Frank Pignanelli & LaVarr Webb: Why so many ballot measures, and which will win?

A record number of meaningful ballot measures have been proposed for voters to approve or reject in the 2018 election. The proposals would boost taxes for education, create a direct primary election system, allow use of marijuana for medical purposes, create an independent commission to propose election district boundaries and expand Medicaid coverage to more low-income Utahns. These measures raise interesting questions.

Why are so many substantive ballot measures being proposed this election cycle? Should these issues be left to the Legislature?

Pignanelli: “The ballot box is the surest arbiter of disputes.” — James Buchanan 

At neighborhood or community functions in Utah, non-Mormons, like me, are happy to bring alcoholic beverages — when appropriate — to enjoy and share. They want to participate in the social exercise, but understand that “certain dynamics” prevent gracious hosts of the LDS faith from providing high-octane drinks. Such rationale underlies ballot initiatives.

Shrewd activists understand that “political dynamics” prevent the Legislature from raising income taxes, salvaging SB54, establishing a boundary commission, etc. So the desired vibrant and substantive discussion with citizens is pursued through the initiative process.

The visionary drafters of our 1895 state constitution were prescient of such potential and mandated that “Legislative power … shall be vested with the Legislature … and the people.” Thus, lawmakers and petition sponsors who grumble at each other are misguided. The relative success or failure of an initiative sends a valuable signal of where Utahns are on issue, and the Legislature should be grateful for the information, without the pain of a vote. Sponsors of a ballot effort should be happy that they can take the message to the citizens without the filters of elected officials.

Implementing a ballot initiative is a wonderful fulfillment of civic duty.

Webb: Most issues should be decided by the Legislature. It would be a mistake to put every major issue before the voters. It should be an arduous task to get a proposal on the ballot — and it is.

However, select important issues that have had much discussion and debate but have not been resolved in the minds of most voters are legitimate subjects of ballot proposals. Any proposal that can overcome the tough obstacles to get on the ballot deserves to be there.

Given the difficulty of gathering the required number of signatures (more than 100,000) to get on the ballot, which measures are likely to be placed before voters next year?

Pignanelli: After the Legislature changed the signature requirement to 10 percent of voters in 26 Senate districts — a daunting hurdle — no ballot initiative has succeeded. (Remember, Count My Vote reached a compromise with the Legislature, but I surmise that they were going to have problems had they not done so).

If thousands of teachers and PTA activists are well-organized, they could push the tax increase proposal through obstacles to be awarded placement. The other campaigns will not have such an expansive volunteer network and will have to procure enormous resources to hire the expensive signature gatherers. Readers should not be surprised if all ballot campaigns struggle with these challenges.

Webb: Getting on the ballot requires an enormous amount of hard work, strong public support and a significant amount of money. My guess is that the direct primary election proposal by Count My Vote, the education tax proposal by Our Schools Now and the Medicaid expansion proposal will all get on the ballot. Medical marijuana and the redistricting commission proposals are popular but will need outside money from national groups to gather sufficient signatures.

Which measures are likely to win voter approval and become law?

Pignanelli: The education initiative will need clever messaging because Utahns are unlikely to pass tax increases — even for education. Because many families have relatives or friends touched by a horrible disease that is alleviated by marijuana, they may have enough goodwill in the general election.

Webb: Voters will readily approve the Count My Vote/direct primary proposal. Medicaid expansion has the firepower to pull out a win. I absolutely want Our Schools Now to win because a substantial investment is badly needed in the education of our young people.

Utah’s leaders have not shown sufficient courage, urgency and persistence to make Utah a top education state so our young people can compete globally for the jobs of the future. As a pro-family culture with the most young people, percentagewise, of any state, we ought to aspire to be the nation’s top education state.

We won’t get there by spending the least per pupil in the country, no matter the uninformed arguments against taxes by groups like the Sutherland Institute and Americans for Prosperity (an out-of-state Koch-funded organization).

Nothing is more important to the future of Utah’s young people and our economy than education excellence.

Having said all that, I worry that the tax increase by Our Schools Now may not pass, setting back the cause of education funding. If it loses, the defenders of education mediocrity will say citizens are happy with the status quo. That would be unfortunate.

See it here: Frank Pignanelli's interview on state re-empowerment

Have you heard the whispers for a new amendment to the U.S. constitution? Should ‘Re-Empowerment of the States’ be ratified, the states would have the power to revoke any executive order, rules, regulations or any other regulatory actions mandated by the federal government. Supporters of this amendment believe the establishment of it will restore conversations between the states and federal government, creating more democracy within the country.

