Station:   KCFR, 90.1 FM

Guests:    Stapleton, Walker

Link:        http://www.cpr.org/news/story/candidate-for-governor-walker-stapleton-republican-on-the-record

Date:        May 22, 2018

Topics:     Investment Banker, Technology Startups, Real Estate Investment Company, Infrastructure, Transportation, Transit, Sales Tax Increase, Bonding, Ballot Initiatives, Business Community, Savings through Efficiencies, Sources of Revenue, Unchecked Fraud and Abuse, Medical Marijuana System, Colorado Department of Transportation, Teacher Salary, Teacher Protests, Public Employees’ Retirement Association (PERA), Defined Contribution, Pension, Employee & Employer Contribution, Legislative Session, Line Item Transparency, Charter Schools, Tom Boasberg, Denver Public Schools, Healthcare Exchange, Medicaid Expansion, Obamacare, Affordable Care Act, (ACA), Managed Medicaid, Community Health Clinics, Emergency Care, TV Advertisement, Support for Donald Trump’s Tax Cut and Jobs Act, Immigration, Sanctuary Cities, Law Enforcement, Enhanced Border Security, DACA, The Wall, Red Flag Warning Bill, Due Process,

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HOST RYAN WARNER: This is Colorado Matters from CPR News. I’m Ryan Warner. We are introducing you to the candidates for governor, ahead of historic primaries June 26. Historic because they’re open to any voter, not just members of a party. Today, Republican Walker Stapleton – he’s now state treasurer. I met up with him on a recent Saturday at a Denver-area soccer field. He was cheering on his 10-year-old son Craig, and talking policy.

COLORADO STATE TREASURER & GOP CANDIDATE FOR GOVERNOR OF COLORADO, WALKER STAPLETON:  There’s going to be a lot of huge economic challenges that this state is going to face over the next couple of years.

[UNIDENTIFIED OBSERVER OF SOCCER GAME, BACKGROUND]: Craig just scored.

STAPLETON: Yes! My son just got a goal!. You must be lucky. You must be lucky, Ryan!

WARNER: Stapleton’s family roots in Colorado go back four generations. He moved to Colorado from the east coast in 2003. He’s been involved in tech startups, was an investment banker and led a real estate investment company. He says he’s frustrated by the pace of government decision making.

STAPLETON: If you’re running a company as I was, the CEO of a company, you make decisions and, he scored again, two goals. See, I’m going to throw my hat on the field if he gets a hat trick.

In government, the analogy I draw is, it’s kind of like being given a pick ax and being told to make a hole in a dam and once you make the hole the water can come rushing through — but it takes a long time.

WARNER: And Stapleton says he’d move faster, and more decisively than the state’s current governor, John Hickenlooper.

STAPLETON: I want to be much more proactive and engaging in the legislative process. You have to be willing to expend capital in doing so, and take a lot of arrows, but that’s what it means to me to be the CEO of the state.

WARNER: And Walker Stapleton is in our studio now, welcome to the program.

STAPLETON:  Thanks for having me on, Ryan.

WARNER: What is the single greatest problem Colorado faces, and how would you solve it?

STAPLETON: I think it’s infrastructure. I think everybody is impacted by traffic, and anybody that wants to have more family time with loved ones, anybody that wants to be more efficient in a professional context, has been impacted by our infrastructure problems in the state, which have really grown exponentially as the population has increased by more than a million people over the last decade.

WARNER: There are a lot of potential solutions floating around the legislature. First off, it directed more money to transportation in this most recent session, and there is the possibility of ballot measures. This election, there could be a sales tax increase on the ballot to pay for roads and transit. There could be bonding. Do you support either of those proposals?

STAPLETON: I support the bonding proposal. I do not support the sales tax proposal in its current form. I believe the department can and should do more. I believe we have dedicated sources of revenue in the general fund that we could and should be using for further bonding for our roads and infrastructure. And before you actually ask government to be an equal player, or a large player, in spending when it comes to our infrastructure needs, I believe asking voters for a tax increase is the cart before the horse, and if you look, it has not worked when it’s been referred to the ballots.

WARNER: And yet, the request potentially, for a sales tax increase for roads is not coming from government itself, but from the business community that says this is a priority.

STAPLETON: It’s true.

WARNER: What is it that you see that they don’t?

