♪♪♪ announcer: Funding for "The Hinkley Report" is made possible in part by the Cleone Peterson Eccles Endowment Fund.

Jason Perry: Tonight on "The Hinkley Report."

State leaders roll out budget priorities that will set the stage for the next legislative session.

From school districts to elections, new audits reveal important findings.

And Utah's governor bans a popular social media app from all state devices.

♪♪♪ ♪♪♪ Jason Perry: Good evening, and welcome to "The Hinckley Report."

I'm Jason Perry, director of the Hinckley Institute of Politics.

Covering the week we have Thomas Wright, businessman and former chair of the Utah Republican Party; Amy Donaldson, executive producer of KSL Podcasts; and Frank Pignanelli, political commentator and lobbyist with Foxley and Pignanelli.

So glad to have you all with us tonight.

We have a lot of interesting things happening in politics.

I want to start with money though, because this is what's happening with our legislature and our governor, it sets the stage for the session, which is coming quickly, and before I get some of the specifics, Frank, I thought I'd ask you first as a former elected official, before we get to the specifics of the governor's budget and what the legislature wants to do, tell us what's happening behind the scenes, because that's sometimes the most interesting part of this process.

Frank Pignanelli: Yeah, for a sick, demented political type like me, this is just fun.

This is like a Bowl game, because it's like ten dimensional poker and chess.

So, you have the governor that's making different bets on what he wants to do.

He came out with his announcement, he wants to put money in different places and things like that, but you have the--on the other side of the table you have the legislature, which is one player, eventually there'll be two players during the session, but they're holding onto this mountain of chips.

They're not betting or they're calling the bet, because they're trying to decide a couple things.

Number one is they're a little nervous about where things are going, the economy and stuff like that, but they also want to see where their body is going to be in response to some of stuff the governor's proposing, but some of the things they also want to do.

And the other thing that's got a big element here, the elephant in the room is vouchers, because no one's talking about it publicly, but it's very much on their minds.

So, this is definitely a poker game that's going on between the governor and the legislature as they try to kind of figure out where the priorities are going to be on the respective bodies and the special interest groups that are weighing in.

Jason Perry: Okay, Thomas, talk about this voucher situation, this is school choice, right?

And so, we're talking about whether or not the legislature funds a certain percentage.

Let's just set the stage a little bit.

The governor wanted a $6,000 increase for teachers.

That's a combination of health care and also for salary, and some people are saying it might be tied to the school choice issue.

Is it?

Talk about that.

Thomas Wright: Well, let's talk about teachers for a minute.

They've been underpaid in Utah for far too long.

I think we can all agree that they need to make a better wage, a more competitive wage.

If we want better expectations and better performance in the classroom, and we have a lot of great teachers that are doing well, we've got to pay them more.

But to Frank's point, this is a lot of money.

I mean, our government in the state of Utah is collecting big surpluses, so for me this is about why do we continue to have big surpluses, and what are we going to do with the money we have, and what are we gonna do going forward?

And so, yeah, vouchers are kind of one of those things that a lot of people believe that competition in education will make it better.

And this has been ongoing in Utah, right, for, like, 15 or 20 years.

It's never gotten any traction, but at the end of the day, that's really what it's about.

Amy Donaldson: And it's been rejected repeatedly by the public, because as a person who sent her kids to private school and also attended public school, the voucher that you would get would not pay for private school.

It would allow--it would subsidize it, so it's really subsidizing people like me who already probably could figure it out in their budgets to do it.

It would depend on choice, and you're taking tax money from communities that, as we've all discussed, don't have enough money now.

The thing I thought was interesting is that some of the increase in the weighted pupil unit is mandated--is statutorily mandated.

And then the governor wanted to give more to that, which I totally support, and then, he wanted to give these teachers a raise, and then there was this discussion about whether or not it would be tied to some political deal.

I think it's interesting that political types see it as fun and interesting, and people like me are, like, sweating bullets, because I just want the kids in my school to have the things they have.

Like, if you live in a community--I live in a west side community, you know, I just read about Logan District giving their kids free lunch with COVID relief funds.

I think it cost, like, $200-and-something-thousand to do that for the rest of the school year.

I just feel like it's serious-- it's business that sometimes I feel like they're playing poker, and we're, you know, like stressed out for our survival.

