>> WELCOME TO "ON THE RECORD."

I'M MICHAEL ARON.

FOR STUDENTS OF NEW JERSEY POLITICS THERE'S A NEW BOOK THAT NEEDS TO GO ON THE SHELF.

FORMER GOVERNOR JIM FLORIO HAS WRITTEN HIS MEMOIR.

IT'S CALLED "STANDING ON PRINCIPLE" AND IT'S EOUT THIS WEEK.

JIM FLORIO IS HERE TO TALK ABOUT IT.

LATER, KENT MANIHAN TALKS TO TOM CAINE ABOUT A THE KISSAL DILEMMA FACING GOVERNOR MURPHY.

THANK YOU FOR COMING.

AND CONGRATULATIONS ON A VERY READABLE AND ENTERTAINING BOOK.

>> THANK YOU, MICHAEL.

APPRECIATE THAT.

>> WHAT CAUSED YOU TO WRITE A MEMORY?

>> A NUMBER OF PEOPLE OVER THE YEARS HAVE ASKED ME TO DO THAT.

I'VE BEEN INVOLVED WITH A LOT OF THINGS AND I JUST DECIDED THAT THERE WERE SOME LESSONS TO BE LEARNED OF MY EXPERIENCE THAT I WANTED TO SHARE WITH OTHERS.

AND SO THAT'S REALLY WHAT THE BOOK WAS ABOUT.

LESSONS LEARNED FROM LIFE EXPERIENCES THAT I'VE HAD.

IT PROVED TO BE VERY SATISFYING TO ME TO RECOUNT THOSE THINGS AND LOOK BACK AND SEE THE PATTERNS THAT HAVE EVOLVED AND THE VALUES AND PRINCIPLES THAT I TRIED TO BRING.

>> ONE OF THE LESSONS YOU IMPART AT THE END OF THE BOOK IS PUSH HARD.

DO YOU THINK THAT SORT OF DEFINES YOUR CAREER?

PUSH HARD?

>> I THINK SO.

NOTHING GETS DONE EASILY ANYMORE.

IT'S GETTING WORSE IN MANY RESPECTS.

BUT I'VE BEEN DMITED FOR GOOD OR BAD, IN DIFFERENT TOPICS OVER THE YEARS.

AND I WANTED TO SHARE EXAMPLES OF WHERE THAT TYPE OF COMMITMENT RESULTS IN GOOD OUTCOMES.

>> I TOOK IT AS INSPIRATION, WHICH WE ALL PUSHED HARD.

>> UP WITH OF THE OVERRIDING SCENES OF THE THE BOOK IS IF YOU WANT TO INFLUENCE PUBLIC POLICY, WHICH ALL CITIZENS DO WANT TO DO, YOU'VE GOT TO GET PEOPLE ENGAGED AND INFORMED.

ESPECIALLY GAUGED BECAUSE THAT'S THE WAY OUR SYSTEM WORKS.

IT'S CALLED PARTICIPATORY DEMOCRACY.

THAT'S BEEN MY LIFE IN CONGRESS AND THE LEGISLATURE AND AS GOVERNOR.

ALWAYS WORK HARD TO GET PEOPLE PARTICIPATING IN THE PROCESS.

>> WHAT DID YOUR FATHER DO?

>> HE WAS A WORKER IN THE SHIPYARD.

AFTER THE SECOND WORLD WAR WAS OVER, THE SHIPYARD CLOSED ULTIMATELY.

FOR A PERIOD OF TIME WE HAD SOME DEPRIVATION.

WE OVERCAME IT.

BUT A WORKING CLASS PARENTS.

ACTUALLY, NEITHER OF MY PARENTS FINISHED HIGH SCHOOL.

I DON'T THINK MY FATHER EVEN WENT TO HIGH SCOOP.

BUT I LEARNED A LOT OF THINGS ABOUT LIFE FROM VALUES.

I PUT A LOT OF EMPHASIS ON SCHOOL, EDUCATION, EVEN PRESCHOOL.

SINCE MANY OF OUR VALUES ARE FRAMED EARLY IN LIFE.

