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Governor Wolf Draws Line in The Sand on Budget After Repeated GOP Failure and Obstruction - YouTube
Channel: Governor Tom Wolf
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Good afternoon.
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Today, I am sad to report that House Republicans again failed to deliver on a budget agreement.
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Over the last several months, I have been flexible and patient as they have repeatedly
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failed to agree amongst themselves on how to approach the budget.
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House Republicans continue to prolong and delay the debate over the means to pay for the programs
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they themselves voted to pass – overwhelmingly – in June.
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They have worked tirelessly to block a severance tax,
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at the expense of finishing this budget process months ago.
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In February, I proposed a budget that balanced by implementing more than $2 billion
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in cuts, savings, and efficiencies and relying on a severance tax and closing loopholes.
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I proposed this budget to begin a conversation on common ground.
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I was optimistic.
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Despite a historically divided government – big and very conservative Republican majorities
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and a Democratic governor, we were making real progress.
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We had made strides on many issues – working together:
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We legalized medical marijuana.
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We instituted meaningful Liquor Reform for the first time since prohibition.
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We invested in Education at all levels.
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We have a fair funding formula.
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Substantive measures to combat heroin and opioids epidemic in Pennsylvania.
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Pension reform had been at the top of the Republicans leaders’ to-do list for decades.
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Yet I, as a Democratic governor with Republican majorities in both the House and Senate,
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brought it across the finish line.
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But despite these efforts, one thing has become abundantly clear:
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Too many Republicans in the legislature are more focused on the 2018 elections
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than on helping Pennsylvania succeed.
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They would rather see me fail than Pennsylvania succeed.
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They would rather protect special interests, lobbyists and campaign donors than do the right thing.
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I’m not going to play their games anymore.
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I’m drawing a line in the sand.
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Yesterday, they said they could not pass their own proposal to lift the exemption on commercial storage.
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Now, their proposal to tax hotels has failed.
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The fairest and simplest solution to this challenge
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would have been, and still is, to replace these taxes with a severance tax.
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It’s the same amount.
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And it’s widely supported throughout the commonwealth
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and among bipartisan legislators,
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as was evidenced by the responsible action taken by the Senate just a few months ago.
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It’s commonsense.
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Pennsylvania is the only major gas producing state in the nation without one.
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The House could still put that in, and have a vote this week to get this done.
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Doing so would bring together a budget with ideas from all caucuses and the administration.
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The House Republicans had every opportunity to put a balanced budget on my desk.
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And they have continuously failed.
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So, in the absence of a compromise revenue plan getting to my desk,
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I am taking action to manage our state’s finances.
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I will take immediate steps to address the deficit.
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First, I will initiate plans to securitize profits from our state’s liquor system.
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This will raise $1.25 billion to pay off nearly all of our prior year deficit
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and significantly reduce the need for additional temporary borrowing to pay our bills.
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The Liquor Control Board sent $210 million to the General Fund last year,
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far in excess of the annual amount necessary to make payments on this loan.
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This would be structured similarly to the Republicans’ plan using tobacco settlement funds.
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Additionally, I will take steps to the best of my ability to manage complement,
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and continue to find ways to streamline government services that do not harm Pennsylvanians.
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I will also look for other state assets to monetize, if appropriate.
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Doing so will put the commonwealth in the best position possible
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to protect funding for schools, senior programs, and hospitals
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– along with investments in our roads and bridges.
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Again, things we have all voted for back in June.
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This is not the outcome I wanted.
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Let’s be clear: The House Republican foot-dragging
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has led to one credit downgrade already and warnings of more.
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That means the Republicans in the House, by virtue of their inaction,
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have handed every single Pennsylvania taxpayer
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a tax increase – all so special interests don’t have to pay their fair share.
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It means that every entity with the commonwealth’s backing will have to pay higher interest rates.
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This affects school districts.
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It affects townships.
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It affects cities.
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It affects boroughs
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It affects counties.
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As well as the Commonwealth.
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Now, we’ll all have to pay more. Just to get the same.
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This is not just irresponsible – it’s hypocritical.
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The very folks who have proclaimed themselves the protectors of the taxpayers hard-earned money
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have blithely reached into the pockets of those same taxpayers.
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I’ve had enough of the games.
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In February, I presented a balanced budget with no broad-based tax increases
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and more than $2 billion in cuts, savings, and efficiencies.
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It funded schools, senior programs, hospitals.