Frank Pignanelli: With all due respect, this is the democratic process.

Amy Donaldson: But the behind the scenes thing is not the democratic process.

Frank Pignanelli: Well, but yeah, but all these different people are trying to decide-- Amy Donaldson: Because we don't have access to this.

I can't come into this room.

Thomas Wright: I just wanna say, I'm so glad I'm on with Amy and Frank; this is, like--when I saw who I was on with, I thought I hit the lottery, and now I know that I did.

But we have seen progress with school choice behind the scenes over the last 15 years; special needs-- Amy Donaldson: People have school choice.

Thomas Wright: Right, but this idea that one size fits all is hard for a lot of people to understand.

There are people that want to homeschool their children, and that should be their choice.

There are people that have special needs children, and they don't fit into a traditional classroom, right?

And that progress has been made over the years.

And so, I like that choice, because it's parental choice.

I'm not arguing for vouchers, Amy.

I'm just saying over the last 15 years, we've seen progress in understanding that individual choice and the parents' right to choose what's best for their individual child has gotten traction, and it should continue to get traction.

This is taxpayer money.

This is the money of the people of the state of Utah; they should have a choice on where their children are educated and how they're educated, because they know them best.

And I think that will continue to get traction in Utah, because it's not about taking money out of public schools.

We all want public schools to succeed.

There isn't anyone I know that doesn't, but parents know their kid best.

Amy Donaldson: Sure, sure, I agree, but if you give a voucher, they take--they automatically will take a portion of their tax dollars somewhere else, and that's people who have the mobility and the ability to do that, the financial ability.

People who are stuck in their neighborhood, like, if your kids walk to school and you don't have a car or you work in two jobs just to make it--look, consider this.

The baseline for somebody who is--who is qualifies for free and reduced lunch for a family of three is $42,000.

Consider that when you look at teacher salary-- Thomas Wright: I don't love labels, because when you say vouchers, people think back to that 2006.

I'm talking about parental choice, and a little bit of competition, and a little bit of freedom for parents to make the choice that's best for their child.

Frank Pignanelli: These are all the dynamics going on behind the scenes.

Amy Donaldson: This is happening behind the scenes.

Jason Perry: So, Frank, tell me about this poker game, you used the poker game sort of analogy a little bit here too.

If we see the governor come out with something like this, like the school choice, maybe the money starts following the students, or even when it comes to tax cuts, which I want to talk about--if the governor puts it forward but the legislature doesn't seem to adopt it right away, what does that mean?

Does it give any indication of what's to come?

Frank Pignanelli: What it means is they're still trying to assess.

They've gotta meet with their caucus, they have some new members, they gotta figure out, number one, okay, where are we going on these different issues?

Secondly, the legislature, to its credit, is very conservative in terms of expending funds, and so they're--if you listen to the committee hearings last week and things like that, they're nervous about where the economy may be going.

So, they may want to hold some stuff back.

But they're also trying to figure out where do we really actually need to put some of the surplus?

Do we put more of it in the rainy day fund?

But already they're starting to weigh, do we really want--this governor's idea of a rebate, is that's something that's really gonna work or not?

The governor's talked about funding bus fares, that's dead on arrival, so what they're trying to do is-- Amy Donaldson: What?

No, no, it's not!

Jason Perry: Amy will be up there working on that.

Frank Pignanelli: But truly what it is, what do they offer?

What do they pull back?

Because remember, for 45 days they're trying different things, they're trying to assess where the caucus is, but also they're gonna get another report towards the end of the session that's going to really align where we are as an economy.

So, legislature's trying to figure all this out.

So it's easy for the governor to say, this is where I wanna go.

But the legislature has to deal with all this, plus respond where the projections of the economy are.

Thomas Wright: Right, and don't forget while we're doing this, I mean, the fiscal year ends June 30, so we know we have a big surplus from the previous year that ended June 30, so we're halfway through this fiscal year, and, again, we're projecting big surplus.

Utah has done really well and has been ranked number one in a lot of different ways because it's been competitive to live here and to work here.

We are slowly falling behind on income tax rate.

Arizona just went to 2.5%, Utah now is almost double that, and if we want to stay competitive, and we want to be the number one state like we have been, we got to do the things that got us there and not rest on our laurels.

