Utah organizations like Dynatronics, Varian Medical Systems and the Utah Technology Council have expressed significant concerns about the impact of the proposed tax on their business and the overall economy of our state.

You can read their remarks in the following Main Street Business Journal article:
http://mainstreetbusinessjournal.com/articleview.php?articlesid=6251&volume=15&issue=19

As we navigate our way through this economic downturn as a nation, now is not the time to add or increase taxes.

My letter sent to legislative leadership:

By Governor Gary R. Herbert
Remarks given on May 15, 2012, regarding the  Medicaid data breach

Overview

On April 2 my office was notified of an information breach of health data on a server managed by the Department of Technology Services (DTS). The server contained both Medicaid and Children’s Health Insurance Program (CHIP) data. During the initial investigation, DTS discovered data from eligibility inquiries was also stored on the server. Those inquiries were sent from health care providers, or third-party billing entities, to determine if patients were enrolled in Medicaid, but those patients may not necessarily be Medicaid or CHIP clients.

The breach occurred March 10 due to an error at the password authentication level, allowing the hacker to circumvent the security system. The unauthorized transfer of information appears to have occurred March 30. During the breach, hundreds of thousands of Utahns—and even individuals outside of Utah—had their Social Security numbers and miscellaneous pieces of personal information compromised by hackers originating in Eastern Europe. As soon as the breach was discovered, DTS immediately shut down the server, the Department of Health began efforts to notify victims and the FBI began an investigation.

We are now able to confirm that this was an isolated incident. Furthermore, personal financial information,

such as bank account numbers or credit card numbers, were NOT stored on the affected server and would NOT have been compromised during the attack. The most sensitive information stored on the server was individual’s Social Security numbers (SSNs).  Approximately 280,000 people had their SSNs stolen off the server.  Other less sensitive information, such as names, dates of birth, and addresses was also stored on the server. Initially, it appeared that as many as 500,000 additional individuals may have had this less sensitive information compromised. However, because so much data was duplicate information, there are fewer victims than originally believed.

However, the compromise of even one person’s private information is a completely unacceptable breach of TRUST. The people of Utah rightly believe that their government will PROTECT them, their families and their personal data.

As a state government, we failed to honor that commitment. For that, as your Governor and as a Utahn, I am deeply sorry. I recognize the tremendous uncertainty and anxiety this episode has created for so many people across our state.

Protect and restore trust

As I have stated repeatedly, the State of Utah must restore the trust placed in it. From the onset, the State’s efforts have been to protect possible victims.

 Immediate Response

In that vein, the State engaged the media to get the word out and launched a hotline (1-855-238-3339) for information and referral and updated the Department of Health’s website to provide as much information as possible. While the State has no evidence that the compromised data has been misused, the Department of Health notified impacted individuals by mail as soon as positive identities and mailing addresses could be confirmed. Those individuals were offered one year of free credit monitoring through Experian, one of the major credit monitoring companies.

The service for adults is called ProtectMyID, and the service for households with children whose Social Security Numbers were stolen is called Family Secure. Enrollment in either of these programs includes an insurance policy

that  will protect an individual from bearing certain costs if they become a victim of identity theft. The value of those programs is up to $1 million for individuals and up to $2 million for families.

At this point, I want to stop and strongly encourage all individuals whose Social Security numbers were stolen to please take advantage of this free, valuable service and enroll as soon as possible. If an individual has received the official letter from the Department of Health, they must enroll before August 31, 2012. Enrollment entails providing an activation code included on the letter and includes:

1. A free credit report

2. Daily credit monitoring

3. Identity theft resolution

4. $1 million of identity theft insurance for any possible identity theft damages related to this incident.

If anyone has any difficulty understanding the letter or process, they should call the hotline number. Also, if you are the parent or guardian of a minor, please be aware the Attorney General’s Office now offers the Child’s Identity Protection (CIP) program to help prevent identity thieves from using a child’s information in the issuance of credit.

CIP provides Utah parents and guardians a free and secure process to enroll a child’s information with TransUnion, a national credit reporting company. The child’s information will remain in the High Risk Fraud database until the child’s 17^th birthday, when it is automatically removed. More information about the Child’s Identity Protection (CIP) program is available at cip.utah.gov.

The State has also been engaged in public forums and community outreach to provide assistance and information. Concurrently, the Department of Technology Services launched a full-scale review of security on all information systems statewide. Health Medicaid Claims data are now encrypted when data is at rest behind multiple layers of security on state systems, and not only when in transit.

 Independent Audits

And while this was happening, I called for a comprehensive, independent security audit of information technology systems—not only for this episode, but across all agencies. For that audit, the State of Utah has retained Deloitte & Touche, a respected and recognized global leader in risk, security and privacy services, and the team from Deloitte has now begun its work. Throughout their assessment, Deloitte will provide the State of Utah with recommendations on how we can better protect Utahns and their personal information going forward.

