October 25, 2015

"It was nice to see we got an A-plus rating, the only state to receive an A-plus rating, for financial literacy in America," Governor Herbert says.

Announcer: KUED presents the governor's monthly news conference, an exchange between Utah reporters and Governor Gary Herbert. This program was recorded earlier.

GOVERNOR HERBERT: Good morning. Thank you for being here, as always. It's great to be with you. And let me just start before we take questions under the heading of more good news, just reference a couple of announcements that took place this past week.

The one that came from the US Chamber of Commerce, which is encouraging, and talking about that Utah has the best economic stability of any state in America today. And on their ranking system of their 6 major categories, and 35 or 36 different metrics, we scored in the top 10 in 5 of the 6, and just barely missed out of the 6th one, where we scored in 11th place. But the indications are that we have, in fact, reason to be optimistic about our future because we are stable economically. We've diversified our economy, and so the economy really right now is very robust, and we're performing very well. So, that was a good piece of news from somebody outside of the state of Utah recognizing the good work of the legislative branch, and our partners in the private sector, and people working together. In fact, they talk about our unique ability to collaborate and cooperate in getting things done in the state of Utah in their report.

The second one I want to indicate to you is where-- in our education system. One of the things I've asked for was more ability to have discussion on the economy and economics and financial information for our students, so they understand, in fact, how the system works and understand the financial aspects of their lives as they become citizens in our great state, and how they can perform. And it was nice to see we got an A-plus rating, the only state to receive an A-plus rating, for financial literacy in America. And again, I think that bodes well that our young people are learning appropriate principles so they can, in fact, participate in the market economy. And it helps us going forward.

Last, the results of those things indicate to us, again, our economy is performing well. As you all I think probably know now, as we released the information, we have a surplus of revenues of about $103 to $104 million in the state of Utah. And that's good news. Again, we are a state that lives within its means, doesn't spend more than we take in, and saves for a rainy day. And because of that surplus, we now have about $528 million in our rainy day fund, which is the largest amount we've had in our history.

Our tax liability, by the way, as you know, is at its lowest obligation in 20 years. So, economic growth and revenue, lower tax obligation puts us in a very good position. We have had some reduction in our general fund sales tax revenue. We projected about $70 million of growth in a $2.25 billion budget, but received--the actual number is about $60 million, so about $15 million less growth. Not a deficit, but less growth than what we projected. On the other hand, on income tax, which again is a direct reflection of the economy and what's taking place in the marketplace, we had projected $144 million in growth there, and received $263 million in growth, so about $119 million in excess. Part of the differential really has to do with the shopping habits of our people of Utah, not unique to Utah, but remote sales, more online sales. And unfortunately, it's sales tax owed, but not being collected. That's part of the reasons why we're working with the National Governor's Association and Congressman Jason Chaffetz, in fact, to fix that so that we have shared responsibility state to state on making sure that those remote sales taxes, those online sales actually have the taxes that are owed in their respective states, collected, and sent back to our tax commission. 

Last but not least, I just would like to emphasize that we're having great success, but it's built upon a foundation of efficiency in state government. Doesn't mean we always agree on everything and what we're doing, but clearly as a state that's been recognized as, if not the best managed state, certainly one of the best managed states, efficiency in state government is what we need to, in fact, emphasize. And I've called upon our department heads, our cabinet members to find 25% more efficiency, more efficiency by the end of 2016.

The good news for you, I'm pleased to report, is that right now today, our latest assessments show that we're about 24.6% more efficient. And so, we'll not only meet the goal that we set here 2 years ago, but probably exceed it by a significant margin. That's a tribute to our employees, our leadership in our departments, our cabinet members who are really performing very well. Again, we are doing good things, putting money into the rainy day fund. Again, it's nice to see the successes we're having, but we all recognize there may be that rainy day ahead. And so, we are in fact preparing for maybe some bumps in the road that may happen sometime in the next few years. Who knows why and who knows what the cause will be, but the fact that we're being prepared for it puts us in good stead. Again, reason to be very optimistic and happy about the status of state government today. So with that, we thank you for being here and happy to answer any questions you'd like to ask.

