February 21, 2008

"So it should be another very, very good year for teachers, as we have done for three years running, now. And that, for me, is a priority." -Governor Huntsman

KEN VERDOIA, KUED: Governor, thanks for joining us today. The most recent projections for our budget show the state is still working with a healthy surplus. But it will be more than $300 million less than previously projected. Now, even assuming that every penny was not going to be spent in the previous scenario, does this rescission, or roll back of an estimate impact your plans for the state? Specifically, can you sustain your plans for funding public education with this reduced amount of surplus?

GOVERNOR HUNTSMAN: The short answer is, I think so. We have to remember that we're still looking at a $775 million surplus, which, instead of being the second largest in the history of the state, it's the third largest in the history of the state. I think when all is said and done, you're going to find that our education numbers are probably about 4 percent higher than they were last year, which is a continuous steady increase, and last year was a record number. And I'm still shooting for a very healthy WPU, or a weighted pupil unit, which is another way of talking about teacher compensation. So it should be another very, very good year for teachers, as we have done for three years running, now. And that, for me, is a priority. All of our other priorities seem to be pretty much in check. But it's interesting, because when you disaggregate the shortfall, I'd say about 35 to 40 percent of it was out of our control, things like the stimulus package, when you look at accelerated depreciation for business, for example, there is a certain revenue shortfall for a year or two that our state will experience, that we hadn't anticipated. When you look at federal reserve rates, they have gone down, which means that our return on invest the capital is less than we had budgeted. That would be a shortfall of probably $20 million alone in that category. So in total it's still going to be a very, very good year, and it means that some of the programs that we had looked at supporting may not, may not see the light of day this year. But by and large all of our needs in the state will be adequately funded.

RICHARD PIATT, KSL-5: Governor, it seems that some of the legislators have narrowed this down to perhaps a choice between raising the WPU, the weighted pupil unit, or fully funding the teacher raises. Do you think that that should be a choice that we have to make? Should we do both? Or what's your view on how we should allocate those moneys?

GOVERNOR HUNTSMAN: Well, I think we can do part of it directly to the teachers, and there's been some talk about $2,000, $2,500 directly to teachers, which I think would be a good thing. We know where it goes, it goes directly to the teachers, and maybe 2 to 3 percent of it in the form of a WPU. We may end up doing both of those. Maybe a 1 percent in the form of a one time bonus. There are two or three ways that we could approach this. I know that there are some who are desirous of getting money directly to teachers, and I understand that, and there are some professionals in the field who I hear from when I go around and visit the school districts who'd like to see it in the form of the WPU. And this year we might see it done both ways.

LISA RILEY ROCHE, DESERET MORNING NEWS: Governor, it looks like one thing that you won't be able to fund this year is a general tax cut again. I know you did not include that in your budget, but both house and senate Republicans had talked about perhaps as much as $100 million in some kind of property tax relief. What's your assessment of that? We're hearing from especially senate leaders that that's just not going to happen this year.

GOVERNOR HUNTSMAN: And I think that's right. We're coming off of record tax cuts, tax reform, that were implemented just a month ago, and I think, as I've mentioned before, that it's probably prudent to see what impact these tax cuts have as they reverberate through our economy, and position us for a more competitive tomorrow. If we see any kind of tax cut, so to speak, it could very well be in the form of the ability for people to purchase on a pre tax basis some sort of health care coverage, which has been talked about. Anywhere from say $15 to $18 million would be the fiscal note associated with that. Maybe to take effect next year. But that has been talked about as part of the overall health system reform approach, and I would see that very realistically as a tax cut, you know. Because it does get right to the bottom line of the taxpayer, and does assist them in buying, as corporations are able to do and as organizations are able to do today on a pretax basis. But we'll see where that one goes.

LISA RILEY ROCHE, DESERET MORNING NEWS: With this being an election year, how difficult is it not to be able to go back to Utahns with yet another general tax cut? You're talking about a fairly specifically targeted tax cut with the health care insurance issue. How difficult is that for being in an election year and have to tell taxpayers, sorry, no break this year?

