Friday, March 05, 2010

Gubernatorial Debate Sponsored by Chamber of Commerce

This is not intended to be even an approximate transcript. These are rough notes taken while watching the debate on PCN, and proofread some hours later. As always, I apologize in advance for any errors or misconceptions.

Chamber of Commerce Gubernatorial Debate
March 4th, 2010

Nick DeBenedictis and Bill Sasso give introductions.

Rob Wonderling introduces Jim Gardner.

Jim Gardner, moderator, introduces some people from Channel 6. Not a formal debate, questions from moderator and from audience.
Tom Corbett, Pennsylvania Attorney General
Joe Hoeffel, Montgomery County Commissioner (former congressman and state representative)
Dan Onorato, Alleghany County Executive
Sam Rohrer, state representative
Jack Wagner, Pennsylvania Auditor General
Anthony Williams, state senator [could not find a campaign website]

JG: [read quotes from a 2005 article discussing how PA is unfriendly to business from 2005] Are they still relevant. What would you do to improve the business atmosphere in Pennsylvania?

TC: Yes, still relevant. The next governor has to bring fiscal discipline to state budget, bring limited government to state, free enterprise, reduce government and business taxes. As we do that we have to encourage our children to stay here. They are our greatest resource.

JH: Those challenges are still with us. We need to improve the quality of life in Pennsylvania to attract business investment and keep young people here. We need to provide the best quality schools, invest in older communities, improve downtowns and older communities, attract private investment with government subsidies, early childhood education. we need to expand community colleges to give middle and low income people access to higher education and retrain workers.

DO: We should create an environment that brings companies, lower the cni [corporate net income tax], remove capitol stock and franchise tax, not just tax, DEP and Penndot and other agencies responsible for permits should understand that companies asking for a permit are not the enemy. Requests for permits have a right to and answer in 4 months not 2 years. Education is key. We must have the best educated work force, revamp our community colleges to be responsive to companies. The election is about jobs and economy.

SR: Without question, Pennsylvania has been hostile to business. There should be a reduction in taxes that have been in place since 1991, corporate net income tax, capital stock and franchise tax. We need to redo a number of things related to how we tax businesses in PA. The regulatory climate is an extension of a governor's attitude. Those who are in the positions can either help or hinder. The entire regulatory climate throws roadblocks in front of small business.

JW: PA has the 6th largest economy in the country, 18th largest economy in the world. There is tremendous diversity in PA. We should remove impediments to doing business, cni must be reduced, capital stock and franchise tax must be eliminated. Lets also look at the startup of small businesses. One of the deterrents is net loss carry forward position. We should have incubator companies from universities -- we must address this issue.

AW: Small businesses want an educated work force and a fair tax system. People wonder why so we have such high taxes for so few things in return. We must have system where if you haven't paid your business taxes you can't renew your business license. We should look at the way we tax. We haven't revisited the PA tax code in generations. There should be a special session on tax code in PA.

JG: Unemployment in pa is 8.9 %, lower than cni which is 9.9%. How you will bring both numbers down?

JH: Invest in older communities and downtowns. Working in a bipartisan fashion I created an economic development program to attract private investment in Montgomery County and it's working. We have to make PA an attractive place for investment. At one point I worked in international business in DCED, with an emphasis on attracting alternative energy investments from Europe to come to Pennsylvania. I understand what it takes to market the state. It's not just about taxes but about quality of life. Sustainability and friendliness to the business climate.

JG: If we reduce the cni we must replace it with something.

DO: As county executive, when I took office we were on our back, facing bankruptcy. Today in our county our unemployment rate is 2.5% below the national average. The payroll for county is lower than it was when I took office. We haven't raised taxes in [did not catch this number] years, cleaning brownfields. Now companies, steel makers are coming in, companies building their headquarters there. A German company making mirrors for solar panels is coming. Westinghouse is going from 2000 to 4000 jobs. How do you do that in a tough economic time? Lower taxes so more companies will come in to make up lost money.

SR: specifics -- 1) cannot raise taxes any further. The budget is about 4 billion dollars out of whack. We must reduce spending. 2) look at those departments that spend most of the money to reduce. The attitude from the governor must be that we are open for business. Look at labor climate in the state. We need to be a right to work state. Don't borrow to spend more than we have. Three big bars in the budget [biggest spenders] are welfare, education and corrections. The solutions for reducing are different for each. We need to eliminate fraud and waste, duplicate programs, many things in welfare where the law is not being enforced. We can't solve the budget problems totally from fraud and waste but it is a place to begin. I'm the only person here who has developed state budgets.

