 Lieutenant Governor Stack, Speaker Terzai, President Scarnati, Leader Corman, Leader Costa, Leader Reed, Leader Dermotty, members of the General Assembly, members of the Judiciary, members of the Cabinet. Like to recognize the Auditor General, the Attorney General, and the Treasurer, and also my wife, Francis. Most importantly, my fellow Pennsylvanians. This will not be an ordinary Governor's budget address. Usually this speech is an opportunity to lay out an ambitious agenda for the year ahead. Under ordinary circumstances, I'd outline my 2016-17 budget proposal, a proposal full of ideas to move our common wealth forward. I talk about new measures I'm proposing to ensure that every child in Pennsylvania has a world-class education that starts before kindergarten and goes all the way through college. I talk about the new partnerships we can create between the public and private sectors to help create jobs and grow our economy. I talk about the new innovations that can build on the progress we've already made in modernizing our state government so that it works better and costs less. And I talk about some long-overdue steps that we can take to help our common wealth fulfill the promise of equal opportunity and economic security for all, including protections for the LGBT community in housing and the workplace, the legalization of medical marijuana, a raise in the minimum wage, and criminal justice reform that will bring fairness back to our system and save tax dollars. But I can't give that speech, not under these circumstances. My fellow Pennsylvanians, our common wealth is in crisis, a crisis that threatens our future. And today, I want to be clear with each member of the General Assembly and with every Pennsylvanian about the actions we must take to resolve this crisis and the consequences that we'll face, all of us, if we don't. First let me be very clear about the nature of the problem. The problem is not that Republicans in the General Assembly and I don't see eye-to-eye. After all, Pennsylvanians are used to seeing political leaders disagree even strongly. And in 2014, in that election, the people of Pennsylvania chose divided government, a Democratic governor, a Republican legislature. And I doubt anybody was surprised when it turned out that we have different priorities. No, this crisis is not about politics at all. This is about math. Pennsylvania now faces a $2 billion budget deficit. That's not a Democratic fact, and that's not a Republican fact. It's just a fact. It's a fact supported by standard and poorest, an independent rating agency. They've done the math, and they agree Pennsylvania faces a massive structural budget deficit that will only continue to grow if we fail to address it responsibly. This deficit isn't just a cloud hanging over Pennsylvania's long-term future. It's a time bomb, and it's ticking away right now, even as I speak. If it explodes, the people in this chamber, if you allow it to explode, then Pennsylvania will experience a fiscal catastrophe the likes of which we have never seen. Please understand, we're not talking about a long-term budget projection. We're talking about Pennsylvania failing to meet its basic obligations this year. We're talking about pain that will be felt all across our Commonwealth this year. If the General Assembly does not approve a responsible plan to solve this crisis, every Pennsylvania will suffer the consequences, and those consequences will be real. They will be immediate, and they will be severe. Nearly three-quarters of Pennsylvania homeowners will see their already-too-high property taxes skyrocket even further. If a member of this body were to stand up and propose a tax increase on property taxes, a property tax increase, he or she would be boot off the floor by both Democrats and Republicans. But in fact, that is exactly what will happen if we do not act. We have seen this play out over the last four years. Since 2011, school districts have been forced to increase local property taxes by $1.2 billion, all because of our irresponsibility right here in Harrisburg. In the last year alone, 83 school districts increased property taxes above the index because Harrisburg did not produce a responsible budget, and another 175 school districts are contemplating additional tax increases this year for the same reason. This tax shifting is not sustainable, and it will only continue to squeeze families and seniors if we do not stop passing the buck onto local communities. Meanwhile, even as Pennsylvanians will pay more, they will get less from their state government. Far less. For example, our education system, already threadbare after years of underfunding at the state level, will take a ruinous hit. Thousands of teachers will be laid off. Guidance and career counselors will be handed pink slips. In all, more than 23,000 education professionals will be immediately yanked out of Pennsylvania schools. Across Pennsylvania, already crowded classrooms will become even more so. Class sizes will balloon by 30 percent to account for all those teacher layoffs. Worse, the consequences will not be evenly distributed. Classroom crowding will be more severe in the schools that can least afford it. But all across our commonwealth, our children, all children, will receive less attention, less instructional time, less opportunity to gain the skills we all need them to have for the 21st century. Technical education, those programs will be cut. Special education programs, they'll be cut. Headstart programs, cut. And tens of thousands of Pennsylvania children will lose access to pre-kindergarten, depriving them of the early childhood education that we all know is key to their future success. This is not a threat. This is not political posturing. This is simply