00:01 - Memo.

00:04 - It is.

00:07 - The last day.

00:09 - Of our budget hearings

00:11 - and

00:12 - and.

00:17 - I would suggest that was the

00:19 - of the clip nope.

00:21 - Seriously grateful for all of our committee members

00:24 - and

00:25 - for the dedication over the last three weeks of budget hearings

00:28 - and to all of our staffs.

00:30 - For all of their work to prepare the members

00:33 - were these budget hearings.

00:36 - Through the staffs at all of the different agencies that have come before us.

00:44 - As well as the staff here in harrisburg

00:46 - and we are going to begin our hearing with the

00:49 - governor's budget office

00:51 - but before we begin.

00:53 - Chairman druzy in

00:54 - any introductory comments thank you sharon harris

00:57 - good morning everyone good morning secretary rebirth

01:00 - welcome to your first budget hearing

01:02 - we appreciate you being here obviously we are have a lot to cover today

01:06 - and the governor's

01:07 - five

01:08 - three point two billion dollar spending proposal

01:11 - two point seven two billion dollar increase over the current.

01:15 - Budget five point four percent

01:17 - increase.

01:19 - Obviously we're concerned with the impacts on the rainy day fund the proposed

01:23 - drawdown of about four and a half billion

01:25 - the depletion of our surplus and a lot of other

01:28 - things that we covered over the past three weeks that

01:31 - ultimately lead to you

01:32 - and so we will

01:34 - go ahead and get started and look forward to your your answers thank you

01:37 - thank you.

01:38 - Before we begin secretary

01:39 - could rise.

01:44 - Do you solemnly swear that the testimony you're about

01:46 - to give us the truth the whole truth so help you god.

01:50 - Maybe seated

01:51 - in the middle of the table as our timekeeper

01:54 - our members will have five minutes to ask questions

01:56 - the light will turn green when they are able to start

02:00 - at yellow that means that there are thirty seconds left

02:03 - and at red that means time has expired will accept you wrap

02:06 - your answer.

02:09 - So that we can get as many questions in as possible.

02:12 - Secretary would you like to begin with the

02:14 - opening statement or go directly to the question

02:16 - read the questions

02:17 - alright let's do it.

02:20 - We'll begin with representative curry.

02:26 - One.

02:30 - Thank you for being here today.

02:33 - First question for you is

02:35 - about the budget impasse.

02:38 - Twenty twenty five twenty twenty six budget was passed on november twelfth.

02:43 - Which means it was four months and twelve days late.

02:47 - During that time

02:48 - school districts childcare centers

02:51 - counties and other partners miss critical payments

02:56 - have you been able to i to quantify the impact

02:58 - of the impasse in terms of missed payments

03:02 - or lost economic activity.

03:07 - So when it comes to the

03:09 - impasse.

03:11 - There was.

03:13 - About.

03:14 - One hundred and six thousand payments that

03:16 - we

03:17 - had pre audit it and worked with

03:20 - the treasury department

03:21 - to be able to issue.

03:23 - Upon the actual enactment of the budget but again those hundred and six thousand

03:27 - payments would have otherwise been released to those

03:30 - entities that you'd mentioned school districts counties

03:33 - and other

03:34 - entities if we would have had an on-time budget

03:37 - the value of those payments was about seven point two billion dollars.

03:41 - So it was seven point two billion

03:43 - and over one hundred thousand payments that were held.

03:45 - Thank you for that information and

03:47 - pa is constitutionally required to have a capital budge shit

03:52 - what impact as a delayed capital budget have to your office's management

03:57 - of our capital programs.

04:00 - Yeah so the.

04:01 - The capital budget

04:03 - is isn't is an important part of the overall.

04:06 - Strategy of

04:07 - providing services.

04:09 - That the

04:10 - from the commonwealth

04:11 - and and

04:13 - having a delayed capital budget

04:15 - visa fee a delayed

04:16 - debt issuance bill which we did ultimately get

04:19 - from the general assembly in november as well.

04:22 - Last year

04:23 - and delays

04:25 - the ability for us to.

04:28 - Issue debt which then is in turn used to continue to pay contractors

04:32 - on capital projects

04:34 - and.

04:35 - The.

04:37 - How we

04:38 - typically would would prefer to have

04:40 - and

04:41 - the capital budget operate is a devil

04:44 - issued alongside

04:45 - the start of a fiscal year

04:47 - ultimately giving the flexibility to the administration to issue bonds

04:51 - when market conditions are

04:53 - are at the best opportunity and thankfully we did have a

04:57 - pretty successful bond sale

04:58 - and we took some additional steps this here

05:01 - to try to drive down.

05:02 - Potential interest costs over the year by doing a multi charger boat approach

05:06 - and brick breaking the sale down into three

05:08 - separate bids

05:10 - and but.

05:12 - Having the ability to to sell when we need to and not

05:16 - potentially slow down payments to manage cash

05:19 - is important.

05:20 - Thank you for your answers

05:22 - thank you chair.

05:25 - Thank the gentlelady representative kale.

05:29 - Thank you mr chairman

05:30 - thank you mr secretary.

05:33 - Over the course of the last

05:34 - really year

05:35 - two years as we've been going through these hearings a growing frustration

05:40 - within our caucus and i think within this body

05:43 - has been about the projections

05:46 - that the governor put out in his

05:48 - budget proposal.

05:51 - This year

05:52 - the projections show a growth of about point seven eight per cent in the budget

05:59 - for the next years going from

06:01 - twenty eight twenty nine twenty nine and thirty

06:04 - and we've talked to multiple secretaries we talked to dhs we've talked to p d e

06:10 - and all of them tell us

06:13 - that if medicaid costs continue the way that they're going if we actually follow the

06:18 - supreme court with the adequacy this is their works on mine

06:21 - the adequacy funding you're talking

06:23 - hundreds of millions

06:24 - billions dollars more of spending

06:27 - yet our overall budget projection has this at point

06:31 - seven eight percent

06:33 - is that a realistic projection.

06:37 - I think that the projection

06:39 - follows a long standing practice of.

06:42 - Showing what we are.

06:44 - Mandated to provide in costs

06:48 - so that would be any kind of

06:50 - collective bargaining agreements that are officially in place

06:52 - and we know for sure are happening

06:54 - and and other made it where it costs an

06:58 - eye.

07:00 - Things like correction spending and

07:02 - dhs spending

07:03 - there is growth in our da dhs projections

07:06 - but i'll also say that

07:07 - as as you know there are

07:09 - potentially large impacts coming down from the passage of h r one

07:13 - at the federal level

07:15 - and

07:16 - coupled with some of the other

07:18 - steps that so actually kush has taken

07:21 - to help manage costs in the dhs space

07:23 - along with

07:24 - our proposal to increase the minimum wage

07:26 - and

07:27 - i

07:28 - know

07:28 - just the redetermination work requirements and other things at the federal level

07:32 - and

07:33 - it it is.

07:35 - It is going to be a very difficult

07:37 - and.

07:38 - Asking trying to

07:40 - do

07:41 - accurately depict what we believe that the

07:43 - overall costs would be not always so what you can see that

07:46 - point seven eight percent is not a good faith projection.

07:50 - I think it is a projection based on the information that we have at this point i will

07:53 - also say that we budget a year at a time.

07:56 - So

07:57 - the proposal that we

07:58 - put before the general assembly in february.

08:01 - Continue the investments that

08:03 - we believe are important to make in pennsylvanians

08:05 - and we also understand that the negotiation process is just that it's a process and

08:09 - we'll be back discussing every year on an annual basis with the general assembly one

08:13 - of the most important things that we do within this legislative body is present a

08:17 - budget vote on a budget pass a budget keep the commonwealth going

08:21 - year after a year we're looking at things it is critical for us to understand

08:26 - to understand where the executive believes the

08:28 - expenses are going to be not just this year

08:31 - but in years gone and future so we can prepare

08:34 - it's that way here it's that way a business is that way for my constituents we want

08:39 - to be able to plan and to plan effectively

08:42 - but when we get bad faith numbers as it relates to projections which is what this

08:47 - basically is point seven eight percent

08:50 - you're your own secretaries within the administration are telling us it's going to be

08:54 - more and then when we asked them about the projections

08:57 - know what the responses it's asked the budget secretary

09:00 - is asked the budget secretary response

09:02 - i guess my question to you

09:05 - are are you familiar with what the spending is going to be in the department of

09:08 - education and if you're not why are you the one putting the projections

09:12 - in the department of education.

09:15 - So we are projecting what the spending level for the department of education would be

09:18 - in the budget year in fiscal year twenty six

09:21 - and again we

09:22 - we cannot speak to what the general assembly

09:25 - will implement in fiscal years twenty seven twenty eight twenty nine or thirty

09:29 - however we know that.

09:31 - It's important to make the investments that we're

09:32 - proposing and twenty six to keep us on a good projection

09:35 - in making investments in our children

09:37 - that was

09:38 - just for the record here i've been in office since two thousand and nineteen

09:42 - and that year was a five point three percent increase the budget the next year six

09:46 - point three percent eleven point five three

09:48 - point one percent and twenty two twenty three

09:51 - five point eight percent twenty three twenty four

09:54 - five point three percent twice four twenty five

09:56 - twenty five twenty six five point seven percent

09:59 - propose this year five point four percent

10:02 - and then the next four years out of projections his point eight percent.

10:07 - Are these good faith projections

10:09 - how can we

10:11 - plan for the future of this commonwealth and be responsible with our constituents tax

10:15 - dollars if we're not getting good numbers from the executive branch.

10:20 - Again the the projections.

10:22 - Are based on what we know for sure we will be paying

10:25 - and

10:26 - a

10:27 - we come back every year with a new proposal based on

10:29 - where we believe the investments should be made and.

10:33 - I believe that we'll be having this same conversation next year about what the

10:36 - investment should be in fiscal year twenty seven.

10:38 - Thank you thank you mr chairman then the gentleman representative webster.

10:42 - Thank you sharon.

10:45 - And thank you

10:45 - secretary.

10:48 - I'm going to talk about k through twelve

10:50 - adequacy funding a little bit right and

10:52 - in that

10:53 - in prior session

10:55 - this

10:56 - this

10:56 - legislature

10:58 - passed

10:58 - house bill twenty three seventy

11:01 - and defined a seven year timeline to

11:03 - to close the atas

11:05 - adequacy gap and i can tell you

11:07 - for schools in my districts

11:08 - it's been enormously impactful powerful

11:11 - particularly for our norristown area schools

11:13 - that that have been

11:15 - inadequately funded.

11:17 - So

11:18 - we had at that time a four point eight billion dollar gap and seven

11:22 - year timeline

11:23 - and over two session

11:25 - two budgets

11:27 - we've paid that down about a billion dollars twenty percent five years ago.

11:32 - So

11:33 - i.

11:35 - As you know the five year budget

11:37 - statement projects adequacy and eight years in a flat

11:41 - and a flat mode and

11:43 - and so

11:44 - on.

11:45 - You know we've had a

11:47 - a court ruling we have a

11:49 - legislative bill for a seven year timeline i'd say the.

11:53 - General consensus is we need to stay on a seven year timeline

11:57 - and

11:58 - can can you.

11:59 - Talk to us about how do we

12:00 - how do we project that how do we stay on on the path that close oozing that gap

12:06 - and then as a follow on

12:08 - if you can speak economically budget wise

12:11 - about the impacts that that's providing for pennsylvania

12:14 - yeah sure

12:15 - so

12:16 - as you stated we've

12:17 - started to

12:18 - address the adequacy gap it was a bipartisan.

12:22 - Effort to create the adequacy formula.

12:24 - It was started at five hundred and twenty six million the first year that we had

12:28 - work to address it in an increased to five hundred

12:30 - and sixty five million dollars last year to the point

12:33 - then i

12:34 - just tried to make.

12:36 - Things change on a year to year basis.

12:38 - There was an agreement

12:39 - last year to increase the amount of dollars that go through the

12:42 - ready learn block grant formula

12:44 - up to five hunt sixty five million.

12:47 - We are again proposing since that was the agreement

12:49 - with the general assembly last year to fund

12:51 - adequacy formula at five hundred and sixty five million dollars again this year

12:55 - and when the formula was created in the school code

12:58 - it it

12:59 - allocates dollars on an annual basis.

13:02 - So we are proposing the five sixty five

13:05 - for fiscal we are twenty six

13:07 - and we understand that there will be future conversations with the general assembly.

13:11 - On what the future of that funding looks like

13:13 - but you know we are committed to

13:16 - work towards the seven year gap.

13:18 - As far as the impacts of adequacy i i've also heard from districts about the

13:21 - importance of the dollars and do know

13:24 - that we're starting to get the reporting on

13:25 - what the districts are using those dollars for

13:27 - i think twenty five percent towards

13:29 - academic success

13:31 - almost twenty percent for full day pre k or full day kindergarten

13:34 - so i think the dollars are being put to good use and.

13:37 - The governor

13:38 - has taken a

13:40 - all of the

13:41 - of

13:42 - approach on workforce development and

13:44 - we've made

13:45 - investments

13:46 - in a

13:46 - bipartisan manner in several areas including.

13:50 - Pre k.

13:51 - Our school

13:52 - school aged children and an adult

13:55 - adult

13:55 - workforce

13:56 - so i think it's all part of the broader workforce strategy

13:58 - to make sure that we're providing resources to schools

14:01 - so that our kids can.

14:03 - Adequately learn and

14:05 - become productive

14:06 - in the future workforce pennsylvania

14:08 - if i ask a question

14:09 - maybe it's a little different anger well

14:10 - if if we're committed to a seven year timeline

14:13 - how does that help you in your projections across the budget in total.

14:18 - I think it it helps us.

14:20 - In

14:21 - building what we believe economic success could be.

14:24 - For the future

14:25 - which ultimately leads to revenue growth

14:27 - and

14:28 - that coupled with our.

14:30 - Changes that we've made in the.

14:33 - Overall business climate in pennsylvania under this administration working with the

14:36 - general assembly with our permitting reform and continuing cut business taxes

14:39 - as well as putting more money back in pennsylvania pockets.

14:43 - Through new

14:43 - new programs like the work in pennsylvania tax credit i think all of that goes into

14:47 - consideration in a bright future for

14:49 - for the commonwealth and allows us to continue to build

14:52 - on those investments which is what this budget does

14:54 - that that's my vision for this kind of love thank you.

14:58 - Thank the gentleman.

15:00 - Representative maiko

15:01 - thank you mr chairman

15:03 - secretary thanks for being here.

15:05 - Real quick

15:06 - i got a couple

15:07 - quick ity questions for you

15:08 - help me understand what's going on

15:10 - and

15:11 - so this year is the second year in a row the governor

15:13 - has been requesting the new enhanced enterprise security

15:17 - think he got ten million last year look for another ten this year

15:20 - to strengthen and expand existing cybersecurity

15:24 - infrastructure

15:25 - can you just

15:26 - brief leaks

15:27 - like

15:27 - touch on why

15:29 - you need that twice in a row and why we can't do that now with

15:32 - existing

15:33 - i t infrastructure.

15:35 - Yeah

15:36 - so at as you've likely heard there have been.

15:39 - Increased attempts in the cyber.

15:42 - Attack type of areas

15:44 - so i think it's just important that we can renew to.

15:47 - Build on the investment that we made last year

15:49 - and million

15:49 - also

15:50 - you know there's an

15:51 - election security.

15:53 - Dynamics as well that are.

15:55 - Certain

15:56 - well.

15:57 - So i think

15:58 - we do provide additional we we provide resources and as part of the overall i teach

16:03 - structure and build out the agencies

16:06 - this would be on top of that

16:08 - dedicated to

16:09 - infrastructure

16:09 - gotcha.

16:10 - Real quick can you touch on the differences between code

16:14 - pa owais ity services and then the enhance enterprise

16:18 - just

16:18 - like

16:19 - any

16:20 - enterprise security

16:21 - enterprise security api area just real quick yet so the enterprise security is

16:24 - dollars that is used by oei ity to be able to provide security

16:28 - away ity

16:30 - as the the

16:31 - main operations of the commonwealth's i t

16:34 - infrastructure

16:35 - and then code pa

16:36 - is our in-house tech build

16:38 - essentially so

16:39 - a co pa was created by the governor

16:41 - to.

16:43 - Reduce our reliance on outside contractors for i t infrastructure and

16:47 - so they've built platforms that would have otherwise

16:49 - been contracted out and not covered by laity

16:52 - and

16:52 - do you know roughly how much the commonwealth were spending total on ity.

16:59 - So the i t shared service billing model projection for an proposal for twenty six

17:04 - twenty seven is three hundred and eighty four million.

17:08 - And that's what gets spilled out to other agencies for

17:10 - enterprise-wide

17:11 - yeah okay through like outside contracting and all that too.

17:16 - It's it's not all an

17:17 - outside contracting it's in-house services provided by o a i t for agencies.

17:23 - Alright cool

17:24 - next going back to that enterprise

17:26 - system life cycle.

17:30 - We have that is to support the required mitigation of technology platform

17:34 - and to end it's supported life cycle

17:36 - and

17:37 - i feel like this is like the katy perry song

17:39 - is hot then it's cold the chest and it's now it's and then it's out

17:42 - we

17:43 - do

17:43 - for fiscal twenty six twenty seven it was thirty one point three

17:47 - and now it's back up to one hundred million.

17:50 - Can you just

17:51 - help me out on that i don't understand.

17:53 - What's the shift and then the timelines.

17:56 - That was pretty good you liked that.

18:00 - I want my time back to er.

18:04 - So the as for project

18:06 - is

18:06 - is the

18:07 - replacement of our sep system the sep system is the backbone

18:11 - of commonwealth operations

18:12 - it's at it's twenty year life cycle

18:14 - and it will no longer be supported so that is the

18:17 - reason for the.

18:18 - The upgrades and a new

18:20 - implementation

18:21 - the money that has been allocated by the general assembly to date has been a lot of

18:24 - the planning and prep work and now we're getting into the actual build

18:28 - so that's what the sixty million dollars is used for here

18:30 - are

18:30 - hopeful to begin to go live in fiscal year twenty six

18:34 - and it'll have enhanced reporting which is

18:36 - beneficial to

18:37 - appropriations committees

18:39 - we all

18:39 - have the general assembly appropriations committees

18:42 - and and the commonwealth i'll use that system is

18:45 - our financial reporting but it's also.

18:48 - The the basis for our hr systems procurement systems

18:51 - of our systems

18:52 - gotcha

18:52 - and then so.

18:55 - You said it's at the end of it's twenty year life cycle so.

18:58 - Rough guesstimate when you are planning to phase that out sometime in the next

19:02 - twenty

19:02 - twenty seven twenty eight timeframe.

19:05 - Or the existing so the existing one

19:06 - yeah yeah i think it

19:07 - loses it's support in

19:09 - at the end of the calendar year so

19:11 - okay

19:12 - got it.

19:13 - And

19:14 - last but not least

19:15 - just to follow up on my colleague at

19:17 - josh kale prior.

19:19 - Yeah.

19:20 - Talking to the dhs secretary

19:23 - you know she was

19:24 - kind of truce when we were asking her about budgeting

19:27 - obviously and

19:28 - we know the h r one things going into effect

19:30 - but as state legislators here on the state level not the federal level

19:34 - and

19:35 - trying to plan onto the out years

19:37 - it's a problem you know that's forty two percent of our budget it

19:40 - is increasing by minimum i've been here ten years

19:42 - to increase five percent each year

19:44 - do you think that that your projections are going to cover the medicaid

19:48 - increases

19:49 - at a minimum because she was saying that's like two hundred million

19:52 - and that's pretty close to

19:54 - over one percent of the projection.

19:57 - I think just based on the trends and again the.

20:00 - Changes that secretary kush has implemented

20:02 - in working with the mcr to try to contain costs along with the

20:06 - and.

