January 30, 2003

The proponents of tuition tax credits believe that if you subject the public schools to market forces, that it will improve them. I need to say very clearly, I believe that market forces inside public schools will improve them.

Reporters (in order of appearance):

DOUG FABRIZIO, KUER
TOM JORDAN, METRO NETWORKS
DAN BAMMES, KUER
LEE AUSTIN, UTAH PUBLIC RADIO
AMY JOI BRYSON, DESERET NEWS:

Transcript:

DOUG FABRIZIO, KUER: Governor, welcome, thanks for joining us. Let's start with the question of tuition tax credits. You mentioned last week in your State of the State address, that while the idea had merit, it was a bit risky in these financial times. Yesterday a Senate subcommittee approved a tuition tax credit bill. How are you reacting to that?

GOVERNOR LEAVITT: The proponents of tuition tax credits believe that if you subject the public schools to market forces, that it will improve them. I need to say very clearly, I believe that market forces inside public schools will improve them. The question is, how do you achieve that? The question of tuition tax credits is based on a very simple ideology. But there are very complex and significant risks. 97 and a half percent of the students in our state go to public schools that are dramatically underfunded--40 percent of the national average--and I've suggested I'm prepared to have a discussion about this, but only after we have adequately funded our public schools. Now, I've suggested that there are ways in which to create a sense of competition and to bring a sense of the invisible hand of the marketplace to public schools that I think are very important, and I hope the legislature will move immediately to adopt. Charter schools in our state and in the nation are working. They create a sense of choice for parents, and options for children. They create a sense of competition in that it requires that the public schools improve, otherwise the students can leave. I've suggested two things. One is that charter schools--which are public schools--that charter schools need to be expanded, and they need to be fully funded. They need to be put on the same footing, equal footing with other public schools. And second, we need to have a revolving loan fund that will allow for the capital facilities to be built, and I think we'll see a substantial increase in the number of charter schools, and hence the amount of market force that's imposed upon the public school system.

DOUG FABRIZIO, KUER: Do you think- - There seems to be now momentum though for this bill. Are you thinking you may get involved in the discussion as this bill now goes forward?

GOVERNOR LEAVITT: Well, I've made my position clear before, and again today, and as I said, I'm prepared to be involved in this discussion. But I'm prepared to support it only after the public schools have received adequate funding, and quite frankly, we're a long ways from adequate funding now. I mean we are at 40 percent below the national average, and that means that the average student in our state has an investment of some $2500 less than the national average. Now, I spent most of my State of the State address talking about what I believe to be the wrong-headed value of time measurement, that our entire system of public education, and I might add, most private schools are based on. And it would be my desire and my aspiration to make a historic and rather bold change in concert with the state Board of Education to change our entire system to a competency-measured system. I used the example in the State of the State of a conversation I had with a friend who said, "If my child misses the first period at high school I get a call within an hour. But if he fails a test I don't hear about that for six weeks." Why? It's because they count attendance. Attendance is mandatory in our system, learning is optional. And my desire is to improve the schools by doing two things. One is adequate funding, but the other is to change what we value. Away from just the clock. When you spent 990 hours in our schools you've had a year. But it doesn't matter what you learned during that period. And I want to measure what we learn, I want to measure the system against the value that's created, not how much time they spend. And that's a very significant historic change. And there's a lot of thought gone into this already, and there will be a lot more. It will do substantially more to improve the schools than any of the other kind of programmatic things that twist around the edges. I might also add, I've proposed a new way of funding the schools. Now, if you want to talk about a market having an impact on education, markets are based on performance, and once performance becomes the game, then competition does its magic. And unless there's a way of being able to measure something other than time, you don't get the improvement, no matter whether it's a public or a private school.

TOM JORDAN, METRO NETWORKS: Have you got a model that this is based on? Is this something that, where we are leading the nation, or are there other states doing this same kind of thing, and is it working?

GOVERNOR LEAVITT: Well, we would be among the first, I think we'd probably be the first state to adopt it as our model. And I might add that I'm not- - I want to make clear that this isn't about completely doing away with the existing system as we know it. I mean this is about incrementally changing toward a competency-measured system. I think we would likely start with some of the basic subjects where it's very clear how you measure competency. But there are- - We have in our own state the applied technology college. All of that is open entry, open exit, competency based. Many of the most significant new education programs in the corporate sector, in the military, are all based on competency measurement. You don't want to send a person out to do something complex with a satellite system unless they're competent. It doesn't matter that they had a lot of time. If they're not competent you don't want them there. Employers don't want to hire people just because they spent a bunch of time. They want to know that they're competent. And so this is a very basic change, and we would be, I think, among the first states to adopt this as a model. But when you've got the kind of pressures we do financially, sometimes there's enough pressure to just make you do smart things and to overcome the inertia of a hundred years of a system that simply may have made sense back when they were measuring things in factories, but this isn't a factory. Schools shouldn't be assembly lines. That's sort of what they are now.