STAPLETON: So, last year, I got in a heated argument with Shailen Bhatt, who was the then head of the Department of Transportation, because he made a decision that he didn’t have to go through the treasurer’s office or through the legislature to make, which was that the department was going to spend $150 million on new offices for bureaucrats while the rest of us sat in traffic with our crumbling infrastructure. And I told him that was misplaced priorities for the department. The department ended up spending $50 million for our roads, and to me, prioritizing $150 million for new offices for bureaucrats and $50 million for bonding for roads sent the wrong message. That’s why last year we didn’t even get a referred ballot initiative for our transportation needs.

If you were to cut across all of our state agencies —  just one anecdotal example, Ryan: If you were to cut 10 percent of executive overhead, and by executive overhead I mean everything from consultants, and there’s plenty of them in state government, let me tell you, to staplers to paper to conferences that people attend in all our departments, you would save approximately $150 million on an annual basis, and we have plenty of money in the general fund that we can and should be using for infrastructure.

WARNER: Just a couple of points, I’ll say that CDOT, at the time of requesting that money for its headquarters, said that it was a question of life and safety, that the headquarters that they were in were deteriorating, there were accessibility issues. But to the broader point that you think there’s a lot of savings to be had in government. If that’s the case, don’t you think Republicans, who control one chamber of the legislature, would have found that by now?

STAPLETON: Well I would hope, but there’s some sources of revenue that we haven’t even explored that I believe we need to. For instance, I think that there is a lot of unchecked fraud and abuse with our medical marijuana system in Colorado. We’ve issued, I think at its heyday, more than 100,000 medical marijuana cards. You can, right now, have up to 12 plants as a medical user and have a compassionate caregiver have the other 86 or so plants. There is, in some counties a 50 percent price disparity between medical and recreational marijuana, in some counties it’s more like 30 percent, 30-50 percent. I’m just giving you an example.

WARNER: So would you like to direct more people to recreational marijuana, which is taxed at a higher…

STAPLETON: No, I would like to fix the fraud and abuse around medical marijuana. Specifically there being a 50 percent price disparity and the fact that it’s easier for an 18-year-old kid to get a medical marijuana card than it is for him or her to get a six-pack of beer in today’s Colorado. That makes absolutely no sense. Advil’s taxed, some states tax prescription drugs, the fed taxes prescription drug imports. This is a billion-dollar-plus industry that has a big state regulatory problem, and I believe if we fix it, we will have significantly more revenue that we can apply to our transportation needs.

WARNER: How would that money come in? In other words, by raising taxes on medical marijuana?

STAPLETON: Absolutely.

WARNER: Okay.

STAPLETON: 100 percent or changing the license process, which is far too easy right now. There’s a number of doctors that are in a class action lawsuit with the attorney general’s office, who write medical prescriptions as fast as their notepads will carry them.

WARNER: Let’s talk about education. Thousands of teachers demonstrated at the Capitol and elsewhere last month calling for higher pay. In Pueblo, teachers recently went on strike. Statewide salaries average about $52,000, roughly 15 percent below the national average. It’s much lower in some rural areas. Should Colorado teachers be paid more?

STAPLETON: I would love to find a way for Colorado teachers to be paid more. The analogy that I draw and all of us, by the way, have family and friends that are teachers. And teaching, I firmly believe is an undervalued profession, not only in Colorado, but nationally. But we have to recognize we have structural flaws in education finance in the state that have to be fixed, and the analogy I draw, Ryan, is that if you have three holes in the bottom of the bucket and you keep telling people I need more water to pour into the bucket, but the bucket is empty every time you cross a room, you have to fix the three holes in the bottom of the bucket. And one of our biggest holes, by the way, and you and I have talked about this in the past during my time as treasurer of Colorado, is our pension system, which sucks more than 20 percent of a teacher’s salary into backfilling obligations with a bankrupt retirement system, and doesn’t go to teacher’s salary and doesn’t go in the classroom. And if you look, right now I believe CBS, Shaun Boyd at CBS, did a report where she said each student in Colorado gets approximately $13,000 of funding. The average public school class is approximately 25 students, that’s more than $300,000 of funding in the average public school class. $50,000, which you just pointed out is about the average salary of a teacher. That’s $300,000 of funding, $50,000 for the teacher’s salary. What happens to the other $250,000? If you look at what’s happened, the expansion of education funding in Colorado, the amount of teachers has grown by about 7 percent or 8 percent. The amount of administrative overhead has grown by more than 20 percent in the last decade. I think that’s a telltale sign that we have a problem with dollars that should be spent in the classroom not getting there.