ERIK NEILSEN, KUED-TV: So governor, Utah Access Plus, the latest attempt to expand Medicaid in Utah, was shut down in the closed door meeting with the Republican caucus just last week. And I've asked this question before when it comes to Medicaid expansion. Do you think this is good governmental process? Are you happy with how this process is shaking out? It's been 3 years.

GOVERNOR HERBERT: Well, I'm not happy from the standpoint of I had a good proposal out there in Healthy Utah. I think all things considered, it is the most commonsense approach to addressing the issue of healthcare to our most needy amongst us, those who are most vulnerable.

And again, it respects the taxpayer, and I think is a good commonsense solution. Now, we have to play the cards we're dealt. I'm not a supporter of the Affordable Care Act. I think, in fact, we see a lot of demonstration over and over of the confusion, the complexity, some of the nonsense that takes place with a law that has flaws in it, coupled with a Supreme Court decision, which puts us in a unique and awkward place.

It's not unique to Utah. Twenty-one--twenty other states have not expanded Medicaid either because of their concerns over this issue. But I think the process we have, we're very deliberative in Utah. We're not reactionary in trying to find the best way forward to respect the taxpayers and provide this solution.

I'll just give you one example of the flaw that we have to deal with. Under the Affordable Care Act, people up to 400% of poverty get subsidy on their insurance premiums. That means a family that makes $50,000--or excuse me, $93,000 a year, a family of four, gets subsidy. So, people that probably need it less, need less help to access healthcare, get help, get subsidy. And yet, those from 50%-100% of poverty under the current system under the Affordable Care Act do not get help. And there's something inherently wrong when those who really need help don't get it, and those who probably don't need the help are getting subsidy. That's just an example of some of the flaws we have in the Affordable Care Act.

LISA RILEY ROCHE, DESERET NEWS: But that's a flaw Utah could fix with Medicaid expansion. The federal government has money on the table to take, and yet, despite all of the efforts over the summer, you and legislative leaders, the possibility of having some kind of program in place for these people, 63,000 Utahans without care, shut down in closed house GOP caucus. How is that the right way to govern. 

GOVERNOR HERBERT: Well, that's a question you need to direct to the House. Again, I put out my benchmark with Healthy Utah. I think it's the best program I've seen. It is, in fact, you know, I think the commonsense approach. And unless--until I see something better, that is the best I've seen. And we spent, you know, a couple years trying to develop it.

But let's not forget it's not just the Executive Branch negotiating with the House and the Senate. It's the Executive Branch and the House and the Senate negotiating with Washington. And some of the issues that could be solved could be solved by Washington being more flexible and giving more leeway to the states.

My positions on most all government programs are really simple. One, don't take the money from us in the first place. We don't need additional programs. If there's a need out there, we'll figure it out and develop our own state program. So, don't take the money from us in the first place. If you do take it, block grant it back to us so we can develop it based on our own uniqueness.

For example, healthcare again, you compare us as the youngest state in America and a median age of 29.2 years of age compared to, say, a Florida, which is a lot more senior citizens, our healthcare needs are different. We ought to tailor our healthcare to those unique populations. If Washington and the Department of Health and the Obama administration would say, "We'll give you the 90-10 split. You only have to take care of up to 0%-100%. Everybody else above 100% can go to the federal exchange. They're covered," they could give us that little adjustment, and there's no reason under the law why they can't do it, and we'd have something resolved tomorrow. So, it's not just the House and the Senate and the Executive Branch of the state. It's also the third partner out there that we have to negotiate, which is sometimes tough to get flexibility from, in Washington.

So, we need to certainly address that and say to Washington, "Give us more flexibility. Don't take the money from us. If you do take it, block grant it back to us." If they block granted back the money, we'd have this resolved. And by the way, we have a lot of people running for President that are talking about that very thing. Marco Rubio was in town here recently and said, "Hey, if I'm president, we're going to block grant the money to you and develop your own programs." Not just on Medicaid, but probably on transportation and other issues. Paul Ryan, who may become the new Speaker of the House in Congress, said the same thing. "We'll block grant the money to you."

