Notes from the Utah Taxpayer's Association's pre-legislative conference

I attended the mostly informative and interesting Utah Taxpayer's Association's pre-legislative conference this morning in the Senate Building. We met in the nice Room 210 with 3 large screens for the various powerpoints we saw. It was less than half full. I counted during the private golf presentations, and there were about 82 people in the room, with a couple coming in and out from the hallway. That is counting 4 people from 2 companies looking to manage or buy government golf courses, 2 ALEC people here for a press conference afterwards, a number of legislators who were presenting bills, charter school people - Chris Bleak who presented, Carolyn Sharette, Steve, Sheldon Killpack who presented - and a bunch of guys in suits. People left after presenting and others entered. The crowd may have topped out at 90 people.

I think there were fewer than 10 "regular" members of the public in attendance counting myself, and the rest were lobbyist/insider types there for work and looking out for their respective interests. For example, the nice gentleman I sat next to ended up being a policy director for the UEA, but I Googled his name right at the end and didn't get a chance to really talk to him. Another indicator of who the meeting was really about was the list of "sponsors" on the back of the agenda who apparently paid for the handouts, the muffins and juice at the door, and probably a room fee. (Meetings of affluent lobbying groups apparently have sponsors.) They were: Billy Casper Golf, a management firm who presented for 15 min. about allowing them to run government golf courses while causing other bills to be pushed off of the agenda, Red Leaf Resources, an oil shale firm who wants favorable laws, 2 companies wanting to manage or buy our state parks: American Land and Leisure and Recreation Resource Management, Questar Gas, and Rio Tinto--both of whom have various tax, regulation, and clean air laws frequently before the legislature. But they of course did this out of the goodness of their hearts, wanting nothing in return; and our legislators would never be influenced by this, even if these companies are in fact paying clients of Senator Stephenson and the Utah Taxpayer's Association. (A law firm specializing in business litigation, and environmental and mining laws, Parsons, Behle, and Latimer, "sponsored" the 2012 Fast Tax pamphlet which is actually a very cool summary of government taxes, fees, and revenue generators in Utah. But they don't want any influence. It is just part of their charitable outreach for politicians with printing needs.)

What citizen could be cynical about conflicts of interest in our state legislature? Conflicts of interest are products of the liberal media, unless we are talking about Barney Frank or Newt Gingrich. But the real point is to never let the Utah Taxpayer's Association's euphemistic name and rhetoric mask the fact that the group is really just a lobbying firm with secret clients that makes a handsome living for its few employees, chief among them longtime State Senator Howard Stephenson. The organization and its aims are not about regular citizens; it exists purely to lobby for laws that financially benefit its secret clients. If Senator Stephenson stepped down from his influential position in the legislature tomorrow, the Association's revenues would immediately plummet.

The notes are long and fairly rushed as it was hard to keep up sometimes. Royce Van Tassell, 2nd-in-command at the Taxpayer's Association under Stephenson, was the emcee of the event. He frequently gave short introductions of the speakers and/or bills. I often wrote the presenter's name, and then wrote VT for Van Tassell, followed by his introductory comment. Hopefully, it's not too confusing. [Comments in brackets are my own thoughts about what I am summarizing.] I indicate questions with a ? followed by the question. Assume answers come from the presenter.

A traffic jam on I-15 made me 10 min. late and I only caught the last bit of Speaker Lockhart's remarks.

My notes:
Sitting by Jay Blain. Googled him right at the end and he is a UEA bigwig. I wish I had known and talked to him a little more.

Lockhart and Waddoups - Some issue will pop up. Maybe national popular vote says Waddoups.

9:19 Dougall – New revenue worst of times b/c of many requests.
1-time money: $128 million 49 gen 79 in education fund
Ongoing revenue: $280 million, 91 general, 188 in ed fund

Immediate needs:
Structural deficit 52 mill
Public ed growth 41 mill
Medicaid 68 , 44 one-time
Other Medicaid 28 M, 18 M 1-time
Legal 14 mill 1-time
Bldg myce 53 mill
1%WPU increase $23 mill
Employee bees 37 mill
Pay down debt 85 1-time

These exceed revenue coming in, both types
Reserve funds, Rainy Day gen 122 mill Ed. 110 Disaster 12
Debt level graph, Stay below line slightly below limit. Excessive debt limits flexibility. What if other downturn? 7 yr cycle? Started May 2008, 3 ½ yrs from next downturn?
Increased revenue volatility. Sales, income, corporate tax volatility increasing. Sales huge increase in swing since 1935. Even bigger in income tax. Showing Powerpoint graphs. Jay Blain points out big down swing in income coincides with Flat Tax implementation in 2007.

Lyle Hillyard on phone – US lost bond rating. Utah has never lost. 2 of 5 criteria are worrisome. 1. How much $ from Fed.? Hill Air Force Base, other firms, like the money, can’t control this area. Can control 2. How close to bond limit? We stayed at 40% historically. Now at 85% for I-15 extra length opportunity. Not stay here, but back down to 40-50% like used to be. Pressure for state bldgs to keep bond limit high. We’re pleased w/ Rainy Day Fund. Volatility might need higher than 6% gen 8% ed fund levels. Gov can make budget rec’s alone, not consensus of leg. Only see Gov final product. People see our deliberations. Go to committee, not leaders. Priority list, hearings, public process. People panic. See tough decisions. Mid Feb brings final rev estimates. Concerned w/ challenges. Uintah Basin rev up says Sen Van Tassell. Done at 9:33

Privatization concerns, 3 items.
Sen. David Hinkins – Audit Gen fund $ reduced rec to State Parks. Reward park financial perf. Business plan updated annually, max revenues, minimize expenditures. Analyze capital investment. Use lower cost staffing, seasonal employees, overlap of support staff eliminate. Reduce law enforcement cost. Reduce #, limited status, sep entity for enforcement at dept level, reduce retirement. Audit recs consider closing high cost w/ low visits, transfer to local. Privatize some, which best? 4 golf courses, 42 state parks, some heritage parks, This is the Place—if cut $800,000 they will give park back to us. So better as is. Benefit to state. Benefit to taxpayers—expect recreation in Utah. Why live here. Not looking to close any, but streamline. American Land and Leisure run Strawberry Res. Concessionaires. Most people don’t know diff. Still good. Not actually turning parks to individuals to make profit, just concessionaires. Can do more efficiently in some cases. Test case at Otter Creek St Park right now w/ concessionaire. They say their bus partnership model working. Privatization premature. Audit made parks more accountable. Now show costs of each park. Responded to requests. Costs are down. Look at all alternatives.