DOUG FABRIZIO, KUER: You talked about, a moment ago, sort of phasing this in. Let's not change it necessarily all at once, but you do want to see some sort of change by the fall.

GOVERNOR LEAVITT: Yes, I would like to see the state school board adopt this in the fall. They have indicated they'll be ready to do it. I suspect it will move toward a system where today, for example, you have 24 Carnegie credits. A Carnegie credit is basically the measurement of time. You spend time, we give you a credit. All you have to get is a D minus or better and we give you the credit. That's a bad system. And I think what we'll end up doing is saying, instead of 24 credits, you might have to have 15 Carnegie credits, but you have to demonstrate competency in a number of specific areas in order to have completed a high school diploma. Now, I want to be very clear about this. There's folks who get all unsettled by the fact that this is about accelerating people through the process, or it's like holding people back. This isn't about- - That's all about the measurement of time. When we say we want to have them skip a grade, or we want them to get out early. That's not what this is about, or holding them back. This is about saying, when you leave we want you to know some specific things. And when you can demonstrate that you know them then we're going to consider you a competent, educated person. And until you can we're going to keep working with you. Because we're not going to leave anybody behind. And we're not going to- - And you can leave people behind by overtaking them or you can just send them on without the information.

DOUG FABRIZIO, KUER: Your deputy for higher and public education, Rich Kendall, said that this system seems to have lost its sense of the basics. Do you agree with that?

GOVERNOR LEAVITT: Again, we measure time. Why do we do that? Why is it that you get a call an hour after your child misses a class? It's because they get paid on the basis of time. If the student shows up they get paid. If they don't, they don't get paid. Now, you can say, well, that makes some sense, but what about learning? I mean right now the system says learning is optional. Mandatory is attendance, because that's the way we get paid. And I would like to see us change that system to begin for teachers and administrators and parents to value learning, not just the fact that their child got through the system. And why is that important? It's because the marketplace values competence.

DAN BAMMES, KUER: Governor, in special session last month the legislature was able to avoid direct cuts to Medicaid program. Nevertheless, shortly after the session the state health department started looking at substantial reductions in services, something like $5 million worth. Even though appropriations are being maintained at something close to the same level then, it appears that the state is losing ground in meeting the needs of people who need these Medicaid services in the state. How can you manage that in a difficult budget year?

GOVERNOR LEAVITT: The secret is for the federal government to give the states the flexibility that they need to manage the system with the dollars that we have. No one is suggesting we're going to spend fewer dollars on health care. We're going to spend more dollars on health care. The question is, how do we deal with that scarce resource? If we had the ability to design a benefit program, I'm convinced we could cover more people, not less, and that we could do a better job administratively, and save even more money. We have what's known as a primary care network that we've just implemented, we're the only state in the country that has done so because we got a waiver, and we're now covering about 11,000 people in the last several months who work but don't have health care because they can't afford it, but they don't qualify for a government program. In the past our incentive has been, if you don't work we'll help you. If you do work we can't help you. And that's a bad incentive, too.

DOUG FABRIZIO, KUER: Governor, we have a question from our microwave site in Logan, Lee Austin of KUSU is with us. Lee?
Clearly we can't hear him.

LEE AUSTIN, UTAH PUBLIC RADIO: Okay, can you hear me now? Sorry about that. It relates to representative Jeff Alexander's legislation on credit unions which would set up taxation on the largest credit unions. There are so many advertisements in newspapers, radio, television, fliers, people are hearing from their banks and credit unions to contact the legislature to either support or oppose the bill, and I'm guessing we won't get you to announce your position on this specific legislation, but how should people assess the validity of the arguments that are being made as they urge people to contact the legislature on this issue?

GOVERNOR LEAVITT: Well, we're seeing democracy play out in a rather remarkable way right now. Both of these categories of financial institutions are positioning to provide what they believe to be a fair place in the market for both of them. I'm confident there's a place in the market for both of them. I suspect that they're challenging each other's facts. I've spoken with the commissioner of banking, and he's assured me that the institutions are safe and sound and being closely monitored, and that any--on both sides--any claim to the contrary would not be accurate. But as to my own position on it, this legislation is going to change. It's not- - It started off at one place and it'll migrate to another, and it's so controversial, and I think my involvement in it at this moment would be so unproductive that I've decided that the standard I'm going to hold it to as to my own support is just fairness. You come up with a fair deal they'll have my support, whatever it is. If they don't then they won't. And I'm not going to weigh in until I can see exactly what they come up with.

