December 19, 2002

The highest priority I had was for education to be put first, and they did that, and I am very pleased, and I think they should feel a deep sense of satisfaction about the way they handled that aspect of the budget.

Reporters (in order of appearance):

KEN VERDOIA, KUED
RICH PIATT, KSL-TV
DAN BAMMES, KUER
TOM JORDAN, METRO NETWORKS
CRAIG HISLOP, UTAH PUBLIC RADIO
JANICE PERRY GULLY, KCPW

Transcript:

KEN VERDOIA, KUED: Governor, thanks for joining us today. Yesterday's special session crafted a plan for meeting the state's most recent budget shortfall. In one respect they honored your call not to impose cuts on education, but they did it by other means than you were proposing. With a night to sleep on it, are you prepared to sign off on the legislative actions?

GOVERNOR LEAVITT: The highest priority I had was for education to be put first, and they did that, and I am very pleased, and I think they should feel a deep sense of satisfaction about the way they handled that aspect of the budget.

I was also pleased about the way things were treated in human services. As I indicated previously, and during this forum, I was concerned that we, I am concerned that we not allow the truly needy in our society during times of economic downturn to be adversely affected. So I was very pleased, and made optimistic by those things.

They did choose to do them in slightly different ways than I would have, but that's understandable. That debate continues. I will say that the session yesterday was a very good warm-up for what is going to be a much more protracted process for the 2004 budget.

I will also indicate to you that, while today ought to be focused on the great things that happened with respect to holding education with no cuts and human services in a position to continue their mission, there are some areas of the budget, specifically law enforcement and the courts and corrections, where cuts were made that go beyond what I believe can prudently be handled. It would include 500* law enforcement officers being terminated and 300 prisoners released early, and I've got some things to work through there, and I don't want to dwell on those today because we've got time next week or after Christmas.

But so let's all celebrate the fact that education was put first, let's celebrate the fact that the truly needy in our community will continue to have those services, and feel some appreciation for the good job the legislature did in handling those in an expeditious way.

RICH PIATT, KSL-TV: Well, Governor, in your opinion should the public be concerned about cuts in public safety and in corrections? The thought of 300 prisoners going free early is not very palatable to a lot of people.

GOVERNOR LEAVITT: Well, what I'm signaling here is that I don't think those cuts can be made in the way that they've been prescribed by the legislation. And I think those cuts were made, really, without a deep understanding of what the consequences would be, and that's one of the things that happens in a legislative special session that's one day to solve a big problem, so I'd like to focus on the fact that they did the right thing by education, and did it well.

They, well, we're a little short in higher education still, but they put the right priority first. Now, as I indicated, I'm going to have to get back before that bill becomes law, there's going to be some more work on it.

DAN BAMMES, KUER: Does this mean another special session?

GOVERNOR LEAVITT: I don't think so necessarily. But we're getting close to the general session. The budget process, when we are doing appropriations, it's a different process than when we're doing cuts, and I have the ability to deal with the legislature on just the specific areas on which we have disagreement.

We can allow the areas on which we have agreement to go forward and celebrate those, and we do, and congratulate them on a great job and feel good about the way they have responded to what I think is the highest priority, and then I'll work through the, I'll work through the areas in law enforcement, as I've said, that I don't think the public will feel good about. Frankly, I don't think the legislature will feel good about once they have a chance to look underneath what they were having to deal with in a kind of quick hurry. So I'll likely bring those back to them.

TOM JORDAN, METRO NETWORKS: Does it concern you that Marty Stephens seemed to be indicating that in the next general session there may be across-the-board cuts that seem to be aimed at saying we're going to be reducing education and health? Is this going to be a real concern?

GOVERNOR LEAVITT: Well, as I indicated, I think that yesterday was, if you were to use the analogy of an athletic contest, it was we got all warmed up and everybody began to get a feel for what the game is going to be like, and the issues were all framed up, and we solved the problem on the, or most of the problems on the '03 budget.

But let me just say that, going on to '04, it's the same debate. We have to put education first in '04, it's a much bigger problem than we had in '03, and it's going to boil down to the same question. Do we defer roads and discontinue subsidizing with tax dollars non-agricultural water? Or do we cut education?

And to me this is a very clear question. They changed the question, and it worked out just fine yesterday. They basically said, should we cut education? The answer was no. Should we defer roads? They said well, we ought to defer roads a little bit, we ought to take a little of the money out of water subsidies and we'll take a whole bunch of money out of the tobacco settlement fund, and that's the way they chose to solve it. And I'm not making an argument with that point, but what it does is heighten the tension, really, on the next year, because there are very few places that you can go to solve the '04 problem, the '04 budget problem.