Billy Casper Golf Pres: Douglas White and Mike Cutler, VP’s, Dan Parkinson citizen, and Billy Casper himself. About quality. Industry rounds played way down 10%. 4.6 mill lost golfers. How retain golfers? Price quality service in parks. OP model must stop taking tax subsidies. Myths of privatization: Rates increase state approves, Res lose access, conditions worse, loss of jobs (we seek good people), service suffers. We have lower costs, expertise, buying power of nat org, municipality not manage day-to-day. Muni funds all cap improvements. Profits retained by muni. 3010 yr contract + renewals. Increased rev examples across country. Billy Casper is fav son. He comes in to clinch the deal. “I’ve never been in front of such wonderful people dedicated to the service of your fellow man. Hope you can keep up with it. Great to be with you.”
Ques from man—If eliminate Daylight Savings Time, how affect rounds? We can be creative. Manage capacity, peak and low times. [No answer, just we’ll manage.]
? Which type of 3 options do you prefer with muni? I like lease. Give up control, but pay capital. But man agreement, you retain profits. Make most sense here. Of 70 muni course, nearly 50% are leases. Van Tassel cuts off ?’s. Other providers too. Here:

Mark Whetzel local golf course managed firm: I love Billy. Since 1990, golf demand up 5% while supply up 60%. We don’t pillage, take profits for 1 yr or 2, then leave. We like long term manage deals. Prefer 10 yrs. We have 3 in N Utah, 2 S Utah, 1 in Mesquite. We like to lease to own, take all risk.
?Utah has high% of golfers right?” So fertile ground right? Yes.

[40 42. 82 people counting 4 golf company dudes, Billy, Legislators, presenters. Represent Utah?? How many lobbyists in the room?]

Rep. Ryan Wilcox – DABC restructuring. “Misdirection” powerpoint. Chuckle to self. I was an intern, then in leg. I was not happy to find myself selling alcohol as leg. I am religion against drinking. Force all Utahns into bus. Justifications. But we’re not measuring right things. DUI’s down and justification. Compared to other states we’re not doing that well b/c our low #’s mask problems. Where drunk? Why? Where teens getting? Why? Who’s irresponsible? Need to measure more and base policy on right metrics. 12 leg audits in past 2 yrs of DABC. Bad corruption and management. Big rev stream not reason for agency or justification. Always looking to sell more. Not just prob w/ last few directors—culture spans 30 yrs. Plan: Not relinquish control, but not a wholesaler or retailer. Focus on what actually reduces teen drinking, DUI’s family consequences. Use new measurement standards. We want to take baby steps, trying to talk to all parties. [Golf guy orange sweater leaves.]

VT – Water even hotter topic than alcohol. How to pay and change long term usage and needs.
Sen. John Valentine: Water allocation based on prior beneficial use. But no system on how to pay for that water. True cost of projects, delivery, and resource itself is masked b/c paid for by prop taxes. When I started in House in 1988, I saw that costs were intended to be masked. Jurisdictions say can’t do water projects on rates b/c not predictable, but say predictable enough for operations. Disconnect. Drafting bill now – phase out over 5 yr period prop taxes to water projects. Will increase water rates, but not cost of water b/c of prop tax decrease. [Kills renters??] Rural Utah cannot fund just fro rates, esp. w/ fed gov lands. CUP has big influence. Many details to work out. We should pay for water’s true cost and use, not masked in prop taxes. Low on details.
? How affect proj to dam Bear River planned 30 yrs? Should pay w/ water rates so recog cost. We hide allocation and use as if not scarce. If proj will go, has 5 yr window, then must be financed by rates.
? Across board, all users? I want to. But may have to compromise.
? Why should leg tell communities how to price services? Leg has respon for nat resources of state. City owns water right, but state has vital interest in nat resource. Can’t say air above city is only respon of city.
? How will this extend to water districts which already levy taxes? Not transparency in their budgets? These are Water Conservancy and Special districts. Must have trans period to ensure no bond defaults. [People leave after water discussion]

Chris Bleak – Head of State Charter School Assoc. – Ed is critical to state. We need fantastic ed system. Charters have grown at rapid rate since 10-12 yrs. 81 charters currently, 45,000 now, 50,000 students next yr. Lumped as 5th or 4th biggest district. Students chosing b/c so good. Focusing on disadvantaged students. Carolyn Sharette has 2 schools in SL Valley. For new immigrants. PProvide comp. 7.6% of all students. Facilities are biggest charter problem. Critical to way teach. They pay much higher % rate than normal districts. Districts can use full faith and credit state’s AAA credit rating.3 3.5 4 % Charters paying 7, 7.5, 8% despite state schools. Original charter ideas of renovating existing bldgs is not feasible b/c school bldg codes too strict. $ back to east coast bond firms. 1. Working with State Treasurer, Richard Ellis, Valentine, industry folks, to allow “moral obligation” AA rating which would save $100,000 to $150,000 per year for carters. 2. Only to those w/ strong track record of finan success, fgood management. Need Investment Grade Rating—many in state have now. No charter in country has failed in 20 yrs w/ Investment Grade Rating. Even with 2 economic downturns. 3. Create funding, State Charter Reserve Acct. Pay premium from rates to create insurance if there were a problem to protect state. Currently required to have 1-yr reserve anyway, other protections. Save $150-200 k yr per $10 mill in debt. More than 100 k in transaction fees. More buyers b/c more attractive bonds.
? W/ reg schools, district is responsible entity. Charters, the Assoc. is respon entity? Group that gets charter is governing board. Have open meeting, reporting req.s Non-profit. They bond for their school. ? WPU funding follows all students? [Weird question.] This is a state funded public school. Income $ follow. Charters manage operations off WPU.
?What is context of “moral obligation” that gets ;lower rate? State responsible if default? Some Steve guy with Bleak– County provided rate for 9 charters but not respon. Moral oblige for all students. ? Why bank would give 3% less? Not contractually required for state to back loan. But I believe state would. So better rate b/c of State's "almost" promise.

