February 15, 2001

It’s my view that we should treat tax policy with the first principle being equity. No one likes taxes, but we should strive to treat everyone the same.

Reporters in (order of appearance):

KEN VERDOIA, KUED
STEVE SPENCER, KUER
DENNIS ROMBOY, DESERET NEWS
TOM JORDAN, METRO NETWORKS
CHARLES TRENTELMAN, STANDARD EXAMINER
ANGIE CALLOWAY, KTVX
LEE AUSTIN, KUSU

Transcript:

KEN VERDOIA, KUED: Governor, thanks for joining us today. A tax break for one is often viewed as a disadvantage for another. And that seems to be the case with the proposal for a tax break for Delta Airlines. Although relatively small in terms of the total dollars involved, it’s being labeled anti-competitive by other airlines. What’s your view?

GOVERNOR LEAVITT: It’s my view that we should treat tax policy with the first principle being equity. No one likes taxes, but we should strive to treat everyone the same. That doesn’t mean that we don’t carve out special groups of people, large groups, in order to create some economic outcome that we desire. We do that- - Or to create a sense of other equity. For example, we exempt tax-exempt organizations or charitable organizations. That’s a tax exemption. We do it because they provide other value that we have chosen as a state to give a credit against some taxes for those who would invest and create more jobs. We do it as a deliberate investment, believing that the private sector can do better with those dollars, or more good to stimulate the economy than any other purpose. So there are times when we make public decisions to create incentives. But for the most part I believe that tax policy ought to be rested on the foundation of equity

KEN VERDOIA, KUED: So in the instant case of Delta Airlines and the proposed fuel tax break, how do you come down?

GOVERNOR LEAVITT: Well, I assume that- - I’m not familiar with that proposal, but I would assume that it would treat every airline flying in and out of Salt Lake City the same. Given that Delta uses this as their hub and they would undoubtedly benefit more, that doesn’t seem unfair to me, given that they would also pay more. So if we’re going to decide as a category to treat airlines in that way as to benefit the public in some other way, then that seems reasonable to me. If it would just carve out one employer or one person, I’d begin to question, or at least it would have to be a very clear demonstratable good.

STEVE SPENCER, KUER: Governor, I have a question about the $40 million tax cut that’s being proposed by the legislature. Especially in view of the federal tax cut that President Bush is proposing, what is your position on that? Do you think it’s too high a number? Too low?

GOVERNOR LEAVITT: I proposed a budget that included a $5 million tax cut. It’s not a large tax cut, but I believe that it is, at this point, what we should do. I am in support of the Bush tax cut. It’s consistent with my ideology, I believe that we should do less at the federal level and more at the state level, and I think that this say time for a good, solid federal tax cut.

STEVE SPENCER, KUER: So do you feel like the $5 million is the level it should be? Is $40 million too high?

GOVERNOR LEAVITT: $5 million is what I’ve proposed in my budget. I’ve not altered that budget at this point. I’m still proposing the same budget, sticking with my proposal, and I’ll let them work through their process and when they get to the end we’ll all kind of reconcile what should be done.

DENNIS ROMBOY, DESERET NEWS: Governor, the legislature’s new budget projections are out this morning, about $31 million shy of what they had projected earlier. Does that change- - Do you concur with those numbers, first of all? And is that going to change your proposal at all? And how, overall, do you think that will shape the budget?

GOVERNOR LEAVITT: Those numbers are consistent with the last estimate that we received a couple of days ago. They obviously will have an impact on the budget. We’ve based our entire analysis on the presence of a certain amount of money, and if you have 31 to $35 million left in that then you’ve got to adjust. Better to do it now than later.

TOM JORDAN, METRO NETWORKS: On that same sort of issue, yesterday the Utah Taxpayers Association came out vividly on the subject of long-term educational financing. They were saying that within ten years we will need a $541 million tax increase to cover what we’re going to need in the way of money to cover students, increased student populations. Is it appropriate to use the surplus? They were, of course, saying use the surplus to start long-range educational planning. Is that appropriate?

