January 25, 2008

"It is an attention getter when you begin an academic year with a void of 400 teachers. And you realize that there is seepage of teaching talent to your surrounding states because they're doing better than you are." -Governor Huntsman

DAM BAMMES, KUER: Thank you, Governor. In your State of the State address earlier this week, you talked about health system reform as opposed to health care reform. But what kind of a system is it possible to put in place in the state of Utah that actually reaches everyone?

GOVERNOR HUNTSMAN: We're going to know over time. And as I mentioned, as well, this is not an easy thing to be embarking upon. If it were, somebody would have done it by now, we'd have a model in place that we could actually look to for some clear guidance. That doesn't exist. And so I think you kind of have to bring out the best of what our community offers, through a stakeholder process, which has been the case for the last year. Some good ideas have been floated, editorial pages have screamed out about how, what it ought to look like, and academics have launched forth in terms of what they think is right. Now it goes to the representatives of the people. As, you know, is the case with all major undertakings. I remember tax reform, you know, three years ago, and, you know, several kinds of descriptions given as that entered the legislative process. We got something in the end. A lot of people said it wouldn't be possible. We got something in the end. Some are saying that this is, you know, too heavy a lift, that it's too complex, too many moving parts. I'm here to tell you, I think we're going to get a frame work by the end of the legislative session.

DAM BAMMES, KUER: Would that be the bill sponsored by Representative Clark?

GOVERNOR HUNTSMAN: Yes, I think that what you see there represents a good start. Along with Senator Killpack. And it looks at the insurance market, which, first and foremost, must be a participant and a player in this. Because we need more affordable and portable policies. Transparency is a pillar of that, as well. And then you have personal responsibility as being part of it as well. And it's kind of built around those three themes. And I'm encouraged so far by what I see, and what I hear, and listen, there are going to be all kinds of arguments and debates and things written in newspapers about what it should look like, and the path that it's taken. The fact of the matter is we're entering a very important part of the process. And that is the deliberative legislative piece, which is never fully predictable, you don't know what the outcome is going to be, but I think the work that has been done by both houses would suggest that we're going to have something that will give us a road map over the next year to drill down on and to put into some sort of final form over the next 2 3 years.

ROD DECKER, KUTV-2: I'm struck by putting it off. It would seem to me that huge stuff could be done right now. My understand knowledge's this. About 306,000 Utahns with no health insurance. About 130,000 of them are eligible for CHIP or Medicaid. There is money there for CHIP or Medicaid. All that needs to be done is to say, "Hey, buddy, would you like some free health insurance for your kids?" A pretty good deal, something you ought to be able to sell. Yet I haven't heard, or hardly anything, about "let's now get this one third fixed." And I guess that's an administrative responsibility if it's going to be done.

GOVERNOR HUNTSMAN: Well, you saw our budget, didn't you, Rod? I mean our budget has tens of millions of dollars that are focused exactly on this very thing. And that is dealing with the 130 to 150,000 of the 300,000 who qualify for a program but aren't there yet. And that is working with a lot of different communities in our state to make sure that we can reach out and get the message to them.

ROD DECKER, KUTV-2: Can you give us a number? Can you say, "Next year at this time, now I've got 130 to 150,000 eligible but not on. Next year at this time I'll have 5,0005,000, or 100,000, or whatever it is, I'll have those guys on insurance."

GOVERNOR HUNTSMAN: All I'm going to say is that I'll do my best. And I have said, and I think I've said to you, Rod, that if we're lucky enough to get re elected I have set a goal for myself that over the next three to four years we want to complete the process. We want to get all of those who are without insurance insured. Now are you going to get 100 percent of them? I don't think any model would suggest you get 100 percent. But most of them, yes. And I think that's a worthy goal and we have set it for ourselves.

ROD DECKER, KUTV-2: You say we're going to wait for the legislature to deliberate. Well these are the guys who, when they had $500 million surplus couldn't find a million bucks for poor people's dental care. You had to go to charity to get it. Are they- - My guess is that they're going to sit and talk, and unless we've got Democrats in the White House, so they're afraid of Washington, they're going to talk until people lose interest as they did in '93, four, and five, and then they're going to lose interest.