WARNER: Okay. And you say that PERA, this is the state’s pension system, is part of this.

STAPLETON: Yes, absolutely. That’s correct.

WARNER: We have to talk about the fact that the legislature passed a bill to shore up PERA, which had a $32 billion unfunded gap. It will ask state employees, and teachers, and others to contribute more to shore the fund up. Also, the state will be contributing more over the next few years.

STAPLETON: Which is taxpayers, by the way.

WARNER: Which is taxpayers, exactly. I want you to give what the legislature did a grade.

STAPLETON: I would give it a C, a solid C, maybe a C+.

WARNER: There were reports that in the final hours of this debate, which came to the last days of session, that you were making calls to some Republicans in the legislature to kill the measure. Is that true?

STAPLETON: No, absolutely not.

WARNER: That is not true.

STAPLETON: No Republican would ever tell you that because it’s not true. I wanted to try and get the best deal possible until the last minute possible. I was not physically even at the legislature. I think I was asleep by the time they finally passed the deal, which was 30 minutes prior to midnight. But I think that it was a necessary step, and if I had been governor at the time, and I would urge Governor Hickenlooper to sign the bill because the cost of not doing anything outweighs the cost of action, in this case. And I can tell you exactly why, if you’re interested.

WARNER: What is one thing you would have changed?

STAPLETON: What is one thing I would have changed?

WARNER: Uh-huh.

STAPLETON: I would have expanded the defined contribution option to teachers because teachers are portable with their professions. They go to Oklahoma, Nebraska, neighboring states. They should be able to take their retirement contributions with them, and they’re not able to. So that’s just one thing I would change.

WARNER: It was actually some educators who opposed the idea of expanding that option for teachers. What is one more area of inefficiency, or I don’t know if the word is bloat, that you see in terms of spending on education. Because what you’re saying is there’s a lot of money being spent per classroom, but it’s not being done wisely. Quickly, give me one more example.

STAPLETON: I think administrative overhead, and you’re talking about the pension system. What’s happening is it’s robbing Peter to pay Paul. They’re either freezing teacher salaries or cutting it by the amount that they have to contribute into the pension system into the back end. Teachers are actually suffering the impact of the pension’s liability in today’s real dollar payments.

WARNER: You go back to PERA.

STAPLETON: Yeah, and I believe, there are 176 school districts, Ryan, should have line item transparency for me as the treasurer of Colorado, but also, more importantly, for taxpayers and for people who care about our schools. They don’t have that right now, and we need to have that transparency and accountability in budgeting.

WARNER: Line item transparency would mean I could see what about my school?

STAPLETON: You could see exactly where the dollars are going. You could figure out why, if there’s $325,000 per class in your particular school district, why, if the teacher is only getting paid $50,000, where does the other money actually end up?

WARNER: Would you have control over that as governor to make that happen?

STAPLETON: Absolutely.

WARNER: In a local control state, you could say that?

STAPLETON: Yes, absolutely. Yes. It’s all transparency, and accountability, and budgeting from the top.

WARNER: You’d pass a law to do that?

STAPLETON: I would issue, I would find out, I’m not a lawyer, but if it took an executive order, I would tell the director of education who ran the Colorado Department of Education that he or she would need to make this information readily available on the website for all Coloradans to see.

WARNER: You support the expansion of charter schools. Briefly tell me why.

STAPLETON: I do. Well Tom Boasberg, I would consider a friend of mine.

WARNER: He is the superintendent of Denver Public Schools

STAPLETON: Denver Public Schools, our largest public school district. He is not a Republican, but I have great respect for Tom. Tom and I agree on two chief things, I think. One is that the pension’s system has been an albatross around the neck of school budgets all across Colorado. The second is that competition in public education works. Tom has been a champion for charter schools. As a result there has been a significant proliferation of charter schools in the Denver Public School District. I believe there’s more teachers actually teaching in charter schools than in public schools, as of last year. And I think that’s a model that we should take across the state of Colorado. I give Tom great credit for doing that in Denver’s, in our largest school district in Colorado.

WARNER: You’re listening to Colorado Matters. I’m Ryan Warner and our conversations with the gubernatorial candidates continue today with Republican Walker Stapleton. I want to talk a bit about health care. You’ve said you would dismantle Colorado’s health exchange. That’s a hallmark of Obamacare. So is the Medicaid expansion. If you’re elected governor, would there be fewer Coloradans on Medicaid? It’s about one in four right now.