GOVERNOR LEAVITT: We have a need to have a long-range plan, always in mind, and we do. We laid out in the fall of last year a 4-year plan. You get much beyond three or four years, it’s very difficult to know what the future will bring. And so we can make long-term commitments, but in terms of long-term plans, we need to wait until we get closer. One thing we do know, we’ll require a strong economy. Under any circumstance we have to have a strong economy. And so my proposals to the legislature have been focused very directly on keeping our economy strong and producing jobs that will be better than average family income-type jobs. Those fall into the high-tech sector. One of my proposals is to double the number of engineers that, and computer science graduates, that our state colleges and universities turn out over the course of the next five years, and I’d like to triple them in eight. That’s aimed precisely at that problem of public education. We have to keep the economy going, because you can’t have a good education system without a good economy. Likewise, you can’t have a good economy without a good education system. So that link has to be focused on over and over and over again.

KEN VERDOIA, KUED: Governor, we’re going to turn our attention to our microwave location in Logan, and a question from Lee Austin of public radio. Lee.

LEE AUSTIN, KUSU: Thank you very much. One method that some legislators are looking to, to gain revenue, perhaps as much as $100 million, is to tax the storage of low-level radioactive waste, and that of course would affect Envirocare. I’m wondering if you have any thoughts on that plan.

GOVERNOR LEAVITT: I did not make that tax part of my budget. I know it is actively being discussed. I do not have a philosophic aversion to it, but I’d like to see the proposal, they haven’t been able to settle on it, and we’ve been waiting, of course, for these revenue estimates to find out how that would play into all of this. And we’ll have more information today and tomorrow, and I think the budget will begin to resolve itself in the next week.

KEN VERDOIA, KUED: Governor, what about the mysteries attendant with consultant reports apparently urging this. Have you been privy to that information, and do you believe that the conclusions of that much-discussed report are- -have merit?

GOVERNOR LEAVITT: I’ve not seen the report. Therefore, all I have are reports that I have read in various publications, newspapers and so forth. I’ve heard legislators discussing the fact that there is a range in their minds, many of them, that there’s room for the state to benefit, given the fact that we’ve granted a monopoly, essentially, in this way. There’s- - I don’t know exactly where this will turn out. It’s not part of my proposal. If they pass it, obviously I’ll have to deal with it, and I’ll have to deal with it in the reconciliation of our two budgets. Right now they’re going through their process. I’ve learned to be patient while they do, and when we get to the end then I put my feelings back on the table and we sort it out.

KEN VERDOIA, KUED: What about the assertion that Khosrow Semnani of Envirocare has purchased good favor within the halls of state government by his political contributions in the past, and that might still any effort to tax Envirocare further?

GOVERNOR LEAVITT: Khosrow Semnani is a person who’s been active in politics, and he’s been, I think, supportive of lots of legislators, but my guess is that will have very little effect when you balance it against the policy issue. It’s all being done in the context of an open legislative session, there’s lots of discussion. I really don’t know what’s being to happen on this. I expect at some point, frankly, that it will be taxed. Whether it’s this year, I don’t know. I’m guessing a revenue estimate that’s dropped $31 million may add some fuel to that discussion.

DENNIS ROMBOY, DESERET NEWS: Do you have any specific way that you might alter your budget in light of the fact that those projections have dropped?

GOVERNOR LEAVITT: I have thought it through. I’m not prepared to announce them at this point. My budget still is as it is. We’ve been waiting, really, to come up with a consensus revenue figure before I begin the process of making those alterations, but it’s pretty clear that everyone is seeing it as less revenue, and we’ll just have to adjust. $31 million is significant money, by anyone’s estimation. However in the context of a six and a half billion dollar budget, it’s really not, statistically, at least, something that is likely to have a big impact. But we’ll have to adjust.

CHARLES TRENTELMAN, STANDARD EXAMINER: Governor, this morning UTA said--or at least I saw it in today’s paper--they have negotiated a price for the right of way for commuter rail, and they’re still asking the legislature for some money to help with that. In light of this revenue projection--and I know your original budget didn’t include much money for that--where does that stand now, do you think?