I'VE SEEN IT WITH MY OWN LIFE.

>> YOU DROPPED OUT OF SCHOOL IN 11th GRADE OR AFTER THE 11th GRADE AND WENT TO JOIN THE NAVY.

>> JOINED THE NAVY IN MY LAST YEAR OF HIGH SCHOOL.

GOT MY GED DIPLOMA IN THE SERVICE.

WENT TO TRENTON STATE TEACHER COLLEGE AT THE TIME.

$150 FOR THE SEMESTER WAS THE TUITION.

I HAD THE GI BILL WHICH GAVE ME $70 A MONTH, WHICH WAS BIG TIME IN THOSE DAYS.

>> A COUPLE OF THINGS.

I WAS IMPRESSED WITH SOME OF THE RESEARCH THAT WENT INTO THIS BOOK.

YOU REMEMBER -- OR SOMEBODY DUG UP THE VOTE TOTAL WHEN YOU WERE RUNNING FOR CLASS PRESIDENT AT TRENTON STATE COLLEGE.

YOU WON 910-187.

>> SOMETHING TO BE LEARNED FROM THAT.

COMPETITION WAS BETWEEN MYSELF AND A VERY PROMINENT FOOTBALL PLAYER IN SCHOOL WHO HUNG OUT IN THE STUDENT LOUNGE WITH ALL THE BEAUTIFUL PEOPLE.

AND ALL THE REST OF THE PEOPLE WENT TO SORORITIES OR FRATERNITIES OR WHATEVER.

I MADE THE ROUNDS OF ALL THE FRATERNITIES, ALL THE SORORITIES AND TALKED TO PEOPLE ABOUT SUBSTANCE.

MY BIG CAMPAIGN ISSUE, I WANTED TO BRING BETTER SPEAKERS TO THE CAMPUS.

>> AND YOU LIST IN THE BOOK SOME OF THE SPEAKERS.

JOHN HOPE FRANKLIN AND -- >> ALEXANDER KORINSKI.

>> THERE WAS A REASON YOU WON.

YOU WRITE IN A BOOK THERE WAS A PERIOD OF TIME YOUR FATHER WAS OUT OF WORK THAT YOU SUPPORTED THE FAMILY MORE OR LESS FOR 18 MONTHS ON GAMBLING WINNINGS.

WHERE DID HE GAMBLE?

>> HE WAS VERY GOOD.

HE WAS A CARD PLAYER.

HE DIDN'T READ THE NEWSPAPERS, HE READ THE DAILY RACING FORM.

RELIGIOUSLY.

WHENEVER HE GOT TIME HE WOULD GO TO BALTIMORE WHERE THEY HAVE A RACETRACK.

SO IT'S INTERESTING BECAUSE I'M THE VERY OPPOSITE.

I'M REALLY FRUGAL.

MY WIFE SAYS MISERLY.

BUT THE FACT OF THE MATTER IS -- >> YOU WRITE THAT SHE'S FRUGAL, TOO.

>> SHE'S VERY FRUGAL.

BUT I'M A GAMBLER IN THE ASSISTANCE OF GAMBLING IN POLITICS, TAKING CHANCES ON THINGS THAT I FELT STRONGLY ABOUT.

SO I GUESS I INHERITED THE GAMBLING INSTINCT, ALTHOUGH MONETARY INSTINCT.

MY MOTHER ON THE OTHER HAND, WAS VERY FRUGAL TO THE POINT OF BEING CHEAP.

>> AND SHE WAS VERY SELF-CONTAINED AND YOU SAY YOU ACQUIRED YOUR DEMEANOR FROM HER.

AND THAT YOU'RE NOT THE WARMEST AND FUZZIEST GUY.

THERE'S A LOT OF SELF-AWARENESS IN THE BOOK.

>> THAT WAS ONE OF THE GOOD THINGS ABOUT THE BOOK.

WRITING THE BOOK FORCED ME TO BECOME A LITTLE BIT MORE SELF-AWARE.

ONE OF THE THINGS YOU CAN RELATE TO, I'M PUNCTUAL TO A FAULT ALMOST.