Sen. Howard Stephenson – Anti-voucher Student Opp Scholarship. Universal vouchers rejected. Unions sent out-of-state $ to say rich kids getting voucher, voters heard advertising and voted down. [Pro-voucher out-of-states sent MORE. Documented. He thinks people are brainwashed if disagree with him.] Somewhat legitimate argument that many best and brightest would leave. When I visit teachers, I ask what is biggest challenge? [When and where?] They almost always say 2-3 most diff students whether behavior - I was one of those - or low scores. I could really focus on other 24 in my room w/o the hard ones. This bill is focused soley on those 3-4 kids. If parents want to add $, they should eb able to. Not many priv schools that accept below grade level, but some. Cath schools want ELL and low performers, We can teach effectively. This will create market for new priv schools. Tax credit allowable if you donate to 501 scholarship orgs, you get 100% tax credit w/ “certain limits.” They will then grant schools w/ req’s for parents to pay part, skin in the game. Takes diff kids out of school system. Why not wait 10 yrs b/c voters rejected school choice? Arizona law was found legal by Supreme Court. OK to give public $ to vouchers, even religious schools. That’s why this bill this year. Myself and sev other legislators. Right time. Give lowest what they need b/c falling between cracks. The name has a ring to it, not a voucher. Already have Carson Smith special needs scholarship. This could be Carson Smith 2.0. Straw poll: Anti-voucher or Carson Smith 2.0. Like 1 person vs. 5 people. Most don’t raise hands. Stephenson laughs at own joke.
1 vote guy ? Union opp? Yes, already. ? School boards USOE support? No. How funded? Would take income tax credits that otherwise would have gone to public school student. System will actually have more money for studs that remain, positive fiscal note. [Billy leaving]

Sen. Margaret Dayton – Thanks to Royce and UTA. What to name Howard’s bill. Call it Student Opp Scholarship, SOS. 6-8 yrs ago opened bill to use ACT as eval for grad preparation. To compare to nation. Seemed like good idea b/c of state $ on state test. State Board sais ACT not allow that and couldn’t afford that. Former state sen. Dave Thomas, current State School Board member, now asked me to run bill to use ACT in place of UBSCT. Has multiple pos effects. 10th graders realize what need to work on or realize they are capable. Bill passed ed. interim committee. Stephenson amended bill to include another test, a military test for students who anticipate post-high school ASVAP? Ed, but not college, free to states. Still State Board rules. Concern is maybe military cuts will cut free tests. But state of Utah will provide readiness testing. Can save money through some sort of applying money toward test costs. [Didn’t understand.] Anticipated will pass quickly.

Sen. Wayne Harper – [Didn’t understand all of this.] Online retailer and phone comp must notify buyer of obligation to pay use tax. Nexus tax says if physical presence in Utah, must pay some taxes here. Like Cabela’s kiosks for online orders. Help people comply with law and make it easier for them to know. Mark Griffin – Internet industry guy – Hard for online companies b/c of diff state rates, agri taxes, school supply exemptions, etc. One state location cost us $350,000 and 2 months of programmer time to meet tax req’s. We oppose state piecemeal proposals b/c of implementation costs. Prob w/ those proposal. Putting another hurdle, info, on web transaction hurts “conversion” of want to sale. If do it on invoice, (other states want to do too) also has cost which may be more than tax collected. We get customer service calls. Cust serv calls from Utah cost us $5. [Really??] Internet not same as cash register. We need fed standard which we are working on. Nexus bill problems – This makes us collect tax to hire service guy in Utah. We stop employing Utah subcontractors to save $. State systems not good.

VT and Rep. Hughes introduce and praise Dr. Nick Trombetta. Hughes – Revolves around turf wars. We spend $3 bill yr. on ed. in Utah including all jurisdictions’ taxes. Adults fight over adult systems. This guy came to reform diff way. He was principal and Wrestling Coach in Midland, Penn, outside Pittsburgh. When steel mill disappeared, killed taxes and school. One school district. No other dist wanted cost of bussing and teaching. Students were shipped to Ohio. Trombetta would send wrestlers running down street to show public they exist. Sent from dist to dist. Midland kids would be sports, valedictorians, parents complain. Tom Ridge allowed charter schools. He is a Democrat. Dist sued over 70% costs paid to charter school. System worked. 40,000 students in 20 states getting online school from Trombetta. 11,000 in Penn on online curric. He came up against great opp b/c of turf, who controls. I want you to meet someone than for any other reason for those kids in that town. I want to see that model expanded in Utah.

Nick Trombetta – I am the son of Italian immigrants who came after WWII. My dad worked at steel mill. He taught me that good ed. is great equalizer, the American ticket to the American promise. Where you live matters in what quality of ed. you receive. We lost $ for ed programs in my town. Neighbors wouldn’t help. We had to buy services from another state. 25 person grant attracted national attention. Many wanted. In 4th yr, Rick Santorum enrolled his kids and enrollment grew to 4,000. We dedicate lives to help kids get ed. whether online or brick and mortar. In New Mexico yesterday, reservation kids online best students in area. I am a proponent of school choice and should receive bipartisan support. When inject free market, parents’ choice, good things happen to public schools too. In Penn 10 yrs ago, under Dem Gov Rendell, charters increased a lot. Opponents said 3 things would happen: 1. Will hurt pub ed and test scores down. 2. Teachers will lose jobs. 3. Dry up cash, take money away. But 3 things happened during Rendell– 1. Test scores went up statewide. 2. More teachers in Penn with less students. (Must look at that.) 3. Record surpluses. [B/C of charters or economy??]