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It upheld our commitment to create jobs.
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But in the time since my budget speech, House Republicans have again proven themselves
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incapable of completing their constitutional duty.
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And so, I will manage the finances of the commonwealth until the House sees fit to do what it’s supposed to do.
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I will make sure we protect education
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I will make sure we protect our seniors I will continue to do what we need to do to combat the opioid epidemic.
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I will continue to do everything I can to create good-paying jobs
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and attract businesses to the commonwealth.
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Again, this is not the way our government is supposed to work.
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But I must ensure that Pennsylvanians are not hurt.
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And so I will act to protect the investments we all made earlier this year in Pennsylvania.
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Any questions?
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Managing the complement what does
that mean are you gonna lay people off
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if no just by attrition just for example
there are sixteen hundred fewer people
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working in the executive branch now than
that we're back in December just through
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attrition the turnover is that great so
I will continue to work with agency
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executives agency heads to manage the
compliment so that we're actually doing
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what we can to streamline government yes
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we haven't cheated yet but just as an
example over a 20-year period
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amortization with 4% interest it would
be about 85 to 87 million dollars a year
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we last year we got 210 million dollars
so 85 is less than 210 million dollars
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and we could capitalize the first year
payment so if you want details on how
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that would work again we haven't
negotiated it yet we'll have to see the
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price will vary as to whether it's
callable non callable all kinds of
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things but just as a general thing yeah
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first of all the the tobacco settlement
fund securitization I mean it's it's
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something that that we could do I have a
problem with that because there are
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programs that that tobacco settlement
fund actually funds and that would be
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you know we'd have a problem sustaining
that if we did that so this seems to be
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something that that is not going to have
the impact that securitizing the tobacco
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settlement fund would have yeah I'm fine
with I'm I'm fine with with what I'm
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saying is that I I'm tired of waiting
it's over three months and I've been
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getting working with them negotiating
with them and you know we have
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agreements with with four of the five
parties here we've gotten to the point
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where we've actually said you know I
called meetings over the weekend of the
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the leaders of the Senate in the house
and and we're all saying you know what
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what is it that you want to do and and
they can't even get the votes so far for
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the things they've said they have called
now this is the third time they said we
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can't get the votes for proposals that
that we're making this does not
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foreclose on anything that they want I'm
just saying I'm tired of waiting this
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big waited over three months and and I'm
not giving up on this process I'm just
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saying Pennsylvania's need some
certainty in this process we can't keep
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waiting for for a proposal that may come
out of the Republicans in the House that
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they seem so far to be unable to deliver
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anytime anytime any any time any time
they want to do this I'm not doing
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brakes on anything I'm managing with
what I have to the best of my ability if
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we actually had recurring revenue if we
actually get recurring revenue like a
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severance tax for example that's going
to make it easier to do the things that
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we need to do to do this but in the
absence of that I am going to have to
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manage I can't sit here and just wait
for something that over a three month
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period has yet to appear despite
promises yeah
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that's right well that's a good point I
have been managing this but I've been
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managing it with the expectation that
the Republicans in the house would
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deliver on the promises they made again
the Senate Republicans delivered on the
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promises they made and I was expecting
the same thing from people with whom
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shaking hands and looking them in the
eye and getting promises but I just
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can't do that anymore so I'm gonna I'm
gonna manage this and there will be some
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some things that are going to be harder
to do in the absence of that recurring
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revenue I can't tell you exactly what
those things are but the basic things
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that we committed ourselves to back in
June protecting education at all levels
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protecting seniors protecting jobs and
trying to create more jobs and and doing
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what we need to do to keep Pennsylvania
in the forefront of the opioid epidemic
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and fighting that epidemic I'm going to
continue to do everything in my power to
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address those those issues you had a
question
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if this all goes forward in everything
but does that mean there's not going to
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be any more payment deferrals or
spending freezes what spending freezes
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are you talking about
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I'm hoping to do what I need to do to
make sure that schools get what they
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need the human service organizations get
what they need that we go forward with
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what we agreed to do in in the budget
back in in June again I'm gonna see a
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lot of that depends on how revenues come
in the General Assembly has authorized
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spending of money and I am now by
default the one who has to manage
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whatever revenues come in with what we
have in place to make sure that we end
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up with a balanced budget and what I'm
saying here is I am committed to doing
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that
how much that that impinges on when some
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some of the things in that that
