April 27, 2006

"I am still deeply interested in getting (tax reform) done for competitiveness reasons and also for securing our funding base for public education." -Gov Huntsman

Reporters: (in order of appearance):

KEN VERDOIA, KUED
GLEN WARCHOL, SALT LAKE TRIBUNE
REBECCA WALSH, SALT LAKE TRIBUNE
TOM JORDAN, METRO NETWORKS
RICH PIATT, KSL-TV
LEE AUSTIN, UTAH PUBLIC RADIO
JULIE ROSE, KCPW

Transcript:

KEN VERDOIA, KUED: Governor, thanks for joining us today. There’s been a series of reports in the newspapers and news accounts indicating that Utah frequently is dealing with issues related to landslides. Is this just a consequence of our ever-expanding population base moving into sensitive areas? And is there a role for government to somehow mitigate the growth in these areas that could be subject to landslides?

GOVERNOR HUNTSMAN: Well, the answer to the first part of your question is, we’re seeing higher levels of precipitation. Now, whether that’s tied to climate change or something else, we need to let the scientists explain. But we’re seeing a lot of precipitation all of a sudden, and we’ve got snow pack that continues to run off at the higher elevations, and we’re therefore seeing vulnerable regions of the state that are more subject to landslides, those that have seen them over the years, when you look at the morphology of certain parts of the state.

And can the state play a role? I think, indeed, the state can play a role. I sat down with some of our geologists just a couple of days ago. And we’ve got the maps, we have the history, we can make this kind of information available to local governments. There are some that ask and some that don’t ask. And I think it would be in everyone’s interest if we understood some of the land formations, or the history of these land formations, before the development occurs. And so there is kind of a “buyer beware” before people build and purchase in areas that are vulnerable.

I saw some discouraging news on the other night, home owners in a part of the state that are experiencing loss of property, property damage as a result of slides, only to discover that slides had occurred there, you know, decades ago. I think we need to do a better job probing and understanding the morphological history of these areas. Counties can do some of it, but I think the state can probably provide a lot of information that generally is not available. And I would ask local governments to take advantage of this resource that we have within the department of natural resources.

GLEN WARCHOL, SALT LAKE TRIBUNE: Governor, this would seem to be an easy thing to put into real estate disclosures, for instance, what the history of the geology of an area was. We know, and it’s a voluntary thing, it’s not a part of state law, but Daybreak discloses, at least to some extent, to its buyers that the soil was previously contaminated. Same thing could be done for this. I mean you don’t have to look back far in history, many Utahns have scrapbooks that include the 1983 season, which is very similar to this. We saw those same areas having slides. We lost a city, a town, Thistle, to a landslide.

GOVERNOR HUNTSMAN: Right.

GLEN WARCHOL, SALT LAKE TRIBUNE: And yet we see the benches--well what is this now, 20 years later--going right up the sides of those mountains again with building. Who’s not getting it?

GOVERNOR HUNTSMAN: Well, the information is there. And again, past is prologue. All we need to do is look back at the history of some of these land formations. And do think we can probably do a better job disclosing. And I think it’s incumbent upon local government to do a better job in requiring that there be some kind of exchange of information that does, to a certain extent, reflect on the history of these land formations, and maybe it’s something the legislature’s going to want to look at next session--I can’t speak for them--but in terms of standards that we ought to be looking at in terms of the type of information that is made available.

We’re growing fast, and a lot of land that nobody thought would be developed upon is likely to be developed upon. Where are you going to put the next million people who enter our state over the next 10-15 years? So there’s going to be a lot of development. And with that development I think there should be some caveat emptors, some buyer bewares and information that goes along with that.

REBECCA WALSH, SALT LAKE TRIBUNE: Governor, are you satisfied with the federal government’s answers on the Divine Strait tests that Utahns don’t need to worry, it’s deep enough under the ground, the radioactive dust will not be disturbed when they do this test on June 2nd?

GOVERNOR HUNTSMAN: I’m not. I don’t think it’s a good idea. I think we have a very unfortunate history that many families are still living with in this state. We are down wind. I believe that, obviously, we need a strong national security position, a strong defense position, and capabilities to protect us abroad. But do the testing somewhere else, where citizens aren’t down wind. Moreover, citizens who have suffered generations, now, from testing gone awry in years past.

REBECCA WALSH, SALT LAKE TRIBUNE: Are you lobbying them not to do the test? Are you writing letters? What are you doing to try to stop that?