20:08 - The impacts that we will be expecting

20:11 - to the medicaid population as a result of hr one

20:14 - i think it's a best estimate for

20:17 - a no

20:17 - timing of course will review it and again.

20:21 - We're talking about

20:22 - twenty eight implementation for

20:24 - hr one and.

20:26 - There's still time

20:27 - or congress could make changes to that so.

20:29 - They can as chairman that the sector

20:32 - may go making a katy perry reference

20:36 - was not on my bill single car today.

20:40 - It's at.

20:41 - The on the air.

20:44 - Representative young.

20:47 - Good morning and good morning

20:49 - budget secretary bieber

20:51 - my question is

20:52 - around missed opportunities and pass revenue proposals

20:57 - the twenties twenty six twenty twenty seven budget

20:59 - projects that there will be a shortfall of approximately

21:03 - four point seven

21:04 - billion dollars the governor's budget proposed as it's for revenue generators one

21:10 - adult use cannabis to closing the delaware loophole three

21:14 - skilled games tax and for

21:16 - minimum wage increase to help address our budget needs

21:20 - however this is the governor's fourth budget

21:22 - proposal and has called for one of these in the past.

21:26 - Looking back backwards how different what

21:29 - our budget picture look today

21:31 - if the legislature

21:33 - had enacted these proposals when the governor first called for them.

21:39 - I believe based on our

21:40 - previous calculations and estimates on what those

21:42 - revenue proposals would have generated over the time.

21:46 - From when we proposed that it would be about three

21:48 - billion dollars in additional revenue that we would be

21:51 - i

21:51 - have realized in the general fund.

21:57 - So as i understand your answer you said that

21:59 - if we would have enacted these proposals when the governor first called for them

22:04 - we would have

22:05 - profit at

22:06 - three billion dollars to date.

22:10 - Is correct.

22:11 - Thank you.

22:15 - Thank the gentlelady representative brown.

22:17 - Thank you chairman.

22:19 - Secretary thank you for being with us

22:21 - so as of the end of february

22:25 - the

22:25 - rainy day fund posted a balance of seven point six three billion dollars.

22:33 - Which could sustain the commonwealth for about fifty six days

22:38 - and the.

22:40 - Office of

22:42 - government finance

22:44 - or officers association actually recommends

22:47 - sixty days so we have a little ways to go with

22:50 - building that that balance.

22:54 - Before the senate appropriations committee you stated that if the governor's budget

22:58 - would be enacted and we used approximately four point five billion.

23:03 - That would be needed to balance his spending proposal.

23:07 - You estimated that the operational abilities

23:09 - of the rainy day fund would be down to just

23:12 - twenty three days

23:13 - so that is correct

23:15 - it is correct.

23:17 - In addition to his sustaining the operations of the

23:19 - commonwealth the healthy balance of the rainy day fund.

23:24 - Has had an

23:25 - undeniable effect on our.

23:28 - Credit ratings.

23:31 - In fact the governor himself has stated that quote

23:34 - reasonable fiscal management of taxpayer dollars

23:39 - led to those very credit upgrades.

23:43 - What are the financial benefits of the credit upgrades we received.

23:49 - Oh the credit upgrades that we've received has given confidence to purchases

23:53 - our bonds

23:54 - and i talked a little bit about

23:56 - our strategies and issuing bonds.

23:59 - In a previous question

24:00 - and

24:01 - the

24:02 - sale of those bonds with higher credit ratings

24:04 - leads to millions of dollars of interest

24:07 - saved over the life

24:08 - of those bonds nz.

24:11 - I would also say just to go back to

24:13 - if i can to a previous point.

24:15 - The national average of

24:17 - a rainy day fund coverage is about forty six

24:20 - and there are differing opinions on

24:21 - what a

24:22 - appropriate amount is there are different organizations who say

24:26 - less than the sixty

24:27 - but the national average is around forty six

24:29 - and it will also say that other

24:30 - states who have had higher balances.

24:33 - Are turning or in similar situations as the commonwealth and are turning to those

24:37 - so the

24:38 - amount of rainy day funds nationwide are are beginning to dip as well.

24:42 - So let me ask you this then if we withdrew four point

24:45 - five billion which is what the governor is proposing.

24:49 - How would that

24:51 - impact fact or ratings.

24:53 - So we've had conversations with rating agencies again we just

24:56 - issued a

24:57 - we just did a bond deal

24:59 - in january and we've had.

25:01 - Conversations directly with all three of the the rating agencies they've all affirmed

25:05 - our previous rating upgrades

25:07 - and and we've heard from some rating agencies that there's differing opinions as well

25:11 - well on how much should be in a rainy day fund vs

25:14 - actually going towards investments to help

25:16 - stimulate the economy.

25:18 - So i think it's all

25:20 - it's more than just surplus that they look at they look at

25:23 - overall stability and at the end of the day

25:26 - the commonwealth always pays

25:28 - our bills on debt service and makes

25:31 - an incomplete the promises that we give to our bondholders.

25:34 - So i think that all gets taken into consideration

25:36 - but we're not this budget it won't would not make us stable.

25:41 - As you've implied so you're saying that you don't think it would impact our ratings

25:47 - i think there's a broader conversation every year

25:49 - when they do affirmations on a variety of issues is

25:52 - that is one thing that has taken into consideration

25:55 - but i also feel that

25:56 - we had.

25:58 - Proposed to use the rainy day fund in last year's budget proposal and ultimately did

26:02 - not use it i understand we will have further conversations with the general assembly

26:05 - on what a final enacted product looks like

26:07 - but we're also going to have increased interest rates with this budget

26:12 - as and bond debt.

26:15 - Why.

26:16 - Does that sound like.

26:18 - Fiscally responsible

26:20 - management of taxpayer dollars to you.

26:24 - We will have additional bonded because we have

26:26 - to fund our capital budget but i'm not sure the

26:28 - reference to increase interest rates.

26:31 - Well with some of the the programs that are being interest

26:35 - introduced there are obviously going to an

26:37 - increased interest rates.

26:42 - I mean the interest rates are

26:43 - on our debt are set specifically by the purchases of our bonds

26:46 - and since we have a very competitive bond program we've been able to keep interest

26:49 - rates down regardless of what our operating budget looks like.

26:54 - Okay

26:55 - thank you.

26:58 - Thank the gentlelady representative waxman.

27:01 - Hello good morning thank you for for being here with us it's good to

27:05 - see you this morning i just wanted to

27:06 - have a couple of questions the first one i just want to clarify from

27:09 - the previous round.

27:12 - When we're talking about the state's bond rating which is

27:15 - the

27:16 - representative can you move them a

27:17 - little closer.

27:19 - There there we go

27:20 - i was saying great things to thank you chairman.

27:23 - Yeah

27:25 - it was another td

27:26 - okay

27:26 - so i just just

27:27 - quickly want to address

27:29 - the previous speaker's comments just around bond ratings and

27:33 - is it just the rate that the bond rating for folks falling at home it's how lenders

27:38 - determine the creditworthiness of the state of pennsylvania

27:41 - and it impacts

27:41 - the rate at which we can borrow money

27:44 - is that bond rating set just on the rainy day fund

27:46 - or there are other factors as well like let's say

27:49 - passing an on time budget.

27:52 - Yes in our conversations with the rating agencies

27:54 - as i mentioned there are a variety of factors that go into an affirmation or

27:58 - changes to the to the rating

28:00 - and

28:01 - on time budgets we've heard from them and

28:03 - in their effort nation statements that they provided us

28:06 - said that.

28:07 - You know

28:08 - that

28:08 - bondholders also like to see stability in

28:11 - when they can expect.

28:13 - Payments or

28:14 - when

28:15 - to show that the commonwealth can

28:16 - operate efficiently.

28:18 - So that's a factor

28:20 - again

28:20 - a surplus

28:21 - amount as well as just general

28:24 - approach and investments in

28:26 - in the economy and there are independent.

28:29 - Entities outside of state government that set those ratings and

28:33 - are looked to for that so

28:34 - just shifting gears i wanted to ask

28:37 - recently the commonwealth has made

28:38 - a fairly significant shift in how we fund arts organizations

28:42 - and we have had some some pushback or we have a lot of arts and culture organizations

28:46 - in my district there's a lot of concern

28:47 - about some of the new policies and i'm i'm

28:49 - wondering has the pennsylvania council on the arts

28:52 - conducted any assessment of the fiscal needs of

28:55 - pennsylvania's arts and cultural organizations and

28:58 - if not will the administration to undertake such an assessment

29:01 - to inform

29:02 - funding decisions in the future.

29:04 - I can't speak to the specific assessments that they may have made

29:08 - i am aware of the policy change that you were referencing

29:11 - and and understand.

29:14 - That the council has

29:16 - a kind of push for a rebranding to make sure that we're taking in all and

29:20 - all directions.

29:21 - Fluid direction

29:23 - approach

29:24 - an article nature

29:25 - and that.

29:28 - With the the overall goal to make sure that

29:30 - the dollars go as far as possible into

29:32 - arts projects

29:34 - and

29:34 - at the end of the day i think it's a

29:36 - i believe it was undertaken with a.

29:40 - Good stakeholder process and

29:42 - the board unanimously voted on that but i would have to

29:46 - inquire specifically about it

29:48 - kind of further assessments that were me.

29:50 - I would strongly encourage that we have

29:51 - some incredibly diverse you know

29:54 - community here in pennsylvania in our arts and culture community and

29:58 - there's just really really important organizations that are

30:00 - struggling at this time because of federal cuts

30:03 - and it's just very important that we make very deliberate

30:06 - decisions around i think fun waiting for the arts

30:08 - and i was just really urge the administration to look at that so thank you so much.

30:14 - Thank the gentleman representative nelson.

30:17 - Thank you mr chair.

30:20 - Like to.

30:21 - Shift a little bit.

30:23 - From the budget numbers in and talk a little bit about permitting

30:27 - reform and a dollar supporting that program

30:31 - last year in november two thousand and twenty five the general assembly

30:35 - we passed

30:36 - an act forty five which was

30:39 - fantastic permit being reform you know two key elements within that

30:42 - i mean there are a number of parts but

30:44 - the first was that

30:45 - public.

30:47 - Publicly posted all permits within the department

30:49 - and then the second

30:51 - was

30:52 - instituting a permit progress tracking system

30:55 - so we know that

30:57 - otiose the office of transformation and all opportunity

31:00 - has primarily been responsible for collecting the data and creating

31:05 - the catalog

31:06 - which is great

31:07 - and

31:08 - so now.

31:10 - Like

31:11 - where

31:12 - do we find

31:13 - the funding

31:15 - in this budget program moving forward to maintain that

31:18 - program

31:19 - where's the where is it in the budget.

31:23 - So otiose specifically has funded out of the cds and

31:27 - government general government operations line

31:29 - but we are also providing funding and propose funding in this budget specifically

31:33 - for code pa to help build out that online.

31:37 - Online system for

31:38 - various agencies.

31:40 - Yes and that's a

31:41 - different

31:42 - line item

31:43 - your code create an appropriation

31:45 - code pa has been funded in a variety of different

31:47 - ways over the last few years there's been an

31:49 - an actual appropriation from the general assembly

31:51 - and then there's been fiscal code language that

31:54 - utilizes existing dollars from other agencies to to work on projects where proposing

31:58 - just the funded off via the appropriation

32:00 - yeah and that's i think what we're trying to better understand not that

32:04 - i am

32:05 - oppositional at all to the ground that we're

32:07 - gaining because we're doing good things but

32:09 - so

32:10 - what will be the officer who will be the office for this next step

32:15 - to develop the permit tracking system

32:17 - will that be.

32:19 - Ot oh is it going to be code pa it's could be a concert without you

32:23 - we work collaboratively on the process

32:25 - okay actual infrastructure

32:26 - for the online databases is being developed by copia

32:30 - so the

32:30 - quantity of those funds the dollars

32:33 - where will we find those

32:35 - in the budget.

32:38 - We are proposing three point seven million

32:40 - built into the twenty six twenty seven

32:41 - appropriation for code pa for the tracking database.

32:44 - Okay

32:45 - excellent i really appreciate that we're just trying to

32:47 - sort through because there's a lot of

32:49 - new things and i'm struggling to find where these programs

32:52 - all fit in and you know who's driving them

32:54 - because then the governor mentioned

32:56 - a new plan in his budget

32:58 - and the grid

33:00 - right and that was

33:02 - this accelerated permit.

33:06 - The governors responsible infrastructure development

33:08 - which is interesting he named it after himself

33:11 - but

33:12 - is the o tio the office of transportation and opportunity

33:16 - are they going to be the lead office with grid

33:21 - so

33:22 - the current process

33:23 - is o tio is very hands on with exists sting projects.

33:27 - So they work very closely with

33:29 - across multiple agencies to ensure that

33:31 - business

33:32 - at the government is working at speed a business when it comes to permitting

33:36 - decisions on

33:37 - projects

33:38 - so when it comes to grid.

33:40 - The governor's standards

33:42 - that he had outlined in his address

33:44 - relate to ensuring that that

33:46 - development

33:47 - specifically in a data center space or meeting certain

33:50 - protections that we would like to see for the commonwealth

33:52 - and that is the local use of local workforce for both

33:55 - the building and for the operation of those centers

33:57 - ensuring

33:58 - environmental protection transparency so that local stakeholders have an idea of

34:03 - the the discussions in it

34:04 - and the talk of development

34:06 - and then also.

34:07 - One of the most important

34:09 - in my opinion is bringing their own

34:10 - power

34:11 - for those to to keep energy prices down and not push those costs off to

34:15 - the local consumers

34:16 - so

34:17 - i'm with you on all those and you know we want

34:19 - pennsylvania contractors doing this work

34:22 - we want you know new

34:23 - natural gas power plants are going to help

34:25 - you know read reduce energy costs

34:28 - so who is ultimately in charge because if

34:31 - the governor's office is using.

34:33 - You know it's own executive office funds are dollars

34:37 - twisting back and forth

34:38 - and then the governor goes

34:40 - like we want these sustained accelerated permits

34:43 - to remain within d e p or d c e d the

34:47 - you know so it's great that you brought up data centers.

34:50 - But will

34:51 - so is the fast track process going to be under

34:54 - ot

34:55 - because

34:55 - something permanent needs

34:57 - to continue to drive the success

35:00 - fast-track is a program operated by aotea so they would continue to to operate that

35:05 - and it would just be making sure that that those

35:07 - standards are being met before we provide fast-track

35:09 - and or other tax incentives that might be in place for those bills

35:13 - and then

35:14 - who for the

35:15 - the accelerated permitting which we all want for these data centers to get to go

35:19 - who trumps who.

35:21 - Because you have three agencies.

35:24 - Can

35:25 - you know somebody's gotta be in charge.

35:27 - I mean

35:28 - the fastrack processes and

35:30 - is managed by audio and audio works in collaboration

35:33 - with d c d d p and other agencies on permitting

35:36 - thank you

35:36 - thank mr sector

35:38 - thank the gentleman.

35:40 - Representative bellman.

35:41 - Thank you chair and thank you mrs secretary for being here

35:44 - one major concern that i'm hearing from a lot of constituents is about affordability.

35:49 - They are complaining and rightly complaining about

35:53 - the price of

35:54 - of gas about the price of groceries

35:58 - about inflation.

36:00 - So i wanted to see

36:00 - how does this budget address affordability

36:03 - for our constituents

36:05 - and so the

36:06 - as the governor mentioned in his speech and is shown in the proposal

36:09 - and there are a variety of areas in which

36:12 - i are trying to make.

36:14 - Items

36:15 - or purchases more affordable

36:17 - for pennsylvania nz and

36:19 - specific in specific areas were talking about in the housing area

36:22 - the governor.

36:24 - Signed an executive order

36:25 - asking for the administration to develop the first housing action plan

36:29 - which was just released

36:31 - a few months ago

36:32 - and

36:33 - there's there are legislative and regulatory

36:36 - proposed other policy changes that would help

36:38 - with affordability in that space

36:40 - but then also

36:41 - we had qa called for the creation of a critical investment

36:44 - critical infrastructure fund

36:46 - with the purpose of that would be would be to.

36:50 - You know

36:50 - add to.

36:52 - Add housing stock i think simple supply and

36:54 - demand the more that there is available and

36:56 - more affordable prices could become

36:58 - and he's also

37:00 - called for a plan on in the energy space as well

37:03 - which would be you know

37:05 - working closely with

37:06 - utility companies as well as

37:07 - you see

37:08 - an understanding that there's

37:09 - in transparency areas there

37:12 - but then also so that critical infrastructure fund would be utilized

37:15 - to help potentially bring new

37:18 - energy to the market as well as.

37:20 - The lightning

37:21 - and the governor called for last year

37:23 - i had some changes in that as well to the edge tax credits which would also benefit

37:27 - bring additional

37:28 - energy to the grid

37:29 - i think the budget also continues

37:31 - some of the other tax cut

37:33 - that we have made

37:34 - for pennsylvanians

37:35 - we expanded the

37:37 - child dependent care tax credit.

37:39 - Under this administration and working with the general assembly

37:41 - as well as creating the new work in pennsylvania tax credit which is putting money

37:44 - directly back in pennsylvania's pockets to help with the

37:47 - controlling costs

37:48 - and can you talk a little bit also about the property tax rent rebate program.

37:52 - So

37:53 - under this administration

37:54 - the general assembly had passed.

37:57 - Legislation to increase

37:59 - the eligibility for property tax rent rebate

38:03 - and it is now tied to a

38:05 - inflationary index so it will continue to grow

38:08 - as

38:09 - social security income or other income sources grow for

38:11 - our aging population

38:13 - so that they don't income out of the program

38:15 - our estimating a little over three hundred million dollars in property tax

38:18 - rebate payments in fiscal year twenty six.

38:21 - The general assembly in last year's budget had also

38:24 - made a change to the funding mechanism for that while the operations

38:29 - are funded

38:30 - for the property tax rate

38:31 - property tax rent rebate program or for and another lottery fund.

38:35 - The.

38:36 - Property tax relief fund actually pays for the

38:38 - the

38:39 - program itself and the the payments to seniors.

38:42 - Awesome

38:42 - well thank you for your work and that messenger.

38:47 - Thank the gentleman representative mustafa thank you

38:50 - thank you mr chairman

38:51 - good morning secretary.

38:54 - The

38:54 - tio as we heard some a little bit about this morning

38:57 - established

38:58 - via the executive order like we talked about in twenty twenty three

39:01 - to help cut through the red tape bring agencies together support peer business

39:05 - and encourage other businesses to move to the commonwealth

39:08 - then

39:09 - again in april two thousand and twenty three the governor signed yet another

39:12 - executive order to formally established co code pa

39:15 - for the improvement of online and digital services

39:17 - within the commonwealth which you referred to earlier.

39:20 - In review of the budget materials

39:22 - i'm trying to understand exactly where the o tio resides

39:27 - does the o tio

39:29 - receive funding through the line item appropriation for code pa

39:33 - not

39:33 - pa

39:34 - code pa.

39:36 - Appropriation funds projects and operations of code pa they have personnel staff the

39:39 - people who are actually doing the work that is what

39:42 - code pa is funded by ot oh as i mentioned in previous

39:44 - test fire.

39:46 - Or questioner is funded out of the dcd judea.

39:49 - Is added that which one department of community

39:51 - economic development studio operation.

39:54 - Oh okay so o tio was out of this edi

39:57 - and then code pa is out of copia

40:00 - i'll be okay.

40:01 - Southern regard with the

40:03 - the funding for the code pa then

40:05 - the governor

40:06 - first called for a three point seven million dollar increase in his executive budget

40:11 - and then in materials that were

40:13 - provided to us

40:14 - it was only three

40:15 - know him.

40:16 - Can you help me understand

40:18 - the difference in

40:19 - what the governor's a fiscal

40:21 - official ask is.

