October 2001

The shortfall in the budget is something that we have seen coming for a time. It obviously needs to be dealt with. I'm anxious to hear the legislature's thoughts about ways we could do that, I'm anxious to collaborate with them in getting that done.

Reporters (in order of appearance):

KEN VERDOIA, KUED
DAN HARRIE, SALT LAKE TRIBUNE
BOB WARD, STANDARD EXAMINER
TOM JORDON, METRO NETWORKS
JENNIFER JORDAN, KCPW
VINCE PEARSON, KUER

Transcript:

KEN VERDOIA, KUED: Governor, thanks for joining us today. You're fresh back from a trip to Germany, but in your absence members of your own Republican party in the state legislature were making repeated calls for the convening of a special legislative session, primarily to deal with a state revenue shortfall of some $175 million. Now this is a shortfall that you have, in fact, been dealing with, but the legislators maintain that now it's time for them, under their Constitutional authority, to be involved in this process, and make some further decisions. You've been characterized as being reluctant to make such a special session call. What's your position?

GOVERNOR LEAVITT: Well first let me say that, after the 14-hour trip back from Germany I'm not sure anyone can be characterized as fresh back, but I am back and had a very interesting experience. The shortfall in the budget is something that we have seen coming for a time. It obviously needs to be dealt with. I'm anxious to hear the legislature's thoughts about ways we could do that, I'm anxious to collaborate with them in getting that done. If there were, after that collaboration had occurred, reasons that we needed to have legislative action, I wouldn't hesitate to do that. At this point I'm not saying that that need exists, but I'm certainly open to a discussion about it.

DAN HARRIE, SALT LAKE TRIBUNE: A lot of the legislators, Governor, as you know, don't like the idea of using money from the rainy day fund, the state's emergency reserve account, and insist that only they have power to appropriate money out of that account. Do you agree with that legal position, and what about the idea of using that money now?

GOVERNOR LEAVITT: I do believe that that's true, it's a factual matter, that they are the only ones that have the power to appropriate money out of it. The highest priorities I have right now are to make certain that we're able to continue our progress in education, and keep the public safe. Public safety and education. And the plan that I'm working within right now would do that. So I'll just keep collaborating with them. They may have some ideas that will help us to avoid using the rainy a fund. It obviously ought to be done as the last thing we do. I do believe that at a time when you have a terrorist attack that kills 6,000 people and does serious damage to the economy may be considered a rainy day. And particularly when we are at least operating under the assumption at this point that we'll see it rebound beginning next spring, and that's the indication of most of the economists, both locally and nationally. We're not proposing to use all of the funds from the rainy day fund, but it's possible we could use a very small amount, if any. But it does need to be on the table, and I'm anxious to work with them. If they've got ideas I'm open to them.

DAN HARRIE, SALT LAKE TRIBUNE: Economists are often wrong. They have been in the recent past, as we've seen. What gives you confidence that they're correct about this, that it's a short-term down turn?

GOVERNOR LEAVITT: Well, I'm not able to be certain about that. On the other hand, I'm not certain about the $177 million, either. We were operating within what the budget analysts say is a plus or minus $50 million. So it's possible we could end up with far 17 different figures, either worse or better, and that's one of the reasons that the Constitution provides for, and the state law, our financial responsibilities are divided by giving the Governor the responsibility among the department heads to make certain that the budget the legislators have passed is balanced. And I'm doing that, and I'll continue to do it, along with input from the legislature.

KEN VERDOIA, KUED: Governor, how do the potential revenues for the state from the Olympics figure into the state's revenue projections? Is there potential positive impact, or perhaps down sides of the potential impact, been figured into the state projections?

GOVERNOR LEAVITT: The impact of the legislature has been part of our projections all along. They have been factored in. So any numbers that you see would represent and reflect the fact that we will see a positive balance from the Olympics in the spring.

BOB WARD, STANDARD EXAMINER: Governor, how do you envision using the rainy day fund? If you need to. I've heard some concern from legislators about using one-time rainy day fund money for ongoing experiences like salaries. Is that your intent, or how do you see that?

