October 27, 2005

"What is most important for me is in income tax reform. Why? Because that goes into education funding. And if we fail there we then fail those who we want to support through funding of education."
-Gov. Huntsman

Reporters: (in order of appearance):

KEN VERDOIA, KUED
MATT CANHAM, SALT LAKE TRIBUNE
PAUL FOY, ASSOCIATED PRESS
LISA RILEY ROCHE, DESERET MORNING NEWS
SCOTT SCHWEBKE, STANDARD EXAMINER
DAN BAMMES, KUER
RICH PIATT, KSL-TV
JULIE ROSE, KCPW

Transcript:

KEN VERDOIA, KUED: Governor, thanks for joining us today. After the optimism of last month's announced breakthrough in the settling of the dispute over the construction of the Legacy Highway, there are signs of a re-emerging deadlock. And some participants are saying the nature of last month's agreement was little more than an optimistic framework, the devil, as it always is, is in the detail. So where do we stand in addressing those details?

GOVERNOR HUNTSMAN: Well, I think we're in good shape. I suspect that in the next day or two that we're going to have something to report, either good or bad. I'm an optimist, and I think that everybody has come to the negotiating table in good faith. The plaintiffs, the concerned citizens, the legislature, our office, and I think we're making good progress. Listen, if this were an easy thing to do and resolve we would have resolved it a long time ago. But it's complicated, there are a lot of moving parts. It is occasionally an emotional issue. And I think, based on all of that, we're making good progress. And at the end of the day we want to have a solution that allows us to get a region of our state that is growing very, very rapidly, to allow them to maintain a sense of mobility. That's important for economic reasons, it's important for quality of life reasons. And the last thing we want is just to maintain the status quo, which is to put it on hold and fight it in the courts for the next three or four years. So I'm optimistic that we'll find a resolution, and we'll likely find it fairly soon.

MATT CANHAM, SALT LAKE TRIBUNE: Governor, the house speaker says that without --if the Democrats vote as a bloc they can stop this in the house, this agreement. Democrats are saying they want three or four million for the Grand Tower rail line. This is the Ninth South rail line that's upset parts of western Salt Lake City. Would you support the state providing three to $4 million for that, and do you think that should be part of the special session?

GOVERNOR HUNTSMAN: No, I don't think it should be part of the special session. I think Legacy ought to stand on its own, without any tie to any other issues. As it relates to Grand Tower, I've worked with the city, with Mayor Anderson and some of his people, in trying to get Union Pacific Corporation to do more, and I've had a couple of conversations to that end with the CEO of Union Pacific, Dick Davidson. And, indeed, they are willing to do more. And I think this now becomes a city issue, and one that shouldn't necessarily be confused as a state issue.

PAUL FOY, ASSOCIATED PRESS: Governor, if I can follow up on that. Do you-- The house Republican leaders are telling the Associated Press that they don't have enough votes for the Legacy Parkway deal in the legislature. So is it falling apart?

GOVERNOR HUNTSMAN: It is not falling apart. We have a term sheet that is, as of today, incomplete on a couple of issues, and once we come to resolution on a couple of those issues then we'll see whether or not we have the votes. I think it's premature to say whether the votes are there or not, given the incomplete nature of the term sheet. Once it is finalized then I think it will be important to start counting noses. And I think it will all play out fairly rapidly once we do bring this to a conclusion.

But listen, legislators, the legislative body is the one closest to the people, and once they see what has been negotiated, and indeed they have been an integral part of the negotiations, then they can decide for themselves whether it's a good thing or bad thing for the state. That's how the process works.

SCOTT SCHWEBKE, STANDARD EXAMINER: Governor, can you say what you're trying to do to convince legislators, or persuade them that the terms of the agreement are valid and the project should move forward?

GOVERNOR HUNTSMAN: Well think it speaks for itself. And I have said all along, and I continue to say that we have spent an extraordinary amount of money, taxpayer money, in getting to where we are today, which is no progress whatsoever. And we run the risk of extending that by another three to four years in court if we do nothing. And to me that's the worst outcome of all, and I think legislators will readily see that that is probably the worst outcome of all. What is the right to thing to do is to bring all stakeholders to the table to try to craft a compromise solution, to get it out of the courts, and to get the shovels in the ground, I hope, by the first quarter of next year and get Legacy built. And I think most elected officials, and even concerned citizens, will see that, based on what we have done and the way in which we've approached it in good faith, and hearing all voices involved, that the interests of Utahns and taxpayers will be better served by this process.