40:23 - Three point seven million is the dedicated amount towards the.

40:27 - Towards the actual tracking.

40:30 - Program.

40:31 - That we were discussing.

40:35 - The actual appropriation.

40:38 - For code pa.

40:44 - Is increasing by just over three million so we anticipate utilizing some existing.

40:49 - Some of the existing funds.

40:51 - Just based on savings for other operations personnel costs etc

40:56 - and

40:56 - still have some of the funds that were previously

40:58 - appropriated both in the appropriation as well as

41:01 - the transfer that i've mentioned from

41:02 - other agency funds okay

41:04 - so you mentioned

41:05 - e p.

41:06 - Uses gg

41:07 - finding like you said for permit catalog but

41:09 - tio is where the infrastructure is managed

41:11 - where's the fiscal responsibility in the budget

41:14 - where's this being.

41:16 - Tracked in the budget proposal.

41:19 - Seems like the governor created this executive order that made his own

41:22 - agency

41:23 - within code pa with his ot out so it's kind of an agency an agency that sounds

41:28 - great

41:29 - i mean so ot one code pa work collaboratively across

41:32 - the enterprise so they work with multiple agencies

41:35 - the actual permanent review

41:36 - as well as the economic development

41:38 - engine and strategies are managed by the existing agency so dcd continues to

41:42 - to be the main economic development

41:45 - agency for the commonwealth and works closely and collaboratively with audio

41:49 - and away i t still manages the overall infrastructure.

41:52 - That code pa is building new

41:55 - online platforms that would have otherwise as in previous years been

41:58 - contracted out and saving money there ndp still manages the actual permitting process

42:03 - then where's the fiscal responsibility then for this.

42:07 - Who's going to oversee.

42:10 - To make sure.

42:11 - I don't understand your question that so the budget appropriate dollars and

42:14 - the

42:15 - the normal

42:16 - fiscal fiscal oversight of dollars resides with the budget office comptroller's

42:20 - office and then eventually with treasure

42:21 - okay so that's where the responsibility is going to lie then

42:24 - it's all general fund appropriations are treated the same

42:27 - we have the same process for everything with oversight and what i

42:31 - know d p dollars owed.

42:33 - The operations of audio

42:35 - and the projects overseen by code pa of all the same process okay great

42:39 - thank you mr

42:40 - chairman

42:40 - that.

42:42 - Thank the gentlelady.

42:44 - Representative flemming.

42:48 - Good morning secretary thank you so much for being here with us today

42:52 - and.

42:53 - My colleague

42:54 - from the first class city philadelphia touched on something that

42:58 - i want to expand upon which was affordability

43:01 - and all of us who are.

43:04 - Trying to get reelected just engaged in a process of of

43:07 - speaking to voters trying to get petition signatures

43:10 - and one of the things that i heard about most was affordability in fact how.

43:16 - It's harder to afford energy groceries etc and for

43:21 - the constituents here in the district that i represent.

43:24 - One of the biggest.

43:26 - Constituencies there

43:28 - is our pre act on retirees

43:31 - and

43:32 - the fact that when they retired.

43:35 - There had been cost of living adjustments

43:38 - that were

43:39 - provided to prior retirees every five to six years or so.

43:45 - And for some inexplicable reason

43:48 - twenty about twenty three years ago

43:51 - that stopped

43:52 - that came to an end and so

43:54 - i want to thank the good gentleman represented malik

43:57 - gary he's the prime sponsor of bill along with the

44:00 - representative dc hospital for eleven

44:03 - that we passed about a year ago last april with bipartisan support

44:07 - to provide a cost of living adjustment to

44:10 - pre act nine retirees so my question for you

44:13 - secretary is is

44:15 - what does that look like if we are able to achieve this legislatively

44:18 - and

44:19 - given the parameters and and

44:21 - what does that look like from a budgetary standpoint and how do we have to build that

44:25 - in our budget should that come to pass.

44:29 - If so our our budget.

44:32 - Back up a little bit our budget.

44:35 - Allocates the state share employer contribution for ssrs.

44:39 - As well as

44:40 - state share

44:41 - contribution

44:42 - for the pcr system

44:44 - and and the the

44:46 - budget that we proposed funded at the.

44:49 - Actuarial.

44:51 - Actuarially recommended rate.

44:53 - For the current system

44:54 - and the

44:56 - we made good strides in ensuring that we're meeting our actuarial.

45:00 - Our actuarial

45:01 - duty

45:02 - in those systems and we've gotten

45:04 - our.

45:06 - Funded liability

45:08 - in those systems up

45:09 - over the last ten years.

45:11 - Specifically to

45:13 - predict nine cola i think the fiscal note

45:15 - at least that i've seen.

45:17 - Would.

45:19 - Increase

45:20 - the needs in those funds

45:22 - and

45:23 - across both of them by about one hundred and seventy ish million a year

45:26 - and and

45:28 - i think it it would it would just be important that

45:30 - we're in.

45:32 - Direct mutation with both systems

45:34 - on what the impacts to the unfunded liability

45:36 - would be in the changes that would need to be there

45:39 - and then ultimately what.

45:41 - This body

45:42 - in the senate provide an additional preparations to cover any of those costs

45:46 - while i've i think it's an exceptional investment

45:48 - and i just want to leave on this point when you know

45:51 - when we debate hate this issue when we talk about the the deficit of the system

45:55 - and you know first of all that bill will never

45:58 - come due all at once right pensions aren't built that way

46:02 - and the second thing is the only reason why there are.

46:06 - Deficits in the system to the extent that they are is because the commonwealth didn't

46:10 - uphold it's end of the bar and to fund it

46:12 - in under prior administrations and so

46:15 - the the workers though retirees they did their part

46:19 - each and every day.

46:20 - Or each and every week or two weeks

46:23 - the the recommended amount was taken out of their paycheck

46:25 - so they funded it they upheld their under the bargain

46:28 - we need to work on their behalf and do the same

46:30 - so and make this a priority so thank you so much secretary

46:34 - thank you mr chairman.

46:36 - Thank the gentleman representative de van zyl

46:38 - thank you chairman

46:39 - thank you secretary for being here today.

46:42 - Mr secretary the governor is proposing a critical investment.

46:46 - Critical infrastructure investment program that

46:48 - would issue two hundred and fifty million dollars

46:50 - over four years

46:52 - it would the total would be one billion yet the budget provides very little detail

46:56 - about which agency will administer the program

46:59 - and how these funds will actually be

47:00 - distributed at the same time governor shapiro's housing action plan

47:04 - announced in february proposes

47:06 - the housing ready community

47:08 - design that would prioritize state funding from this apparent ease

47:12 - that adopt certain zoning and permitting reforms

47:15 - now what i find interesting is the governor has been very critical of president trump

47:18 - and attempting to condition federal funds to adapt certain policies

47:22 - yet it appears the commonwealth is doing the very same thing

47:25 - using taxpayer dollars as leverage to pressure local governments

47:29 - into adopting the administration's preferred zoning policies

47:32 - so my question is for you.

47:34 - Districts like mine who are eighty twenty eighty per cent farmland

47:38 - twenty per cent of downtown area who have

47:40 - ordinances already in place designated to protect

47:44 - our farmlands and it's just to protect the character

47:46 - of what we have

47:48 - will these communities be left out of this.

47:51 - Action plan the housing action plan.

47:55 - So the housing action plan.

47:58 - Was developed with thousands of stakeholder input over many

48:02 - roundtables

48:03 - and the recommendations that came out of that

48:05 - were a direct result of those conversations

48:07 - and the.

48:09 - Specific changes

48:11 - as

48:12 - as it relates to ordinances

48:14 - and

48:15 - i think would also fall under

48:17 - changes that we are proposing to the municipal planning code

48:19 - which is obviously a

48:22 - enacted statue by the

48:23 - by the general assembly and would require those changes

48:25 - so i think the normal legislative process that would

48:28 - have buy-in from a variety of stakeholders

48:30 - into any of those changes would be important

48:32 - and i think that would be an opportunity to ensure that.

48:36 - The constituent that you represent have some

48:38 - buy into the process

48:39 - but i

48:40 - don't think you you you answer the question if

48:42 - a community and we all believe in local support if a local

48:46 - municipality does not adopt to

48:49 - the

48:50 - the

48:50 - housing plan and i got it right here.

48:53 - Modernization of zoning to create incentives for pro house in communities

48:57 - it's in his action plans if my communities do not adapt to that

49:01 - will they be left out.

49:03 - I think the actual ordinances.

49:06 - It would be up to two under under the.

49:09 - Designation that you're speaking to apologies

49:11 - i was talking about the municipal monica but

49:13 - under the designation that you're speaking to i think

49:16 - and you know

49:17 - it's part of a broader strategy to ensure that.

49:21 - Access to housing is available

49:23 - and i think

49:25 - you know certainly.

49:27 - The.

49:28 - The details around what the designation will look like i think

49:31 - are still in

49:32 - and

49:33 - are still in discussion and i think there's opportunity to to kind of shape

49:37 - what the ultimate designation looks like

49:39 - but i think on the face that the the

49:41 - whole point of the housing action plan

49:42 - was to ensure that we had stakeholder buy-in on

49:45 - what the future of housing looks like in the needs.

49:48 - For communities but also for businesses

49:51 - and as it relates to making sure that we have workers

49:53 - and an ability to attract workers to different areas so i think it's a

49:58 - an across the board approach that we're looking to take

50:00 - on all things housing that ultimately benefits everybody.

50:04 - I would agree with you on the whole purpose of it because as we know

50:07 - we need affordable housing

50:08 - across the commonwealth but

50:10 - then finally i'm going to wrap up with this but if we don't know the details

50:13 - we don't know which communities are going to be left out

50:16 - which ones are going to be able to take

50:18 - take advantage of this

50:19 - is it fair to put a billion dollar price tag over four years

50:22 - over taxpayers in these communities who may not even be able

50:26 - be able to opt in it is

50:27 - the this program.

50:29 - I i i view those two things as

50:32 - while they they can move on concurrent paths i don't view those two as specifically.

50:37 - Needing to do want to get the other

50:39 - division for the

50:40 - critical infrastructure fund is to

50:42 - develop

50:43 - additional housing

50:44 - and to your question about where that would live we've proposed

50:47 - for the program itself to live in the office the budget

50:50 - in work in a similar capacity as the current archive

50:52 - program which is also run by the officer the budget.

50:55 - It would.

50:56 - Generate interest in programs

50:59 - or it would generate interest.

51:01 - In a variety of areas including energy and housing development

51:04 - and the merits of those projects would be what

51:06 - would dictate where the where the dollars go.

51:09 - Yeah

51:09 - i just i just take your answers for the fact that.

51:12 - You didn't exactly answered but

51:14 - that our community is what

51:16 - i'm assuming will be left out of it but

51:18 - it's something that i look forward to working you guys want to make sure that we are

51:20 - definitely incorporated

51:22 - thank you

51:22 - thank you chair

51:23 - thank the gentleman representative gallagher.

51:26 - Thank you chair thank you mr secretary already today.

51:30 - Last year the governor's executive budget proposed dropping

51:33 - the pennsylvania state police reliance on the motor fun

51:36 - from two hundred and fifty to two hundred million

51:38 - dollars for the continued year over year drawdown.

51:42 - The enacted budget

51:43 - it remained to two fifty is there such a proposal

51:46 - is there no such proposal and in his proposed budget

51:48 - this year

51:50 - do you think two fifty

51:51 - two hundred fifty million dollars is a reasonable

51:53 - amount for psp to draw from the motor fun.

51:55 - So

51:56 - you are correct we did propose a

51:59 - step down.

52:01 - Rate of reliance on the motor license fund in last year's proposal and ultimately

52:06 - in negotiations with the general assembly and the

52:08 - fiscal.

52:10 - Position of the general fund it was decided not to continue not to enact that step down

52:14 - we have not proposed that step down

52:16 - and

52:17 - the whole reason for the step-down.

52:19 - That that we were proposing and we were on on that path was to

52:23 - provide additional dollars

52:24 - for road and bridge projects as well as match.

52:27 - Federal dollars that we are receiving.

52:29 - We believe the proposal that we had put forward does allow us

52:32 - attempt to meet our match obligations for federal

52:35 - funding

52:36 - and

52:37 - to date just as a result of those actions we have freed up about six hundred and

52:40 - twenty five million dollar there's for additional road and bridge projects

52:43 - and even at current law

52:45 - it would free up

52:46 - over the next five years a total of two billion

52:48 - dollars extra for road and bridge projects.

52:50 - Thank you mr secretary.

52:52 - In that this is the second year you've proposed

52:54 - creation of a new appropriation under the

52:56 - pennsylvania commission on crime delinquency

52:59 - county probation reentry services.

53:02 - The appropriation would consolidate multiple multiple county based funding streams

53:06 - for parole and all appropriate

53:08 - probation

53:09 - reentry gel-based medication treatments

53:11 - can you elaborate on why this calc consolidation is so beneficial.

53:15 - Yeah so

53:16 - this was actually part of

53:18 - our

53:18 - our first year in remap

53:20 - when we had work specifically with pc c d

53:22 - n d c d in the department of corrections

53:25 - with the whole intent of making sure that the dollars that we're providing.

53:29 - That the general assembly appropriates

53:31 - that gets used by communities

53:33 - and is being utilized

53:35 - as efficiently and effectively as possible

53:37 - and i think in conversations with

53:39 - pccd we had

53:40 - noticed that

53:42 - there were are certain restrictions on each of the two

53:44 - programs

53:46 - and it was just more beneficial to the communities

53:48 - or the counties

53:49 - and other entities that utilize these dollars that have more flexibility

53:53 - so that's what the thought process was behind it it'd be

53:55 - treated more like a block grant rather than one specific

53:58 - funding stream for one specific purpose in

54:00 - another funding stream for a different purpose

54:02 - combining them and giving ultimate flexibility to the locals.

54:05 - Thank you mr secretary thank you chair.

54:08 - Thank the gentleman representative barton.

54:11 - Thank you mr chairman and welcome secretary river.

54:15 - Secretary reared that not a single utility scale nat gas project has been started in

54:21 - pennsylvania since governor wash gov governor wolf pardon me

54:25 - pushed us

54:26 - into the regional green gas initiative and in two thousand and nineteen.

54:32 - Twenty two states including ohio and west virginia.

54:36 - Had natural

54:37 - gas power plants

54:38 - under construction under construction in various development

54:42 - and

54:43 - as of spring of this past year.

54:47 - Interestingly

54:48 - there were no

54:49 - sites

54:50 - plan

54:51 - for any of the eleven states

54:53 - that were.

54:55 - Participating in reggie.

54:58 - Energy is the backbone

55:00 - of our economy

55:01 - i think

55:02 - energy is the backbone of any economy.

55:05 - From our direct development of our state's

55:07 - abundant natural resources

55:10 - to the affordable energy required to keep our manufacturing sector competitive

55:15 - and and demanded by our constituents.

55:20 - It's undeniable strong energy economy depends on a strong

55:24 - energy sector.

55:28 - This

55:28 - past year

55:29 - amendments in the fiscal code

55:31 - officially ended pennsylvania participation in reggie

55:35 - i believe that's a very good thing.

55:40 - What are the prospects for enhanced energy investment.

55:45 - Across pennsylvania in the coming years

55:47 - and how would these investments

55:49 - impact the economic outlook here in the commonwealth.

55:54 - Yet so to to your point

55:56 - energy is the backbone of the economy

55:58 - and we have.

56:02 - To to your point cleared an obstacle

56:04 - and at

56:06 - the general assembly

56:08 - had viewed.

56:09 - As an obstacle to to.

56:11 - Energy growth

56:12 - in the commonwealth.

56:14 - The governor has put forward

56:15 - his plan and.

56:18 - Last year.

56:19 - On potential

56:20 - ways ways to attract new energy

56:22 - i've

56:23 - referenced one of those and that was

56:25 - changes to the edge tax credit

56:26 - which would.

56:29 - Open up some additional incentives to

56:31 - bringing new energy to the grid

56:33 - and

56:34 - the critical infrastructure funds

56:36 - that

56:37 - that we had just

56:38 - spoken to about

56:39 - would also provide some of additional

56:42 - potential resources to.

56:44 - Large-scale projects to bring additional energy to the grid i think

56:47 - overall the governor's stance on energy is

56:50 - all of the above

56:51 - types

56:52 - of energy

56:53 - and he had as part of the lightning plan

56:55 - had proposed

56:56 - and you know different changes to

56:59 - have a p s to to

57:02 - you know coordinate

57:03 - energy types

57:05 - and

57:05 - i think

57:07 - you know his his stance on

57:09 - permitting as well.

57:10 - In concert with the general assembly and making changes to our permitting process

57:14 - i think all open us up

57:16 - to you know additional.

57:19 - Additional

57:20 - investments in the future

57:21 - and

57:22 - i would just also say that

57:24 - the steps that we've taken not just in the permanent

57:26 - space but it just in the overall business climate

57:29 - in reducing our corporate net income taxes

57:31 - and bringing businesses here which then ultimately

57:34 - those businesses need energy

57:36 - and

57:36 - it all kind of place together and is all part of

57:38 - the overall economic development strategy of como

57:41 - was the the corporate

57:42 - net income taxes are

57:44 - still only going to get us to a four percent rate at at at

57:47 - four

57:48 - twenty

57:48 - twenty

57:49 - twenty

57:49 - thirty one thirty one

57:50 - so

57:51 - that's that's still far when

57:53 - ohio is already at zero

57:54 - but let me let me just

57:55 - because your your resume is very impressive

57:58 - and and simply hailing from school county

58:01 - puts you on a higher plateau we know that already

58:04 - and

58:05 - as does a representative brennan.

58:08 - But you've got a strong background in economic development and and fiscal

58:12 - responsibility let me let me just ask you a question secretary

58:15 - if you were the cfl

58:16 - of a coal fired power plant and let's just say it's at nineteen or pardon me twenty

58:21 - twenty nineteen

58:22 - twenty nineteen

58:23 - just just or twenty twenty

58:25 - right after governor wolf had had entered us into

58:29 - the the reggie.

58:32 - In understanding that the power plants there's a lot

58:35 - lot of moving parts right.

58:37 - Would you recommend to your

58:39 - board of directors your president

58:41 - as she fo

58:43 - to reinvest

58:45 - to reinvest in that power plant to keep it going

58:47 - with reggie looming over your head.

58:53 - So

58:54 - i think on that question

58:55 - that.

58:56 - I would just say i think we're in a position now where that

58:59 - policy is no longer in place

59:01 - and i think it's important that we move forward from where we are

59:05 - and

59:06 - the policies that we've

59:08 - enacted

59:09 - and the the path that we're on with our economic development strategy

59:12 - or

59:13 - are good things to recommend to ceos

59:16 - or investments in it's working as you're seeing in other areas

59:19 - and like the eli lilly announcement jane j announcement some of those other big

59:23 - developments that are occurring because of the path that we're now on

59:25 - well and and our time's up and i and thank you

59:28 - chairman

59:29 - but i will say that at the

59:31 - my concern in the governor's lightning plan which you referenced is the

59:34 - the pennsylvania climate emissions reduction

59:37 - which does include a cap and investment program on and and to regulate carbon

59:41 - emissions so that that that is a concern although not

59:43 - part of the budget so just wanted to make that comment

59:45 - thank you chairman thank you secretary river

59:47 - thank the gentleman representative.

59:51 - Allegory.

01:00 - 07.500 No.

01:00 - 12.450 Thank mr chairman.

01:00 - 17.580 The secretary

01:00 - 18.830 appreciate you being here

01:00 - 19.520 i

01:00 - 21.600 think it's term for the time.

01:00 - 24.410 We heard from my colleague

01:00 - 25.530 of.

