‘These Are Serious Times' — a Conversation With Bill Haslam

Our full Q&A with Knoxville Mayor and gubernatorial candidate Bill Haslam

(Note: This interview was conducted by Jesse Fox Mayshark on June 7 in the mayor's office on the sixth floor of the City-County Building, and was used in our July 15, 2010 cover story "What Does Bill Haslam Want?" This is the full interview.)

What have you learned about government as mayor, and how can that translate to serving as governor?

I'll give you several things. Number one, what I learned is, it does matter who serves in office. I thought that before, I think that even more now. Number two, there are some things very similar about being in a public job and being in a private job. It's all about hiring good people, you still have to make revenues and expenses balance. There can be all the good reasons in the world to spend money—build more sidewalks, pave the roads more, pay firefighters more—all those are good, but you've still got to balance it with existing revenues. And that's true in business or in a public job. And ultimately in a public job, I know it sounds corny, but there's a greater good involved. In a private job, you're working for the shareholders, whether it's one person or a million, you're working for the shareholders. In a public job, you're working for the citizens. The difference is, if you're in business, everybody knows, here's what mission is: We're trying to sell more newspapers or sell more Fritos or manufacture more TV sets, or whatever it is you're trying to do. In a public job, you don't have that same consensus about exactly what it is you're trying to do.

An example I give is when we started doing the visioning process for the South Waterfront. The idea was, as a city, 200 years of Knoxville, I don't think we did a great job developing the north side of the waterfront. So we had an opportunity on the south side, because you have a lot of old manufacturing plants that are empty, et cetera, we've got three miles of riverfront, let's see if we really planned it and did it well, what would it look like? And the very first meeting I went to, we did the normal visioning process where you divide everybody up into tables and talk about what you want. At my table, there was a woman on my left who said, "I think the whole thing should be a butterfly park." And a guy on my right that said, "God meant waterfront property to be industrial distribution, that's what it should be." And I'm thinking, whoa, we've got a long process here. I use that example just to say, in a public job you're working for the citizens, but there's a wide disparity of opinions about what that means.

I think the other big difference in a public job versus a private job, and this is hard for somebody coming out of business to say, but in a public job the process matters—not as much as the result, but almost as much. As somebody who came out of a business—particularly a private business where you met with the senior team and the board discussed it and bam, you're off—it doesn't work that way. That can be frustrating coming out of private world, but also you learn a lot. If it had been up to me, the South Waterfront, I would've just said, "Hey, all right, here's what we're going to do. I'm going to go talk to somebody to put some condominiums here, we'll get somebody to put their office here." In the end, we wouldn't have had any buy-in to the process at all. Now, right now, due the economy, we don't have as much going on there as we'd like anyway, but I'm still confident that we have this plan, that widespread community buy-in, it was a much better process to get there.

People have to actually feel like their voices were heard.

They do. And you know, part of that is, I heard somebody quote when I was running, said, "Just because you have your say doesn't mean you get your way." But in the public job people ought to at least get their say, and then the elected people ought to have a discussion about whose way we're going to decide on.

Are you the right kind of Republican to run this year?

I guess we'll see. I do hear most people you talk to saying, these are serious times and we want to have a serious approach to it, where we talk about it in terms of the best approach instead of just yell at each other. I hear that sentiment over and over and over again.

It doesn't get drowned out by people being angry?

Sometimes it does. Because on the political spectrum, there's angry people all along the spectrum. But I think most people realize that these are hard problems, and the answers aren't real easy. We've got a state budget that's a billion and a half underwater. That won't be easy to fix. As a conservative, I'd like to tell you, well, there's a billion and a half of fat in state government, we're gonna go cut it all out and nobody will feel it. But I don't think that's true. I think when you make the adjustments, people are going to feel those cuts. And that's whoever the governor is. You don't take a billion and a half out of state government without anybody noticing it. That pressure will be felt in higher ed, it'll be felt in K-12, it'll be felt in how frequently roads get paved. People will notice.

That leads to another question, which is, why would anybody want to be a governor right now? It's probably the worst political job in America.