what the math tells us will happen if this crisis is not resolved. This is the reality that teachers and parents and children in our commonwealth will face if the General Assembly does not act, and the damage will not be limited to our schools. Basic state services will also face devastating cuts. We will lose nearly $200 million in services to Pennsylvania seniors, including prescription drug assistance and home and community-based services. Pennsylvania seniors who depend on that assistance will be forced to pay more out of pocket. Some will have to choose between paying for groceries and paying for the medicine that keeps them alive. These are our elderly parents. These are our neighbors. And they're counting on this funding to pay for the medicine they need. But if we don't have a budget, we can't help. We'll lose $180 million in assistance for people living with mental illness or intellectual disabilities. These Pennsylvanians are the most vulnerable among us, and they are counting on our help to live full lives and contribute fully to their communities. But if we don't have a budget, they'll be denied significant opportunities to improve their lives. We'll lose $40 million in state funding for childcare, and thus forfeit nearly another $50 million in federal matching funds for a total cut of nearly $90 million. It's hundreds of thousands of working parents are counting on our help to have some peace of mind and the ability to earn the living upon which they can raise their families. But if we don't have a budget, 211,000 Pennsylvania children will have nowhere to go. We'll lose $11.5 million in funding for domestic violence shelters and rape crisis centers. Survivors of domestic violence and sexual assault rely on these safe havens to have somewhere to go in the midst of unthinkable pain and unspeakable terror. But if we don't have a budget, those shelters and crisis centers, they're going to have to shut their doors to the people who need them. Critical programs such as these make up nearly three-quarters of our human services budget. Simply put, the Commonwealth of Pennsylvania cannot meet its obligation to its citizens if the General Assembly does not meet its obligation to pass a responsible budget. And while my administration will always strive to tackle fraud and be as efficient as possible in the government operations, even these new harsh, these harsh cuts that we're talking about here that you're talking about, that cuts, they're going to harm single mothers, they're going to harm seniors on fixed incomes, and those who are down on their luck, even those cuts will not solve our mathematical crisis. Indeed, anyone in this chamber who claims we can simply cut our way out of this mess without also increasing revenue is just ignoring the math. They're also ignoring history. If we don't have sustainable revenue sources in our budget, the result will be billions of dollars in new property tax hikes at the local level. Pennsylvanians need to prepare for these consequences, and I don't say this with any joy whatsoever. But someone in Harrisburg has to start telling the people of Pennsylvania the truth about the mess we're in. You know, before I ran for governor, I ran a business. And in challenging times, I know that you can be fiscally responsible while still looking out for the people you serve. These values are not mutually exclusive. In fact, they're closely linked. And if you're in business and the numbers don't add up, you can't ignore the problem or wish it away or spin it away. You have to take a clear-eyed look at how the problem arose, and then you have to solve it, and fast, or you won't be in business for very long. Pennsylvania businesses don't have the luxury of pretending their problems don't exist. Neither do Pennsylvania families, sitting around the kitchen table trying to make ends meet. And the truth is, neither do we here in Harrisburg. So let's be honest about where we are and how we got here. After all, this fiscal crisis did not appear from out of nowhere. This was no act of God. We are in a hole. We dug ourselves right here in Harrisburg. And if the consequences I'm describing sound familiar, it's because Pennsylvania has been building up to this moment for years. For years, our leaders have tried to balance our state budget on the backs of our children and our schools. When I took office, Pennsylvania ranked near the bottom of the country in the percentage of state-level K-12 investment. The burden of funding our schools therefore fell on our local communities. And that, in turn, meant huge spikes in property taxes for Pennsylvania homeowners. That's a bad way to solve a budget problem. Although it's a great way to create an education problem, we were left with tens of thousands of teachers laid off, crowded classrooms across most of our school districts. And that was just part of the problem. You see, even these huge cuts to education weren't really enough to balance the budget. But instead of finding a sustainable way to deal with the real deficit, Harrisburg chose to paper over the problem with a series of budgetary gimmicks and quick fixes. Now, maybe you can get away with that for a little while. But sooner or later, the rent comes due. And if folks here in Harrisburg thought this sleight of hand was a real long-term solution to our budget problem, then the only people they were fooling were themselves. Because nobody else bought it. The three major ratings agencies, Fitch, Moody's, again Standard and Poor's, they have each downgraded our credit a total of five times over the last five years. Our credit has actually been downgraded three times in the last two years alone. And each time, each time, the rating agencies have explained that the downgrades are a