TOM JORDAN, METRO NETWORKS: So functionally, failure is not an option at this point? If you can do anything about it?

GOVERNOR HUNTSMAN: I've thought about it. I will do whatever I can to ensure that we don't fail in this undertaking. And by failure, I mean just continuing the status quo for another three to four years.

LISA RILEY ROCHE, DESERET MORNING NEWS: Governor, what are you willing to give up from the originally-conceived agreement, which now it appears may have been announced prematurely that there was an agreement in place, what are you personally going to let go of, from what you originally saw this agreement being?

GOVERNOR HUNTSMAN: Well, as a former trade negotiator I would tell you that the worst thing I could do would be to show my hand publicly, or to show the hand of the executive branch publicly. We're still in the middle of negotiations, we want to let it play out for the next couple of days and see where that gets us.

I just want to compliment all involved. Everyone involved in this process has come to the table in good faith, and it hasn't been rancorous, it hasn't been acrimonious. Certainly it's emotional to some extent for all parties involved. But I really compliment all representatives who have been part of the negotiating process so far.

LISA RILEY ROCHE, DESERET MORNING NEWS: But is it fair to say that there are things that you're willing to take another look at, at this point in the negotiations, without getting specific?

GOVERNOR HUNTSMAN: Well, I don't want to comment at all on the negotiations. I they're where they ought to be, and we'll let them play out for the next day or two, and see what that conclusion is.

DAN BAMMES, KUER: Governor, your tax reform proposal is being discussed in a series of public hearings around the state, along with several others. The one thing that none of them really includes is a repeal of the sales tax on food. Your proposal included tax credits in that area. But given the opportunity that exists now for tax reform, is it fair to conclude that there's never going to be, ever, in the state of Utah, a repeal of the sales tax on food? It's going to be there from now until the next millennium?

GOVERNOR HUNTSMAN: I don't think that's a fair characterization. I think we stand a better chance now than ever before of doing something on the sales tax on food. Again, the process is not complete. We're simply rolling out some ideas, broadly defined, on the income tax. And I like where we are in the income tax, we've put forth a good, I think, pragmatic approach to stabilizing the revenue flow from the income tax, knowing that all of it goes to education.

And if you extrapolate the numbers into the future you'll find a very alarming thing, and that is it is decreasing in size. We want to make sure we stabilize that, broaden the base, and secure education funding going forward. We can do that by wiping out the exemptions, taking it from seven to five, thereby also improving our competitive position. I think this is a good approach, good tax policy, good for taxpayers, good in terms of securing and stabilizing funding for education, and good for our competitive position.

Now, that is part of the tax policy. You have to remember that it is still being deliberated. It's today in, I think, Cedar City. There's a lot more work that needs to be done in the run-up to the legislative session, and I will tell you that the sales tax on food, as an issue, will continue to be discussed as part of a broader tax package in the run-up to the legislative session.

RICH PIATT, KSL-TV: Governor, how realistic is it for the public to expect some kind of meaningful reform proposal to go through this next legislature, given all the give and take that's constantly ongoing with this proposal?

GOVERNOR HUNTSMAN: I think the chances are quite good. I don't think we've ever seen a better environment, a more propitious environment than the one that we now face going into the legislative session. Again, like Legacy, if this were an easy thing to do it would have been done sometime between the 1950s and now. This is a difficult issue. It is, similarly, emotional as an issue, but it's time that we lift up the hood of the car and take a look at the engine and do a little bit of tinkering. Now's the time to do it, and I think that we actually have, for the first time, the right environment in which to get something done.

RICH PIATT, KSL-TV: Is it acceptable to you to have piecemeal legislation? In other words income tax this year, you know, other taxes later on, corporate income taxes a separate issue, or do you want it all in one bundle, and done at once?