LISA RILEY ROCHE, DESERET NEWS: But Governor, I understand why you don't want to criticize fellow Republicans in the House for the way they did not take action on this. But yet, those same Republicans yesterday in a caucus that was open talked about how proponents of Medicaid expansion have misled Utahans, that in fact we're not leaving money on the table by not taking Medicaid expansion in the sense that of the $700 million Utahans are paying in taxes, we're getting back a little more than that, about $20 million last budget year than that. Obviously, there is more money out there if Utah were to expand Medicaid, but the suggestion was you and others who want to see that done haven't been entirely clear on that.

GOVERNOR HERBERT: Well, it's certainly the first I've ever heard of that spin on the situation, so it's hard for me to comment on something that nobody's really addressed to me directly. And I don't want to negotiate through the press. But again, you know, we all know that we send a lot of money back to Washington D.C. And again, we ought to get it back with less strings attached so we can do what's unique to Utah. And I also believe that the--we ought to put the solution the problem of profligate spending, which is what they're trying to say in Washington DC, at the foot of Congress. They're the ones that should be responsible for balancing their own budget. I think it's terribly ingenuous for us to say, "Well, we should balance the federal budget here in Utah." That's not our responsibility. That's Congress' responsibility. It'd be like people in the cities and the counties telling our state legislature and the governor, "Well, we're going to tell you how to balance your budget." That's the responsibility we need to make sure we put at the feet of Congress and say, "You have the responsibility to balance your budget. You take care of that. We'll react to what you do with us. The cards we are dealt with, we will play. And we'll play them as effectively as we can."

BOB BERNICK, UTAHPOLICY.COM: Governor, you've been saying for months, if not over a year, that we are paying taxes, Obamacare taxes, and we're not getting that money back, and that we should try to get that money back. And yesterday, that's exactly the opposite of what house Republicans said. They've looked at the fiscal year 2015 and said we are getting that money back. We're getting back that money plus $20 million more. And next year, by their projections, you'll get even back $100 million more extra. And so, the question is, have you been using bad numbers? 

GOVERNOR HERBERT: We have not been using bad numbers. In fact, everybody until whatever evidently happened yesterday has been agreeing with the numbers. There's not been a dispute over the numbers. What I do know is this: Utah is a recipient state. For every dollar that we send back to Washington DC, we receive $1.07 back. Some of that is because we have a large public land state. Some of it is because we have a number of military establishments and installations. Some of it is because of our colleges and universities, and the grant money that comes back. 

So, we are a recipient state. But let me just caution everybody to understand two things. Whatever the amount of money being spent on government, at all levels of government in the state of Utah, approximately 93%-94% of all of those dollars are generated by Utah taxpayers. They don't come from some other place. Whatever the obligations are to pay the bills, whatever the monies are that are being generated in tax revenues come from Utah. Now, that being said, we have the concern, I guess, out there that somehow, we're becoming more obligated to the federal government for our budget. That's a myth. The amount of money that we have as far as federal dollars today in our current budget is a little over 25%.

The historic average over the last 20 years has been between 25% and 26%. We're not any more beholden to the federal government to get our money back here to Utah today than we were 20 years ago. Certainly it fluctuates up and down based on the economy and the need for government assistance. Certainly there's more of that during bad economic times than during good economic times. But we've always been a recipient of additional monies than we pay for reasons and others that I've mentioned. That being said, you know, monies are fungible. We're sending money back there. Again, it's not our obligation to balance their budget. It is our congressional delegation and the people in Congress, that's their responsibility. We hope they'll balance the budget. In the meantime, we'll do the best we can with the cards we're dealt.

LISA RILEY ROCHE, DESERET NEWS: But why are you so far apart? Why are you saying that we're not getting back all the money we're sending back now in Obamacare, and the house is saying, "Oh no, yes we are, and more"? How can you be so far apart? 

GOVERNOR HERBERT: You're bringing something up that I have not even had a chance to discuss. You heard in a caucus yesterday I don't even know what the numbers are. Maybe ask me that question in a month from now, when I have a chance to talk about that with leadership. I'm just suggesting to us all that it's not our responsibility to balance Congress' budget. We got to deal with the dollars that we have here. We're not becoming more beholden to the federal government than we've been in 20 years. And we ought to be rational and responsible in what we're doing.

