THE MISSOURI GUBERNATORIAL RACE: INTERVIEW WITH MEL CARNAHAN

On Friday, Oct. 24, Democrat candidate for Missouri Governor, Mel Carnahan, was interviewed by Southeast Missourian Editor Ken Newton; Managing Editor Joni Adams; Political Editor Jim Grebing; and Perspective Editor Jon Rust. A similar interview with the Republican candidate, Bill Webster, was printed in Wednesday's newspaper.

MR. CARNAHAN IS LIEUTENANT GOVERNOR OF MISSOURI. FOLLOWING IS THE TRANSCRIPT OF THE ONE HOUR INTERVIEW.

First of all, what makes you distinctly different from Bill Webster?

Well, I think almost everything. I've got a long career in public life. I've been in the country law practice and in small business. I was co-owner of a manufacturing business for 15 years with my brother, did the financial management, had to make payroll. I think anyone who has had that experience for that length of time is never quite the same and so when my opponent very cavalierly talks about me not understanding small business and business in general, I think I understood it before he was born and have a more thorough knowledge.

Frankly, I'm in a position to create an environment in the state for the expansion of small business, for the conversion of education, the creation of jobs in the forum of state government. And I've gotten some of that experience all along the way whether in my community, in many offices in which I've served, and frankly, I have a commitment to these changes that is unmatched.

I used to say in the primary, we had five candidates at that point, there was not anyone close to me with my determination to make the state what it ought to be. Also truthful that is getting to be a rather scarce commodity. I'm sick to death of Joe McCarthy ads and ads that try to get me in the Second Injury Fund scandal. I think you know that I'm not in it.

I'm not in that scandal and my opponent is and he sullied himself, he embarrassed himself and all of us and I'm going to make it clear that people understand it. There is no fabrication, there is no exaggeration, it's just a way of comparing records. I think that's important.

There's a lot of talk that government in the 1990s needs to be doing a little more with less or at least doing more with what it's got. Do you agree with that? How will state government do that in your administration?

Absolutely (I agree). That is the wave of now. Sometimes you say the wave of the future ... it's now. The governor is not going to have essentially more resources, it's going to have to work with what it has and try to be a little more efficient, leaner. My priorities are education, creation of jobs, and reform the state government. Reform the state government side is the side where we're going to have get those efficiencies. I am absolutely committed to doing that. I started it as state treasurer. I literally made millions of dollars in savings to the state with management changes, doing it better. I know that as governor we can do a lot more than I was able to do as state treasurer and we are going to do that, we're committed to it.

Discuss your broad plans for restructuring state government.

We're going to assess that using state employees, using outside borrowed executives, and retired executives. We're going to assess the essential functions of what we want to do for state government, what services are essential. We're going to look at how we're providing them and whether we're doing that efficiently or not and then we're going to find, of course, a number of them that are being provided are probably not essential. Those are the ones we're going to begin to pare.

But I have not prejudged the study because I'm going to let it be the result of the study. I have not prejudged what it is but I know my experience as treasurer is that when we bid the state bank account we literally saved millions, the treasurer notwithstanding. We absolutely did save millions. We included modern cash management. There was very little conception in the state of the time value of money.

We laid the foundation, by the way, for it to be tightened up later, which I think (Wendell) Bailey has done some of but we strictly made the major change from the past. We computerized the office. There was not a single computer in the state treasurer's office. There were a couple of terminals to search for lost checks out of the bank. That's all you had in there and so we computerized it. What it is, it's just good management.

People say why didn't you tout yourself more? It's not my style. I thought it was my job, I did a good job.

Your opponent has been quite specific in his plans to restructure state government, with zero base budgeting and sunset rules being starting points. Are these in your plans, as well?

Yes. We'll use the zero base budgeting. There's been proposals in the legislature to do that. I'm going to try to find some way to do it where we'll cycle them, a few departments this year and a few another and let them be staggered, otherwise we're going to have to put on a big bureaucracy to administer zero base budgeting.

On the desegregation issue it seems like if you boiled the plans down, you have the Webster/Steelman plan, saying the state should continue to fight and you have the Carnahan/Nixon plan that says it's time to seek a solution. So, can you contrast those approaches and why is yours better?

First of all, I'm going to start with my main thesis: It's time to cut our losses. I think everybody will agree with that. Under the Webster regime, over $1.4 billion in court-ordered payments and it's been on the thesis for fight, fight, fight. And, it's been an unsuccessful fight. The plaintiffs are playing us for fools.

Almost anyone who knows anything about this issue realizes that the state's stance is actually hurting. Under his approach there is no end in sight. Either in money or time. Under my approach we are going to seek a date ending, three to five years out in the future, but there will be a time when we will come out from under court-ordered desegregation. And that we'll take our present obligation, around $400 million a year now and growing, and we are going to taper that to that zero point. And we are going to try to seek a plan that will get us to that point.