NO POLITICIAN GENERALLY IS PUNCTUAL.

I GOT THAT FROM MY MOTHER.

TO BE LATE IS TO BE RUDE.

EAT ALL THE FOOD ON YOUR PLATE.

PEOPLE IN EUROPE DON'T HAVE ANY FOOD.

>> THERE'S A REVELATION THAT YOU'VE ALWAYS KEPT PRIVATE.

BUT NOW IT'S TIME TO TELL ANYTHING.

ONE OF YOUR TWO BROTHERS WAS GAY, KEPT IT A SECRET AND DIED OF AIDS.

THE OTHER, YOUR FATHER LATE IN LIFE GOT SICK.

THERE WASN'T A LOT OF MONEY AROUND.

HE WANTED TO BE ABLE TO LEAVE MONEY TO YOUR MOTHER.

SO INSTEAD OF BUYING MEDICINE HE LET HIMSELF DIE.

WHAT HAPPENED?

>> HE COMMITTED SUICIDE.

SHOT HIMSELF.

>> WAS IT DIFFICULT?

>> TWO LESSONS.

IT'S A TRAGEDY IF SOMEONE HAS TO BE SO CONCERNED ABOUT THE EXPENSE OF THEIR HEALTH PROBLEMS, LITERALLY TO SAVE MY MOTHER RESOURCES SHE WOULD NEED AFTER HE WAS GONE.

THAT'S A SAD SITUATION.

WE CHANGED THAT A LITTLE BIT BY MAKING MEDICARE COVER MORE PHARMACEUTICAL COSTS.

THAT WAS NOT THE CASE THEN.

AND THE WHOLE GAY ISSUE HAS CHANGED DRAMATICALLY.

>> AFTER THAT EXPERIENCE AND TRENTON STATE COLLEGE, A YEAR IN COLUMBIA, YOU WENT TO RUTGERS LAW SCHOOL, YOU GOT INVOLVED IN CAMDEN COUNTY POLITICS.

YOU WRITE THAT THE LARGER THAN LIVE FIGURE, THE FORMER MAYOR OF CAMDEN, SECOND ROLE MODEL, YOUR FIRST BEING JOHN HORN WHO YOU WORKED FOR IN THE ASSEMBLY.

THEN YOU TOOK HIS ASSEMBLY SEAT.

>> I TOOK ONE WITH HIM.

>> WITH HIM.

WHAT WAS HE LIKE?

HE GOT BUSTED IN ABSCAM.

HE WAS ROUGH.

HE STARTED OUT WITH GOOD INTENTIONS.

HE WAS KIND OF THE BOSS IN THE CAMDEN COUNTY AREA.

JUST GOT TO BE A LITTLE TOO FLEXIBLE IN TERMS OF THE THINGS HE DID.

CROSSED THE LINE OP A NUMBER OF OCCASIONS.

LAL THE CATALYST FOR THE WHOLE ABSCAM SCANDAL.

>> RIGHT.

HE PLAYED THE MOVIE, I DON'T REMEMBER WHO PLAYED HIM.

BUT IT WAS A PRETTY RICH PORTRAYAL.

>> IT WAS A VERY ACCURATE PORTRAYAL.

PHYSICALLY AS WELL AS THE DEMEANOR.

>> I CAN'T REMEMBER THE GUY WHO PLAYED HIM.

YOU SPENT FOUR OR FIVE YEARS IN AND THEN MOVED TO A OPTIONAL SEAT.

>> YOU WRITE THAT GETTING THE SUPERFUND LAW PASSED WAS THE MOST DIFFICULT THING YOU DID AS A LEGISLATURE.

HOW SO?

>> PEOPLE WHO WERE OPPOSED TO IT WERE FORCEFUL.

THE CHEMICAL INDUSTRY, PETROCHEMICAL INDUSTRY.

PEOPLE WHO POLLUTED WHEN IT WAS NOT ILLEGAL TO POLLUTE.

YOU DIDN'T HAVE LAWS IN THOSE DAYS.

BUT WHEN IT BECAME MANDATORY TO CLEAN UP, PEOPLE WERE SAYING THE CITIZENS SHOULD PAY FOR IT.