VT – Should we be paying districts for students who left?
Sheldon Killpack – Work w/ Academica West, Charter school management – In Utah, income tax goes to operations of pub schools. Prop tax goes toward facilities. When charters created, WPU was easy. Send to charters. How make up for prop tax issue when students leave? Easiest solution rather than battle of districts taking money to follow child. What otherwise would have followed child, leg made in lieu money. This money comes off top, fund in lieu taxes, unfair to districts w/o lots of charters. Leg decided to take at least 25% of prop taxes for students. Worked. State still over $70 mill for charters. 13 yr phase in Rep. Menlove’s bill. New students’ will get prop taxes from districts into charter pot. Districts will get off top income tax money back. Local prop. $ will follow child. There is flexibility w/ funds from WPU, not from districts, Give districts flex to use prop tax money. Why don’t districts want more? Why not plan diff, fewer bldgs, more for operations. Allows parity of opportunity for districts and charters. HB 313. Money follows child.

Rep. Jim Neilson – Severance tax biggest thing of leg. Const amendment. When we sever nat resources from ground, one-time sev tax. Was put into permanent trust fund. Takes ¾ vote and Gov sig. to spend money. Only for more serious emergencies. More diff to use than Rainy Day funds. Only done once slightly after Olympics—not paid back. Some 2008 const amendment allowed leg to divert $ BEFORE going to trust fund by only majority fund. One-time monies. If we spend sev tax fund today, not there for urgent need tomorrow. New Const. Amendment to fix.

Sen. Wayne Niederhauser – Procurement code. [No idea what this is.] No major changes since 1979 American Bar Assoc. code changes. Will adopt much of modern lang. in 2000 Bar standards. Lots of clean-up. [Didn’t listen well here.] Bad code makes bad media stories. Teeth for intentional violation of procurement code.

Sen. Stuart Adams – Energy incentives.

Sen. Ben McAdams – VT says get districts out of business of helping local developers. Muni’s can charge up to 1% extra state sales tax. 50% to location of sale and 50% to location of population. $100 spent at Gateway. Local option 1%. $1 collected. .50 to SLC and .50 to statewide fund distributed based on population. SLC gets 8% of that other .50. Rough formula, not scientific, realizing population has costs. Fairly reflective of where needs fall. Mostly fair. SLC #2 in nation in daytime pop increase. 180,000 to 350,000 each day. Costs w/ that. 600 S. use 90% by non-res, police, fire, etc. Ran formula that SLC spends $280 on non-residents. [Seems fishy to me] Bro would have to spend $56,000 to make that in retail tax. Retail doesn’t do all. Tax incentives and population coming sometimes cancel out increased retail. Cities chase too much sometimes. Working w/ Rep. Nielson and Hughes, Sen. Stephenson. Add a component along w/ point of purchase and population. Add job wage $ to calculation, so not reject good jobs with costing facilities. Figure out dist. of wages and distribute some sales tax on that. Cities worried, don’t want civil war between cities. Only accept if new revenue on table. There is a federal movement to require online retailers to collect online sales tax. IF that happens, we should change dist. formula. We would see 5-10% increase. Law triggers IF fed. Law passes.

VT Sen Madsen is neighbor of mine. SB 27 film bill got wrapped up this morning.
Madsen – I’ve been working for 3 yrs on film issue. Text at 5:30 this morning that is resolved. I’ve been trying to help largest independent movie studio in world, Raleigh Studios, lots of cities, for 3 yrs. Wanted to come to Utah. Came to state about draconian local land use authority, could use only 1/6 of space. Tried to help over years. People are sovereigns. Delegate little auth to state, which then delegates further to local level. Some say leave “local tyrants.” Leg not accountable for that. I disagree. State has responsibility to ensure no gov in state turns into tyrants. How many movies could have been made in 3 yrs? How many jobs in that time? [Only money matters] If only gov understood, value of time. Gov not understand. [Lots of irony here about leg tyranny??]

Rep. Patrick Painter – HB 41 Simplify Taxes on Personal Property. Will help small business owners. Reduce audits.
? Prevent muni’s from raising other taxes to offset losses from bill? May very slightly affect prop taxes on all businesses and home owners. Makes it easier to do business.

David Crapo – SB 27 Taxpayers Right to Refund Some court ruled that individual had no right to ask for erroneously collected taxes if a vendor charged wrongly, gave to state. State not responsible if state didn’t make mistake. This amends code. State can give back even if vendor makes mistake. Puts burden on state to justify keeping $. Retroactive to help past claims.

VT Casey Anderson is w/ Speaker Lockhart, so not talking. Jonathan Williams and Megan Archer will do Utah Taxpayer’s Assoc. news conference in 15 min at cap bldg.

Local educational software company gets statewide contract AFTER making $12,000 in campaign donations in 2009

There was a nice article on KSL a few weeks ago about Imagine Learning software helping non-English speaking students learn the language. It's not a rigorous piece with one school's personnel and a company representative giving a glowing review of the program. But notice the small paragraph near the bottom:

Utah lawmakers funded a statewide license for this program, so any Utah school can address this growing need without hurting its budget.

Now I am not commenting on the effectiveness of this program. I have no experience with it and hope it is truly awesome. I often work with students learning English and any effective tool would be great.