GOVERNOR HUNTSMAN: Oh, I think this year we are beginning the implementation of the largest tax cut the state's ever seen, $400 million worth. And I think that is a message that a lot of people will be taking back to their constituencies, and rightly so. They should take credit for that. It took a lot of years to prepare, and I believe it is responsible, for example, for our being able to attract, you know, interest on the part of people like Goldman Sachs, Disney, the recent announcement by Hershey, for example. So the economic development apparatus still continues to move forward with people expressing interest in what I still believe to be the top performing economy in the nation. A nation that is listing, and that is under performing economically, to be sure. But given all of the bad news economically out there, our state continues to stand tall in terms of its own performance. And I would say that probably 25 percent of the states out there, I'm trying to get a handle on what the exact number is, but so far I've been able to count about 25 that actually are in the red from a budgetary standpoint. And so the fact that we're still doing quite well on a surplus basis- - I mean you look at states like Nevada, which had to cut quite deeply into their budget. Arizona, I think on a percentage basis is doing worse even than California. So as I think I've mentioned before, the economic reasons driving those budget phenomena are not necessarily the case here, and I think that we will weather whatever economic storms ahead of us quite well, and continue to out perform the nation by two to three times.

KEN VERDOIA, KUED: But are we, in fact, seeing, with these reduced surplus estimates, an indication that we are on leaner times, that surpluses may not be the given assumption for the future years, that we may be back in a leaner economic period, even if we fiscally well manage, that it will be a leaner time rather than the flush two or three years we're coming out of?

GOVERNOR HUNTSMAN: Well, all economies are cyclical in nature, and if you call a lean time a year in which you have a 500 to a $775 million surplus, I call that still a pretty good year. And while in many states, and I think when the tallies are done over the next year or two, you're probably going to find 40 or 45 of the 50 states that are really suffering. I suspect that we will buck that trend in the sense that we will continue to grow. We'll be in the positive territory, certainly not as positive as we have been over the last two to three years, but let's face reality. Over the last two to three years, you know, given our performance, you can't stretch the rubber band any more than it's already been stretched. You know, you have to face reality, and that is you can't get any lower on unemployment, you can't get any higher on job growth, you're just rate limited because of your, you know, your population base. So I think everyone knew that we would face times where we weren't growing quite like last year and the year before. And the overlay on top of that, then, is how we are linked to the nation's economy, and the performance, or lack thereof, that they're experiencing nationally. And I think, you know, you'll find that we're down a little bit this year. Next year it's hard to know where we're going to be. Some would say that this downturn could be short lived, others could argue that it's going to take a year or two for the real estate, the residential real estate market, just to name one, to kind of correct itself and bring it back into some sort of economic equilibrium such that growth is part of the overall plan.

TOM JORDAN, METRO NETWORKS: On the issue of economic development, just to take it up for just a moment, it's been a good week. We had substantive meetings with the governments of Hungary and Colombia in something which I know you care very much about. Is this part of simply a playing out of the whole strategy to diversify the economy with foreign trade? Or is it just a bigger push going on right at the moment?

GOVERNOR HUNTSMAN: International trading partners typically will look at economies that are performing well, they'll look at regions within the United States, and it's not surprising, therefore, that we're getting a lot of international attention, people who want to trade more, who want to entice more in the way of technology transfers, who want to look more at what our universities are doing with respect to the USTAR construct, for example, trade in agriculture. There are a lot of things that people would find interesting. With respect to Colombia, Colombia negotiated a free trade agreement with the United States that was wrapped up several months ago, and because of lack of trade promotion authority in congress they're not able to get it done. And so I think they're trying to get grassroots support for that. And you know, European delegations have been through, and they want to engage more with a state that is becoming more global in terms of its outlook, and exporting a heck of a lot more than we did a few years ago. If you look at our export numbers, we're probably seven, seven and a half billion dollars, growing at, I don't know, 10, 15 percent per year. So more engaged to be sure, and I think that's registered in the number of visits we're getting from people.