01:00 - 26.690 Represent fleming

01:00 - 28.710 with regard to

01:00 - 30.930 the pre eq nine colas.

01:00 - 32.630 Certain pieces cause

01:00 - 34.550 so be house bill four eleven

01:00 - 38.030 of twenty twenty five it passed with a bipartisan vote

01:00 - 42.090 it ranged from fifteen percent to twenty four and a half percent.

01:00 - 43.640 Cost of living adjustment over

01:00 - 46.610 a time frame from retirees that's

01:00 - 47.510 retired

01:00 - 51.090 from july twenty two thousand two.

01:00 - 54.320 Before july of nineteen eighty two that would be

01:00 - 55.970 that class of individuals

01:00 - 57.470 over twenty five years

01:00 - 58.820 that they've been

01:00 - 01.170 retired for some of them.

01:01 - 02.432 Actually

01:01 - 05.132 our municipal police and firefighters.

01:01 - 07.182 Also.

01:01 - 09.122 Need

01:01 - 10.502 a cost of living adjustment

01:01 - 12.482 and they have a proposal

01:01 - 15.080 which i'm authoring hospital twelve eighty nine

01:01 - 18.882 providing an ad hoc special ad-hoc cola for them.

01:01 - 21.180 That's ranging from attend a twenty year post

01:01 - 23.832 retirement timeline for those individuals.

01:01 - 26.892 What in this budget could be utilized

01:01 - 28.442 in a revenue center nz

01:01 - 31.978 to get us to our goal of helping our pre eq nine

01:01 - 35.292 retirees in our municipal police and firefighters

01:01 - 37.692 get what they want.

01:01 - 41.802 So.

01:01 - 42.662 We

01:01 - 44.052 i believe

01:01 - 45.192 and.

01:01 - 48.282 I think the fire pensions

01:01 - 49.075 and

01:01 - 51.062 other municipal pensions are funded out of

01:01 - 53.012 insurance proceeds currently

01:01 - 54.752 and so i think

01:01 - 55.592 you know just

01:01 - 57.812 based on the intricacies of that

01:01 - 59.282 funding source

01:01 - 02.582 i think we would have to look at what changes to the existing

01:02 - 05.282 i think their floors and percentage basis

01:02 - 06.632 i think

01:02 - 07.772 so we would have to look at

01:02 - 09.422 the revenue streams coming in

01:02 - 10.682 from those insurance

01:02 - 11.732 proceeds

01:02 - 14.642 but then you know also we've proposed new revenues just on them

01:02 - 16.142 from a general fund side

01:02 - 17.882 and so i think

01:02 - 18.392 you know

01:02 - 20.082 there are opportunities

01:02 - 20.882 and

01:02 - 22.743 just across the board on

01:02 - 23.822 new revenues

01:02 - 24.542 and

01:02 - 26.252 specifically

01:02 - 27.872 the ones that we had proposed

01:02 - 28.832 that we think

01:02 - 29.522 are

01:02 - 31.362 some common sense.

01:02 - 34.262 Policies for

01:02 - 36.302 potential future investments

01:02 - 40.202 obviously we had proposed what those invest mints could look like and where they go

01:02 - 42.392 but as i said before it's a

01:02 - 45.752 negotiation process with the general assemblies on shared priorities on what

01:02 - 47.942 ultimately makes it into a final enacted product

01:02 - 49.052 and

01:02 - 50.172 so.

01:02 - 52.202 As i had mentioned rep fleming

01:02 - 52.832 and

01:02 - 55.992 i think just making sure that we're working with all of the systems

01:02 - 59.162 to ensure any changes enacted by the general assembly we are eating our

01:02 - 01.199 responsibilities to ensure that those dollars remain

01:03 - 02.942 there and available to the people who depend on them

01:03 - 07.322 i appreciate that so if we were able to exercise some of those options of revenue

01:03 - 09.302 streams coming in and also changes within

01:03 - 11.813 our budget structure we might be able to get

01:03 - 15.012 to that goal of what they're looking for.

01:03 - 19.182 I think it's an ongoing conversation with the general assembly on.

01:03 - 22.712 What the dedication of resources would look like to to any priority

01:03 - 24.552 i appreciate that.

01:03 - 27.792 Look i i understand

01:03 - 28.592 that

01:03 - 29.252 you

01:03 - 30.662 you really can't get

01:03 - 35.132 what you want all the time and in our camels retirees they've been they've been

01:03 - 37.722 asking for over twenty years now.

01:03 - 39.692 But

01:03 - 43.452 i also understand that if you do try sometimes which we've been doing.

01:03 - 47.882 You might find that you get what you need and

01:03 - 51.512 our commonwealth's retired state workers educators support professionals

01:03 - 53.742 municipal police and firefighters.

01:03 - 57.162 Should also get what they need.

01:03 - 59.582 So i thank you for your time thanks for your testimony

01:03 - 00.872 and thank this term.

01:04 - 02.192 Thank the gentleman.

01:04 - 03.572 Representative

01:04 - 04.722 reichert.

01:04 - 07.052 In fact mr chairman

01:04 - 09.362 i thank you secretary for being here and

01:04 - 13.412 i want to start off with sort of an airing of grievances and it's not with you it's

01:04 - 16.472 with with some of your colleagues from some of the conversations we've had

01:04 - 19.381 you know over the past couple of weeks for these budget hearings

01:04 - 19.982 we had

01:04 - 22.672 secretary carol hair ab and when we were

01:04 - 25.202 talking about some issues that i'm seeing with

01:04 - 27.937 folks in my district women in particular who are

01:04 - 30.272 applying for real ids and getting the run around

01:04 - 35.102 in a with their marriage license in demonstrating name changes but meanwhile they're

01:04 - 37.782 getting passports with much easier processes

01:04 - 41.312 and in showing this interaction i had with secretary carol to

01:04 - 41.882 some

01:04 - 43.802 some women in my life they were just

01:04 - 45.812 dumbfounded that there was no the

01:04 - 49.130 ownership of the issue that there was no plan to do better

01:04 - 51.632 that you know the reaction from the secretary was that

01:04 - 55.572 pandora is in peak form and there's there's no need to do better.

01:04 - 57.482 Secretary are kush

01:04 - 58.872 dhs

01:04 - 01.352 was talking about the fact that

01:05 - 02.882 due to hr one

01:05 - 06.542 there is the potential for folks to to lose snap app benefits

01:05 - 09.692 but when pressed she was saying that most people are meeting

01:05 - 10.562 the

01:05 - 12.692 community engagement requirements but

01:05 - 14.342 it's an issue with

01:05 - 16.472 paperwork how her department

01:05 - 18.812 interfaces with these people and and

01:05 - 22.882 in one particular the their forums i mean it said

01:05 - 26.402 to mail or fax and here we are seven months as after

01:05 - 30.602 h r one has been signed into law and we don't even have an email address i mean i i

01:05 - 33.872 you know don't have a fax machine but i have a phone

01:05 - 36.462 that i can snap a picture and email

01:05 - 39.962 that that information and you know anywhere else you know.

01:05 - 42.633 When we look at at the private sector we

01:05 - 45.032 look at businesses that have to adapt and and

01:05 - 49.722 make it easy we're for them to interface with the folks that they serve.

01:05 - 53.142 What what do we have in this budget.

01:05 - 56.292 That the governor's proposal to

01:05 - 59.232 create these efficiencies or to better.

01:05 - 03.782 Interact with the people that we all represent what what what what is in there

01:06 - 04.802 to

01:06 - 09.012 reduce the bureaucracy to make to find these efficiencies

01:06 - 13.152 and to make government actually work and be responsive for people.

01:06 - 16.052 Yeah i think a good example is code pa

01:06 - 17.612 which we've talked about before

01:06 - 18.182 and

01:06 - 18.932 the the

01:06 - 21.272 whole idea behind code pa was

01:06 - 22.172 and

01:06 - 25.922 you know developing systems that are beneficial to the residents of the commonwealth

01:06 - 28.032 to better interact with their government.

01:06 - 31.412 Through the website through online that just that doesn't eliminate the bureaucracy

01:06 - 33.002 or reform the bureaucracy it just

01:06 - 37.592 makes the bureaucracy somewhat more accessible online it doesn't change the fact that

01:06 - 40.319 you know a person can't email in these forms to

01:06 - 42.722 certain agencies it doesn't change the fact that

01:06 - 45.512 you know penndot doesn't want to explore different ways that

01:06 - 46.082 you know

01:06 - 47.162 they don't want to talk to

01:06 - 50.912 the us department of state how they process marriage license code pa just

01:06 - 54.362 improves the online experience but it doesn't do anything to

01:06 - 58.090 fix the bureaucratic red tape that a lot of people are

01:06 - 01.382 experiencing on a day to day but on a day to day basis what

01:07 - 04.202 what is the governor proposing to eliminate

01:07 - 07.202 red tape that we see for average people i get we'd get

01:07 - 10.052 all the permanent reform and everything for businesses but

01:07 - 11.942 what's he doing for

01:07 - 14.142 the actual average person.

01:07 - 19.862 I mean copia can be utilized for those things and they are working on additional

01:07 - 22.005 projects than just a permitting tracker.

01:07 - 25.292 They they can build and have developed forms

01:07 - 28.292 of for for agencies i

01:07 - 30.252 can't speak to specific.

01:07 - 35.042 Program or form because everything is dictated in a different manner some have

01:07 - 36.931 federal requirements if it's a federal program

01:07 - 39.092 that certain hard copies be retained or provided

01:07 - 42.072 i will also say though in my time.

01:07 - 42.932 In in

01:07 - 45.572 in the various agencies that i've served there have

01:07 - 47.732 been process improvement projects there have been

01:07 - 51.792 cutting down on the need for physical copies of applications

01:07 - 54.422 i can speak specifically to the ark ap process

01:07 - 55.232 say that we've

01:07 - 56.882 gotten rid of the need for

01:07 - 59.262 a very laborious.

01:08 - 03.812 Submission for formal applications for the project we've gone from

01:08 - 06.042 a twenty three tab

01:08 - 08.842 application to a ten tab application so we've cut

01:08 - 11.372 out information that we otherwise weren't utilizing

01:08 - 15.092 so we are constantly as an administration looking at process and movement

01:08 - 16.532 and

01:08 - 20.012 you know i always welcome conversations around what that looks like and i'd be happy

01:08 - 22.024 to have those conversations directly with you or

01:08 - 24.002 good i look forward to that because i mean again the

01:08 - 26.552 the reaction that we are getting from the secretaries is that

01:08 - 29.192 while these things are set in stone and you know even though

01:08 - 32.582 again i i've had a number of women come into my office just

01:08 - 36.212 in a couple in tears with with the irs around there to gain from pandora and the

01:08 - 37.802 reaction from the secretary is that.

01:08 - 39.722 There's nothing to see here

01:08 - 42.432 just with my last couple of seconds.

01:08 - 44.042 I just wanted to touch on.

01:08 - 45.662 The the governor's

01:08 - 48.452 office itself and the appropriation there for it's

01:08 - 49.782 increased

01:08 - 52.712 over seventy five per cent since the governor has taken office

01:08 - 56.642 from six point nine million dollars to over twelve million dollars in this

01:08 - 59.072 in this proposal but in the in the out years

01:08 - 01.712 you know as there's a lot of people were talking earlier it's

01:09 - 05.162 actually it's zero percent it's there's a zero percent increase booked

01:09 - 07.392 so does that mean that the governor is not looking or he's

01:09 - 09.992 not going to be coming back to us next year asking for

01:09 - 12.512 raises for employees adding new people

01:09 - 15.612 and their coal or anything for himself.

01:09 - 22.112 Again we we budget projections on personnel costs based on eggs and in-place

01:09 - 23.822 collective bargaining agreements and

01:09 - 24.842 an

01:09 - 27.792 actual costs that we know are going to occur

01:09 - 28.952 and that is

01:09 - 30.872 for various reasons one being

01:09 - 32.912 to maintain our position in those

01:09 - 34.842 in those negotiations.

01:09 - 39.572 Not setting specific expectations but even the coal itself is is by statute i mean

01:09 - 42.092 that we know that that's going to occur but it's not reflected

01:09 - 43.562 in the budget ask

01:09 - 44.972 anybody the budget projections

01:09 - 46.572 and we do work.

01:09 - 49.502 We do work across all agencies to make sure that we are living

01:09 - 50.852 trying to keep our

01:09 - 53.612 personnel costs in check and

01:09 - 57.212 i believe that we've he made good strides in

01:09 - 59.049 going from at least what we've proposed in

01:09 - 01.442 previous years and those appropriations down to a

01:10 - 02.282 lower

01:10 - 05.822 increase so you know we we will continue to to work towards that

01:10 - 09.132 i look forward to a zero percent budget next year thanks sir.

01:10 - 11.412 Thank the gentleman representative guzman.

01:10 - 15.512 Thank you mr chair and thank you secretary of labor for your time this

01:10 - 16.412 this morning

01:10 - 19.922 secretary ruber you're the architect of this budget all want to be direct

01:10 - 24.302 i've sat through weeks of these hearings and quite frankly i've noticed a pattern

01:10 - 28.052 my friends on the other side of the aisle they love to rail against big government

01:10 - 30.962 they love to cook call this budget and others bloated

01:10 - 33.512 they love to talk about fiscal responsibility

01:10 - 37.742 one of them a couple of years ago took a flame thrower to the budget number on camera

01:10 - 39.582 real subtle

01:10 - 43.662 but then i heard these same members sit in this room.

01:10 - 45.482 Asking the secretaries

01:10 - 48.762 why government isn't doing enough to help their communities

01:10 - 51.094 why why government isn't doing enough to stop

01:10 - 53.312 hospital closures in their rural communities

01:10 - 56.072 why government isn't helping state police

01:10 - 56.822 coverage

01:10 - 59.372 belay helping them the leaves in their communities

01:10 - 02.282 and community that don't even pay for their coverage to begin with

01:11 - 04.532 why government isn't doing enough

01:11 - 05.852 to help their schools

01:11 - 07.572 get enough funding

01:11 - 10.394 and you seem to me mr secretary it's

01:11 - 12.644 talking out of two sides of your face you know it's like

01:11 - 14.174 we're demanding services

01:11 - 15.614 and then refusing to pay for them

01:11 - 17.874 as now fiscal conservatism

01:11 - 20.051 that's really quite frankly us is honesty

01:11 - 22.634 because we know that eighty percent of our budget

01:11 - 25.074 is education and human services

01:11 - 26.324 that's medicaid

01:11 - 28.064 for all of our grandmothers

01:11 - 29.954 that's food for our food banks

01:11 - 32.054 that's funding for our kids' schools

01:11 - 33.974 that is keeping hospitals open

01:11 - 36.284 in your rural communities so

01:11 - 39.584 if you don't like aspects of this budget and you want to cut certain

01:11 - 40.904 aspects of this budget

01:11 - 43.484 then tell us what exactly you want to cut

01:11 - 46.214 tell your communities and tell this body

01:11 - 47.864 what schools you want to cut

01:11 - 50.144 tell this community can tell this body

01:11 - 52.964 what hospitals you want to cut in your communities

01:11 - 54.477 tell this community and

01:11 - 55.484 tell the body

01:11 - 58.134 what funding you want to cut.

01:11 - 02.144 Meanwhile the federal government is making life incredibly more difficult for us

01:12 - 05.624 one hundred and forty four thousand pennsylvania losing food assistance

01:12 - 08.174 one hundred and four thousand and losing healthcare

01:12 - 11.114 and they're pushing washington pushing eighty seven million

01:12 - 13.424 more dollars in funding to the state

01:12 - 16.218 so you know my in my opinion this is not a time to play

01:12 - 18.854 not play games with numbers this is the time quite frankly

01:12 - 20.174 to keep the lights on

01:12 - 22.604 and so secretary river i have just

01:12 - 24.834 a couple of very simple questions

01:12 - 27.493 if this budget doesn't pass with the revenue increases

01:12 - 30.014 at the budget that the governor is asking for

01:12 - 32.414 where do the cuts come from

01:12 - 34.584 and who pays the price.

01:12 - 38.924 So if the

01:12 - 41.594 the revenue proposals that we had proposed

01:12 - 43.064 are not enacted

01:12 - 44.084 and then

01:12 - 44.864 we

01:12 - 47.784 we collectively as a

01:12 - 49.503 the general assembly and the administration

01:12 - 52.194 during negotiations have difficult decisions

01:12 - 53.354 that would need to be made

01:12 - 54.464 and i think

01:12 - 56.694 you know and unfortunately those who are hurt

01:12 - 59.874 or everyone who relies on those dollars the.

01:12 - 02.371 Constituencies that you would reference the schools

01:13 - 05.214 the county governments nonprofits businesses

01:13 - 05.924 and

01:13 - 06.794 i

01:13 - 09.614 am happy with the progress that we have collectively made

01:13 - 12.344 as an administration in working with the general assembly

01:13 - 13.914 on the investments

01:13 - 18.374 in each of those areas and believe that we are seeing those pay off.

01:13 - 21.824 Pennsylvania is attractive to to businesses and

01:13 - 24.494 we want to make sure that people want to move here stay here

01:13 - 26.234 build a career here build lives here.

01:13 - 30.464 So i think it's it's it's very important that we continue to make those investments

01:13 - 33.464 which is why we had proposed a revenue sources that we have proposed so if we don't

01:13 - 35.502 pass those revenue sources we've got to come up with

01:13 - 37.664 either four to six billion dollars worth of cuts

01:13 - 38.444 and so

01:13 - 42.014 if we were to freeze and or cut every agency outside of

01:13 - 44.114 education and or human services

01:13 - 45.224 state police

01:13 - 48.494 pen dot corrections agriculture d e p p

01:13 - 49.694 all of them

01:13 - 53.844 would that get us halfway to closing that deficit mr secretary.

01:13 - 57.284 As you mentioned most of the

01:13 - 01.914 appropriations of the general fund are to education and human services.

01:14 - 03.704 So collectively the

01:14 - 06.824 appropriations outside of those agencies would be small

01:14 - 10.214 i think there would still have to be some reliance on

01:14 - 11.994 the existing surplus.

01:14 - 14.774 So again that's cutting in

01:14 - 19.844 education and human services that's cutting schools that's cutting hospitals that's

01:14 - 21.734 cutting medicaid that's cutting food

01:14 - 22.694 assistance

01:14 - 26.984 and so when you have politicians who talk about fat being cut from this budget

01:14 - 30.594 i'm asking where is that fat because all i see is bone

01:14 - 33.074 again house democrats along with this governor

01:14 - 34.784 we have done our job in my opin

01:14 - 36.914 we've passed multiple revenue solutions

01:14 - 38.696 whether it's cannabis reform whether it's

01:14 - 41.084 raising the minimum wage whether it's skill games

01:14 - 43.964 closing the delaware loophole you name it we've done it

01:14 - 47.204 and senate republicans have yet to do their job and they've blocked

01:14 - 48.944 every single

01:14 - 51.158 one you see politicians in his building they

01:14 - 53.354 love to hate big government until they need it

01:14 - 55.094 mister secretary they demand in

01:14 - 56.654 a hospital funding

01:14 - 58.454 they demand state police coverage

01:14 - 00.644 they demand school funding in their district

01:15 - 03.554 but then vote against it in the budget that pays for all of it

01:15 - 04.364 again

01:15 - 08.324 that's not fiscal conservatism that's talking out of two sides of your face

01:15 - 09.314 and so again

01:15 - 13.484 in this budget in june it's going to be time to either put up or shut up you're

01:15 - 14.987 either going to cut schools in your community

01:15 - 16.964 are you going to cut hospital is your community

01:15 - 18.584 or are you going to help us passes budget

01:15 - 20.214 documents secretary.

01:15 - 21.284 Mr chairman can i

01:15 - 23.189 can i just internet please.

