UTOPIA: the Buck Stops with the Cities

I want to go on record now, to state that Utah should not bail out cities for the huge indebtedness they will incur because of their involvement with UTOPIA.

In 2004, the Legislature warned the cities that they would lose their shirts on UTOPIA, but several cities went ahead anyway. The argument was, “How dare the State interfere!” Exactly. They made their bed.

UTOPIA clearly has failed. (It has abandoned its reason for being – complete build out; its product is inferior to the competition; and its new financing scheme laughably balances, by proposing to charge customers an installation fee of $1,000 for what currently can’t be given away for free. Somewhere, Ken Lay is saying, "Now that's chutzpah!"). To play out the string a little longer, though, UTOPIA wants to tap into more debt, backed by the full faith and credit of the cities, of course. For a project that has failed in every measure, cities are using one credit card to pay off another.

Make no mistake; the cities clearly know that UTOPIA is in a death spiral. However, they don’t want to face the music now. Instead of currently facing the financial consequences of stepping into a competitive arena they know nothing about, cities are lining up to increase their future indebtedness to the staggering amount of $500 million – more than doubling the stakes. Pointing out the joke of the whole thing, the refinancing scheme makes only the merest pretense of moving forward, by allocating just $11 million to new build, which is not enough money to build anything. (Before being sold off, the Charter system in little old St. George struggled, because of inadequate investment. And Charter had invested over $20 million on upgrades to its existing system there. To put things on more of a Wasatch Front scale, Comcast recently has invested $500 million to upgrade its Utah system).

In order to mask their problems for a little while longer, cities are piling huge sums of debt on the taxpayers. Given the budgets of the pledging cities, the $500 million indebtedness is enormous. It will hurt them, and it could hurt the State. The cities are in trouble, and they are making decisions that will put their citizens in real jeopardy.

I guarantee that those cities will marshal all of their considerable political clout, to petition the State to bail them out of their financial straits. They will say, “A different city council got us in this mess. We are innocent. Please bail us out.”

My answer: no. At times, cities need assistance from the State. But not when they knowingly make horrible decisions, just to avoid accountability. Every one of these cities clearly knows what it currently is doing. Each city is hiding from accountability – for a season – by burying its problems under a pile of money.

President Lee Caldwell

President Lee Caldwell announced that he will be leaving Dixie State College. He and his wife Bonnie will be missed tremendously. President Caldwell's efforts on all issues affecting the College, the students, and the community, were second to none.

President Caldwell picked up the torch regarding an affiliation with the University of Utah and blazed the trail with gusto. Without him, the affiliation would not have begun.

I clarified with acting-commissioner of higher education, Dave Buhler, that the affiliation is moving forward. He agreed.

Dixie State College

Dixie State College had a very good year legislatively, receiving more new money than any other college/university in the State. There are many people to thank for that. Near the top of that list would be House Speaker Greg Curtis and UofU President Mike Young. They understand what we’re trying to do down here – match educational opportunities in Washington County to the economic and innovative vibrancy that fills this blessed corner of the State. Likewise, the skilled personnel from DSC and the UofU that are working on the affiliation are to be commended for their excellent work to date.

This morning, I had breakfast with the brass for higher education (the Regents and Commissioner’s office), leaders from DSC, and leaders from the Dixie Applied Technology College. After that breakfast, I had a wonderful hallway huddle with President Caldwell and a few of his VPs, trustees Shandon Gubler and Steve Caplin, and Mark Gubler from the Alumni Association.

It’s tough to reduce the content of several great hours of dialogue to a few sentences, but here it is for me. Our community is very excited about increased education opportunities that could arise from an enhanced affiliation with the UofU. But, of course, where there is change, there is an element of trepidation and concern that the changes be beneficial. Finding the best possibilities and engaging the support necessary to achieve those possibilities requires broad community dialogue. Not in a way of selling something that is already baked, but in a way of inviting the community to participate in determining and blazing the trail. We need to look at the progress we’ve made to date on the affiliation and broaden our discussion with the two communities of interest.

Quite simply, the affiliation between the two institutions should work however the two communities of interest determine that it should work. Both institutions want better education opportunities. The UofU wants to better fill its mission as THE flagship institution for the entire State. DSC wants more degrees and programs. Those are great things. Let’s reboot the discussion, look at the great steps that the two institutions have made, and have a broad community dialogue on the next steps that we can take.

I have drafted some initial thoughts on a possible pathway for the affiliation. They will appear next Tuesday in the Dixie Weekly. Please take a look and give some input.

A Fantastic Blog

Check out ColorComments. Wow! What a great tone for discussing many complex issues.