And let me just describe that. If this were the place where we had revenues in 2003 in our fiscal year, we'll start the budget year with slightly less in '04. We're going to have fewer dollars in the year 2004 than we had in the year 2000. And we'll have 150,000 more citizens in our state. So you get the picture here that this is a daunting problem.

We start our budget process by looking at what we call the mandatory costs. If this is where our revenues are, we know that on top of that we've got to have, or our first expenditures will have to be things like the population increases in our schools. They're going to show up, and you need to- - We're going to have to pay for them. We're going to have Medicaid populations that are going to grow. We have interest that we have to pay. Some things that have to be paid. And it's about, it's almost $200 million, and we're starting with virtually no money. So we're going to have to reprioritize.

Now, when you get down to reprioritizing, what comes first? Education needs to come first. And that's, I said that in the '03 budget and I was delighted that they chose to agree with me, and that we could be together on that point. I say the same thing in '04, and we'll have the same debate. Is it better to defer roads and not subsidize water with tax dollars, or is it better to cut education? And to me that's, cutting education is not the answer.

RICH PIATT, KSL-TV: Governor, when you're talking about prioritizing, I'm wondering if you're willing to consider prioritizing within the education system. Specifically the Employers Education Coalition Commission by you and headed up by Frasier Bullock has recommended actually increasing the education budget by $90 million, but also making hard choices in possibly eliminating electives like they cited flower arranging, and making tough choices within education so core curriculum can be put forth a little bit more effectively. Do you support what they're recommending?

GOVERNOR LEAVITT: Yes. Let me say that I thought the education, the Employers Education Coalition did a first-rate job in spending somewhere in the neighborhood of six months where up to 23 organizations, most of them business organizations, employers, took an independent look at the circumstance we have in our education system.

They had independent research, they had independent advice, they had the ability to go into the schools, what they did. And they came back, from what I have read, I'm going to be receiving a report today from Frasier Bullock, but they said first of all there's a funding crisis. That's a very important declaration on the part of employers to say, this system needs more money.

Second, they've got to do a better job with what they have, hence we've got to eliminate some of the less, or the subjects that are not as core to the basic subjects. And I absolutely agree with that.

The third thing they said that I think is the key to all of this, is they said we've got to begin to measure competency as the value that we measure, not time. Now, I was personally heartened to see that, because as you know, this has been a theme that I have driven for the entire time that I've been governor, that, and that's the reason we put our U-PAS system into place, where students are tested every year on every subject. The reason we put our basic skills graduation requirement in, in the tenth grade. It's the reason that we use open-entry, open-exit competency-based learning in our Utah College of Technology. All of those things are indications. So I felt great about the general view they had of it, and I'm looking forward to reading the report in some detail.

KEN VERDOIA, KUED: Governor, we have a follow-up question related to education and financing from Craig Hislop of the Utah Public Radio at our location in Logan. Craig?

CRAIG HISLOP, UTAH PUBLIC RADIO: Governor, relating to higher education, tuition increases have become a regular event in this state. In the near future, as far as we can see, every January is that going to continue to be the case, do you think?

KEN VERDOIA, KUED: Craig Hislop just phrased an excellent question. It does not need translation, but because we had a failure in the audio system I'm going to translate the question for you.

GOVERNOR LEAVITT: Thank you.

KEN VERDOIA, KUED: Craig, from the campus of Utah State University, raises the question about the perpetual need to increase tuition to shore up higher education funding, therefore putting a greater burden on the student to pay for higher education costs. He says is this a practical eventuality that you're saying every student must plan for as we move into the future of higher education as well?

GOVERNOR LEAVITT: Well this is a question that's being visited nationally not just locally. And candidly, I would say this. We provide about 70 percent subsidy to the education of every student who's on a higher education campus. That is to say their tuition pays about 30 percent and the state pays about 70. As the pressures for all of the other parts of the budget continue to grow, I expect there will be continued upward pressure on tuitions.

Now, if they stay within the range of inflation, that makes, that should be expected. If it gets wildly outside that range, then I think there's a big problem. I think we ought to be able to manage it within the traditional growth of costs.

Now, I did, yesterday, note- - I said let's not cut education at all, higher or public. Public education there were no cuts. Higher education is still $3 million short. A budget as large as theirs, that's not a big amount. They started off thinking they would cut $24 million out of is it, so it wasn't very much, but it's still a very important part, and it would amount to about I think three and a half or four percent tuition increase if it had to be born by the students. That's another part of the budget that I want to scrutinize a little more, and one that I believe we'll see again in '04. Because we can't sustain cuts in education, in my mind. Not at a time when we have more students coming back because of the lack of employment, it's more important than it's ever been in terms of employment, our economic prosperity is going to be tied to it.

