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February 21,2017

"It appears we're going to prioritize education funding again this year, which, as you know, is my number one budget priority." Governor Herbert

ANNOUNCER:  KUED presents The Governor's Monthly News Conference, an exchange between Utah reporters and Governor Gary Herbert.

GOVERNOR HERBERT: Good morning. Good to be with you after a few months’ hiatus, and nice to be with you, and thanks for your attendance. Let me just say in the beginning, we're halfway through the legislative session, and that's the good news. The bad news is we're still halfway to go with the legislative session. But seriously, I think our legislature is really doing a great job with the session this year.

We seem to be coming together on a lot of different issues. One, I appreciate the fact, it appears we're going to prioritize education funding again this year, which, as you know, is my number one budget priority. I think you're going to find a significant infusion of money there.

Two, kind of a corollary issue, is that we've asked for them to take a look at tax reform, to look at opportunities for us with the economic engine — we have to optimize the revenue stream that it should produce — so looking at tax credits and tax exemptions.

Other opportunities to enhance sales tax, et cetera, and so I think that's going to be a significantly important thing we're starting. I don't think we can finish it this session, but it's important that we start that discussion. And lastly, I asked them to take a look at alcohol policy, and I see that moving slowly but surely through the process and I think we'll have an opportunity to, in fact, enhance areas of public safety and public health, particularly underage drinking in our young people and get some things accomplished there with our alcohol policy. So, I feel good about the legislative session. I think we're going to ramp things up in the last three plus weeks.

Secondly, I am excited about going next week and meeting with the National Governor's Association, which I'm the past chair of, as you know, meeting with my friends, the governors across this great country. We'll have an opportunity to see our good friend, Mike Pence, now as vice president, and an opportunity to meet with the president and talk about issues that are important to the states.

What I'm optimistic about is the more elevated role that I think states can and should play in developing policy and solving the people's problems that we have in this country, and I think that's going to be an opportunity. Also, we'll be meeting with new senior staff and cabinet members, and again, particularly an opportunity for us here in the Intermountain Mountain West to talk about issues that are uniquely Western issues here in the Rocky Mountains. So again, a busy time, but a reason for all of us to be optimistic about Utah's future. So, with that, what questions do you have for me today? 

ERIC NIELSEN, KUED-TV:  Well, just to kind of follow up on what you were saying, what do you make of everything that's going on with President Trump's first month in office?

GOVERNOR HERBERT:  Well, I think it does shed a light on his inexperience, number one. As you've heard Senator Hatch say multiple times, he's never been a politician, he's never really been involved in running for office or holding office and so there certainly is what I would consider a learning curve. If you'd never been a plumber before and all of a sudden are asked to fix some leaky pipes, you might make a stumble here and there and maybe use the wrong wrench now and again. So, I cut him a little slack on that.

I think some of the rhetoric — I'd appreciate it toning down just a little bit — the big joke is, can we just take away his phone so he doesn't tweet as much? But he's doing a lot of what he said he was going to do when he campaigned and those who didn't like what he said on the campaign trail are really upset that he's actually doing what he said he was going to do now that he's been elected as president.

I'm sure that's going to be some of the topic of discussion when we get back there with the governors and what can we do to make sure that we get good outcomes on behalf of the people of America, certainly through our respective states.

BOB BERNICK, UTAHPOLICY.COM:  Governor, you're going to meet with the Outdoor Retailers folks later on today, and you've put forward already some of your ideas on trying to sell them to stay here. What do you think the chances are they will stay here? It looks like with the ads coming out and all the people dropping off, it doesn't look real good right now.

GOVERNOR HERBERT:  Well it's certainly a challenge. You have to compete in the marketplace out there, with not just the outdoor retailers and their trade show but with business, and competition is key, and growing the economy and all aspects of it, we've been very successful in the competition in the past.

Our economy is in fact the best, most diverse economy in America today, so we're pretty good at competing. And I would say with the Outdoor Industry Association and the Outdoor Recreation Trade Show, we've been a blessing to them too, they've double or tripled over the last 20 years since they've been sited here in Utah, so we will talk to them about the important reasons why it's in their own best interest to be in Utah. I would say really two things really come to my mind, at least. One, we all know this, we take it for granted because we live here, we have the best outdoor recreation vistas and venues in not only America but maybe one of the best if not the best in the world.