We are also taking a closer look at our response to victims, as we want to provide the best service possible to protect private data and help individuals going forward. For that review, we are contracting with Hogan Lovells to first assess our efforts in relation to the Health Insurance Portability and Accountability Act, ensure any potential harm to victims is minimized, and then develop mitigation plans for enhanced privacy and security policies. Furthermore, we will engage the Digital Health Services Commission going forward as technical experts to assist in our review of process and solutions.

Personnel Action

When it comes to private data, the State of Utah –that includes every one of its employees—must take that responsibility very seriously.  And frankly, we generally perform at a very high level. But as we know from this incident, this breach was the direct result of employees who neglected to adhere to established security protocols.

Simply put: There is no room for error. That is why we have redundancy and quality control processes—to ensure error does not occur. In this incident, process was clearly not followed.

Consequently, after my initial review, I find personnel action is warranted at this time. As is appropriate within state employee processes, two personnel are now being reviewed for corrective action or termination. And based on what I believe was inadequate oversight of this incident and the agency, I have requested and received the resignation of the executive director of the Department of Technology Services.

I have asked Mark VanOrden, IT director at the Department of Workforce Services (DWS), to serve as interim director at DTS and to fully cooperate with Deloitte in their independent review of the agency. A recipient of the notable Merrill Baumgardner award for excellence, Mark is a 28-year veteran of the State’s IT force, and has overseen the development of five major products for DWS. Mark is known for his ability to “think outside the box,” with a combination of management and technical skills. Right now, I am counting on and am confident in his ability to pull the DTS team together to focus on optimizing the value of Deloitte’s audits and our efforts to rebuild public trust in our IT systems and processes.

 Investigation

You may be interested to know that we have been told by law enforcement that cyber attacks on public information systems have increased by 600% this year. Cyber terrorists and hackers try to access our state systems a million times per day.  We have been generally successful in thwarting those attempts and we will remain vigilant in our effort to ensure Utah’s state security is rock solid. In fact, we are committed to enhancing our IT systems and processes to ensure an even more secure IT environment.

But I want justice for the people of Utah—for the potential impact to individual lives and families, as well as the brazen theft from a governmental entity. So we will remain engaged with the FBI and local law enforcement as they move forward with the investigation and as they work directly with the East European government in a cooperative effort to identify the thief or thieves who did this. The reality is that we have been told this could be a prolonged process and this type of criminal can prove difficult to apprehend. But the people of Utah have my commitment to see this through. I assure you, the State of Utah will exhaust every option available to bring these criminals to justice.

 Health Data Security Ombudsman

In addition to our ongoing efforts, including audits and investigation, today I announce the appointment of a HEALTH DATA SECURITY OMBUDSMAN. The ombudsman will coordinate three critical components of Utah’s public response to this incident:

1-      Individual case management for victims and families

2-      Credit counseling and identity theft resources

3-      Public outreach and stakeholder collaboration

I am honored and delighted to announce the appointment of Sheila Walsh-McDonald as director of the Health Data Security Ombudsman Office. Sheila will report directly to the executive director of the Utah Department of Health, Dr. David Patton. They are both here with us today.

Sheila is a trusted and experienced member of the public health and advocacy community, having dedicated her 33-year professional career to working on behalf of Utah’s disparate populations, with a focus on improving and strengthening the public and private programs that serve them. She earned her Bachelor of Social Work at Temple University in Philadelphia, Pennsylvania, graduating Cum Laude and completed her Master of Social Work at the University of Utah, with an emphasis on community organization and public policy. The vast majority of her career has been spent at the Salt Lake Community Action Program and, I can tell you, Sheila is both known and well-respected on Utah’s Capitol Hill.  As a health care, welfare reform, and homeless advocate, Sheila has worked closely with state agencies to assure the best policies are implemented to help low-income families and individuals become self-sufficient. Her office will be located alongside Dr. Patton, on the 4^th floor of the Cannon Building in Salt Lake City. Sheila will focus on case management, credit counseling and community outreach.

Remaining Considerations

There remain many unanswered questions, but as we move forward, we will remain focused on our objective to restore trust. We will only do that successfully when our systems are secure and our citizens and their credit are safe. We will continue to work with medical providers to address in practical ways how we can ensure their business needs are met without jeopardizing individual identities or security. We are committed to work with legislators to address both the costs associated with this incident, as well as possible statutory remedies that may be warranted.

A Note of Caution

It is imperative that I provide a strong word of caution at this time. We must all take heed and beware of scammers. There are those who will prey on the vulnerable and ill-informed. To the people of Utah, please know that NO ONE from the State will contact you and ask for information over the phone or via email regarding this incident.  I strongly recommend that you do not provide private information, especially not a Social Security Number or account information, in response to a phone call or email you DID NOT initiate. This incident is a tragic reminder that it is a different world in which we live. The dynamics continue to change and there is a very real and growing cyber risk.