GOVERNOR HUNTSMAN: That is something we'll have to determine as we proceed. What is most important for me is in income tax reform. Why? Because that goes into education funding. And if we fail there we then fail those who we want to support through funding of education. And so to me that's the number one priority in terms of tax reform. I'm sure there are going to be other issues peripheral to this that will come up, probably this year and maybe even next year. And that should be an ongoing part of the whole discussion on tax reform.

And again, I'm not sure that we should ever be completely satisfied with where our taxes are. We live in a very fast-paced, flat world, as Thomas Friedman would say, and we always need to keep an eye on, first of all, are we ensuring support for the next generation of Utahns through proper funding for education? Second of all, do we have a competitive position that allows us economically to develop our base? And we're always going to have to keep our eye on tax policy going forward. So I think it will be more or less an iterative process for some time.

KEN VERDOIA, KUED: One of the related issues that received some attention in hearings in Price and Vernal was the possibility of shifting the uses of sales tax and property tax--sales tax being shifted to support public education, property tax being shifted to the use of cities and counties--and that has some local officials very, very concerned, especially in rural areas. They say the consequences of that would be devastating. Where do you stand on this possibility of a shift of those designated uses of those funds?

GOVERNOR HUNTSMAN: I don't have a position on it right now. I'm looking into it. I'm more concerned about the income tax right now. But I do look forward to taking a look at this issue and, obviously hearing the many voices that will want to contribute to this discussion. The cities and towns of our state clearly are going to want to say something about it. A place like Moab is going want to say something about it. And I'll listen to the different voices out there and understand it as we move forward. I haven't looked into it enough right now to really render any kind of a judgment.

LISA RILEY ROCHE, DESERET MORNING NEWS: Governor, you talk about reforming income tax being your number one priority on tax reform issue. Yet there's a movement within the Republican leadership not to go with your plan, which would pretty much overhaul income taxes as we know them, but to simply sort of lower the rate and do some rebracketing and call it a day. There seems to be a growing interest in that. Is that something that you can incorporate in what you proposed, or is that something that you just flat out reject as good for the state?

GOVERNOR HUNTSMAN: Well, again, we have put our best thinking, based upon deep and thorough analysis with the experts, on the table. And knowing full well the legislative process, it will include a little bit of negotiation and fine tuning as we move into the legislative session. And that I am prepared to do. If you want anything to survive at the end of the process you have to be willing to engage in that process of give and take. But I'm very satisfied with what we put on the table. And I think, in the end, at least I hope that we will see something that does, in large measure, resemble our original package.

RICH PIATT, KSL-TV: Governor, if I could switch topics just for a minute, here. This week Questar Gas announced its rates for its customers are going up 40 percent, and there's a real concern, I believe, that there are a lot of elderly and poor people who are going to be turning their heat down to the point where they may put their lives in danger. Is the state in any position right now, do you think, to help those people out and provide some kind of assistance, or maybe supplement the programs that already exist?

GOVERNOR HUNTSMAN: It's a very, very good point, Richard. And it's going to be a difficult winter for a lot of people. There's no doubt about that. And the 20 percent increase really comes on the heels of a 15 percent increase, which comes on the heel of a 7 percent increase before that. All told it's about 37, 38 bucks on average per month that people will being paying extra for heating costs.

And I convened a meeting of stakeholders last week to talk about this very thing, and what we need to do, and the charge I gave them, is, first of all, let's recognize that we have a problem going into the winter months, and we need to act. We need to do something. Let's, first and foremost, look at and define the programs that we have available to those most vulnerable in our community. And there are three or four such programs. Let's define what they are, let's make sure that we, through some sort of public effort--which we'll be doing, I think, in the next couple of weeks--remind people of these that these programs are in place and they can tap into them for support.

But beyond that, we also need to identify what the chasm is going to be between those programs and the reality of the situation, given the increase in prices, and how do we close that gap? And I don't have an easy answer there, but I do have some good minds thinking about it. And so the first order of business is really to define the programs that currently exist to help support those who are most vulnerable, to get that word out as aggressively as we can, and then to figure out what kind of chasm will be left and how to close that.