I think right now it probably is. For two reasons: The federal government doesn't have to balance the budget, so they don't face the same hard choices. And at the local government level, it's a little—you can't wrap your arms around it, but it's more manageable. I mean, our budget in the city of Knoxville is less than it was three years ago, but you can do a deep dive and figure out where you're going to address that. It's a little harder in the $28 billion enterprise that's the state of Tennessee to do that. It is a really hard job. But I guess the flip side of that would be, I think you have a chance right now to say, all right, how do you do that the right way? When I give my political stump speech that I've given a thousand times, I say all the time that I think the next governor's going to have the hardest time to be governor of any governor ever in the state of Tennessee. But I also think that's a good chance to say, all right, here's what I fundamentally believe to be true about governing, and if we do it that way, let's see what happens.

Phil Bredesen gets a lot of credit for the way he's handled things...

Deservedly so.

Are there things that you think he's not doing that need to be done?

Everybody can just swing at the pitch that's thrown to them. He came in and what he felt like the first thing he had to do was, you know, he had TennCare, which was growing and taking up the whole state budget. Or it was progressing that way, it was 33 percent of the state budget. And he said, we're not going to have any new dollars for K-12 and the BEP plan, higher ed, et cetera, we have to address that. That's gonna come back around now because TennCare, there are a lot of things that keep pushing that cost up. But he I think addressed that, and really has taken the first steps at shrinking state government. But I think this, I think those first steps are easier. It's like if I said, okay, for your family, you're gonna take 5 percent of your budget next year. And you say, okay, we did it. Now next year, take another 5 percent. Well, that gets a little harder, because the easy cuts are made. But I do think Governor Bredesen has done a good job of addressing the things that came to him. The difficulty is, the new governor's not going to have the stimulus plan money to work with. But that's what every state is facing, and that's why I think being governor no matter where you are in the next few years will be really hard.

So how do you do that in a strategic way that sets you up for something in the future, and that isn't just purely reactive?

I think you do do it in a strategic way, so you look at everything from, you know, how's the state purchasing goods? We're a $28 billion enterprise, one of the things I learned in business real quick is, you make almost as much money how you buy things as how you sell them. So I think there's an opportunity there. I think you literally then go department by department and say, what's our fundamental mission we want to do here? Has there been some things creep in that we don't have to do—we'd like to do, but we don't have to do—to make that mission work. I'll give Governor Bredesen credit for something else: While I think the next governor's job will be difficult, I think he's done a very good job of writing out the blueprint, if you will, for how it has to happen. He's done everything he can to say, here's steps to get you where you need to be.

Tennessee is in an interesting position, because it consistently ranks as a business-friendly state, a lot of the cities in the state including Knoxville show up on lists of nice places to live or affordable places to live and so forth. But at the same time, the state consistently ranks toward the bottom in academic achievement, literacy...

I think that's really one of the big challenges for the next governor, and here's how I'd put that: To be competitive in the economy going forward, it's going to require a higher degree of education. I think the economy is going to come back, but I think it's going to come back slowly, and I think it's going to come back with more of a difference to it in terms of your education. Even today in Tennessee, if you have a college degree, unemployment's less than 5 percent. If you dropped out of high school, it's over 20 percent. The statewide average is at 10.5 percent. So the economy's going to differentiate more going forward. The problem we have as Tennessee is this: If you're over the age of 25, there's a greater chance that you don't have a high school degree or even a GED than that you have a college degree. That's not a good formula to be competitive. And one of the things that I think a governor does, what a leader does anywhere, is help define the new reality. Every kid is not meant for college, but more students are than we've graduated from college in the past.

There's the community college system.

That's the other thing. The question is, okay, you've got a shrinking budget, and need to graduate more. Of the billion dollars in stimulus plan money in this year's budget, I think like $168 million's going to higher ed. The fair next question is, okay, shrinking higher ed dollars, gotta graduate more, what's going to give? I do think we're going to have to use our community college system more, which is really more cost-effective for the state and for the student, too. So I think you'll see a bigger emphasis on the community college system in the next several years as we try to increase the number of people with degrees.

What about on the revenue side? You're not in favor of a state income tax. Are there other things the state can do?

