July 2002

We monitor on a monthly and quarterly basis, in fact sometimes weekly, the cash flow of the state, and the latest figures demonstrate that at least we've bottomed out and are starting up.

Reporters (in order of appearance):

KEN VERDOIA, KUED
TOM JORDAN, METRO NETWORKS
BRYAN SCHOTT, KSL RADIO
JANICE GULLY, KCPW
CHRIS VANOCUR, KTVX
SCOTT MILLER, KBZN
REBECCA WALSH, SALT LAKE TRIBUNE
LEE AUSTIN, UTAH PUBLIC RADIO
ROSS CHAMBLESS, KUER
CHERYL NIEDERHAUSER, KUED

Transcript:

KEN VERDOIA, KUED: Governor, thanks for joining us today. The most recent special session is now out of the way, further adjustments made to meet the revenue shortfall in the state of Utah. Yet figures continue to come into your office, updating you on the progress, or perhaps lack of progress in the economic picture for this state. What are the most recent figures telling you?

GOVERNOR LEAVITT: We monitor on a monthly and quarterly basis, in fact sometimes weekly, the cash flow of the state, and the latest figures demonstrate that at least we've bottomed out and are starting up. Now whether that will continue I don't know. But the most recent is we have some, there's some good news and some bad news, but the pluses outweigh the minuses.

KEN VERDOIA, KUED: One would then wonder, in the context of the recently-completed special session, aside from keeping our fingers crossed and collectively hoping for an economic upturn nationally that would quickly extend to Utah, what can the state do in the next months to ensure that the economy stays on that positive, even if it's a mild positive track?

GOVERNOR LEAVITT: We have to take the long-term view. We have a thousand-day plan, which is a relatively short horizon, and then we have to have a plan that will extend into the 10,000 days.

The primary focus in my mind is education. There has never been a time when education was more closely linked to economic prosperity than now. Education is economic fuel. We will have a growing work force that will be our comparative advantage. It will only be an economic asset if they're well prepared, if they're well educated, and that they're able to sustain jobs in the technology sectors, they're able to provide companies with what they're looking for, there's a sense of entrepreneurship. I'm optimistic that will happen. But it won't happen unless we're able to put the investment there that's necessary.

Now currently we are not just last place, but we're a long ways below 49th place in terms our per capita investment. I've said for a long time you can't measure education's value simply by what you spend. We have been able to produce above-average results with that spending. But we continue to fall further and further behind. And so one of the themes you'll hear from me about our economic recovery is the need to assure that we have education funding that's adequate.

Currently there's a group of employers, a large group of employers that I have asked to take a look at this, I've asked them to answer the questions, one, what happens if we do nothing to the quality of our work force? Two, what are our aspirations? Three, can we afford our aspirations in our current situation? And four, if we can't, what should we do? And last, how should we measure ourselves? Now I have asked employers to do that, not because they're the only ones with an interest, but because they have an economic interest in assuring that our workers are well prepared. I believe that they will take a steely-eyed view of this because they have an economic market interest, and that they will come back with some suggestions as to how we should go about it.

TOM JORDAN, METRO NETWORKS: Governor, is it time for a steely-eyed view at health care? I know you've dealt with that at the National Governors Association which you've just come back from, we've had HMO's dropping 20,000 people off of Medicaid, the state is going to have to pick that up apparently. Is this the time to wade in on that?

GOVERNOR LEAVITT: I believe that, when you look at broad social issues over the next decade, that health care will become the dominant issue. For many reasons. Some of them are demographic, some of them are technological, some of them are social. But for whatever the combination of reasons, I believe health care will become the dominant social and political issue of the next decade.

Now, how do we go about solving it? Well there's a couple of very prominent, immediate problems. One of them is prescription drugs. The cost of health care is skyrocketing. I'll give you just an example from the state's standpoint. We have been cutting our budget, we've been cutting it in every category except education. And even there we had to cut some minor places. But if you look at the state budget you'd see minus, minus, minus, minus, minus, minus, until you get to one line-Medicaid. And they're you'll see a great big plus, 8 percent. The number of dollars that are now going from taxpayer funds into Medicaid, which started off as a very small portion of the state budget and has ballooned to the point that nationwide it's over 20 percent of all state budgets. If it continues to grow at this rate, within 25 years it'll eat up the entire state budget. I mean it is a very significant part of what we now do. We have to figure out how important that is to us, what kind of benefits we're going to provide.

Now the state has recently engaged in what has become a little bit controversial on a national basis, a waiver that the federal government gave to us that is unique. It basically followed a different philosophy. It says, let's take a segment of our Medicaid population, that's health care to the poor, and rather than giving them benefits that are 135 percent of what a working family would receive, let's give them 115 percent of the benefits. Still be better, but let's not make it so radically better that we can't afford to give health care to everyone who needs it. And let's take that difference and spend it in a different way. Let's provide basic health care to people who are working but can't afford health insurance.