GOVERNOR LEAVITT: We have $10 million on the table as a participation bloc. It’s out of our Legacy Parkway budget. We’re able to take money that will not be spent there and put it on the commuter rail. I think- - We’ve been waiting for this figure on the right of way. Pretty hard to put money into a program, or proposed money, that you didn’t have really a plan. They’re getting close to a plan. Once we see it then I understand the legislature’s indicated that they likely will not fund the right of way this year. At least I’ve read that in the paper. Though I suspect that could change too. There are strong advocates for it. We have the tax, the UTA has the quarter cent that was voted by the people. I’m guessing that they could use some of that. There are other assets. The state has some land that we would be, I think, prepared to devote that could go toward it. My guess is, when it happens it’ll be kind of pieced together from a lot of different sources.

ANGIE CALLOWAY, KTVX: Governor, as you know there is a controversial hate crimes bill this legislative session. What do you believe will take place? Do you believe there is a hate crimes problem in Utah, and should we have enhanced penalties?

GOVERNOR LEAVITT: Well, you’ve asked some really searching questions that I think the legislature has been wrestling with. Do I think there’s a hate crimes problem? I guess maybe the best question is, do I think that hate exists? Regrettably, I do. Do I believe that, at times, that it motivates crime? Regrettably, I believe it does. Do I believe that we ought to have enhanced penalties for crimes that are committed against groups? I think that’s- - I think that is, in fact, a reasonable thing to do. I don’t think that it’s a huge jump to do that. But it’s difficult to prove that the crime was motivated by the hate. If you can, then in my mind it’s fine. A couple of rules that I think should apply, however. One is we ought not to be specifying groups, giving one group status over another. If it’s demonstrated hate, or demonstrated crime, motivated by hate against any group, it ought to be treated the same. Second of all, we ought to primarily be punishing the crime. It may be an enhancement because of the action against a group, but we primarily ought to focus on the crime.

TOM JORDAN, METRO NETWORKS: Governor, there’s an organization known as the Western Systems Coordinating Council which is headquartered in Salt Lake, and they serve as an umbrella for electrical producers and suppliers in fourteen states, and parts of Canada and Mexico.

GOVERNOR LEAVITT: Busy people these days.

TOM JORDAN, METRO NETWORKS: Yeah. And I was wondering what our state input is into that organization, given the fact that we are a producer and we- -they are moving toward large regional transmission organizations to try to facilitate that. Where are we on that issue?

GOVERNOR LEAVITT: You know, I have to confess I’m not 100 percent sure what the governance structure of that organization is. I believe it’s a co-op that’s contributed to by all of those private and public interests, meaning municipal governments and power plants that are owned by investors to coordinate. The state does not have any direct influence or representation on that cooperative. I will say they’ve been very helpful as we’ve begun to sort out our energy policy. Before a week is out I’ll be laying out a new energy policy for the state, we’ve been working on it for a couple of weeks, and the help of regional organizations has not just been helpful in its development, but it’ll also be helpful in its execution.

TOM JORDAN, METRO NETWORKS: But you have no direct connection to that?

GOVERNOR LEAVITT: I have no direct connection nor direct governance, and I’m not able, frankly, to enumerate with any authority how that is done.

CHARLES TRENTELMAN, STANDARD EXAMINER: Governor, a month ago, when the power emergency first started, you said you were going to ask the Federal Energy Regulatory Commission to investigate where the money was going. Have you heard back from them yet?

GOVERNOR LEAVITT: Well, I’m not the only one who made that call, and- -

CHARLES TRENTELMAN, STANDARD EXAMINER: I’ve seen a lot of answers in the press, but I’d like to know if you’ve had any.

GOVERNOR LEAVITT: I have not. I also have, in the course of the last month, notified the Federal Energy Regulatory Commission that I believe they should maintain as an option, particularly as we get closer to the summer, the reordering of the market, if you will, by temporarily imposing some kind of cost-plus pricing. I’d like to distinguish that from caps. It’s different than a cap. A cap would be where you’d take an arbitrary level and say no one can charge above that number. In my judgment that causes a lot of unintended consequences. People begin to quit producing power, for example, if their costs are greater than they can sell it. A cost-plus pricing would be similar to that which we have in Utah, where a generator is required to disclose what their costs are, they get a return on their investment, and a return of their investment. I believe in the long run we’re better moving to deregulation. But in the meantime, while we’re seeing these huge transfers of wealth around the region and around the country because of a dysfunctional market, it’s been my assessment that that’s an option they clearly should preserve.