TOM JORDAN, METRO NETWORKS: You're about to take off on a trade mission to Mexico, and I understand you've actually got a chance to talk to President Fox. This is, I gather, a fairly rare occurrence because he doesn't do a lot of that kind of meeting. What's the attraction in Utah for him?

GOVERNOR LEAVITT: I have met President Fox on a number of occasions, and we have what I consider to be at least a casual friendship, and he's gracious in inviting me to come visit him. I will be taking a group of Utah businesses to Mexico as a follow-up on our Olympic effort. I'll be meeting, in addition to President Fox, several of their government ministers, and hopefully I'll be able to bring into contact Utah businesses with potential buyers of their product and suppliers for them that'll make them more competitive. It's an effort to build on our Olympic legacy.

AMY JOI BRYSON, DESERET NEWS: Governor, the legislature so far is moving toward restoring some of those controversial cuts that were made to public safety, corrections, and courts. In your opinion have they gone far enough, and what happens in June when the prediction is Lone Peak will have to be shut down?

GOVERNOR LEAVITT: Why don't I address the general budget situation, in the context of your question, we're in a very difficult position at a state. We have greater demands and we have fewer dollars, and that's always hard. I can define victory for me in very simple terms. I do not support cuts in education, and I am not prepared to turn prisoners out of our prisons prematurely as a means of balancing the budget. Now, I've put forward a balanced budget. There are people who don't like the way I've done it--I accept that. I've proposed that we delay roads. I've suggested we might find another way to subsidize our water. There are people who don't like that, and I understand it. But we now need to see other alternatives, and I'm prepared to entertain whatever alternative they come up with. But I want clear that I do not support cuts in education, and I do not support turning prisoners loose in order to balance the budget. Now, I vetoed a measure that would have required 400 prisoners to be released prematurely. That's in addition, I might add, to those that routinely are released. Not for budget purposes, but because their time is up. It would also require that a very high number, as many as 130 personnel from law enforcement agencies, would be reduced. And it's not made sense to me to turn prisoners loose and then take police off the street. And they have now come back and said, well let's put $3.7 million to cover this $7.8 million of the need. I've only had a chance to look at the corrections portion of that, and I'm persuaded that this year, if they funded at that level, we won't have to release prisoners. I'm still assessing what it does to the courts and to law enforcement, and I'll have information about that later. But that's just the '03 budget. I still want to be clear that I am not prepared to accept cuts in education, and I'm not prepared to accept turning people out of jail to solve this problem.

TOM JORDAN, METRO NETWORKS: So you could actually veto again if the legislature goes back and reinstates the cuts?

GOVERNOR LEAVITT: As I said, I'm not prepared to support cuts in education, I'm not prepared to support turning prisoners loose as a means of balancing the budget. I don't think we need to do that, and I've put forward what I think is a responsible way. It's not an easy way; it's not a happy way. We all like to build the roads and, and we'd all like to build them on exactly the same schedule we intended, but we made the schedule in 1997 when we were awash in money, and we're not in 1997. Oh, for the days we were, but we're not.

DAN BAMMES, KUER: How about tax increases? We had a letter became public this week from a banker who advises the state on its credit rating indicating that tax increases would help protect the state's credit rating, you know, in addition that other thing it does of funding state government. But is it time to look at perhaps some broad general types of tax increases, as Governor Bangerter did in 1987, and is it also possibly time to look at repealing some special interest tax breaks, such as the sales tax exemption on ski passes?

GOVERNOR LEAVITT: Well, I put a budget forward that allowed us to move without cutting education, without turning prisoners loose. Yes, it did delay construction on some roads, and yes, it does require us not to subsidize water in the same way we do. I've made it very clear I'm very open into putting more money into water, but I don't want to do it out of sales tax. And I'm just prepared to receive any alternative to that if they have options they like better. But we need to have options, and I'm prepared to receive them. Right now I've got a proposal, it's, I think, a good one, it's a responsive one, if they don't like that let's see what else is out there.

DOUG FABRIZIO, KUER: So you're adamant about corrections, you're adamant about education. You don't feel that same way about tax increases. If there's something reasonable you would consider it?

GOVERNOR LEAVITT: I've put a budget forward that does not have a tax increases. I've done it by slowing our highway construction down. I hear them loud and clear. They don't like that. But it really boils down to some hard options. You've either got to accept the idea that we're going to delay our highway construction, or you've got find a way to pay for them. What I don't accept is that we just continue down the road like it was 1997, and continue to put all kinds of sales tax dollars into highways, when we've got colleges and universities and schools and prisons and other things that just have to be supported. Now, you've asked a direct question and I've simply not answered it. But I am, because I've put a proposal together that I think's sound and reasonable. If they have other solutions, I'm open to them. I'd just like to hear them.