Conclusion

As I conclude, let me reiterate: The State’s driving objective is to restore trust in the government of the State of Utah. This news is unsettling. It’s stressful. It’s personal. In fact, I have family members who received a letter from the Dept. of Health. The Lt. Governor received a letter. Family members of my staff received letters. For me, this IS personal. It significantly affects the people of Utah and thousands of families statewide. Because I am your Governor, THAT makes it personal.

Please be assured that the personnel for the State of Utah are not only reviewing what happened. We are not only sorry it happened. We are identifying the best ways to make sure it does not happen again. Cyber-security is the modern battlefront and we are all enlisted—you, me, our state agencies, the Legislature—all of us have a critical role to play. As the citizens of this great state do our part to protect ourselves and our families, the State of Utah is committed to do its part better.

Given at the Committee on Science, Space, & Technology
Energy & Environment Subcommittee, United States House of Representatives

Thank you Chairman Harris, Ranking Member Miller and members of the Committee. I am Samantha Mary Julian, Director of the Governor’s Office of Energy Development for the State of Utah, the epicenter of unconventional energy development in the United States. Utah is proud of being a major energy producer (11th Crude Oil, 9th Natural Gas, 15th Coal). Our office was created to be the voice for responsible energy development within our State.

I am not here to say that oil shale and oil sands will drop prices at the pump and immediately solve our Country’s devastating dependence on foreign oil. I am here to say that the responsible development of unconventional energy is happening today in Utah. Leading technology companies have settled in Utah, permits have been granted and efforts begun. Hundreds of millions of private dollars are being invested and jobs are being created as we speak. These critical resources in Utah are no longer on the horizon. The unconventional industry is operational in Utah and poised for continued growth.

These developments are important to note, as the federal Government needs to understand that these industries are commercially viable and proven. The BLM’s 2012 PEIS (Programmatic Environmental Impact Statement) as well as the 2010 GAO report “Energy-Water Nexus” should have recognized that oil shale and oil sands technology is quite advanced, with completed pilot and demonstration projects. The fact is that both industries have been commercial outside of the United States for over 50 years, with the most obvious examples being in Estonia for oil shale and in Canada for oil sands. Operators and technology from both countries are now in Utah and continually seeking public lands certainty and federal policy consistency.

The size of the oil shale and oil sands resources are so large it is difficult to comprehend. The United State Geologic Survey estimates that within Utah’s Uintah Basin alone there is the equivalent of over 1.32 Trillion barrels of oil. Simply put, this is more than the entire reserves of OPEC and enough to supply the United States with over 100 years of oil consumption.

Special interest groups often attack these industries claiming massive use of water that is anyways unavailable in our State. Not only do we fervently believe and assert that water is available for oil shale and oil sands development, but water is owned by the State in trust for its citizens, and as such it is subject to the State water appropriation system managed by the Utah State Water Engineer. Water is available both through existing water rights and through the general market system. The state can and will, consistent with the authority of the State Water Engineer, process applications to approve or transfer water rights for oil shale, oil sands or any other use. This process is well known and has been in place for over a hundred years.

In addition, advances in technology should lay to rest false estimates from f GAO’s Energy-Water Nexus2, BLM’s 2012 PEIS and special interest groups. The EcoShale technology from Red Leaf Resources utilizes low temperatures for heating and requires no process water3. Enefit’s Enefit280 oil extraction process uses no water4. Every oil sands company proposing operation in Utah recycles its process water.

We were asked to speak specifically about the challenges associated with the federal government’s involvement in unconventional energy. These challenges are critical as approximately 75% of oil shale and tar sands resources are under federal lands. This request is timely; as right now would be optimum timing for Secretary Salazar and the BLM to take steps forward in implementing policies and practices that support Congress’s mandate in the 2005 Energy Policy Act to establish a commercial leasing program for oil shale and tar sands. We are extremely concerned with this and ask the Committee to do everything in its power to encourage the current administration to embrace legislation passed by Congress.

Despite the lack of efforts of some federal agencies, the unconventional energy industry is alive and growing in Utah. Red Leaf Resources, a Utah technology company has just entered into a $200 million Joint Venture with the French oil company TOTAL and received mining permits for its first project. Mr. Cameron Todd from US Oil Sands has successfully raised significant funds and just testified about his efforts in our State. These two leading projects are both on State land and this is no coincidence. Utah actively manages its lands to promote the responsible development of its energy resources as it produces the main source of funding for our schools. Simply put, Utah educators and students depend on responsible energy development. As any operator will tell you-coal, oil, gas, wind, solar, shale, sands, etc- working on State land is not only more clearly streamlined but consistently regulated. We are very proud of this in Utah.

Besides making land available for responsible development, the State is leading additional efforts at providing pathways for responsible unconventional energy development. One of these efforts is an ‘Oil Sands Technology Zone’, where technology companies and entrepreneurs are given a rent-free lease on a ‘pre-permitted’ site adjacent to an active oil sands mine. This facilitates the technological advancement of sometimes nascent bench-scale technology and allows for ‘proof-of-concept’ at a level sufficient enough to remove technology risk for capital providers. We hope that this will enable the identification and successful development of the most environmentally friendly, economical oil sands technology in the world.

