January 28, 2005

"My first order of business is economic development, it's what I ran on, it was my center piece as a means by which we can then pay all of the other bills." -Governor Huntsman

Reporters (in order of appearance):

KEN VERDOIA, KUED
DAN BAMMES, KUER
MATT CANHAM, SALT LAKE TRIBUNE
LEE AUSTIN, UTAH PUBLIC RADIO
LISA RILEY ROCHE, DESERET MORNING NEWS
TOM JORDAN, METRO NETWORKS
CHRIS VANOCUR, ABC 4-NEWS
JENNIFER NAPIER-PEARCE, KCPW

Transcript:

KEN VERDOIA, KUED: Governor, we welcome you to the first televised exchange of the Monthly News Conference. Considering that we have nearly 50 of these scheduled over the next four years, we might take a slow and steady approach in ramping up to full speed. Unfortunately, events and challenges have decided to move apace quickly, and so we will as well. The first question, then, comes from the state legislature, where legislators are considering a bill that would give patients greater flexibility in approaching physicians for care, rather than having them dictated by HMOs or health insurance plans. Those in favor of the bill say this provides greater rural health care, and greater flexibility and competition. Those in opposition say it could lead to explosive cost increases. How do you come down on this concept of the willing provider health insurance plan?

GOVERNOR HUNTSMAN: Well, I'm going to take a look at it. Health care, and the way in which we deliver health care, and the cost associated with health care, are all things that we need to be fully mindful of as public policy makers, and work to improve. The fact, for example, that we have nine percent of our population goes uninsured, I think is a travesty and needs to be addressed.

And the fact that we have escalating health care costs, driven largely by pharmaceutical costs. And I joined a letter that Governor Tim Polenti and others sent to the Prime Minister of Canada a week or so ago seeking a meeting with him so that we could explore ways in which we could actually engage in more cross-border trading on our pharmaceuticals. I don't know that that will ever come to fruition, but I do think it's something we need to look at. And even the secretary of Health and Human Services, Tommy Thompson, has stated that it won't be long before we have some arrangement with Canada where we can actually access cheaper pharmaceutical costs.

And I think, beyond just any willing provider, we need to look at the cost of litigation. There's a lot of frivolous litigation in the medical profession, and I think tort reform is something that needs to be addressed, as well, as part of any approach to the way in which we provide medical services and costs. California has addressed this, along with about six other states, in terms of putting caps on liabilities. We've done a little bit in the area of tort reform. I think there is more to be done. But I am going to be in favor of patients being able to access local doctors, local services, at a competitive cost. And how that manifests itself legislatively, I don't yet know, but I'm going to take a look at any willing provider and consider what our options are.

DAN BAMMES, KUER: Governor, we're early in the legislative session, but how are your budget priorities shaking out, now, in the appropriations process? What have your meetings with legislative leaders been like on budget priorities?

GOVERNOR HUNTSMAN: It's a good question, Dan, and the reason we put out a budget is because we have certain things that we consider to be priorities. We have education, we have transportation, we have health care, we have salaries for public employees that, I think people who have been underpaid and underappreciateed for too long, and I think we have an opportunity to address a lot of these.

Now the question for the executive branch, for this governor, will be, do we get the legislature to play ball with us? I don't know the answer to that yet. We have had several interactive sessions with both Republican leadership and Democratic leadership, both chambers, and I'm going to continue to drive home these priorities. I put them there for a reason, I think they represent many of the areas that we do need to focus on as a state that need to sit and sort of correct some of the imbalances that have been present in years past, and I'm going to continue to fight for those priorities.

A lot of it's going to have to do with the overall number on transportation that the House of Representatives rolls forward. They've talked about $80 million. I put forth $33 million, which I think is adequate for this year, along with a the $70 million in bonding that we've committed to do. But the whole transportation discussion, I think, is one that has to really go back to a joint legislative study that was done by Representative Lockhart and Senator Walker, where they took a look at lots of different approaches to funding transportation, which is going to be a significant undertaking for all public policy makers over the next many years.

And we're going to have to look very creatively at how we do that, and all options are going to have to be on the table. But as we sit right now, much of this discussion over the next few weeks will be, well, I think, be distilled down to how much money is allocated to transportation, as driven by the house versus as driven by the executive branch.