GOVERNOR HUNTSMAN: And that Damocles could very well be what is in part motivating people during the short term. And the work that I have seen from Representative Clark and Senator Killpack would suggest that you've got some important players in both bodies who are taking this very, very seriously. And I'm impressed by their work.

ROD DECKER, KUTV-2: Can we say this in a year you won't set a number, but in the year there will be a significant difference, and you'll be able to point and say, "A year ago we had this many who were eligible but not on, now we've got significantly fewer"?

GOVERNOR HUNTSMAN: In a year I believe we will be well on our way with a frame work that will be a fundamental outline of what we need to do to get us to the finish line. And I think that would be a very laudable thing for the state to do.

LISA RILE ROCHE, DESERET MORNING NEWS: Governor, one of the topics that you didn't mention in your State of the State speech was a tax cut. You did not include any tax cut in your budget, despite the ongoing state surplus, but you've heard from the majority party in both the senate and the house that they do want a tax cut. I believe $100 million is the figure both have agreed on, and they're both looking, I believe, at doing something with the property tax to relieve some of the concerns people had when they open their property tax bills recently. Does the fact that you didn't include that in your State of the State address mean that maybe you are willing to negotiate? You didn't come out firmly saying no, this isn't the year for tax cuts?

GOVERNOR HUNTSMAN: Well, I did mention tax cuts in my speech. In fact it was probably the sixth or seventh paragraph into the speech, as I recall. And that is this month we begin the largest tax cut/reform we've seen in recent history in our state. And we now have a tax that, on average, per citizen, is lower than the national average. We've always been higher. So it was good to remind people about the work that has been done over the last couple of years, and the tax package that received the unanimous vote and endorsement of the legislature, which basically has taken effect this month. So that is something we all need to keep in mind. We've done a lot of heavy lifting on that very thing.

Now, I didn't offer any tax cuts in my budget, because we've just been through that last year. I believe with the economy doing what it is doing, even in a period with some uncertainty ahead, that we now shift our focus to those things that need to be reinforced to ensure a successful future. And I've outlined carefully what I think those are, and a tax cut is not part of that in the traditional sense.

Now, if a property tax cut hits my desk, I have said before, I know people are feeling because of the increases that we have experienced as a state, we have led the nation month over month in terms of property value increases. So what do we see today? We see that right now our average home price in this state is about $220,000. Right at the national average. We've never been there before, so even with all of the month over month record increases we've seen, we're just right now arriving at the national average. So there isn't a lot of artificiality built into that number. You know, there isn't a bubble, in other words, like in Clark County or Maricopa County, where you're seeing trouble within that particular sector of the economy. So the increases have caused some pain, there's no doubt about that. And there's a lot of talk about a property tax cut. As soon as something hits my desk I'm willing to take a look at it. That is the only area of tax cuts that I would be interested in considering.

LISA RILE ROCHE, DESERET MORNING NEWS: It sounds like you are, then, in agreement with Republican leaders in the house and senate, that something, that there needs to be more tax cutting done in the area of property tax.

GOVERNOR HUNTSMAN: Well, we have to look at it in the totality of everything else we're trying to do, is not as a one off arrangement. Things have been done in the past on property taxes that would be considered perhaps a one off arrangement according to some tax experts. And so whatever we do I think we have to look at in the totality of the other priorities, like education, like health system reform, like some of the other fundamental building blocks that we're looking at. So I'm not looking at it just for the sake of property tax cuts for the sake of property tax cuts. I think we need to look at it in the totality of many other things that are happening in our state, and where it would leave us in terms of our viability going forward on the revenue generation side.

LISA RILE ROCHE, DESERET MORNING NEWS: Is $100 million a good figure, in your mind? Or is that too much given the state of the economy?

GOVERNOR HUNTSMAN: That would sound, to me, to be high. But again, I want to reserve judgment until something definitive and quantifiable hits my desk.