So, again, the '04 budget will be framed up in, do we continue to support education as our highest priority, or do we defer roads and infrastructure until we can afford them?

RICH PIATT, KSL-TV: At what point do we start talking about a possible tax increase, with all these budget problems that seem to be recurring?

GOVERNOR LEAVITT: Well, I've been able to put forward balanced budget recommendations not raising taxes. I've been able to do that by saying I'm prepared to do without building some roads. I'm- - It's not something we've done in the last decade and a half. We've had the money to build roads and to build water projects, and to cut taxes, and double the amount we put into education. Prosperity is a wonderful thing, and it produces much easier public policy dilemmas than we have now.

But we can balance the budget in 2004 without a tax increase, but we have to make some decisions, and the decision in my mind is, let's not cut education. But let's defer some roads until we can afford them, and let's also discontinue the practice of subsidizing water projects with tax dollars.

And I want to make something clear about this water situation. I've said quite a bit about it in the last couple of weeks. I learned something in this debate. First, I learned that the more people understand this, the more they're inclined to agree.

The second thing I learned is that it's easy for the debate to become confused, particularly among those who depend on water, as we all do, but in, for example, agriculture, or those who work in it and depend on its, they work in the industry.

The way we're going about preparing for the future in water is both insecure and inadequate. We have large water needs in the next 30 to 50 years. We have no way of financing it. If we continue down the road saying we're going to use tax dollars to subsidize half the water cost, we're ultimately going to run ourselves onto a sand bar and we're simply not going to have the ability to do it.

So what did I learn from this session? I learned that I've got to communicate better the large vision, here. The larger vision is to take care of the needs of our community in water for the next 30 to 50 years, to create a self-funding mechanism where water rates become the means, or water users become the means by which development funds are made available, and that we finance future water from water rates and water payments, as opposed to taxes. Right now we're subsidizing water development with taxes, and it does serious violence over time to our ability to support our first priority, which is education.

RICH PIATT, KSL-TV: Some of the people who are involved in that debate are fearing that what you're talking about will amount to a tax increase, especially for people in rural communities.

GOVERNOR LEAVITT: Well, I refuse to believe that you can look at it as a tax increase if we're saying to people, one of the things we want is for you to use less. And if you have a system where we're the third lowest cost in America, and we use the second highest amount, what we're saying to them is, consume, consume, consume. What we ought to be saying to them is, conserve, conserve, conserve.

Our system has the wrong incentives in it. And I'm looking to have a 30 or 50-year discussion, here, to deal with the large issue of how we go about making certain that the generation that follows us has the water that they need. And that's our obligation. And so this debate's getting all tangled up well, what about my water fund this year? I don't want to have that debate right now. What I want to have is, what about the 30-year horizon? Let's talk about that and the one-year will take care of itself.

DAN BAMMES, KUER: Governor, the Utah National Guard has 22 percent of its personnel on active duty right now. Another unit's just been notified, 60 soldiers being called up early next year, and the Defense Department is telling us that we can expect more guard and reserve call-ups. Do you feel that Utah is bearing a disproportionate burden with such a large proportion of the guard called up here?

GOVERNOR LEAVITT: Well, I think I would just question the use of the term "burden." It is a burden for families of those who serve, but it's a patriotic duty and obligation, and one that our Utah National Guard has done in a proud way.

I met yesterday with four of the soldiers who were in Afghanistan. I wanted to understand what they did there, and I believe if Utahans understood fully how deeply involved our Utah special forces troops were in the early and most difficult days in Afghanistan, they would be stunned. These are people who were involved in literally door-to-door combat, face-to-face with the enemy. They were in grave circumstances, in harm's way, and they served with gallant competence.

We have a configuration of troops in our national guard that are of particular value to the national effort, and I expect that they likely will be called up, and it will likely be in disproportion to the size of our state.

TOM JORDAN, METRO NETWORKS: Since we're off on, away from taxes for a moment, I've been hearing that there is going to be a resolution coming out of the interior department on the, or a regulation coming out to solve the rural roads issue. Is that likely?

GOVERNOR LEAVITT: Well, I have had lengthy, ongoing, it seems like continuous conversations with the interior department regarding their policy. The Norton administration in the, or rather in the Department of the Interior, needs to express a doctrine as to how they're going to define this issue. And once they have, then it's my optimism that we'll be able to go about the process of negotiating solutions to road disputes that have gone on in some cases for 35 and 40 years. There are 5,000 disputes. The key to it is this change in policy. I do have optimism that it'll be released in the next few weeks.