KEN VERDOIA, KUED: Governor, we’re going to turn back once again to Logan, another question from Lee Austin. Lee?

LEE AUSTIN, KUSU: Several proposals being considered by the legislature may or may not have Constitutional problems. I know you don’t talk about vetoes at this point in the session, but pay check protection, or pay check deception, depending on your point of view, is one bill that’s assured a legal challenge. Someone said the large tax to prohibit private fuel storage from moving the fuel here will also guarantee a court challenge. Your thoughts on that?

GOVERNOR LEAVITT: Both of those bills will have my signature. If, in fact, they end up being challenged in court, it won’t be the first time or the last time that happens.

STEVE SPENCER, KUER: Governor, on higher education, there was a large rally yesterday, students came to the capitol to present their point of view. Can you tell me a little bit more specifically than the plan that was introduced to the public so far what kinds of battles you’re willing to fight as far as the educational budget, especially in light of the lower budget projections?

GOVERNOR LEAVITT: Very clearly I desire education to be the highest funding priority. I want to see out of this session a number of things. The first is, I’d like to see a doubling of the number of computer science and engineering graduates in five years, and that means we’ll need to build buildings and fund additional professors. And I’ve also proposed nurturing science and math students in our public schools through the creation of a system of retaining our best faculty members in the areas of technology by giving them incentives. I also feel very strongly that we need to fund the growth in higher education. We have tremendous growth right now because people are returning from the work place back to the universities and colleges to be retooled. And that’s not going to quit. It’s going to be enhanced. I’ve also engaged during this session in a great deal of discussion about the governance of the applied technology centers, where I believe we will conduct in the future, and currently do conduct, a lot of the post-secondary training that is offered to our citizens. All of those form one crucial link--education and the economy. We have to focus on the economy, in 2003, 2004, 2005. If we don’t, we’ll be in a very difficult spot when we get this new wave of students coming into our public education system. So that link is very real to me, and that’s where my priorities will lie.

STEVE SPENCER, KUER: As a follow-up to that, some legislation is being proposed, so-called truth in tuition legislation. What’s your position on that?

GOVERNOR LEAVITT: I’m not familiar with it. I’m not able to comment because I just don’t know much about it.

KEN VERDOIA, KUED: Governor, Lee Austin referred in passing to legislation related to the proposed storage of high-level radioactive waste on the Skull Valley lands of the Goshute Indian tribe. One component that’s been much discussed is the creation of a $1.6 million appropriation to conduct what’s identified as a community outreach, some call it a propaganda campaign, against or involving the Skull Valley Band. If $1.6 million is set aside to inform the public, what would you like to see that money used for?

GOVERNOR LEAVITT: The $1.6 million will not be used, in major part, for informing the public. It’ll be, in major part, used in playing lawyers to sue them, and to do everything we can in Washington to lobby against their capacity to do it, going to Federal Court, challenging them in the environmental process. I intend to impanel, as we have now, a significant group of legal talent for that purpose. I expect that there’ll be disagreement over whether or not the challenges are proper, that they’ll have to acquit their position. We’re going to acquit ours which is, we don’t want it here and we’re going to do everything we can to keep it from coming. We’ll go to court, we’ll go to the Congress, we’ll go to the environmental battlefield, and we’ll go to the stockholders of the companies that are doing it. And we need some money and resources to wage that battle, and I’ve asked the legislature to provide it, and I hope they will.

KEN VERDOIA, KUED: Nevada Governor Gwynn has actually advocated the creation of a $5 million advertising public relations fund to reach out throughout the nation to communities that would be affected by the transportation of the high-level radioactive waste. His concern, of course, is Yucca Mountain as the permanent storage site. Would you see Utah joining Nevada in this outreach campaign to cities like Omaha or St. Louis or Minneapolis to build public support, or public opposition, I should say, for such trans-shipments of high-level radioactive waste?