01:15 - 24.704 So

01:15 - 26.564 i would also just like to add that

01:15 - 27.944 as an administration

01:15 - 32.454 i referenced it a little bit earlier we have taken steps to try to.

01:15 - 33.554 Minimize

01:15 - 34.765 and.

01:15 - 38.124 Minimize our spend and maximize our efficiencies.

01:15 - 40.404 So through the remap process.

01:15 - 42.344 We have we have tried to

01:15 - 45.254 pair our actual utilization of our

01:15 - 47.144 correctional institutions to

01:15 - 50.684 what our actual prison population is to try to cut down on

01:15 - 53.274 and you know over appropriations

01:15 - 55.634 or or driving additional costs

01:15 - 58.413 and we've also undertaken as

01:15 - 00.254 his administration the soup initiative

01:16 - 03.644 which takes the same concept making sure that our actual footprint

01:16 - 07.694 in our lease costs in our overall building costs are in line with what our actual

01:16 - 08.804 employment

01:16 - 11.574 and workforce needs are so.

01:16 - 16.044 I think we've done what we can and through the negotiation process we've certainly.

01:16 - 19.634 Made agencies kind of tighten up their bootstraps as well

01:16 - 21.358 so just.

01:16 - 24.788 Looked forward to continuing to work with the general assembly on the.

01:16 - 27.864 Thanks gentlemen representative rigby.

01:16 - 32.384 Thank you chairman harris morning secretary mr secretary i'd like to talk about voter

01:16 - 36.494 registration and education appropriations for the fiscal year twenty six twenty seven

01:16 - 39.824 the department of state requested five hundred and ninety eight thousand for this

01:16 - 43.794 preparation and it's budget submission to your office in october

01:16 - 46.046 however the governors added an additional one

01:16 - 48.434 point four million to this line proposing a

01:16 - 51.074 total of two million for the voter registration and

01:16 - 53.624 education two hundred and fifty percent increase

01:16 - 55.614 from the current year.

01:16 - 57.803 Department of state testified last week that the

01:16 - 00.104 new funding would be used for additional outreach

01:17 - 04.194 but cannot give specific examples about how this money be spent.

01:17 - 06.721 The last time this appropriation was increased

01:17 - 08.774 anywhere near this magnitude of two million one

01:17 - 12.914 was all the way back in fiscal year two thousand and thirteen and fourteen after the

01:17 - 15.344 voter id law was supposed to be implemented

01:17 - 16.454 obviously the

01:17 - 18.084 is up for reelection

01:17 - 22.304 why is this funding necessary now and do you feel that this funding if enacted

01:17 - 25.074 would also present a conflict of interest.

01:17 - 26.624 For the governor and running for his

01:17 - 28.244 reelection and again

01:17 - 33.114 since no new voter initiatives have been enacted since twenty thirteen or fourteen.

01:17 - 35.484 The reasoning for this increase.

01:17 - 37.734 So.

01:17 - 39.142 The the

01:17 - 41.384 historical practice in

01:17 - 45.254 budget proposals at least under this administration has been to increase resources

01:17 - 47.144 during the even year election cycles

01:17 - 48.945 i don't believe it'll be a conflict because we

01:17 - 51.714 don't tell people how to vote we tell people.

01:17 - 54.144 How the importance of voting and.

01:17 - 57.944 The methods and timelines around voting.

01:17 - 00.894 So i i don't believe there's a conflict.

01:18 - 02.234 Just because he is

01:18 - 05.034 on the ballot for reelection this year

01:18 - 09.224 but again in historical practice we have increased and if you go back to our

01:18 - 10.214 two thousand

01:18 - 13.494 twenty four budget proposal we had proposed increases

01:18 - 15.684 in the even year out your.

01:18 - 16.544 Fiscal years

01:18 - 19.454 and is for that purpose we know that there's better turnout

01:18 - 24.524 and there's more interest in voting so just making sure that people know how to vote

01:18 - 26.684 what methods are available is important

01:18 - 28.532 i mean when i look at the numbers from two thousand and

01:18 - 31.214 thirteen fourteen up to twenty twenty five twenty six

01:18 - 34.514 we went from four hundred and fifty eight thousand five hundred and ninety one

01:18 - 35.774 thousand one hundred and three thirteen

01:18 - 38.724 thousand over that twelve year period

01:18 - 41.654 and now we go to a million and a half

01:18 - 43.034 to two million now

01:18 - 44.954 on his proposal just seems like

01:18 - 47.387 a lot do we know where these monies are going to be

01:18 - 50.564 appropriated is is it going to any certain counties where

01:18 - 54.104 do we know how it's going to be dispersed or can we find out where and how

01:18 - 55.764 it's being dispersed.

01:18 - 59.084 Sure i am happy to work with the department of state to get information on

01:18 - 01.694 what their intended utilization of those dollars would be

01:19 - 03.134 i don't

01:19 - 03.824 i

01:19 - 05.264 i do not i leave

01:19 - 07.364 election matters to the department of state

01:19 - 11.984 and they they operate the bureau of elections and have the responsibility of ensuring

01:19 - 14.214 fair safe elections across the commonwealth

01:19 - 15.344 but i'd be happy to talk

01:19 - 16.454 with the secretary

01:19 - 17.294 and

01:19 - 18.344 come back with a

01:19 - 19.424 proposed plan

01:19 - 20.934 for those dollars.

01:19 - 22.694 I appreciated thank you very much secretary

01:19 - 24.114 thank you chairman.

01:19 - 26.874 Thank the gentleman representative kincaid.

01:19 - 28.704 Thank you mr chairman.

01:19 - 30.324 Secretary.

01:19 - 32.384 Earlier hearings

01:19 - 34.424 at the attorney general testified

01:19 - 35.354 that he

01:19 - 38.274 left up to the governor's office

01:19 - 39.564 the.

01:19 - 44.444 Lawsuits against the federal government when it overreaches it's authority and denies

01:19 - 49.164 resources to that are rightfully designated to the people of pennsylvania

01:19 - 52.096 to date the governor has joined trois many lawsuits

01:19 - 54.794 to that effect and all of the cases that have been

01:19 - 56.474 resolved to this point

01:19 - 57.254 have been

01:19 - 58.124 resolved

01:19 - 00.804 to the favor of the people of pennsylvania

01:20 - 01.544 and

01:20 - 05.514 how much money has the governor's office had to expand

01:20 - 07.374 on those cases.

01:20 - 09.344 I don't have a

01:20 - 12.702 specific amount of time i can say that it was all done in

01:20 - 16.254 house there was no outside counsel for any of those suits.

01:20 - 18.414 So it would have all been borne by.

01:20 - 21.314 The existing resources available to officer general counsel

01:20 - 22.724 so that the attorney

01:20 - 23.954 general said that.

01:20 - 26.534 Part of his decision making was

01:20 - 28.694 if you choose to take one case you have

01:20 - 29.564 to

01:20 - 32.624 choose to to leave another one is that something that is

01:20 - 36.234 happening as a result of of needing to take on these cases.

01:20 - 40.710 You mean specifically non federal government related cases

01:20 - 42.414 or attorneys.

01:20 - 44.264 I mean we have a

01:20 - 46.004 finite amount of attorneys

01:20 - 50.724 internally and we have made it a practice to not use outside counsel so.

01:20 - 52.004 In theory

01:20 - 54.489 we do try to make sure that we're providing this

01:20 - 56.954 year the all of the services that the agencies need

01:20 - 59.234 and through our office of general counsel

01:20 - 00.014 but

01:21 - 01.404 obviously.

01:21 - 03.254 Their their time

01:21 - 04.434 i.

01:21 - 07.104 Could otherwise be dedicated to other services.

01:21 - 08.574 Thank you.

01:21 - 13.574 Do you think it would be appropriate to reallocate funding from the

01:21 - 19.124 attorney general's office in order to ensure that there are sufficient resources and

01:21 - 23.234 potentially attorneys to be able to address these cases if the attorney general is

01:21 - 25.524 unwilling to take on these cases.

01:21 - 27.076 And

01:21 - 27.545 i

01:21 - 29.116 think ultimately that is a

01:21 - 31.616 a decision of the appropriators

01:21 - 33.496 in the general assembly on

01:21 - 35.386 what a final product looks like.

01:21 - 39.616 You know we obviously work closely with the attorney general on a variety of

01:21 - 45.166 instances and and have had a good working relationship and but you know.

01:21 - 48.076 We could always you as additional resources

01:21 - 49.216 we try to budget

01:21 - 50.866 accordingly and appropriately

01:21 - 51.766 and but

01:21 - 53.917 you know that that's an ultimately a decision of

01:21 - 55.876 the general assembly and appropriation process

01:21 - 59.576 thank you i want to turn to i'm.

01:21 - 01.196 Farmland preservation

01:22 - 02.636 and.

01:22 - 06.976 We have a really robust farmland preservation program in

01:22 - 08.696 at pennsylvania.

01:22 - 11.326 Been really effective at

01:22 - 13.196 preserving farmland

01:22 - 15.386 all across the commonwealth

01:22 - 17.686 but it isn't accessible to

01:22 - 21.926 urban farmers and protecting urban farm land.

01:22 - 27.106 Because it doesn't meet those those can small patches of land don't necessarily meet

01:22 - 27.916 the

01:22 - 29.471 definitions.

01:22 - 31.246 And

01:22 - 35.026 i wonder if you could speak to the importance of pennsylvania's agricultural

01:22 - 39.256 conservation easement purchase program and enabling farmland to stay farmland

01:22 - 40.666 and also how we might

01:22 - 43.016 make that accessible to.

01:22 - 45.866 More urban farmers and smaller farmers.

01:22 - 46.696 Yeah

01:22 - 48.676 so as a farmer myself

01:22 - 49.276 i

01:22 - 51.226 absolute we see value in

01:22 - 52.436 agricultural

01:22 - 53.896 industry in pennsylvania

01:22 - 54.616 and

01:22 - 59.566 the egg preservation program is critically important to ensure that

01:22 - 02.576 farmland remains farmland for future generations

01:23 - 07.696 and the egg industry is one of a kind of teeters back and forth between tourism and

01:23 - 10.237 agriculture with the biggest industry in pennsylvania

01:23 - 12.466 obviously we have our founding on agriculture

01:23 - 13.396 and

01:23 - 16.136 and you know secretary reading.

01:23 - 21.446 Has been a vocal proponent of urban agriculture

01:23 - 24.346 and expanding agricultural opportunities into urban settings

01:23 - 27.016 we've had urban agricultural type grants

01:23 - 28.306 as a result of

01:23 - 31.246 funding that has been appropriated by the general assembly in concert with the

01:23 - 31.996 farm bill

01:23 - 34.156 and i think you know

01:23 - 35.626 open to

01:23 - 38.896 further conversations on what the status and the future of the egg

01:23 - 40.936 preservation program looks like

01:23 - 42.466 i do know that you know

01:23 - 46.126 there there are certainly way more demand than there are resources available i think

01:23 - 50.456 the funding for that comes from cigarette tax transfers i believe at the moment.

01:23 - 54.016 So i think you know any any conversations around expansion

01:23 - 57.236 of that program would be beneficial to the commonwealth.

01:23 - 58.186 Do you think that

01:23 - 01.246 in the governor's budget that he's he's proposed

01:24 - 06.136 once again legalizing cannabis do you think that that would be an additional revenue

01:24 - 08.906 source that we could use to preserve farmland.

01:24 - 10.696 Yeah and

01:24 - 15.376 again we've proposed revenue sources and that ultimately we believe our

01:24 - 18.226 common sense policies and the

01:24 - 20.848 use of those revenues are up to negotiations and

01:24 - 23.266 conversation of shared priorities with the general assembly

01:24 - 26.086 i will say from an agricultural standpoint we view

01:24 - 30.016 adult use cannabis as a new potential crop and growth opportunity for our.

01:24 - 32.056 Farm farming community

01:24 - 34.486 and i think just given the

01:24 - 35.746 current situation

01:24 - 39.196 with tariffs and other otherwise impacts on

01:24 - 43.216 our farming community having the ability to diversify crops

01:24 - 46.936 and enter new markets is going to be important so that is why we actually

01:24 - 49.766 proposed to put it into the department of agriculture.

01:24 - 52.241 Because we believe it is a future agricultural

01:24 - 54.286 commodity an opportunity for our farming community

01:24 - 55.006 thank you

01:24 - 55.726 mr sharon.

01:24 - 58.786 Thank the gentlelady representative all summer

01:24 - 00.866 thank you mr chairman.

01:25 - 02.896 Glad to have you here this morning

01:25 - 04.066 mr secretary

01:25 - 07.400 mr secretary as part of the proposed tax and

01:25 - 11.906 revenue modifications for the upcoming fiscal year.

01:25 - 15.196 The governor is proposing the repurposing

01:25 - 20.036 reform and modification of several tax credit programs.

01:25 - 23.266 Including one that i'm very passionate about

01:25 - 26.666 the education improvement tax credit.

01:25 - 27.766 As you know

01:25 - 30.796 this tax credit provides tremendous benefits for

01:25 - 34.286 parents and students seeking additional options

01:25 - 37.406 to best suit their academic needs.

01:25 - 42.836 On page c one dash seven in the executive budget.

01:25 - 43.876 The governors

01:25 - 46.917 the governor proposes to reallocate caps

01:25 - 50.206 within the program to provide more tax credits

01:25 - 53.746 to education improvement organizations

01:25 - 56.296 the overall cap for the

01:25 - 01.286 e i t c program is proposed to remain unchanged.

01:26 - 07.136 Can you please elaborate on what specifically the governor is proposing

01:26 - 08.408 in terms of re

01:26 - 11.686 reallocating the caps within the program

01:26 - 12.526 yeah sure

01:26 - 13.576 so

01:26 - 15.296 as i mentioned.

01:26 - 18.976 We have taken a very detailed approach

01:26 - 19.696 in

01:26 - 20.326 and

01:26 - 22.436 in things like remap

01:26 - 23.636 and.

01:26 - 25.936 Looking at all of our existing programs

01:26 - 30.346 within agencies and making sure that the dollars that are made available by the

01:26 - 35.086 general assembly are being put to their intended purpose and being fully utilized and

01:26 - 38.446 that's why in some of the other ones that i've talked about with edge those are

01:26 - 40.696 unutilized we're talking about making changes to

01:26 - 42.166 actually utilize them

01:26 - 43.396 in the

01:26 - 44.266 case of the

01:26 - 45.376 education

01:26 - 47.366 improvement tax credit.

01:26 - 50.686 As you note there are four programs underneath that umbrella economically

01:26 - 54.746 disadvantaged schools the i o pre k and k through twelve scholarships.

01:26 - 57.495 Out of those four the only one that has been fully fully

01:26 - 00.316 utilized up to it's actual cap underneath the school code

01:27 - 02.626 legislation is the io probe graham

01:27 - 05.956 overall in fiscal year two thousand and four there was about one hundred and three

01:27 - 10.616 million dollars of the one of the allocated resources that went unused

01:27 - 14.686 and we believe that there is opportunity to readjust the caps to make sure that the

01:27 - 17.696 programs are being fully utilized and that's what we're proposing.

01:27 - 21.672 While i understand that some of the credits were

01:27 - 26.206 underutilized in prior years the numbers show that it was just

01:27 - 29.756 a matter of time between the expansion of the credit

01:27 - 31.766 and the donors catching.

01:27 - 34.336 Catching up to utilize it.

01:27 - 37.066 Considering that the current budget

01:27 - 43.136 which contained a a fifty million dollar increase for scholarships to children

01:27 - 46.096 in the economically disadvantaged schools

01:27 - 48.716 was only past four months ago.

01:27 - 55.346 It is noteworthy that e i t c credits are already over eighty eight percent

01:27 - 56.576 utilized

01:27 - 58.756 this number would be higher

01:27 - 01.246 if not for the fifty million dollar x

01:28 - 02.366 expansion.

01:28 - 04.706 Yet.

01:28 - 06.946 As of the beginning of february

01:28 - 10.456 the current utilization utilization of these credits

01:28 - 13.466 already exceeds last year's cap.

01:28 - 15.596 While i understand

01:28 - 16.143 that the

01:28 - 17.806 ios are popular

01:28 - 22.276 their expansion should not come at the expense of scholarship credits

01:28 - 27.136 that many of us have fought so hard to create in for pennsylvania students

01:28 - 31.766 so that they can benefit benefit to choose the school of their choice.

01:28 - 37.766 Is there a draft language currently available for us to review.

01:28 - 40.636 It would simply be

01:28 - 45.236 changes to the existing caps in the school code so i can i can provide that.

01:28 - 47.146 Just a a quick

01:28 - 48.736 follow up on the

01:28 - 51.086 on the school students

01:28 - 55.096 the scholarships do you have any data that shows the number of students

01:28 - 56.456 that

01:28 - 59.986 proportionately are urban to rural or

01:29 - 03.656 how those scholarships are divided out by any chance.

01:29 - 06.416 There it has been a long standing

01:29 - 08.816 impedance on the.

01:29 - 11.146 On the administration to be able to collect data

01:29 - 13.786 as it relates to those programs there are specific

01:29 - 16.492 information that has been allowed to been collected and

01:29 - 19.696 no other information was allowed by law i do know that

01:29 - 21.046 in i believe

01:29 - 22.096 the school code and

01:29 - 23.506 twenty twenty four

01:29 - 26.626 there were some cia changes to reporting so i can check in with the department of.

01:29 - 28.727 Human and economic development to see if that

01:29 - 30.166 is something that we're allowed to collect

01:29 - 32.836 yeah if if you could follow up that'd be

01:29 - 33.976 i'd appreciate that

01:29 - 35.756 well that.

01:29 - 38.266 This is very concerning to me

01:29 - 41.782 to hear about this proposal while education

01:29 - 44.746 improvement organizations do support search certain

01:29 - 46.636 innovative programs

01:29 - 52.166 they do not provide scholarships for students who are seeking a better education

01:29 - 56.656 while i understand that there's currently while we're currently waiting well

01:29 - 58.196 while i understand

01:29 - 00.926 there's currently a waiting list for businesses

01:30 - 02.836 seeking the tax credit

01:30 - 07.006 i think the most important thing that we're all forgetting is that there are sixty

01:30 - 11.386 thousand students who are waiting in line with their families

01:30 - 13.186 to receive those tax credits

01:30 - 14.326 to get

01:30 - 16.886 an opportunity for a better education.

01:30 - 19.736 Thank you mr chairman.

01:30 - 20.356 Thank you sir.

01:30 - 23.276 Thanks gentlemen representative salzburg

01:30 - 24.836 thank you chairman.

01:30 - 30.526 If you'll indulge me for a moment i'd like to tell you about a wild goose chase

01:30 - 37.096 that i recently undertook and so i represent the thirty fourth legislative district

01:30 - 41.446 in allegheny county and when people in my district came to me

01:30 - 47.326 and said that they had been submitting fraud waste and abuse report arts regarding my

01:30 - 49.186 local school district woodland hills

01:30 - 54.446 to the state for in some cases several years with no response

01:30 - 58.676 i felt that it was my job to do wipe my job title

01:30 - 02.266 implies which is represent those people in harrisburg

01:31 - 05.596 and so i started reaching out because they are calling for an audit

01:31 - 10.486 so i reached out to why it seemed natural to me the auditor general's office i was

01:31 - 12.586 then informed that in twenty twenty two

01:31 - 14.116 the auditor general

01:31 - 18.556 i unilaterally declared that there would no more there would be no more school audits

01:31 - 20.446 performed under the auditor general's office

01:31 - 24.436 the forty six full time auditors who are employed by the

01:31 - 29.026 era of school audits were be let go that entire department was going to be dissolved

01:31 - 33.236 and that the department of education should pick all of that up.

01:31 - 35.896 In order to save apparently five million dollars

01:31 - 39.886 apparently this was also news to the department of education who said that they

01:31 - 43.736 learned about it from the memo that was publicly released that day.