Now, we have, we got this waiver in February, we instigated it in July. Between the 1st of July and today we've had 3,000-3,000-applications in this state. I expect that we'll have, between now and September, 25,000 Utah families, or persons, who will receive basic health care using the same dollars that we were using before. No new dollars here. It's just that we're going to provide basic health care to many instead of a rich benefit package to a few. Now, that kind of thing we'll have to do, I think, if we're ultimately to meet the basic health care needs of a broad population. And it's going to be a daunting task, particularly in light of the education demands that we have.

BRYAN SCHOTT, KSL RADIO: Governor, with all the revenue problems the state has been having, the legislature has understandably been caught up in crisis management. Do you plan for the next session to urge lawmakers to do some forward thinking in terms of the budget and revenue?

GOVERNOR LEAVITT: I hope that process started with the special session. The special session was a short one, but it highlighted, I think, what is an inevitable collision between funding education and investing in people, as opposed to funding more and more infrastructure at this time.

We have spent a lot of money on roads, we've spent a lot of money on water development, and I'm asking the question, which ought to come first? And I'm also asking the question, how is it that we have taken all of this money from our general revenue, which is how we pay for higher education, for example, and we transferred it to roads, and we've also done the same thing with water? Now, we have the second, we have the second highest per capita use of water in any state in America, and we have the third lowest rates of all the states in the country. We're in a 100-year drought. We have to ask the question, why are we going to continue to subsidize water rates with these shortages, and then undersupport education? We have a shortage of water, but we subsidize it, and we have an abundance of children, and yet we undersupport it. We've got to rethink that proposition, and one of the things that came out of the special session was a commitment to have a task force of legislators between now and January to begin thinking about that kind of issue.

Now, there are many others like that, but that's the kind of strategic thinking we've got to begin to do, because the inevitable train wreck between our education needs and the economic realities, we started off talking about how are we going to assure that the economy is good? You find out how- - You build a good economy by creating the economic fuel, which is knowledge and education. We have to have a good infrastructure too, but we have one. We have a world-class infrastructure. We have to develop more water. But it ought to be paid for out of those who use it, as opposed to tax dollars.

JANICE GULLY, KCPW: Governor, a number of years ago during more flush economic times- -

GOVERNOR LEAVITT: Oh, those were the days.

JANICE GULLY, KCPW: Those were the days. The legislature looked at the number of sales tax exemptions that are granted to various industries. Do you think it's time to go back and relook at that and say, do the airlines really need an exemption on airline food? Do the ski resorts still need exemptions? What do you think about that?

GOVERNOR LEAVITT: Oh, in my second, first year as governor, we had another little collision, I vetoed a tax increase, and said let's go back and take a look at all the tax exemptions that are given. And I empowered a very, I thought, formidable process to go back and take a look at each one of them, and we spent a lot of time looking at all of them, and focused, and even made some recommendations, and the truth is we even repealed a couple. But the next session, or the session after that, in flush economic times, by golly, they were back. We ought to be doing that constantly.

What a tax exemption, what we're really saying is that this is a place we could or should invest public money by allowing somebody not to pay the taxes that everybody else does for some other good social or economic purpose. And we ought to be measuring those in a way that holds them against a standard of performance. And without responding on any of them, we ought to constantly be asking that. Are there a few that I think probably don't meet that standard? I think there are a few. I'm not going to name any today, because they're all very sensitive. But that'll be part of this broad rethinking of our tax policies. It's time a lot of that happened.

CHRIS VANOCUR, KTVX: Governor, even though it's not directly on your radar screen, you're obviously aware of the conflict between the Salt Lake Tribune newspaper and the Deseret News. I'm curious your feelings about that, and whether in general you support as many voices in the media as possible, with the possible exception of mine?

GOVERNOR LEAVITT: With that qualification. You know, I've got one basic view on that conflict. Stay out of it. Now, do I believe that there needs to be independent voices in the media? Absolutely. I believe that despite the fact that often times in my current role I feel like I am on the short end of it. But every political figure does. But I just don't want to get involved in that. It's a legal dispute, it's not anything I have control over, and I feel confident in time the process will work itself out.

KEN VERDOIA, KUED: How do you assess- - You have an opportunity to travel widely in this nation and meet with other governors and hear their complaints about what they may view as victimization by media coverage. How do you assess the general relative health of the Utah media in general in terms of serving the information needs of the public?