GOVERNOR LEAVITT: Well, by its very nature, the rainy day fund is a one-time expenditure. And so we'll have to figure the 2003 budget based on the new basis. In other words, if we use a portion of- - We estimated the revenues in '02, that's the period between now and the end of June of next year, to be this big and they turn out to be this big, then we'll end up using perhaps the rainy day fund to make up some part of that, and then budget reductions to make up the other part. But when we do next year's budget we'll have to realize that those rainy day funds won't be there again, and we'll have to reduce the base to begin the budget from the new base, not the old base.

TOM JORDAN, METRO NETWORKS: Have you gotten any ideas about what you would target as programs that could get cut?

GOVERNOR LEAVITT: I've actually laid out a fairly general but specific game plan. I'm anxious to hear what the legislature thinks about how we could do it. If we could do it without the rainy day fund, I'd be all for it as long as we're able to maintain the progress of education and keep public safety where it needs to be. Those are the two priorities that I will insist upon under any process, is that we continue our progress forward on education and that we maintain public safety. Those are the two areas, and particularly this time when we're concentrated so heavily on homeland security and the Olympics.

JENNIFER JORDAN, KCPW: Governor, the federal government has increased its funding, its security funding for the Olympics. Is the state asked to increase any more of that, and how much more?

GOVERNOR LEAVITT: We have asked the federal government to provide us with an additional four and a half million dollars, and they've granted that, or at least that's appearing in all of the appropriations bills. Outside of that, federal agencies have asked for somewhere in the neighborhood of 35 to $40 million to meet their obligations in a way that they think is important. The state has an Olympic plan that we've had in place prior to the September 11th events. It was a good plan. It'll be an even better plan now. We haven't changed the plan dramatically except to thicken it, and we haven't broadened it, we've only thickened it. We've put more people, we've put more high-tech equipment, more state-of-the-art equipment rather, and people in places where we think they could best be used.

JENNIFER JORDAN, KCPW: The IOC member from Norway, although he's apologized since, speculated that perhaps America shouldn't be hosting the Olympics at all. Can you give us any sense of what's happening behind the door, what kind of conversations are going on, as that speculation is now out in the open and in the press?

GOVERNOR LEAVITT: I think the fact that he indicated that he was either misinterpreted or misspoke that that's not an issue, and I don't expect that it'll be one that ruminates.

DAN HARRIE, SALT LAKE TRIBUNE: You've been asked, though, about whether there's a contingency, should the games be called off. And said, well, we really haven't thought about that. Is that not something there should be a contingency plan in place for?

GOVERNOR LEAVITT: Well- -

DAN HARRIE, SALT LAKE TRIBUNE: In worst-case scenario.

GOVERNOR LEAVITT: Right now we're planning to have the games, and we're moving forward with the games. And there's no indication to believe we ought to be doing anything else. There would be so many people adversely affected by it, and there would be so many potential ramifications that could not be predicted, that at this point the best thing for us to do is to get prepared to do the games, because they're coming and we're going to hold them, and that's where we're focused.

DAN HARRIE, SALT LAKE TRIBUNE: So absolutely no plan in the event that it doesn't come off?

GOVERNOR LEAVITT: If I ever got to the point that I thought that that was a probability, or even a strong possibility, we would have the capacity of creating whatever plan was necessary. At this point it's not, and to the extent that it became in the future different, then I would change that response.

KEN VERDOIA, KUED: Governor, is there a concern on your part that the character of these games is changing rather dramatically, that with the ratcheting up of security, with all that has held in the air after September 11th, that these games, as you try to ensure that they will go forward, will have such a strong security presence, such a restriction on movement to ensure that security of the athletes and the visitors, that, in fact, this may resemble, for a couple of weeks, an armed camp with very tight restrictions, and kind of turn against that spirit of the great festival of athletic undertaking?

GOVERNOR LEAVITT: I believe the games have taken on a heightened importance. We are going to be the place where the world comes for the first time after September 11th to heal, and to celebrate the values that we collectively, as a civilized world, believe are important--peace, courage, the value of human endeavor. I think that all that has occurred has created a situation where fate has fallen on our state to be the host, and we will do it well.

JENNIFER JORDAN, KCPW: But still in all, can March come fast enough?