So, there needs to be a talk too about the income tax rate so that we can stay competitive in the state of Utah.

Frank Pignanelli: There will be, there will be.

Amy Donaldson: And I would say, in addition, I think the tax cut is--it's so minuscule for most people, for people who--I think it was over, like, $173,000, you got $1,300; for the rest of it was like everyone will get at least $100, so, I get-- Thomas Wright: But what a tremendous time it would be to cut the rate, with the economy correcting, headed into a recession.

Amy Donaldson: I'm not arguing-- I'm not saying that you don't do that, I'm saying be realistic about it, what it is.

And what makes you competitive as a place to live is better schools and public transportation and air that we can actually breathe and water that we can use and drink.

Jason Perry: Frank, to this point here, are we going to see a tax cut this session?

What's it going to look like?

Frank Pignanelli: You will see a tax--I believe it'll be an income tax cut, they'll bring it down a little bit more, because as-- Amy Donaldson: Point one zero, that's what they proposed.

Frank Pignanelli: What Tom's talking about, though, they look at a map of the Western United States, especially look what the other states are doing, and so there will be a tax cut on that.

I don't think that--I would be surprised if they do a rebate.

I think you can see more money go into the rainy day fund.

But I think the governor has laid out--the word vouchers and school choice is not used, but he said that $6,000 raise for teachers, I think that is the standard that he says, "I will then look at a school choice thing."

But they have to assess, they have to assess whether they want to do that, because it went down 22-53 last year.

The people of Utah rejected it back in 2007.

Now, there's a lot of push for it, but they have to assess that that's what they want, because if they want to go that path, that's gonna change the dynamics of the rest of the budget.

Jason Perry: One last point on this one, Thomas, because, you know, all of you brought this up to some degree here.

Our legislature is worried about what comes next year and the year after, so talk about some of their plans here, like the $600 million that they set aside for inflation issues with the current budget.

How are they planning for the future?

Thomas Wright: Well, that's what the rainy day fund is, and with the surpluses we have, we can replenish the rainy day fund and be in a great position.

But what you don't want to do is have the rainy day fund, and then continue to run these huge budget surpluses when Utahns are struggling, right?

And we're falling further behind the Western states.

We want to make sure we remain competitive, make sure that taxpayers have the biggest break they need to do well, and maintain the rainy day fund.

And that's a possibility to do all of that.

And so I don't think the income tax rate-- Amy Donaldson: Maybe it's raining a little bit right now.

We don't build up, but we don't deplete it.

Frank Pignanelli: But there's one key in all this, and Tom would know especially about this.

They talked about putting $600 million in to pay down the debt.

There's no way they're gonna pay down the debt when they're at a 3% rate.

They'll only get more debt at a higher rate.

That is money that they're gonna be using for something else.

But they got to decide where the priorities of the caucus are, and that's where the poker game comes in.

What's gonna work and not work?

And remember, for the last three years it's been the legislature that really has decided how the state spends its money.

Thomas Wright: And that's going to happen again.

And this is gonna be a real interesting year because of the new legislators, because of the amount of money, and because of all the dynamics that exist in this current climate that we're in, it's going to be a fascinating thing to watch.

Jason Perry: We talked about employment a little bit.

I want to talk about an initiative the governor put out this week, what he's calling his Skills First Hiring Initiative.

Amy, talk about this for just a minute, governor's announcing no longer requiring a bachelor's degree for many of these jobs.

Amy Donaldson: Many state jobs, yeah, and encouraging counties and cities to do the same thing.

I actually really love this.

I think there are people who have a life--I mean, maybe I come from a profession, journalism, that once didn't require a bachelor's degree and now does, and I know a lot of really great journalists who've been in the profession for 30, 35 years who can't get jobs, you know, or change jobs because they don't have a degree.

And I would say 35 years--I have a degree, and I also have 30-plus years in journalism; the 30-plus years in journalism is more valuable.

And I do think that it is a barrier that you don't ever go past.

So, you don't dialogue with somebody and say, what do you-- what can you offer?

Your value is automatically tied to this degree, and I think that there are certain jobs that experience would weigh heavier for me than a degree, at least to get you in the door, you have the conversation, and I really support the effort.