AND WE WERE SAYING THE POLLUTERS SHOULD PAY.

THEY WERE NOT ENTHUSIASTIC ABOUT THAT AND THEY FOUGHT IT.

>> HOW LONG DID IT TAKE TO GET THAT BILL PASSED?

>> 2, 2 1/2 YEARS.

FORTUNATELY PRESIDENT CARTER WAS IN OFFICE AND WAS SUPPORTIVE.

UNFORTUNATELY REAGAN CAME IN AND HE WAS NOT PARTICULARLY ENTHUSIASTIC ABOUT MAKING THE KPLUTERS PAY.

>> YOU RAN FOR GOVERNOR IN 1977.

>> HE VACILLATED FOR A WHILE.

SAID HE WASN'T SURE HE WAS GOING TO RUN.

>> HE WAS VERY POPULAR.

BUT HE MANAGED TO WIN BECAUSE TOO MANY ORE DEMOCRATS WERE VYING -- >> VERY CLEVERLY REDUCED THE NUMBER OF PEOPLE, INCLUDING ME, INTO THE PRIMARY RACE.

I FORGET WHAT HE HAD, 30% OF THE VOTE.

HE WON EIGHT OR NINE PEOPLE.

>> THEN YOU RAN IN '81 AGAINST TOM KAINE, THE CLOSEST ELECTION IN STATE HISTORY.

>> YOU RAN IN '89 AGAINST A FOAL LOW CONGRESSMAN FROM NEW JERSEY AND BEAT HIM HANDLEY.

HE WAS VERY OUT OF TOUCH WITH HOMOSEXUAL RIGHTS.

THAT GOT HIM IN TROUBLE.

HE SAID GAYS SHOULDN'T BE ALLOWED IN THE CLASSROOM.

ISSUES LIKE GAY RIGHTS AND DRUGS.

PHARMACEUTICAL UKT PROSECUTES, -- PRODUCTS, THINGS LIKE THAT.

>> YOU BECAME GOVERNOR AND DID A LOT OF STUFF.

YOU REFORMED AUTO INSURANCE.

A SPECIAL SESSION OF THE LEGISLATURE TO GET A NEW AUTO INSURANCE SYSTEM.

YOU BANNED ASSAULT WEAPONS.

YOU WOULD WIN THE JOHN F. KENNEDY PROFILES IN COURAGE AWARD.

YOU PASSED A CLEAN WATER ACT.

AND YOU WERE -- YOU DON'T WRITE THIS IN THE BOOK BUT I REMEMBER YOU WERE ON THE COVER OF THE NEW YORK TIMES SUNDAY MAGAZINE.

BIG PICTURE OF YOU WITH A LINE THAT SAID SOMETHING LIKE, A NEW KIND OF DEMOCRAT.

SOMETHING TO THAT EFFECT.

YOU WERE ON THE HIGH TRAJECTORY AND THEN CAME THE TAX HIKES.

IN THE SPRING OF THAT YEAR.

>> REPRESENTATION HAD BEEN MADE.

THERE WAS A $300 MILLION SURPLUS.

AT THAT TIME, THE RECESSION WAS STARTING.

WHEN I CAME IN, IT WAS DOWN TO $600 MILLION SHORT FALL.

AND HALF OF THE YEAR THAT WE WERE IN.

ANTICIPATED $2.3 BILLION I THINK.

>> THE SUPREME COURT ORDERED YOU TO PUT HUNDREDS OF MILLIONS OF DOLLARS INTO SCHOOL AID.

SO SOME COUNSELLED THAT YOU SHOULD DO ALL THESE TAXES AT ONCE.

HIKE THE SALES TAX, BROADEN THE SALES TAX, AND HIKE THE INCOME TAX ON INCOMES OVER $70,000, WHICH WAS A LOT OF MONEY BACK THEN.

83% OF THE PEOPLE WOULDN'T HAVE HAD TO PAY THAT.

>> THAT'S RIGHT.

>> THE ASSEMBLY SPEAKER SAID GO FOR IT ALL.