The answer is, probably not. I am definitely against a state income tax—not just for philosophical reasons, I think for practical reasons. One of the things you see as you campaign around is there are an incredible number of businesses that have located here for that specific reason. Historically what Tennessee's done every time we've gotten in trouble is we've raised the sales tax. But we've kind of played that string out. If you average your state and local sales tax combined, we're the highest in the country right now. So you're not gonna do that anymore either. You have limited alternatives. You're not going to raise taxes. The revenue's going to come back, but I think it's going to come back slowly. I think we're looking at 1, 2, 3 percent increases, not 7, 8, 9, 10 percent increases. It's not just true of me, I think whoever the next governor is, your only real alternative is you're going to have to shrink state government. And that won't be pain-free. I think that's what you're going to see from states everywhere. The good news in all that is, relatively Tennessee's in better shape than some of our competitor peer states.

But local governments are doing that, too. One of the things you learn being a mayor, people come to you all the time with good ideas, like, "Shouldn't we build sidewalks in every neighborhood?" Well, yeah, I'd love to do that. But it costs a million dollars a mile to build a sidewalk. So we do what we can and what we can afford, and keep trying to press forward.

Staying on the topic of money, but shifting a little bit to you personally, I loved the headline in the News Sentinel a couple of months ago that said, "Haslam Defends Wealth."

Yeah. (Laughs.)

That was obviously there when you ran for mayor, this whole issue that you come from a powerful family, a wealthy family, you were able to spend a lot of money on the mayor's race...

Although, to be clear, I didn't spend any of my own money.

Right. You raised a lot of money. But you're perceived as having access, either through family wealth or connections. To the extent that you appreciate the dynamics of politics and everybody having a voice in it, how do you feel about that?

A couple of comments. In this race, in this governor's race, more people have given to this campaign than have ever given to a campaign in the history of the state of Tennessee. I'm proud of that number, I think almost 10,000 contributions is the last count we had, and I think that says something. Because people think, oh well, fund-raising's easy, but really, we've had probably 125 different events, and every one of those you work hard to get people there, and you're asking people to give their hard-earned money. People sometimes think raising money's a piece of cake—it's work.

But people I think naturally ask, "Can a guy like Bill Haslam identify with me, when I work this job from 8:30 to 5 every day and I'm worried if I can make my mortgage payment and make everything work?" I've been mayor for six-plus years now, and I'm willing to stand on my record of understanding who I work for and what the struggle looks like.

Phil Bredesen also had a lot of money before he went into politics. What if we reached a point where the only people who could afford to run for office were people who were already wealthy? Would that be a concern?

Well, again, I'd go back to, look at our campaign. You have more people that have given than any campaign in the past. So, sure, but there are a lot of different paths to winning an election.

I'm curious how you see your service as mayor and running for governor in the context of your family. Your father is a hugely successful businessman who also from pretty early on was deeply involved in the civic life of the city, the university. The public perception is that the next generation has somewhat split those roles—your brother has kind of taken over the hard-driving business side of it, and you've kind of inherited the public service side. But how do you see yourself in that?

Yeah, it's kind of interesting. The way I first ran for mayor, I happened to be on spring break one year with Bob Corker, who at the time was mayor of Chattanooga. We've been friends forever, we're both bike riders, we were going on these 20-mile bike rides every day. And one day I said, "Bob, I don't get it. Why would anybody want to be mayor? You left a successful business behind, it makes no sense to me." And he goes, "Well, do you care about your city." I said, "Yeah." "Have you served on tons of different boards and headed this agency and that?" I said, "Yes." He goes, "You can make five times as much difference being a mayor as you can doing those things. They're great, but you can make a lot more difference being a mayor." And so, that kind of really was one of the first times I got serious about thinking about it. And I've found that to be true. Being mayor is a wonderful job. It really is, because you can't fix every problem, but you can help address a lot of them.

I'm not at all saying you can't make a difference as a community volunteer, being on this board, et cetera. But you can make a bigger difference serving in public office. And I now encourage people all the time to run for office, from school board to City Council to Commission, because I'm so convinced of what a difference it makes.

And you haven't minded the fact that when you're in that position suddenly you're subject to an awful lot of pressure and criticism and all sorts of things?

It's definitely true. The first time I ran for mayor, you learn real quick there's a different vulnerability and visibility to public office, no matter what you do. Once you're running and once you're elected, there's decisions you make that, in business quite frankly might be harder and bigger and involve more people, but that don't end up on the front page of the newspaper. And so there's a different personal stake when you're in public office. And it does take some getting used to. I know a lot of people who are incredibly effective in the business and private world that wouldn't, and probably shouldn't, move to the other side. Because you have to be okay with people saying things about you that, A.) you don't like, and B.) you don't think are true. But that's part of it.