In addition, the State has created an Alternative Energy Development Incentive which is managed through our office. Unlike similar policy tools, this incentive was not created to make winners out of uneconomic energy resources. This incentive was created to encourage responsible energy development as Utah’s education system relies on it for funding classrooms and textbooks. It was created to make Utah the epicenter of unconventional energy and we believe it is. Through this incentive, a significant portion of State tax liability is refunded to responsible energy developers, including oil sands and oil shale producers. This incentive is based on previous tax payments and thus incentivizes meaningful development of resources at a commercial scale at no risk to the State.

Perhaps the most important effort made by the State to develop a pathway for responsible unconventional energy development is Governor Gary R. Herbert’s 10 Year Strategic Energy Plan. This plan is the product of stakeholders throughout industry, government, academia, environmental concerns and other important viewpoints. This massive undertaking aligned all relevant parties to identify goals and recommendations to provide a pathway for the responsible development of Utah’s energy resources.

The third topic we were asked to speak on was how the federal government could contribute to expand production through support for research and development. I will repeat that the most consequential assistance that the federal government can provide is to assure that BLM is consistent with what Congress has already mandated. There is, however, strong opportunity for the federal government to provide support on the R&D side as well. The current DOE procurement processes favor internal government R&D providers (national labs) over external providers (industry & research universities). If funding decisions were instead calculated proportionally (at a minimum) to a States GDP or energy production ranking, the R&D resources of Utah’s leading industry and research universities would increase from ~$3.5M to over $60M. Given that Utah’s industry and universities are a clear leader in unconventional energy R&D this would elevate the support for oil shale and oil sands from the federal government almost 20 fold. In the words of DOE Undersecretary Arun Majumdar, “the road to a secure future is to invent locally, make locally and sell globally.” Increasing Utah’s share of R&D funding to represent its size and that fact that Utah is an energy producing state would mean additional resources to concentrate on Utah’s critical unconventional resources, i.e. ‘inventing locally’.

I will conclude my comments by again requesting that Congress leverage its overwhelmingly bipartisan support for the Energy Policy Act of 2005. You instructed BLM in section 369 to create a commercial leasing program. Proactive work by BLM would positively affect our energy independence, national security, and decrease our dependence on foreign oil. Utah, as a robust and business friendly State, is successfully fostering this crucial industry. We would truly appreciate the support of Congress to make unconventional energy an R&D priority and to help federal agencies understand that taking steps to ensure public lands certainty and federal policy consistency would create an energy game changer. Thank you for your time and offering me the opportunity to speak today.

Sources:

http://www.gao.gov/assets/320/311896.pdf

http://www.icse.utah.edu/assets/archive/2011/assets/pdfs/red_leaf_nelson_2011_ucf.pdf

https://www.energia.ee/en/oil/international/enefit

The Bureau of Labor Statistics (BLS) recently released the employment data for all 50 states, and Utah is well-placed.

Utah’s 2.3% employment growth rate ranks #4, following:

North Dakota:  6.6%
Louisiana:  2.5%
Oklahoma: 2.4%
Utah/Kentucky/Texas:  2.3%

While we are not adding jobs at the pace we were during the economic boom that preceded the downturn, our job growth pace is one of the best in the nation and most importantly, Utah’s growth is broad-based

Utah’s unemployment rate of 5.8% is not statistically different than it was last month, according to the BLS.  It is the 10th lowest in the nation (12% in Nevada is the highest, 3% in North Dakota is the lowest).

The following maps illustrate the recent data. Click to zoom in.

We are here today because the federal government has failed to keep its promise.   That promise made to Utah in the 1894 Enabling Act – the same one made to every other state – was that the federal government would dispose of public lands in an expeditious manner.

Today the federal government controls more than two-thirds of all the land in our state.

This is not just a Utah problem – it is a western problem.  Approximately 90% of all federal lands are in the western states. In seven western states, federal land constitutes more than 50 percent of the total land area.  Western states must live on a daily basis with management of our lands by a distant Congress and by unelected federal administrators.

Royalties and severance taxes from grazing, resource extraction, and other responsible economic uses of public lands are curtailed – often by arbitrary and overly-restrictive federal stipulations on multiple use and development.

It means that Bob Abbey actually controls far more land in Utah than I do.

The bill I am signing today – House Bill 148, sponsored by Representative Ken Ivory – establishes a principle-driven framework for structured, civil public dialogue, a potential legal challenge, and a path forward to re-balance our relationship with the federal government.

The State of Utah must be restored to its status as a co-equal partner with the federal government,
and, in doing so, we hope to attain the educational parity our students need and deserve.