AMY JOI BRYSON, DESERET NEWS: Doesn't your budget that you've put forward for the next year have reduced spending? Isn't it smaller than like four years ago?

GOVERNOR LEAVITT: It is. But the budget I put forward is fewer dollars than in 2000, the fiscal year 2000. Four years ago. And we have 150,000 more people. So something has to give, and what I have said has to give is we can't build roads at the same rate. Now I hear them loud and clear. They aren't fond of that idea. I accept that. But if we're going to build roads at the same level, and if we're not going to cut education, and if we're not going to let prisoners turn loose, then we've got to come up with some new solution, and I'm ready, I stand ready to listen and to talk about any of them. Right now I have a budget proposal that makes some sense to me. It's not easy, and it's not, it didn't make everybody happy, but it's a sound budget.

TOM JORDAN, METRO NETWORKS: There's the rational on something Dan mentioned, the special interest exemptions, and in terms of the ski industry, is that an exemption in part because of the amount of money that is generated by winter sports in this state? Is that the tradeoff?

GOVERNOR LEAVITT: There are a number, a large number of situations where the state legislature over the years has said, this is a category where the public good would be better served by not having them included in the tax system, or by having them included differently because it generates so much new activity that we come out ahead if we don't tax it. That's an example. At some point in type the legislature said, we're better off competitively as a state if we don't charge sales tax on lift ticket, because it keeps us competitive with Colorado. Now, if the legislature granted that, they have the power to un grant it. But it's part of what they have to decide in terms of how to best use an out- - And again, I've put a budget forward. It doesn't cut education, it doesn't turn prisoners loose to balance the budget. I'm not suggesting any of them want to do either of those things. I want to be clear about this. I am not suggesting that they want to radically cut education. I don't think there's a soul up there that does. I don't think there's a soul in the legislature who wants to turn prisoners loose. But we have to balance the budget. And I've balanced it by saying let's delay our roads, let's change the way we subsidize water, let's cut some programs back otherwise. And they're going through a very difficult process of trying to decide what they want to do. And there's no clear answer yet, but you wouldn't expect there would be at this place in the legislative process. And I just stand ready to receive their ideas. I understand they don't like mine, but I'm looking for theirs.

DAN BAMMES, KUER: You've been a strong supporter over the years of George W. Bush, both as governor of Texas and president of the United States. Were you disappointed, though, that his State of the Union address didn't include any help for states in budget difficulties? Utah is not quite as bad as some other states, but were you disappointed?

GOVERNOR LEAVITT: The best thing that George W. Bush could do for the states isn't to bail us out financially. It would be to give us the tools we need to manage Medicaid. And I have a feeling there'll be some announcements about that coming forward in the not-too-distant future. And I hope very much that the Congress will implement them.

DOUG FABRIZIO, KUER: Governor, let me ask about, go back to tuition tax credits if I may. Would- - You talked about the fact that the legislature seems to be clear on your perspective, and that you would love to get involved in the discussion as this bill seems to be moving forward. Would part of that message, though, that you send them be "I don't like the one currently under discussion, and would, in fact, veto it if it did pass"?

GOVERNOR LEAVITT: My message is very clear, and that is, I believe that the market is a good thing, I think there are better ways to do it than tuition tax credits, I'm prepared to have a discussion about tuition tax credits, but only after our public schools have been adequately funded. And I think we're a long ways from adequate.

DOUG FABRIZIO, KUER: So that, to me, says you will veto this bill if it passes.

GOVERNOR LEAVITT: I can repeat it again, but I think I've been very clear in my point, and I have- - I do not believe the public schools are perfect, I think they need improvement. I've proposed a competency-based system that will dramatically change the basic value set. I've suggested an expansion of charter schools. I think that our schools are, for the most part, our teachers are remarkably dedicated, they do a great job with very limited resources, but there are ways we can improve it, and I think I've put out a very clear agenda of competency measurement, charter schools, and adequate funding. And all three of those need to be part of our discussion. I'm prepared to engage in a conversation about tuition tax credits, but only, but only after they have met the standard of adequately funding the 97 and a half percent of our students who are in public schools today.

DOUG FABRIZIO, KUER: Maybe 30 seconds left, Governor. Finally, education clearly is the thing most on your mind these days.

GOVERNOR LEAVITT: A recovery of the economy in the long term is my highest priority, and that's why I keep talking about education. Because education is economic fuel, and the society that produces the best-educated workers in the future will be prosperous. Period. And those who don't, won't.

DOUG FABRIZIO, KUER: Governor, thanks for joining us, and thank you for joining us. Good evening.

 

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