So how long did it take for your skin to thicken up a little?

It's a gradual process. I don't think anybody ever really gets used to seeing something written or said about them that they don't like, I don't care who you are. But there is a process, it's the frog in the pan deal. What would have seemed unbearable heat at first, now you go, oh, it's okay. I look back to things in the first race that bothered you or I stayed awake at night thinking about, and now I go, oh, okay, that's part of the deal. But, you know—the heat keeps getting turned up.

Obviously you've had some of that in the primary. I guess the most recent one was Wamp going after the whole theater deal.

That actually doesn't bother me, because I know, hey, here's the story. I guess it bothers you that some people think, okay, he was doing something wrong there. If somebody accuses you of something, for some people, wherever there's smoke there's got to be fire. But in that case, it's like, I know what happened there. I would do it again today. Knowing it was going to be on the front page of the paper, I would do the same thing. If anybody would like to buy those bonds today, they can buy them from me. (Laughs.) But in the end, you have to decide, I remember in business we used to say, would you feel good about that deal if it was going to be on the front page of the newspaper? Knowing that in business, 95 percent of the time, it's not going to be. But in [public office], you've got to know that 95 percent of the time, it is going to be. So you have to feel good about it.

But the personal part of politics in public service is, when I talk to people who talk about running, it's the first place I go. People tend to underestimate how difficult that is. And while I encourage people to run, I just say, hey, when it's your name on the ballot, or your name on the front page of the paper, it feels different.

Have you had conversations with your brother about that?

Yeah. I think he's an incredibly effective CEO, I think he's one of the best I've ever been around—I realize I'm biased, but I do think that. But he would tell you himself that being in a public role is not the right role for him. And that's the other thing about running for office, is that the candidate or officeholder eventually gets used to it, but their family members don't. There's people in your family that still remember something that somebody said in the past or whatever, and you're like, well, that was a long time ago and we've moved on, or that was that reporter's job. They'll be all mad about some article somebody wrote, and I'll think, well, that's his job.

And you still have to go back and deal with him the next week.

Yeah. The longer you're in office, the more you understand, there's roles people have to play. As long as they're being fair to you long-term, you know, you have some good days and bad days.

Along those lines, one thing I've heard several people give you credit for was hiring Madeline Rogero. Was that a difficult decision? That was a contested election.

It was very contested, it was close. I mean, I barely won. But in the end, I knew Madeline would be great at that job. She had a high degree of credibility, she had a good insight into the community. And if you think about what Community Development does for us, she had the perfect background and the perfect skill set. And I think she has done a good job. Once the campaign was over, Madeline and I had talked lots about different things, she had been very helpful in lots of things, she was serving on the KAT board at the time. You know, campaigns are hard, they are personal, and that one was very close. But in the end, I knew she'd do a good job. I involved some other people in the process to say, make sure this isn't just me who thinks this.

You also had to deal with pressure from people who had their own ideas about who should be hired.

Exactly. And again, that's a different thing about this job versus being in the private world. In the private world, at the end of the day, if you're responsible for hiring that person, it's your problem. But in this, you have lots of people who have their own ideas and their own interests.

Lots of constituencies.

You do. It's interesting, running for mayor or running for governor, everybody feels like their geography or their constituency hasn't had equal treatment. "Well, you're from East Tennessee, so there's no way you'll understand Memphis." I can't believe how many times people say, "Well, you know, we kind of get ignored here." But the same thing was true when I ran for mayor: "You're from West Knoxville, how are you going to care about," et cetera. So I think there's just a natural tendency to think, everybody else is getting a better deal than we are.

What's it been like running statewide where being named Haslam doesn't give you instant recognition, except maybe in Republican Party circles?

Even there, only some. You'd think, well, you've been heavily involved in the Republican Party, but to your average voter who lives in Jackson, Tennessee, they may or may have even heard of Pilot, except for the one that's on their exit at I-40. It's not like around here where everybody knows. So that is different. There's some really refreshing parts about that, you kind of start at ground zero for good or bad. But running statewide, I tell people all the time, it's a lot like running for mayor. The geography is just the biggest difference. And when I was running for mayor, I was just doing that. This time, I'm being mayor and running for governor, and you add the geography to it, and the fact that I've already been doing this for about a year and a half. All that adds up.