So, if you're going to come to a place that has outdoor recreation opportunities, there is in fact no better place than here in Utah. Over 35 million acres of beautiful landscape we call the public lands.

Secondly, which I think is also important, is that there's no better location, Salt Lake City; you're 10 minutes from the airport to downtown to set up your shop for your trade show, you have great access at close proximity to 35 million acres and the opportunity to have a successful trade show and the network, which is what the trade show is about, really I think is, there's no better location than here in Salt Lake City. The convenience is something I think everybody understands.

So, we'll try to convince them, in spite of maybe some differences, that we have out there. We have a lot more in common, and for the interests of the trade show, there is no better location than here in Salt Lake City, Utah.

MICHAEL ORTON, CAPITOL PRESS CORPS:  Given that that burgeoning economy that you just cited, governor, and the fact that the BLM and Interior is just changing the designation of how they plan to manage the new monument and the previous monument of Grand Staircase-Escalante, wouldn't you also endorse the fact that Utah is fast becoming the outdoor recreation capital of the world?

GOVERNOR HERBERT:  It certainly is and we want that to continue. It's certainly a part of our economic expansion. We spend a lot of money on outdoor recreation. Our tourism and travel budget is over $21 million a year that we're spending to promote our mighty five national parks, our 43 state parks — did you hear me, 43 state parks and museums that we have out there that we're putting money into. We've incorporated a lot of private land that we pay money for to have access, to expand, even, the outdoor recreation experience, and whether the outdoor retailers stay or go, I guess, who knows what's going to happen down the road there, but Delicate Arch, Zions, they're going to stay here, the beautiful vistas and venues that people appreciate and come here for are not going to leave, and we're going to continue to promote those.

We spend more money on conservation efforts in Utah than the next two or three states in the Intermountain West combined, so we're spending a lot of money and resources in promoting what is really an asset of our public lands here as part of our economic expansion opportunities. That doesn't mean that we neglect other opportunities out there, certainly the BLM lands are designed to have multiple use, farming, ranching, our agricultural interests, which is a big part of our economic opportunity too, natural resource extraction, energy development, they all should be able to and I believe can live together in harmony and be good stewards of the earth at the same time. 

LISA RILEY ROCHE, DESERET NEWS: Governor, you said if the outdoor retailers leave, how successful do you think you can be in this meeting given the position the legislature's taken, given the position you've taken with the legislature?

GOVERNOR HERBERT:  It seems to revolve around the Bear's Ears, really, is the big issue, it seems like to me, and I'm anxious to talk with them about that issue. Again, it's an area where we actually agree upon and we ought not to let the nomenclature and the rhetoric drowned out the substance of what we're trying to do, which is protect those areas that we call the Bear's Ears region and really respond to what the Native Americans would like to have as their sacred lands.

I can tell you, having had personal conversation with the past Secretary of Interior, Sally Jewell, on a number of occasions, we all said the best way to protect that is legislatively, not with the monument, but legislatively, and the Native Americans would like to have co-management capability where they have more to say about what is going to be down with their sacred lands, that can only happen legislatively.

So, there's an agreement there of protection and a response to the desires of the Native Americans. We just need to, I guess, decide whether that can be done legislatively better than the monument. I think it can. Some want the monument — that's going to be part of the discussion — but we all agree that there deserves to be some protections of that area.

LISA RILEY ROCHE, DESERET NEWS: Well didn't you move too quickly then, you and the legislature, to call for the monument to be rescinded if there's not a legislative solution in place? I know there's the Public Lands Initiative, but that hasn't gone very far in Congress.

GOVERNOR HERBERT:  Well again, just like we said about Trump, this is what he campaigned on. Why are we surprised, in fact, that he's now trying to implement what his campaign promises were? We've been very consistent in Utah, saying we wanted to have a legislative fix, we worked very hard, Congressman Bishop and our congressional delegation on the Public Land Initiative, to really bring peace to 18 million acres, with a conservation effort that was four to one in favor of conservation, protecting streambeds, putting a buff around Arches National Park, so it didn't work, and so the argument's been, "Well, you couldn't get it legislative, so therefore, let's do this." 

