April 27, 2000

Most of the problems that we've been having budget-wise are in the area of what's known at out-of-home care, and we're working hard not to compromise the care of children, but we are working to operate within our budget.

Reporters (in order of appearance):

KEN VERDOIA, KUED
CHRIS VANOCUR, KTVX
TOM JORDAN, METRO NETWORK
DAN HARRIE, SALT LAKE TRIBUNE
ROBERT GERHKE, ASSOCIATED PRESS

KEN VERDOIA, KUED: Governor, thanks for joining us today. Recent media reports indicate that the State Division of Child and Family Services has been removing children in their care from expensive treatment programs and placing them in less expensive foster care settings. Now, this is playing out as that agency deals with a substantial budget crisis. It leads some people to conclude that this is a cost-saving maneuver which might cause the care of those children to suffer at the hands of the state. Could you comment on this situation?

GOVERNOR LEAVITT: In the last nearly seven years we've increased the budget of that division nearly $200 million. We've cut caseloads substantially, we've been able to make a lot of improvements. The legislature did not fund levels of growth that we had hoped, but we- - And so what we're doing is making certain that every, every case is screened and prioritized. Most of the problems that we've been having budget-wise are in the area of what's known at out-of-home care, and we're working hard not to compromise the care of children, but we are working to operate within our budget.

KEN VERDOIA, KUED: So this is something that is taking place where you have to reduce the number of people in those expensive settings? Is that the decision?

GOVERNOR LEAVITT: This has been an area that many have believed we could be more efficient in to begin with. And we have a budget, and we're doing our best to live within it. And I don't believe we're compromising the care of children, but it's clear we're trying to ration the dollars we have to make certain that it goes to the highest priority cases.

CHRIS VANOCUR, KTVX: Governor, this issue has been in the news for about 5 years and is now back, and I'm curious whether you think, yes or no, that these so-called gay clubs should be allowed to meet at Utah schools.

GOVERNOR LEAVITT: This is an issue that's playing out in lots of different forms, all over the country. And I would much prefer to see it not play out in schools as an issue. I just, I don't think this is the place for it to play out.

CHRIS VANOCUR, KTVX: Why is that?

GOVERNOR LEAVITT: Well, it's just we've got other things to do in school that are more important, in my mind, it's detracting from their resources and otherwise. And I'd just as soon it didn't play out there. It'll play out in the courts, and it is now playing out.

CHRIS VANOCUR, KTVX: I take that as a no, that you would prefer not to see these clubs at school.

GOVERNOR LEAVITT: I think that the process that they went through at the Salt Lake School District was a rational one, I thought they came up with a reasonable position, a consistent position, and it'll go now to the appellate courts, and I sense there's a pretty good chance it'll be overturned.

CHRIS VANOCUR, KTVX: As you mentioned, this issue is playing out on a number of fronts. What about the notion of gays joining the ranks of Boy Scouts?

GOVERNOR LEAVITT: That's a private organization, it seems to me that private organizations ought to be able to play, rather, to make decisions about their leadership. I think it's going to be one that will be a very serious detriment to the Boy Scouts if it's not resolved in their favor.

CHRIS VANOCUR, KTVX: What I'm reading into these past couple of answers is, perhaps you're not a huge supporter of gay rights.

GOVERNOR LEAVITT: I do not believe that gay, that sexual orientation should be a protected civil right. I don't believe that anyone should be badly treated in any circumstance. The law is clear on what is a protected civil right, and sexual orientation isn't one of them.

TOM JORDAN, METRO NETWORKS: Governor, yesterday we got a fax from the Mountains and Plains Booksellers Association touting you as a hero for your defense of bricks and mortar business in the Internet sales tax issue. This issue obviously isn't going to go away. You are becoming a national leader for the bricks and mortar businesses in the Internet sales tax fight. Since the issue is not going away, where do you see it going, and how does it feel to be a hero?