ROBERT GEHRKE, SALT LAKE TRIBUNE: There's some talk about targeted business tax cuts, things that would benefit a number of businesses, but most specifically I think Delta, things like adjusting the way their tax is calculated, some property tax relief for expansion of the airport. Are those things off the table, as far as you're concerned? I know you've said you want to meet with Delta and talk with them about what they would like to see. Where do you stand on that?

GOVERNOR HUNTSMAN: That would be an extraordinary measure that I think events need to dictate. Delta, I know, is moving forward with merger talks, either with Northwest or United, and we have to remember that Delta being a hub location is extremely critical to our economic viability. Not only for travel tourism purposes, but for economic development purposes. Also for basic transportation purposes of goods. And it does allow us to be more of a premier destination than we would otherwise be. Their merger talks are largely going to determine their own destiny as a company, which then determines where they cut and where they don't. So I think we have to respond to the marketplace realistically, knowing that Delta is critically important. They have thousands of employees here because it is a hub location, and I think we as a community have, you know, we benefit. There's a certain level of cachet associated with being a hub location. So I would reserve judgment on any kind of business cuts writ large, to say that if it came down to a Delta situation that we really did kind of have to sharpen our pencils on, as a result of merger plans, I would want to be in a, I would want to be in a position to respond to that.

ROBERT GEHRKE, SALT LAKE TRIBUNE: By that I mean special session possibly, if action is needed after the session?

GOVERNOR HUNTSMAN: I think we would want to keep all options open in that particular scenario.

TOM JORDAN, METRO NEWS: Both sides of the legislature have moved very fast on teacher retention packages in some form or other. Do you have the feeling that at this point the sort of an gene today that you had laid out is something which we're actually going to be able to see in place by the end of the session with some significant motion in that direction?

GOVERNOR HUNTSMAN: I hope so. And I want to commend the legislature for taking seriously the whole teacher compensation package, as they did last year. And I think many in the legislature want to see this done. I think it's important to them as well. It is an attention getter when you begin an academic year with a void of 400 teachers. And you realize that there is seepage of teaching talent to your surrounding states because they're doing better than you are. And I've said it, you know, it's a two pronged approach. It's compensation, but it's also capacity. We've got to expand the capacity of teachers coming into the classroom. And so we've got another budget item that I think will be successful that bolsters our education program at six colleges and universities in our state. So that after four years we have 1,000 more teachers per year that enter our classrooms. That's the capacity side. So if we're able to, you know, to effect compensation so that we're knocking on the door of 35,000, soon, and then 40,000 after that, which is, I think, kind of where we will need to be when it all settles out, and we're dealing fundamentally with capacity, I think those are the two areas that are in most immediate need of attention.

ROD DECKER, KUTV-2: In the years that you've been Governor, I think, I know in the last two and I think in the first one, the February revenue estimates were better than the December revenue estimates. That looks as if it may well not be true this year. The February, you talk about lots of money for teachers and lots of money for a number of things. Are you going to get hurt come February because the national economy's bad and it will suck Utah down?

GOVERNOR HUNTSMAN: Hard to know where we're going to be in February. I believe that the numbers will still be strong, and you know, let's be very clear, here. We're in a privileged position as a state, vis a vis where a lot of my colleagues are, with states that are bleeding financially right now. We're in a good position, and I think we will continue to be in a good position, just based on a lot of underlying economic fundamentals. I don't know where the February numbers are going to go, but there could be some variability there. How large, I don't know. A lot of it is tied to the U.S. economy, and the U.S. economy has been hit by, you know, the housing sector first and foremost. The global economy seems to be relatively stable and strong, when you've got growth numbers like 9 percent in China and 8 to 9 percent in India, and the European union that is hanging in there, you've got a global economy that isn't in the tank, which you know, would portend, you know, a deeper depression, because we're so inexorably tied for an export portfolio standpoint to global markets. So you come domestically and you look at the housing sector, which I think has been hit very much as a result of the cheap money made available over the last five to seven years, without a lot of collateral being asked for from the lending institutions.