RICH PIATT, KSL-TV: Governor, I wonder if you would mind sharing your thoughts on the Senator Trent Lott situation. Should he resign?

GOVERNOR LEAVITT: I really don't have a lot to add to that debate. I've worked with Senator Lott, I think he's a competent person, but the members of the Senate will need to make the decision as to who their leader is.

JANICE PERRY GULLY, KCPW: Governor, back to the roads issue. You've been in this effort for over the last year, possibly more, to identify these rural roads and somehow codify them as actual roads. There have been complaints from the environmental community that they haven't had a seat at the table. And they say with your Enlibra policy that they really should, they should be a partner in this process. Is that true?

GOVERNOR LEAVITT: Well, the table hasn't formed up yet. I've been working with interior to do two things. One is to come up with a policy so that a negotiation could go forward. The second thing I've been doing, we've been preparing for litigation, and providing, collecting information on these roads. These roads, some of them go back into the 1800s. We've been using them ever since, and because of a quirk in the law, we uniquely as a state are challenged 5,000, on 5,000 different roads. And so we've got a dispute, I've indicated I'm prepared to bring a civil action against the national government if need be, but I believe it can be negotiated, and if it is, if that policy comes forward then we'll begin a negotiation process.

I feel some confidence that there will be, as there always will be, those who will dispute that. But right now what we have is a matter between the state and the federal government, and to the extent that we can involve various other stakeholders in a discussion, we will.

TOM JORDAN, METRO NETWORKS: Tuition tax credits were backed by the employer's coalition. That's a fairly controversial issue. Are you, given the nature of that coalition, are you able to back that?

GOVERNOR LEAVITT: What I liked most about what I read on that issue with respect to the employer's coalition is they said, look, this is a package. This is a full package. You've got to have more money to support existing public schools, you've got to measure competence, you've got to find a way of eliminating the things in school that are not at our core mission, and they said we've got to have more choices in our school system. Taken as a package, it's hard to disagree with that.

Where I have had significant disagreement with the advocates of tuition tax credits is they see it as the solution. It may be a small piece of a larger problem, but I don't think you can say we're just going to pass this and that solves the problem, because we have 98 percent of our students who go to a public school, who depend on the state to support it, and so the idea that we would simply take public money out and give it to private schools, when we've got the lowest funded public schools in America, doesn't make a lot of sense to me as a stand-alone issue.

Now, add some money, add a new doctrine of competence, change the focus and the core, maybe there's room for it but it needs to be looked at as an over all. Stand alone I don't support it.

KEN VERDOIA, KUED: Governor, I'm going to jump in here. With two minutes remaining in our time today, I'd like to and you two reflective questions. And the first is the passing of former Utah Congressman and long-time Democratic stalwart Wayne Owens, who influenced and affected politics in the state for three decades. Your thoughts on his passing?

GOVERNOR LEAVITT: It was just a stunning piece of news. So out of the blue and so unexpected. I grew up in a generation that was in that bridge, really, between the 60s when we all spent our time protesting, and the 70s where we all engaged and realized that there's more than protest, you've got to engage. And Wayne Owens was sort of the leader of a generation leaving the protest era of the 60s and saying we've got for work within the system. And he's been here for 30 years, he's been part of the fabric, whether he was in office or out of office. And I think he'll most be remembered for the fact that he remained devoted to the big ideas of his ideology.

KEN VERDOIA, KUED: We have about one minute left now, and this is the final opportunity for us to gather in this studio in this setting for the year 2002. Thoughts on the past year, and more importantly, perhaps on this season.

GOVERNOR LEAVITT: I think about 2002 as a year of extremes. On one hand we had the 2002 Winter Olympic Games, a moment that will likely never be duplicated in my lifetime in terms of the state, the people, the experience we had. Then we've gone through a period where we've had fire and drought and pestilence and flood and recession and war. We've had the extremes. But at the end of the year, this is a great place to live, we're enormously blessed as a people, and I'm grateful to be a Utahan and an American, and happy holiday to all of you and to our viewers.

KEN VERDOIA, KUED: And on that note we will remind you that a transcript of this and every edition of the Governor's Monthly News Conference is available on line at www.uen.org courtesy of our partners at the Utah Education Network. Good night.

[*-After the News Conference, Governor Leavitt announced that he had mis-spoken the number of law enforcement officers impacted by state budget cuts. He indicated the actual number is fifty (50) rather than the five hundred mentioned in the program.]

 

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