By the way, my opponent flips out, "Oh, he's going to coddle up to the plaintiffs or he's going to give a blank check." Well, I'll tell you one thing, this country lawyer doesn't give blank checks for himself, his clients, or if I'm working for the state - the state. There will be no settlement, if it's not a better settlement and I can know that before we sign off. So there is no danger whatsoever of this being a worse approach. There's every prospect that it'll be a better approach. This idea that we stand here and fight, fight, fight, to the taxpayer's last dollar is foolishness.

I say it's time to get real and let's quit wasting money on attorney's fees. They spent $12 million on attorney's fees. That would run a lot of schools. I say let's spend the money we spend on education and kids, which is going to be my primary goal. I believe we can do a lot more of that and I think we can get started on it soon after a new administration starts.

There have been two recent supreme court decisions, Oklahoma City and Atlanta, that have changed states' desegregation responsibilties. In effect, saying there is an end to the responsibility at a certain point. Do you think these decisions impact the situation here in Missouri?

It will absolutely be taken into account in the settlement negotiation because there are some indications we don't have to do the extreme things. I think the former decisions were extreme. I disagree with them. No one disagrees with them more than me. The fact is you've got to deal with them. You've got to deal your way out. So I would use the benefit of any decisions that are slanted our way. That could be an element in the settlement discussion.

Yes, it gives me further hope. I think there was hope of settling before those. I think there's more now. By the way, he criticizes me about settling. He secretly tries to settle. Which way does he want it? Is he the only one that can settle a case? I don't buy that. Frankly, the people of Missouri won't either.

What do you see as the state's role in dealing with the problem of affordability and availability of health care?

We are going to have to enter the field, I favor national health insurance, but I think that will go slow. So in the meantime we cannot leave 650,000 Missourians without coverage and many others with inadequate coverage.

I favor that approach have the state help small businesses form group-buying coalitions probably through Chambers of Commerce, regional collections obtained from the Chamber so we can get some rates like the big companies. It's my opinion that many companies would provide health insurance if they could buy it at reasonable rates, or least more reasonable rates. That's one of the things I would foster.

I would foster health education in the schools. It's estimated that 60 percent of our school children have a risk factor for heart disease due to poor diet, lack of physical activity or smoking. If by education we could reduce those factors dramatically, we would have a multiplier of savings down the line. There are a number of things we can do. A big emphasis on preventive education, a big emphasis on providing what care we do provide in clinics as opposed to the emergency room. We're paying about 10 times what the cost of this care is for the indigent, those without anything.

We're not doing it in a sensible way. I want to take one by one, a few specific things where we can contain costs and broaden the accessibility and I think that's the role of the state.

You mentioned national health insurance, what about national health care, a Canadian-type plan?

No, I have not gone that far and I think, I do favor a plan that uses market forces to control costs. The manage care approach, using market forces, I think rather than just government bureaus to set rates. So, I do favor some of the market forces in that for part of the cost control. Also a lot of emphasis on prevention. I think both of those have, what the attractiveness of those are, is that they'll permit us to have a lot more health care on the same dollars we're spending now.

How do you feel on the universal health care approach that Gail Chatfield is pushing in legislature?

I have not signed off on that. Me and my party have a lot of pressure to do so but I did not do so. The things I have described are not of that plan.

Do you feel the state needs more money for education or more education for the money or a combination?

Both. And my plan does both.

Can you discuss your tax increase, you've drawn some criticism for your $290 ... $190 million ... tax increase?

Well, you would think so but let me tell you what it does first and then I'll talk about the other side. The press always wants to ask about the tax increase. I think you ought to be more responsible, I think you ought tell a little bit about what you're going to get. Nobody wants a tax increase. I don't. Nobody does. But I do want some improvement in education, I'll tell you that, and that's a commitment of mine.

I came out with a 15-point plan called the Carnahan Plan for World Class Schools. I'm going to reduce class size in kindergarten through third grade. Now everybody agrees that's a great indicator of quality and output and success. Webster's for it. Everybody's for it. But he's going to do it with a magic wand and I'm going to tell you how we're going to pay for it. Early childhood education, it's another one but it's simply not extended to near all the children. Teacher development. We don't do a very good job in continuing education for teachers. We've done it in a lot of other professions. But we don't have much of a system and we don't pay for it. So we're probably getting about what we've invested.

We've got to have teachers up to date. There's a big component for that. There's a big component in my plan for a true vocational track for the children that don't want to go for four-year college degrees. We don't do a very good job of public education for preparing those people for work.

I say we're in an emergency about education. We can't have a continued downward slide of test scores and an increase in dropout rate. We won't have a teacher worth having in this state if we don't have better education, if we don't prepare a work force, prepare people for a better future.