01:31 - 46.036 So then the department of education also

01:31 - 50.200 i have a bureau of school audits that was never created.

01:31 - 54.880 So we are at a point now where the.

01:31 - 57.780 Bureau of audits which is under your

01:31 - 03.760 auspices i has instituted an audit of my school district that is forthcoming

01:32 - 08.100 but i'm also given to understand that that's extremely unusual that that's not really

01:32 - 10.320 the normal way that a school audit would be done

01:32 - 14.572 i wonder if you can walk me through how are our five hundred

01:32 - 18.090 some school districts in pennsylvania currently being

01:32 - 21.360 audited if there are those fraud waste and abuse reports

01:32 - 22.350 or other

01:32 - 25.840 indicators of some sort of a potential financial issue.

01:32 - 27.510 Because

01:32 - 31.120 schools receive federal funding they are subject to.

01:32 - 32.340 Federal single audits

01:32 - 33.417 and

01:32 - 37.240 so there are federal auditing components that go into.

01:32 - 39.000 Consideration with school districts

01:32 - 42.880 and we had to your point we have started.

01:32 - 44.580 Doing selective audits

01:32 - 47.490 just based on our capacity and harbin city to do those

01:32 - 49.780 and our audits.

01:32 - 51.370 You know.

01:32 - 52.600 Obviously.

01:32 - 54.000 We cover

01:32 - 58.000 all agencies under the governor's jurisdiction with our bureau of audits.

01:32 - 59.220 So there's

01:32 - 00.120 a lot of

01:33 - 02.320 potential audits to go around

01:33 - 04.660 but we have been increasing

01:33 - 08.460 and our our staff within the bureau of audits to be able to

01:33 - 10.920 to try to take on some additional school audits

01:33 - 16.390 and we work very closely with the department of education and and.

01:33 - 18.990 Identifying potential risks

01:33 - 20.520 and

01:33 - 21.810 factors that would

01:33 - 23.080 otherwise.

01:33 - 26.160 Open up the ability for us to to perform

01:33 - 27.300 performance audits

01:33 - 29.290 on state dollars.

01:33 - 31.810 So it's a it's a management of resources

01:33 - 34.053 and you know working and having good relationships

01:33 - 35.850 with all five hundred school districts

01:33 - 37.440 and and

01:33 - 40.570 our collaborative process with the department of education.

01:33 - 45.120 So when i asked the department of education during their hearing how many sets of

01:33 - 47.426 full-time eyes do they have on as fraud waste

01:33 - 49.980 and abuse reports i was told effectively zero

01:33 - 55.650 and so in terms of looking at the staffing of the former bureau of school audits

01:33 - 59.940 who had i'm told once had as many as one hundred and twenty full time auditors and

01:33 - 02.490 then we're down to that forty six number when it was dissolved

01:34 - 07.860 do you have staffing that would be comparable to the staffing that once existed

01:34 - 09.940 before that twenty two dissolution

01:34 - 10.560 no

01:34 - 12.670 no our bureau of audits.

01:34 - 15.480 Is not anywhere near the size and scope of what the

01:34 - 16.260 auditor

01:34 - 17.850 the auditor general would have had add

01:34 - 20.260 in that but again we are.

01:34 - 22.590 We are building up our audit capacity

01:34 - 24.240 and as a result of

01:34 - 26.078 conversations with the general assembly and

01:34 - 28.110 increased appropriations to the office the budget

01:34 - 30.030 obviously we take

01:34 - 33.630 all complaints of potential fraud waste and abuse very seriously

01:34 - 35.760 and and you know we

01:34 - 37.710 are bureau of auditors committed to

01:34 - 38.850 working with

01:34 - 40.420 audited.

01:34 - 41.640 Entities

01:34 - 42.780 through the processes

01:34 - 47.140 so when that five million dollar savings occurred

01:34 - 49.150 in the auditor general's

01:34 - 52.440 budget in order to dissolve the bureau of school audits.

01:34 - 56.460 That five million dollars was not transferred

01:34 - 57.850 to

01:34 - 58.890 the eye

01:34 - 03.810 care of audits generally in order to compensate for that but that did not get sent to

01:35 - 07.440 some other auditing function that currently uses that money to correct.

01:35 - 11.190 Or not i wouldn't say it was a direct transfer but

01:35 - 13.800 again we have worked with the general assembly on

01:35 - 15.766 providing some additional resources to the

01:35 - 17.760 office the budget to help staff up for audits

01:35 - 19.830 not to the extent of five million dollars though.

01:35 - 24.030 I i don't want to misquote a number i can get back to you on what.

01:35 - 26.460 We've dedicated to increase money for that

01:35 - 29.086 but you certainly don't have the forty six auditors

01:35 - 30.990 in place that they might not specifically for school

01:35 - 33.578 thank you very much i appreciate your responses.

01:35 - 35.400 Thank the gentlelady

01:35 - 36.690 representative krupa

01:35 - 38.530 thank you mr chairman.

01:35 - 42.600 Good morning mr secretary i guess it's almost lunch at this point i do i want to

01:35 - 46.710 clarify before ask a question at a point that was raised earlier there are clear

01:35 - 51.040 distinctions between cases that the office of the attorney general prosecutes

01:35 - 55.050 and those that the office of general counsel can prosecute as outlined by the

01:35 - 56.940 attorney general it has budget hearing

01:35 - 00.328 at a time when lgc has nearly twice as many attorneys

01:36 - 02.640 within their compliment then the attorney general

01:36 - 07.290 i really believe that any talk of transferring funds away from the attorney general's

01:36 - 09.210 office and the important work that they're doing

01:36 - 10.530 is misguided

01:36 - 12.700 but my question specifically

01:36 - 14.130 are questions this morning

01:36 - 16.740 are about the federal response fund

01:36 - 21.630 according to the governor's budget materials this far and would be used to respond to

01:36 - 26.590 any action or inaction by the federal government that results in the reduction

01:36 - 28.920 in funding to programs impacting

01:36 - 32.880 the health safety and welfare of pennsylvania so my first question is very simple

01:36 - 35.790 what specific federal action or inaction

01:36 - 39.510 is the governor anticipating that requires the creation of this fund

01:36 - 43.890 is is there a particular federal policy change funding cut or enforcement action that

01:36 - 46.510 this proposal was meant to respond to.

01:36 - 50.940 So there have been several examples in which the administration had to

01:36 - 52.180 do.

01:36 - 53.620 Provide.

01:36 - 55.930 Assistance to pennsylvania

01:36 - 58.050 as a result of action or inaction

01:36 - 01.560 i think the most glaring case was when there was a lapse in snap funding

01:37 - 03.180 at the federal level and

01:37 - 04.200 pennsylvania ones.

01:37 - 05.979 Were facing a

01:37 - 08.230 hunger crisis so the administration

01:37 - 10.260 and utilized dollars

01:37 - 12.640 that would have otherwise been utilized by agencies

01:37 - 14.910 for other purposes in what they were planned for

01:37 - 17.190 to be able to react

01:37 - 18.030 and

01:37 - 22.450 so i think that is a prime example of what we would anticipate.

01:37 - 24.600 As as was mentioned there were

01:37 - 27.240 at least twenty instances where we've had to

01:37 - 30.088 do you know provide action against the federal government

01:37 - 32.830 to ensure that the dollars that we were committed

01:37 - 34.990 actually been received here.

01:37 - 38.610 The the federal response one i will say is also not meant to be.

01:37 - 44.640 A complete coverage of any federal change we recognize that any long standing effects

01:37 - 47.760 and impacts on the commonwealth or residents would need to be a collaborative

01:37 - 49.290 conversation with the general assembly

01:37 - 51.600 on whether or not we continue those but i think

01:37 - 53.160 just an abrupt

01:37 - 55.298 end to services that

01:37 - 57.660 commonwealth residents have come to rely on

01:37 - 00.000 is not helpful and we need to

01:38 - 02.760 have the proposal is there so that we can help

01:38 - 03.750 lessen the burden

01:38 - 07.860 my second concern is where the money is coming from the rainy day fund exists for

01:38 - 10.710 genuine fiscal emergencies affecting the commonwealth

01:38 - 13.042 it is meant to stabilize the budget during

01:38 - 15.600 downturns not to create a discretionary fund

01:38 - 18.330 to respond to political disputes with washington

01:38 - 19.806 mr secretary i think

01:38 - 24.450 taxpayers deserve clarity here taking a one hundred million out of the rainy day fund

01:38 - 28.920 to create a broadly defined discretionary account without clear guide rails

01:38 - 31.500 raises serious concerns about

01:38 - 36.630 both fiscal discipline and whether those funds could be used to under mind legitimate

01:38 - 38.640 federal law enforcement activities

01:38 - 41.460 that's something that many pennsylvania strongly oppose

01:38 - 42.270 so

01:38 - 46.920 mister secretary can the governor how does the governor justify pulling a one hundred

01:38 - 48.510 million out of the rainy day fund

01:38 - 50.040 for this purpose

01:38 - 53.850 when the general assembly already has the constitutional authority

01:38 - 58.000 to appropriate funds if a true emergency arises.

01:39 - 01.560 Yeah so there's a couple of points in there

01:39 - 03.250 and the.

01:39 - 07.740 What we have seen is that we need to react faster than what the appropriations

01:39 - 10.290 process could potentially take i understand given the

01:39 - 12.103 severity of emergency

01:39 - 12.930 there would be

01:39 - 16.750 ongoing conversations of the reaction needed in the time.

01:39 - 17.550 That it would take

01:39 - 18.750 to respond to that

01:39 - 21.540 and as it relates to the rainy day fund

01:39 - 24.480 we are proposing one hundred million dollar transfer out of that

01:39 - 25.800 i will say that

01:39 - 28.290 the interest alone generated on the rainy day fund

01:39 - 32.190 in the in fiscal year two thousand and four was three times that and it's eight times

01:39 - 34.930 that over the three year period under this administration.

01:39 - 37.230 So i think the investments that have been made on that

01:39 - 40.590 could potentially go to help mit dhgate any impact from the federal government.

01:39 - 44.400 Finally i want to address one last issue with respect to this

01:39 - 48.030 across the country we've seen some states and local governments attempt to use

01:39 - 50.864 taxpayer resources to obstruct or interfere with

01:39 - 53.730 federal immigration enforcement i want to be very clear

01:39 - 58.050 interfering with legitimate operations of us immigrations and customs enforcement

01:39 - 02.670 is not just a pa policy disagreement it can create a serious national security risk

01:40 - 03.360 federal

01:40 - 06.041 immigration enforcement often targets individuals

01:40 - 08.710 connected to violent criminal organizations

01:40 - 12.010 drug trafficking networks and human trafficking operations

01:40 - 15.960 taxpayer dollars from the commonwealth of pennsylvania should never be used to

01:40 - 18.810 undermine or obstruct those lawful federal operations

01:40 - 21.720 semi question is this can you assure this committee

01:40 - 25.110 that no funds from this proposed federal response fund

01:40 - 27.420 would ever be used to interfere with or

01:40 - 32.320 obstruct or undermine legitimate ice enforcement activities in pennsylvania.

01:40 - 35.970 The creation of the fund would be subject to legislation and

01:40 - 36.510 i

01:40 - 37.260 think that would

01:40 - 40.470 all be part of an ongoing conversation with the general assembly if there is an

01:40 - 42.792 appetite to create the fund that we proposed

01:40 - 45.630 i will also say that as as

01:40 - 47.220 you likely heard from the

01:40 - 50.550 pennsylvania state police and the department of corrections we work closely with our

01:40 - 52.980 federal partners and abide by all state and federal laws

01:40 - 55.540 thank you and i'm at a time thank you so much.

01:40 - 00.430 Thank the gentlelady representative frill.

01:41 - 02.500 Thank you chairman.

01:41 - 04.360 Thank you mr sector.

01:41 - 06.370 I want to talk a little bit about.

01:41 - 10.200 Some of the forecasts that we have in the future the budget and revenue

01:41 - 13.110 i know they're in over the past couple of years as that

01:41 - 16.230 rainy day fund has been used to make up some some some gaps

01:41 - 17.370 and we've

01:41 - 20.730 had some proposals for revenue and in the form of

01:41 - 23.340 legalization of marijuana school games

01:41 - 28.150 closing the delaware loophole had this body acted.

01:41 - 31.440 Three years ago when these first proposals had gone

01:41 - 33.610 is it true that.

01:41 - 35.992 This budget would look different in terms of

01:41 - 37.710 it's dipping into the rainy day fund could you

01:41 - 39.670 in aggregate tell us.

01:41 - 41.280 Had had this body acted

01:41 - 42.840 when they were first proposed

01:41 - 44.710 about how much money

01:41 - 47.770 do we leave on the table as as a body here.

01:41 - 51.596 Would have enacted it as we had proposed at the time of proposed based on our

01:41 - 53.816 assumptions at those times it would be about three billion

01:41 - 58.346 so about three billion dollars that we've left on the table

01:41 - 59.246 and

01:41 - 59.936 and

01:42 - 01.776 and just to be clear

01:42 - 03.936 that three billion dollars.

01:42 - 06.506 For for things like skill games

01:42 - 10.176 is taking a unregulated untaxed industry

01:42 - 13.106 and certain and just bringing a degree of fairness

01:42 - 17.396 and treating it like other industries other similar industries within pennsylvania

01:42 - 19.136 so right now they have a

01:42 - 23.066 a significant difference is significant advantage versus other

01:42 - 26.024 similar industries has that correct.

01:42 - 29.426 Pennsylvania has been i think a leader

01:42 - 31.256 when it comes to the.

01:42 - 33.026 Regulation of gaming

01:42 - 34.847 a national leader among other states and there

01:42 - 36.836 have been models that have been modeled after

01:42 - 39.846 the commonwealth the gaming control board has.

01:42 - 42.026 The regulatory authority and the

01:42 - 44.066 requirement essentially to make sure that

01:42 - 46.256 all gaming is fair and equal

01:42 - 47.575 and

01:42 - 52.286 also when it comes to an unregulated gaming vs regulated gaming and

01:42 - 54.246 a regulated gaming.

01:42 - 55.746 Industry

01:42 - 58.776 allows for constant certain consumer protection.

01:42 - 00.416 Qualities and

01:43 - 01.466 you know it

01:43 - 02.306 with the

01:43 - 06.336 increase in gaming opportunities there's always an increase in potential

01:43 - 07.646 addiction or

01:43 - 08.389 or

01:43 - 10.766 other concerns so i think

01:43 - 12.236 being able to ensure that

01:43 - 14.200 everything under the is under the auspices of the

01:43 - 15.926 gaming control board is important in that aspect

01:43 - 18.507 and i think it would be similar to if we're talking

01:43 - 21.086 about the legalization of marijuana if we bring a

01:43 - 25.766 as a black market edit that we all know exist today and under

01:43 - 26.576 strict

01:43 - 28.136 controls of the state

01:43 - 32.666 then there'll be things like quality control testing and

01:43 - 33.806 safety so

01:43 - 38.226 not only is it a revenue potential source but is a public safety

01:43 - 39.426 and.

01:43 - 42.206 Piece of legislation that we can put forward as it is that true

01:43 - 43.166 yes i would agree with it.

01:43 - 44.366 Thank you.

01:43 - 45.986 Moving onto to

01:43 - 48.296 healthcare enough future projections i notice you know

01:43 - 51.416 the way we're budgeting i know it's been characterized as we don't

01:43 - 54.926 we don't really budget you know future but that's not really what

01:43 - 56.816 our budgets constructed it's

01:43 - 59.646 here's our budget proposal this year

01:43 - 02.906 and here's what our contractual obligations look like

01:44 - 04.166 as our base

01:44 - 05.396 on put on pot

01:44 - 08.966 upon which we are going to start our budget year after year is that that correct

01:44 - 10.896 that is correct we provide

01:44 - 11.516 a

01:44 - 13.086 a budget proposal.

01:44 - 14.096 That

01:44 - 16.826 provides for investments that we believe would

01:44 - 19.016 continue to push our progress forward

01:44 - 22.476 and then that is the base that is used for future negotiations

01:44 - 24.565 and i think exhibiting knowledge on both sides one of

01:44 - 27.176 the biggest concerns that we have is the budget on da h

01:44 - 28.466 in an education

01:44 - 31.316 as the federal government has proposed cuts

01:44 - 32.616 to.

01:44 - 34.446 Medicaid medicare

01:44 - 36.656 and we don't know what those rules look like

01:44 - 42.156 but we know it's coming and it's it's billions of dollars that are going to be cut.

01:44 - 43.206 From

01:44 - 47.336 our budget here in pennsylvania in the future because of this as

01:44 - 50.016 if if we don't we don't.

01:44 - 52.192 Know exactly what that's going to do to our budget

01:44 - 54.716 but it's also going to have a significant impact on

01:44 - 57.386 healthcare access in pennsylvania endless

01:44 - 00.156 this body acts is that correct.

01:45 - 02.616 That is correct there are a number of changes.

01:45 - 07.026 That were enacted in hr one that will have an impact on.

01:45 - 08.156 Access to

01:45 - 09.876 medicaid program

01:45 - 11.556 as well as other.

01:45 - 13.026 Benefits.

01:45 - 14.616 That our.

01:45 - 17.426 That our population

01:45 - 18.726 utilize

01:45 - 20.936 and and you know

01:45 - 25.296 as i had said in a in a previous comment there is also still time.

01:45 - 28.196 For congress to make any kind of changes to that

01:45 - 30.836 of all it is set to go into effect in twenty twenty eight

01:45 - 35.456 and there are a whole bunch of things in there that will ultimately have an impact

01:45 - 38.586 to the access a number of individuals that access.

01:45 - 40.446 Healthcare in pennsylvania.

01:45 - 42.626 Thank you and i'll do one last question just

01:45 - 43.046 go

01:45 - 44.156 go back to the previous

01:45 - 45.776 questioning talked about the

01:45 - 49.736 hundred million dollars for the federal response and and i think there is a

01:45 - 54.206 very critical statement there and that my colleague begun as the

01:45 - 55.626 the legitimate

01:45 - 00.746 law enforcement of of the federal government but that's really not what this is

01:46 - 03.836 designed to do because each of the forty five i believe

01:46 - 06.966 are lawsuits that we fought against the federal government.

01:46 - 09.416 Said this was an illegitimate act this was a

01:46 - 13.616 enact either against constitutional law or against current federal statute

01:46 - 15.956 and we've won every single case so so.

01:46 - 19.586 Really if you look historically whip transylvania is done

01:46 - 23.486 we've challenged illegitimate acts by the federal government and been proven

01:46 - 26.016 successful each and every time is that correct.

01:46 - 28.296 The suits that we had brought against.

01:46 - 32.156 The federal government as a direct reaction of resources that were

01:46 - 36.266 already previously committed to the commonwealth of those i

01:46 - 38.286 have the ones that have been decided they

01:46 - 40.196 have been all ruled in our favor there's crime

01:46 - 42.546 thank you sir i appreciate your time.

01:46 - 46.256 Thanks gentlemen representative donahue thank you mr

01:46 - 49.566 chairman and thank you secretary for being here today.

01:46 - 52.586 Last year the administration certified over one billion in

01:46 - 54.746 property tax relief for the first time

01:46 - 56.136 i ever.

01:46 - 56.756 What

01:46 - 58.421 what does that say about our commonwealth

01:46 - 00.876 and how does that help everyday pennsylvania.

01:47 - 02.036 Yeah so the

01:47 - 05.317 overbid really over the one the one billion dollars

01:47 - 07.676 that we certified last year for the first time

01:47 - 08.756 and

01:47 - 10.346 has put us at

01:47 - 13.238 roughly thirteen billion dollars of property tax relief

01:47 - 16.296 that we have provided since the inception of that program.