So what do you see now? You have the Fed that is taking the discount rate down to what could very well be 2 to 2 and a half percent, that followed by you know, the cost of capital, Libor may be going from 8 percent to 5 percent over the next quarter or so, which would be a very good cost of capital scenario for the United States. But on top of that, you have the complicating factor of lending institutions that are beginning tighten their qualifications and the criteria they're asking for, which were fairly loose a number of years ago, because their non performing loan portfolios are not improving. And so that could be the longer term complicating aspect that troubles me just a little bit as one kind of distant observer of our future economic performance. But if you look at, you know, purchasing manager's index, if you look at the raw materials that are typically bought that prime the pump of any economy, basic raw materials, the third and fourth quarters of this year are looking somewhat promising. So if you want to say we've maybe been in a recession the last quarter or two, let the economists argue that, there could be light at the end of the tunnel by the end of the year for the United States. Who knows?

JED BOAL, KSL-5: Governor, getting back to education, you spoke of year round schooling as a more efficient model for running our school systems. How do you make that work? And how do you resolve any kind of resistance that there may be from teachers who don't want to work year round?

GOVERNOR HUNTSMAN: Well I think year round schooling is maybe a slight exaggeration on the model that we're putting forward. The model we're putting forward really is consistent with U star high schools, and in State of the State it's really hard to describe in a sentence or two what a U star school is. And so I tried to work very hard on the language so that you can roll something out that gets to the point of summer months that are inadequately used in terms of infrastructure, teachers, and remedial and accelerated classes that so many of our kids need. So what are we trying to do?

We're going to try to use the summer months by, first, extending year round contracts to math and science teachers in, I hope, examples in all of our 40 school districts. And we've got hopefully $11 million, the bill that Ron Bigelow is supporting, to help, first and foremost, negotiate year round contracts with math and science teachers. You start there.

And then you back up and say, okay, in these U star qualified high schools, so to speak, let's now create during the summer some opportunities for kids to accelerate, if they want that opportunity, or to remediate. And I, like every other family in this state, I have a son who would love to accelerate, and one who needs a kick in the fanny to get caught up with everybody else. And that is, if we had those kinds of opportunities during the summer months, that would be huge, and we just don't have those now.

Third, it would maintain a focus on this whole gestalt of the U star world in which our kids are going into at the higher ed level, and that is a quantitative economy that will lead the nation in terms of the industries that will be part of our future. We need kids who are qualified in math and science, along with the many other areas that we're going to be focused on.

So those three areas, teacher compensation, opportunities for kids, and a whole focus at that high school level on the U star world, what lies ahead, even as far as languages are concerned, the kinds of languages we're teaching, I think will all be part of the fortified summer months that we're very, very interested in. And listen, I've gone around to almost every single school district in the state, and I've tried this out on teachers and administrators, and they like the concept. And many of them want to be part of the trial run, and I think we might have enough money, here, if all goes well, to maybe create an example of a U star high school in every one of our school districts, and then we'll see if it works in practicality.

JED BOAL, KSL-5: How much of a difference does that make in terms of the viability of our schools and, the economic viability of our schools? Will it reduce class sizes?

GOVERNOR HUNTSMAN: Well, what I think it will do is it will keep teachers who now are inclined to leave in an economy where you can find jobs in the tech sector, for example, if you're a math or science teach, you can find three times the salary outside. And so how do you deal with that? Well year round contracts would present an opportunity for teachers making 45 to 49,000 as a starting salary, as opposed to 30 or 32. That's huge. Second, you know, for all of the kids who are either trying to get ahead or get caught up, they have a new opportunity during the summer months that kind of, I think, to a certain extent, helps with the gap that we're now facing in some of our schools. I mean you can do a whole lot in K 3 and I'm a real believer in early childhood literacy in terms of closing the gap, that's the most important thing we can do. Beyond that, I think providing some opportunities during the summer months that we just don't have otherwise, getting kids plugged into them to get caught up is a very important opportunity. So while it might not address classroom size, per se, I think on the performance side for our kids, it would be very important in terms of securing teachers who would be inclined to leave, math and science teachers, it would be very, very important.

ROD DECKER, KUTV-2: Do you support the longer school year bill of Senator Stephenson's?

GOVERNOR HUNTSMAN: I'll have to take a look at that before I render a judgment on it. I don't know exactly how he describes or defines a year.