However, I am concerned with the process. Why did this software company get a "statewide license?" This generally means any school in the state can sign up for the program and the state budget will cover the individual licenses, so basically a no-limit contract. How much is each individual student license? How many schools with how many eligible students have signed up? When was this passed? If it was in the 2010 session, I didn't hear anything about it and I followed the education budget debates closely. There have been crushing debates for two years in a row as the recession has killed public education budgets. The cuts have gotten deeper, class sizes are going up while other services are getting axed, and the projections for next year are for even more cuts. Legislators, schools, and the public debated about which "pet projects" and programs to fund and which to get rid of. Music, art, busses, science programs, merit pay plans, pension cuts, etc. have all been part of the debate.

I think that debate is legitimate and necessary in the rough economic climate. I just wonder if Imagine Learning was part of that debate or just slipped in somewhere. I have searched the three base education funding bills from the 2010 session, SB 2, HB 1, and HB 4, and I can find no mention of funding for Imagine Learning or English language software.

Making the matter even more murky are the large campaign contributions made in 2009 by Imagine Learning to key legislative leaders, especially conservative leaders. The August financial disclosure for 2009 showed donations to Senate President Michael Waddoups and Merlynn Newbold, education base budget sponsor and common co-sponsor of Howard Stephenson's bills. Imagine Learning's year-end financial disclosure for 2009 revealed donations to heavyweights: Greg Hughes of the House Education committee, Ron Bigelow--Chair of the Executive Appropriations Committee, $1,000 to Howard Stephenson--member of the Senate Education Committee and 2 interim education committees (and influential lobbyist), and $5,000 to Gary Herbert.

At the very, very least, this creates the perception of "Pay to Play." Make donations to the right people--maybe conservative lawmakers who usually oppose funding to education programs they are not personally sponsoring--and get a lucrative, statewide contract. That perception is real whether Imagine Learning is a wonderful program or a sham.

The donations are large and uncommon in the industry. I scanned the entire list of corporations that filed state financial disclosures for 2009 and didn't see any other company selling educational material--correct me if I'm wrong. (And for fun, go through the list and look at the donations from your favorite or least favorite company. The nearly $300,000 spent by Energy Solutions on both parties in 2008 and 2009 is especially impressive. All these corporations are spending tens and hundreds of thousands of dollars because of their civic mindedness, not because they expect anything from the legislators. Right ethics reform opponents?)

Really, does anyone think Red Meat Radio Howard Stephenson would support funding a statewide, educational software contract in a terrible budget year if these donations were not made? The bright minds at Imagine Learning spent $12,000 in profits without expecting influence and return on investment? It's a happy coincidence that the last educational software program to heavily lobby the legislature also got a large contract directly from Howard Stephenson in 2008?

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How blatantly will the State Board of Education Nominating Committee thumb its nose at the public? Or will Kim Burningham get his today?

I don't have time for much. Utah Mom's Care had an excellent post on this a few days ago. The results of Monday's meeting and vote will be announced this afternoon.

Basically, Republican leadership can't keep it's theories straight on their opinions of Utah voters. In the case of the state school board, they're too stupid to vote unless there is an R(epublican) or D(emocrat) next to the name of a candidate, so we have to appoint a committee literally half made up of lobbyists (all the industry "rep's" are lobbyists appointed by the governor--people like Stan Lockhart, Micron lobbyist and head of the state GOP when they passed vouchers) to remove "unworthy" candidates from the ballot. In the case of vouchers, the public rejected them almost 2-1 because they were misinformed by evil teachers.

But when the ethics reform initiative didn't get enough signatures, that was because Utah voters are so smart and approved of the legislature's already passed reform. I think as the Utah Mom's Care post said--voter apathy enables this ridiculous, easily abused system. And in the last days of the ethics petition drive, there were still more people than not that had not heard of the initiative.

Here's an opinion piece by two Republican activists spelling out how the public is too dumb to vote without party affiliation, and the Tribune Editorial rightly stating that this system actually takes advantage of voter apathy for political gain rather than doing anything to make the final election between the chosen candidates more informed.

Sara Brate at the Accountability blog covered this bad process two years ago. Most revealingly, she put the candidate vote totals in an excel sheet for all to see. Notice that industry voter block that pushed the agenda. There were two incumbents pushed out by the vote of 6 people and shenanigans in my state school board district.

So Kim Burningham effectively represented the overwhelming majority of both Utahns and his district in the anti-voucher battle, infuriating Republican leadership. He fought hard on the ethics initiative, once again battling for things large majorities of Utahns want, but legislative and political party leadership abhor. Will he be taken off the ballot by 6 lobbyists? If so, I predict a short period of outrage from observers, and then no consequences. If only 2 legislators got taken out after the voucher debacle, and the bill to change this process couldn't get traction the last 2 years, nothing will happen now.

Two reasons to sign the ethics initiative on the last day, April 15th

Two reasons:

1. In current Utah law and practice, lobbyists can be legislators.

This really shocks 90% of people I talk to along with the fact that a senator representing Utah Valley is currently both a lobbyist and a state senator. As they ask for more info, I tell them that Howard Stephenson is one of the most influential policy makers in our state, and his "taxpayers association" is really a 4-employee lobbying firm with a secret list of business clients. Stephenson's sole basis for employment is his effectiveness in achieving legislation favorable to his clients. If he votes the "wrong" way or does not push bills his clients favor, he will be fired. This is not the normal and inherent bias of a citizen legislature, but basically a man paid for his votes. Worse, since the Utah Taxpayers Association's clients are secret, you never know on a given bill whether Stephenson is being employed to vote a certain way. He cannot be objective or risk his livelihood. How can it be interpreted any differently? Recent reform bills did nothing about this practice.

2. The latest ethics reform bills passed by the legislature will not only fail to stop the vast majority of the lobbyist money coming in, but new loopholes would allow half of it to go unreported if spending spending patterns remain similar.

Bernick's analysis in the Deseret News of lobbyist gifts and meals this year reveals the distinct lack of reform.

"Despite Utah legislators' claim that they took large steps in lobbyist gift-giving reforms this year, a Deseret News analysis of new lobbyist disclosure reports finds that a new reform bill they passed would ban just $1,100 of the $71,700 spent on lawmakers so far this year...