JW: We're in the worst recession since the Great Depression [lists places where jobs lost]. tough challenges are facing us. We must look at how state government is run. I've done 25K state audits. The first area -- contracting process for state government. The majority of bid contracts do not have competition. We should get the best buy at the lowest price. if there is no competition, we should rebid. That isn't happening now. Too often contracts are handed out or extended. Another facet of this is that it screens out many small businesses, women owned and minority owned businesses

AW: Philadelphia ranks 7th in poverty, [gives other statistics]. Our economy has to change. Over 50% of kids won't go on to college. They used to go to work in mines, on farms. Those are no longer options. We need to change curriculum these kids graduate from. Philadelphia is #6 in bioscience hubs but we turn our back on it. Westinghouse allied itself with the University of Pittsburgh, burgeoning economy because they are graduating engineers. It allied itself with private and public sector. PA has that skills set. Private sector will lead us out of this.

JG: There is a coming crisis in the PA pension system. Employer contributions for public schools system will increase from 8.22% now to 29% in 2013 and peak in 2015. What is solution?

SR: Budget wise right now we are insolvent. We don't have the money to pay our bills. Pension cannot be passed along in tax increases. We must modify the system itself, unsweeten benefit system for those not yet retired, change way we are funding and allocating education costs. Shift to a defined contributions. program. We are two years behind CA in the pension crisis. We will have to do some very difficult things.

JW: We have too many public pension plans in PA. we have large number of local public pension plans in the state. We need to consolidate police pension plans into one for state. and eliminate administrative costs, increase investments because pull more money together. The Dept of Auditor General sounded an alarm [2? 3?] years ago. One example, you only need to work for state government for 5 years to be vested. That needs to be increased to 10 or 15 years.

AW: We need to change period of vesting. We need to revisit act 38 and act 9 and probably change them.

TC: Part of the problem is that some of the members at this table voted to increase COLA. We have to revisit eligibility requirements. People retire at 55 and live for another 30 years. broken system. called on governor to convene special session for economic recovery plan. fix eligibility and new employers and people already retired.

JH: I agree we have to look at all of these changes. Pensions were made too lucrative. The only people who kept their part of the deal are employees and teachers. not administrators. We not be able to solve this problem by squeezing back. I’m not a fan of defined contribution, and prefer defined benefit. We need a graduated state income tax, tax on marcellus shale, close Delaware loophole. Big corporations take advantage of it, small ones don't.

DO: The problem is we didn't live up to commitments. The employer, employee and benefit side, all supposed to pay in. Government diverted it to balance budgets. Every single year I have to go to Harrisburg to talk about bills to lower retirement age, increase benefits. We should stick to long term commitments. Consolidation problems. About 30% of pensions have 7 or fewer people in them. Fewer plans, fewer advisors, etc. duplicated functions.

JG: Tolling I-80, paying for transportation funds, septa might see capitol budget future evaporate. mass transit essential part of any area like Southeastern Pennsylvania. What if cannot toll I-80?

DO: Supported act 44, I-80 big part of that, I watched in last 5 years while state government pits highways and bridges against mass transit in cities. We need it all. That's why I supported act 44. If the federal government rejects it we have to deal with it in state. not giving up on federal program yet. still alive. if it's not there then a significant problem for Harrisburg.

SR: Against act 44, not fair to put burden on northern part of state. tolling not the solution. in past governors have not put aside ahead of time for that. Involve public private partnerships, look at cost cutting. can't raise more taxes.

JW: Hard to disagree with a tractor trailer entering state in Ohio and going to NJ and not paying anything and not stopping for so much as a tank of gas, but it is hard to say to locals that they have to pay to go to the doctor, etc. I-80 tolls must stay on I-80. Spend money correctly. Over 600M$ in Pittsburgh to build tunnel one mile long [blogger’s note – this is a smack at Onorato]. Must be done in a fiscally responsible way.

AW: if Obama administration turns its back on PA I would be shocked. Every time I go to Harrisburg I pay a toll. We have to face the reality, maintain highway, pay toll, expand mass transit, expand mass transit behind the cities.