GOVERNOR LEAVITT: This is a very controversial issue, and it's one that's undoubtedly going to continue to be. It's one that's very, it's clearly defined by two questions. When it comes to taxes, particularly sales taxes, how much should we pay? And the question is, the second question is, who should pay? On the question of how much, I'd like to see it as low as possible. I'd like to use dollars from collecting sales tax that's now not, that's owed but not collected, I'd like to use it to reduce the sales tax on food. I'd like to eliminate the sales tax on food. And the question of how much is, in my mind, as little as possible. The question of who pays, very clearly I think we ought to have a level playing field. And that's what's boiling down now, is a question, are we going to have a policy that says we'll create some permanent special privileges where a certain portion of our economy doesn't have to pay for schools, roads, or law enforcement, and then we'll have everybody else pay more? Or will we have a level playing field where everybody pays the same? I don't know anybody that likes taxes. I don't, but if you have to have them, at least they ought to be fair. We ought to treat everybody the same. We ought not to discriminate against local businesses. Now, where's it going? I think it's pretty clear that the E-commerce business is headed toward a concept people like to refer to as clicks and mortar, where almost every business, every retail business, at least the successful ones in the future, will have a web site that you can buy on, a retail counter, a catalog, and a telephone. And you can buy through any of those. What we have to have in the 21st Century is a sales tax system that treats all of them the same, a level playing field. That's what all the major retailers want. J. C. Penney's, Sears, Wal-Mart, K-Mart, GM, Circuit City, Radio Shack, all the major national retailers are saying, "Just give us a level playing field." And how can you have a tax policy that's based on anything else? I think that this will play out in congress this year on just some minor issues, we'll go through the election, we'll go through another Christmas season, we'll see a substantial increase in E-tailing, and I think we'll get down to, in the next two years coming up with a system that will allow us to have a level playing feel field. And if we can't, if we can't achieve a level playing field, then I think you have to ask a question about whether the sales tax is even viable as a tool in the 21st Century. It may not be. If we can't fix the system, then we may have to scrap the entire sales tax system, and that will have dire consequences in terms of what the result is on other taxes. And I don't support that, I'd like to avoid that, but I think that that's a possibility.

DAN HARRIE, SALT LAKE TRIBUNE: Governor, there is a tax right now, a use tax where people are supposed to, I guess voluntarily pay for purchases made outside the state. You've made much of I think a famous jar of peanuts and other items that you've purchased. Do you voluntarily submit those taxes?

GOVERNOR LEAVITT: I do. A person whose profile has been as high on this as I, I think I pay double, if I'm not mistaken, just to make sure. Made certain my mother paid, I made certain that everybody that I had any contact with paid.

DAN HARRIE, SALT LAKE TRIBUNE: Isn't it painful to do that, though, knowing that there really is no enforcement of that law?

GOVERNOR LEAVITT: Yeah, there are 850,000 tax filings every year in the state of Utah, and only 3,400 people did it. It's a legal requirement. I mean it's the law. But it isn't enforced, and it's, again, a good indication of why we really need to fix this system. The existing sales tax system is a wreck. It needs to be dramatically simplified. With or without the Internet We can do better than what we have. There are retailers that spend thousands, rather, millions of dollars in just administering it, and it's a expense they don't need to have, the technology is available to do it. One of the opportunities now is to just do a much better job at being able to take the friction out of the system and the cost out of the system.

ROBERT GERHKE, ASSOCIATED PRESS: During the last legislative session there were some legislators said the income tax code needs to be overhauled, as well. I mean, would you be supportive of just taking the entire state tax code and taking a whole new look at it?

GOVERNOR LEAVITT: I don't think that would be unproductive. But I'm not optimistic that you could garner the political combinations that it takes to do it. Tax policy is a combination of unhappy alternatives. And trying to balance them out and find a place where you can make everybody feel good is very difficult. It's happened over years. If you push- - It's like a balloon, if you push in it pops out someplace else. I think there are some things that could be done, as I said, on the sales tax that would dramatically improve it. I think there are some areas in the income tax that could be improved. It's possible that this whole issue of E-commerce could drive a significant debate on how we deal with the financing of local government and state governments nationwide.

KEN VERDOIA, KUED: Governor, we're going to turn our attention now to Logan, where we have a question from Mike Weibel of the Logan Herald Journal. Mike?

MIKE WEIBEL, LOGAN HERALD JOURNAL: Hi, Governor. You've talked a lot about the need to improve our tax system. When and where do we get started?