GOVERNOR LEAVITT: You know, I have been governor now for ten years, and I've come to understand, I think, better the media and their job, and I think they've come to understand mine over time, and I've come to understand the media has a job for do, and it's to report the news, and that they're people, and that they have a story to do and they want to get home and mow their lawn. And that sometimes that means that they do a better job than others. But for the most part I feel like I've been fairly treated, and that the public is well served.

SCOTT MILLER, KBZN: Governor, speaking of some of the other governors around the nation, you had the chance to meet with them in Boise, Idaho this past weekend. What are some of the highlights you brought back from Boise that you're now thinking about?

GOVERNOR LEAVITT: The most interesting part of the Boise meeting to me wasn't a policy conclusion, it was a political reality that in the nineteen-the 2000, rather, and two election, there's going to be a big change in power in this country. Twenty-one of my colleagues will be leaving office. And there could be more. There's 30-plus elections. That's a considerable shift, and I'm going to be fascinated to see how it turns out. Because I do think the country at its root is at a very important time, with issues like homeland security.

We spent a lot of time talking about homeland security. I met last week and the week before that with George Tenet, the head of the CIA, and my current role as a player in homeland security has caused me to be in a position to, I think, understand the challenge that we have as a country. And it's considerable, and it's going to be solved, not at the national level, it's going to be solved at the local level. Hometown security is what that is. We talk about as homeland security, but it really is hometown security. It's how do you take 700,000, an army of 700,000 law enforcement agencies, or agents, local sheriffs, police on the beat, state agencies, how do you organize them into a force that's cohesive and integrated, and is functioning?

Now, we need to have a set of standards that help give us a common language, that create a sense of common strategies, and I think the president's strategic plan that he released earlier this week does a good job of that. The question is, how are we going to reorient ourselves at the local level to make that happen? That was a fascinating discussion.

REBECCA WALSH, SALT LAKE TRIBUNE: Governor, how do you feel about the tips part of that plan, where utility workers and postal workers may be asked to turn in people who are acting suspicious?

GOVERNOR LEAVITT: Well, during the Olympics, I remember the first day of the Olympics, we had a question that came about as to how high should the magnetometers be set? Zero meant no protection, 10 meant everybody stood in line and got basically patted down and frisked, and a long line. And there was quite a discussion about where it ought to be, behind the scenes. I think as a country, we're in exactly that circumstance. We're asking ourselves, how high should the magnetometer be set? We don't want to live in a police state. I'm involved right now in a conversation with other states about drivers licenses. What is the role of a drivers license? Is it to attest, to certify that you can drive a car safely? Or is it a piece of identification? Well, if it's a piece of identification, what does that mean about the role of the state in determining if a person is here legally or not? What does it mean about the state as to whether or not we have a duty to determine exactly who a person is? Are you the person you say you are?

That's a high burden, that's a high standard. And it now begins to create a much different question about a drivers license. Is a drivers license a component of a national identification system? Do we want to live in a system where, if you walk down the street a policeman can say to you, "I find you suspicious, show me your I.D."? I don't think we want to live in that kind of a society. And yet I know, as a matter of some fact, that there are members of Al-Qaeda and other terrorist organizations who are resident in this country, and who have thoughts and plans- - And you look at the person, the persons involved in September 11th. There were 19 of them. Seventeen of them entered this country legally, there was, they were absolutely clean, they had drivers license obtained legally, they had documentation to be in this country. They were somebody's neighbor. Now, if a postman had noticed something peculiar about them, would it have been good for them to have reported it? How high should we set the magnetometer? I don't know the answer to most of the questions that I'm posing. I have an opinion on a few, but those are the debates that we're now engaged in. And they're fascinating, complex, and they will shape the way our life ultimately fits together in the next decade.

KEN VERDOIA, KUED: Governor, we're going our attention now, I have to get in our colleague at Utah State University, Lee Austin, who's standing by from Utah Public Radio. Lee?

LEE AUSTIN, UTAH PUBLIC RADIO: Thank you. There's been quite a debate since the Senate vote of Yucca Mountain as the permanent site for waste storage. Whether that makes the Goshute Skull Valley proposal more or less likely to happen. Senators Hatch and Bennett say they voted for Yucca Mountain because it makes the PFS proposal less likely. But most people seem to think just the opposite is true. What's your view?

GOVERNOR LEAVITT: I know it's still the focus of my attention, and the focus of the state's attention. Yucca Mountain has now been decided as the place it will ultimately end up. But PFS is still on track to be licensed, and it is still the focus of our glare, attention, and opposition. Yucca Mountain's approval has changed our strategy some. It was anticipated that that would occur, and so we've been thinking through. I have, we still have a legal strategy, we still have a political strategy, we still have an environmental strategy. Yucca Mountain being approved has opened up some new strategies that will unfold in the next couple of months. But we're still opposed, it's still out there, and we're going to do all we can to kill it.