We don’t have all the answers.   Indeed, we need to ask more questions.  But this bill formalizes and legitimizes the engagement of policymakers in moving the conversation forward.

This bill is the mechanism to put the federal government on notice, a way to provide leverage for enhanced federal dialog,  an apparatus to facilitate a paradigm change when it comes to public land management, and the justification for conducting a thorough economic analysis of the financial potential of the lands in question.

I thank Representative Ken Ivory, Senator Neiderhauser and Representative Roger Barrus – the sponsor of a companion bill, House Joint Resolution 3 – for leading the charge on this effort in the Legislature.

I want to thank Chief Deputy Attorney General John Swallow and his staff for their counsel and advice as this legislation advanced.

I thank Senator Hatch, our senior senator, who has been fighting this fight since he arrived in Washington.

Congressman Rob Bishop has been a tireless advocate and leader in highlighting the interrelationship between public lands and education. He also always has great maps.

Senator Lee also played a key role this process. At one point early this year Senator Lee came to my office and told me he needed legislation like the bill I am signing today to shine a spotlight on this issue for his colleagues back in Washington. His early support proved to be a catalyst in making this happen.

Congressman Chaffetz, who sends his regrets (his son is actually leaving on a mission today), wanted me to convey that he is highly supportive of this effort.

Again, I would like to thank all those who have spoken to us today – and all the various stakeholders involved – for their leadership.

Federal control of our public lands puts Utah at a distinct disadvantage with regard to education funding and future fiscal needs.  State and local property taxes – on which states rely to fund public education – cannot be levied on federal lands.

The result: Utah students face a stark disadvantage in an increasingly competitive global economy.  Utah consistently ranks last in per pupil funding – and it is no coincidence that 10 of the 12 major public lands states are also below the nation’s per pupil funding average.

In order to bring our per pupil funding to the national AVERAGE, Utah would have to spend an additional $2.2 billion more annually on public education.  This would require a 100% increase in our income tax.

Tax rates at that level would devastate the economy, destroy family budgets, and immediately transform Utah from the best state for business to one of the worst.

The status quo simply cannot continue.

As Governor, I am looking down the road 20 or 30 years and realizing Utah must act NOW.

Today I am compelled to sign this legislation – and to lead this fight – because we are reaching a point when our educational needs—which are so critical to sustained economic growth—are colliding with broken federal promises and moribund federal policies.

This is just the first step in a long and difficult process, but it is a step we must take.

I invite all western states to join us.

This is a fight worth fighting.

Governor Herbert and the Canyon Craft Cabinets Family

By Governor Gary R. Herbert

A few weeks ago, I had the privilege of signing S.B. 129, Unemployment Insurance Modifications. The signing took place at Canyon Craft Cabinets, a family owned business in Salt Lake which will be greatly affected by the reductions in unemployment insurance premiums.

Chris Buckingham, owner of Canyon Craft Cabinets, who works with his three sons and a few other “like-family” employees, spoke briefly at the event and, frankly, he stole the show. Chris’ moving remarks brought the room to tears as he recounted his experiences as an honest businessman who fell on hard times due to the economic downturn. He emotionally spoke about having to let go valued employees throughout the years and expressed his heartfelt gratitude for the much-needed unemployment insurance reductions.

I am so grateful to Chris for perfectly representing what this legislation was all about: helping good, decent business men and women to get back on their feet and start hiring again. I know there are many other businesses like Canyon Craft Cabinets who will greatly benefit from this much-needed legislation and I commend Senator Bramble and Representative Peterson for sponsoring it, and the Utah State Legislature for unanimously supporting it.

Chris’s Buckingham’s Remarks:

Good morning. I would like to extend a welcome to all of you who have come to visit us here at Canyon

Craft Cabinets. We are honored to have you Governor Herbert and our state legislators here to visit our small business. We consider our business as an average small business trying to offer a quality product an affordable price.

I started Canyon Craft Cabinets on October 1, 1989. I started this business with a $5000.00 investment and a lot of faith and hard work. As my three sons grew to adulthood, I invited them to be a part of this company. I have spent the last 22 years along with my three sons, building a business that would be an asset to this community and provide a modest living for our families.

We have worked hard and played by the rules of government and we feel like we have succeeded in building a successful small business. I would like to share one thought with you that will demonstrate why we are so grateful to the state legislators and to Governor Herbert for this tax break that will ease a little stress of trying to keep our small business going.

In 2007 our gross sales was 2.9 million dollars with 33 employees. We paid $1800.00 in state unemployment tax. That was a 0.3% tax rate. In 2008 our gross sales was 1.7 million dollars with 21 employees. We paid $450.00 in state unemployment tax. That was a 0.1% tax rate. It was during the end of 2008 and all of 2009 that our sales dropped dramatically.

During the good times we saved as much money as we could, knowing that someday we would see a slowdown in business. When our sales dropped so dramatically, we used what savings we had to keep our employees hoping the economy would get better.