However, the newspaper also found if the lobbyist gift-ban restrictions found in a citizen initiative petition were in effect, 99 percent of the gifts given to legislators in January, February and March of this year would not have been allowed."

The purposeful loopholes in the law just passed are even worse:

Meals costing more than $10 must come with the accepting lawmaker's name attached, unless large groups of legislators are invited. If the whole Legislature, the House or Senate, a legislative committee or a party caucus are all invited to the meal, then that expense is exempted, no matter how many actually attend. In fact, the all-invited expense will no longer even be reported by the giving lobbyist, as is the case under the old lobbyist law. Gone from the public record will be how much was spent by this or that special interest group hosting a meal for an identifiable number of legislators, no matter what that expense may be.

In the first three months of this year, $35,168 — nearly half of all gift-giving that was reported, the newspaper found — went for meals where all members or some caucuses were invited, an amount that won't be seen in future lobbyist reports.

In addition, in the 29-member Senate, the president can authorize lobbyist-paid-for trips and expenses for a senator of either political party, and that lobbyist expense won't be reported, either, under the new law. The speaker of the House also may give such a trip exemption for any representative, but by internal House rule (which was not adopted by the Senate), the speaker must disclose that expenditure and the representative who took it in a timely manner.

Bernick explains that gift giving is down 20% from last year's 1st quarter, but I have difficulty praising the legislature for accepting "only" $71,000 of gifts in a three month period rather than $89,000.

The legislators can take offense and (falsely) call the proposed restrictions and independent commission a "power grab" all they want, but that doesn't change these numbers. The state legislature wants us to believe that the vaunted free market they value so much is spending tens of thousands of dollars in just a 3 month period to accomplish nothing; these firms and special interests are so blind to their own interest that they just throw this money away without making a profit on the expenditure; and Howard Stephenson has been employed for the last few decades to not influence the incorruptible legislature. Think about that premise and either find a last minute petition to sign, or go online and sign electronically as that battle rev's up. Here are the links to the Utahns for Ethical Government initiative and also the Fair Boundaries initiative.

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Revealing conversation while gathering initiative signatures

One afternoon, I was gathering signatures for both the Utahns for Ethical Government initiative and the Fair Boundaries initiative. I ran into two professionally dressed people wearing real estate nametags. I explained the Fair Boundaries petition to polite interest and nods, and then I started explaining the ethics petition.

"If this were to pass, next year state legislators could not take any gifts from lobbyists, period. Including meals."

One of their eyes lit up and the person said "I'll sign that" while grabbing a pen. I continued to explain that it would prevent a person from being a lobbyist while serving in the legislature and that one of our state senators representing Utah Valley is a lobbyist. They nodded and grinned. But as the person started to print their name, they paused.

"Wait. Maybe we shouldn't. Don't we do this?"

"Lobby? Yes. The realtors' associations are the biggest lobbyists in the state."

They discussed if anyone would be mad they signed the petition. I told them that they should be aware that Taylor Oldroyd is strongly opposed to the initiative and in fact had mixed his Republican Party interests with his County Realtor Association position and gotten signature gatherers kicked out from in front of the Home Expo. I also explained SB 275 and the GOP plan to call people after the fact and convince them they should remove their names from the petition because it is anti-Mormon.

"So yes. If this gets enough signatures to get on the ballot, you probably will get a call from Taylor Oldroyd."

"Listen. These are both good. But we're both new in the profession."

"Yea. We can't afford to get on the wrong side of Taylor right now."

I told them it was sad, but I understood that they didn't want to risk their livelihoods. I explained the rest of the leadership arguments about supposed loss of free speech, invasion of privacy, and their twisting to pull the anti-Mormon stuff out of the bill, and why I thought they were good provisions that improved the political process. They both said they agreed, but didn't want to antagonize Oldroyd. I thanked them and sent them home with information to give to others they knew.

I spoke with some other realtors I knew about the incident, and they laughed. They explained that Taylor is not even a realtor, but merely their hired gun to lobby and administrate.

(I hope some of you comment, but I may not respond for a couple days. It's not you; it's me. I'll respond when I can in a few days.)

Last day of the session: Howard Stephenson pushes a 75% reduction of corporate income tax late fees at the cost of 3 million education dollars a year

Take a look at the legislative calendar for the last day of the session. If you click on the box labeled Senate Bills under the House menu, you will see the queue of Senate bills waiting to be considered by the Utah House of Representatives today. There are two consecutive bills by Senator and registered lobbyist for the Utah Taxpayers Association (A euphemism for Utah Big Business Tax Reduction At All Costs Advocacy Association), Howard Stephenson, SB 186 and SB 64.

Senate Bill 64

SB 64 had already been on my "to blog" list, but Rolly beat me to it the other day. When I had first checked out the bill after seeing it pop up, I read the first few lines of the text through the "Highlighted Provisions" and just started laughing. To anyone following Gehrke's and Rolly's coverage last December of Stephenson unethically advocating for state contracts for ProCert , the intent is obvious. (Those 2 links lead to just the comments from the articles because of the Trib's lame archival policy. I'll post the text to the articles and an editorial in the next few weeks when I review the controversy and explain why "professional textbook review" is a total crap corporate giveaway.) The legislature would form an Administrative Rules Review Committee composed of 10 permanent legislators, plus 4 leaders of specific committees for each bill review, to check if state employees are acting legally (line 55), to ensure that they "comply with legislative intent" and that the legislature is allowed to slowly usurp the executive branch's functions(line 56), to certify that business taxes go down (lines 57-58), and to badger the State Office of Education to hire ProCert. The bill curiously has no fiscal note even though it requires this new committee of up to 14 legislators to meet once a month (lines 35-37), and I highly doubt they'll be meeting without receiving their per diem. Finally, the bill gives this mini-inquisition of intent power to spend their time examining basically anything they want:

60 (c) (i) To carry out these duties, the committee may examine any other issues that it
61 considers necessary.