Jason Perry: Frank?

Frank Pignanelli: My wife and I have graduate degrees, believe in higher education, but we got Z generation kids that question it, and you have to look at the fact that the inflation rate for higher education has been twice, three times the regular inflation rate.

There's questions, are we getting a practical education that helps us?

We're having a hard time getting jobs, so I think what this is is a signal that, with all due respect, I'm speaking--from the campus, higher education is being questioned down on main street.

What is the value of it?

I think it's a signal to higher education, they probably need to have reform a little bit.

Jason Perry: Go ahead, Thomas, and maybe why don't you weave in the governor's comment also about freezing tuition?

Thomas Wright: Yeah, so this week my daughter graduated from UVU, from the nursing school, and she's electing to go on six more months, one more semester, and get her bachelor's degree.

But it was so refreshing to go and watch her graduate with a nursing degree.

She already has a job, and that's a field that she was very passionate and interested in, and then simultaneously weaving in the bachelor degree.

That's kind of the new thing, right?

The dual mission, so to speak.

And UVU has set the pace on that, and it's such a positive environment where people are doing both, and I think that's good.

On the tuition, tuition has outpaced pretty much everything in our society, and higher education needs to be questioned on the cost of tuition.

There's automatic increases every year that make it unsustainable for people.

Look at the debt that students have and the controversy that's created.

And the governor did say he wanted to freeze tuition, but a freeze only matters if the taxpayers don't supplement or subsidize the freeze.

So, he's saying I don't want students to pay more, but then if he turns around and ask the legislature to pay for it, then I have a problem with that.

We need to freeze tuition and stop raising tuition or figure out a way to get it more under control.

Jason Perry: So, Frank, to this one point for the sake of thoroughness on this too, so when it comes to higher education, when the legislature, for example, they authorize, like, a 5% tuition--compensation increase, they only fund 75% of that increase.

And historically they've left that last 25% to the universities to figure out, which often ends up being tuition, which is where that is found.

So, how does this really offset with the legislature?

What do you think happening there on this table?

Frank Pignanelli: I think what you're gonna see, and you might see eventually or not, I think what they're trying to-- the governor, legislature, are going to do is say we expect you to to change how you're doing things, reduce staff or do more adjunct professors or something like that, because I think--I got to believe the legislators are hearing, the governor's hearing from especially younger people say, we don't see the value of this, and that's why you see the freezes, that's why you're seeing, is the degree necessary?

So, you're right, it's only partially funded, so I think they're going to say, instead of just raising tuition, figure out a way to compensate that piece.

Thomas Wright: And one of the things that we need to be honest about in the state of Utah is you hear all the time, well, look at the cost of higher education in Utah compared to the other states.

It's so much more affordable.

And it's because we're subsidizing it with taxpayer dollars behind the scenes.

And so, it's kind of like water, right?

If you're not paying the fair market value of water, you're going to use more.

It's the same with higher ed.

We need to have an honest conversation about what's really being paid, not just from the student, but from the taxpayer, and make sure that it's fair, and that students--and that citizens and taxpayers of Utah feel good about it.

Jason Perry: Let's get to something else that the young people are using these days, but we have a question for you.

I want to set the stage.

I'm not sure what kind of impact this has on Frank's TikTok account, but let's talk about an announcement from the governor through a student question that was submitted this week.

Iradukunda Esperance: Hello, my name is Iradukunda Esperance, and I am a third year student at the University of Utah majoring in Political Science.

According to the Salt Lake Tribune, Governor Spencer Cox said in a news release Monday, "As a result, we've deleted our TikTok account and order the same on all state-owned devices.

We must protect Utahns and make sure the people of Utah can trust the state's security system."

With this being said, why has the governor taken the step to ban TikTok, and will this have an impact on our state cybersecurity system?

Thank you.

Jason Perry: Okay, Frank, this is a-- Frank Pignanelli: Well, I deleted my TikTok account last week after I heard from members of Congress talk about it, and I'm having a discussion with my children at Christmas time, saying, get rid of that thing.

Obviously, something is happening here.

They're concerned about-- whether it's with China or whatever, they're concerned about the security of this.

But also this is a warning to what's gonna be--we're gonna see in Congress next year, and at the Utah legislature.