DOUG BERMAN, YOUR TRUSTED STATE TREASURER SAID GO FOR IT ALL, GET IT OUT OF THE WAY.

JOHN LYNCH, THE WILY SENATE PRESIDENT SAID DON'T DO EVERYTHING ALL AT ONCE.

SLOW DOWN.

DON'T ANTICIPATE THE COURT'S ORDER.

LET THE COURT ORDER OF HUNDREDS OF MILLIONS OF DOLLARS FIRST AND THEN LET THE LEGISLATURE FIGURE OUT A SOLUTION.

YOU LISTENED TO THE FIRST TWO.

DO YOU REGRET THAT?

>> NO, NO.

I DON'T.

AND THE COURT CAME DOWN BEFORE THE BUDGET WAS PASSED.

WE SUBMITTED OUR BUDGET FIRST.

WE PASSED THE BUDGET.

THOUGH JOHN LYNCH WAS VERY SMART, I JUST REJECTED THE IDEA OF DELAYING ANOTHER YEAR.

MOST OF THIS MONEY IS GOING TO GO INTO THE SCHOOLS, WHICH IS WHAT HAPPENED IN NEW JERSEY.

I WANTED STOOD SOMETHING AS RAPIDLY AS POSSIBLE NOT TO WASTE A YEAR OF STUDENTS NOT GETTING QUALITY EDUCATION.

>> YOU GOT VILIFIED.

I WAS THERE.

I HAVE NEVER SEEN ANYTHING LIKE IT IN TERMS OF NEW JERSEY'S GOVERNMENT.

TAX REVOLT SPRUNG UP ACROSS NEW JERSEY.

THE NRA JUMPED UP, FURIOUS WITH YOU OVER BANNING ASSAULT WEAPONS.

AND IT WAS A REAL ASSAULT WEAPONS BAN.

IT TOOK ASSAULT WEAPONS AWAY FROM PEOPLE WHO HELD THEM.

>> IT'S STILL IN PLACE TODAY.

>> THE NJEA WAS UPSET WITH YOU BECAUSE OF QUALITY EDUCATION ACT WHICH PUT THE PENSIONS FOR TEACHERS ON LOCAL GOVERNMENT AND THEREFORE PUT AN INCENTIVE FOR LOCAL GOVERNMENT TO HOLD SALARIES DOWN.

EVERYBODY WAS -- >> THE STATE HAD TO PAY FOR IT.

>> EVERYBODY WAS AGAINST YOU.

THEY WERE THROWING ROLLS OF TOILET PAPER AT THE STATE HOUSE.

WAS THAT THE CENTERPIECE OF YOUR PUBLIC CAREER?

>> I DON'T KNOW.

TIME PASSING, I WAS THE LAST GOVERNOR DOING THAT.

TO FULLY PUND THE TENSION SYSTEM.

AFTER ME, NOBODY FUNDED THE PENSION SYSTEM RIGHT UP TO THIS DAY.

POEM WITH HINDSIGHT ARE SAYING MAYBE IT WASN'T SO BAD THAT WE DID THE RESPONSIBLE THING AS OPPOSED TO THE IRRESPONSIBLE THING.

BUT I'M COMFORTABLE WITH EVERYTHING WE DID.

I THINK THE STATE WAS BETTER OFF.

>> YOU WRITE, YOU DON'T REGRET WHAT YOU DID BUT YOU MAY REGRET HOW YOU DID IT, MAYBE GOING TOO FAST, DOING TAXES AT THE SAME TIME WAS SOMETHING YOU WOULD UNDO IF TO YOU HAD A CHANCE?

>> IT'S PROBABLY APPROPRIATE TO SAY, WE DID STUFF BEFORE EVERYONE ABSORBED WHAT WE HAD TO DO.

>> YOU WRITE THAT YOU WERE ALL ABOUT FAIRNESS AND PROTECTING THE UNDERDOG.

AND IT SOUNDS LIKE A LITTLE LIKE WHAT BILL MURPHY IS SAYING TODAY.

HOW DOES BILL MURPHY COMPARE TO YOU.

>> I THINK HE HAS THE SAME AKROECH.