01:47 - 18.086 Historically the

01:47 - 20.136 amount of money that was.

01:47 - 23.336 Certified was around five hundred and ninety five million that was for for.

01:47 - 24.806 Nearly a decade

01:47 - 25.646 and then

01:47 - 27.596 twenty twenty two we started

01:47 - 31.346 increasing that just based on available funds in the property tax relief fund

01:47 - 33.296 to seven hundred and fifty million

01:47 - 35.966 and another seven hundred and fifty million the year after

01:47 - 37.196 nine hundred

01:47 - 38.816 in twenty three

01:47 - 39.566 in

01:47 - 40.616 two thousand and four

01:47 - 41.366 and then

01:47 - 44.341 twenty five was one point two five billion so we are

01:47 - 46.692 again proposing to certify at least that amount one point

01:47 - 47.276 two five

01:47 - 48.746 and will continue to

01:47 - 51.686 look at the the funds to determine if.

01:47 - 53.546 If the fund can sustain

01:47 - 57.056 an increase but overall that is general property tax relief to farmstead

01:47 - 58.656 homestead farmstead.

01:47 - 00.456 And.

01:48 - 02.196 That.

01:48 - 05.096 That goes directly to mitigate

01:48 - 08.976 potential increases in property taxes for individuals.

01:48 - 11.486 Thank you for that

01:48 - 14.606 just shifting gears a little bit to energy affordability

01:48 - 16.866 our energy prices are rising

01:48 - 17.336 and

01:48 - 19.949 constituents are understandably concerned about

01:48 - 22.706 the impacts on energy pricing and also the

01:48 - 25.206 prevalence of data centre.

01:48 - 27.306 Proposals throughout the commonwealth

01:48 - 29.479 ok could you just discuss the importance of

01:48 - 31.956 pence moving is responsible infrastructure.

01:48 - 34.406 Development proposal that the government

01:48 - 36.546 governor proposed in his.

01:48 - 38.256 Budget address.

01:48 - 41.916 Yeah again we we recognize that ai and.

01:48 - 43.676 Has future benefits

01:48 - 44.456 to

01:48 - 45.596 a variety of

01:48 - 46.406 areas

01:48 - 47.868 and and

01:48 - 48.776 you know

01:48 - 50.786 we we have have worked with

01:48 - 55.466 potential growth of data centers and building of new data centers in the past under

01:48 - 58.566 this administration what we are proposing is to.

01:48 - 00.366 Increase the.

01:49 - 03.746 Are what we are proposing is to ensure that the

01:49 - 04.866 and.

01:49 - 08.576 The the future development of that if they're going to benefit from

01:49 - 09.896 and you know

01:49 - 11.336 a hands on approach

01:49 - 13.436 and ability of the administration to

01:49 - 15.146 generate that growth as well as

01:49 - 16.496 future tax incentives

01:49 - 17.156 that are

01:49 - 19.836 good otherwise be available to those.

01:49 - 21.006 Developments

01:49 - 23.286 we want to make sure that we are hitting.

01:49 - 24.926 A list of

01:49 - 26.766 a group of standards

01:49 - 27.716 to ensure that

01:49 - 31.286 the people in those local area are are protected

01:49 - 33.776 and we want to make sure that the

01:49 - 37.676 environmental resources that are available to people in those areas are not impacted

01:49 - 39.476 we want to make sure that the

01:49 - 40.836 and.

01:49 - 43.176 The local workers

01:49 - 46.436 are utilized to develop that as well as operate those

01:49 - 46.976 and

01:49 - 50.526 those facilities we want to make sure that.

01:49 - 51.476 People

01:49 - 54.146 the developers who are making those developments on those

01:49 - 57.636 large centers which utilize a lot of energy are utilizing.

01:49 - 59.556 Their specific

01:49 - 00.956 are bringing their own energy

01:50 - 02.936 and the reason for that is to make sure that

01:50 - 06.216 the costs to local businesses and.

01:50 - 09.116 Residents don't increase just as a result of that

01:50 - 11.496 and then.

01:50 - 13.646 Also just want to make sure that the

01:50 - 16.067 locals in the area are at least aware of the planned

01:50 - 19.239 development and have some buy into the the development.

01:50 - 21.936 Thank you for your answer thank you mr chairman.

01:50 - 27.696 Thank the genuine representative brennan.

01:50 - 28.976 Thank you chairman

01:50 - 31.496 thank you secretary i thank you for being here today.

01:50 - 35.336 It's been a pleasure working with your office and the governor's office and

01:50 - 38.486 you know for the last few years that i've been here i've i've watched the governor i

01:50 - 42.386 i often tell my my constituents that he's the first governor in some time to have.

01:50 - 44.786 A business plan probably decades

01:50 - 45.896 at three decades i think

01:50 - 47.376 and

01:50 - 49.566 you know what of the things i am also always concerned

01:50 - 51.966 about is our infrastructure here in pennsylvania

01:50 - 55.556 and you know i i've watched the source streamline programs have been developing the

01:50 - 58.046 site's plan i've seen some of the successes with the

01:50 - 00.536 you know billions of dollars in investment coming here

01:51 - 03.096 to pennsylvania but i'm wondering.

01:51 - 07.736 I have a few questions about our infrastructure and and i see that the governor's

01:51 - 11.306 proposed a new critical infrastructure investment program

01:51 - 12.626 which is intended to close

01:51 - 14.496 housing energy

01:51 - 16.926 school districts local government.

01:51 - 17.396 Can you

01:51 - 20.036 tell us a little bit about this program and share how

01:51 - 21.776 how that's intended to function

01:51 - 24.036 yeah absolutely so.

01:51 - 26.996 Again you you touched on it and you heard the governor saying his

01:51 - 28.926 proposal that affordability.

01:51 - 33.966 Is important and one way to tackle affordability is to ensure supply

01:51 - 36.896 and so the intent of the critical infrastructure

01:51 - 38.196 program.

01:51 - 40.266 Would be to

01:51 - 41.856 create the program.

01:51 - 44.576 Solicit applications for projects whether

01:51 - 46.766 that be in development of new housing

01:51 - 51.326 and you know it it also depends on how it's structured on what uses could be

01:51 - 53.786 and since they are talking about bonds we

01:51 - 57.326 if we're going to do non taxable bonds we have to make sure that it's in line with

01:51 - 59.216 the eligible uses for non taxable

01:51 - 01.086 if we go with a taxable

01:52 - 04.476 direction that opens up for other potential uses

01:52 - 08.216 but i think just in general in the housing space creation of new housing

01:52 - 10.406 rehabilitation of existing housing

01:52 - 11.936 are all important

01:52 - 12.626 and

01:52 - 14.653 in the energy space touched on a little bit to

01:52 - 17.616 just making sure that we have resources available

01:52 - 21.416 to to pair with our changes that we've made in the permitting process and making

01:52 - 23.816 pennsylvania just a more attractive place to do business

01:52 - 26.579 and and a need for energy

01:52 - 28.746 as a part of that process.

01:52 - 30.716 In the school facility side

01:52 - 34.046 we've made great strides in working with the general assembly and investing

01:52 - 36.566 around four hundred million dollars in the last few years

01:52 - 39.146 in infrastructure updates to to

01:52 - 44.556 do to our school facilities but we've also heard that the need for those.

01:52 - 45.566 School facilities quality

01:52 - 47.066 improvements are in the billions

01:52 - 49.076 so we are proposing this fund

01:52 - 53.366 really as a holistic approach to make sure that pennsylvania remains competitive

01:52 - 54.926 and so that we can

01:52 - 56.876 have safe places for our schools

01:52 - 59.156 and our children who are the future of our workforce

01:52 - 01.697 safe housing and affordable housing who are the existing

01:53 - 04.166 workforce and the ability to attract new workers here

01:53 - 08.036 in energy to heat the homes in the businesses of the which is

01:53 - 11.576 all in concert with working towards our goals and the economic development strategy

01:53 - 13.916 that we outlined and i do believe

01:53 - 18.146 we in this chamber really have to consider the need to build up our infrastructure to

01:53 - 20.546 protect our infrastructure i'm hearing from my business leaders

01:53 - 23.276 that we are seeing limitations i know

01:53 - 27.476 i've had conversations with some my colleagues about closing the delaware loophole

01:53 - 31.106 and how that could i mean we have a program it's a passive benefit

01:53 - 34.136 and it it favors outta state companies in

01:53 - 37.526 in at the expense of of pennsylvania companies and we're also

01:53 - 40.856 falling behind in this infrastructure improvement when we could be putting

01:53 - 41.492 you know

01:53 - 45.026 up to five hundred million dollars a year and our infrastructure or other programs in

01:53 - 48.006 pennsylvania so i do think we have to continually consider.

01:53 - 48.886 The need

01:53 - 49.856 to keep that

01:53 - 51.336 infrastructure

01:53 - 54.686 together and and how it how it interacts with our business development

01:53 - 58.226 one other question i had as we've seen a lot of uncertainty at the federal level

01:53 - 59.426 with our

01:53 - 00.636 institutions

01:54 - 03.276 that that do research i'm wondering.

01:54 - 07.586 What are your thoughts on on how these do decreases in funding impact

01:54 - 10.916 some of our education institutes here in pennsylvania is there anything that

01:54 - 13.206 that we can do as a body.

01:54 - 15.086 Or that we should do to provide more

01:54 - 16.676 stability for these

01:54 - 18.246 for these institutions.

01:54 - 20.766 Yeah so we.

01:54 - 24.426 I will say some of the existing investments that we've made.

01:54 - 25.976 You know there are

01:54 - 29.606 there are some dollars which would never make up the amount of money

01:54 - 30.776 potentially lost

01:54 - 32.796 through the nist funding.

01:54 - 34.536 At the federal level

01:54 - 35.636 but the

01:54 - 36.566 we've made

01:54 - 38.276 some investments in

01:54 - 39.816 in biotech.

01:54 - 42.956 Specifically in the department of health we've made some investments in

01:54 - 44.846 neurodegenerative research

01:54 - 45.596 i

01:54 - 49.406 certainly would never fill the gap a critically important and and

01:54 - 50.276 weave

01:54 - 52.826 as part of our overall economic development strategy

01:54 - 53.486 have

01:54 - 56.150 really been trying to focus on in innovation

01:54 - 57.296 in life sciences

01:54 - 59.246 in other industries in that areas

01:54 - 00.236 and

01:55 - 00.836 you know

01:55 - 03.236 certainly have good working relationships with

01:55 - 04.686 our universities

01:55 - 06.026 through the commonwealth

01:55 - 07.286 and and

01:55 - 08.976 i think

01:55 - 11.336 to come off as a whole would benefit from

01:55 - 12.086 the level

01:55 - 14.276 of innovation investments that we've called for.

01:55 - 15.307 Through

01:55 - 18.456 the innovate and pa two point oh program.

01:55 - 22.076 That we had proposed in our budget and thank you so much we're certainly seeing the

01:55 - 24.996 benefits of all that planning and investment thank you.

01:55 - 29.426 Chairman shrews

01:55 - 31.476 thank you chairman harris.

01:55 - 36.986 So the proposal before us that the governor put forth in february as a spend of just

01:55 - 39.276 above fifty three billion dollars.

01:55 - 40.626 Revenues

01:55 - 43.075 based on current estimates are expected to be

01:55 - 46.476 around forty seven billion dollars give or take.

01:55 - 51.966 The governor is proposing to balance this budget drawing down the rainy day fund

01:55 - 52.916 by about

01:55 - 54.626 four and a half billion dollars

01:55 - 56.316 draining our surplus

01:55 - 57.506 and then

01:55 - 01.746 proposing these new revenue sources that we've heard discuss today.

01:56 - 03.866 Regulating and taxing skill games

01:56 - 06.366 legalizing and taxing

01:56 - 10.406 recreational marijuana and increasing the minimum wage which have been around

01:56 - 13.566 as was noted for several years now.

01:56 - 19.386 Those are not currently in place so they are speculative speculative revenues at best

01:56 - 21.096 but we.

01:56 - 22.956 Do know that the governor

01:56 - 26.496 with a rainy day fund and draining the surplus.

01:56 - 27.686 Will

01:56 - 29.636 essentially put us in

01:56 - 32.996 a more difficult physical fiscal position

01:56 - 35.016 in the outlying years

01:56 - 36.506 now as you had stated

01:56 - 37.656 currently.

01:56 - 40.166 As you have met with the bond rating

01:56 - 41.396 specialist

01:56 - 44.066 we are okay because we are able to

01:56 - 46.896 pass a balanced budget which we have done.

01:56 - 49.319 The past three years since the shapiro

01:56 - 52.226 administration took office by utilizing other funds

01:56 - 56.556 by draining our surplus but if we continue down this path.

01:56 - 58.316 We won't be able to do that

01:56 - 59.736 curve correct.

01:57 - 04.476 So we had put forward revenues

01:57 - 07.646 to help mitigate any potential need to draw down surplus

01:57 - 09.756 as i'd mentioned in the past.

01:57 - 11.606 In past testimony here

01:57 - 12.536 and

01:57 - 13.986 we believe.

01:57 - 16.856 We have left about three billion dollars off the table

01:57 - 20.996 while these are speculative all revenue sources in the commonwealth at one point were

01:57 - 23.796 not in existence and were speculative at one point.

01:57 - 24.806 So i think it's a

01:57 - 28.526 negotiation process and work with the general assembly on an acting

01:57 - 30.386 revenue sources to continue to

01:57 - 31.046 the investments

01:57 - 32.846 think that's a little bit of a stretch

01:57 - 36.249 we know the revenue sources that we have right now in front of us

01:57 - 36.626 to

01:57 - 40.050 to deal in hypotheticals i think isn't isn't being

01:57 - 43.016 responsible with the the taxpayers of this commonwealth

01:57 - 45.236 so i think you understand our concern though

01:57 - 47.513 because we do have a good credit rating now

01:57 - 49.916 because we have that money in the bank if you will

01:57 - 52.376 and then projecting just a one point

01:57 - 53.066 eight

01:57 - 54.086 percent

01:57 - 56.996 growth in expenditures over the outlying years really

01:57 - 01.046 i think is is misleading to the taxpayers of this commonwealth because

01:58 - 04.646 once the rainy day fund is gone once the surplus is gone

01:58 - 08.516 word of those funds come from if we don't have the revenues to meet

01:58 - 10.536 the required spend.

01:58 - 14.682 The constitution says that we have to propose a

01:58 - 18.116 balanced budget with expenditures and revenues in line

01:58 - 20.396 and if the expenditures outgrow

01:58 - 21.575 the.

01:58 - 24.291 The the available revenues then we have to propose new

01:58 - 26.906 revenues which is what we have done for the last four years

01:58 - 27.896 so i think it's

01:58 - 32.156 we will continue to seek common sense nz policy changes

01:58 - 34.200 that would generate revenues and allow us to continue

01:58 - 35.936 to make investments in the people of pennsylvania

01:58 - 39.176 and if if those revenues aren't there where where

01:58 - 39.986 does the

01:58 - 42.036 funding come from.

01:58 - 43.806 That would be.

01:58 - 48.146 An enacted product is subject to negotiations with the general assembly on what a

01:58 - 50.518 balanced budget looks like at an enactment.

01:58 - 53.946 Again.

01:58 - 57.476 Word do the revenues for this commonwealth come from.

01:58 - 59.126 Current revenues

01:58 - 03.096 come from a variety of sources they come from taxes they come from these.

01:59 - 04.776 They come from.

01:59 - 06.836 Other federal sources

01:59 - 07.786 there's a

01:59 - 10.016 large variety of revenue sources

01:59 - 11.426 and at one point

01:59 - 13.911 the revenue sources of this commonwealth were not

01:59 - 16.196 in place at one point they were all speculative

01:59 - 17.066 is what i tried to

01:59 - 19.116 that's what i meant by that statement.

01:59 - 22.136 So they are all part of proposals

01:59 - 24.246 and all part of open

01:59 - 27.146 and constructive com conversations with the general assembly

01:59 - 30.326 on the best ways to continue to make investments in the people of pennsylvania

01:59 - 35.676 but essentially if those speculative revenues aren't in place.

01:59 - 39.416 Ultimately it's going to fall on the taxpayers to make up that gap

01:59 - 42.536 ultimately would fall to the general assembly to enact a budget

01:59 - 43.586 in concert with the

01:59 - 45.246 with the administration

01:59 - 47.016 on what balanced budget would look like

01:59 - 48.806 whether it's new revenues or decrease spending.

01:59 - 50.466 Okay.

01:59 - 52.536 You're very good at.

01:59 - 54.086 Walking around the answers

01:59 - 56.136 that is the answer.

01:59 - 57.416 Just just

01:59 - 00.416 out of curiosity how how do you determine

02:00 - 02.831 what amount you put in the line items because

02:00 - 04.886 throughout these three weeks of hearings

02:00 - 06.326 you know we have had

02:00 - 10.476 various agencies before us who have requested certain amounts

02:00 - 13.487 but not received those amounts or conversely

02:00 - 16.406 they've been given more than they asked for

02:00 - 18.546 how how are those determined.

02:00 - 21.336 So the we solicit.

02:00 - 24.146 Through our budget instructions in august two agencies

02:00 - 26.096 would have cost the carry budget would look like.

02:00 - 27.966 They provide

02:00 - 30.356 the submission in october

02:00 - 31.856 to the governor's budget office

02:00 - 33.096 outlining.

02:00 - 36.926 The the operational dollars where the

02:00 - 38.546 and personnel

02:00 - 39.356 figures and

02:00 - 41.966 that they believe would be necessary to continue to operate

02:00 - 45.139 what we do in the office of the budget is scrutinize

02:00 - 47.786 every every line in appropriation when it comes to

02:00 - 49.356 personnel.

02:00 - 50.396 We look at

02:00 - 53.606 existing vacancies and how long those vacancies have been unfilled

02:00 - 55.046 we apply

02:00 - 56.786 certain criteria to

02:00 - 57.596 do

02:00 - 59.306 the number of pays that we

02:00 - 00.636 i believe.

02:01 - 03.236 That should that vacancy be filled in the in the

02:01 - 04.106 in the

02:01 - 05.486 proposed fiscal year.

02:01 - 09.446 How much time we think it would take and we generally apply

02:01 - 12.086 try to apply a standard across all personnel

02:01 - 13.406 and look

02:01 - 15.596 when we look at all personnel across all agencies

02:01 - 17.366 regardless of governor's jurisdiction or not

02:01 - 18.446 and

02:01 - 20.976 then what we do do as we have.

02:01 - 25.796 Of his policy priorities that that we review in concert with the governor

02:01 - 28.706 and and that is what ultimately makes

02:01 - 29.876 the proposal

02:01 - 31.646 and we work very closely

02:01 - 32.606 and

02:01 - 34.466 across policy and budget

02:01 - 35.426 to

02:01 - 38.306 ensure that the proposal that we're putting forward

02:01 - 41.786 is that that builds on our previous investments and continues to to

02:01 - 43.166 move the commonwealth forward

02:01 - 45.546 and so there are.

02:01 - 47.906 There are ongoing conversations with

02:01 - 50.376 agencies on their budget submissions

02:01 - 52.046 and ultimately we make the final

02:01 - 53.316 proposal

02:01 - 53.966 in february

02:01 - 58.256 then just one last question that kind of sum it up do you do you start with a number

02:01 - 59.396 or do you just

02:01 - 01.626 build to that number

02:02 - 01.976 and

02:02 - 04.376 do you look at current revenues

02:02 - 06.246 or is that just.

02:02 - 08.145 Again hypothetical we're just going to put the

02:02 - 11.042 number out there and figure out how to get there.

02:02 - 11.902 One

02:02 - 13.082 so

02:02 - 14.462 we.

02:02 - 17.872 We build a budget based on what we believe

02:02 - 18.532 is

02:02 - 19.492 is the best

02:02 - 22.222 use of taxpayer dollars in investments in the company of

02:02 - 24.662 and then we.