GOVERNOR LEAVITT: Governor Gwynn and I have, the states of Nevada and Utah, do have a couple of things in common, one is a belief that until there is a permanent solution, that the best solution is to leave it where it is. It’s stored in concrete casks at the site where it’s developed, where it’s produced. We don’t produce this, we don’t benefit from it, and we really ought not to be in a position of storing it for people who do. I think Governor Gwynn feels that way as well. He does have the complication of being, at this moment, seen as a potential long-term storage site. We are seen as a temporary storage site. Of course one of the worries we have is if you ever get it put one place, it’ll never leave, and so we resist that. Will we join in his effort? We’ve talked about it, but there’s not been any agreement to it. We have common interests, and if we could improve our common interest then I wouldn’t hesitate to discuss it further.

TOM JORDAN, METRO NETWORKS: Governor, earlier this week--and I hesitate to bring this up--but the conservative CATO Institute said some unpleasant things about you in terms of- -

GOVERNOR LEAVITT: I thought you were going to bring up my 50th birthday.

TOM JORDAN, METRO NETWORKS: Well, if you’d rather. They obviously came out talking about, you know, a tax-and-spend governor. I have a feeling you probably don’t take that same line on the issues that they were dealing with. It would be appropriate, I suppose, to get your take on it.

GOVERNOR LEAVITT: Sure, thank you. Ironic, I suspect, that in the same week the state was judged by the most credible and, I might add, the most complete academic study of state governments produced in the country by Governing Magazine and a university in the east that I can’t recall right now, and judged us, again, the best-managed state in America. They judged that looking at a broad range of measures, how do we manage our debt? How do we manage our taxes? How do we deal with the services? Are we efficient? How many employees do we have? They judged us the best-managed state in America, and I was very proud of that. The CATO Institute is a think tank that, by their own description, is a basically a libertarian organization, and they believe that anything that grows the amount of money that is invested in government is bad. Now, they had not taken into consideration the fact that we’re growing with our young people at about twice the national average. They didn’t take into consideration the fact that we were rebuilding our highways for the next thirty years. They didn’t take into consideration the fact that our taxes have actually decreased as a percentage of our personal income because our economy is growing so fast. They have very clear ideologic agenda, and they like to use these report cards, and every two years they do the same thing. It’s as predictable as the sun coming up. And frankly, I don't- - No one likes to be criticized, but I, frankly, I’d feel more criticized if they rated me an A. Because we wouldn’t be taking care of the legitimate needs of the people of this state. And I don’t think that was, frankly, their interest. Their interest is in looking after the ideologic interests of the CATO Institute.

KEN VERDOIA, KUED: Well, since we’ve introduced the subject, and we have about two minutes left to go in this news conference with you today, the governor of the state of Utah did, in fact, turn 50 this past week. Ruminations on a half century past?

GOVERNOR LEAVITT: I’ll have to confess that I’ve not had a birthday in the past that’s caused me to reflect as much as my 50th has. I find myself in the position of, perhaps never being happier in my life, doing something I love in terms of public service, and having the blessing of the a family that’s healthy and strong, and the basic needs of my life taken care of. If the next 50 years can be as good as the past, I’ll be very grateful.

KEN VERDOIA, KUED: And that said, as you look forward, if we can all anticipate, to another 50 years, how would you hope those 50 years will treat Utah? By what standards would you like to see this state measured? Not just your contribution as a governor over three terms, but how would you like to see the state measure its own success in the next 50 years?

GOVERNOR LEAVITT: I- - I aspire for this state, 50 years from now, to look back and still maintain the fundamental quality that creates good neighborhoods, clean water, clean air, economic prosperity, and a capacity for families to live out their lives in the way they would choose. Being a free people. Being a people about good things, and living out the same kind of satisfaction that my generation has been able to. Recently we put into a time capsule a 100-year reflection of all of the state legislators. It was interesting to me to see what they wrote. They wrote about their basic values and the things that they deemed to be most important, and it’s my hope that all of those things will be intact 50 years and, for that matter, 100 years as well.

KEN VERDOIA, KUED: Governor, thank you for your time today. That concludes this month’s edition of the Governor’s Monthly News Conference. A reminder that a transcript of this and every news conference is found online at www.uen.org, courtesy of the Utah Education Network. Good night.

Recorded: February 15, 2001, 10:15 a.m. Eccles Broadcast Center
Broadcast: February 15, 2001, 9:00 p.m. KUED-Channel 7

 

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