Advocates for re-empowerment reached out to Frank Pignanelli to participate in a promotional video to educate people on the amendment.  As you can imagine, Frank had a few words to say on the subject. He believes it is important to drive conversations between the states and federal government, as opposed to the federal government 'playing cute' and going around the states. 

You can watch the video here: https://www.youtube.com/watch?v=yPG8m2k8Co4

Frank R. Pignanelli and LaVarr Webb: Possible strategies employed by some of Utah's top chess masters

Chess is a lot trickier than simply moving 16 pieces around a board. To win, competitors must be good strategists, anticipating a competitor’s reactions and moves. Impulsive action guarantees a loss. As in chess, so in politics. We review possible strategies employed by some of Utah's top chess masters.

Salt Lake County Mayor Ben McAdams surprised the Utah political scene by announcing he’s "seriously considering" a 2018 run in the Fourth Congressional District, currently held by Congresswoman Mia Love. Is he sincere, or is this a chess maneuver with a furtive goal?

Pignanelli: "In life, as in chess, forethought wins.” — Charles Buxton. Dandruff flakes were flying as politicos frantically scratched their heads over this unexpected development. All agree the popular, creative and successful mayor would be a formidable candidate in this or any race.

But in the last 70 years, only two Utah Democrats knocked off a Republican incumbent in a federal election (Frank Moss in 1958, Wayne Owens in 1972). Experts classify the Fourth District as solid GOP. Love won by a 13-point margin in 2016, including support from a chunk of Democrats. She is a ferocious campaigner who is substantive and charismatic. Utah leaders respect Love’s engaged membership in the House Financial Services Committee, which oversees a crucial element in the state economy. To overcome these obstacles, McAdams would need to undertake an intense negative campaign, thereby blemishing his well-deserved reputation as a bipartisan problem-solver.

Why this move by McAdams? Many insiders believe Love will run for the Senate, and McAdams’ announcement automatically places him as the front runner to fill the vacancy. Regardless, inevitable polls will broadcast his strengths (and weaknesses) and media talk of his potential candidacy will last for months. All this guarantees extra relevancy and attention for a possible statewide race in 2020, without filing for office in 2018. Castling is a chess move to realign key pieces, which McAdams just performed on the political chessboard.

Webb: My feeble IQ is better suited to checkers (or maybe Yahtzee) than chess, but I believe McAdams is seriously interested in this race. There aren’t many big-time political opportunities like this for an ambitious young Utah Democrat — even one who is moderate, competent and well-liked.

McAdams is mentioned frequently (by the “great mentioners”) as a 2020 gubernatorial prospect, but the numbers look daunting, if not impossible, for him to win statewide. Running as an independent or third-party candidate wouldn’t help.

McAdams' best chance would be for a moderate Republican to pick him up as a lieutenant governor running mate, creating a bipartisan ticket. With the right Republican at the top of the ticket, the combination might be formidable.

A campaign against Love would be very tough. It would, unfortunately, quickly degenerate into a very nasty race, with national Democrats and Republicans jumping in with an onslaught of personal attacks and negative advertising.

This may be a chess move that establishes McAdams as seriously interested in higher office, but running comes at a cost. However, if he does run and loses, he’s still county mayor for two years.

Personally, I think McAdams can do more for Utah as county mayor than as a minority Democrat among 534 other members of a dysfunctional Congress.

World Trade Center Utah President (and former gubernatorial chief of staff) Derek Miller has been open about his intent to run for the U.S. Senate in 2018. Yet, he recently penned an op-ed almost begging Mitt Romney to run for the seat. What is this all about?

Pignanelli: A Romney candidacy to replace the retiring Orrin Hatch has a predictable outcome. So Miller is covering his bets by aligning himself with Romney, with the hope for a return of the favor.

Webb: Not much intrigue exists here. Miller certainly wanted to run, but the combination of Hatch freezing the field for so long, and a new volunteer church calling made 2018 the wrong year. The cynics among us could speculate that Miller (and other young prospects) support Romney, in part, because Romney is likely to monopolize the seat for only six or 12 years — not 42 like Hatch.

Many political observers and even friends of Hatch believe he will not run again in 2018. Yet he is fundraising, sending out literature and holding town hall meetings. What’s the point of these chess moves?

Pignanelli: Hatch, the ultimate chess master, has been making a series of moves, while proclaiming he may not finish the game. Consequently, potential contenders are sidelined as he continues to gather financial and political strength. Come December or January, Hatch will announce his candidacy. Will he whisper "Checkmate”?

Webb: Acting like a candidate has kept competitors far at bay, which suits Hatch if he runs, and suits Romney, his favored replacement, if he doesn’t run (which I expect). Either way, Hatch wins.