GOVERNOR LEAVITT: Well, I don't want to understate by any means the pressure all of us are feeling to do this well. On the other hand, I don't want it to happen in such a fashion we don't get to savor it as an experience at the same time. We have worked for a decade as a state. We've been through bruising and difficult experiences, and this is going to be a moment that we should all recognize as a high responsibility, but we need to enjoy them while they're here.

KEN VERDOIA, KUED: Well, in this interlude let me change subject matter. There have been some concerned voices among state legislators about the increasing role of attorneys serving directly in state agencies, rather than working directly under the auspices of the Attorney General's office. Now, to the average person on the street this may sound like an arcane argument that's in the details. But is there a reason for the public to be concerned about the growth of non-Attorney General attorneys functioning as legal representatives for state agencies?

GOVERNOR LEAVITT: Well, we just want to have the legal work done in the Attorney General's office that needs to be done there, and we want work that isn't necessarily legal work but is sometimes done by a person who has a law degree to be done in the most efficient way. And this is an old argument. I mean it's an old discussion, and we're in the process of working it out with the current attorney general. We had it worked out with the past one, and I'm guessing whoever the next Governor is and whoever the next Attorney General is will probably have to go through the same discussion.

KEN VERDOIA, KUED: What about those who point to the state Constitution and say that attorneys for the state must be under the control of the attorney general?

GOVERNOR LEAVITT: Well what the Constitution says is that the attorney general will be the legal advisor to the Constitutional officers. It doesn't say that every piece of work that could have any legal implication needs to be done or passed by the Attorney General. That would mean every contract that a department head got had to go by the Attorney General's office. I don't think so. Our purpose isn't to engage in a turf battle here. We just want to have an efficient system that will allow routine things to be done in a routine way.

TOM JORDAN, METRO NETWORKS: Governor, it seems that the Alcoholic Beverage Control Commission has been regularly breaking state law by having closed meetings. Since they're your appointees, are you going to clean them up or clean them out? Are you satisfied with them?

GOVERNOR LEAVITT: Well, let me just give some background on the Alcohol Beverage Control Commission. They're a little bit like the gambling commission in Nevada. The Governor appoints them, they're confirmed by the Senate, and once they're confirmed by the Senate, sworn into office, they act independently of either of those bodies. It was designed to do that. So they don't serve at the governor's pleasure, they are established by statute and operate independently. Now they have, obviously, had a flaw in their process that they themselves have acknowledged, and they have fixed. And as far as I'm concerned, that's what's necessary, and they ought not to do things that are contrary to the statute, and it sounds like that they have discovered that they were, and changed it.

DAN HARRIE, SALT LAKE TRIBUNE: Fourteen years ago, when the state was last in the kind of financial trouble that it's in now, the legislature was called into special session and dramatic cuts were imposed, and taxes were increased. Do you see anything on the horizon that would call for such a combination?

GOVERNOR LEAVITT: I don't see that under the circumstances as we know them today.

DAN HARRIE, SALT LAKE TRIBUNE: How about tax relief? At the congressional level, Congress is working on I think a $100 billion package to try to stimulate the economy. Do you see anything on a state level to try to do that?

GOVERNOR LEAVITT: Macroeconomic policy, I think, is best handled at the national level and not on a state-by-state basis. I'm not sure that we would have the impact that Congress would have, and will be affected by the Congress, both in positive and negative ways. While the people of our state will get the benefit of the tax cuts, the state government, because of the way our tax system works, it means that we get less money at the state level. So we'll have to factor all that have into our equation.

DAN HARRIE, SALT LAKE TRIBUNE: So you're pretty much hands off on this economic crisis, let national congress deal with it and let the economy go where it will?

GOVERNOR LEAVITT: I don't think we ought to be making our economic decisions in the state based strictly on stimulation of the economy. Because we, frankly, our government isn't big enough to have that much of a direct impact on the local economy. We ought to be making decisions based on what the state's economic needs are, in education, and keeping the state safe.

DAN HARRIE, SALT LAKE TRIBUNE: A lot of legislators make the point that deeper cuts could solve this problem because even with, if you cut out $177 million of the budget you'd still have a budget that was $255 million larger than the previous year. Do they have a point there, that there's enough there that you could cut without doing real damage?

