August 25, 2005

"I do believe that once people understand the importance of a flatter, fairer tax, they will buy into the concept of what we're trying to do." -Governor Huntsman

Reporters (in order of appearance):

KEN VERDOIA, KUED
TOM JORDAN, METRO NETWORKS
LISA RILEY ROCHE, DESERET MORNING NEWS
JOHN DALEY, KSL-TV
RICHARD PIATT, KSL-TV
JONATHAN BROWN, KCPW
MATT CANHAM, SALT LAKE TRIBUNE

Transcript:

KEN VERDOIA, KUED: Governor, thanks for joining us today. The state seems to be dealing with a double-edged sword when oil prices go over $65 a barrel. On one hand it opens up opportunity for energy exploration in the state, and many view that as good news. But on the other, government budgets and, like personal budgets, have to deal with the cost implications of those escalating energy costs. School districts in Utah are complaining that they are very hard hit by increased gasoline costs. Is it making a dent in your budget cycle?

GOVERNOR HUNTSMAN: Well, this is a very important issue you're bringing up. And some could see it as an invisible tax of sorts, energy prices escalating as they are. I think it speaks to the fact that we probably haven't effectively, or effectively enough, ruled out a comprehensive energy program that deals with doing something other than accepting imported sources of oil, which is 65 percent of our fuel that keeps our nation's economy going. On one hand, we have more in the school lands trust fund that will help to support schools. On the other, it's going to cost, on the transportation side and on the fuel and heating side, more.

What I am interested in, and one of the reasons I brought on Dr. Nelson as an energy advisor, is to look for the first time ever as a state at a real energy policy that can address issues going forward that might allow us to take a look responsibly at our raw materials in our state and couple the traditional hydrocarbon approach with alternative ideas: Solar, wind, geothermal. We have them all in this state, and they need to be looked at.

So I think you can expect from our administration, perhaps for the first time ever, some real good thinking on an energy policy going forward. And I hope that, to some extent, that will influence the region. Because I know there are other states similarly situated, Colorado and Wyoming specifically, that are looking at the same sort of predicament.

We have resources, yet we're dealing with imported oil prices that are causing our pump prices to go absolutely through the roof. And I think there's more that we can be doing about that, and should be doing about it.

KEN VERDOIA, KUED: Is it carrying implications for your budgeting process as you consider the expenses of state government in the coming year?

GOVERNOR HUNTSMAN: We'll be able to address that more thoroughly as we put our budget together. We're some weeks away from putting our budget together, but I can tell you this, that energy prices as high as they are will affect costs across the board. There's no doubt about that. So at the right time we're going to have to see to what extent these higher prices will have on government operations in general.

TOM JORDAN, METRO NETWORKS: Are you going to take into- - I assume you're going to be taking into account, too, while we are pushing energy, the good relationship you have with the outdoor industry association, for instance, which was very positive about their meetings with the lieutenant governor just recently. Did you see environmental protection as one aspect of how we develop energy?

GOVERNOR HUNTSMAN: Well, there's a sense of responsibility that needs to go with any kind of development of an energy policy. And for that reason I put together an energy working group that draws from all sectors and all points of view. It is important as we go forward that we do it responsibly, and we do in a way that does not in any way soil the legacy that we're passing down to the next generation of Utahans.

LISA RILEY ROCHE, DESERET MORNING NEWS: Governor, you're talking about looking at alternative sources of energy. What about looking at alternatives to how the state uses vehicles, the state motor pool? Are you interested in looking at maybe cutting the use of vehicles, or turning to alternative fuel sources for those vehicles as the way to perhaps offset some of this increase in gas prices?

GOVERNOR HUNTSMAN: I think it's a very legitimate question, and it may come as a shock to some of you but I've actually talked to Rocky Anderson a couple of times about this, and I talked to our new energy adviser about this. As she comes in and begins on September 1st, one of the things I want her to look into and, indeed, report back on, and it will be part of a cabinet meeting presentation that we have probably at our next cabinet meeting, is to look at waste that we can operate government more efficiently from an energy consumption standpoint. And that probably has a transportation component, has a heating component as well, it has an electrical component in terms of the types of lights that we use, for example, and I'm going to leave this all open for discussion and review as we move forward. I think it's a very legitimate area.