GOVERNOR LEAVITT: Mike, the way we start, I believe, is to begin, well, in fact, today, as we speak. There is a meeting in St. Louis where there are 35 states gathering to develop a model law, the process of a model law that would radically simplify the system. It would go from a large number of different definitions in different states. Mr. Harry mentioned the bottle of peanuts I've talked about. If you- - Just to give you a good example, peanuts in their raw form are taxed in five states. If they're roasted they're taxed in 11, if they're honey roasted they're taxed in 17, if they're in Fiddle Faddle I think it's 21. I mean it's a very confusing set of definitions. And it goes like that in lots of places. In some states shoelaces are clothing, and others they're not, hence not taxed. In some states fruit juice, if it goes over 10 percent fruit juice it's considered juice, and if it's under that it's soda pop and it's taxed differently. There are just a thousand of these, and we've got to- - It boils down to standard definitions, we've got to simplify the number of rates, we've got to create a system so that people can, if they're purchasing over E-commerce, it can be done without any complication to the seller. Those are the kinds of things we will need to do. I think ultimately we'll need to ask congress to authorize an interstate compact between the states, and then put incentives in it where the states are rewarded if they have a simplified system, and in some way sanctioned if they don't. And I think over the next four or five years we may well see a revolutionary change for the better in the way we deal with sales taxes.

DAN HARRIE, SALT LAKE TRIBUNE: Governor, let me talk about another tax, gas tax. Right now it's an election year, it's not a popular thing to talk about, and gas prices are very high. Even next year, after the election is over, when it's maybe feasible to talk about these, is it possible to increase gas taxes when the price is so high?

GOVERNOR LEAVITT: I would say it would be awfully difficult.

DAN HARRIE, SALT LAKE TRIBUNE: Therefore you don't see that in the foreseeable future?

GOVERNOR LEAVITT: Well, we went nine years before we adjusted the sales tax for inflation. We've now been, what, five or six. I mean periodically it has to be done. It's a very unhappy thing to do, and not a pleasant thing to do, and you know, at some point in the future it'll happen. I wouldn't predict when, and it certainly would be unlikely to happen at a time when gas prices are high and it would be painful for consumers.

KEN VERDOIA, KUED: Governor, legislation is moving through both the house and the United States Senate dealing with the San Rafael Swell. Senator Hatch's bill calls for a conservation area, a legacy area in the San Rafael area. And environmental groups are called it voodoo conservation, saying that it's a sham of environmental protection. How do you come down on the bills proposed variously by Senator Hatch and Representative Chris Cannon?

GOVERNOR LEAVITT: I'm quite optimistic. There's a lot of support, even from the administration, some momentum in congress. I think there's a chance it could pass.

KEN VERDOIA, KUED: Do you consider it offering the type of protection you deem appropriate for San Rafael Swell?

GOVERNOR LEAVITT: I think it's a very innovative approach. It in some cases produces more protection than would be there with just wilderness. In other cases it uses different definitions. What is it does basically is it says, "Let's not just call something wilderness or non-wilderness. Let's manage the land according to its best use. Let's protect aggressively that which is in need of protection, and then let's use for multiple use those things that are best adapted to that. Frankly, it's a very logical approach, in my mind.

DAN HARRIE, SALT LAKE TRIBUNE: It is an election year, there are lots of special interests out there trying to organize their folks. One of the major special interest battles this year is banks and credit unions, and there's starting to be some rumblings out there of perhaps going back on the legislation that was passed a couple of years ago and now imposing a tax on credit unions. Are you hearing that talk, and what's your attitude on that subject?

GOVERNOR LEAVITT: Actually I haven't heard that.

DAN HARRIE, SALT LAKE TRIBUNE: What's your attitude on that subject?

GOVERNOR LEAVITT: I've always wanted to maintain myself as A kind of arbiter of fairness on legislation. I haven't taken a position on one side or the other, and I haven't any intention of doing it now. I will, as we get into the legislature, if it comes up, I'm going to engage in monitoring it first, and then try to shape it if I can. But there is no proposed legislation, so it would be difficult for me to speculate on that.

DAN HARRIE, SALT LAKE TRIBUNE: Are you at all worried that the special interests are actually going out recruiting candidates with one thing in mind, and that's either banks' or credit unions' interest, and that's their one issue they're recruiting candidates, they're recruiting delegates, and they're basically trying to, through force of democracy, get their agenda through the legislature?