When our savings ran out, we were forced to lay off several of our employees. That caused me a great deal of sadness. I hated the thought of taking away a man’s income. We valued our employees and wanted to keep them. However, we had no choice. We bring back as many employees as possible, temporarily, when we have work enough for them to do. However, it is only temporary.

Last year in 2011, our gross sales were 960 thousand dollars with 11 employees. We paid $13,200.00 in unemployment tax. That is a 5.9% tax. Since 2008 we have suffered an almost 6000% increase in our unemployment tax rate. It has been extremely difficult to continue to operate under such a heavy tax burden along with all the other taxes we must pay.

Before this tax break, that Governor Herbert signed today, we estimated, that this year, in 2012, we would probably pay as much as $19,000.00 in unemployment tax. That is an 8.1% unemployment tax rate. That would have been an almost 40% tax rate increase in unemployment tax over last year.

We are grateful to the state legislature and to Governor Herbert for this tax relief. We hope that more tax relief will be coming our way. It is so difficult to pay 6% or 8% unemployment tax along with all the other taxes with which we are burdened.

Thank you Governor Herbert and thanks to you state legislators for this tax relief you have given to us.

Chris Buckingham, Owner of Canyon Craft Cabinets, Giving His Remarks

]]> http://blog.governor.utah.gov/2012/03/unemployment-insurance-modifications-help-a-utah-family-owned-business/ http://feedproxy.google.com/~r/UtahGovernorBlog/~3/MZeCKeVMoJw/ 2012-02-28T16:40:48Z govpubliz By Governor Gary R. Herbert As Published in the Deseret News 2/26/12  As 2014 looms and the requirements of the Patient Protection and Affordable Care Act threaten to become permanent, virtually every state is seeking a solution to an impending Medicaid-induced budget crisis. In Utah, Medicaid consumes 21.5 percent of our budget, nearly double what [...]

By Governor Gary R. Herbert
As Published in the Deseret News 2/26/12 

As 2014 looms and the requirements of the Patient Protection and Affordable Care Act threaten to become permanent, virtually every state is seeking a solution to an impending Medicaid-induced budget crisis. In Utah, Medicaid consumes 21.5 percent of our budget, nearly double what it was a decade ago, encroaching on critical education funding and elbowing out social service, transportation and corrections needs. For Medicaid to survive and state budgets to balance, states must both modernize Medicaid and bend the health care cost curve.

Utah set out to do just that, and our solution garnered the bipartisan, unanimous support of the 104-member Utah State Legislature, as well as stakeholders across the spectrum. But such broad-based support was inadequate for federal observers. Following a prolonged approval process, the proposal was squarely undercut last month by Washington, D.C., bureaucrats who prefer the failed federal status quo to a state-initiated solution.

The framework of Utah’s solution was principle-based and outcome-driven. The principles included caring for our most vulnerable populations, protecting long-term program viability, promoting responsibility and preserving individual choice.

The desired outcome was simple: improve the way we deliver health care to the most vulnerable populations while protecting Medicaid’s long-term viability. To achieve the outcome, Utah’s proposal includes five innovative components:

1) Change financial incentives for doctors, rewarding quality instead of quantity.

2) Align Medicaid’s growth rate with that of state general funds.

3) Offer a premium subsidy option to provide Medicaid clients access to a health plan offered through their employer or the Utah Health Exchange.

4) Modestly increase co-payments to curb over-utilization and encourage appropriate care.

5) Reward those who actively maintain or improve their health.

These are seemingly sound requests. But D.C. didn’t get it. Staff at the U.S. Department of Health and Human Services (HHS) — the agency from whom we need approval to enact our proposals — denied many key provisions, effectively gutting Utah’s solution. What was baffling was the rationale, or lack thereof.

First, bureaucrats rejected our cost containment strategy, even though Oregon has used precisely the same approach since the 1990s, an approach reauthorized by both the Bush and Obama administrations. If one state has used a strategy that works for almost 20 years, why can’t other states follow suit?

HHS also initially rejected our idea of incenting patients to get healthy or stay healthy. Once we pushed back, a higher level officer reviewed the situation and reversed course. While we appreciate their acknowledgement of their own flawed reasoning, it also illustrates the inconsistent and capricious nature of their review process.

Of course, this is not the first time Washington has demonstrated a stubborn and biased unwillingness to allow Utah to manage our Medicaid program. Last fall, after three full years of inaction, HHS rejected a separate proposal to allow Medicaid clients to choose a private individual policy that better meets their needs. In their denial letter, staff suggested they simply didn’t believe Utah Medicaid recipients could make the right choice for their families.

In order to resolve this arbitrary denial of state solutions, I have scheduled a face-to-face meeting with Health and Human Services Secretary Kathleen Sebelius on my next trip to Washington. On behalf of the people of Utah, my message will be clear: re-examine your agency’s arbitrary and unsupportable position on our Medicaid proposals, and restore the role of states as true partners in what used to be a state-federal partnership.