TC: The transportation system is of great importance to business, tourism, people. How could we create budget dependent on fed government? We have to reduce budget and spending. Great amount of money to be saved. As Jack Wagner says, look at people on welfare who aren't eligible, legislative leadership funds. Not only what governor can save but legislature, spending and size of staff, even judiciary can save money. How do we pay for transportation for next 10 years. build on concrete or sand.

JH: If we don't broaden our vision we will be choking in traffic and have economic meltdown. We can't maintain our highway or increase capacity or maintain mass transit if we are cutting taxes. Toll i-80. Double money to Penndot, increase tolling, gas tax, car registration fees, public / private partnerships. Increase revenue for Penndot. We need to get products to market, need straight talk.

JG: Less crime, more attractive business climate. Much of violent crime down in Philadelphia, but gun violence still increasing in Philly. The city wants its own gun laws, state says no. Can cities have more stringent gun laws than state?

JW: This is a big problem in Philadelphia, Harrisburg and other areas. As a marine in combat, I knows what weapons can do. In favor of assault weapons ban. Enforce the laws that are on the books and be more aggressive with people who have guns and shouldn't. Far better off to have statewide restrictions than local. Differing regulations for different areas make it difficult to go from one community to another.

AW: Philly should at least say who can get a gun license. If we can't regulate guns, let us say who can get license. I worked on getting first straw purchase task force. Collected untold number of illegal guns.

TC: We can't answer this question without talking about the Supreme Court on Tuesday. It probably won’t allow separate law. Good tough law enforcement is the way to go. Gun violence task force. Working with Philly police. We have almost 1300 investigations, 400 arrests. Seen 25% reduction murders [note sure I got this right] 24% reduction in shootings. Funded at local level. Supremacy of the state applies to all communities in the state.

JH: Philly ought to be able to have own gun laws. Change state law. About 25 communities have passed lost and stolen gun laws. State should support that and pass its own. Limit gun purchases to one a month. sensible gun laws. Protect the rights of hunters and sportsmen.

DO: would support lost and stolen laws, child safety locks, Philadelphia’s local option. Alleghany County looked at the program. Worked with DA, put together violent gun task force, which was successful.

SR: No. every individual has the right to bear and keep arms to protect ourselves It’s in the Constitution. That's why the uniformity clause is in effect in PA. No one should lose the right to defend themselves.

Q; How would you propose to change the culture in Harrisburg?

AW: Issues have to drive the momentum. It’s not that Democrats or Republicans win, it’s that people lose. We don't need a governor who grandstands. I’ve broken ties with my party on a number of issues. 100 days late budget a scarlet letter. We shouldn't get paid if the budget is not on time. We shouldn’t take our pay late, we just shouldn’t get it..

TC: is culture of Harrisburg and relationship between the governor and legislature. Announced plan last week for openness and reform in government, Transparency -- put contracts on line. Bidding process online. Per diem issue. Relationship between governor and legislature. Each governor and each legislature will act in a different way. When elected I will sit down with the legislature. Let's get this thing going. Legislature holds hearings in Feb and Mar for the budget. We should not ask what the needs of the agencies are but what the needs of the people are, when working on the budget..

JH: Next governor needs to create coalitions, create consensus. find common ground. I’ve done that in my career. I’ve had more success with bipartisan coalitions than any else here. I actually like legislators. I would work hard to solve problems. I know how to beat Republicans on election day and work with them next day.

DO: Culture has to change. I have built coalitions and sometimes work against party lines but also keep core beliefs. I built coalitions for mass transit, etc. I’ve also put out 6 policy papers. first one was on reforming Harrisburg. We need to change how we do business. We need to shrink the size of legislature. Not just the number of people there but costs. How many people they employ and how much we spend on it. We need a minimum 20% savings. If there isn’t a budget on July 1, demand of the governor and the legislature that no one gets paid until it’s past. I wouldn't use the Dept of Human Services as a pawn.

SR: I would establish a culture. telling of the truth, budgetwise, pension wise. attitude must be understanding that tax dollars that come to Harrisburg don't belong to us. Our job is not how to spend it but how to spend it wisely. Transparency. Stop pay to play.