It's a lot of work.

It is a lot of work. I tell people all the time that democracy's the right idea, but boy is it hard.

The Republican candidate line-up this year is interesting. You've ended up fairly or not seen as sort of the moderate. You have two other guys running who are trying really hard to be aggressive and kind of angry, and that sort of leaves you as the guy who's not yelling as much.

Well, I think in a campaign, you get in trouble when you try to be who you're not. I was giving a talk last week in West Tennessee, and right before I got there, one of our local supporters said, you need to show a lot more passion when you talk. And I said, hey, I'm going to show them who I am. Because when you try to be something you're not, it just doesn't work. In the end, I'm saying, here's what I think the issues are for the state, here's why I think I'm the right guy, and live with that.

What kind of reception do you get?

It's interesting, there are different crowds. You speak to everything in one day from a totally partisan Republican crowd to a totally nonpartisan Rotary club to a group of life insurance salesmen. And I think if you try to say, okay, I'm speaking to this group, I'm going to be this person, I'm speaking to that group, I'll be that person, then I think you end up trouble. Some groups obviously you click with better than others.

You call yourself a conservative, philosophically. But what does that mean to you?

Everybody would define that differently. To me, it means this: In the end, I think the smaller government we have, the better. That, ultimately, private people are going to be a lot more efficient, whether it be families or businesses, in how they spend money than government is. Obviously, I wouldn't be mayor running for governor if I didn't think government had a role. But the question is, how big is that role? Is it, the government should take care of every need, or, you know, government should totally leave us alone? Well, nobody's on either end of the spectrum, it's where you are on the liberal-conservative deal. And I tend to think, again, that the more money we leave to let people decide, we're just going to be more efficient and effective. In the end, I think that even the best, most well-meaning government is going to naturally be a little wasteful.

But you also appreciate the restrictions that government has. You can't just say, we're going to have our K-12 education done in Guatemala because it's cheaper.

Exactly. I'm running for governor, I am a mayor, I think there is a proper role for government. Take K-12. There are some families that are going to choose to educate their children at home. They should have the right to do that. But obviously, most kids, we're going to be responsible for educating them. And hopefully the parents are playing a big role in that, but at the end of the day, how do we have the best education system that we can? Fully supporting the right for private education or religious education, but at the end of the day most of the kids are going to end up in public schools, so let's talk about that.

Do you support vouchers, or any kind of experimentation like that?

Ultimately I think there's some real benefit there, in competition for schools. I think we're a long way away from that in Tennessee. So what you'll hear me talk about, like I said, is, while fully protecting and supporting the rights of home/private/religious education, you're going to see most of my focus be on, how do we have real reform in K-12 education. We can't stay 42nd out of 50. We can't stay with more high school dropouts than college graduates. We can't stay with 28,000 kids a year dropping out of school and be who we want to be as a state.

What about environmental issues? There's the sense that you come from a family...

A petroleum-based family. (Laughs.)

Exactly. So how much interest are you really going to have in alternative energy sources and so forth?

Well, you can say here's what I would do, or you can say here's what I've done. Look at what Knoxville's done. We're one of the few non-coastal cities to be named a Solar American City. We have our own energy sustainability program around here to cut back on the city's own use and how we can model that. We've become one of the links for the electric car recharging initiative with TVA and Oak Ridge and Nissan, the city signed on to be one of the original partners. There'll always obviously be, "Gosh, this is a family that made their money selling gasoline and diesel fuel"—and still does, and still will be for the foreseeable future. But I can promise you that we're going to continue to push Tennessee in some of the directions it's been going. Governor Bredesen I think has done some significant things, not just recruiting the solar industries of Wacker and Hemlock, but he put some money toward—the big question with solar going forward is, can it be cost competitive?—and so he put some money for a research deal with UT and ORNL that said, can we crack the nut of seeing if we can cost-compete instead of just totally having the government subsidize adding solar power. If we can become known for the research piece of that as well as the manufacturing piece, you know, there's a real "there" there.

And you think those are transitions that need to be made.