MATT CANHAM, SALT LAKE TRIBUNE: How willing will you be to fight for your priorities in that area? You've talked about economic development, you've talked about education and salaries, and you've talked about infrastructure. How hard will you fight for your other priorities?

GOVERNOR HUNTSMAN: Well, we're going to fight very hard for our priorities. That's the reason we put out a budget, and we signaled some of these priorities. Listen, it all falls very nicely into the four areas that I highlighted during the campaign, that I've highlighted since the election, and it's the economy, it's education, it is quality of life, and it's governance. And in all these areas I've got one or two priorities that I've tried to shepherd along through this legislative session. And I'm going to do it doggedly, and we're going to do it indefatigably, and we're going to find allies within the legislature who are willing to do business with us.

And listen, I'm in bridge-building mode. I'm one who, as a former diplomat, believes that the first order of business is to find where you agree as opposed to disagree, as I did with SUA when they were in this last week. You know, I once read, well, years ago, that a Republican governor actually sat down with SUA as if it was a big deal. And I thought, well, you know, shouldn't we have our door open to all voices and all interests, and all those who have something to say about issues of the day? And so I sat down with SUA this week, and the first order of business was to figure out where we agree as opposed to disagree.

And similarly, I'm doing that with everyone who walks in my office. And I'm building bridges with the legislature, and the first order of business there is to figure out where we agree, where we come together, versus disagree. And we begin to come together and accomplish those things on which we converge, and then we'll leave some of those that we disagree on a little bit later. And I'm not sure that, you know, we'll find solutions for everything, but we'll certainly try.

KEN VERDOIA, KUED: Governor, we're going to extend the theme of the legislative session and turn our attention to Logan, where we have a question from Utah Public Radio's Lee Austin. Lee?

LEE AUSTIN, UTAH PUBLIC RADIO: Thank you. As you had indicated, one of your priorities, economic development, and part of that is an attempt to eventually phase out the corporate income tax. House Bill 78 has advanced out of committee. Some have said, though, without other pieces of tax reform to look at, simply starting out with elimination or phasing out of the corporate income tax is sort of a leap of faith, and there is an editorial today in the Salt Lake Tribune. I'm wondering if you could respond to that.

GOVERNOR HUNTSMAN: Well, thank you, Lee, for the question. My first order of business is economic development, it's what I ran on, it was my center piece as a means by which we can then pay all of the other bills. And my commitment is to get something done this legislative session. I've looked at the totality of tax policy changes that I think need to be done, and then I ask myself the question, now realistically, what will the market bear? What can I actually get done with the legislature?

And I've come to the conclusion that we can't do everything I'd like to do with the legislature in one session. So therefore we need to break out those parts that are doable this legislative session, and maybe put on hold those that aren't immediately doable for further study. So if I combine that reality with the fact that I'd like to have something in our hip pocket that I can actually market for economic development purposes, that leaves us with a corporate tax.

Now, it is a very careful phase-out. We're looking at something that won't even begin for two years. We're starting first with a double-weighted sales approach, which is something that we should have done a long time ago, that virtually every other state in America does, that really puts more tax focus on sales as opposed to property and payroll.

And while we're getting the corporate sales tax done--again, something that's not even going to take effect for two years--and on top of that we'll have a five-year phase-out period--we can then, in the off season, which is to say after the legislative session ends, begin looking at sales and individual taxes. And I hope that by the session next year we are prepared to take a good look at sales taxes and individual taxes. And that means we're going to have to have some rebalancing.

It means that we're going to have to recognize the reality of our economic situation in our state, which is an economy based largely on services. We're two-thirds services based. So we can either recognize that reality and calibrate our tax policy accordingly, or we can continue to move along as if pretending that we're still an economy based on mining and manufacturing and agriculture only.

So this is my first attempt at getting something done on tax reform, knowing full well that during the next year we have to address sales and individual taxes, as well. Now, if we are not successful, we still have two years before this corporate tax engages to deliberate on whether or not, a year or two from now, this is going to be a good thing for the state.