We've got some things in there, a lot of incentive based things and a lot of accountability, it's all in the plan. Okay, that's what we're going to get. I have said we can get some of that by shifting money, by savings, and I've even identified it in the plan. To reduce class size takes 1,700 teachers. You just can't snap your fingers and get pay for 1,700 teachers. It costs money, it's a big component of our plan and it's important.

So I've said there's going to be modest cost and we're going to have to face them and I say the way to do that is to put that before the people. I've said that always. My opponent said, "Oh, he put it in later." I didn't either. It's always been in there. Just another indication he tries to distort my plan. And you say, "Well, you're putting out a false hope." I think not. I think not but I don't think Proposition B last year was a true referendum on education. By the way, it was a bigger plan than mine. Mine is a more modest plan than that, and Bill Webster supported that.

He's very shrill to say I'm going to run off business by my plan. He supported a bigger one. Did he support a plan that was going to run off business? Ask him. See, this shrill election rhetoric that you happen to be hearing right now, he doesn't believe that. But the fact is that my plan is so specific that you will be able to calculate its effect on the Cape School District and on the Jackson School District and on the Benton School District and on the Sikeston School District. You could not do that with the plan last year. And of all the things wrong with it, that was the fatal flaw, because people would come by and say, "I'm not going to give you any money, it's all going to Kansas City, St. Louis, somewhere else." We'll have in there what you're going to get and what it's going to cost.

And it will be positive. We will have positive things so that you can get these programs to reduce class size, you can get the early childhood education, you can get these specific things. And, you can have a debate in every community: Is this proposition that Mel Carnahan is promoting across the state, is it positive for our school? And you'll look at it and say, well, we believe it's positive for our school and we do need these things and I think that will become more a true referendum on support of education. And I'm going to get out and lead it.

I'll tell you what this is, it is the same way to promote a levy or promote a bond issue, or any kind of an issue for a community thing. That's the way you do it. You get Democrats and Republicans, and Conservatives, Liberals, laborers, farmers, old folks, you get everybody and you get them all involved on your committees and you go forward. We're going to have to do that as a state community.

Let's look at Webster's plan. He admits we need about the same kind of money we do. But he's going to borrow, he says, and he does it under a cloak.

In the debate the other night he reduced it down to even doing it just for one year. Well, doing it for one year won't get my plan, his, or anybody else's. The capital cost of desegregation has been running between $60 and $90 million a year. And so, if he's going to do, I thought he meant $200 million a year, and I think that is what he meant when he first said it, he's just going to borrow it. Every $200 million you get costs $450 million to pay back over 20 years at current good interest rates. And so if he ran it for three years in his first terms of administration, if he was governor, he would have $1.4 to $1.6 billion in repayment.

By the way, he puts it in words like this: he says borrowing will free up money from the other fund as though, free - you can just have this money for education. And he keeps referring to it'll be tax exempted, as though tax exempt obviously to the investors, but it has to be paid for with taxes. And so he's tried the back door approach which basically will call for a tax increase down the line. So it's Webster's back door tax increase.

He'll say and do anything to get elected and what he's doing is he's saying, "Well, I can get you some little way to patch this through and then our children will pay for it later." That's what's been the Reagan approach. That's why we have the $4 trillion deficit.

Let me ask you about your position on school choice...

In my plan there is a little bit of experimental public school choice; in other words, within-district public school choice. Experimental. I have not embraced it as a big concept. The wholesale adoption of school choice, no.

Does your plan speak to higher education as well?

No, it does not. My basic stance on higher education is that we've got to broaden access to higher education. I do have one element of mine that sets up a universal scholarship plan that does make some more money available for college students, that's even in my elementary secondary plan.

Would that be an expansion of what's called Bright Flight scholarships now or is that a separate program?

It's separate. I'm very high on the Bright Flight, it's an excellent plan. I will be very supportive, I'm very committed to public education in secondary and elementary and higher education but I do want to complete the plans for fixing the missions of the various universities and once they are defined then support them very fully in each of their niches. So that is an ongoing process which I support and I will be very supportive of higher education but I do not have a specific plan for that.

Do we need one-third of the state budget allocated for education?

I'm quite sure there will be under our plan. I think that Blunt was the big one for that one, that plan. You see that's another playing the numbers game. I think the people that were doing that were really trying to act like I can get you something for nothing. Under my plan, if adopted, I think it will get us about to that. But I think just to say well, let's adopt a constitutional amendment that would make a third, or something, and not really do anything about the tax base or about the sources. I think that is just fooling people. So, I have not gone at it that way.

There's a lot of talk that legislature needs to act next year on a plan, a new foundation formula or it will run into potential court action requiring that. What kind of role will you play in the next legislative session as governor in trying to get a new formula written, enacted, and funded?