Yes. And I think very appropriately so. People ask all the time, are we using too much fossil power, and we are. But short-term, you show me the alternative. I don't think Americans are ready to change their lifestyle as drastically as they would have to. But should we be making every effort to move that way now? You bet.

You've talked about the convention center as the most direct reason for you needing to raise taxes. And that was Victor Ashe's project, but most people around town who were here at the time saw it as your father's pet project.

Yeah. I'm not sure I agree with that logic. You'd have to ask him for certain, but that's definitely not how I would remember that, or in the conversations that I've had with him that he would say that either, that he was sold out for the convention center to happen. I'm not 100 percent sure I agree with that.

People have tended to see your father as being a sort of controlling influence in a lot of things over the years. Do you think people too often saw his hand behind things?

I'm biased, but I do think that. When I ran for mayor, that was kind of the issue: Is this Bill running for mayor, or is this Jim just wanting to have his hand in something else? Honestly, I think if you look back to kind of what my dad's done for 50-plus years that he's been in Knoxville, I honestly think it's been for the good of the city. Now, would there be times that people go, gosh, you know, I wouldn't have done this, or I wouldn't agree with this? But in the end—again, I'm prejudiced—but I think Knoxville's a lot better city because Jim Haslam lived here and started a business here. I'd kind of challenge anybody that would argue that.

And how do you feel about the convention center overall, whoever's idea it was?

You know, it did add a lot of cost structure to us. On the other hand, I think it's become something that's become part of who we are as a city. If I was going back, would I do it or not do it, it's kind of a hard question. But there's no question it added a lot in the cost structure. The two or three things that happened 10 or 12 years ago, the convention center, the pension plan, there's some things that have added a lot to the existing operating cost structure of the city. But you can kind of go back and go, should've, would've, but I don't really think of it that way. Here's the cards we're dealt, so I'm going to play these cards.

I do think the direction you've seen out of Knoxville lately is saying, let's see if we can rebuild downtown and make it kind of the hub for not just the city and the county but the entire region. I just left having lunch at Market Square on a Monday, and the place is humming. The Biscuit Festival last weekend where they had three times as many people as they thought they'd have. I think that kind of natural synergy is a great way to build a city.

You reach a kind of sustainable level.

You really do. When I ran for mayor, when Madeline and I were running, you could've almost run a really good campaign by running against downtown. Everything that's happened down there, the convention center, the Women's Basketball Hall of Fame, there's a whole lot of arguments about, if I live in Norwood or West Hills or Parkridge, why do I care? But I think we're past that, people go, "Okay, I get it now." It's become kind of a cultural hub, an entertainment hub, it's helped us.

One of the biggest challenges as a mayor is, the physical boundaries are pretty much set—you can annex, but it's problematic. And growing with new buildings is really hard, because you've got all the zoning battle issues. And yet if you don't grow, you've got a problem, because every year employee salaries go up at least 2 1/2 [percent], health insurance costs go up, the pension plan goes up. If you're not growing, pretty soon you've got a real problem and you're just going to have to keep raising taxes and chase people away. And so downtown is a place we could grow without having that kind of pressure. And here's the last thing I'll say on this is, one of the things any community should work hard to do is to keep young people wanting to live there. I think downtown's a piece of that. I know some people who say, "I was gonna move to Nashville, or I was gonna move to Atlanta or Charlotte, but I kind of like Knoxville now," because of things that are happening downtown. How do you measure that? I don't know. But there's a real value to keeping talented people around.

And to be honest with you, sometimes we get more credit than we deserve. There was a lot involved. Victor started some stuff, there were a lot of individual entrepreneurs who were downtown risking their own dollars to make things happen.

In a way it's almost a good illustration of the kind of governing philosophy you're talking about, because part of what's happened downtown was government kind of stayed out of people's way. It did a lot to encourage things, but it also kind of let people do things they wanted to do.

There were some places where they seeded the water, so to speak, with the Sterchi building and the KUB building, the old Miller's Building. But primarily they just kind of stayed out of the way. You had a lot of individual entrepreneurs who came in and pushed things, and we said, okay, how can we help? So I do think it's a good model. And because of that, our revenues have picked up. If you look at the CBID's revenues compared to the rest of the city, in tough times it's been good.

Latest Blog Posts