JOHN DALEY, KSL-TV: Governor, Legacy Highway is in the news again today, the Salt Lake Tribune has a story about UDOT having conversations with the congressional delegation about trying to get a rider through congress that would make this go through. What's your position on that? Do you think that that was the way to go, or not, given that there were discussions going on, negotiations with the environmental community?

GOVERNOR HUNTSMAN: We have discussions ongoing, and have for some time, and I'm putting my trust behind those negotiations because I think they might yield something. I believe in bringing stakeholders to the table, and doing so responsibly. And here we have the plaintiffs, whom I give credit for coming to the table and having this discussion, that might yield in some result here.

My bottom line is I want to get Legacy Highway done. We have people sitting in traffic, we've spent hundreds of millions of dollars litigating this thing, and I, as governor, would be irresponsible if I didn't try to do everything on all fronts. Now, the legislative angle has been tried before, and it's failed before, as it did this time. Senator Hatch tried to do this year what I think he or Senator Bennett tried to do last year.

What is important for me is to get Legacy Highway done in a timely fashion, and I happen to believe that the best fix is to sit down responsibly with the plaintiffs and to iron out an agreement, which we have done, we're in the process of vetting that now with the legislature to see if we can't come up with some buy-in there, and then to move forward.

JOHN DALEY, KSL-TV: And did you support the rider, did you support that legislative effort, or not?

GOVERNOR HUNTSMAN? Well, I didn't have much say in geting it done. It was something that our legislators put forward. But I will tell you that I would support anything that would get Legacy Highway accomplished.

JOHN DALEY, KSL-TV: What's the sticking point at this point?

GOVERNOR HUNTSMAN: The sticking point, I would characterize as being as being the legislative vetting that is taking place right now, which is a normal step that one has to take when you have an executive and legislative branches involved. And I think in the next two to three weeks we'll have a sense of where they come down on the agreement, and we'll then continue working with the plaintiffs, hopefully on an agreement that resembles, by and large, what it is today, and we'll be able to move forward.

But right now we're caught up in the legislative vetting, and I don't know exactly where that's going to put us over the next couple of weeks. But representing the executive branch, I want to keep this moving forward.

RICHARD PIATT, KSL-TV: Governor, if I could switch gears just for a moment. The tax reform task force is continuing its work, and if I could ask you a specific question on just one of the ideas that they're talking about. You have stated earlier that you were in favor of some kind of relief on the sales tax on food, whatever kind of creative form that may take. How strongly do you feel that that is something that needs to be done?

GOVERNOR HUNTSMAN: I would love to see it done. I think it is a tax that hits people in all the wrong places. We're one of only eight states that actually does so, and I think that we, as we proceed through this tax review and reform task force, need to look at the way in which we're taxing people, at what level we're taxing people. And I've been an advocate of this, I continue to be an advocate of this.

I have heard from members of the legislature that it is on the table and still being discussed. The question, of course, will be how do you remedy the loss that rural governments will incur? And I don't think that's a deal breaker, I think there are ways to address this, but I think, moreover, if we look at the basic food staples, as opposed to the food tax in total, which some would say is 150 or $200 million. That's soda pop, that's popcorn, that's candy bars. That's not what I'm talking about. I'm talking about food staples. I'm talking about meat and potatoes, and that's a much smaller number, and I think it's a number that we realistically can deal with that, if done right, will help those who today are hit unfortunately.

We're talking about those on a fixed income, those who are retired, and I want to make sure that we've got a tax regime that is family friendly, that is friendly to all segments of society, and one that, moreover, at the end of the day, is competitive for our state from an economic growth standpoint.

RICHARD PIATT, KSL-TV: Historically the legislature has resisted this for the reasons that you've stated, and there's a relatively small number of people who are obviously in favor of it. How far are you willing to go to fight for this particular issue?

GOVERNOR HUNTSMAN: Well, I've not dropped it since I talked about it over a year ago on the campaign trail, and I think people know that I stand for this in the legislature and outside the legislature. And I've met with community groups who agree, and some who disagree. And I think this is a question of fairness, to my mind. And I'm going to continue talking about it to see what we can can't get accomplished.