The House Rules Committee

The House Rules Committee takes original ownership of all legislation. Yesterday, we met and recommended that some bills go straight to the House floor for consideration (and possible passage) by the whole House. Those bills passed out of interim committees unanimously. And, we recommended that some bills go to standing committees, where the committee chairs can determine whether the bills will receive a hearing (and debate, amendment, referral to the House floor or – rarely – death).

Committees aren’t killing bills (now, watch, to prove me wrong, all my bills will die in committee). Nor are bills being killed on the floor. When they are, they quickly become zombie bills, coming back from the dead on a motion to reconsider after the sponsor has successfully begged enough colleagues to “just let it advance in the system.”

So, each chamber shovels garbage forward to the other chamber, counting on the other to kill it. And, even then, most bills are killed by the clock (when we constitutionally turn into pumpkins at midnight on the 45th day), rather than by an actual vote. This is a bad practice. To do its part, I plan for the House Rules Committee to more aggressively filter out bills that we deem don’t have a shot at actual passage. And – as you can imagine – we’ll catch all sorts of grief for being oppressive thugs.

To gauge that criticism, let me explain how the process will work. Believing that committees work best when each member is empowered, I have distributed many of the Chair’s prerogatives to the 7 other members of the committee. (We have 6 Republicans and 2 Democrats). Each member can nominate an equal number of bills to each recommendation list we send to the whole body for its approval. However, a majority of the Rules Committee members must agree with those recommendations.

Thus, there are two steps to successfully navigate the House Rules Committee. First, members of the House need to find a Rules Committee member (any Rules Committee member) who will add his/her bill to the list. And, remember, each member, including the Chair, has an equal number of nominations. Second, each Rules Committee member must work with the other 7 members to make sure his/her recommendations will have majority support in the Rules Committee. If a particular bill doesn’t have majority support, the Rules Committee member should tell the bill sponsor to work with the members of the Rules Committee and the Rules Committee member should nominate a different bill.

People will mostly decide the effectiveness of this approach by the fate of the bill(s) they favor, but it is the most open, democratized procedure the Committee has ever used. Rep. Hendrickson suggested that we close the House Rules Committee. I discussed that suggestion with the other committee members, and it’s not going to happen. I’m a proponent of more openness in government, but I don’t think that Rep. Hendrickson or the Democrats should be pilloried for raising the issue for discussion.

An argument could be made that a closed process would work better for the minority party. (Not MY argument, mind you, but AN argument). In general, there isn’t as much partisan friction in the Utah Legislature as the Media might have you believe. Democrats have some very effective members; like every member of the Legislature, they simply understand that a majority of votes is needed at every step in the process; and they put legislation in a form that it can receive that support. If a Rules Committee member doesn’t do his/her homework with the other members of the Committee, to determine whether majority support exists, the bill simply will be removed from the list. A more candid exchange and, yes, horse trading and deal making could produce a less-blunt outcome. In a closed meeting, members are more likely to say, “C’mon. You know that bill is not ready and doesn’t have a prayer of passing the Legislature and will only take time away from bills that have a shot. What do you want that might have a prayer?”

It’s exciting to be back in the Capitol. I am optimistic that the Rules Committee will do a good job of serving the House and the people of the State.

The Budget

Robert Gehrke wrote a good article on the current status of budget talks. Senator Bramble sums up the situation: "'I think as we go into this session, it sounds like the House, Senate and governor are much closer than we've been at the same point in previous years,' said Senate Majority Leader Curt Bramble. While Senate Republicans did not settle on the size of a tax cut, he said a reduction in the $100 million range is 'reasonable and possible.'"

The Governor's initial task in the budgeting process is to provide recommendations to the Legislature. Governor Huntsman did a great job.

For starters, he didn't use fake money. We have a spending cap. Some things count toward that cap, some don't, and some are grey. The Gov didn't fudge those numbers. Thus, the two branches agree on the amount of available revenue that exists.

Also, there are some (unglamorous) things that absolutely have to be funded (like enrollment growth in Medicaid). By not accounting for those things in a recommendation, a Gov leaves lots of fake money on the table to fund wish lists (leaving the Legislature to play Scrooge, by appropriating the money where it actually has to go).

And, most importantly, his recommendations are good. The biggest expenditure is public education. The 7% increase the Gov recommended is appropriate. We differ a bit on how that should be appropriated, but it is a point we will work out.