appropriations budget I don't know yet
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but it would be a lot better if we had
the budget revenue to pay for the budget
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that we agreed to in June yes
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I'm looking at everything I need to do
to balance this budget and manage the
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taxpayers fund here that's that's what
I'm going to do and I I did that in
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business I'm gonna do it here yeah yes
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we didn't get into that conversation but
but I gave him a heads up that I was
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coming out and doing this and he thought
that was a good thing but he can speak
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for himself
yes yeah let me be this is not this is
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not a discrete plan that is separate and
apart from what what I would do to
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manage this if I had the revenues that
were enshrined in in my proposal in the
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Senate proposal and the different
proposals that came from the Republican
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leadership in the house but they haven't
gotten to votes for it just means that
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given less that's going to come in I'm
gonna still try to manage this process
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if at any point in time they come up
with with a budget proposal that passes
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muster in the Senate that that I can I
can sign on to yeah I will I will move
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to that because that's going to give me
the the revenues that I need that I'd
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like to have to make sure that all these
things are protected in the absence of
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that I'm going to do the best I can
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today it sounds like basically budget
talks are limited and there's no blanket
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in the tunnel but but I guess my
question is in terms of dollars and
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cents are you doing that part
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yeah but we are part I think I think the
the the problem is that the between
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about five hundred six hundred million
dollars of recurring revenue recurring
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revenue not one-time transfers not
something that says next year we're
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gonna have to go back here talking about
the same thing we need recurring revenue
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and and again that's why I proposed a
severance tax that's recurring revenue
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that every other gas producing state in
the United States has we don't have it
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here but recurring revenue would really
plug that hole again keep in mind of the
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three billion dollar deficit that we
started this year with I plugged over
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two billion of that with savings and
streamlining and again just the the the
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cut in the this attrition in in the
compliment of employees the number of
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employees sixteen hundred fewer
employees that's worth about 150 to 200
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million dollars each year
that's recurring so I will continue to
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do do that kind of thing and I think
that's but I still needed some recurring
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revenue the Senate I didn't agree that
wasn't that's I mean I that wasn't what
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I proposed but I could agree to it it
was a compromise what came out of the
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Senate back in in July the same kind of
thing is what what we need and it's not
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a matter of a couple dollars it's a
matter of recurring real recurring
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revenues so that we can finally get our
arms around this budget deficit this
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will close it well we had the first one
was was on a severance tax the second
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one was on the exemption removal the
exemption the elimination of the
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exemption for commercial storage that
was a House Republican idea then we had
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one came out late last night I think
actually was reported out of the Rules
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Committee on a hotel tax so then then we
heard earlier today that they don't have
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the votes for that
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that I've seen you say that the liquors
securitisation would raise about one
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point no 1 billion two hundred and fifty
million dollars that's what we need to
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raise we think we need that that's what
would have red been raised by the
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tobacco securitization - it's a 20-year
amortization but again we haven't
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negotiated this Charlie I'm just giving
you an illustration of what at a twenty
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year period at four percent interest it
was about 85 to 87 million dollars a
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year and we'd capitalized the first year
last question the Liquor Control Board
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actually I don't have the ability to do
that the Liquor Control Board does so
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I've spoken with Tim Holden the chairman
Holden and and he didn't seem to think
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that would be a problem so I'm making
this announcement the assumption that
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that he will do what he said he was
going to do
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well that's that's a the state related
Penn State University of Pittsburgh
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temple and Lincoln University that's
called the non-preferred appropriations
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that's sitting in the House of
Representatives has not gotten to my
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desk I'm assuming that if it does get to
my desk they will put the revenues in to
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pay for that six hundred and forty seven
million dollar price tag that would cost
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to do this but again if that comes to my
desk without revenues I'll try to figure
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out a way to do that but it makes it six
hundred and forty seven million dollars
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harder to do waive it Dennis really as I
said in my comments I think it has
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everything to do with it I think a lot
of people are playing politics here and
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they weren't last year and so we got a
lot of things done the the the from you
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know it's historic funding for education
at all levels early childhood basic
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higher education to legalizing medical
marijuana to pension reform that that
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actually got a positive editorial
reviews in the Wall Street Journal and
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The Washington Post when's the last time
that ever happened we've addressed the
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opioid epidemic I think in ways that
most other states have not done so we've
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done a lot of things together and I
think what's disappointing about this is
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for some reason that has stopped and I
don't understand why it stopped okay
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thank you very much
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