STAPLETON: I can tell you that there would be a managed Medicaid model. Right now the exchange is not working as it should because we’ve had about a quarter of the people that we would have liked to have enrolled in the exchange, that have actually enrolled. The reason being is that there’s nothing compelling people to enroll, because you can get an employer plan with Cigna for the same cost, or maybe even cheaper, more efficiently than actually joining the exchange, so there’s no carrot there. We have, as you probably know, 14 of our 60 counties, mainly in Western Colorado that have one choice of health care provider, have seen their health care premiums increase by double digits over the last couple of years. There are individuals in Western Colorado that are paying more for home mortgages, I mean more for health care than they are for their home mortgages. That is an unsustainable model for health care in Colorado.

WARNER: What does it mean, managed Medicaid?

STAPLETON: Let me tell you. Managed Medicaid means that as the federal government proves itself more and more inept, with the capital I, at solving our health care needs, what I believe will happen, and I don’t know if this is going to happen in six months or a year, they will wash their hands of this problem. They will return back to the states in the form of grants, money, and there will be a huge battle over whether to make that money retroactive to the Affordable Care Act, whether to make it inflation adjusted. Eventually though, they will say to the governors at the state level, hey, you can figure out the future of Medicaid expansion in your particular state. You’re going to have to figure out how to make this sustainable. In Colorado when I started as treasurer, the budget was $18 billion. Today the budget of the state of Colorado is nearing $30 billion. Medicaid expansion and entitlement expansion are the two largest drivers of budget growth in our state.

WARNER: So if the federal government block grants Medicaid as you think it might, what would be your guiding principle for distributing the money?

STAPLETON: To improve access and affordability. And a managed Medicaid model means the following. It means a proliferation of community health care centers. I’ve got three young kids, and I’ve got a little clinic at King Soopers across the street. When my kids get sick, I joke that I need a lifetime supply of Amoxicillin. I think my youngest daughter, Olivia, likes the pink bubble gum taste of the stuff. But I take my kids across the street to an RN, and I pay $10 to $15 for a copay. The pharmacy is right there. If I took them to their pediatrician, I’d be paying four times as much and the insurance company would be billing me six or seven times as much. That is not a cost-effective model.

If you go to Denver Health to the emergency room on a Friday night, it looks like Grand Central Station. The reason is because you have indigents there. You have people that have Medicaid. You have people that have private health insurance. You have people that are seeking shelter from the cold. Then you have the people that actually have the gunshots and the heart attacks in the emergency services. That is not an effective way of providing emergency care. It’s not effective from a care standpoint and it’s not effective from a cost standpoint either.

WARNER: Do you think there’d be fewer people on Medicaid then, under this model?

STAPLETON:  I think, I don’t know about numbers. I think that the model would look different, though. And different, by that, I mean that everybody can’t be filtered in the same funnel of care. There has to be a managed system where the people that actually are there for emergency services, are there for emergency services. Some people that have Medicaid aren’t going to be able to show up in the Denver Health Emergency Room.

WARNER: You would just say they can’t be there?

STAPLETON:  Well they can be there, but they’re not going to be able to be treated there, they’re going to have to, because quite frankly, there’re some people that are there on a Friday night that don’t have emergency-level health problems.

WARNER: So there would be a clinic that they would be referred to.

STAPLETON:  Sure, and a community health clinic. Also, I think we need to move to plans that are more affordable for younger people that are starting their careers, and millenials, with higher deductibles, catastrophic health insurance. We need to get back to affordability for young people for healthcare plans, because they can’t afford it right now.

WARNER: Your campaign has just placed its first TV ad with a claim that I’d like to explore.

STAPLETON: Yes, please.

[Ad with Walker Stapleton’s narration]: “I was the only treasurer in the country with the courage to support Donald Trump’s tax cuts.”

WARNER: In fact, treasurers in Kentucky and Utah wrote op-eds in support, Missouri’s treasurer went on to Washington to lobby for it. Do you stand by that claim?

STAPLETON:  Absolutely. We went off the official White House press release for the tax deal, and on that official White House press release, I was the only treasurer listed. As I told —

WARNER: But that doesn’t say that you were the only treasurer to support it.

STAPLETON:  But we were the only treasurer listed, and I didn’t have time. I didn’t actually care to go and poll my colleagues on a state-by-state basis as to whether they were supporting the tax plan. The semantics of whether I was the first treasurer in the country, or one of the first, are not what’s important. What’s actually important is what the tax plan’s going to do for Colorado. Under —

WARNER: I don’t think it was referred to as only.