Renae Cowley interviewed by blogger

Foxley & Pignanelli has enjoyed watching associate Renae Cowley pursue her latest endeavor in barrel racing. Renae has gone from never having never barrel raced to qualifying for the professional circuit in just one season. She has crushed the summer season and already training for next year.

Renae has a knack for excelling in the goals she sets for herself in both her professional and personal life. She has chosen to share her barrel racing journey through social media. Her @renaecowley channels have caught the attention of multiple blogs and rodeo fans. She was recently interviewed by The Small Town Boss Babe to discuss her barrel racing experience.

Read her interview here:

http://www.jessieguilford.com/single-post/2017/09/21/A-Success-Formula-that-Works-From-Barrel-Racing-to-Boss-Babe

Frank R. Pignanelli and LaVarr Webb: Our opinions on health reform, NFL protests and Columbus

In politics, expect the unexpected. Issues suddenly arise we didn’t know were issues. But one thing you can rely on: your columnists always have opinions on issues — and non-issues.

After another stinging defeat, is congressional health care reform dead and buried?

Pignanelli: “Republicans campaigned on [Obamacare repeal] so often we have a responsibility to carry it out. That's pretty much of a reason as the substance of the bill." — Sen. Chuck Grassley 

As with many Americans, I wince at commercials showing poor animals suffering from abuse. I experience the same painful emotions watching Republicans attempting to pass health care reform. They are clearly uncomfortable in this role, and relieved to move onto safer topics like taxes. But the issue is not dead.

Later this year, insurance rate increases will aggravate employers and working families. Furthermore, problems that existed before Obamacare, or caused by it, will increase in severity. Expect Republican voters to express frustration that a GOP-controlled Congress cannot deliver needed changes. These dynamics could push possible intraparty challenges, even for Utah federal officeholders.

To preempt this, I predict another round of torturous health care reform deliberations in Congress. Unfortunately, we can't count on the Humane Society saving them, and us, from the resulting pain.

Webb: It is unfortunate that the Graham/Cassidy legislation failed. It was the country’s best chance to improve health care and control its costs. By devolving much of Medicaid funding to the states, each state could have crafted solutions that best fit the needs of its citizens. The wails of woe and despair by the various liberal advocacy groups and the medical/insurance complex were self-serving and deceitful. These groups simply want big federal government health care. It is inexplicable to me that virtually everyone believes the federal government is a mess, yet so many people want the federal government to run health care.

Lt. Gov. Spencer Cox described President’s Trump’s criticism of the NFL for allowing players to kneel in protest during the national anthem as a “diabolically brilliant” action that divides the country. Is the always magnanimous Cox correct, or is there a real issue behind Trump's actions?

Pignanelli: Cox nailed it again. Trump also understands deep in the American psyche is the belief that politics and sports can mix, but never on the playing field. It was a shrewd distraction from his unfulfilled agenda.

Webb: Trump didn’t need to engage in this fight and went too far in calling for the players to be fired. I’m all for peaceful protest at the right time and place. Go protest in front of city hall or the police station. But I’m absolutely offended to see NFL players and coaches exploit the singing of the national anthem and our flag before a captive audience to make a political statement.

This is in-your-face protesting. They are going out of their way to be as obnoxious as possible in front of millions of Americans who came to witness (or see on TV) a football game and, perhaps, to feel a little patriotic as the flag is shown and the national anthem is sung. It is hijacking and exploiting the country’s most sacred symbols to make a political point.

If it’s not about the anthem, or the flag, as they say, then why use the song and flag as a backdrop? Why stuff it down the throats of football fans who aren’t interested in their political views?

Their action is not illegal. It’s constitutionally protected. But it’s bad judgment, ill-mannered, insulting, offensive, rude, divisive and disrespectful.

The Salt Lake City Council may consider a resolution to replace Columbus Day with Indigenous Peoples Day. A handful of other large cities have done this in recognition of the atrocities suffered by Native Americans by European settlers. Is this necessary?

Pignanelli: Columbus Day was created to celebrate all immigrants, in response to nasty ultra-nativist activities. Because this great explorer was Italian, millions who share my ethnic heritage are proud of him and the magnificent contribution we make to our beloved America.

Columbus was not perfect but his bravery and tenacity opened the New World to millions seeking opportunity. If unfair treatment of Native Americans is a standard to strip honorific days, the following holidays are jeopardized: Independence Day (creating a government that warred against tribes), Thanksgiving (we know how that turned out) and Christmas (spreading Christianity was a frequent rationale for maltreatment).

Equally important, honoring anything Italian is always good for American souls-regardless of heritage.