And I'm going to approach that very carefully, with an eye toward the bottom line of education, because people say, well, it's a $200 million hit for education. And I take a look at that number and I say, well, that number just isn't real. Because the numbers I'm looking at show a corporate income tax that is shrinking at 8 percent per year, and one that is highly variable. Some years it brings in $80 million, another year it'll bring in $130 million. But the fact of the matter, it is shrinking with each passing year.

So I will approach this very carefully and very deliberatively, with an eye towards competitiveness, but also with an eye, over the next year or two, to whether or not it realistically is having an impact on the ways in which we fund education. And if it's having a deleterious impact in two years, I'm going to want to do something about it. But I think in the meantime we will have sufficiently looked at corporate, individual, and sales as a way of rebalancing the way in which we go about taxing our citizens and our corporations and our property, such that we can actually consider tax reform a done deal a year from now.

LISA RILEY ROCHE, DESERET MORNING NEWS: Governor, you campaigned, though, on taking the sales tax off food.

GOVERNOR HUNTSMAN: I did.

LISA RILEY ROCHE, DESERET MORNING NEWS: Did you seriously consider making that one of your first steps in tax reform? And is that a promise you can keep if you're putting it off now for another year?

GOVERNOR HUNTSMAN: Well, I think it is something that we can keep. It's something that has to be factored into the totality of tax reform. You can't lead with the sales tax on food, maybe you can end with the sales tax on food. But when you look at tax reform, you have to look at the key pillars of tax policy, which really are individual sales, property, and corporate. And as we're kind of wending our way through the next year, I do hope to address the sales tax on food. And there are any number of ways that we can do that. We have to remember that we're one of only eight states that still taxes food. I think it's highly regressive, it hits people in all the wrong places. But listen, it's got to be part of a broader effort on tax reform, and not as a stand-alone approach.

LISA RILEY ROCHE, DESERET MORNING NEWS: But yet corporate, taking corporate income taxes off business is a stand-alone in the plan you've introduced. Why can't you lead off with sales tax on food? That would benefit so many Utahns right now.

GOVERNOR HUNTSMAN: It would, and I think we can get there. My whole reason for looking at the corporate tax, again, I had two things in mind. Number one, what will the market bear in terms of realistically getting it done? Number two, is it consistent with an effort to make our environment more competitive as a state? And with the corporate tax I got yes as an answer on both those questions.

TOM JORDAN, METRO NETWORKS: Governor, you've brought up the issue of the sort of Utah service-based economy. This issue obviously came up this week in the long-stand lawsuit involving the Grand Staircase-Escalante National Monument, where the two sides of that seem to be fairly clearly drawn between sort of the Utah Association of Counties pushing to do something or other to down size that monument, running straight into the problem of, obviously, a tourist-based economy, outdoor recreation economy, which would seem to be the forward-looking point of view. Is this one you'd like to just stay out of for the time being because there are a lot of other priorities?

GOVERNOR HUNTSMAN: Well, it's one that I am not part of, despite some newspapers' attempt to drag me in this week. This designation was made under the 1916 Antiquities Act. The legal wrangling was already done under Governor Leavitt, and we found that the state had little in the way of recourse. Now we'll leave it up to local officials to do whatever they think is appropriate, here. The amicus brief that was filed by the general counsel's office was simply a friend of the court brief to basically ensure that the legal processes, as we move forward, don't jeopardize arbitrarily and capriciously the 70 percent of land that is BLM owned and controlled. It isn't an attempt to shrink the size of the monument, and I think there was a misunderstanding there. But we don't have, necessarily, a dog in this fight, and it's not something that I'm taking on right now.

CHRIS VANOCUR, ABC4 NEWS: Governor, since this is your first Channel 7 press conference, I'm curious how you and your staff prepared, and what's the one question you were hoping we wouldn't ask?

GOVERNOR HUNTSMAN: I prepared, as I would for any encounter with crack journalists, as all of you are. I came up with a one-page piece of paper covering all the possible questions. And I don't put, necessarily put answers there. I anticipate questions, and then I sit around at home with Mary Kaye and the kids, and I say, "How would you answer this if it happened to come up?" And so I get good input from my family members.

CHRIS VANOCUR, ABC4 NEWS: And I'm waiting for the one question you didn't want to hear?