GOVERNOR LEAVITT: Well, why don't I raise that up a notch and say I think there are a lot of groups doing exactly the same thing. And on one hand you can argue that is democracy, people can organize and do their best to have their voice heard. On the other you can say it's really not in the interest, long-term, in my judgment for democracies to be shaped by those who are simply advocating for one cause. But I have every confidence the people who are on both sides of the debate, you recognize, have interest in education, they have interest in roads, they have interest in being able to have clean air and clean water, and to have our schools improve. So I don't question the fact that they, people may have an interest that's more prominent to them, and maybe what motivated them, but I would hope that they would also look at the larger picture. I've been going through a lot of delegate meetings in the last couple of months, and it's very clear that typically people need an issue to motivate them into politics. And it's usually one they feel deeply about. And obviously this is one in which there's a lot of people feel deeply. There's a- - Its an interest- - Credit unions, for example, are a very closely-knit community. It's a community. And it's not unlike a lot of other communities that end up with political interests that motivate them.

KEN VERDOIA, KUED: Back once again to our location in Logan for a question from Lee Austin of Utah Public Radio. Lee.

LEE AUSTIN, UTAH PUBLIC RADIO: Thank you. Speaking of issues that people feel strongly about, we're having another round of debate here and in other parts of the state about the merits of fluoride added to water systems. I know it's not exactly something your office will be leading out on, but I'm wondering if you have an opinion about the safety or effectiveness of fluoride.

GOVERNOR LEAVITT: Each morning I get up and brush my teeth, and each night I brush my teeth, and as I look at my toothpaste I think it says "with fluoride." So obviously every community needs to make that decision on their own, and that's why we have it as a ballot process, and not for governors to get to decide.

ROBERT GERHKE, ASSOCIATED PRESS: Governor, a year ago at the Republican convention you were heckled by some other conservatives there at the meeting. We're a week away again from the state convention, and what sort of reception are you expecting, and do you think the conservative wing of the party has taken over the party, and is that good for- -

GOVERNOR LEAVITT: I have been involved in Republican politics since the early 1970s, and there has always and will always be, in both parties, a group that are On the extreme ideologically of their respective camps. That's what makes conventions a great place. I mean it makes them, they're almost sometimes a circus atmosphere because people are there to express their views. I expect I'll be received warmly, as I have at all the county conventions. I expect there will be a few people there who don't like what I've done, and that will be the moment which they choose to express it. What's important to me, ultimately, is that I'm nominated by the party of, by the Republican Party. I'd like it to happen at the convention. If it didn't I'd obviously go on and follow the process through. If you're going to run for governor, you need to be prepared to stand up and have people ask hard questions and say unkind things, and hopefully once in a while people say you've done a good job.

TOM JORDAN, METRO NETWORKS: On to something slightly related to that. One of the issues that has been contentious, certainly for at least one large group of opponents, is the Public Service Commission legislation. The price of Questar stock has gone up better than 50 percent since the end of the legislative session, which would seem to be an indication that the, that Wall Street was very happy with what the legislature did. Have you had any second thoughts about the wisdom of that legislation?

GOVERNOR LEAVITT: No, I haven't. I think it is a very tough call, because it's not clear cut. The bill does not do anything immediately, it has a deferred date, until July of 2001. I chose not to sign it for a specific reason. I wanted to send a very clear signal that this is not over. And unless the legislature produces a bill that provides for adequate consumer protection, I am committed to call them into special session until they do. The consumers of this state will not stand for a regulatory system that does not provide for adequate consumer representation. Now, I allowed the debate to go forward because I believe there are some things about our regulatory system that need to be reexamined in an atmosphere where deregulation and markets are being allowed to work to the benefit of consumers in many other areas. Telephones, electricity, I can see a day very clearly when you'll have a choice on who you buy electricity from. I can see a day when you'll have a choice who you buy natural gas from. I can see clearly the day you'll have a choice on who you buy your residential telephone from. That's already beginning. So we're going through a process. But in that time frame of transition, we've got to have consumers protected, and I'm not prepared to accept anything that does not, in fact, provide that.

CHRIS VANOCUR, KTVX: Governor, in reference to House Bill 320, some on the hill refer to that as the Questar bill because of their interest in it, and their reported help in drafting it. And I want you to clarify a couple of things which are floating out there. Your father, is he on the Questar board?