JW: 7 late budgets is a symptom of a larger problem. Partisan paralyzed politics. I’ve had a good open honest communication with others at table. The governor must have same with general assembly. Others are not the enemy. Keep that in focus in front of general assembly. Communicate openly and honestly.

Q: What sort of cutbacks and executive perks would you eliminate until the economy rebounds?

TC: I don't know what kind of perks the governor has. We will try to reduce. set a goal of reducing by 10%

JH: 10% cut sounds good.

DO: % should be a measuring stick. People say candidates always say this and then don't eliminate. I said I would eliminated 6 of 10 elected row offices, held by Democrats and I did that. I said I would consolidate 911 centers and did that too.

SR: The governor hands out checks, WAMs, dispensed at will. That is a benefit that the governor has used. That’s nice but if you don't have money we must cut it out.

JW: Lead by example. don't cut DEP by 25% unless you do the same in governor's office.

AW: Greatest perk is fundraising. Pension mangers haven't changed even when lost money. In New York pension managers can't make political donations.

JG: PA is 39th in per capita health spending. Fed health dollars sent to pa very low compared to other states. What can you do to bring them up?

JH: not sure why we aren't getting our fair share of federal money. We have a tremendous problem with health care in this state. Adult basic, state budget cuts resulting in 88% increase in premiums for adult basic. I hope the federal government passes health care reform and that it has a public option. if the federal government doesn't we will have to tackle it in PA. I would like to move forward with medicare like model at the state level.

DO: haven't seen that particular report. could relate to where we are regarding poverty or matching money. Generically look at limited dollars from state and look at maximizing programs and dollars. Health care alone is probably biggest threat to small businesses. Cost increases, wage increase, profit increase, etc. no competition in health care. feds must do something.

SR: Overall the more we take from federal government the less freedom we have to solve our own problems. Federal health care reform is unconstitutional.. We do need reform. cap of pain and suffering, we are driving doctors out of state. We have the answer here. More federal government not better for us.

JW: We need health care reform. We have identified 14% eligibility errors in assistance. Correcting this could result in savings that could be rendered in hundreds of millions of dollars. This is not related to recipients but by insurance companies; services may not even have been provided.

AW: we just lost Sec. Estelle Richman. she has talked about this issue. matching dollars for federal monies. How do we deliver in PA. We are much too dependent on the employer for health insurance.. We should change package of mandates. We need the ability to have modest package. Many other states have a fraud line. We don't.

TC: we can try to figure out statistics. we don't have all the facts. PA is in lower middle in many economic indicators. We need to take care of our own health care issues. First step is to reduce cost of defensive medicine. Pass fair share act and tort reform. The legislature passed it twice recently but governor vetoed it.

Closing statements

DO: Thanks to organizers and moderator. I’m running because we can definitely turn the state around. We can create an environment where companies want to relocate here. Our advantage is our shipyards, great interstate system. Real change in legislature is in corporate structure, legislature. I will do in the Commonwealth what we did in western PA.

SR: thanks. challenges that are unequaled and unparalleled. not met with rhetoric and easy words. understanding fiscal issues. What the Constitution is about. 15 yrs in business, 17 yrs in legislature. I know what I'm talking about. Proper principles properly applied.

JW: thanks. PA state government train off the track. Competition in every bit. camp finance reform. contract reform tied to camp finance reform.

AW: thanks. I joined the race because the Democrats are off track. People want to hear what they are most fearful of. worried about jobs, school system. too many failing systems. want accountability for money spent. property tax reduction. jobs, school choice, regionalize government to reduce property tax.

TC: This is the most critical election to PA since WW2. I’m running for all of us, children and grandchildren, want Pennsylvanians to stay in Pennsylvania. want new businesses to come to PA and stay in PA. We can no longer compete at level that many states can. Change tax structure and regulatory structure. Partner with business and not be an adversary.

JH: The next governor has to bring us together, inspire people. I have fought for public education, economic development, community revitalization, reproductive choice but more than a compilation of positions, match goodness of people of state, reach consensus in politics. challenged need change and reform.

JG: 6 smart insightful and committed candidates.

Rob Wonderling; thanks moderator and companies that underwrote event.

[blogger's note: While I appreciate the amount of work it takes to put together an event of this nature, it does not seem quite appropriate for the organizers to take nearly 20 minutes of a 90 minute event to explain their own agenda and make introductions.]

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