RICHARD PIATT, KSL-5: Governor, this is a question that may seem a little obscure, but it may be timely given that we're talking about the earthquake in Wells, Nevada today, this morning, Representative Larry Wiley has a bill to spend several million dollars to retrofit some of the state's rural schools to protect them from earthquakes. That bill is having trouble in the house. I'm wondering if, given the news today, the reminder of the earthquake danger in this area, if, in your mind, this is a reminder of how we start to need to think about, if we need to start thinking about how we're going to protect rural areas of the state, and, in fact, areas that we don't normally think about from earthquakes.

GOVERNOR HUNTSMAN: I think it is absolutely the case, that this is, in a sense, a wake up call, when you have a 6.3 magnitude earthquake that is 39 miles west of the Utah border, in a town called Wells, that that most people haven't heard about until this morning, and you have a couple of sizeable aftershocks, you know, it affects Wendover, and we have, you know, department of health officials looking at helping, we've got public safety people looking at helping, they're all standing by. I think it is, in a sense, a wakeup call, and that is how prepared are we? I'm always asking that question. How prepared are we, at every level? I mean you know why shouldn't our schools be every bit as prepared to face an earthquake as the state capitol? And all of the new buildings are. It simply is a function of looking at the older buildings, and you have to kind of look at the life cycle of those older buildings, and that is how much longer are they likely to provide shelter and housing for schools? And then do the economic analysis to see if it is, in fact, worth investing as opposed to building a new school. But I think this will probably spark a healthy debate about how safe our schools actually are vis-à-vis an earthquake.

GLEN WARCHOL, SALT LAKE TRIBUNE: Governor Huntsman, Senator Chris Buttars at the state legislature made some comments this week that have brought a lot of scorn to the legislature and to him, himself. Comments were seen by a lot of people as racist, and at very least, insensitive. There have been some calls, including editorials in papers around the state, that Republican leadership should step in, yet so far they've just sort of joined ranks behind him and supported him. You've pointedly avoided any kind of comment on it. Do you think that this is, this might make you look, and the Republican leadership, look complicent in any way in a sort of, if it is only ignorance, but a problem that's being picked up nationally?

GOVERNOR HUNTSMAN: I think it's hard to say that I have studiously avoided comment when I showed up on the front page of your good newspaper, commenting on it. And I basically said that it is up to Chris Buttars' constituency to express whatever level of outrage they think is appropriate in this case. Voters own their districts. They put people into power, they take people out of power. They put pressure on people who do stupid things. To make decisions about whether or not they stay or how long they actually serve. And I'll say, as I said, again, I think it's absolutely up to the constituency of Chris Buttars to determine how long he serves, and to express whatever level of outrage they think is appropriate in this particular case.

GLEN WARCHOL, SALT LAKE TRIBUNE: To put you on the spot a little bit, some might say that's sort of a non stand on the issue. As governor and as normal head of the Republican party, don't you feel that it is your place to make some sort of statement on those kinds of comments that Chris Buttars made in general? To deplore them, or to support them?

GOVERNOR HUNTSMAN: Well I think I've said what is appropriate for somebody in my position to say. Who holds the power in this particular case? The people who put him in office. They're the people also who are responsible for sending a message if they feel that is an inappropriate thing to say. I thought they were highly inappropriate and intemperate remarks. I was offended personally by them. And I attended church last Sunday at the Calvary Baptist church, I was a speaker there, and I know there were a lot of people there who were offended as well. France Davis talked about it in his sermon, and he asked people to pray for Senator Buttars, and for there to be greater understanding on all sides in this particular debate. And I think what Pastor Davis said was absolutely appropriate.

JEFF ROBINSON, KCPW: Governor, what's your position on Energy Solutions' proposal to bring 1600 tons of low level nuclear radioactive waste into Utah?