HE WAS VERY COURAGEOUS.

PEOPLE DON'T USUALLY CAMPAIGN ON THOSE TYPES OF ISSUES.

I THINK HE'S VERY WELL PREPARED.

>> THERE'S A DIMENSION THAT'S ALSO A LOVE STORY.

LUCINDA YOUR SECOND WIFE CAME INTO YOUR LIFE IN THE MID '80s AND BECAME FIRST LADY AND HAS BEEN AT YOUR SIDE EVER SINCE.

>> WE'RE A WONDERFUL COUPLE.

I'M GLASS HALF EMPTY AND SHE'S GLASS HALF FULL.

>> IS THAT THE SECRET?

WHAT HAS SHE DONE FOR YOU?

>> PEOPLE SAID SHE LIGHTENED ME UP A BIT.

PROBABLY HAS.

>> I TRY TO BE OVERLY RATIONAL.

SHE'S TRYING TO CONVINCE ME THAT RATIONALITY IS FINE, BUT YOU NEED EVERY ONCE IN A WHILE FOR EMOTION TO PLAY A ROLE.

I'M NOT CONSCIOUS OF IT, BUT PEOPLE TELL ME SHE HAD AN IMPACT ON MY DEMEANOR.

>> YOU WRITE THAT LIFE IS GOOD?

>> IT IS.

WE MOVED EASY TO SOUTH JERSEY.

MY GRANDCHILDREN ARE THERE.

>> THE BOOK IS DEDICATED TO THEM.

>> I HAVE TEN OF THEM.

HOPEFULLY THEY'LL GET SOMETHING OUT OF THIS BOOK.

>> I READ IT AND I RECOMMEND IT.

THANKS, GOVERNOR.

THE STATE'S 2019 FISCAL BUDGET MUST BE BALANCED.

BUT WHAT BILL MURPHY HAS PO POSED REQUIRES LOTS OF NEW SPENDING.

THE QUESTION FOR THE DEMOCRAT-CONTROLLED LEGISLATURE IS WHETHER THEY'LL GO ALONG.

THE GOVERNOR'S PERSPECTIVES WITH KENT MANIAN, FORMER GOVERNOR TOM KAINE TALKS TAX, CONSEQUENCES AND WHAT COULD LEAD TO A SHOWDOWN.

>>> LAWMAKERS HAVEN'T REALLY SIGNED ON YET, THE DEMOCRATS TO THE GOVERNOR'S PROPOSED MILLIONAIRES TAX.

AND THEN THERE'S THE PRESIDENT'S TAX PLAN WHICH HAS LIMITED DETUKSS FOR NEW JERSEY IN SOME STATE AND LOCAL TAXES.

PUTTING ALL OF THAT TOGETHER, GOVERNOR KAINE, YOU EVE LED THROUGH CRISIS, WHAT'S A GOVERNOR TO DO IN THIS SITUATION?

>> WELL, WHAT HE SHOULD NOT DO IS HAVE AN ENORMOUS TAX INCREASE.

WE'RE IN COMPETITION WITH NEW YORK, CONNECTICUT, PENNSYLVANIA.

STATES AROUND US.

YOU'VE GOT TO KEEP YOUR TAXES IN LINE WITH OTHER PEOPLE.

AND INCOME TAX THINGS, THEY'RE ALREADY HIGHER THAN THEY SHOULD BE.

>> WHAT ABOUT THE PROMISES HE'S MADE IN THE CAMPAIGN?

EVERYTHING FROM FREE COMMUNITY COLLEGE TUITION FOR FULL FUNDING IN EDUCATION, PENSION AND THE INCREASE IN MINIMUM WAGE.

>> I LIKE THIS GUY, HE'S A GOOD HUMAN BEING, AND HE REEZ PROPOSED THINGS THAT I SUPPORT.

BUT YOU CAN'T -- JUST LIKE A FAMILY, YOU CAN'T DO EVERYTHING YOU WANT TO DO UNLESS YOU'VE GOT THE MONEY TO PAY FOR IT.

WE DON'T HAVE THE MONEY TO PAY FOR IT, JEOPARDIZING THE STATE AND THE FUTURE.