DAN BAMMES, KUER: Governor, the Utah Education Association sees early career incentives for teachers, math and science and others, special education, as perhaps a better alternative to differential pay later in the career, things like tuition subsidies, incentives for living in rural areas and things like that. Do we need both? Which approach would you favor, if they're exclusive?

GOVERNOR HUNTSMAN: Well, I think we need everything we can get right now. And just in a couple of areas, we've asked for in our budget, and I think we're getting some positive resonance back on $26 million that would go into a special fund that would serve to incentivize, recruit, and retain those teachers ho are hard to get and hard to keep. And in today's world they would be math and science. In tomorrow's world they might be history and writing teachers. I don't know. But this would allow us to kind of cover some of those so called hot spots. We're also asking for 7 and a half million dollars in ELL, which is probably three times what we've ever asked for to cover a critically important part of the fabric of our state's education. When we've got situations where, you know, in a parent teacher conference you need an interpreter, that, you know, we need to figure out better and more creative ways of helping kids who are coming into a classroom with, struggling with a brand new language. So that will help as well. We're doing everything we can at this point. In close consultation with all the stake holders, and that's what I'm interested in, is having all the voices sitting around the table, hearing all of the challenges that we face as a state, and then doing what you can in covering the greatest number of students and teachers with the resources that we have available.

TOM JORDAN, METRO NEWS: Governor, I have something slightly different that is relevant right at the moment. The, yesterday the outdoor industry association gave its top award to the Sierra Club for its outreach programs. Last night the X Dance Action Sports Film Festival was delivering its awards

GOVERNOR HUNTSMAN: I was in one of those films, but I won't tell you which.

TOM JORDAN, METRO NEWS: The motocross. But half of their films came from outside this country, and they were raving about Utah and its snow, heading off around the world for this. At the same- - Obviously that's part of what you would like to see in terms of tourism development. On the other side, we have the Bush administration push right now for the BLM land management plans, which is trying to open up a lot of the land that those groups would like to see preserved for human recreation, the BLM plans right now are all aiming kind of extreme expand, extractive industries. You would appear to be, because of your clean air initiatives and alternative fuel initiatives and such, to be more on the side of the public land protection. But what's the role at this point that you can play in this? Because obviously these two sides don't get along together.

GOVERNOR HUNTSMAN: Well, more than you might imagine. And I think, you know, our office, to a certain extent, you know, can be seen like Switzerland. I mean you're an independent, neutral territory. And we work with every group that you've talked about. We work with Frank Ulimeyer and Peter Metcalf, and others who are on the outdoor side, and you know, we work with the BLM. And the industry folks. And it's always going to be a careful balance. There's never going to be an easy solution to any of these. But first and foremost, I think we have to proceed understanding that, you know, we're handing the most important commodity of all to the next generation, that is, you know, beautiful lands that we, today, are responsible for. And I take that charge very, very seriously, as I do the air we breathe and the water that we drink. And so I will continue balancing all sides in a stake holder process that gets us forward. That's the only way it can be done, from what I've experienced so far, and I'll continue doing my best.

DAN BAMMES, KUER: Governor, Utah's presidential primary is just a few days away, and you have in the past endorsed Senator John McCain. This super Tuesday primary could be make or break time for his presidential campaign. Do you intend to campaign for him? And do you think western issues are now getting the kind of focus that they might need?

GOVERNOR HUNTSMAN: I think so. When I turned on the television last night and I saw a Barack Obama commercial, you know, tailored for Utah, and I've seen the number of candidates who have come through our state, and the advertising that is being done. And the interest displayed on those who to turn out and participate, I think that's hugely consequential. I think that, that excites me to no end. And I think it really does speak to the political relevance of the western United States, and we are the center of the western United States. So this has been a very good thing for us.

DAN BAMMES, KUER: Will you campaign for Senator McCain?

GOVERNOR HUNTSMAN: I have in the past, and I will continue to do what I can as a volunteer.

DAN BAMMES, KUER: All right, thank you very much. A transcript and audio recording of today's news conference with Governor Jon Huntsman junior are available on line at KUED.org, and at UEN.org. We thank you for joining us today.

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