And you know, it may be through some fund raising, it may be through work with some of the utilities, and maybe through federal support. I don't know. But there will be increases this year, they won't be as dramatic as what I think the Midwest will see, which will be more like a 60 percent increase as opposed to 30 to 40 percent increase. But it's going to be a tough winter for some people.

RICH PIATT, KSL-TV: This is something that's top of mind for you, it sounds like.

GOVERNOR HUNTSMAN: Yes. I'm looking into it with a real desire to make sure that we are prepared.

TOM JORDAN, METRO NETWORKS: You just came back from an energy conference in Montana. Did you come back with any concrete new ideas that could be put into effect now?

GOVERNOR HUNTSMAN: I tried to sell the Western States Primary to a couple of people while there. It was organized by Brian Schweitzer, who is my colleague in Montana. And I think, really, what came out of it, more than anything else, was a genuine reaffirmation that western states are very concerned about the energy situation, and indeed, want to do something about it.

This, I think, was important to broadcast. It brought western states governors together again to talk about energy, and the capabilities, and the possibilities of our western states, if we were to create kind of a regional approach to energy. We have clean coal technology, we have solar and wind and geothermal, we have tar sands and shale. We have a lot of potential. Now let's come together and try to define a regional strategy, as opposed to a national strategy which hasn't necessarily served us well.

RICH PIATT, KSL-TV: Questar has stated yesterday in their announcement and the reaction to it that, "Well, we're pretty much locked into the wells that we have right now, and if we could only get the state to grant us more permits for more wells then perhaps we could ease this situation." Do you think that this is the time to consider some kind of proposal to do that? Is the timing appropriate now, or do you think they're trying to leverage this into getting what they want?

GOVERNOR HUNTSMAN: Well, the way that I will see it is, how do we best serve people who are in need? And if we can bring on line more in the way of supply that will help to ease the situation which has been exacerbated by the supply-demand balance and by the hurricanes which have hit the gulf coast, then I want to do something about it. Again, it's part BLM, it's part state. Under the recently-enacted energy act, there are some exemptions in terms of winter drilling that might allow for more supply to be brought on. That has to be measured very carefully against environmental impact, and what it does to habitat for deer and elk, for example. But these are all discussion that is ought to happen, and indeed, they're discussions that I know western states governors are having even as we speak.

DAN BAMMES, KUER: Governor, rather than an immediate concern, something that's more of a chronic concern, Utah Division of Services for People with Disabilities routinely has waiting lists that extend for years for people needing their services. As the state's economy improves, as the state has good budget years, is there any prospect that that will one day change, or is that something that people, this population simply has to accept and work with?

GOVERNOR HUNTSMAN: I hope it changes. I really do. I hear a lot about this issue, and I know that it has been a deeply painful challenge for a lot of people over recent years. I will be submitting my budget in December, and it's part of our budget-making process. I've discussed this with our analysts, and we'll just have to wait and see what our final budget brings. But this is certainly on my mind, and something that I would, in some form or fashion, like to address.

JULIE ROSE, KCPW: Governor, back to rural Utah for just a moment. You have launched an initiative, a rural roads initiative in partnership with the attorney general's office to maintain right of way, that the counties can maintain right of way on certain roads in rural Utah. And I'm wondering what's at the root of this effort from your perspective? Are you doing this to prevent the federal government from taking over more of Utah's land?

GOVERNOR HUNTSMAN: I think the root of it probably goes back to the 1860s with the original lands legislation, and then fast forward history to you know,1976 FLPMA, and the way in which it's gone back and forth between federal control and state control. And, you know, it was fairly- - It was clarified to a large degree by the recent court case in the 10th Circuit by the three-judge panel, which does give some clarity to the state's role and state primacy on this issue. Now this, again, is something that needs to be done as- - with stakeholders. And the BLM has to be part of it, the state will be part of it, and there will be a lot of concerned citizens on all sides that will be part of this.
We have to remember that there is an appeals process that is open to concerned citizens in the aftermath of the 10th Circuit Court case, and then the three counties primarily involved will have to do an inventory. And that inventory will take upwards of a year. Again, this, you know, started, or at least was made somewhat visible by the MOU that was struck between my predecessor, Mike Leavitt, and Gale Norton, secretary of interior. And it's gone through a lot of twists and turns. It's hard to say that we concocted anything.