The role of the federal government should not be to stifle and suppress state innovation and solutions to our Medicaid morass.

To the contrary, the federal government should look to the states — the true incubators of innovation and ideas — for solutions to the challenges besetting both Medicaid and state budgets. Who knows? We might have more than four or five good ideas to avert this crisis. (Please see above, Washington.)

by Governor Gary R. Herbert

A few months ago, I had the opportunity to visit the site at Camp Williams where the National Security Agency is building its first Comprehensive National Cyber-security Initiative (CNCI) Data Center – which will be called, simply, the Utah Data Center when it is complete.

TheUtahDataCenteris a nearly $2 billion investment in our country’s national security infrastructure.  Thousands of local construction workers have been engaged to build this 1.5 million square foot facility.  You could fit 10 Cabela’s stores inside a 1.5 million square foot building, just to give you some perspective.

It is the first facility in the world expected to gather and house a yottabyte – or one thousand trillion gigabytes – of data.  More importantly, the Utah Data Center will also house up to 200 high-paying jobs. Utah was picked over 37 other locations to house the data center.

Utah’s technology infrastructure, its transportation infrastructure, and its industrious, highly-educated, and bi-lingual workforce were all identified as reasons why Utah prevailed in the fierce competition to house the NSA data center.  However, perhaps the most significant factor in the NSA’s choice was the cost and availability of electricity.  As one NSA official put it,Utahoffered “an abundant availability of low-cost power.”

The Utah Data Center will require an estimated 65 megawatts of electricity for its operations – enough electricity to power 40,000 homes or the nearby city of Riverton. One expert estimated that the NSA could end up spending up to 95% less on electricity in Utah than if it had built the data center at the NSA headquarters compound in Maryland.

Even if the NSA were willing to pay Maryland’s high electricity rates, it was unlikely that Marylandcould have provided the needed power in any case. The Baltimore Sun began reporting all the way back in 2006 that Maryland utility companies were having trouble keeping up with the NSA’s power demands.

With the Utah Data Center, our “abundant availability of low-cost power” has brought billions of dollars of investment, thousands of jobs, and millions in ongoing revenues to our state. The Utah Data Center is a dramatic example of the direct, tangible benefits which Utah’s energy supplies bring to our state – but it is hardly the only example.

Utah’s stable and affordable energy gives us a major competitive advantage over other states, and is one of the major reasons companies are choosing to relocate and expand in our state. Last November, Forbes ranked Utah as the best state for business for the second consecutive year.

Forbes specifically mentioned Utah’s energy costs – an impressive 31 percent below the national average – as one of the major factors in our repeated number one ranking. In order to protect Utah’s energy advantage, we must secure our supply of stable, low-cost energy, and we must do it now!

My administration is aggressively promoting responsible energy development in Utah. Last year, I released Utah’s first 10-Year Strategic Energy Plan.  To create my Energy Plan, I brought together a task force of the best and brightest minds from industry, academia, government, and advocacy groups.

This diverse group of stakeholders was tasked with creating a framework to secure our energy independence. The plan they created is not a static document, doomed to live on a shelf, but is designed to evolve with time.  It is, however, also a document which has action items which we are already implementing, and goals which we are on our way to achieving. And, in order to ensure that we stay on track, my Energy Task Force – many members of which are here with us today – continues to meet and to guide the implementation of our plan recommendations.

I would like to touch briefly on a few of the plan recommendations which we are currently pursuing.  First is to develop a strategy to keep public lands open for responsible energy development.

One of the major challenges for energy development is that many of Utah’s natural resources must be extracted from federally-managed public lands. While we have made some progress in persuading the federal government to site and permit oil and gas wells, there remain great challenges ahead.

This is evidenced by the fact that, just a week-and-a-half ago, bureaucrats from the Department of Interior took nearly 1.8 million acres of Bureau of Land Management land off the table for oil shale and tar sands development. The BLM director said it wants to encourage “research and development” first – and I am as big a fan as anyone of R&D.

What the BLM is really doing, however, is asking industry to invest millions of dollars of their hard-earned capital to develop a resource which the BLM itself might never make available. The oil shale and tar sands in Utah, Wyoming, and Colorado have the potential to be one of the greatest energy resources in the world.

In his last State of the Union address, President Obama called for greater development of our domestic energy resources.  How that is to be accomplished when energy producers are shut down and shut out by bureaucratic fiat remains unclear. We have demonstrated – in the Uintah Basin and elsewhere – that developing our energy resources and being good stewards of the environment are not mutually exclusive propositions.

We cannot – and we will not – let the federal government halt responsible energy development in Utah. I will continue to work with our Congressional delegation, our Legislature, and my fellow Governors to fight for our rightful access toUtah’s energy resources.

Another recommendation of my 10-Year Strategic Energy Plan is to enhance technology advancement. Because we owe it to our children and their children, we must innovate safer and cleaner ways to extract our natural resources and utilize energy. As Governor, I am calling on the private sector and our major universities to lead out. Our goal is to create an “energy research triangle” that launches Utah into a new era of energy technology innovation.