GOVERNOR HUNTSMAN: Boxers or briefs? (laughter)

KEN VERDOIA, KUED: Talk about the challenges of being forward looking, even in the context of Chris's question, anticipating what might come next. Your campaign on governor was based on being forward looking for Utah and Utah's future, and yet within days of being elected governor you are thrust into responding to a natural disaster, the flooding in Dixie. That's something that confounds this notion of being forward looking, and dealing with a tragedy at hand. We know the waters have receded, we know work is under way, we know commitments are there for state funding to help out in certain areas. I'm wondering what you have taken away from that incident, as you were coming into office being forward looking, is this a powerful reminder of the day-to-day challenges of your office as well?

GOVERNOR HUNTSMAN: Well, it's a reminder of a couple of things. It's a reminder of the heavy and random and largely unpredictable hand of mother nature that we will experience from time to time, whether it's flooding, whether it's avalanches, whether it's tornados. These are unpredictable, not something you can anticipate, but they're all incidents that you have to respond to with some immediacy, and with some care and compassion, and with some sense of coordination with state and local government.

And listen there is no how-to book on these things. And as my second or third day in office we got the call on this flood, all I knew is that I wanted to be down there as fast as possible to assess for myself what was happening on the ground, and to lend some sort of assistance on the coordination of local and state governments.

But also to put my arm around people who were suffering. I mean I sensed that there was a human aspect, here, that was significant. It was a little bit like--and I'm learning this with each passing day--how large the human dimension of this job. It isn't all mechanics, it isn't all policy papers, it isn't all stumping here and there to different special interest groups. There's a very significant human dimension to this job that I didn't anticipate during the course of the campaign, and there is no how-to book that one gives you as you take office.

I called last night the mother of Matthew Smith, this sergeant in the Marine Corps, who went down in the H-53 helicopter crash in Iraq. A group that had gone from fighting in Fallujah to largely securing the premises for the vote on Sunday. You know, how do you call a mother, you know, who just lost a son? That's a tough thing to do. It was hard for me to call, but I knew I had to, and I knew I wanted to. I couldn't look for a book or look to an advisor and say, "How do you do this? Walk me through it." You just pick up the phone and you call and speak from your heart. It's the same thing I did standing on the bluff overlooking parts of St. George as I watched families literally watching in real time their most prized possession, their private property, being swept away in these strong floods.

So I'm learning that the job is really a balance of, is a balance of the practical and the analytical, and the emotional, and it all has to be applied at some level. You really do have to not just talk about it, formulate it, and think through it, but there is an applied aspect of the job that I don't think a lot of people fully comprehend, and that is you have to make is it work. You have to make it play out in the lives of people, such that it makes sense. It becomes real policy.

So it's, it's different in that sense from other government jobs that I've had experience with, and that is it's more of the analytical, it's more of the policy formulation. This very much is an applied job, it's a hands-on job. You not only have to deal with the policy in a sort of abstract fashion, but you have to deal with it in a very applied, and real-life fashion as well. And so it's a balance between both the analytical and the applied, with a large, with a large part being the human heart and human outreach, which I enjoy. I enjoy. It's hard sometimes, but I enjoy that part.

DAN BAMMES, KUER: Governor, have you heard from the White House on a disaster declaration at this point?

GOVERNOR HUNTSMAN: We hope to hear today. Now I'm not going to be specific and give you any time in which it might occur, but I'm telling you that we hope that by the end of the week, which kind of is today, we hope to have an answer from the White House, which would formally declare Washington County a disaster area, and then make it possible for FEMA to formally send in their teams and begin the rebuilding effort.

It's a two-week process, we knew that going into it when I signed the letter and sent it to the regional office and then on to the president, and sometimes these are situations which can become terribly frustrating from a bureaucracy standpoint, but we knew from the beginning that it was going to be a two-week process. And we worked it very hard from our side, our congressional delegation has worked it very hard from the Washington side, as well. And I fully anticipate that we're going to hear very soon.

JENNIFER NAPIER-PEARCE, KCPW: Governor, back to the legislature, an effort to ban smoking in private clubs is being debated in the Senate today. Some worry that it could hamper tourism. Just wanted to get your thoughts on that.