GOVERNOR LEAVITT: Well, there's no question we'll have to make cuts and make a lot of them.

DAN HARRIE, SALT LAKE TRIBUNE: But can you cut that much?

GOVERNOR LEAVITT: Well, that'll be the issue. I've laid out a general framework. One of the things that we're dealing with is this year, but we're also dealing with next year. And I feel good about the fact that this year we were able to make substantial progress in education, both in its funding and in the nature of the way we approach it with more accountability. I'd like to keep that progress going. I don't want what I think will be a relatively short-term condition to disrupt our economic or our educational process. As I indicated before, my biggest priorities are keeping our education progress on track, and at the same time keeping the public safe during a time when we are worried about terrorist attack, and we've got a new homeland security in place, we've got to be very cautious in the way we deal with this. And the truth is, we don't know at this point what the impact of the economy will be on our tax revenues. We're dealing with estimates. We're still dealing with estimates. And we'll get more estimates in November, and I'm managing the release of any funds against actual revenues, not guesstimates. And that's a better position to be in, and why the law is as it is, to turn over the responsibility of managing the executive branch to the executive branch during periods of the year, and then the legislature obviously has the responsibility of establishing those budgets.

VINCE PEARSON: Do you have specific ideas about what should be cut, or will you be leaving that to your department heads to determine?

GOVERNOR LEAVITT: I'm basically allocating the pain to the department heads and then reviewing their response to it to make certain that I can agree with their decisions.

BOB WARD, STANDARD EXAMINER: Governor, you've indicated before that maybe we ought to, or the state ought to rethink how roads are built and funded, and that maybe fewer general fund subsidies should go into transportation. Is now the time?

GOVERNOR LEAVITT: Well I believe that we need to start a general conversation about how to restore the integrity of the general fund to its original purpose. We've taken a lot of general funds during good times off to subsidize different things, and it's caused us at times to pay for things out of the general fund that would well be paid for by specific users. And I would, I'd like to continue that discussion, and this would be a good time to start that re-analysis.

DAN HARRIE, SALT LAKE TRIBUNE: Are you requiring from legislators, in order for you to call a special session, that they have a specific plan on the table? Is that what you're kind of requiring?

GOVERNOR LEAVITT: I'm just saying I'd like to hear their ideas, and that if I felt that the ideas required a special session to implement, and that they were good ideas, then I'd be very willing to work with them on a special session. But at this point, I believe I can implement their good ideas, and our good ideas, and balance the budget without the complications and the inexactness of a special session.

KEN VERDOIA, KUED: But it's their view that this is not a complication, but it's in fact their constitutionally mandated role.

GOVERNOR LEAVITT: Well their responsibility is to set budgets. It's the obligation of the governor to manage within those budgets.

JENNIFER JORDAN, KCPW: Governor, the redistricting debate was a fractious one with many people crying foul, not only in government, but in the media as well. Meg Holbrook charging that the lines were illogical, and you saying, "If I think they're illogical I won't sign the bill." Why did you sign the bill?

GOVERNOR LEAVITT: Because I thought on balance that they met the standard of both being defendable and, at least defendably logical. 104 people are going to come up with a different set of prior items than I would. I would have drawn those lines differently I think, and I think that if you had put another 104 people, they would have done it differently. On a different day 104 people might have done it differently. The same people might have done it differently on a different day. This was a messy process and it's not an easy one, and I came to the conclusion this was about as good as we were going to get, and it was time to end the discussion.

JENNIFER JORDAN, KCPW: How about going for a nonpartisan, special committee next time?

GOVERNOR LEAVITT: Well that's a discussion that is one that we can have. I don't think there's any such thing as a nonpartisan committee on reapportionment. Somebody has to appoint them, and then the debate comes as to whether or not the committee was appointed fairly. Some states have tried that, and they've had mixed results on it. But right now this is not something about which the legislature has any choice, it's the people who would have to change that. And if the people choose to change it then obviously that's how we'd do it the next time.

VINCE PEARSON, KUER: You don't have a strong opinion about that issue?

