Democrat Fred DuVal made his formal entrance into the 2014 governor's race last week. A native Arizonan who grew up in Tucson, DuVal served in Bruce Babbitt's gubernatorial administration in the 1980s and in the Clinton White House in the 1990s. In 2002, he made an unsuccessful run for Congress from a Northern Arizona district that included Flagstaff and the Native American reservations. He earned his law degree at ASU, has worked on various economic development and alternative fuel initiatives, and has served on the Arizona Board of Regents and the Democratic National Committee.
Why are you running for governor?
Arizona is facing a tipping point as to whether we're going to get into the business of human development and learning and workforce capacity, which is what the new economy will require, or whether will we fall back on a real estate economy and miss the opportunity to be an accelerating economy in the next century.
What is it that we're not doing that we should be?
There's a whole arc of things ... drawing the right professors here, creating ideas in both the public and private sector, drawing in venture capital to capitalize them, sending a signal to the global marketplace that we're very serious about certain disciplines and we're going to be doing the best practices in those areas so that scientists will come and money will come. And most importantly, sending a signal to the smart students graduating from our high schools and colleges that they can stay and make their lives here.
What kind of signals do you think we're sending now?
That if you are in the real estate business, we're boom and bust but there are dollars to be made. Certainly, we have niches where we're starting to move—biosciences in particular—but we can do so much more. The biosciences are one area; biofuels such as algae is another. Flexible solar is the next generation of solar energy. There are all these areas on the horizon. The big underlying strategy is the way we interact with Mexico. We have every reason, of course, to take complete ownership of the trading opportunities that Mexico presents and we're underperforming in that area. Frankly, we're watching our neighboring states steal our lunch.
Is part of that because of the laws we're seeing coming out of the Arizona Legislature?
Yes. What you hear over and over from CEOs and university presidents is, "Gee, I've got someone I really want to hire but they won't come (to Arizona) because they don't have confidence in either the education or the political system to be able to make a long-term commitment to the future." And that is slowly, slowly contaminating our intellectual, creative business infrastructure for the future.
You mentioned the solar industry. We've seen some of the incentives established by the Arizona Corporation Commission going away under the leadership of the new commissioners. Are they moving too quickly to do away with those incentives?
Without a doubt. Other states are moving in the opposite direction to get as many of the new solar companies and economic growth as possible. We are exiting that opportunity prematurely.
What are the best strategies to turn around the education systems in Arizona?
A sustained, predictable long-term commitment. That includes money, to be sure—restoring the deep, unsustainable cuts that have already occurred. But it's not just throwing money at the schools. We then leverage that money into a responsible, comprehensive discussion about accountability and what we expect from our schools so the taxpayers have reassurance that their money will be well spent. But the key is getting off this roller coaster of investments one year and cuts the next. You can't build sustainable outcomes on that kind of platform.
Not to get all wonky, but how does the state need to adjust its tax system to bring in the revenue to make those investments and have a stronger economy?
We need low, competitive taxes. And in recent years, Arizona has moved in that direction, to where most businesses will say the tax situation here is very favorable. It's about as favorable as anywhere in the country. What they're looking for is workforce, so we've got to focus on that. I see the streamlining of the state's complex sales-tax system is the hot topic now and I think it will be resolved in a compelling and smart way. We've got to simplify the sales tax. Secondly, we've got, in parts of our tax code, sort of antiquated taxes and antiquated exemptions. I think we need to bring our overall system into the 21st century. And as part of that, we have to look at sales-tax application across the Internet and other forms of taxation to make sure we are being smart and fair and building for the future.
That's no easy task when you need two-thirds approval from the Legislature to raise any taxes.
That's exactly right. In the short term, we can anticipate—it has been Arizona's story in the past—that we go through growth years and contraction years. What we really need to do is leverage the growth years into smart investments, but do it in a way that does not set us up for a recession and then a contraction. (We need) a more measured and longer-term sustainable strategy that both parties can agree on so that we send people a signal that we have a strategy for the long term.
The biggest fight at the Legislature right now is the expansion of the Medicaid system to cover people with incomes up to 133 percent of the federal poverty level. Gov. Brewer is fighting her own party on this one, with Republican lawmakers reluctant to go along even though the state would receive billions of dollars from the federal government. Do you think Gov. Brewer is doing the right thing?
I do. And for me, this is déjà vu all over again. This is a repeat of the debate I was a principal player in when we first created AHCCCS (the Arizona Health Care Cost Containment System, the state's version of Medicaid). In that case, it was a Democratic governor. But the point is, there were pockets of resistance among the conservative ideologues who resisted what was—to most centrist, thoughtful people—a compelling economic development case, to say nothing of a compelling moral case. I think that in the end, the overwhelming economic case and moral case for moving forward on this will carry the day for the governor.
Final question: Has the entry of dark-horse Republican gubernatorial candidate Al Melvin scrambled your strategy?
I look forward to as many Republicans of as many different backgrounds and viewpoints of the world entering their race, and will watch with great relish.