Senate Bill 186

And as bad as that is, SB 186 could be worse. I'm trying to be fair and not claim dishonest intent without sound evidence, but the bill was certainly not presented accurately by its sponsor nor vetted completely by the Senate committee or body. Help me here. Listen to the audio (Click on "Senate Revenue and Taxation Committee 2/18" under the Audio Recordings of Debates heading. When 17:49 of audio pops up, just know that only the first 8 minutes concern SB 186). Does Senator Stephenson mislead the Senate Revenue and Taxation Standing Committee about the larger impact of a nice little bill to encourage individuals to pay their late taxes promptly?

0:00 Sen. Stephenson starts out, speaking from the committee dais of a committee he sits on rather than taking the floor, and says that "the bill in large part was brought by the tax commission," but then mentions that "tax practitioners" (What or who does that mean? Those members of the UTA who pay taxes?) asked for a reduction from 2% to .5% in late fees "for failing to pay certain income taxes." Senator Business Lobbyist doesn't mention that these are largely corporate franchise and income taxes and avoids the topic for the rest of the bill's hearing.

From about :30 to 2:30 in the recording: He invites a tax official, Bruce Johnson, to explain the innoucous, common sense part of the bill . They are giving individuals submitting their taxes late a break for the first 15 late days, allowing them to pay less than the normal 10% late fee in order to encourage rapid submission. Plus, they are coordinating with a new computerized tax system, GenTax. Lines 67-313 of the bill deal with this graduated partial grace period. That sounds fine, but I was looking at the enormous fiscal note and wondering how cutting the late fees on people for a few days was going to cost the education fund over 3 million dollars a year.

2:34 Sen. Neiderhauser asks Stephenson if the bill has a fiscal note.

2:37-3:13 Sen. Stephenson says he doesn't know, gets handed an incorrect fiscal note for a couple hundred thousand dollars total cost in 2010 and 2011 (which from things said later in the recording, I believe shows the cost of just the 15 days reduction in penalties for individuals proposed and discussed by the Utah Tax Commission), and is unable to decide if the lost revenue is from the General Fund as he first claims or the Education Fund (income tax), which I also believe also shows his change from the original intent since Bruce Johnson firmly thought it was a General Fund reduction.

He then takes awhile to explain that passing this before the GenTax system comes on line is important.

4:47-6:23 THE INFURIATING PART Senator Valentine both illustrates the potential for a committee to thoroughly examine proposed legislation and weigh its ramifications...AND the "You scratch my back..." mentality of "I don't want to hold up the bill" even though I have no idea how much it costs and it is obvious the sponsor has no idea either.

. - 4:47 Sen. Valentine asks about lines 322 and 326-330 and explains that those heretofore undiscussed corporate franchise and income tax late fee cuts, as well as penalty reductions for late individual income taxes, come out of the Education Fund. I start to see where the $3 million cost was coming from.

. - 5:25-5:56 Sen. Stephenson is confused by the dates in that updated portion of the bill. Sen. Valentine reads the bill quickly and accurately and explains that the penalty rate reduction from 2% a month to .5% a month in income tax is the source of the reduction in revenue for the bill from the Education Fund.

. - 5:57-6:09 More evidence that Stephenson subverted the bill. Bruce Johnson of the tax commission pipes up and says "That was the reduction in rate that you added Senator and I didn't look at that...but it would appear to me that it should be education funds." He had no idea about the intent or effects of Stephenson's business-friendly "additions" which clearly DID NOT apply to his explanation of the original intent of the bill. I am very, very suspicious as to why Sen. Stephenson would not understand that cutting the penalty on large, corporate income taxes by 75% per month would have a huge net effect on state income. In fact, from his testimony, it appears that Stephenson is largely unfamiliar with that part of the bill and I suspect the corporate franchise and income tax penalty reduction was a late business lobby addition after the original bill went to the Legislative Fiscal Analyst and came back with the smaller general fund reductions mentioned around the 2:45 mark.

. - 6:09-6:25 Sen. Stephenson will request a new fiscal note, Valentine doesn't "want to hold up the bill because I understand exactly its need..." but he wants to be accurate about which budget they're dealing with in the "tight budget year." If Valentine really cares about fiscal responsibility and understands the need to encourage prompt payment of late taxes (the first 313 lines of the bill), why doesn't he demand real information about a hastily added section of the bill that encourages late payment by reducing the penalties associated with large corporations paying their franchise and income taxes on extensions by 75%? (Lines 314-330)

6:25-6:51 Sen. Valentine begins follow-up question possibly addressing my concern about the intent of the bill to encourage prompt filing, and...Sen. Stephenson interrupts because he has finally figured out that he has the wrong fiscal note.

6:55-7:08 Jokes about perjury and whether it was intentional or merely negligent oversight...Possibly both in my opinion...

7:09-7:37 Sen. Niederhauser declares they won't ask questions because they don't have a fiscal note and opens it up to the public who surely had no idea what was going on.

7:37-8:08 Senator Valentine moves they pass the bill anyway and the committee unanimously votes in favor of the bill with "encouragement" to get the fiscal note. My opinion of committees as largely being political softballers which only scrutinize certain bills for political or ideological reasons is confirmed.