GOVERNOR LEAVITT: He is.

CHRIS VANOCUR, KTVX: Those who don't like the bill--you know how these things work--they call us and say, "We need to look into this, the governor's father sits on the board and he also owns a lot of stock." Is that true? Does he own a lot of Questar stock?

GOVERNOR LEAVITT: He owns a certain amount of stock, and I have no idea how much it is. But let me say, this has been discouraging to me that the people would impugn the integrity of my father and imply that somehow he would use influence with me to affect it because of his membership on that board. My father is an honorable man. Is he a man of integrity that does not deserve to have his honor or his integrity questioned. He didn't have any conversation with me about this bill at any point in time. And those who would imply otherwise are simply doing it to create a political advantage that is unfair to him. He doesn't deserve to have his honor or his integrity impugned in this case.

CHRIS VANOCUR, KTVX: Actually I don't think they were raising questions about your father, I think they were raising questions about your motivation, and whether this, in fact, passes the so-called smell test.

GOVERNOR LEAVITT: Why would I- - What interest would that mean- - It's not my stock, it's my father's. And we didn't have a single conversation about it. And those who would imply that that's the reason I acted, I think do so unfairly, and I thin it does impugn the integrity of my father, that he would somehow use his influence with me to affect it, and it would be unfair. He's an honorable man.

CHRIS VANOCUR, KTVX: Well, again, I think when you cited the increase in stock price, what I'm being told is some of the analysts who follow the utilities, they cited more favorable business conditions in Utah. And again, I think that's where they're addressing their concerns, is that by not acting on the bill and not vetoing it, that helped increase the price, and for whatever reason benefits your father and your family.

GOVERNOR LEAVITT: I did not do anything on the bill with that in mind. If people believe that Utah has an atmosphere where a business can operate effectively, I don't see that as being a negative, but it wasn't done in any way to affect one company or the other. It was done with the idea that over the next ten years, twenty years, there's going to be a lot of changes in the way utilities operate, and we need to have a regulatory scheme to make sure that we're able to protect consumers.

DAN HARRIE, SALT LAKE TRIBUNE: You mentioned there are certain issues that motivate people to get into politics. Have you seen this HB 320? Have you seen people motivated to get active in politics because of that bill?

GOVERNOR LEAVITT: I've seen groups who were very active already talking about this one. I mean it's- - You've had a number of groups who are active on the hill. I mean it's been brought up in almost every delegate meeting. There are three or four issues that you can count on being brought up in Republican meetings, and that's one of them.

DAN HARRIE, SALT LAKE TRIBUNE: Do you think legislators will lose their positions because of that bill?

GOVERNOR LEAVITT: Well, it's a controversial bill, and I don't think there's any question that in the close elections it could have an impact. As will a number of other bills that passed the legislature. That's really why we have the legislature run every two years, it keeps everybody very sensitive to the electorate. Which is a good thing.

KEN VERDOIA, KUED: We're in the last couple of minutes of our program. I'm going to ask you a sensitive question about a recent legislative work force services interim committee where they considered people with disabilities in Utah, and the state's inability to provide basic services to those disabled individuals. There's now a waiting list of some 1,500 people, a waiting list that can be five and even eight years long to these people getting basic services so they can live with any semblance of a quality of life. And we threw a financial band aid at it in the last legislative session. They're saying it's $14 million we need to come up with to reduce this waiting list. Do we owe it to these people to provide that money?

GOVERNOR LEAVITT: The question that you're asking is the right question. What is the level of, quote, entitlement that a person has who is disadvantaged in one way or the other? The more that you say a person is entitled, the bigger you can make that waiting list. The less you say a person is entitled, or that society has an interest in being able to provide, the lower it is. There are a lot of people I would like to provide services to that we have not been able to, and I hope we'll be able to continue to add to that, to take people off that list.

KEN VERDOIA, KUED: I didn't give you enough time for a very complex question. Maybe next time when we join you next month for the Governor's Monthly News Conference. Good evening.

Recorded: April 27, 2000, 10:00 a.m. Eccles Broadcast Center
Broadcast: April 27, 2000, 7:00 p.m. KUED-Channel 7; and 11:00 p.m. on KULC-Channel 9

 

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