Webb: Columbus was a remarkable explorer who established the first permanent colonies in the Americas in four difference voyages. Most historians say he was also ruthless — exploiting, enslaving and otherwise mistreating the natives. As did many other European conquerors. As did the indigenous people themselves among their warring factions.

I think it is fine to celebrate indigenous people with a special day, as Utah does on Nov. 3. But I do not see harm in commemorating the beginning of the European settlement of America, and calling it Columbus Day, while also acknowledging – and learning from -- the barbarism that occurred. It is easy, but not always fair, to judge what occurred more than 500 years ago by the standards and values of today’s modern, civilized world.

150th Anniversary of the Golden Spike, brought to you by Douglas Foxley

A concurrent resolution was passed during the 2017 Utah legislative session recognizing the upcoming 150th anniversary of the United State’s first transcontinental railroad, as well as requesting that a committee be formed to plan the commemorative ceremony. We are honored to announce Governor Gary Herbert selected Foxley & Pignanelli’s founding partner, Douglas Foxley to serve as the ceremony chair. 

 Those close to the firm know there are few individuals more educated and proud of the great State of Utah and its rich history than Douglas Foxley. He has dedicated much of his time to serve various leadership positions to enrich the state. The wedding of the rails is a significant milestone in Utah's history as well as that of our nation. 

 The opportunity to coordinate the 2019 celebration has quickly become a passion project for Doug. He has been hard at work bringing together stakeholders from across the state to ensure this is a celebration worthy of such a historical event. As Doug has said, "it will be the party of the decade!" 

Frank Pignanelli & LaVarr Webb: Huntsman’s new job, Trump’s speech and CMV initiative

Both local issues and international affairs are important to Utah. We take a look at some of them.

Former Utah Gov. Jon Huntsman is poised to become ambassador to Russia. What is the impact on international, national and local politics?

Pignanelli: "Diplomacy is to do and say the nastiest things in the nicest way.” — Isaac Goldberg

As a heathen Gentile who grew up in Zion, I can state that Mormons cannot help but be great diplomats. Most spent two years in other parts of the country and world — not as occupiers — but persuaders. They comprehend that each society (especially in Utah) has a unique way to "do business." Reared in Utah's passive-aggressive culture, LDS adherents are rarely confrontational but achieve their ends through subtler means (a skill needed by ambassadors).

Huntsman possesses these talents on an exponential level. Former ambassador to China and Singapore, no one is better suited to demonstrating strength while maintaining communications with the Russians. This assignment in Moscow keeps him relevant and could lead to an eventual appointment as secretary of state.

Although not yet 60, Huntsman has an impressive resume. The Obama campaign feared him as a potential opponent in 2012. Every day that goes by, there are more Republican millennials who will identify with Huntsman than almost any other politician. Very charismatic and clever in social media, Huntsman is also viewed as outside the establishment (a valuable commodity in 21st-century politics). Huntsman will be on a short list for national office in 2020.

Huntsman will demonstrate a successful, and global, application of the “Utah Way.”

Webb: Huntsman will be a terrific ambassador in this enormously sensitive and important position. But it will be difficult even for this consummate diplomat to navigate the world of President Donald Trump. Huntsman must avoid being undercut by wee-hour tweets and inconsistent administration signals. Can Huntsman condemn Russia’s aggression and incursions into the rights of other countries if Trump periodically tries to cozy up to Vladimir Putin?

Still, if Huntsman performs well, he might be in a position to take over for Secretary of State Rex Tillerson once Tillerson is inevitably fired by Trump or he tires of fronting Trump’s erratic foreign policies.

Locally, this appointment eliminates Huntsman as a potential challenger to Sen. Orrin Hatchin 2018, or to whoever runs to replace Hatch if he retires. That’s good news for Mitt Romney.

Utah is a state with healthy international trade and strong relationships with people in countries across the world. Did President Trump’s tough talk at the United Nations last Tuesday help or hurt Utah’s international interests?

Pignanelli: Hello!!! Is anyone paying attention? "Rocket Man" sent two missiles across Japan — an incredible and frightening event. I appreciate Trump inherited this problem and enjoy his creative chest thumping. But he has to apply action, or other nut jobs will think they can intimidate without ramifications. There needs to be severe economic sanctions (with rigorous penalties for noncompliance) that squeeze North Korean ruling families. This will impact Utah’s international, American and European interests in the short term but deliver long-term benefits.

Webb: I admit the nationalist in me liked a lot of Trump’s speech. It was nice to see a president stand up unapologetically for America’s interests and bluntly call out some of the world’s dictators. Trump received harsh criticism from liberals for some of the speech’s more memorable lines, but in reality it was a nuanced speech. Anyone who listened carefully found points to both love and hate. Some analysts said it was clearly written by committee, alternating between tough talk and lofty rhetoric worthy of a world statesman.