GOVERNOR HUNTSMAN: No less than it has in California. No less than it has in New York City, or the state of New York. No less than it has in seven other states in America. I'm not sure that this is something that would hamper travel and tourism. That's just my guess. We're not the only state talking about it, or indeed, the only state that has done it. There are others who have gone before us, and they are very much the, probably most popular destinations when you look at California and New York for travel and tourism.

JENNIFER NAPIER-PEARCE, KCPW: So you support it? You support this bill?

GOVERNOR HUNTSMAN: Well, your words not mine. I'm going to take a good look at it, but I think there are some very real issues when we talk about the way in which second-hand smoke and the carcinogens associated with second-hand smoke affects restaurant workers, and affect musicians who are playing in bars and clubs. And I think we have to sort of analyze the real health issues here that are associated with second-hand smoke that I think are very real. And so for me it is a health and a safety issue. Now, that doesn't mean I'm giving you an answer on this. It simply means that that tends to be my bias as we sit here today.

CHRIS VANOCUR, ABC4 NEWS: Did you ever have to deal with that when you were playing in the band?

GOVERNOR HUNTSMAN: Yes.

LISA RILEY ROCHE, DESERET MORNING NEWS: One of the opponents of the bill raised that issue of its effect on tourism, and also talked about how our liquor laws may be hurting tourism, as well. You hinted at that during the campaign, that our laws might be a little confusing to our visitors and there might be a way to make it easier for them to obtain a drink here in Utah. Where is that on your agenda at this point? Do you see yourself proposing any changes any time soon?

GOVERNOR HUNTSMAN: Well, it isn't on my immediate list. I've got my big issues here. It would really fall under quality of life, under number 3, and how it affects travel and tourism. And you know, as I've looked into this, and you've got to remember that I came at this, not understanding fully the lay of the land from an alcohol policy, or alcohol law standpoint. So I put a team together, really, to look at it, including drinkers and non-drinkers. I thought it was fair that we balance it as we approached some level of analysis.

And we looked at it, and the feedback that we got was--from drinkers, as well--was that we don't understand a lot of the changes that have already been made in recent years, and have not done an adequate job in presenting the facts in terms of how alcohol policy has transformed itself, largely starting with those debates back in 1962 and 1968, and then running up to the recent Winter Olympics. So I think there's a lot that we can do in terms of presenting what already is on the books in a clear and simplistic way. So when people, as they ski down Park City or Deer Valley, don't encounter four or five separate sets of rules that govern how they acquire a drink.

It is not a priority, but I intend to work with all the stakeholders in figuring out how we can articulate a message that does lead to some clarification on simplicity and transparency. So that it doesn't appear to be as confusing as it has been in years past. In other words, couple the real changes that have been made with an understanding in the marketplace. The changes have been made but there isn't an understanding in the marketplace that many of those changes have been made.

Now we still encounter, you know, as I see it, three bigger issues on the alcohol front that people would identify: 3.2 beer, one-ounce drinks where the average is one and a half ounces, and the club policy. Now, these are the bigger issues out there that should be left for debate over time. Particularly the club issue, I think, is something that ought to be debated at some point during the next year. I think that's a legitimate issue to put on the table and to debate. But first and foremost I think it's important to look at simplicity and clarification of that which is already on the books.

KEN VERDOIA, KUED: Governor, unfortunately we've moved into the last minute of our time, our allotted time this morning. I'm going to ask you one open-ended question that requires a very short answer, unfortunately. It seems that on a number of initiatives you're talking about your meeting that institutionalized reticence, "we haven't done it that way, we can't do it," whether it's tax reform or whatever, liquor by the drink or whatever it might be. How do you deal with that?

GOVERNOR HUNTSMAN: It's a new day. You find allies who are willing to look at things a little bit differently. And what I'm finding largely in the makeup of the legislature, there are lots of new people, there's new leadership, there are fresh ideas, and there's a willingness to maybe look at things a little bit differently than we have in the past. And that's why I think term limits are good for the governor, and something that I'm going to try to get through the legislative session. Whether I'm here for a term or two terms, I think that re-freshening of the system, that aeration, is a very good thing for public policy making.

KEN VERDOIA, KUED: Governor Jon Huntsman, thank you for time today. A reminder that a transcript and video streaming of this and every Governor's News Conference is available online courtesy of the Utah Education Network. That's available at www.uen.org. Until next time, thanks for joining us.

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