KEN VERDOIA, KUED: Governor, along that same line, I received an email question from a medical school student-middle school student, and it would be appropriate to introduce this at this time because sometimes the simplest questions provide the best understanding of the situation. Berlinda says she's involved with a nuclear waste school project in her middle school. And she writes, "Doing a project about nuclear waste, and I have just one question. When it comes to storage, why Utah and Nevada, and why not the east?"

GOVERNOR LEAVITT: Well, I think the Utah answer, and the Nevada question are entirely different answers. Frankly, the Utah answer is that I think a group of utility companies shopped around until they could find an Indian tribal nation that was in enough, in a poor enough condition that they would sell their sovereignty. Now, and they have taken advantage of their, of that tribal nation's willingness to sell their sovereignty by making this contract with a group of their leaders, who I don't think necessarily represent the views of their tribal nation, who I think have done pretty well financially as a result of their arrangement, meaning the tribal leaders. Nevada, on the other hand, was a function of a great deal of process and debate, went through 22 years of discussion, and they concluded it was the safest place for it to be. Vastly different processes, and entirely different answers. One is the way you operate a democracy. The other is not.

BRYAN SCHOTT, KSL RADIO: Governor the scandals currently surrounding a couple of big companies, Enron, WorldCom, haven't really hit home yet, but there's a big one lurking out on the horizon. Qwest, have you any thoughts about that?

GOVERNOR LEAVITT: Well, I've been monitoring it. We depend on Qwest, we depend on Qwest for an investment. If they don't have the ability to invest in our infrastructure it hampers our economic growth. And so I'm watching it very closely. I will say this. Independent of Qwest, but simply with respect to all that we're seeing with the Enrons and the Tycos and the WorldComs, there's a great cleansing fire sweeping through the American corporate culture right now. It needs to happen. If you cheat, you go to jail. And they need to be treated with the same level of dispatch that we do some of the crimes that happen on the street. R

CHRIS VANOCUR, KTVX: It hasn't forced Utah at all to relook at its accounting practices or the way we do business, has it?

GOVERNOR LEAVITT: The state of Utah? The state of Utah is viewed constantly by multiple rating agencies who scrutinize everything we do. I recently went to New York to defend our accounting. They gave us a triple A bond rating, which is the highest rating possible. We have been designated as the best-managed state in America. That was part of that scrutiny. Utahans can be very proud of the integrity that's been used in accounting for public money.

JANICE GULLY, KCPW: Governor, hunters and hikers in Millcreek Canyon, there's been some criticism of plans to allow those two to mix in the elk hunt, and there's a lot of outcry about that. Is the Governor's office interested in that?

GOVERNOR LEAVITT: Well I'd never say we weren't interested in it, but have we thought about it, no, and have we been involved in it, no, and do I have an opinion about it, no.

JANICE GULLY, KCPW: Do you plan to take any action?

GOVERNOR LEAVITT: It's not come to me at this point for any action, and I'm a little flat-footed on the issue because I don't know much about it. Sounds like one I ought to be, though.

ROSS CHAMBLESS, KUER: Governor, the cost of fighting wildfires in Utah is racking up, and it's estimated that it may cost nearly $20 million or more. Has this, has money been budgeted to take care of these fires, or if not, where will that money come from?

GOVERNOR LEAVITT: No, it hasn't been budgeted. Will it be considerable? Yes. Where will it come from? I don't know. Where do I think it ought to come from? Well, not out of education.

CHERYL NIEDERHAUSER, KUED: Governor, what do you think will be the likely outcome of the University of Utah's lawsuit regarding the gun ban on campus?

GOVERNOR LEAVITT: You know that question about the Tribune and the Deseret News? My position is the same on that one. I don't know. The courts will figure it out. I've had my share of that dispute, people know where I stand, and now we'll let the courts decide on how they will. It's a good question, but one I can't contribute much to today.

KEN VERDOIA, KUED: Governor, last minute. You seem to indicate now in a couple of aspects of the budget, the possibility exists that we may need to revisit the budget and our spending later on in this year. Is that something you believe is almost inevitable for us?

GOVERNOR LEAVITT: No, I don't. Not on all three. I'm not saying it's unlikely, but I don't think it's an inevitability. But I'll tell you that the 2004 budget is going to drive a lot of basic public policy questions.

KEN VERDOIA, KUED: Governor, thank you for your time. That concludes our time for the Governor's Monthly News Conference on KUED. A reminder that a transcript of this and every session of the Governor's News Conference is available online courtesy of the Utah Education Network at www.uen.org. Until next time, good night.

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