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LEHI — Former Gov. Mike Leavitt told lawmakers Thursday they need to face a number of long-term issues, including an eroding sales tax base, and offered some advice on combining statesmanship with political gamesmanship.
Leavitt, who stepped down as governor in 2003 during his third term to join then-President George W. Bush's administration, delivered the luncheon address at the Legislature's second biennial policy summit, held at Adobe's Utah office.
The nearly daylong summit organized by the legislative staff featured speakers on topics ranging from what drives economic prosperity to the demographic changes the state can expect in the future.
Now head of a health care consulting firm, Leavitt provided some political perspective for the dozens of lawmakers in attendance about what it takes to be successful in government.
He said what's needed is a combination of statesmanship and gamesmanship, describing trading a sales tax cut for a gas tax increase in 1997 to pay for rebuilding I-15 through Salt Lake County in time for the 2002 Winter Olympics.
"If you are simply there just to do the statesmanlike thing and you have no gamesman skills, you will be overrun and do no good," Leavitt said. But he also warned gamesmanship is best in small doses.
His experience in the federal government, which included a stint as U.S. Health and Human Services secretary, taught him there are people there trying to solve problems.
States have been ineffective and have "lacked courage" in holding Washington accountable, he said, praising the Assembly of State Legislatures that met recently in Salt Lake City to draft rules for a state-led convention to amend the U.S. Constitution.
"Having a formalized structure to do it is going to be a lot better than simply doing civil disobedience," Leavitt said. He also suggested lawmakers take advantage of a sympathetic presidential administration.
"One of the things I feel badly about is that I think we missed, in the last four years of the Bush administration, we failed to make some progress on some very difficult problems, particularly in our federal land issues that we could have," he said.
The former governor said that was the result of a decision not to "choose to make progress that involved making a compromise. I think that was a mistake. I'll just leave it at that."
Leavitt described the state's problems as similar to airplanes circling an airport in a holding pattern. Lawmakers, he said, have the opportunity to look at the large issues involved more systematically to smooth the landing.
The eroding sales tax base is one of those issues. Sales tax collections grew at a slower rate than anticipated in the budget year that ended June 30, in part due to Utahns not remitting the taxes for Internet purchases.
Senate President Wayne Niederhauser, R-Sandy, asked Leavitt for his ideas about stabilizing the sales tax, noting taking the state sales tax off food purchases created a "huge volatility" and that there are issues with imposing the tax on services.
Leavitt didn't offer any specifics, other than a warning it's an issue that can't wait.
"It has to be dealt with. You can say, 'This is not a good option, this is not a good option, this is not a good option.' There are no good options here. And one of the worst ones is to do nothing," Leavitt said.
He said he understands the political difficulties associated with raising taxes.
One of the things I feel badly about is that I think we missed, in the last four years of the Bush administration, we failed to make some progress on some very difficult problems, particularly in our federal land issues that we could have,
–former Utah Gov. Mike Leavitt
"I don't think you ought to be devoid of it. I don't claim I ever was. But there's going to be a point where this discussion is going to come home," Leavitt said. "There's not going to be any new sources, but we do have a growing economy."
That growth can allow action to be delayed at least until after the 2016 election, when it's easier to deal with tax increases. He said the erosion just means people are spending money differently, not that they are less well off.
Another issue lawmakers will have to face is funding for education, Leavitt said. For decades, public schools in Utah, funded through the state income tax, have lagged behind the country in per-pupil spending.
"We have been able to get by as a state with our spending and flourish pretty well," he said, because of "a series of cultural anomalies that have allowed us to produce a miracle with the funding we've had."
But Utah is now becoming more like the rest of the country as the population grows.
That leaves the possibility of becoming "less effective as a state," Leavitt said, suggesting the need to find more money for schools may be a problem that lawmakers will have to take to the voters.
"I don't know when that is ripe. I'm not proposing it today. But I have watched this issue for 30 years and it doesn't change. The problem just continues to grow," he said. "It's going to have to be dealt with."
House Speaker Greg Hughes, R-Draper, the summit's last speaker, didn't address the tax issues discussed by Leavitt but pointed out lawmakers agreed last session to raise the state's gas tax for the first time since 1997.
"I think we're on the right track," Hughes said. "I think we are committed to that long view."