There is a concern about big tech, there's a concern about privacy, so you're going to see a lot more of these questions raised on a whole bunch of different aspects of social media.

Amy Donaldson: I was just gonna say, I think the right to privacy was ceded with the Patriot Act many, many years ago, and it's just eroded more and more over time, and we don't really even know, I don't know anyone who reads the terms and conditions as they click that and sign up for their social media accounts.

I think you're gonna have a hard time prying TikTok out of the hands of the younger generation.

I know there are some other options in video, and I'm sad myself to see the UDOT TikTok account be deleted.

I don't have TikTok.

I actually deleted it about six months ago after listening to a tech podcast about the surveillance abilities that were in that app.

And I think we probably should ask more and more, when you're getting something for free, you're the product.

And do you want to be the product?

Thomas Wright: This speaks to a bigger issue in our country too about cybersecurity.

It's a great national security threat.

Look at our banking system, everything, I mean, everything we do now is tied to these systems, and it raises a lot of questions.

TikTok's just kind of the tip of the spear, but there's a lot of questions, a lot of conversations that need to be had.

Jason Perry: Thomas, Frank mentioned this a moment ago, it's one thing, our governor making this declaration on all state-owned devices, but federal legislation is coming, it appears.

Thomas Wright: Yeah, it will come.

They're really concerned about it.

There's a lot of things with TikTok, if you read the reports, that a lot of people have grave concerns with.

And so, it's probably time to start listening to those, and, you know, when you're the CEO of the state, as the governor is, he has the right to say, hey, the employees of the state, you know--he's supposed to be looking out for the state, right?

And so, while I appreciate the civil liberties, and, you know, this is--if I'm the CEO of my company and I say, hey, on company devices, this is not what we're going to do-- Amy Donaldson: And not just company devices, like, these are company accounts.

So, the UDOT has a TikTok account.

You know, a police department might have a TikTok account.

And that's really the issue, is these are tied and connected to email systems and other aspects of a business or department.

Thomas Wright: And all it takes in today's world is to click a link in an email, and you're totally compromised.

So, you know, we live in a really dangerous world, and cyber security will continue to be a big topic.

Amy Donaldson: And I do think this may have happened earlier if the people who are in charge were Gen Z, if they were-- I think one of the issues you have is the people who are trying to make these laws and make these decisions don't actually understand how these things work.

If you've watched a public hearing about Facebook, Twitter, any social media, you understand that people making at least our federal laws don't actually really understand the way this stuff works.

Jason Perry: I want to get to a couple other state issues that are coming, including a couple of audits that were just reported this week.

And it's always interesting to watch those, the Legislative Auditor's Office goes forward-- Amy, you're ready for these already.

Amy Donaldson: We love audits.

Thank you, John Dougall.

Jason Perry: You love those audits.

I'm sure he says thank you to you also.

Thomas Wright: Nobody's better at these audits-- Amy Donaldson: Oh, no!

Jason Perry: We have two that were reported this week that I'd like to talk about for just a moment, and the first one has to do with elections.

And this is tied to our TikTok, we talk about privacy, but it's also the connection to what happens to our systems.

And the governor talked about this in a press conference, about this audit.

I want to talk about what the audit findings were and where Utahns are on election security.

Here's from the governor.

Spencer Cox: When you lose faith in elections, that erodes the very foundation of our republic, and we cannot do that.

And so, these recommendations will help us to continue to improve trust, and the data speaks very clearly.

We saw a significant increase this year over last year in polling around the people of Utah who believe that elections are fair and free and not fraudulent.

That's good news for us.

We also saw that 93% of Utahns cast their ballot by mail this past election.

Even though we have election day voting, you can vote in person, 93% of Utahns chose to mail in a ballot, and that's really great news.

Again, that's a show of support; although there are a few very loud detractors, they are very, very few.

And so, we appreciate the audit and look forward to implementing it fully.

Jason Perry: So, Thomas, it appears Utahns trust the system, and particularly 93% by mail.

Thomas Wright: Yeah, you know, when I was chairman of the party ten years ago, we really had a vote by mail push.

Utah has a different vote by mail system than a lot of states.

I think this is really misunderstood, right?

People in Georgia that are really upset about vote by mail have some valid concerns, but they're different because of the way they do vote by mail there versus the way we do vote by mail in Utah.

