Ducey: Budget, $300 million owed to schools, to be top priority

PHOENIX — Doug Ducey said Monday the budget will quickly become his top priority when he takes office as governor, including what to do about a lawsuit that’s left the state owing more than $300 million to schools.

That includes being open to reaching a settlement in the school-funding suit, he said.

“I’d certainly rather be paying teachers than be paying lawyers,” Ducey said after volunteering at the Society of St. Vincent de Paul. “So I would like to settle the lawsuit, but the election is over now so we’re looking at the budget and making that a top priority.”

After serving meals to dozens of homeless people, Ducey said he and his team will form a budget study committee before he takes office.

“I want to see a budget that’s structurally sound,” he said. “The specifics of that are going to be talked about in our inaugural address.”

A lingering question is what will become of a lawsuit that prompted the Arizona Supreme Court to rule that state leaders failed to follow a voter-approved law requiring annual inflation adjustments to base school funding. A Superior Court judge later said the state owes a first payment of more than $300 million, but Gov. Jan Brewer has said she plans to appeal that.

Throughout Ducey’s campaign, he said he agrees Brewer but wouldn’t rule out a settlement.

The lawsuit stems from Proposition 301, which in 2000 created an extra 0.6 percent sales tax earmarked for education. It also required the Legislature to increase the base level school funding with inflation, something lawmakers stopped doing in 2010.

The state Supreme Court ordered the base-level funding reset to the level it should be at had it been adjusted every year. In all, the state could wind up paying nearly $1.6 billion.

That uncertainty adds to forecasts of bleak state finances and tough choices facing the next governor and lawmakers.

Ducey said he’s putting together a transition team that will help him with the budget and other decisions, like what may happen with President Barack Obama possibly using an executive order on immigration reform.

He said Obama should demonstrate leadership on immigration by working with the incoming Congress, in which Republicans have majorities in both houses.

“I would call on the president to demonstrate leadership first by securing our borders and work with elected leaders on a step-by-step process for proper immigration reform.”

Asked what he wants in terms of immigration reform, Ducey said, “We are a nation of immigrants, but we’re also a nation of laws.”

Ducey talked with reporters after working at the Society of St. Vincent de Paul to promote Serving Arizona, a campaign in which he’s encouraging Arizonans to volunteer.

“We want to highlight those who we can help,” Ducey said. “I really believe there’s so many of us that can do more and that everyone can be a part of this, whether it’s providing food or clothing or a few extra dollars.”