It is certainly in Utah’s interest for the world to be a stable place bolstered by free trade and positive international relationships. It’s too early to measure whether Trump’s foreign policy will move us in that direction or not.

Is the new Count My Vote ballot measure to create a direct primary election system for Utah really needed? Or is it best to leave the existing CMV/SB54 compromise in place?

Pignanelli: Maybe I am old school, but I adhere to the principle "a deal is a deal." Factions within the GOP challenged the law and House Republicans sent a “message vote” to eliminate it. Notwithstanding, the Legislature has upheld their bargain with CMV advocates. Results of recent races will compel most candidates to pursue the signature route with or without attention to delegates. I encourage CMV to have thoughtful second thoughts before acting.

Webb: I would have been happy with the SB54 compromise if assured it would remain in place. But with an ongoing lawsuit and continued attacks by elements of the Republican Party and the Legislature, it makes sense to ask Utah voters, once and for all, if they want a party nomination system that allows all party registered voters to have a voice, or if they want a select few convention delegates to control the nomination process.

A change to a direct primary system would not be a radical step. It’s the process used by almost every state in the country, providing opportunity for maximum voter participation. And by fixing a few glitches in SB54, the proposal would create a model system to nominate political party candidates.

Foxley & Pignanelli hosts UAFS and NAIB annual convention

Foxley & Pignanelli is the association management firm for the Utah Association of Financial Services (UAFS) and the National Association of Industrial Bankers (NAIB). Management services include state and federal government relations, communications, event planning, training, plus board and committee governance.

On September 12-14, 2017, Foxley & Pignanelli hosted the UAFS & NAIB Annual Convention and Golf Tournament in Midway, Utah.  Bankers, academics, vendors and regulators attended this important industry event.

Highlights included:

Brokered Deposit Project

Dr. James Barth, Lowder Eminent Scholar in Finance at Auburn University

This report describes and examines the role brokered deposits play in the banking system as well as the regulatory treatment of such deposits. The focus is on the impact of brokered deposits on bank performance, bank failures and bank failure costs. An assessment is made as to whether the differential treatment of brokered deposits is justified in view of the empirical evidence examined.

Shape of Things to Come…Future of Fintech

John Lass, President of Lass Advisory Services LLC

The world of financial services is being impacted by waves of disruption from the growing FinTech sector.  But FinTech itself is rapidly being transformed by new advances in data analytics, AI, robotics and other tech sectors.  John Lass led us on a guided tour of the future to consider both the risks and opportunities facing financial institutions. 

Safety and Soundness of Industrial Loan Corporations

Dr. James Barth, Lowder Eminent Scholar in Finance at Auburn University

The ILC update project provides an updated assessment of the contribution and performance of industrial loan companies to the US banking system. It is shown that during the most recent financial crisis, ILCs provided credit when other financial institutions were unable or unwilling to do so (due to a lack of liquidity or capital). Moreover, in terms of ROA, 80 percent of the ILCs performed better than the average of all FDIC-insured institutions, while 80 percent also outperformed the average of all state-chartered institutions. When the ILCs are compared to commercial banks within the same size categories, 50 percent or more of the ILCs came out ahead of their respective FDIC-insured institution size group in terms of ROA. Based on all the other measures, nearly half the ILCs performed better than all FDIC-insured institutions and state-chartered institutions. This suggests that the ILC industry should be allowed to grow by tapping into new sources of capital from companies that are otherwise prohibited from owning a bank by the BHCA.

Other Convention Presenters:

Regulatory Updates

Kathy Moe     FDIC Regional Director

Ed Leary         Utah DFI Commissioner

Matt Sheeran FDIC CRA Review Examiner 

Risk Governance & The Board of Director’s Role

Catherine Bromilow, PWC

US Liquidity Regulations: Overview and Future Impact

Steve Turner, Novantas

Cybersecurity: Prevent. Detect. Respond.

Chad Knutson, President SBS Cybersecurity Institute

Regulatory Change + Economic Uncertainty = Opportunity or Threat?

Robert Spendlove, Sr. VP Economic and Policy Officer, Zions Bank

Rising Interest Rates in a Post-Crisis Environment

Steve Turner, Novantas

CRA Community Needs Assessment and Financial Literacy Outreach

Sorenson Impact Center, Salt Lake County, Kem Gardner Institute

Political Updates

Doyle Bartlett, Federal Lobbyist NAIB, The Eris Group

Mark Johnson, Government Relations Director, Toyota