Pointing the finger

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Have you noticed Doug Ducey popping off on Twitter recently?

He’s bashing Gov. Katie Hobbs for blowing through the surplus that Arizona had when he left office.

Meanwhile, Hobbs blames Ducey for setting Arizona up for financial failure.

But the truth of who to blame is always a little more nuanced than the politicians would have you believe.

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You don’t hear much from former Gov. Doug Ducey these days.

Since he left office at the start of 2023, the former governor has mostly kept a low profile, showing up to the occasional speaking engagement at a center-right organization and sporadically popping onto Twitter to do what former politicians do: post pics of said speaking engagements, root for the local sports team and acknowledge patriotic holidays.

But in the last month, the former governor has added another genre of post to his social media repertoire: tweets pointing the finger at his successor for tanking Arizona’s budget.

Ducey’s sudden bout of attention comes as Gov. Katie Hobbs is gearing up for a tough reelection, and in that sense, the tweets attacking Hobbs aren’t surprising. Ducey is the former chair of the Republican Governor’s Association, the campaign apparatus for Republican governors, and he was a big backer of Karrin Taylor Robson, who now has her eye on the Governor’s Office.

Plus, Ducey’s legacy is at stake.

While Ducey’s clapbacks at Hobbs have touched on a variety of issues — from his prized “universal” school voucher policy to his hallmark “flat tax” reform — the central theme of the shade-throwing is that Ducey did good stuff that set the state up for financial success, and Hobbs has squandered the head start he gave her toward sustainable, steady management of the state.

The Hobbs administration, meanwhile, argues that while Ducey left the state with a surplus, he set up policies — including that flat tax and massive school voucher expansion — that put the state on a course to go over a fiscal cliff after he left office. The cost of vouchers has skyrocketed since he left office, and his phased-in flat tax policy is only now reaching its full potential to blow a hole in the state budget.

The state is on track to spend more than it brings in next year.

And that’s without including any of the new spending that politicians will inevitably stuff into the budget.

So, who, really, is to blame for the big old hole that politicians have blown into Arizona’s budget?

Is it Ducey, for slashing taxes and ushering in an uncapped school voucher program that has cost way more than projections?

Or is it Hobbs, for wasting taxpayer funds and spending beyond her means?

Or is it possible that the answer is more nuanced than reflected in politicians’ angry tweets and hopeful campaign propaganda?

The case against Ducey

Ducey came into office in 2015 with a huge budget headache — a roughly $1 billion deficit brought on in part by the expiration of former Gov. Jan Brewer’s one-cent sales tax increase that helped Arizona get through the recession years.

So he slashed the government.

And those deep cuts — which included ongoing cuts to universities and community colleges that still affect their budgets today — set his administration on a path toward small but steady budget increases for his remaining seven years in office.

But in his second term, Ducey pushed through two policies with steep financial implications that were not entirely clear at the time — either intentionally or otherwise.

The first was universal school vouchers.

When lawmakers were debating allowing every student in Arizona to get a school voucher back in 2022, they estimated that by the time the program was fully operational, it would cost Arizona an extra $125 million per year.

This year, vouchers are on track to cost the state nearly $1 billion — or roughly 800% more than originally estimated.

One of the reasons budget projectors got it so wrong is that they didn’t predict how many private school kids would take advantage of the program.

Part of the analysis about how much universal vouchers would cost was that, each time a student switched from a public school to a voucher-funded private school, it would actually cost the state less.

But vouchers didn’t save us money by lowering per-pupil funding for public schools, as Ducey and his allies predicted it would. Instead, a huge portion of the new voucher recipients were already attending private schools (or homeschools) to begin with — now taxpayers are just paying that tuition.

The second Ducey budget-busting policy was the “flat tax.”

In 2021, Ducey championed legislation that replaced the state’s graduated personal income tax, which ranged from about 2.59% up to 4.5%, with a single flat rate of 2.5%.

Now, distilling what impact that has had on the state budget is a tricky business.

Ducey and his allies would say that the low, predictable tax rate has brought in jobs, and therefore helped to increase revenues, which have gone up since the tax rate was reduced.

Democrats, on the other hand, say it cost the state billions in tax revenue that would have otherwise been collected — leading to the shortfall that Hobbs had to deal with during her first year in office.

In fact, both are probably true.

But it’s definitely true that we would have more money had we not instituted a flat tax.

The case against Hobbs

There’s no denying that Hobbs came into office with a budget surplus and went on a spending spree.

But it is debatable who’s to blame for that.

Upon taking office in 2023, Hobbs had her own list of pricey spending priorities, and a plan to pay for them by eliminating the ballooning cost of Ducey’s universal school vouchers.

Of course, vouchers didn’t get eliminated — and to pass any budget at all, Hobbs had to gin up bipartisan support by agreeing to huge “slush funds” for lawmakers to dedicate a portion of the state budget to their own pet priorities.

In 2023, lawmakers dedicated roughly $2 billion in funding to their pet projects.

But not all of those forecasters actually got funded — before many of those projects could even get started, lawmakers realized they overspent and had to significantly trim the budget the next year.

And just as Ducey’s cuts during his first year in office had a ripple effect that set him up for increases over the remainder of his term, Hobbs’ overspending during her first year (with the help of Republican lawmakers) put the state in a financial hole that her administration is still trying to dig out of.

And there have been other blemishes on Hobbs’ financial record worth noting.

This year, Hobbs had to ask lawmakers for an emergency supplemental appropriation of $120 million just to keep the Division of Developmental Disabilities from going broke.

GOP lawmakers blamed Hobbs, saying she continued the federally funded Parents as Paid Caregivers Program without legislative approval, forcing lawmakers to come back and fund the program.