GOVERNOR HUNTSMAN: I have not been asked about it, nor have I done anything- - Now, I’ve heard what our congressional delegation is doing. I concur completely with their sentiment, and if there’s anything else I could do I would certainly do that.

TOM JORDAN, METRO NETWORKS: So the state actually doesn’t have options on something it could do to step in, and is it properly handled by the federal level?

GOVERNOR HUNTSMAN: Well it’s a federal issue. The Senate and the House vis-à-vis the Department of Defense. And if there was a role for the state to play I would gladly step up. I don’t believe this is a good thing.

LISA RILEY ROCHE, DESERET MORNING NEWS: Do you believe, though, Governor, that this testing even needs to be resumed? You suggested doing it somewhere else. Does it need to be done at all? A lot of people are making an argument that we don’t need to return to that kind of testing.

GOVERNOR HUNTSMAN: I am not a defense department planner. I can’t answer definitively. I would not want to put myself in their seat. But doing the kind of testing that might disturb the earth, which has brought so much in the way of tragedy and tears to our state, is not a good idea. And I don’t know what other options the Department of Defense has, whether they can do simulated tests, more automated tests without disturbing land and people. I suspect that that increasingly will be an option, the high-tech kind of testing that you see done traditionally.

I’m not in their seat, and therefore I can’t speak for them. All can I do is say I will always stand up for that which protects the citizens of this state.

KEN VERDOIA, KUED: Governor, this raises questions about a number of federal installations which are really are not under state control, including the Dugway Proving Grounds. There’s been rumors, discussions, and if you will, black box planning about an increased mission for the Dugway Proving Grounds. Are you kept in the loop in terms of the future of the Dugway Proving Grounds, or are you pretty much in the dark in terms of what they’re actually doing in that most secret of locations?

GOVERNOR HUNTSMAN: Well I’d like to think that I’m in the light. I’ve been out there. I’ve carried on conversations with Dugway leadership and with Pentagon leadership about the kinds of things that are going on. Again, if you look at expanding missions to include, for example, the UAV, the unmanned aerial vehicle, where you’ve got an extended runway on their property, that would be a legitimate use of the facility, for example. The Defense Department increasingly is going to go toward a single-platform fighter, the F-35, the joint strike task force fighter. The Navy, the Air Force, the Marine Corps will all end up using it at some point. But I think we’re probably seeing the last generation of pilot-generated, or managed aircraft. I think we’re going to likely see, you know, beyond that, unmanned or un-personed vehicles. And they’ve got to have large areas in which to test those vehicles, and I do think things like that are legitimate uses of Dugway property.

RICH PIATT, KSL-TV: Governor, gas prices are in the news, making headlines virtually every day. You’re an advocate for tax reform. What about the idea of using that $70 million that was going to be used for income tax relief to somehow provide relief for gas prices in the state’s portion of the gas tax?

GOVERNOR HUNTSMAN: Well, it’s an interesting thought. That money really has been earmarked for tax reform specifically, and I would want to hold true to the original intent of that money. But gas prices are, listen, it’s a variable thing. And we’re seeing a spike in prices in anticipation of a heavy drive season in summer. Typically prices are forward-priced by several months, and that’s exactly what we’re seeing. But we’re kind of in an economic wind shear of sorts, here. We’re seeing it in extremely high demand, without any new refinery capacity having been brought on line, and then on top of that we’re seeing enormous global instability.

You look at every country from whom we import with the exception of Canada, is under some sort of, is in some kind of political throes. Certain levels or degrees of instability. And that’s adding to the complexity of pricing and of distribution. I’m guessing that by the middle of next month, I don’t want you to hold me to it, you’re probably going to see prices go down somewhat. But it speaks to the issue of self-sufficiency. We’re still importing a lot, too much in my mind. We have the wherewithal to develop new types of technologies, hybrid types of technologies, renewable energies, which I’ve always thought would be a very important part of our future, and right here at home. And it sure would be nice to see more research and development money from the big oil companies going into some of this kind of thing, more aggressively than it is today.

And, you know, at some point we’re going to have to look at the construct of the oil companies, and to see if we’re not somehow closer to the Theodore Roosevelt world, when he was a trust buster, than a world in which you have more players in the marketplace. I don’t know how many there are assembled around just the oil sector, but there aren’t very many. And you look at profits, now I’m not ever going to complain about free market profits, but you know, the federal government at some point needs to see if there is in any way some sort of violation of a Herfendahl index, for example. Too much aggregated by too few in one industry sector.