Now we find we have a president says, "You know, maybe we can do this legislative." With the new president and the new administration, so we're trying to see if that's not a way to explore it and the possibility of resolving it in the best interests of everyone. So, for me, it's a better opportunity legislatively, it's kind of a repeal and replace, we're going to replace it with this and then repeal the monument, is probably the way I would envision it.

UNKNOWN: Members of the industry have called for you to step down from your call to rescind the national monument. Is that something you would consider?

GOVERNOR HERBERT:  We'll have that discussion today and see, in fact, how that comes about. Again, my job is to reflect the desires and the will of the people of Utah. That's how we develop policy, and we'll continue to do that in reflecting what the people of Utah want to have done as far as the policy inside our borders.

ROD DECKER, KUTV-2:  You say funding public education's your number one budget priority and that seems to be in the long-term tied to tax reform, and you've mentioned some, you've pointed out some reforms, notably the collecting the sales tax on distant sales. Yet, you seem uncharacteristically passive.  You've said, "See, here's some things you could do," but you haven't put forward a plan, you're not holding negotiations, you're not pushing. My guess is you're waiting strategically to pounce at the right moment. Could you say why we're not seeing a plan, and if you are waiting strategically, what you're waiting for and where you might pounce?

GOVERNOR HERBERT:  Well as my good friend George W. Bush would say, "I'm using strategerie here." I want to be strategic but I don't want to do “ready, fire, aim.” There needs to be an opportunity to analyze our tax policy today and compare it to the marketplace and what we want to do for tomorrow. Tax credits, the exemptions that we have out there, ought to be reviewed, we have 89 of them. We used to have like 19. So, some of those ought to probably be reviewed and analyzed, some maybe ought to be kept, but some of them ought to be maybe jettisoned, that takes some time to analyze.

One thing I've been very clear upon, and I'm pouncing on this one right now, and that is that we recognize we're losing about $200 million a year of people buying online and not paying the tax that the law requires them to pay, it's called a user tax, been on the books since 1938, and that's a significant loss of revenue, the economic engine is out there actually generating, but we're not having a mechanism to collect the tax.

One of the things I'm going to be doing and talking about when I get back in Washington here this next week with the other governors is what can we do to get Congress to pass that federal legislation sponsored by Congressman Chaffetz, Remote Transaction Parity Act, which would resolve this issue once and for all and let us move ahead. That's something we very much are pouncing upon right now.

Other options that are being talked, there's an array of possibilities out there, a raise in gasoline tax, which we didn't recover from the loss of inflation, we took some of it, we needed about 12 cents, we got five cents, maybe that's it. I see where the president's, Niederhauser, has talked about maybe we need to revisit putting the tax back on food. So, there's a number of options. We need to analyze and see what's going to be the best for Utah going forward, the online sales tax is one that we need to get done because that's what I would consider the most logical, easiest thing to do, which has virtually no detrimental impact in the economic engine of Utah.

JUDY FAHYS, KUER: Two governors before you have tried to do that, to get the online sales tax, what's happening now that makes that more likely to happen?

GOVERNOR HERBERT:  Well, it's because more acute in each of the states. You can picture back in 1938, it was not a big deal, maybe a few catalog sales here and there, it was not a loss of revenue. But today, the revenue stream that we're losing is significant. Depending on the estimates, it goes from 150 or $60 million to 225 or 30 million, so you know 200 million, and it's rising. It's getting more and more that we're losing there, which means we've narrowed the base, which is putting pressure on us to raise the rate. Hence the Our Schools Now, they're saying, "Hey, how can we raise more money for education?" Let's just raise the income tax. Well that certainly is an option, and I appreciate their zeal and their understanding, we've got to put more money into education, the question is which of all the options out there is going to be the best for us to raise revenue and not dampen the growing, expanding economy of Utah.

ROD DECKER, KUTV-2: Are we going to see--

BOB BERNICK, UTAHPOLICY.COM: The legislature and they're halfway through, but there are about half a dozen bills that actually give more exemptions. One of them in the Senate is a manufacturing exemption that's something like $32 million, are you ready to say now you would veto bills that actually give more exemptions?

GOVERNOR HERBERT:  I am willing to, obviously, I'm not picking on any specific bill, as you know, I always want to read the bills, understand the pros and the cons before I make a decision, but we ought to be eliminating tax exemptions, not creating more of them.