Hobbs won the political battle, but not before Republican lawmakers got their jabs in about her shoddy budget skills.

And while the supplemental appropriation solved the imminent problem, policymakers will have to go back to the drawing board this year to solve a new projected $160 million shortfall in the program.

Not to mention, Hobbs’ first budget director, Sarah Brown, resigned after just two years on the job. While that didn’t have any actual financial implications (other than perhaps the cost of a posting on jobs.com), it added to the narrative that Hobbs is bumbling her way from one financial crisis to another.

However, these days, Arizona can coast through some overspending thanks to the $1.6 billion tucked away in our “rainy day fund.”

Not only did Ducey make stuffing that fund a priority, he also pushed lawmakers to increase the amount the state can legally keep in that fund from 7% of annual revenues to 10%.

Blame Trump

While governors rightly take a lot of credit and blame for their state’s finances, there’s another consequential player in this mix: the feds.

President Donald Trump’s HR1, AKA the “big beautiful budget,” will cost Arizona around $500 million per year over the next three years, per budget analysts. That’s largely lost revenue as Arizona conforms to federal tax changes, and added costs to the state as Arizona takes on increased costs and administrative burdens from programs like SNAP and Medicaid.

But on that front, there’s a sliver of hope. HR1 includes $10 billion to reimburse states for border security costs since 2021.

Hobbs submitted a request for a one-time $750 million reimbursement.

SNAP judgment: While other governors rush to secure emergency aid, Gov. Katie Hobbs hopes the “nonprofit social service community” will step in to help the nearly 900,000 Arizonans who will lose SNAP benefits when the federal government stops paying for them next month, Capitol scribe Howie Fischer reports.¹ Virginia’s and Louisiana’s governors declared a state of emergency in preparation for the SNAP cuts, while Colorado’s governor asked lawmakers for $10 million to cover the gap. Hobbs said Arizona doesn’t have the money.

“I’m not sure what resources (other governors are) coming up with,” she said. “We don’t have those resources.”

Justice, off duty: The official reports on how two off-duty Phoenix police officers handled the fatal beating of 22-year-old Rafael Montoya outside a downtown Phoenix club in March contradict cell phone video of the killing, the Republic’s Robert Anglen and Elena Santa Cruz report. A security guard sucker-punched Montoya as he was restrained, and officers Daniel Dominguez and Anthony Goldsmith did not immediately render aid or detain the security guard. They were only issued written reprimands for not turning on their body-worn cameras. The family of Montoya, who has a one-year-old daughter, filed a legal claim against the City of Phoenix.

Undelivered: The U.S. Postal Service stopped funding a Phoenix mailroom that gives homeless people a place to receive mail like medication, job applications and ballots, arguing they can use a nearby post office instead, ProPublica reports. But unlike regular post offices, the Keys to Change mailroom doesn’t require a government ID, which many homeless people don’t have. Meanwhile, HUD is set to cut its Continuum of Care grants, and housing advocates say the loss of funds could cost Arizona 3,000 long-term beds for homeless people, per KJZZ’s Katherine Davis-Young.

Sinema strikes again: While expressing support for a new data center, former Sen. Kyrsten Sinema told a Chandler commission she’s “working hand-in-glove with the Trump Administration to ensure American AI dominance,” the Daily Independent’s Jason W. Brooks reports. Sinema threatened federal preemption if Chandler doesn’t approve the site plans. Now, it’s up to the Chandler City Council to make the final call.

We won’t threaten to preempt your local government if you don’t subscribe, but we do know a zoning guy.

Bonding time!: If you’re a Maricopa County voter, today’s the last day to mail in your ballot for the Prop 409 election to decide whether property owners finance a $900 million bond for Valleywise Health. You can drop off your ballot at a ballot drop box until November 4, and you can find the locations and hours of operation here. The Republic’s Stephanie Innes has a super thorough explanation of the measure here, and you can find our previous explanation of what the hell a bond is here.

In other, other news

Arizona Republican Chair Gina Swoboda said she’ll step down from her post in January to run for CD1 (Ignacio Ventura / KJZZ) … State schools Superintendent Tom Horne is asking the State Board of Education to ban DEI (Mitchell Koch / AZFamily) … A “cannabis wellness” shop in Prescott fears going out of business after Attorney General Kris Mayes banned smoke shops form selling hemp derived THC products (TJ L’Heureux / Phoenix New Times) … The Salt River Pima-Maricopa Indian Community is asking its members what they think about changing the tribe’s name (Gabriel Pietrorazio / KJZZ) … And Hank joined KJZZ’s “The Show” yesterday to talk about eating magic mushrooms.

A few weeks ago, a Scottsdale bakery went viral over a bad review.

An influencer tried to score free pastries from JL Patisserie in exchange for a glowing review. After the bakery said “non merci,” the influencer showed up anyway and told her followers the pistachio flavoring in her croissant was “fake.”

Owner Jenna Leurquin fired back in a now-viral video, outing the influencer for the blackmail while showing off a tub of authentic Italian pistachio paste. The video currently has 8.3 million TikTok likes.

@jlpatisserieI will forever dedicate my time and energy to continue to make it right to the people who value my teams hard work and have respected us and supported us since day one. #review #influencer #bakery

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Famous food influencer Keith Lee recently made the trip to Scottsdale, per 12News, and declared JL Patisserie “one of the best bakery shops (he’s) ever been to.” He tried six different items, but the pistachio croissant was sold out, because karma is delicious.

1. ICYMI, we previously wrote about the potentially devastating impacts SNAP cuts could have on food banks here.