GOVERNOR HUNTSMAN: I don't like any waste in the state. I've said that from the day I was elected. And I think our actions would back up exactly what I'm saying, and that is every year we have taken this closer to the end point, that is when we have zero waste coming into the state. We have identified a volume specific end point which is to say, you know, 3 million cubic yards left, after that no more, period, end of conversation. In this particular conversation, there is a broader federal policy issue, here, that I think is a very relevant one, and that is should the United States, at a federal level, at the NRC level, be allowing waste into the state? Or into the United States. We've got so much domestically we have to deal with, and an ever diminishing number of landfills. And the NRC, I think, is going to take a federal position on this, and I suspect their decision is going to be to block the foreign importation of waste. I'm guessing, I don't serve on that commission, so I don't have any say. But I suspect that's what their decision is going to be.

JEFF ROBINSON, KCPW: If they don't, it's my understanding that you would have the authority to say "this isn't coming to Utah." Would you do that?

GOVERNOR HUNTSMAN: I will look seriously at that very question at the right time. I don't know that I have that authority. I've heard both sides, but I'll tell you, loud and clear, what I believe. I don't like the stuff coming into our state. I never have. We're moving to the point where we won't have any of it, whether it's international or domestically produced coming into our state, and I'm very proud of the fact that we're moving to that end point. We deserve better. But if we are presented with a policy call that we alone control, I'll certainly consider that.

ROBERT GEHRKE, SALT LAKE TRIBUNE: But the NRC will ask you what you think about this at some point during the process, and you will tell them, "we have a cap on our waste"? Are you going to tell them you support it or oppose it?

GOVERNOR HUNTSMAN: I don't know that the NRC is going to ask a state governor what they feel about the international implication goes of bringing waste in from other countries. I think they alone are probably responsible for that call. I'm not sure that I can shed any more light on that, other than to say, whatever the call, we have a volume specific end point, after which there's no more coming into the state, any way, shape, or form. And if that influences our outcome which it should, because it should help them in understanding that if you've got domestic needs and you've got an ever diminishing capacity for storing, boy, that would help me in making the determination. That is to say, let's put the domestic trash before the international trash. And if it helps to clarify that point for them, then maybe we're adding to the debate in a helpful way.

RICHARD PIATT, KSL-5: But they're saying that this has been treated so that it's not quite as hot. Does that make you feel any better?

GOVERNOR HUNTSMAN: That falls under the A category. I don't like any of the waste. And I've said that. We've already, the first year I was in office we took categories B and C completely out of consideration. Now we're stuck with A, and we're soon to be out of A. And so, you know, any of the waste, I think, is something that we shouldn't be bearing in a state as beautiful as ours.

TASHA COOK, KUER: Governor Huntsman, just changing gears, there are numerous immigration bills that are being proposed during this year's legislative session, from repealing in state tuition to making it illegal to harbor or transport illegal immigrants. What is your opinion about this?

GOVERNOR HUNTSMAN: I've spoken out on immigration, writ large, a number of times, and I have said, and I'll just kind of repeat the gist of what I've said, and that is, I think it's inappropriate for a state to start creating a patchwork of policies addressing an issue that is generally a federal issue, and is crying out for a federal fix. And I'm convinced that right after the presidential election there is going to be a federal fix. The people are demanding that. And so I think we simply need to wait out, and look at these- - There's been an idea for a task force to kind of review all of these bills, I think Senator Jenkins is pushing that. I think that's a good idea, because I think we need to kind of look closely at the implications. There are economic considerations, there are security considerations, there are human condition considerations. All of them need to be looked at when evaluating these immigration bills. But let's see what the federal government does, and then fill in the gaps if any gaps are left at that point. I think it would be a little bit backward to start haphazardly creating a patchwork of policies, only then a year later to have the federal government step in and tell us what we're all supposed to do, and then finding that we have to disengage from some of those positions, which I think would be a very difficult and painful thing to do. I think we have to, you know, look at places like Oklahoma. I called the Governor of Oklahoma, Brad Henry, and had a discussion with him about, you know, how their laws were impacting their state. And they are impacting economically. They're feeling the economic reverberations. Look what Arizona's doing. I think it is wise in this case to hold off, and understand in the meantime the implication of all of these immigration bills, and to see how they would then fit into a federal solution to immigration, which is exactly what our nation is calling out for right now.