I have often said that Utah’s greatest natural resource is its people. I firmly believe that no state has a spirit of innovation or a culture of industry to match Utah. Hence, Utah will be the incubator of technologies which will allow us to extract, conserve, and produce energy in a more efficient, safe, and environmentally-friendly way than we ever have before.

We are already seeing commercially-viable energy technologies emerge from our research universities and from our public-private partnerships.  Some of those technologies are already making a difference both here at home and in countries around the world. Securing our energy future means that not only will Utah continue to be in position to export energy, but Utah will also be poised to export homegrown energy technology.

A third plan recommendation is to reduce energy consumption statewide.  As noted in my plan, energy efficiency is our cheapest and most readily-available resource. Utah is already making progress in our energy-efficiency efforts. We were recently recognized by the American Council for an Energy-Efficient Economy (ACEEE) as one of the “most-improved” states in the nation, and the highest-ranked state in the region.

Promoting reduced energy consumption also helps with one of the major challenges we have with energy development in our state – the issue of air quality. We cannot control the weather, but neither can we ignore the human and economic consequences of poor air quality.

Just over two weeks ago, I announced Utah’s first statewide air quality initiative – the Utah Clean Air Partnership or U-CAIR. U-CAIR will bring together government, business, and households on a voluntary basis to set achievable and vital air quality goals. The simple message of U-CAIR is this: Everyone can do something to improve Utah’s air. And one of the simplest things everyone can do is to reduce their energy consumption.  Reduced energy consumption leads to reduced demand for energy production and reduced emissions.

Another way we can reduce our emissions and improve our air quality is, of course, to increase the use of alternative and renewable energy resources. I believe that we would be short-sighted and foolish not to explore the possibilities and potential which alternative and renewable resources present. And, in fact, we have wind, solar, hydroelectric, and geothermal resources currently functioning and producing energy in Utah.

However, I also believe that all solutions and opportunities must be based on the principles or free markets and free enterprise. We cannot continue our energy independence – not secure our energy future – on the back of technologies which cannot compete without taxpayer subsidies and which have not solved the problems of intermittency and storage.

Again, I believe thatUtah’s human resources will lead the way to unlock the potential of alternative and renewable resources to compete in the free and open market through continued research and innovation.

To conclude, I want to issue both some commendations and some challenges. First, I want to commend you – those here in this audience and those who you represent – for your contributions to our state.

• There are over 16,400 people who are directly employed in energy jobs in Utah.
• Those energy jobs pay, on average, 191% of the state average wage.
•  There are over 800 energy firms currently doing business in Utah.
• 2.5percent of Utah’s total wages are from energy jobs.

Last fiscal year, direct revenues to the state from the energy sector totaled more than $267,500,000 – money which was used to fund critical needs like education, transportation, and human services. The energy sector is a vital part of our state’s economy, and a vital part of the lives of Utahns in so many ways. Thank you.

I would also like to leave you with three challenges:

1. Use your collective and individual influence to advocate for responsible energy resource development in our state.I have committed to doing everything in my power to fight for Utah’s right to responsibly develop our natural resources, and I ask you to join me in that fight.
2. Promote policies and practices for improved air quality. I invite each of you to become a U-CAIR partner – and to encourage your friends, businesses, industry groups, and local governments – to become U-CAIR partners.  As I mentioned, everyone can do something to improve Utah’s air. You can find more information on the U-CAIR program at ucair.utah.gov
3. Aggressively pursue technology innovations in energy efficiency and development. Some of you in this audience are doing research to develop those technology innovations.  Some are funding that research. All of us can create a demand for those technology innovations through our individual and collective actions. The choices we make in the free market will either create the demand which will fuel the technology innovations of tomorrow, or will reinforce the status quo and put us on a path of diminishing returns and decline.

I am optimistic aboutUtah’s future.  I am confident that, by working together, we can preserveUtah’s competitive advantage now and into the future. By doing so, we can also preserve Utah as the best state for business in America, and create opportunity and prosperity for Utah’s citizens

Citizens have a right to know where their precious tax dollars go.  As a result, the State of Utah provides easy access to state and local government financial data for 380 public entities at transparent.utah.gov.

Officially launched in May 2009, transparent.utah.gov includes revenue, expenditures, employee compensation, and financial information for state agencies, higher education institutions, public education (local school districts and charter schools), and transit districts.  Entities with total budgets of less than $1 million are currently exempted by the Board from reporting.

I am also pleased to report that local governments, in compliance with legislative mandate, have made significant progress adding their financial information to transparent.utah.gov.  Currently, 100% of counties, 96% of municipalities, and 84% of local and special districts have posted their revenue and expenditure information.

transparent.utah.gov is free.  I invite all Utah citizens to check it out and see where your tax dollars go.