s not our issue,’ or, ‘We’re not going to allow that to get us off course.’”

Along with other governors, Ducey has pursued a de facto trade policy of his own, notably during the trade-skeptical Trump administration. Arizona’s largest trading partner, by a factor of four, is Mexico. Ducey has worked hard to cultivate relations with leaders of that country and the neighboring state of Sonora. 

Like any good salesman, he recognizes the cardinal virtue of keeping his best customer happy.

“The positive about the Biden administration coming in is that there’s no longer the threat of imposing tariffs for no good reason on our friends like Canada and Mexico,” Hamer says.

As president, Donald Trump updated NAFTA with the U.S.-Canada-Mexico trade agreement, which was ratified last year. Ducey credits Trump with slowing drug and human trafficking along the border down to “a trickle.” He worries that President Biden is conflating the immigration issue with border security. Over the weekend, he complained that “Joe Biden has broken our border.”

With companies including Palantir, Charles Schwab, Oracle and Hewlett-Packard all moving their headquarters out of California last year, Ducey also has his eye on another neighbor. “When I’m not doing trade missions in Mexico, I’m doing them in California,” he says. “Arizona is in a prime position to bring people and businesses to the state.”

Pandemic Criticism

Over the past year, Ducey has faced considerable criticism over his handling of the pandemic. He’s one of a relatively small number of governors never to impose a statewide mask mandate, although he allowed localities to do so last June. Still, Kate Gallego of Phoenix and other mayors complained that he went for months last year without even talking with them.

At times last summer and again as recently as January, Arizona was among the worst coronavirus hot spots in the world. Ducey dumped a team of experts from the University of Arizona and Arizona State University who warned against lifting the state’s stay-at-home order last spring, although he backed down amid criticism. Will Humble, a former state health director who heads the Arizona Public Health Association, has repeatedly complained that Ducey has failed to mitigate the spread of the coronavirus, allowing more people to die while waiting for a vaccine. “We have a governor and health director who don’t care,” Humble said in January.

Gov.+Doug+Ducey+weaing+a+mask+talks+to+an+Arizona+resident+sitting+in+a+car.


 

Ducey visited a vaccination event held at the Phoenix Municipal Stadium in early March. (AZ governor’s office)

 


Nearly 17,000 Arizonans have died due to COVID-19. The state still has one of the highest per capita caseloads in the country. Nevertheless, Ducey recently allowed restaurants and other businesses to operate at full capacity and ordered schools to offer in-person instruction to students who want it.

“Every state has had its challenges with the virus — it’s vicious and it’s unpredictable,” Ducey says. “Of course you have to listen to what people are saying, including your critics, but I wanted to make decisions that are the most effective. Our touch was targeted and measured and balanced.”

No governor has escaped criticism during the pandemic. Ducey has faced recall attempts both from conservatives who felt he impinged on personal liberties and progressives who complained his approach was not restrictive enough to combat COVID-19. Neither of those efforts got as far as the pending recall against his Democratic neighbor, Gavin Newsom of California.

Ducey knows you can’t serve as governor for six years without making enemies. In January, the state Republican Party censured Ducey for assuming “dictatorial powers” during the pandemic and for certifying Biden’s victory in the state last November. 

Ducey, who will be term-limited out of office next year, still has a lot he wants to get done. He’s focused on positioning Arizona and its economy for the post-pandemic world. His own party’s censure hasn’t fazed him a bit.

“It’s an action of zero consequence,” Ducey says. “It hasn’t affected a thing that we’re doing.”






Alan Greenblatt is a senior staff writer for Governing. He can be found on Twitter at @AlanGreenblatt.
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