IF YOU RAISE THE TAX ON MILLIONAIRES, SO-CALLED.

YOU'LL DRIVE THEM OUT.

AND WE DON'T KNOW HOW FAST OR HOW MANY.

IT'S LIKE A BLIND MAN WALKING TOWARDS THE EDGE OF A CLIFF.

GIVING A TREMENDOUS FEDERAL TAX INCREASE BEFORE THEY UP AND LEAVE.

THEY PAY A LARGE PORTION OF THE TAXES IN NEW JERSEY, AS THEY LEAVE, THE STATE LOSES A LOT OF MONEY.

AND THE REST OF US HAVE GOT TO PICK THAT UP.

>> THERE WAS WORD THAT STEVE SWEENEY SAY SAID HE WOULD GO ALONG WITH A MILLIONAIRE'S TAX BUT NOW HE SAYS NOT SO FAST.

>> THAT'S BECAUSE HE'S A REALIST.

THE TRUMP TAX HAS HIT THE CLAZ THEY WANT TO HIT VERY, VERY HARD.

ON THAT BASIS ALONE WE'RE LOSING SOME PEOPLE.

WE LOST $100 MILLION LAST YEAR BECAUSE OF PEOPLE MOVING OUT.

YOU CAN'T TAKE TOO MUCH MORE OF THAT.

YOU LOSE MORE MONEY THAN YOU MAKE.

YOU'VE GOT TO LOOK AT THE SPENDING SIDE.

YOU'VE GOT TO FIGURE IF YOU WANT THESE NEW PRIORITY, THEN LOOK AT SOME OF THE THINGS YOU DO.

YOU JUST CAN'T DO ANYMORE.

>> WITH ALL OF THE GOVERNOR'S PLEDGES, DOES THAT TAKE AWAY SOME OF HIS FLEXIBILITY IN THIS BUDGET?

>> IF THE GOVERNOR TRIES TO DO ALL OF THEM AT ONCE, THEN IT CERTAINLY DOES.

HOPEFULLY HE WON'T DO THAT.

IF THEY GET THE REVENUE TOGETHER, YOU CAN EVENTUALLY DO THESE THING BUT YOU CAN'T DO THEM ALL AT ONCE.

>> PART OF THE GOVERNOR'S PROPOSALS INCLUDE AN INCREASE IN THE SALES TAX.

BACK TO 7%, WHICH IT USED TO BE.

IN DOING THAT, NOW WE'RE LEARNING OF THE SO-CALLED TAXPAYERS SAFEGUARD SO THAT IF THE SALES TAX DOES GO BACK UP, THE GASOLINE TAX, WHICH PASSED AT 23 CENTS INCREASE A GALLON HAS TO DISAPPEAR.

>> WHAT IS THE POINT OF GIVING THE CLIENT WITH THE SALES TAX AND THE NEXT GOVERNOR MIGHT PUT IT RIGHT BACK.

WE'RE NOT GOING TO VOTE FOR THE GAS TAX IF THAT HAPPENS.

THAT'S IN THE BILL THAT WAS PUT IN JUST LAST YEAR.

THEY MAY SEE THE PRIORITIES ARE MORE IMPORTANT.

>> COULD ALL OF THIS LEAD TO A STANDOFF COME JULY 1?

THE CLOCK IS TICKING.

>> IT COULD HAPPEN.

BUT SOONER OR LATER, PEOPLE HAVE TO COME TOGETHER AND THEY WILL COME TOGETHER.

BUT THEY'VE GOT TO HOPEFULLY COME TOGETHER, NOT JUST IN A POLITICAL SOLUTION.

A SOLUTION THAT REALLY HELPS THE STATE AND HELPS THE STATE TO BUILD ON A BASE AND MOVE ON TO THE FUTURE.

>> GOVERNOR, THANKS FOR GIVING US SOME PERSPECTIVE ON THE ISSUE.

A.

>> GOVERNOR TOM KEAN.

YOU CAN FOLLOW US ON FACEBOOK AND TWITTER.

I'M MICHAEL ARON.

THANKS FOR WATCHING.