The legislature absolutely does need to revise the foundation formula. It came close the last two years. There are two lawsuits pending that will, in my opinion, be ordering that if the legislature does not do it. So I take it as assumed in my plan that the legislature will do that first thing.

Frankly, with the polarized differences, something that has to be compromised to get another formula through.

As far as the state's overall tax structure, studies indicate Missouri's tax structure may be a little aggressive in relying on the sales tax, taxes like that. Do you favor an overall study of Missouri's tax structure to try to reallocate it for fairness, not necessarily for additional revenue but to shift the burden in a fair manner?

I think that would be an excellent idea. I think that I do not put that as one of my top three priorities.

I am somewhat doubtful that the public will believe that you're going to have tax reform and not raise their taxes. I think they'd probably be way ahead of us and say that they're very suspicious of that.

What do you see as state government's role in the issue of abortion?

I think we're gotten too far in the personal privacy of decisions on both abortion and the right to die. I do not favor more restrictions and I have made that very clear. I have never supported the constitutional amendment to bar abortions and we've had a very zealous administration and attorney general in this area. The attorney general personally argued the case of Webster vs. Reproductive Health. It went all the way to the Supreme Court, argued for a total repeal in Roe vs. Wade to put the law back to the dark ages, back to the days of the coat hanger and so forth. I think that was wrong. I think he's an extremist.

Explain your plan for bringing jobs to Missouri.

I came out with a plan called Jobs 2000, which is my description of economic development plans and it calls for a very different approach in economic development.

I am going to emphasize existing business, small, medium size existing business. Eighty percent in new jobs will be created by these methods and we're going to give them technical assistance, marketing assistance, whatever we can find that they need to stay in business to retain jobs and to encourage them to expand.

We by law cannot do for an existing business what we can do for a new business and that's wrong. People have talked about this all my adult life and yet it's not become state policy so we're going to put this emphasis on existing business and we're also going to put the emphasis on localities, on your local economic development efforts. I believe that economic development decisions are best made at the local level with state assistance and that's going to be the philosophy that we follow.

The Second Injury Fund has become a big issue in the campaign. Would you discuss that from your perspective?

We've used documented articles from papers and from other sources and if you put them together, they'd be like a big city phone book. It wasn't something our campaign dreamed up. Let me give you just give you a little review of some of things that I think are absolutely established fact, not the kind of stuff that Webster's putting out in his ads.

By law Bill Webster appoints the lawyers who represent the Second Injury Fund. Now notice the feedback on that. Now those lawyers that he represented were also permitted to sue the fund, an extraordinary thing. Until the scandal came out, I didn't know that lawyers could do that.

Computer analysis of 11,000 cases by the St. Louis Post-Dispatch revealed that on the average claimants lawyers who gave money to Webster received settlements that were 50 percent higher than people who didn't play the game. That's not the worst. Those that made claims against the funds but were also his designated defense lawyers. See, he got them to go both ways, they got settlements that were three times higher than average. Again this was the Post-Dispatch that put all the cases for the last four years in a computer and analyzed them.

Since he became attorney general, the expenses of the fund, the claims against the fund went from $3,500,000 to $30,000,000. Part of that was inflation; it wasn't all of it, but that was part of it. A recent actuarial study released early this month shows the Second Injury Fund was $135,000,000 in the red, and that a 50 percent tax increase in the surcharge that businesses pay on their workman's comp insurance to get the fund solvent.

Are you implying that all of the increases in the Second Injury costs are Bill Webster's doing? Didn't the redefinition of what a second injury is, expanding the number of claims, impact the situation?

No, I'm not implying that. But he was in charge of the system. He created the system. And now there's a federal grand jury investigating the Second Injury Fund. That's not my charge, that's in the papers and that's been verified. The person leading the grand jury is Joseph Savage, a Justice Department expert in public corruption cases. He was brought in from out of state to lead this inquiry. There's no other person that we know of that was called before the grand jury that's a public official except Bill Webster.

There's a pattern of abuse of office, it is factual. He can try to call me Joe McCarthy or whatever he wants to; I'm bringing out the record and it is important, it is an integrity issue. Absolutely is. I think it is a great conflict.

How would you try to restructure the welfare system. Do you favor welfare reforms?

We must have welfare reforms. The system we've got may have been well intended but is not working. We can't have generational welfare recipients. We've got to do things that move people from the welfare rolls to the work rolls so I support a workfare system, a well crafted workfare system and that would be a system where someone who did not have the care of a small child or disabled person would have to, as a condition of getting benefits, do some work-related activity, whether it be job training, a job search, some sort of incentive based system.

We've got to get back to the idea that welfare's temporary. The way it is now is absolutely wrong. There are a number of models of alternative service delivered, that show promise. Some of those are happening in the Ashcroft administration.