TOM JORDAN, METRO NETWORKS: On the subject of taxes, we've all recently gotten our county tax assessments and such, and one of the issues that has been one that's gone on for some time now is the subject of property taxes for water. I was looking at my taxes and noticing I'm paying $80, when I have a completely xeriscaped yard. And I was thinking, is this something that you would like to go at? To try to- - You know, certainly Governor Leavitt was big on trying to get that eliminated. Is this something that you can move forward on?

GOVERNOR HUNTSMAN: Well, this can be talked about in the total tax reform effort. And all I would say on the water front is, even though we're flush with water and all of our reservoirs are filling with the exception of a couple, Strawberry and Lake Powell specifically, we still need to maintain our conservation ethic, which I think has taken root over the last several years, and we need to maintain that conservation ethic. And I think if we do that it could have implications for water that is then needed for personal and economic uses, and maybe there is something that then we can do on the tax side. But it all starts, to my mind, not just with re-engineering the tax formula or equation, but basically having a continuing discussion on water and the supply-demand of water.

JONATHAN BROWN, KCPW: Governor, getting back to the tax reform task force, are you comfortable with the speed they're moving at? And are you confident that they'll have something for the next session of the legislature?

GOVERNOR HUNTSMAN: I can't say I'm comfortable or uncomfortable, being fairly new to the job and having never dealt with the legislative processes before. I guess, in some senses, in the private sector world maybe you'd be pulling your hair out in frustration. But in a deliberative world like we have in government, where you have a balance of power politics and different branches of government involved, it is moving forward at a speed that is acceptable to me, and I'm expecting by October to have some good recommendations by the committee and the working group.

JONATHAN BROWN, KCPW: And if you don't?

GOVERNOR HUNTSMAN: Well, I don't know what will be the outcome if we don't. Suffice it to say, I'm going to be pretty active through September, taking this discussion to the people of this state, and talking about it on the stump. Because I do believe that once people understand the importance of a flatter, fairer tax, they will buy into the concept of what we're trying to do.

There's a lot of misunderstanding out there, there are a lot of interest groups that are trying to keep the status quo, and that's only to be expected. But this is an issue that we need to continue to take out to the people. And so, by October-November we have the working group that does make some recommendation that are in line with what we think we can do with the state.

One of my concerns is, if we don't do it this year, it's very difficult to do it in lean years. We have a year in which there are surpluses, and which our economy is doing reasonably well, and those are the years where you have these discussions about tax reform. You can't punt and leave it for the lean years, it just isn't going to get done then at all. So it's kind of now or never. And if it isn't now then it's kind of same old thing since the 1950s, which is forget about the whole tax end of public policy. Particularly when our economy is so different today than it was when they actually wrote the tax code.

KEN VERDOIA, KUED: A couple of settings you've made reference to the need to take it out on the stump to the people. Are you suddenly advocating that somehow this is something the people of Utah should vote on? Or are you saying they should then influence their legislative leaders?

GOVERNOR HUNTSMAN: Well I believe in participatory democracy. I believe that all the citizens around the state tuning into the issues that do affect us. I can't think of any issue that affects the citizens of this state any more broadly or comprehensively than tax policy. And I hope that every family thinks about tax policy to some extent. And as they conclude what is best for them, I hope they pick up a phone and call their legislator and let them know what they think is best.

KEN VERDOIA, KUED: Not necessarily a ballot box.

GOVERNOR HUNTSMAN: Not necessarily- - No, not a ballot box. I think we can do this effectively just by carrying on a conversation throughout the state on tax reform and tax policy.

MATT CANHAM, SALT LAKE TRIBUNE: How do you take this on the stump? I mean is this something that you have a plan for?

GOVERNOR HUNTSMAN: We have lots of events as we move through September and October, and it's something that you'd generally inculcate into your stump speech. And we're already talking about it when we go different places, and raising awareness about the importance of tax reform, and I think it will be more specific to that end as we get out in September and October to chambers and to different business groups and to different community organizations.

LISA RILEY ROCHE, DESERET MORNING NEWS: Governor, is it your package you'll be trying to sell, or is it the legislature's package? Already we're seeing some differences between some of the things you've said the state needs, like an elimination, eventually, of the corporate income tax, and what the tax force is suggesting. They seem to be scaling back some of the ideas that you started with.