Again, the principles are similar, or I think clear. One, to Washington DC, don't take the money from us in the first place. And two, if you do, block grant the money back to us. Monies are fungible out there. There's certainly a lot of things going on. And what they're doing to pay for all the obligations we have we know is running a deficit. We understand that. But that's their responsibility to fix it, not the state of Utah or any other state. We will live with what they give us as parameters. We want to respect the taxpayers and get the best bang for the buck we can.

ROD DECKER, KUTV-2: Some legislators seem willing to consider ending capital punishment in Utah. Are you in favor of that? Would you go along with it if they did it? Are you opposed to that?

GOVERNOR HERBERT: Well, again, it's a new discussion that's just come up yesterday. I've been a supporter of capital punishment with these parameters. One, it should be extremely rare and to be done-- for the most heinous of crimes. That's how Utah's done it. We have eight people, I think, on death row today. It's not a common occurrence in the state of Utah where we have an execution. Secondly, the process should be, in fact, streamlined. It is not right to have somebody that's on death row for 20, 25, 30 years. Justice delayed is justice denied. And so, the process should be, in fact, streamlined so that we don't have this long, lengthy period of time of uncertainty. I don't think it's fair for anybody involved in the process. That being said, I think the people of Utah support in the majority capital punishment for those most heinous of crimes. And it should be done on a very rare occasion.

Bne Winslow, Fox-13: Governor, I wanted to ask another subject. The World Congress of Families is meeting next week. It's a group that the Southern Poverty Law Center is holding an event today, calling them a hate group, an anti-gay hate group. Why are you speaking there next week?

GOVERNOR HERBERT: Well, I speak to a lot of different conferences and conventions that come to Utah as the governor, welcoming people to Utah. We're a very welcoming state. We have a lot of people here in our own community that have very diverse points of view and ideas, and we don't all agree on everything. So, it's appropriate for the governor to go to this organization and say, "Welcome to the state of Utah. We hope you enjoy your stay here." And we may not agree with everything that they say. We'll have to wait and see what they say. I'm not certain that everything that's being alleged is, in fact, truthful. But again, they're welcome to our state, just like other people that have different points of view in other areas. We're not all the same. And we invite diversity and difference of opinion to Utah. 

MICHAEL ORTON, UTAHPOLITICALCAPITOL.COM: Governor, it's not all been great news economically speaking for the state. The county commissioners in Sevier County indicated that they are going to have to raise taxes, property taxes, by 70%, seven-zero percent. I thought it was a typo when I saw it come across the agenda. But it primarily is because of a precipitous decline in extraction revenues that they'd become quite used to. There is a plan now--the planning commission down there has approved a solar farm project, a very small one, that shows some promise. Rocky Mountain Power has already gone into the purchase angle of that, so it looks like a good deal. Do you think that the state has been too reliant in some situations on extraction revenue?

GOVERNOR HERBERT: No, it's certainly been a big sector of opportunity for us in the state of Utah. We have uniqueness in Utah because we have opportunities for natural resource and energy development, but most of that is taking place on public land, so we have the challenge of delay, for example, to get a permit here in Utah on public lands. It takes about a year and 3 months to get a permit. Say in North Dakota on private lands, it takes about, you know, 2 months. So, time is money, and it's the extra straw on the camel's back that makes it a little tougher for the energy industry here in Utah. And that would include Sevier County as well as the basin, Carbon County, Emery County, those areas that are most impacted.

Secondly, certainly as we have in overall good news for the economy of Utah as a whole, we recognize that there are pockets out there that probably are not performing as well, whether it's Sevier County or sometimes in Garfield County right now, where they're losing population or students, it's an aging population there in Garfield County. Wayne County I just visited here just a couple of weeks ago, similar kinds of things. So, not everybody is enjoying the prosperity that the state as a whole is enjoying. That's probably not unusual, by the way. And again, particularly those who don't have a diversified economy, that are beholden and saying the base is mostly on energy as the foundation for the economy, they will be impacted more than others. So, diversification. Again, I'm pleased and grateful that Utah as a whole is now the third or fourth most diverse economy in America. That bodes well for our future. Other counties need to follow that example and say diversify too.