ROD DECKER, KUTV-2: Will we see a process, you say we need to get smart first, we need to look and, okay, will we see a process of looking, will we see a plan, a specific plan, these are the ones we should close and this is where we should spend the money and some of it for education?

GOVERNOR HERBERT: I expect that you will, again, as we've had opportunities to talk with legislative leadership, some of this will be kicked into some interim studies so we actually have an opportunity for the private sector to weigh in, economists, fiscal analysts from our office as well as the legislative office, so we can look at this and say, "What would be the best tax policy going forward with this new economy?"

We all recognize we're shifting to a more service-oriented economy. The data tells us that where we used to have about 72% of our GDP being taxed, now it's down to about 40%, so there's a lot of our economy that is not part of the tax policy, that's why I say, you want to broaden the base so you can lower the rate. Makes it easier for all of us, and it doesn't have the dampening effect on a growing, expanding economy that you could have otherwise if you have a big tax increase, say on income.

ROD DECKER, KUTV-2:  You mention interim, is this an area of legislative leadership, are they going to be the guys who decide or are you going to decide and then they're going to do what you say?

GOVERNOR HERBERT:  Well we're going to work together, it's a collaborative effort, clearly the legislation that needs to passed has got to come from the legislature, so we've got to have buy-in there. We're sounding the clarion call for tax reform in the executive, but it's going to be a collaborative effort and we're going to bring in people outside of the legislature where we talk to local governments, but we're particularly going to talk to the private sector, how is this impacting you?

Again, most of the tax credits and tax exemptions are there for good and noble purposes, it's trying to change people's behavior and send us to have a better, healthier economy. It's why we've cut taxes. And we have the lowest tax obligation now in Utah that we've had in the last 20 years. Well, it's just time to review all those things and see if we have the right balance when it comes to tax policy in an effort to broaden the base and lower the rate.

LISA RILEY ROCHE, DESERET NEWS: But governor, you've got the group, Our Schools Now, pretty powerful business and community leaders, really putting pressure for some kind of commitment to raise more money for schools. They don't want to wait for an interim study to come up with a proposal that might be adopted by the 2018 legislature, they want to see that commitment this session. What do you think will come of this? Will there be, for example, the sales tax restored on food as a start, in conjunction with your interim study, or are we just not going to see anything until the interim study is done?

GOVERNOR HERBERT:  When we did tax reform before, it started in 2005, the first year that Governor Huntsman and I were elected to office. It took us a couple of years to get to the point where we actually had everybody on board, so there's some time involved. It's easy to say let's just raise the tax, it's simple, and I actually applaud the Our Schools Now people are saying, "Look, we've got to put more money "into education," more than even what the economy has been producing, which is, our goal has been to put over $200 million a year into education, that's happened.

We have a goal of a billion dollars of public education new funding over five years, and we're about $45 million to the good after the second year on that, by the way. So that goal is being reached, but the Our Schools Now is saying, "You need to do more, and if you don't, we're going to take you to the people." And that's, it's certainly got everybody's attention, that's I think, why we have the energy about tax reform today, so let's capitalize on that. There's six or eight different options out there, we might pick two or three of them, but it's going to take us some time to get to where we need to do, and my deadline is by the end of the next legislative session, that we actually have something in place that becomes new tax policy.

JULIA RITCHEY, KUER: Can we pivot to immigration for a minute? I was wondering if your office had had any communication with Immigration and Customs Enforcement about stepping up raids in the state and how you feel about reports that ICE has expanded its scope to include undocumented immigrants without criminal history, and how that might affect what you tell Washington next week when you're visiting.

GOVERNOR HERBERT:  We have communication with our public safety office, with in fact the federal ICE people and immigration authorities in Washington, D.C. In my past, I've met with the FBI to understand how they're vetting refugees, for example. We have policies in place that are not going to change, and we have a very successful program for refugees and for immigration. We've been to court, we've fought about it, the courts have told us when it comes to immigration, that's a federal issue, the states really don't have a role to play there, but we certainly are a welcoming population and we will continue to be a welcoming population and particularly our refugee program is working actually very well.  So I don't know what's going to happen as we go forward. There's the debate over the executive order that's been put in place by President Trump, we'll have to wait and see how that plays out, but our policies and our welcoming attitude in Utah is going to stay the same.