GOVERNOR HUNTSMAN: What is more important to me than eliminating the corporate income tax, and I've said this time and time again. Yet I keep getting hit with, "He's the guy who's trying to push the corporate income tax." More important to me is a flatter, fairer tax. If we can achieve that, the corporate income tax certainly is important, and I think even members of the corporate community would say it's important. But not at the expense of destroying broader tax reform in other areas. Like the income tax and like the sales tax. Those, for me, are priorities before we get into the corporate tax.

LISA RILEY ROCHE, DESERET MORNING NEWS: So you're willing to accept a package that does not include the eventual elimination?

GOVERNOR HUNTSMAN: I am.

RICHARD PIATT, KSL-TV: With real complex and large pieces of legislation sometimes the public not only feels left out, but there's a feeling that things are done in a rush. If the public doesn't feel they've had adequate time to study the plan, and give their input, because there's an implication that if the plan comes out in October it's a done deal and the public hearings won't make any difference, would you be satisfied with piecemeal legislation next time, perhaps the corporate income tax being considered as a separate bill rather than one large omnibus bill?

GOVERNOR HUNTSMAN: Well, I don't want to show our hand on what our legislative strategy might be. We're going to take it as the fall plays out, and as we make progress with this, with this particular tax reform undertaking. Although I will tell you that this shouldn't be a new concept to most of our citizens. Indeed, my predecessor unfurled a comprehensive tax reform package that isn't too far distant from the one that we are talking about. And so I do believe that many of our citizens, to the extent that they are interested, have had a chance to immerse themselves in what likely outcomes will be in terms of tax policy.

KEN VERDOIA, KUED: Governor, you've invested time to make a trip to Mexico, you're on the front edge of an initiative to consider new directions for a collaborative relationship with Mexico--education, culture, economic development, and this plays out at a time when a number of citizens groups are very concerned about the impact of undocumented immigration through Mexico to the United States and to Utah.

How do you reconcile those two what seem to be competing interests? On one hand developing closer ties, on the other hand, understanding the concerns of your citizens that are saying we already have too close of a tie, if you will, unofficially?

GOVERNOR HUNTSMAN: Because I believe part of a solution, longer term, part of a solution, will come through a bilateral fix, and that is a shoring of the ties between two nation states. They can't be done unilaterally, it has to be done in collaboration with our partner to the south. They must create 500 to a million jobs per year to satisfy their work force needs. That's part of the reason we have undocumented workers who cross the border, to the tune of 500,000 per year.

Yes, we have demand here in this country, and we'll always have demand in this country, and if it isn't people coming from the south it'll be people coming from across the Atlantic or across the Pacific. We're an open country, and I think that's one of our strengths, and it always has been one of our strengths. We can do a better job in terms of border fortification. I think Governor Bill Richardson has addressed that point pretty adequately, and I think Governor Nepolitano has also spoken out on that point, as well.

We do need border enforcement. We do need better registration for those who are coming across the border and taking jobs, where law enforcement can track who is living where, who is working where, as people work toward a work permit, and then a green card, and then ultimately citizenship. So I see what we're doing as complimentary.

We need a strong bilateral relationship with Mexico, and it must occur in the economic sphere, it must occur in the education sphere, and I believe, because we have almost 300,000, now, who draw their, or trace their origins to Mexico or Latin America, it's important that we have a cultural dimension too, so that all people in the state feel that they are part of the life of the state. And for me that's an important dimension.

But listen, there's going to be legislation that will be presented in congress later this year, first or second quarter of next year, Senator McCain, Senator Kyle, Senator Kornan, they've all got individual bills, and they look at border enforcement, they look at the way that we used to do things pre-world War II, which was doing a better job in tracking the labor flow across the border to the north.

And they do need to hear from governors, and this will be on our agenda at the next Western Governors Association meeting. It's not been on our agenda before, it will be on our agenda upcoming, and I hope that through this issue being on the agenda, that key governors in the west are able to weigh in with members of congress, or even in a committee hearing, about what we feel regarding the legislation that is being proposed. I think it's important that they hear from those who are on the front lines.