I’m not in a position to know that, but you know, with prices going where they are, at some point someone’s going to take a look at that, as well as the vagaries of the trading that goes on in the NIMEX, the New York Mercantile Exchange, to see if the trading that is going on in a very uncertain world is somehow creating these spikes in prices that ultimately is borne by the consumers. There’s a lot going on out there that I’m sure is being looked at.

GLEN WARCHOL, SALT LAKE TRIBUNE: Governor, to speak about something that you do have very direct control over, the special session on taxes has been at least postponed, and there’s been a lot of posturing in the last couple of weeks about what might go on as far as tax reform, and what might happen to that $70 million you just mentioned. Do you think there’s going to be a special session on tax reform before the regular session?

GOVERNOR HUNTSMAN: It is up to our office to call any special session, and I would like for there to be a special session before next year’s regular session. And I would hope that by the end of the year we can do that. The $70 million is earmarked for tax reform. I would like to see reform, as opposed to simply a tax give away. Our system is in need of reform. It is still the right thing to do, and I am still deeply interested in getting it done for competitiveness reasons and also for securing our funding base for public education.

I just want to make sure that we’re always open and honest with the public, and that’s one of the reasons that I called a halt to it when I did. I want to make sure we can get our numbers together, and then again, work with the legislature and proceed forward, likely in a special session format before the end of the year, and take another run at tax reform.

GLEN WARCHOL, SALT LAKE TRIBUNE: You know, there’s been some comments that the reason that the tax special session was postponed, that you more or less used the famous mistake as cover for a problem of getting votes lined up that would help your tax reform package pass in a special session.

GOVERNOR HUNTSMAN: Well thanks for giving us credit for insightful thinking. I’ll take it. No, I think people are reading a little bit too much into that. There was an overrun in the numbers, I took a look at it, and I thought we can do one of two things. We can either sweep it under the carpet, as some people would do, or we could simply be open about it, and take a step back and let people become more familiar with the new numbers that we’re looking at. And that’s what I chose to do.

KEN VERDOIA, KUED: Governor, I’m sorry, we’re going to take advantage of this opportunity to join one of our colleagues in Logan for a question from Utah State University, and that would be Lee Austin of Utah Public Radio. Lee?

GOVERNOR HUNTSMAN: Hi, Lee.

LEE AUSTIN, UTAH PUBLIC RADIO: Thank you. Monday, May 1st we’re going to see another round of pro-immigration rallies in the state. There seems to be a wide variety of views on how that should be handled, whether a boycott is appropriate, whether school classes should be skipped, whether employers should allow people to attend these rallies. I’m just wondering your thoughts, as you watched the last rounds, 20,000, however many people were rallying. What do you think of this development?

GOVERNOR HUNTSMAN: Well, people speaking out on issues that are important to them is an important American tradition. And there’s a time and a place for it. I would say that during school hours, for school kids, is probably not the right time to be demonstrating politically. There’s plenty of time in the off hours.

Moreover, I think May 1st is a very important test date for our public schools. And I would encourage kids to remain in the classroom and to do that which needs to be done to prepare for the marketplace, and use whatever free time they have after that to do whatever they’d like to do in terms of free speech and organizing politically.

RICH PIATT, KSL-TV: Governor, with regards to the ongoing and not-much-talked-about until recently health care task force. Recently I uncovered that the Health Care Coalition, which was setting itself up as a voice for consumers, was solely funded last year--and I admit that this was a start-up funding--$45,000 entirely funded by Regence Blue Cross Blue Shield, a competitor to IHC’s health insurance branch. Are you concerned, given that, and given the fact that this organization needs money to get started, and that there’s a lot at stake, that the consumer’s voice could potentially get lost in this task force?

GOVERNOR HUNTSMAN: I’d like to think that we listen to the consumer’s voice. They don’t necessarily need a special interest group to do that. I think that we’re pretty responsive to the voice of the consumer. What is important to me are the 250,000 people in our state right now who don’t have insurance. And I’ve committed our administration to coming up with some fixes by the next legislative session, and we’re working hard on this.

We’re looking with some interest at what Massachusetts has done. I will invite some members of that planning effort to visit our state to see if we can’t learn from some of that which they’ve done, and that would suggest working with insurance companies to do more in the way of providing policies that are affordable, and it may be have a different prescription drug component and one that may be more tailored for the young, immortal generation, shall we say? And probably doing something with small business, like we had talked about before. That’s something I’m still interested in. The possibility of their tapping into our public pool, for example.