I thought the audit was really positive, and it provided a good roadmap for how we can improve without pointing out any really big glaring inefficiencies.

So, we should be proud in the state of Utah about the way we're running elections.

Amy Donaldson: I agree with that, but I also think that it's important to look at--you're looking at 93% people voted by mail who voted.

So, there were--I think the numbers came in around 63%, 65%, yeah, so there are a certain portion of people who are not voting.

And I also think that in addition to addressing, like, hey, let's look at the process and where we can be better and do we have an issue, where are those issues, and the county by county breakdown, I thought, was really fascinating.

And I just wonder how much of that factual information is going to be believed when somebody's having, really, I think a lot of the doubts were created by emotional reactions from people in power who just-- who called quite into question without really knowing these specifics of the way Utah's mail in system is different than Georgia's or Arizona's.

Frank Pignanelli: Auditing Utah's elections is like auditing fry sauce.

It's always been good, and always will be good, so I don't know why anyone's surprised.

We have the gold standard of elections across the country.

Once again, reaffirmed.

Jason Perry: So interesting, Frank, because this is both sides of the aisle, right?

This is Republicans, Democrats alike, united.

Thomas Wright: And vote by mail's driving higher turnout, I mean, to Amy's point.

Amy Donaldson: It's making it accessible.

And I also think you're getting better ballots, because when I-- when we first started mail in ballots, we had a couple of initiatives on the ballot, and I've gone into a booth in my lifetime and not known anything about an initiative.

I'm trying to read it and think, oh man, and intuitively, what do I feel about this?

And as a person with dyslexia, I struggle with double negatives, and I'm, like, reading it 19 times.

So, I can Google the initiatives, I can look at UtahVote.gov and see--or "Ballot-topia" or whatever, and find some information, and make a more informed decision.

I can research, oh, I didn't know this woman was running for my school board.

Thomas Wright: Or, like, the judges, you know, if you're in a bad mood, you vote no on all of them; if you're in a good mood, you vote yeah, you know.

Amy Donaldson: Or if you're married to a lawyer, you can just say, hey, is there any judges I should not vote for?

Yeah, but I think you get a better ballot, because people are at home, but it also makes accessible people who have illnesses, people who are--you know, not every building--I remember when Taylorsville City Hall was in a strip mall, some of it was not accessible to people.

So, I think you just get-- there's a ton of reasons why this is--why vote by mail is just an additional option.

There are still people who want to go, there are still people that--we have early voting.

We have a lot of ways for you to vote, and we should be looking for every and any way for people to vote.

Jason Perry: In our last minute and a half or so, Frank, that was a good audit.

Salt Lake School District, not a very good audit.

Frank Pignanelli: Yeah, and that was disappointing because I think everyone around this table had sent their kids to Salt Lake School District, and it was really frustrating for-- Jason Perry: Three of four, sounds like.

Amy Donaldson: Granted.

Frank Pignanelli: What was really frustrating to read is that the school board members were inserting themselves in the procurement process and things like that.

And this could be a trend, what's happening.

More audits on different school districts in terms of their financing and funding and things like that.

Amy Donaldson: I hope it does, because as a person who covered education for many years, I think you'll find that there are often times when it's not what you know, but who you know, and it's, you know, my cousin does this side business, could you just check it out?

It happens.

Thomas Wright: The audit was scathing.

I mean, it was a scathing audit, it was not positive, and it was disappointing as a taxpayer, as a resident of Salt Lake City, as somebody who sent their kids to Salt Lake City public schools, it was concerning.

And I hope that they take that audit and find some constructive ways that they can improve, but, you know, as a business person, we have to obsess about the customer.

If we don't obsess about the customer and the experience they have and the value they get from what they pay us, then we go out of business.

And I hope from that audit the Salt Lake School District takes that the student is the customer, and the parents are, the taxpayers are as well, and obsesses about that experience that they're having and looks at it in a new light, because the world's changed a lot.

Jason Perry: It has.

That's got to be the last word.

Thank you so much for a very interesting conversation, and thank you for watching "The Hinckley Report."

This show is also available as a podcast on PBSUtah.org/HinckleyReport or wherever you get your podcasts.

Thank you for being with us.

We'll see you next week.

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