KEN VERDOIA, KUED: I want to clarify, to the best of your knowledge western governors have never seriously considered undocumented immigration or immigration control as part of their agenda in the past?

GOVERNOR HUNTSMAN: Well, let me speak to my involvement. Which isn't long. I have not heard that it is come up as a major agenda item. It certainly hasn't been on the agenda since I have attended the meetings, and that's something that I wanted to include, it's something I talked to President Fox and officials in Mexico about doing, I think it's something that needs the raised awareness among policy makers as we work toward a fix this fall.

The good news to me is that we have some good ideas on the table, and the good ideas are going to be debated in congress, and with that needs to be expressed the voice of western governors as they work toward a solution sometime next year.

TOM JORDAN, METRO NETWORKS: Any update on President Fox's visit here?

GOVERNOR HUNTSMAN: All the representations that we're getting from the foreign ministry would suggest that he is still planning a visit to the western United States with a couple of stops, including one here in Utah. So I have high hopes that it will take place.

JOHN DALEY, KSL-TV: We had a high-profile presidential visit this week, as well as protests. How do you think the war is going, and are you concerned about, you meet with the troops and families who have family members over there. Do you worry about the military getting stretched too thin?

GOVERNOR HUNTSMAN: I'm just a governor. I'm not a policy planner in the Pentagon. I have attended all the funerals of those who have lost their lives from Utah, I call the parents, I feel the pain that they go through. Also the pride that they feel in having, in this case all sons, no daughters yet, die while doing something they were extremely committed to.

The bigger issue on Iraq is getting a Constitution that all parties, including the Sunnis, can agree to, to a participatory democracy that allows free elections to continue, as they already have, and three, working toward broader security for the new nation of Iraq. And I would suppose that at some point we're going to have to have a conversation about a reduction of forces in Iraq, and the security, then, being left with those who we've worked so hard to train over the last year. The Gulf Cooperative Council probably playing a role, the European nations probably playing a role through NATO.

We're spending a lot of money in Iraq, and we've done a lot in the way of shoring up the institutions of democracy, and allowing for them, soon, to govern their own nation state based on democratic principles going forward. Now whether it's an Islamic republic or a democratic form of an Islamic republic, whether it's an Indonesia or a Pakistan, I don't know that anyone can say at this point. But it will be something better than it was before.

But I think over the next six months there's going to be a very lively debate in terms of the timing that, in which this all occurs. And how committed the United States will then be in terms of the current force levels over the next several years.

RICHARD PIATT, KSL-TV: Governor, were you concerned at all with the publicity that Mayor Rocky Anderson's been getting with his antiwar and negative President Bush statements that Utah's image might be tarnished vis-a-vis economic development and businesses and your efforts to attract them? Are you hearing anything from people that that might be potentially injurious?

GOVERNOR HUNTSMAN: Well, I haven't heard from anyone specifically. It reminds me that we do live in the United States of America, where we prize free speech and debate. A fact we were here celebrating with members of the VFW who fought in lots of wars during the past century to protect that right. Do I agree with the message? No. I have disagreements with what Rocky is saying. But do I- - I champion the right for people to speak out on this or any other issue? Of course I do.

RICHARD PIATT, KSL-TV: Would it be fair to say that as a diplomat his tactics make you wince a little bit?

GOVERNOR HUNTSMAN: All I would say is that all statements carry implications. And if you're a senior elected official they carry sometimes profound implications in the way people see or interpret them. And will it have an impact on economic development? I don't know. Are people going to disagree with what he said? Of course they are. But it's in the spirit of free speech and openness and debating some very legitimate issues that we have as a country.

I don't agree with where he's coming down. I would have handled it differently as a senior elected official. But may we all stand tall and cherish the right of free speech.

KEN VERDOIA, KUED: Governor, we are out of our allotted time, so I want to thank you for your time today for this taping of the Governor's Monthly News Conference, and offering my reminder to you that a transcript of this and every edition of the news conference is available on line at www.uen.org, thanks to our good friends at the Utah Education Network. Until the time we meet in September for the Governor's Monthly News conference in Salt Lake City, thank you for joining us, good night. 

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