Now the floor debate:

Click on the Day 35 debate. It's 6:03, including liberal amounts of downtime and a role call vote. (The bill name links to audio, or you can click on the day and scroll down the list to SB 186 for video.) A couple weeks have passed since the committee hearing, and Sen. Stephenson now rises and says absolutely nothing about the story that got him through committee, encouraging the prompt payment of late taxes. He says nothing about those 15 grace days of reduced penalty. Instead he jokes they are going to make Utah as friendly as the IRS, gets a laugh, and now sorrowfully announces that the tax decrease will cause a fiscal note, explaining nothing specific or even what was requested at the end of the committee hearing. The lame highlight comes from 1:30 to 3:00 on the recording. Sen. Okerlund asks Sen. Stephenson to explain the fiscal note--remember, this $3-million-a-year ongoing hit to the Education Fund from 2010 onward was presented as as a two-year $125,000 cut in the General Fund during committee. Sen. Stephenson asks Okerlund questions back, hems and haws, followed by an awkward pause, and explains nothing. Sen. Okerlund, however, appears a bit reluctant to admit he has no idea what the bill is doing and especially why. No one understands what the one-time money that is shown as income means, including Sen. Stephenson. It makes me so mad when legislators have no idea what they are sponsoring because they are just acting for some lobbyist!! The next day, Sen. Stephenson gives an explanation from the Fiscal Analyst...how many do you think really understood it? I didn't.

Click on the Day 36 debate. It's a whopping 2:52 long. Stephenson gives the canned explanation and the bill passes with a unanimous vote. Whenever the legislators brag about how much careful, unbiased, non-lobbyist-influenced deliberation they give policy, I just think of crap like this. You could have taken a roll call for justification of SB 186 right after the vote, and I bet not one senator, with the possible exception of the sponsor, could have done more than repeated Stephenson's sorry excuse for an explanation that "It makes us not as mean as the IRS." I wonder how many even looked at the fiscal note which Stephenson purposely avoided announcing out loud.

Recap

1. Sen. Stephenson presented the bill as one thing during committee, and emphasized the opposite on the floor. His lobbyist interests seemed to conflict with the goals of his Tax Commission partners who helped draft the bill. (This seems familiar...)

2. NO ONE ELSE EVEN CARED!! Sen. Stephenson could not satisfactorily answer one question in committee or on the floor. If a PTA lady speaks in support of a bill in committee, Bramble, Stephenson, and Dayton grill her. If the powerful Senator Stephenson is completely unprepared, cannot answer basic questions about the reasoning behind his bill, omits that his bill costs 3 million dollars a year, and disingenuously changes his story from place to place, while other legislators vote for a bill they obviously know nothing about....that's fine. And once again, they will tell us it's the media's fault the public distrusts the legislature.

3. Sen. Stephenson is mucking around with HB 2, trying to shift charter school costs to districts, which regardless of substitute version cuts all training days and Career/Technical budgets and portions of everything else, while sneakily cutting over 3 million education dollars a year through a fee decrease that almost exclusively helps corporations. (I'm not sure what happened to the laptops for preschoolers Upstart program. Does anyone really know if that money was spent this year or has been cut?)

4. Weber County Forum and Ogden County Forum have been featuring well-reasoned pleas for the state or county to collect late property taxes...so Senator Stephenson goes and makes it easier for corporations to delay payment of corporate franchise and income taxes. The regular Joe Taxpayer's burden gets a little heavier.

Any legislative interns reading this, please ask your legislator to ask one question of Rep. Harper, the House sponsor, when SB 186 comes up for debate this morning. Why does the majority of the bill encourage prompt payment of late taxes, but the small expensive part encourages LATE payment of owed taxes? Seriously. And for a difficult bonus question, ask: Why are you stealthily cutting $1 1/2 million from education next year and $3 million every year after that?

As you head to the caucus meeting tonight, remember that teachers are anti-family Communists who must be stopped!!

I'm heading to my first caucus meeting tonight. I'm a teacher. I have cast many votes for both Republicans and Democrats. I have a family and children whom I love.

I believe our legislators should not give extra time to lobbyists rather than constituents, not accept gifts (Senator Bramble's concerns about not receiving paid trips to "investigate" important issues are self-serving and far outweighed by the appearance of impropriety, whether real or only perceived) or at the least disclose every gift over five dollars in value, should not push through tax breaks for lobbyists (Delta, Anderson Corporation, Skoal, etc.), should not use omnibus bills to dishonestly shield defeated legislation from discussion and public scrutiny, and should not be able to LIE about their employment with a multi-billion dollar nuclear consortium and then testify on behalf of that corporation in front of a committee that they chair!

I believe vouchers were an ingenuous attack on public education that fooled many people through their false claims of "cookies" to redistribute. The legislators constantly attack and belittle teachers and school districts, even when their own legislative audits and public information budgets prove their findings wrong. It doesn't have to be business vs. schools, but there is a virulent anti-public-education movement that is vastly over-represented in our legislature.

Teachers are not covertly teaching abortion, sex, or anti-American values. Discussion of our history--good and bad--and moral dilemmas is not a threat to America. A lack of critical thinking and blind acceptance of what politicians tell us IS.

It's not like the blog I read today is known for critical analysis of both sides, but this post makes me simultaneously mad and sad. This is the extreme right-wing that does not represent the large center of public opinion in Utah.

If you want to protect our conservative, pro-family values in Utah, please do not stay home Tuesday night. Our opponents are organized and are launching an all-out war against conservatives, and it's won or lost in that little neighborhood caucus meeting of only about 20 people. Not only is parental choice in education at stake -- but everything we cherish as conservatives.

Teachers are not the enemy! To oppose vouchers is to support one of the primary means of creating the largest, most prosperous middle class in the history of the world. On the otherhand, vouchers benefit very few families at the expense of the majority of middle-class families.

And in a totally non-surprising show of hypocrisy, here is an excerpt from an email sent out from Parent's for Choice in Education last Friday:

Special interest groups opposed to meaningful education reforms are well aware of this, and in a bold attempt to protect the education status quo, they've recruited candidates across the state to run as Republicans against school reform incumbents. They're even running anti-voucher candidates in districts where a majority of voters voted for Referendum 1.

Translation: In a bold attempt to hijack democracy in favor of an unpopular ideological agenda, Parent's for Choice in Education has spent over half a million dollars in the last two campaign cycles ('04 and '06) to unseat pro-education Republicans--even in the majority of districts that oppose vouchers--and ramrod vouchers (among various anti-education measures) through the legislature by one vote. We are upset that people are calling us on our dishonesty and getting involved in the political process.