LISA RILEY ROCHE, DESERET NEWS: Are you going to deliver a message to the president or the administration on that immigration policy, given Utah's welcome mat?

GOVERNOR HERBERT:  We'll have an opportunity, I expect, to talk about immigration, certainly with the governors, and depends on what comes up with our meeting with the president and the vice president, but my position really has been very similar to what Vice President Mike Pence's was when he was governor of Indiana. And so, I don't know that there's a lot of difference there, it's maybe how you approach it, kind of your attitude, how your rhetoric is.

We, in fact, have what we call SBI agents here in Utah, State Bureau of Investigation, and so when a refugee comes here and they're introduced to Utah, we greet them, we review their background, it's kind of like a second bite of the apple and check out what their backgrounds are, then we take them to our refugee center, and we end up saying, "We're going to give you shelter, housing; we're going to have you learn English; we're going to give you skills and training, and help you get a job." And have them integrate into our society, the program's working very well.

Every state ought to mimic, in fact, kind of what we're doing here in Utah, and we protect the public safety, which is foremost of the role of government, but we also do it in a way that's not off-putting to those who are fleeing terror and are looking for refuge in some place in America, which I think we have a role as Americans, in fact, to play. 

ROD DECKER, KUTV-2: In your State of the State, you talked about rural Utah and how rural Utah needs help in comparison to urban Utah. You set a goal, I have three questions. One. 

GOVERNOR HERBERT: How much time we got?

ROD DECKER, KUTV-2: Are you doing anything, is there anything in the current legislature that promotes this? Two, could you tell us a little bit about, maybe this is one, could you tell us a little bit about the problem, and three, are you going to have a long-term plan, could you tell us anything about that?

GOVERNOR HERBERT:  Well, I can and our goal is to have 25,000 new jobs created in rural Utah, off the Wasatch Front, and we understand that the changes of the marketplace, the dynamic aspects, which is sometimes forgotten, we don't have as much need for as many farmers and ranchers as we did here 25 or 30 years ago.

It's shrinking, the yields are up and the labor's less intensive. So we've got to diversify, if there's any word of what we need to do in rural Utah, we need to diversify our income, it can't be all natural resource, energy development; can' be all farming, agriculture; can't be all tourism and travel. It needs to be a combination of all of the above and more. And I think we have opportunities through our Rural Partnership Board, through our education systems, to in fact have more business involvement, to find ways to create and expand, we'll be meeting with CEOs and companies from around the state, we have an economic development summit coming up, which will help kick this off, where we say, "Let's take the top 100 CEOs of Utah "and say what can you do to maybe take a job "and expand opportunities in a rural county?"

They've got great labor out there, good work ethic, and any more with telecommunications and the technology we have today, you don't have to be in a major metropolitan, urbanized area to in fact do things. So, we're going to explore some opportunities of seeing what we have with companies here, we could expand your profitability by expanding into the rural parts of Utah so a few ideas we're kicking around, but we'll have more, probably, to announce when we have our economic development summit.

ERIC NIELSEN, KUED-TV:  Governor, we have just about a minute left and I'm wondering what you make of the recent town hall meeting that Representative Chaffetz had, and what you think of that. Would you have a public town hall meeting?

GOVERNOR HERBERT:  Well I had one just two days before, it wasn't quite as raucous as Congressman Chaffetz, but we certainly had a lot more people with a lot more energy in the room, we normally have had about 75 to 100 people that showed up, I've done this every year with some of our legislators, and we had about 250. So, there's energy out there and I think that's probably good. The operative word ought to be dialogue, I ought to listen, hear, and understand, and then you ought to be respectful and hear me explain and give my point of view and as we reason together we can maybe come together. So, I think as we have dialogue and discussion on significantly important issues, we ought to in fact be respectful of each other's opinions and work together and collaborate together to get a good outcome and develop good policy. 

ERIC NIELSEN, KUED-TV:  Well thank you very much. The Governor's Monthly News Conference is a KUED production. This show is recorded before broadcast, but KUED is streaming this live, and it is also on Facebook Live. Please go to kued.org for more information on this. Thank you for watching.

ANNOUNCER: This has been The Governor's Monthly News Conference. An archive of transcripts, video, and audio is available online. Please visit kued.org. Thanks for joining us.

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