So I like to think that consumers can, their voices can be heard, and that we are responsive. And right now my focus and attention is on a whole lot of people in the state who are uninsured.

RICH PIATT, KSL-TV: In your opinion, is health insurance and health care, are health insurance and health care issues in the same order as immigration? In other words, guidance has to come from the federal government that would be helpful before the state can really effectively address this?

GOVERNOR HUNTSMAN: Well, immigration really is a federal issue, although we took a leadership role, some of us western governors, in outlining some policy proposals for the Senate, which I personally was quite involved with. Now it’s left up to the Senate and the House of Representatives to take it from there.

In the case of health care, there is a lot that we, as a state, can do. What I’m concerned about is, as we look at what a state can do, we not lose sight of the cost drivers. Those things that have taken it from, when I was born in 1960, three or four percent of our GDP to what today is knocking on the door of 20 percent of our GDP. And those cost drivers are malpractice insurance and pharmaceutical costs. I mean look at what we pay compared to some other developed countries. And it’s, for example, behavior that leads to free riders. People taking advantage of emergency room visits, for example.

So we’ve got to make sure that, you know, the federal government does do what must be done in terms of managing the overall environment that leads to the higher costs for health care. We as a state can then do what I think we do best, and that’s fashioning policies on a local level, which we fully intend to carry out.

JULIE ROSE, KCPW: Governor, what about an investigation into the practices of the health care industry in Utah? The chair of the privately-owned health care task force that the legislature has been meeting for the last year. This week he says this is bigger than us, and he’s calling for an investigation. Both federally as well as on a state level. Is that something that you would support? Do you think there are improprieties taking place in the health care industry here in Utah?

GOVERNOR HUNTSMAN: I don’t know that there are. Our health care costs are significantly lower here than you find in other states. I’m getting a debrief by some members of this legislative task force a little bit later, and I look forward to hearing from them and maybe taking some of their advice. I don’t know yet what they’re going to say.

DAN BAMMES, KUER: Governor, the trustee who now controls the United Effort Plan in Hildale and Colorado City is moving house by house to require the payment of property taxes, and telling people that they must leave if they don’t pay, and running into resistance from the religious community that occupies them. Are you worried over the long term that there’s some potential for confrontation and possible violence as this moves ahead? Is there anything you can do to help everybody keep their cool, as this thing moves along?

GOVERNOR HUNTSMAN: I would hope not. I think it’s in good hands, and I know the attorney general has had an active interest in this and he is following it very, very closely. I don’t see any signs of trouble at this point.

TOM JORDAN, METRO NETWORKS: Governor, you probably this morning read Thomas Friedman’s column on the California energy efficiency with more detail than usual. Part of California’s plan, of course, is to eliminate purchases of electricity from coal-fired power plants. Do you see, in terms of your own comprehensive energy policy, efficiency policies that’s coming in, a potential conflict down the road between the Utah coal industry and the export of electricity from the state, and the need for alternative fuels, and does that impact some significant local industries in the wrong way?

GOVERNOR HUNTSMAN: Well, it’s a very, very good question and it goes well beyond Utah. It really goes to the western United States, and, you know, even places like West Virginia and Ohio and other places that produce coal. And that is, what should the standard be in terms of clean coal? And as we move more toward technologies that resemble the old Fisher Tropes model, for example, that’s been around since the 1920’s, but really isn’t viable until prices get beyond a certain point, and today we find that that kind of process could be economically viable. It’s a cleaner kind of process.

And I know there have been some discussions, most recently between Governor Freudenthal and Governor Schwartznegger, and I talked to Governor Freudenthal about these very conversations. And they’re actively discussing what these standards ought to look like for clean coal. And I think you’re going to hear a lot more about clean coal and the possibility for achieving cleaner coal technology as it translates, then, into energy, from a lot of western governors. And I think it’ll be a very, very healthy debate, because it has everything to do with the environment, and with economic development, and with our energy needs in the fastest growing part of the country, which is the west right now.

LISA RILEY ROCHE, DESERET MORNING NEWS: Governor, if we could go back to tax reform for just a moment. Glen alluded to the confusion and frustration we’re seeing among some members of the legislature, especially the house, which has now basically called for you to call a special session, use that $70 million that’s on the table for an immediate tax cut. You said you want reform. Well, the reform package you propose has a much, much higher price tag.

It seems that some of this frustration is coming from not hearing from the governor’s office exactly what you’re going to do to tweak that plan. Are you going to take it down to $70 million? And if so, how does that change your reform effort? Or are you going to call on the legislature to pass a larger tax cut to embrace the entirety of the reform package you proposed? What specifically are you looking at doing now with tax reform?