direct result of these little tricks Pennsylvania has employed to avoid facing up to the reality of its fiscal situation. When Harrisburg doesn't take our budget seriously, the folks who rate our debt, well, they don't take Harrisburg seriously. So today, because of years of budgetary irresponsibility, the Commonwealth of Pennsylvania is considered to be among the least credit-worthy states in America. This is embarrassing. But embarrassment isn't the only point. You see, because our credit has been downgraded so much, we're actually paying a higher interest rate on that $17 billion of debt that we have. This is going to eventually cost us an extra $139 million a year. That's if the interest rates don't keep going up. That's $139 million a year that doesn't go to improving our schools. It doesn't go to making our business environment more competitive. It doesn't go to reducing our taxes. It's a $139 million penalty that the people of Pennsylvania pay for Harrisburg's fiscal irresponsibility. That's how we got here. And it's why, when I took office last year, I proposed a different kind of budget. Instead of shortchanging our schools, I proposed a historic commitment to education, beginning to restore the $1 billion that had been cut from our schools under the previous administration, making new investments in early childhood education and community colleges, increasing our state's share of funding for public schools and directing more of that funding to the districts that needed it most. And instead of using sleight of hand to avoid dealing with the deficit, I proposed a serious plan to balance our budget and set us on a more sustainable course. No more gimmicks, no more quick fixes. A new approach in Harrisburg, a fresh start for Pennsylvania. Now, I expected that Republicans would not agree to everything in my proposed budget. What I didn't expect was what I got. A budget that didn't even balance. Incredibly, the budget that they sent me relied on the same gimmicks and quick fixes that had gotten us in trouble in the first place. In that case, the June 30th budget, $1.5 billion worth of optical illusions that would have made our actual budget problem even worse. If you were running a business and you took a budget like that to your banker, you would be laughed out of the room. But Pennsylvania's creditors, unfortunately, don't have a sense of humor about this sort of thing. Actually, neither should we. While I was disappointed with the Republicans' proposal, I wasn't discouraged. So I came to the table ready to talk, ready to negotiate, ready to compromise. It took months of bargaining. It took some painful sacrifices from both sides. But in the end, all that hard work paid off. We had a deal. The compromise budget I worked at with members of the legislature last year included some of the things that I wanted, but not everything. But it did have an historic investment in our schools. It included some of the things that the Republicans wanted, but not everything, including changes to our pension and liquor systems. And I continue to believe that we should solve these decades-old problems. We still need changes that provide taxpayers' savings and stability in our pension system. And we need to bring our liquor system into the 21st century. Okay, that's one person. However, these improvements by themselves are not magic bullets. And changes in these two programs will not alone mitigate the consequences of a continued failure to acknowledge the basic math problem we face. Again, the compromise budget included these Republican priorities. But most important of all, the compromise budget balanced. It solved the financial problem. Passing it into law would diffuse the fiscal time bomb and set us on a more sustainable course. It passed the Senate with a majority of both Democrats and Republicans and had bipartisan support in the House. All that was, all that remained was a final vote before I could sign it into law and we could finally move forward. I was ready, pen in hand. And then the House Republican leaders just walked away. They walked away from the table and went home for the holidays without holding that final vote. They still have not held that final vote. Listen, I understand the frustration you almost feel looking at this huge mathematical problem. But yelling it will not make it go away. Wishing it will not make it go away. We need to do what's right for the people of Pennsylvania. Budget because we still have a budget crisis. That fiscal time bomb, it's still ticking. Our teachers still hear it. Our parents hear it. Our seniors hear it. Our creditors definitely hear it. You need to hear it. The time for games is over and now it's time to finish the job we should have finished last year. Now look, arguments over policy priorities, again, I get it. They're healthy. It entails disagreement. Compromise is hard. But we had those arguments. We worked out our disagreements. We reached a compromise. Republicans and Democrats sitting in this chamber right now sat at a table with me and did the hard work to find common ground. We had a deal. And then the House Republican leaders walked away. Only in Harrisburg could that be seen as an acceptable way to do business. But you know what? I'm not interested in the inner workings of the Republican caucus. I'm not interested in politics. This isn't about politics. This, again, is about mathematics. And so here's what's real. It's about mathematics. And here's what's really, really frustrating. When some Republican leaders bailed in our agreement, I was handed yet another budget where the numbers didn't add up. A budget that would cut another $95 million from our schools. A budget that would zero out funding increases for our institutions of higher education. And