There’s an argument to be made that Doug Ducey would not be governor today if it were not for Kirk Adams, who on Monday announced he was quitting as Ducey’s chief of staff.
It’s not just that American Encore, a group linked to the Koch brothers for who Adams was working at the time, put $750,000 into ads attacking Democratic gubernatorial hopeful Fred DuVal during the 2014 campaign. There also was another $650,000 promoting Ducey from the group that does not disclose donors.
Adams’ ties go back even further to 2012, when Ducey, as state treasurer, was leading the campaign to defeat a proposition that would have implemented a permanent 1-cent sales tax, largely to fund education. In essence, that measure would have kept in place a temporary penny levy pushed through by Gov. Jan Brewer in 2010 to help balance the state budget during the Great Recession.
Americans for Responsible Leadership, another “dark money’’ group, put $500,000 into killing the ballot measure – and raising Ducey’s profile.
Adams, who headed that group, said that the money came from the Center to Protect Patient Rights, which became American Encore.
But Adams, in an interview Monday with Capitol Media Services, said it would be wrong to link Ducey’s rise to the state’s chief executive on that 2012 campaign he helped fund.
“The campaign certainly assisted in introducing him to the Republican electorate,’’ Adams acknowledged, particularly around the issue of his opposition to anything he sees as a tax hike. “So, he was on-brand and was clearly on-message.’
Adams has had a long-lasting impact on Arizona even before Ducey.
It was Adams, as a Mesa legislator and House speaker, who pushed through legislation in 2010 to lower the corporate income tax rate from just below 6 percent to 4.9 percent over several years.
That same deal also allowed some multi-state corporations to pay no corporate income taxes at all. And it altered how businesses are assessed for property tax purposes, further reducing liability.
Adams argued at the time that the package would send a strong message to companies that Arizona is an attractive state to do business.
More to the point, he said estimates of lost revenue were based on a “static analysis,’’ assuming that the number of businesses here remained the same. He predicted there actually would be higher tax collections as companies expand here.
In the 2015 fiscal year, corporate tax collections were $663 million. This year they are just $361 million – versus the $702 million that legislative budget analysts figured that, everything else being equal, corporate collections actually would have reached this year.
Even Brewer, who signed off on the package at the time, said the tax cuts were “a little bit too aggressive.’’
“There’s another way to look at this,’’ Adams said Monday.
“Overall state revenues are up from where they were,’’ he said, mainly due to increases in sales and individual income taxes. And the state is looking at a potential $1 billion surplus on its $10.4 billion spending plan.
The other side of the equation, though, is that state aid to public schools is not yet back to where it was before the recession on an inflation-adjusted per-student basis. But Adams said it is that surplus that allows the state to implement a planned 20 percent hike in teacher pay by 2020 and restore some of the cuts made in other funds.