02:02 - 29.452 It's all it all coordinates together on the the revenues that would be needed to make

02:02 - 30.731 those investments which is how he came up

02:02 - 32.212 with the revenue prepare puzzles that we did

02:02 - 32.902 alright

02:02 - 34.532 thank you.

02:02 - 36.842 Thank the gentleman.

02:02 - 39.472 I'm secretary thank you again for being here

02:02 - 43.262 just a few questions before we wrap up.

02:02 - 44.552 I.

02:02 - 50.372 A lot of comments have been made about the speculative nature

02:02 - 51.772 of the budget

02:02 - 52.402 and

02:02 - 54.322 would you say that budgets

02:02 - 55.802 in government

02:02 - 58.652 to a sense are speculative or.

02:02 - 00.592 An educated guess

02:03 - 02.432 in many ways.

02:03 - 05.692 We are required to put forward a budget proposal and it is

02:03 - 08.362 that it is exactly that a proposal on

02:03 - 12.862 what we would recommend that the general assembly appropriates for specific programs

02:03 - 14.976 as well as the revenues that would be needed

02:03 - 19.022 to cover those programs and and it is up to a

02:03 - 20.332 a good

02:03 - 20.962 open

02:03 - 23.914 negotiation process with the general assembly on shared

02:03 - 27.422 priorities in what a final negotiated product looks like.

02:03 - 32.032 I i i agree and understand it but even on our documents when we're looking at it

02:03 - 34.972 it says estimated typically with revenue

02:03 - 35.512 correct

02:03 - 40.252 and so would you agree that it is an educated guess on what we believe leave

02:03 - 41.602 those revenues would be

02:03 - 42.202 yes

02:03 - 43.012 there is a

02:03 - 43.446 a

02:03 - 45.622 process that is undertaken with the governor's

02:03 - 49.412 budget office and the department of revenue looking at economic factors

02:03 - 50.302 and

02:03 - 54.142 growth trends of business taxes and that is how our revenue estimate is.

02:03 - 56.782 Exactly that an estimate is determined

02:03 - 57.952 so it's an estimate

02:03 - 59.162 yes.

02:03 - 02.722 So when we do our estimates would you say

02:04 - 05.072 our estimates are conservative.

02:04 - 07.312 Moderate or

02:04 - 09.442 are more aggressive in our estimation

02:04 - 10.852 our revenue estimates

02:04 - 12.292 are are

02:04 - 13.532 are conservative

02:04 - 18.562 over a twenty five year period the actual revenue growth of

02:04 - 21.052 the commonwealth has been about three and a half percent

02:04 - 25.531 of the certified amount for fiscal year two thousand and five

02:04 - 29.092 was about two point nine percent and the

02:04 - 30.832 adjusted revenue estimate

02:04 - 34.792 and that we are proposing for fiscal year two thousand and five would be about three

02:04 - 37.882 and a half percent so we were underestimate we're adjusting our estimate

02:04 - 38.902 and the

02:04 - 41.632 overall estimate for your base revenues for two thousand

02:04 - 43.488 for fiscal year two thousand twenty six is

02:04 - 45.472 about three point one percent so we are under

02:04 - 46.912 are two point one percent i'm sorry

02:04 - 50.362 so we we're under well under where the historical trends have been.

02:04 - 53.522 Right now year to date.

02:04 - 56.422 How are we on our revenue estimates are we a

02:04 - 59.392 head are we are we behind where are we

02:04 - 04.132 we are one last i checked one point four percent ahead of where we expected to be

02:05 - 07.562 dollars and cents for it for all of us who.

02:05 - 08.792 Who don't.

02:05 - 10.732 I think it's about two hundred

02:05 - 11.571 two hundred million

02:05 - 14.192 so two forty four are.

02:05 - 17.282 Two hundred and something million.

02:05 - 18.752 A head

02:05 - 20.702 of what we were estimated

02:05 - 23.222 to be at this point.

02:05 - 26.528 That is correct we are increasing our estimate

02:05 - 28.792 two hundred and forty four million but we are

02:05 - 30.412 about three hundred million ahead

02:05 - 31.372 sorry i got the numbers wrong

02:05 - 32.852 so.

02:05 - 36.172 If i'm looking at the the numbers

02:05 - 37.402 that you all provide

02:05 - 39.952 you know my staff gives me an update every month

02:05 - 41.272 on where we are

02:05 - 44.282 it looks like year to date.

02:05 - 48.062 We are about three hundred and eighty one million dollars

02:05 - 50.192 ahead of where we estimated.

02:05 - 52.222 Does that seem like a have.

02:05 - 53.287 A good

02:05 - 56.072 of a right range of numbers.

02:05 - 57.652 Yeah yeah so we

02:05 - 00.892 i think as secretary brown had estimated the

02:06 - 03.662 we try to be plus or minus two percent.

02:06 - 04.522 We are

02:06 - 06.002 closer

02:06 - 10.582 year to date to two percent over where we at estimated three hundred and eighty and

02:06 - 14.452 we are adjusts putting our revenue estimate up from what we certified as result of

02:06 - 19.672 our economic so to the person sitting at home that means that when we did our budget

02:06 - 24.622 estimates and what we talked about what we thought we would get in as a commonwealth

02:06 - 26.702 because these are estimates.

02:06 - 29.662 The actual realization is

02:06 - 30.502 that we

02:06 - 34.732 under estimated what we thought we would bring in

02:06 - 39.112 and that we've brought in almost four hundred million dollars more a

02:06 - 40.712 year today.

02:06 - 42.572 Than we have.

02:06 - 45.322 That we thought we were going to have that is that a fair assessment

02:06 - 45.862 that is correct

02:06 - 48.032 what are some of our.

02:06 - 50.552 Big collection moths.

02:06 - 52.792 In our yearly cycle water those

02:06 - 53.632 months

02:06 - 54.712 and

02:06 - 55.462 april

02:06 - 57.682 obviously is personal income tax

02:06 - 00.562 and marches typically the

02:07 - 02.722 corporate income tax so we have

02:07 - 05.002 our biggest revenue generating months ahead of us yet

02:07 - 06.142 wait so so

02:07 - 06.892 let me get this get

02:07 - 10.732 so we're already almost four hundred million dollars

02:07 - 13.082 ahead of what we estimated

02:07 - 15.862 and we've yet to get to

02:07 - 17.602 the larger moths

02:07 - 19.462 and our fiscal cycle

02:07 - 20.572 where we collect

02:07 - 23.102 where we typically collect more revenue.

02:07 - 24.832 Was that is that fair to say

02:07 - 25.432 that is correct

02:07 - 26.122 okay

02:07 - 28.592 so i won't focus on staying at home.

02:07 - 29.762 One

02:07 - 31.202 this administration.

02:07 - 35.302 Has a conservative view of how we estimate

02:07 - 36.772 what our revenue is going to be

02:07 - 37.582 that means

02:07 - 39.112 if you're sitting at home

02:07 - 40.852 and you're thinking about

02:07 - 42.052 how much money

02:07 - 46.412 you're you're going to bring in in the month of of january february

02:07 - 48.562 to your to your own part personal

02:07 - 49.892 income.

02:07 - 52.552 That means that the commonwealth does the same thing

02:07 - 55.398 and what we've done over the last few months is that

02:07 - 58.192 we have thought that we will bring in less money

02:07 - 03.322 and we're actually bringing in more so much so that it's almost four hundred million

02:08 - 05.542 dollars more than we thought we'd bring it

02:08 - 07.912 and for the folks sitting at home

02:08 - 10.172 we've yet to hit.

02:08 - 14.362 I think we're focusing in track and field will say we've yet to hit our stride

02:08 - 17.182 with regards to the months that we actually

02:08 - 18.142 collect

02:08 - 20.452 a significant amount of our money

02:08 - 21.562 in our fiscal year

02:08 - 23.792 would that be an accurate summation

02:08 - 24.592 as correct

02:08 - 25.222 okay

02:08 - 28.612 so we're four hundred million dollars over where we thought we'd be the

02:08 - 31.522 marches were in march now so that's when

02:08 - 33.442 businesses pay their taxes

02:08 - 35.252 and then april

02:08 - 38.242 is when everyone else typically pay so those are our two

02:08 - 39.652 big months

02:08 - 41.452 where we'll probably

02:08 - 44.252 because we're conservative in our estimation

02:08 - 47.282 will probably get even more

02:08 - 48.722 ahead

02:08 - 51.262 on how much money we're bringing in

02:08 - 53.792 based off of what we thought

02:08 - 55.342 we would bring it

02:08 - 57.722 and so i think i think.

02:08 - 59.312 It's interesting

02:08 - 01.942 i mean we've sat here for weeks and we've heard people

02:09 - 04.132 say all these different things going back and forth

02:09 - 04.822 but

02:09 - 07.742 it comes down to the numbers

02:09 - 09.382 your budget secretary

02:09 - 11.272 it's about the numbers to write

02:09 - 11.872 correct

02:09 - 12.992 okay.

02:09 - 16.892 And so we're ahead of the game

02:09 - 17.842 with our

02:09 - 19.472 with our revenue.

02:09 - 24.182 And we still haven't hit the months where the revenue comes in.

02:09 - 26.342 We're ahead of the game

02:09 - 30.682 with regards to our credit rating our bond rating which is

02:09 - 34.012 you know for the people sit at home it's basically the state's credit

02:09 - 34.882 score

02:09 - 36.232 and just like you

02:09 - 40.522 at home if you have a decent credit score when you go out and try to borrow money or

02:09 - 42.832 buy a car buy a house you get a better interest rate

02:09 - 44.182 while for the state

02:09 - 46.402 when we have a better bond rating

02:09 - 47.152 that means

02:09 - 49.582 when we go out to the market to bonn

02:09 - 51.232 we get a cheaper interest rate

02:09 - 53.242 a cheaper interest rate on our bonds

02:09 - 55.779 means that the debt service which is the money that

02:09 - 58.852 we have to pay back which is your taxpayer dollars

02:09 - 02.552 that means we're paying back less in interest

02:10 - 04.822 because we're good fiscal stewards

02:10 - 06.726 correct correct.

02:10 - 09.422 So when we have a budget impasse.

02:10 - 12.152 Right.

02:10 - 14.692 Could that possibly hurt our bond rating

02:10 - 16.112 yes

02:10 - 19.862 and so when there are folks in this building.

02:10 - 24.572 Who are okay with us holding up the budget.

02:10 - 28.202 They are possibly

02:10 - 30.332 holding our.

02:10 - 34.922 Bond rating in limbo correct.

02:10 - 35.602 Eventually i

02:10 - 41.242 saw a drop in our bond rating would also mean that we would be paying more interest

02:10 - 43.112 when we go out

02:10 - 46.972 and we bond and when we the state borrow money correct

02:10 - 47.332 correct

02:10 - 50.094 who pays the difference in net interest if there's more

02:10 - 53.942 interest that has to be paid where does that money come from.

02:10 - 56.362 All net service

02:10 - 59.642 is paid out of the general fund which is.

02:10 - 00.682 Current revenues

02:11 - 01.912 as tax dollars

02:11 - 04.492 taxpayer dollars

02:11 - 05.852 correct.

02:11 - 06.892 Okay.

02:11 - 08.522 Now.

02:11 - 10.262 My last one.

02:11 - 13.732 In the budget

02:11 - 15.362 there are.

02:11 - 18.092 Revenue generators

02:11 - 19.922 skill games

02:11 - 22.082 legalization of adult use cannabis.

02:11 - 24.392 Raising the minimum wage.

02:11 - 26.512 If those things don't

02:11 - 27.632 happen.

02:11 - 30.572 We don't generate that revenue.

02:11 - 33.482 What do we have to do with this budget proposal.

02:11 - 36.212 We would either have to

02:11 - 38.102 utilize more

02:11 - 41.672 of the rainy day fund or surplus

02:11 - 42.892 or would have to make

02:11 - 44.812 difficult decisions on what our

02:11 - 46.620 expenditure levels would look like what

02:11 - 47.882 it could.

02:11 - 49.192 You know

02:11 - 50.212 difficult to say

02:11 - 52.492 that that sounds like a good political

02:11 - 54.142 what does that actually mean

02:11 - 56.002 we'd have to make difficult

02:11 - 57.242 decisions.

02:11 - 59.192 In layman's terms.

02:11 - 00.772 We would have to look

02:12 - 02.792 at every appropriation

02:12 - 04.912 that is appropriate out of the general fund

02:12 - 06.422 and make.

02:12 - 08.509 Decisions on each of

02:12 - 09.320 it's

02:12 - 10.040 each

02:12 - 13.310 any kind of reduction in those lines would have impacts on programs

02:12 - 14.670 or services.

02:12 - 16.050 Or.

02:12 - 20.060 Personnel of the administration reduction does that mean cut

02:12 - 20.870 yes

02:12 - 21.800 okay

02:12 - 22.610 so

02:12 - 24.080 let me get this in layman's terms

02:12 - 26.030 for the people sitting at home i want them to understand

02:12 - 26.930 what we're doing here

02:12 - 29.480 so if these revenue generators don't have happened

02:12 - 30.320 right

02:12 - 33.230 well i've had to take more money out of the rainy day fund which

02:12 - 34.070 some of them

02:12 - 35.360 some of my colleagues seem that

02:12 - 36.170 don't want to do

02:12 - 37.350 fine.

02:12 - 38.850 Or.

02:12 - 41.220 We'd have to cut.

02:12 - 42.980 Services.

02:12 - 46.880 So that means stuff like cutting money to our schools correct

02:12 - 47.330 correct.

02:12 - 50.614 Cutting money to department of human services correct correct

02:12 - 53.160 so that means cutting more money from.

02:12 - 55.830 Let's say rural hospitals correct.

02:12 - 59.730 Cutting money to intellectual disability

02:12 - 01.820 that that's a part of dhs right

02:13 - 02.600 okay

02:13 - 04.070 so we would have to

02:13 - 05.540 go through the budget

02:13 - 09.060 and see all of these things that we're willing to cook.

02:13 - 11.700 Last question have you received.

02:13 - 14.640 Another or counter

02:13 - 16.070 budget proposal

02:13 - 18.390 then to what the governor has proposed.

02:13 - 19.730 Not to date no

02:13 - 21.630 so no one.

02:13 - 24.200 Who has criticized the budget

02:13 - 26.070 has authored

02:13 - 28.050 their own budget proposal.

02:13 - 31.800 To the governor or to the budget sector.

02:13 - 32.810 Okay

02:13 - 34.200 listen.

02:13 - 36.990 Over the last three weeks we've been critical.

02:13 - 38.510 And

02:13 - 39.486 many folks

02:13 - 41.760 in this chamber have been critical but.

02:13 - 43.700 This is now the time to help

02:13 - 47.970 we have a gap to fill and if you don't like.

02:13 - 50.550 Taking money from the rainy day fund.

02:13 - 51.900 That's fine

02:13 - 53.840 but you have to show us how

02:13 - 55.550 you'd balance this budget

02:13 - 59.370 without cutting services and programs to our constituents.

02:13 - 02.450 If you don't like the governor's budget proposed

02:14 - 03.260 revenues

02:14 - 06.230 show us how you'd like to generate

02:14 - 08.220 more revenue.

02:14 - 10.290 If you don't like.

02:14 - 14.100 What we're doing to generate funds you have to show us.

02:14 - 17.640 What you would like to cut.

02:14 - 19.380 We've been critical.

02:14 - 22.670 But as these hearings

02:14 - 24.810 begin to come to an end.

02:14 - 27.210 It's now time to put up.

02:14 - 31.550 It's easy to be critical.

02:14 - 34.440 Without giving a solution.

02:14 - 40.080 Heard a lot of complaints about our five year projections but i don't think i've seen

02:14 - 44.430 even a one year budget proposal from anyone else.

02:14 - 46.700 Who has criticized this

02:14 - 47.970 budget.

02:14 - 49.550 So if you're going to complain that's fine

02:14 - 51.540 but complain with the purpose.

02:14 - 55.290 And complain with a proposal.

02:14 - 58.080 Because the truth of the matter

02:14 - 00.020 is that we have a budget proposal

02:15 - 02.280 in front of us it is balanced.

02:15 - 06.261 It calls on us to raise the minimum wage to regulate

02:15 - 08.420 skill games which are already happening here

02:15 - 10.340 and to legalize adult use cannabis

02:15 - 13.885 that's fine if you don't support adult use cannabis fine

02:15 - 17.930 where are we going to find the money that is necessary

02:15 - 20.370 to fill the gap in our budget.

02:15 - 24.260 And if you don't think we should fill the gap that's fine to

02:15 - 28.350 give me your list of things to cut.

02:15 - 31.520 Because that is the reality

02:15 - 33.180 there is no

02:15 - 35.390 way around it there's no

02:15 - 37.830 you know nice bow

02:15 - 39.780 to put on it.

02:15 - 44.040 Either we fun the things in the budget proposal

02:15 - 47.580 or we start talking about where we're cutting

02:15 - 50.130 and so i submit to you.

02:15 - 51.680 As we begin

02:15 - 55.010 we got one more hearing this afternoon but as we begin to leave this building

02:15 - 57.290 if you don't agree with this fine

02:15 - 58.970 start to have

02:15 - 01.340 the community meetings in your district

02:16 - 04.088 and start to prepare your constituents for

02:16 - 06.770 the lack of money coming for rural hospitals

02:16 - 09.680 or the lack of money can aiming for their school districts

02:16 - 13.640 or the lack of money coming for those nursing homes or the lack of money that's

02:16 - 15.020 coming for those roads or bridges

02:16 - 18.830 or the lack of money that's coming to make sure you have clean water or the lack of

02:16 - 20.510 money that's coming to make sure that you have

02:16 - 23.330 clean air or the lack of money that's coming for our

02:16 - 26.120 our adult programs or the lack of money that's coming

02:16 - 29.400 for our folks who are struggling with the dicks one.

02:16 - 31.370 Set up

02:16 - 32.780 the community meetings

02:16 - 34.130 and the town halls

02:16 - 39.530 and began to prepare your constituents for the lack of resources that are coming

02:16 - 41.862 and then i want you to tell them the couple that

02:16 - 45.210 with what the federal government is already doing.

02:16 - 50.220 So not only will the federal government not be there for them

02:16 - 52.400 but the state government won't be there for them

02:16 - 53.730 either.

02:16 - 56.180 This is not

02:16 - 57.720 a game.

02:16 - 01.610 We can give cute sound bites all we want

02:17 - 04.560 but now the real work begins.

02:17 - 07.290 You don't want to fund it.

02:17 - 09.210 What you going to cut.

02:17 - 10.430 It's really that simple

02:17 - 12.290 if you feel like we can't afford it

02:17 - 13.220 fine

02:17 - 15.480 give me your list of cuts.

02:17 - 18.270 Know where my office is.

02:17 - 20.070 You know my staff.

02:17 - 23.490 We'll be happy to take your list of cuts

02:17 - 25.470 but don't do it quietly.

02:17 - 28.400 The same way you proclaim

02:17 - 29.820 in the rotunda.

02:17 - 32.600 Is the same way i want you to proclaim those cuts

02:17 - 34.080 in the rotunda.

02:17 - 38.400 Because the people of the commonwealth deserve to know.

02:17 - 40.610 If we don't think we can do this

02:17 - 43.500 they deserve to know what we're willing

02:17 - 44.820 to cut.

02:17 - 47.640 And with that.

02:17 - 49.460 I will conclude this budget hearing

02:17 - 51.950 and thank the secretary for being here with us

02:17 - 54.690 we will be back this afternoon.

02:17 - 59.910 At one fifteen with the department of health

02:18 - 00.770 and d that

02:18 - 03.540 until then this budget hearing is adjourned.

02:18 - 32.600 Hmm.