I mean we kind of- - You're placed in the driver's seat when the car's already moving down the road at 55 miles an hour, and you try to ensure that there's not a collision as you proceed. So there are a lot more in the way of twists and turns, but I think it's fair to say that the court case most recently out of the 10th Circuit did clarify, to a large extent, where we go on this issue. But it also means that we need to work collaboratively with all stakeholders as we proceed.

SCOTT SCHWEBKE, STANDARD-EXAMINER: Governor, what progress is being made to get other western states on board with the idea of a western states primary?

GOVERNOR HUNTSMAN: Well, I think it's going to be a combined effort of some of us making the arguments as to why it's a good thing for the western states, and then for the individual legislatures determining that it is important enough to appropriate some money in support of. And Bill Richardson and I will do some door knocking over the next couple of months, and we hope to be able to aggregate about five to six states in this effort, and I think we'll get there. And we're working with legislative leadership. I took the legislature, legislative leaders with me to New Mexico most recently just to show that we are, in fact, supportive, executive branch and legislative branch. And that's kind of what we're going to have to do, but something that also poses I think the latest challenge of all, and that's getting the executive and legislative branches bought into this in the five or six states that I think we can get at the end of the day.

KEN VERDOIA, KUED: Governor, we're in the last three or four minutes of this program, so this may not be the last question, but I wanted to reserve time for this. As we meet on this Thursday morning, the name of Harriet Meiers has been withdrawn as a candidate for the associate Supreme Court justice position. It is the most recent in a string of buffeting events for the administration of President George Bush. He is failing, in many people's opinion, in terms of public opinion, it's sinking to somewhat record lows for his administration. Your view of this administration, its abilities to deal with a very challenging agenda of issues that have been thrown at it, and its prospects for being able to right the course to serve the confidence of the American people?

GOVERNOR HUNTSMAN: Well, this administration has a lot of really important issues before them that they will have to deal with. And the sooner that they can get beyond the CIA leak case, and the sooner they can get beyond the Harriet Meiers incident, the better off they're going to be. Because these are issues that affect all Americans, and that will really determine our destiny in the years ahead. And I speak primarily of Iraq, I speak primarily of determining what our relationships will be with the major powers of the world, something that has received little debate over the last couple of years. I'm talking about China, India, Russia, Brazil, Mexico. The energy situation, which is to say how we deal in an environment of ever-escalating energy prices and what that means for our manufacturing base and the consumer. Then I think we've got a lot of health care issues out there that do have to be dealt with, with a sense of reality. Particularly the insurance side. These are all hugely important issues of our day, and they seem to be lost in the cacophony of political scandal. And the sooner that they can wipe the slate clean and move on the better we will all be served as citizens of this great country.

KEN VERDOIA, KUED: Do you find yourself already looking at the horizon of 2008 and what the next administration might be?

GOVERNOR HUNTSMAN: I find myself looking at all of the issues that we've discussed here today, and not much beyond. I'll let the professional pundits and prognosticators figure out what '08 brings, and that's all kind of part of the Washington echo chamber. I'm not much interested in that. I'm more interested in the issues that face us out here.

TOM JORDAN, METRO NETWORKS: These problems that you bring up, how are they impacting state in specific ways? What- - Some of these clearly must have an impact in areas that you have some coordination with, with Washington.

GOVERNOR HUNTSMAN: What it does is it diverts attention, and it takes time away from the substance of the issue. They're focused more on the politics of the issue, as opposed to the substance of the issue. And any time that you have diverted energy and diverted resources, we are that much less better off as a state when we rely on a functioning, healthy relationship with the federal government. And that would be the only issue that I would be concerned about. But so far we seem to get answers to our questions, and we seem to be able to get things done as a state. Let's just make sure that we don't fall into the political abyss from which there is no return.

KEN VERDOIA, KUED: Governor, we've run out of our allotted time, just time enough to remind our viewers that a transcript of this and every Governors News Conference is available on line courtesy of the Utah Education Network at www.uen.org. Until next month, thank you.

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