Lastly, the good news is when you say 70% increase, the county portion of the property tax is generally the lowest. So, we have state obligations, but mostly school district is the biggest. The county and the city--it probably would go school district, city, and then county the lowest. So, they might be only 20% of the overall property tax obligation. So, a 70% increase for them would be probably a smaller number than that really sounds when they say 70%. It's like a 100% increase, if you only have a dollar, it's now $2. So, a similar kind of thing happens with county property taxes. Don't want to minimize the hurt and the pain, but put it in perspective.

ROBERT GEHRKE, SALT LAKE TRIBUNE: On a similar topic, I guess, the proposition 1 is going be on the ballot. It would raise taxes for UTA and roads, a portion of it going to the counties. Are you planning to vote for that?

GOVERNOR HERBERT: I will vote. Yes, my residence is in Utah County, so I will vote.

ROBERT GEHRKE, SALT LAKE TRIBUNE: Will you vote for it, or against it?

GOVERNOR HERBERT: You know, that's yet to be determined what my position will be, for or against it. I do know this. This is something that the cities and the counties have been asking, to have a local option for their own unique transportation needs. Obviously, UTA is a part of that discussion and the impact it will have. Seventeen of our twenty-nine counties have put that on the ballot. It's an option that the people can say yes or no about. They can control the destiny of whether that tax should be increased or not. It's something, again, that the legislature responded to because of the local government's concerns and the needs for additional help on transportation. As we all know, transportation infrastructure is a big part of what needs to be done in our state, particularly not only for just quality of life issues, but to eliminate congestion, to help with our mass transit needs, but also for business. If we can't get from point A to point B, our economy will suffer. And our businesspeople have told us that they will suffer. So, it's certainly a significantly important issue, and I'm going to weigh and consider that, and I'll make sure that I vote. And how I decide to vote is yet to be determined.

ROD DECKER, KUTV-2: Big increase in DUI deaths in Utah. Do we need to take action? Does the legislature need to do something? Are you planning to do anything administratively?

GOVERNOR HERBERT: I'm concerned about the spike we've had in DUI and fatalities. We've been very good with our highway patrol and our efforts. We've actually had a significant decline over the last decade of DUI and fatalities and accidents on our highways.

But most crime, you know, that we have in the state of Utah right now, if you go to the Point of the Mountain and look at the prison population, you go to our county jails, you'll find a significant impact based on substance abuse, alcohol abuse that leads to crime.

Addiction certainly leads to crime, unfortunately. So, we need to, in fact, take a hard look at what are we doing with our drug courts, how we're working with rehabilitation efforts. Part of our criminal justice revisions that we've talked about is, can we not just warehouse people, but in fact find--get a program to help them with their alcohol problems and their substance abuse problems? That's part and parcel of what we need to be talking about. We probably need to make sure that we have plenty of law enforcement out there. And there are certain times of the day, certain times of the year when we need to beef up enforcement to make sure we get the drunk drivers off the roads. 

Rod: Ought we to be careful about more liberal liquor laws? Ought we to either tighten them up or be careful about expanding them? Some people would say-- we've made them more liberal over past years. Some people would say maybe it's catching up with us.

GOVERNOR HERBERT: Well, I don't know that the laws are more liberal than they ought to be. I think they are actually about right. I think that the culture of Utah and what we've taken as a position with state control of liquor has been we don't want to promote it. But it's certainly a legal substance based on the law. It should be accessible and available to people who choose to be responsible in their consumption of alcohol. I support that.

We, in fact, were able to use that as a profit center to help us with our educational costs and other issues that have need here in the state of Utah. It's about $137 million in profit that comes out of our liquor stores that has put into our defraying of costs for government services, and particularly education.

So, I think we're at a good place. We need to, you know, monitor as always and review and assess and revise and improve if need be. And I expect that's the same thing with alcohol.

LISA RILEY ROCHE, DESERET NEWS: Governor, what about SB-54? There were some interests among lawmakers to get that on a special session agenda. No special session on Medicaid expansion, so is something going to happen before the session starts in January?

GOVERNOR HERBERT: You know, I have no plans for a special session now. Medicaid expansion, the alternative to Medicaid expansion was what we were going to look for. But I'm always open to discussion with the legislative leadership, and we'll see what happens in the future. But right now, there's no plans for a special session.

ERIK NEILSEN, KUED: Sadly, we've reached the end of our time, governor. Thank you very much for joining us this week.

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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