GOVERNOR LEAVITT: I'll tell you what I've concluded. If you had taken the headlines and the arguments from ten years ago, you'd find that they were almost identical to the ones that happened this year, and twenty years the same, and if you'd have had the Democrats in charge instead of the Republicans, you'd have found the same arguments being made, but in the inverse. And this is a biased-nature political process, and it's it's an ugly process, and one that I'm glad only happens every ten years.

TOM JORDAN, METRO NETWORKS: Governor, there's been a little bit of criticism just recently of the national public health system for not being up to speed in dealing with the anthrax issue. Do you have any reason to think that we need a review of the state public health system at this point? We seem to be in good shape. Have you got any idea about a review?

GOVERNOR LEAVITT: Independent of the Olympics, independent of the terrorism incidents, independent of the current anthrax, this state has had a long level of preparation dealing with chemical warfare and bioterrorism because of the fact that we have 44 percent of the country's chemical munitions in earthen bunkers out near Tooele. Part of what has come with that has been a lot of training for emergency personnel, a lot of equipment, a lot of different exercises. I don't know that anyone can be perfectly prepared, but in terms of well prepared, if there's a community in the world that's well prepared to deal with this kind of a thing, it would be us.

KEN VERDOIA, KUED: Governor, you've recently, within hours, returned from a trip to Germany. Why this trip? Why at this time? Has this been a long-standing plan?

GOVERNOR LEAVITT: I was invited by the Chancellor of Germany to come to see what they have been doing in a number of areas, and it was a fascinating visit. I had a chance to spend nearly three hours with Chancellor Schroeder, and we talked, I suspect, naturally, about the circumstances with the war on terrorism, talked a lot about his reaction to the President and their participation, about the political situations within East Germany and West Germany and the unification of Berlin. I learned a lot about their political system, about their economic system. I met with a number of world-renowned economists. I had expected to learn a lot about their education system. It turns out that that wasn't as much a focus as the other things I've spoken of. But those are enriching moments, and one I was appreciative of.

KEN VERDOIA, KUED: Were there concerns on their part about the Olympic games, or anticipation on their part about the Olympic games?

GOVERNOR LEAVITT: Only enthusiasm and optimism. I spoke with the President of Germany, as well as the Chancellor. He indicated that it was his plan to attend. The German team is going to be here with long-standing preparations. Sometimes we miss the point, I think, that this is really not about anything other than the athletes who have spent, in some cases, a lifetime preparing for this moment. And that's where the real excitement of this ought to be placed.

TOM JORDAN, METRO NETWORKS: Governor, you recently got a chance to meet one of your favorite authors Thomas Friedman man of The Lexs and the Olive Tree. Did you take away from that meeting something that would be immediately relevant to how to deal with issues here in Utah?

GOVERNOR LEAVITT: Oh, it was a fascinating breakfast. Mr. Friedman wrote, as you indicated, the Lexus and the Olive Tree, which is a definition, really, of what the world, what a global economy means, and the changes that it provides. Interestingly enough, that's one of the issues that people often point to as a potential disruption for this and other large events. People protesting the impacts of the global economy. While I was in Germany I spent a lot of time talking about the extent to which the global economy reflects on our current situation with terrorism, and how it might be a counter-reaction to that. While I don't make commentary on that right now, I did find that to be- - I did find any kind of exposure like that to great thinkers, I've found does inspire lots of thoughts in me, and it does help me, sometimes in unpredictable ways.

KEN VERDOIA, KUED: Governor, in the last 30 seconds of our program, now, just before we went on the air you were speaking to a major cable news network who was concerned about preparations for Olympic security, and you sought to assure them that the public seemed to be standing with the Olympic movement through ticket sales. Can you tell me about that?

GOVERNOR LEAVITT: Well, the last report I had, we have received about 45,000 orders. Many people ordering many. But of those 14,000 only 14 had called to say maybe they'd changed their mind. 14,000, orders- - 45,000 orders and 14, rather. Then they put on additional tickets a couple of weeks ago, and I'm told that ticket sales are brisk. But they are available and you can get them on the web site at www.slc2002.org.

KEN VERDOIA, KUED: At that point let me give you another web site, that's www.uen.org for a transcript of this news conference. Good night.

 

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