STAPLETON:  Well, the only, or one of the only. I mean, one of the first, for sure. We took that information based on the press release, and I think rather than the semantics of whether I was the only or one of the only, I think what’s important is what the tax plan is going to do for Coloradans, and it’s going to give 75 percent of the people in Colorado a tax cut. It’s going to take a family that’s making $60,000 and reduce their federal tax burden from $1,700 to approximately $100, and it’s going to repeal the individual mandate that the Obamacare, was at the heart of Obamacare. Last year in Colorado, there were approximately 130,000 Coloradans or so that had to pay a tax because they couldn’t afford health insurance. Out of those 130,000 Coloradans, 80 percent of them have a household income of $50,000 or less. So the tax plan is going to give relief to all those people. So the semantics of whether I was the only, or one of the only, or the first, or one of the first, is to me, not significant.

WARNER: I think it’s a question of whether you do your homework, and whether you say what’s right.

STAPLETON: Well we did do our homework because we took it off the White House press release.

WARNER: I want to ask you about where you stand with the Trump Administration on immigration. Is there anything you disagree with the president about when it comes to that issue?

STAPLETON:  I think immigration is a federal issue, and needs to be dealt with by the federal government. And so —

WARNER: Where do you —

STAPLETON: If you’ll let me finish here, and so my differences are that I care to focus on what I can do as the governor of the state at the state level to deal with illegal immigration. I think the heart of the matter from a state level is our problem with sanctuary cities in Colorado, specifically in Denver. And I would do everything I can to prevent sanctuary cities from cropping up in the state of Colorado, because I think it’s important that the governor have the back of law enforcement. By that I mean sheriffs and DAs that are on the front lines trying to keep our community safe. It is unconscionable to me how somebody who has committed a crime as an illegal alien, specifically a felony, can be treated with more rights and protections than a law-abiding US citizen.

WARNER: Is there anywhere you disagree with President Trump in terms of the immigration issue federally?

STAPLETON: I mean, I’m not, I’m going to pay attention to the sanctuary city issue. I’m not able as governor to do anything about the federal government not being able to solve immigration problems, so I’m interested in actual practically applying what I can do in the state of Colorado to make our community safer. Not the federal government being unable consistently for years to solve immigration.

WARNER: Do you like the wall?

STAPLETON: I like border security and I think the wall has become a euphemism for border security.

WARNER: Do you like the wall itself?

STAPLETON: I like more, I like enhanced border security. And if you look at what President Trump proposed, he said that he would give legal status to well over a million DACA recipients in exchange for enhanced border security and that didn’t get passed by the federal government unfortunately.

WARNER:  As you know there was another mass shooting at a school last week in Texas, ten people died. Here in Colorado the legislature just defeated a so called red flag warning bill. It would have prevented people who are a risk to themselves or others from having a gun. Do you support that idea, very briefly?

STAPLETON: I support the concept and I support the spirit of the legislation but I would have not supported that particular piece of legislation because of the arbitrary way in which due process was actually carried out. In my experience as being treasurer, I’ve never seen a bill that’s been rushed through and introduced in the last ten days that has been well thought out and well-conceived. I think this bill from a due process standpoint was ill-conceived.

WARNER: What did it need?

STAPLETON: So, it needed a more thorough process where — already there’s a process in place where county attorneys can adjudicate through the legal process somebody who is mentally ill. I preferred Senate Bill 270, which is now sitting on Governor Hickenlooper’s desk, a bipartisan product that actually will enhance mental health services and actually hopefully enhance reporting as well. That is a more holistic approach to mental health than simply empowering people, sometimes on an arbitrary basis, to take somebody’s guns and there is no remediation for false claims or anything like that.

WARNER: There were several check-ins with a judge, I’ll say.

STAPLETON: Well the 182 waiting period I think was arbitrary in the bill.

WARNER: Thank you for your time.

STAPLETON:  Yes.

WARNER: It’s run out so quickly.

STAPLETON:  I appreciate it.

WARNER: Republican Walker Stapleton is running for governor.

STAPLETON:  Lightning round. Thanks for having me.

WARNER: We are interviewing all the major party candidates before the primaries, which are open to all voters in Colorado as we said. You can hear the conversations we’ve already aired and read transcripts at cpr.org. And we are scheduled to speak with Democrat Jared Polis next Wednesday. This is Colorado Matters