GOVERNOR HUNTSMAN: Well, first of all we’re working with the legislature, we always have. The legislature’s worked on tax reform for two years, now. And we’ll always work with the legislature, without whom we can’t get anything done. The numbers are going to vary as we look at different options. I don’t yet know exactly what option we’re going to come down on. We’re thinking through this in real time. It will end up being very close to what we’ve always talked about—a flatter, fairer tax. One that is competitive and one that secures the base for public ed funding. And I don’t know what that is going to cost, but the $70 million range is something that we have talked about. It’s already on the table.

And listen, we have a choice. Do we simply give that away by way of tax cut, or do we use it wisely by way of tax reform, that leaves everyone better off, because our income tax then goes from seven percent to five percent? That’s what I’d like to see at the end of the day. That’s what we’re working on. It’ll vary somewhat from what we had before, but the premise will be the same, and we’ll work actively with the legislature in getting us there, both Republican and Democrat.

LISA RILEY ROCHE, DESERET MORNING NEWS: I’m sorry. You have not ruled out, then, Governor, going back to the legislature and saying, you know, “I like the plan I proposed, it does have a higher price tag, let’s look at that, spending a little more money. Let’s look at a slightly larger tax cut to keep the plan I originally proposed in place.” You have not ruled that out?

GOVERNOR HUNTSMAN: The premise is right, it’s where our state needs to go. The numbers will follow. You know, at some point you have to say, “What will the market bear?” Well, we had talked about a specific number. Before that number then went north. And I don’t know whether the market will accept that. I think the market will accept the premise of what we’re putting forward in terms of tax reform. That I don’t want to lose. The number might vary somewhat as we move through the year.

DAN BAMMES, KUER: Governor, yesterday West Liberty Foods announced plans to build a meat processing plant in Weber County, and there’s some question, because the state is providing incentives to help bring this plant to Utah, as to what kinds of jobs the state is hoping to incentivize. The plant is seen as providing relatively lower-paying jobs than perhaps high-tech industries or other industries that you might work to bring to the state. Is this the kind of industry that you’d like to see coming here to Utah? And is this an appropriate use of state incentive money?

GOVERNOR HUNTSMAN: We need jobs across the board. We need high tech, we need low tech. Because any kind of labor force will have those who are basically trained for high-tech and low-tech jobs. And we have 500 jobs coming as a result of this move. They have to earn the right to get the incentive. It isn’t like they’re paid to come. They’ve got to earn that. And I think that’s the way it should be.

Moreover, the salaries that will be paid are 130 percent of the county’s average. So my desire is to see salaries move upward, and in every case where we’ve brought thousands of jobs now, over the last 60 or some-odd days, to the state, they’ve been significantly higher than the prevailing wage within the counties. Whether they’ve been north up in Logan, whether they’ve been south in Utah County, whether they’ve been financial services here in Salt Lake County, the wages are going up, and that’s what’s important. And we’re bringing jobs here for a booming population, and all of that is very, very important.

KEN VERDOIA, KUED: Governor, we have about a minute and 30 seconds left in our time remaining, and I’m going to take you into health care in a different realm. Much reporting has focused on the federal government’s plans, response, and concern with avian flu and its possible transmutation to people and then becoming a pandemic that would involve the United States. Reporting of late has focused on the lack of preparation in states and communities that will be stuck with the real crunch of responding to a pandemic. Are there hospital beds, are there adequate immunizations available, what would be the impact in agricultural areas?

Utah seems to be stretched very thin in terms of rural medical care to begin with, and then has a large poultry agricultural component as well. What is this state doing to be prepared for avian flu?

GOVERNOR HUNTSMAN: Well, I think we had one of the first conferences ever held with the Secretary of Health and Human Services, and our state government, which was done while I was in Iraq. I was going to be part of it then I was called out of the state. But it really comes down to making sure that we’ve got the right kind of immunizations, which I believe our Department of Health has looked into and feels comfortable with, and too, that we have the capability to quarantine. And that we’ve looked at as well. And I feel our state is very, very prepared for any kind of problem in this particular area.

KEN VERDOIA, KUED: Governor, thank you for your time, our time has run out for the Governor’s Monthly News conference on KUED. A reminder that transcripts and video streaming of this program are available on line. Thanks for joining us, we’ll join you again next month with another edition of the Governor’s Monthly News Conference.

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