Many in the Legislature want a good chunk of the education money to go directly to teacher bonuses, rather than to the districts in a lump sum. In negotiating salaries with the districts, the education unions demand that most of the money go to teachers nearing retirement (since retirement is based on a percentage of their highest paid years); this hurts teachers at the start of their careers. By paying the money as an across-the-board bonus, it works to lift salaries of the younger teachers we need to retain more than if we were to send the money directly to the districts.

As for a tax cut, stay tuned. As I have stated many times before, I believe that cuts to the personal income tax stimulate the economy. Businesses are very mobile, and they look at the income tax rate as a key indicator. Thus, I will work to further reduce the income tax rate.

Mitt's Mormon Speech

I liked Mitt’s Mormon speech. America does well when it openly discusses its prejudices and divisions. Regardless of parties and positions, it is exciting that our leading candidates include a Mormon, a woman, and a black man with a humdinger of a name. We’ve come a long way, baby.

How to Cripple Utah's Economy

For decades, Utah has worked hard to bring in better paying jobs. St. George provides a good example of this work – and a good example of how to bring economic progress to a halt.

Realistically, the economies of states largely follow the national economy. However, there are a few things state governments can do to boost or undermine their own fate. One specific thing Utah could do to hurt its economy would be to increase energy prices.

In south St. George, some enterprising individuals teamed with the City of St. George, the State Trust Lands Administration, and the Dixie-Escalante Rural Electric Association, to create the Fort Pierce Industrial Park. Without manufacturing, touristy places like St. George can develop very unhealthy economies. Through Fort Pierce, largely because of fantastic energy rates, St. George has placed itself on the map for clean manufacturing. The jobs that are being imported and created in the industrial park are fantastic, and, through the multiplier effect, those jobs are inuring to the broader benefit of the community and the State.

And, by the way, the affordable power for Fort Pierce is generated in the Uintah Basin, at the coal-fired Bonanza Power plant. Utah is a coal state.

One of the employers in Fort Pierce is Blue Bunny ice cream. Because of the affordable power rates, Wells Dairy decided it would make sense to produce lots of ice cream in St. George. Raise its power rates, and Blue Bunny loses its reason for being here -- as do other manufacturing businesses and prospective businesses sensitive to the costs of inputs (meaning, all manufacturing businesses).

Utah has some unique aspects that can help attract or repel business development. One of the best things Utah has going for it is affordable power. The Legislature knows this and is extremely concerned that Utah might lose this advantage.

By contrast, no matter what it does, California is looking at much higher energy costs in the future. Because businesses are extremely sensitive to higher energy costs, what can California do to keep from losing businesses to neighboring states in the future? Get them to take steps that will lead to higher energy rates. Let’s not take that bait.

I Heart St. George (Part 4)

Sara and I are throwing our annual Christmas party tonight. (For any newbies, we are serious about you performing a number; no exceptions). Things are beautiful, ready, and calm. Nine years ago, that was not the case.

Sara was in the hospital, in Salt Lake City, with a pregnancy that had gone awry. I was in St. George with our three young kids (our oldest was 4 ½), traveling up twice a week to visit her and trying (unsuccessfully) to keep all the balls in the air down here. At a church Christmas party, JoLynne Miller asked how I was managing. “Fine.” Her suspicions having been raised by the way my girls were dressed and “styled,” she stopped by the next day. Looking at the chaos, she said, “You lie. This is not ‘fine.’”

So, JoLynne arranged things, and, for the next few weeks, she and a brigade of other saints would show up to clean, cook, tend, and help us manage. People would show up with cleaning stuff, and I’d just say “thanks,” and they’d do their thing. Up in Salt Lake, Sara was extremely grateful to get these reports that her babies (and clueless husband) were being taken care of. But, she was mortified/stoked to learn that notorious clean freaks Kamie Truman and Valarie Snow had cleaned our house. Anyone we tell the story to who knows them asks, “Did they clean under the beds?” Yes.

One Saturday, a teenage neighbor boy, Mark Blake, knocked on the door with a Christmas tree from the nursery where he worked, saying he figured I hadn’t had time to get one. He left, and I cried (and I’m tearing up as I write this) at the generosity of my fine community. I’ve never seen angels from on high, but I’ve seen plenty of angels just off Red Hills golf course.

Arthur Anderson Audits Giuliani Affair

Giuliani is my second choice for President (behind the Mittster). But . . .

. . . if you love the circus that is politics, you’ve just gotta love Rudy’s dance regarding security-detail payments for his affair. When Katie Couric asked America’s Mayor how he thinks the episode will affect people’s perception of him, he stated, “I think it will show that we do things honestly, honorably, above board.”

Sure. All-in-all, I’d say it was one of the more honest, honorable, above-board extramarital affairs in recent memory. “But, honey, take a look at the accounting!”