RICH PIATT, KSL-5: At the same time are you noticing

TASHA COOK, KUER: Do you think that state efforts aren't necessary, then?

GOVERNOR HUNTSMAN: Pardon me?

TASHA COOK, KUER: Do you not think that state efforts are necessary at this point?

GOVERNOR HUNTSMAN: Well, I think state efforts that study and investigate some of these ideas, based upon the criteria I just mentioned, what are the safety implications? What are the economic implications? What are the human condition implications? So that we understand what they will mean to our population if enacted. I've already said that, you know, taking tuition away from kids who had no say over their journey in life, being punished essentially for decisions by their parents, I think, is not appropriate. The driver privilege card. It was instituted for a reason three or four years ago. We've got 40,000 of them now, 78 percent of whom are insured. I think the card is working, and I think that's what's coming out of our senate. I think you would hear that debated as well. So there may be some issues in terms of certification of law enforcement agents, how they cooperate with ICE, for example. But I don't know where that's going. I'll know once it hits my desk. One thing is for sure, the immigration measures started out here, you know, a more comprehensive approach, and now they're kind of narrowed down to a more specific and tailored approach to immigration. That's likely to hit my desk sometime fairly soon. And I'll take a good look at what it calls for at that point.

TOM JORDAN, METRO NETWORKS: Governor, the legislature doesn't appear to like you hobnobbing with over states and provinces on the western climate initiative. What do you see is the future of that?

GOVERNOR HUNTSMAN: Well, I think, you know, it may be that. But what they're looking at in 144 is really impacting the way that a governor deals with all cross border issues. Like the earthquake today, for example. Let's just use that as an example. You know, I called Governor Gibbons, we're looking at doing cross border cooperation on health and maybe law enforcement in time of an emergency. What do you do? You know, we had 360 such examples just from last year that would have been impacted by this bill. So while there might be one larger issue that is driving a few people to take this position, I think we have to understand more broadly what the implications would be in the real world, and more than that, you know, I need to guard and protect the prerogative of the executive branch, for whomever occupies this office in the future. And that's something I guard very zealously. And that's why I've hinted at vetoing 144. ROBERT GEHRKE, SALT LAKE TRIBUNE: Stepping back to immigration briefly, one of the issues that's been batted back and forth between the senate and the chamber of commercial is penalizing businesses that hire illegal immigrants, the chamber doesn't want them to be penalized. The senate bill originally had that in, it's apparently being scaled back. What are your feelings? Should businesses that hire illegal immigrants be penalized? And to what extent should they be? GOVERNOR HUNTSMAN: It depends if it's witting or unwitting, which is a big difference. And you know, we have to compare the world today, which is an imperfect world, with the world of tomorrow after we have a federal fix, that might very well include a biometric identification card that employers can then look to and make decisions to hire based upon. I think that is an improved world that we'll likely find ourselves in, in the next year or two. So you know- - And I've talked to Lane Beattie about this, and I'm going to listen closely to what the business community has to say about this very thing. Knowing full well that any decision that's made this year is likely to change, because of the national implications in the next year or two.

KEN VERDOIA, KUED: But in the last year we've had the Swift raids, we've had the Lindon raids, both of these are major incidents where we've had major numbers of illegal immigrants working in places.

GOVERNOR HUNTSMAN: Right. And I've had, in these cases we've had very clear violations of the law. And what I'm talking about are those people who, in today's world, need a flow of labor to keep their businesses operating, and who have a very hard time identifying the residential status of their employees. We don't do a very good job of that today, and we do need a biometrically based card eventually that helps people make those decisions. And I think that's where we're going to be in the next year or two, and I think that's going to be helpful for employers.

KEN VERDOIA, KUED: Not enough time for another question, just enough time to thank you for your time today, Governor, and remind you that a transcript of this and every edition of the Governor's News Conference is available on line at KUED.org. You're invited to visit us there, and look back at the words from the past and look forward to the issues of the future, as we will next week next month, rather when we return with another edition of the Governor's Monthly News Conference. Good night.

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