worst of all, a budget that still did not balance. We are sitting at the bottom, folks, of a $2 billion hole. It's simply unbelievable that some folks in this chamber want to address that problem by continuing to dig. I can agree and I can accept that we can disagree about the importance of education. I get that. I can accept that we can disagree about the proper role of government in securing a more prosperous future for our commonwealth. And I can accept that I won't get everything my way. But I cannot accept. And Pennsylvania cannot afford another irresponsible budget that ignores the fact of this fiscal crisis and pretends that our problems simply don't exist. I did not run for this office to be party to the corner cutting and budget gimmickry that got us into this mess. We can't afford to play political games while this crisis is casting such a dark shadow on our future. There is simply too much at stake. The train has been careening down the tracks for years and now the moment of impact has arrived. And whether or not we crash is up to the people in this chamber. It's up to the people in this chamber to save our children, to save our seniors, to save our most vulnerable populations from bearing the brunt of devastating cuts. It's up to the people in this chamber to save our taxpayers at the local levels from getting handed the bills. Harrisburg wasn't responsible enough to pay right here. It's up to the people in this chamber to save Pennsylvania's future. It's time for the people in this chamber to get back to work. The good news is I still have my pen. And we still have a budget that reflects months of hard work and honest negotiation. A budget that has been approved by bipartisan majorities in both chambers of our legislature. A budget that avert this fiscal catastrophe and gives us a chance at a fresh start. We can get it done. Send that compromise budget to my desk and we can put our commonwealth on more secure footing than it's been for years. But let me be very, very clear with each of you. We are going to have to stop playing games with our fiscal future. We are going to have to stop closing our eyes and just hoping that our problems are gonna go away. We are going to have to face hard facts. So don't send me another budget full of gimmicks that are too cute by half. Don't send me another budget where the numbers really, really don't add up. I'm not gonna be amused by that. I'm not gonna be fooled by that. I will not be convinced that dime store magic tricks are a substitute for a real responsible budget. And more importantly, and more importantly, neither will our creditors nor the people of Pennsylvania. If you can't agree to the budget reforms I've proposed then help me find a sustainable alternative. But if you won't face up to the reality of the situation we're in, if you ignore that time bomb ticking, if you won't take seriously your responsibility to the people of Pennsylvania and find another job. This, this is not the time for denial. This is not the time for obstruction. This is the time for leaders to come together and honestly and sincerely take on the crisis we're facing. Because if we don't solve this crisis, whatever partisan gain you think you may win will be dwarfed by the enormous losses this state will suffer. Nobody in Pennsylvania will care one iota about the politics of a disaster that caused the Commonwealth so much. I refuse to let that happen but I cannot stop this catastrophe alone. The people of Pennsylvania need you to do the right thing. I'm not asking people in this chamber to give up their political beliefs. I am asking that you join me in mustering the political courage to meet this crisis head on. I am asking that they do their job, that you live up to the promise to uphold the constitution that we all took to defend the Commonwealth of Pennsylvania's constitution. That's what we all did when we took our oath of office. This doesn't require anyone to walk away from his or her principles. It merely requires that each of us declare that our highest principle is the responsibility each of us has to the people of Pennsylvania. The people of Pennsylvania deserves schools that teach, jobs that pay, and a government that works for them. They deserve leaders who are willing to work hard and sacrifice to build a better Commonwealth because that's what the people of Pennsylvania do every day to build a better life for their families. Their strength, their resilience, their spirit illuminates our path forward and gives me hope that when I stand in this chamber to give my budget address next year, it will be under far happier circumstances. After all, I ran for this office because I believe deeply in our Commonwealth, in our spirit of innovation and entrepreneurship, in our longstanding tradition of tackling our challenges and seizing our opportunities with boldness and courage, with integrity and honesty, in our potential to build a bright future as bright and prosperous as our past. I know that many of you entered public service for the same reasons. And last December, a number of Republicans and Democrats came together to prove that there are leaders in this body who can put their differences aside and get things done. After a year as governor, despite the overwhelming challenge we now face, I still believe in Pennsylvania. The possibilities before us, they're still limitless. A bright future is still within our grasp. I still believe in the enormous potential of our Commonwealth. And I'm counting on everyone in this chamber, everyone to do the right thing so that we can fulfill that potential. I'm ready to do the hard work to build a brighter future for Pennsylvania. I hope you're ready to join me. Thank you. God bless the Commonwealth for Pennsylvania.