Put aside the question of blame for Pennsylvania’s budget arriving 200 days late. Who deserves the most blame is now inconsequential. The more important question is: Can Governor Wolf regain political momentum?
The Republicans got what they most wanted from the new budget: No broad-based tax increases. Wolf got less than he wanted in school funding and received no new revenue for the structural deficit. And the citizens of the Commonwealth got nothing in terms of fixing a pension fund time bomb, addressing a structural deficit, or getting local property tax relief.
Wolf lost the battle of his first budget and is losing the battle of his first fiscal code, the operating system for the budget.
The Governor lost the budget battle because the Republican legislative majority, while not veto proof, could hold out longer than the Governor. In a battle between a single protagonist (the governor) and a crowd (the legislature), pressure for relief—from school districts, social service agencies, and local governments—draws strongly towards the one person able to change the situation. This is the risk that any executive leader assumes when he or she signs up for the job.
Wolf needs staffers who are able to go at their boss, who is gaining a reputation for not listening to any advice that does not support his viewpoint. As a business and civic leader in York, Wolf was always a big fish in a small pond. He has had nobody to push back at him or run interference for him as he makes an adjustment to a much larger pond.
Wolf is also losing the battle of the fiscal code. Why? Because a number of members from his own party were unhappy when he chose to override the bipartisan commission’s school funding formula with a one-time formula that concentrates the overwhelming majority of new money in three urban districts. The Democrats who broke ranks and voted with the Republicans created a veto proof majority when it became clear their constituents would lose out.
Wolf has been feuding with a dozen or so Democratic legislators from Western Pennsylvania for several months, since they voted against tax increases and in support of the final budget resolution.
The legislators claim that Wolf punished them by turning off the faucet of routine constituent services. When their offices call certain state offices for constituent assistance they get redirected to the Governor’s Legislative Affairs Office instead, and then everything goes blank.
In early April they sent a letter to the Governor noting their concerns and since that time there has been no real news regarding the dispute, except denials of wrongdoing from the Governor’s office.
There is a pattern of power tantrums on the part of the Governor: dismissing the head of the open records office, defunding the public pension watchdog within state government, and replacing SRC Chair Bill Green. None of these issues alone is that big of a deal. Two of the three have already been reversed, and Green is just now seeking his day in court. But along with the retaliation against some in his party, Wolf’s image as a new kind of politician has evaporated.
The Governor is in a bind, not because he lost the first round of the budget battle or because he had side riffs with a few members of his party; he is in a bind because he is in danger of becoming isolated. A good number of Democrats and many independents who still support most of his priorities are losing confidence in his ability to lead. The lone warrior image (Mr. Wolf goes to Harrisburg) he cultivated so well during this campaign has come to pass; except the consequences are not what he assumed.
It is time to propose a broader bargain that would be an equally hard pill for Democrats and Republicans to swallow. A stable revenue source, the deficit, school funding, pension reform, and, yes, even the liquor stores have to be on the compromise agenda. There is no longer any choice for the Governor if he wants to lead the Commonwealth.
Wolf has to retool and pivot. But first he has to come to terms with the fact that he cannot wait for a new election to shift the balance of power in the legislature. Because it may not happen. It certainly does not affect this current year and it is hard to know whether even a Democratic landslide in November 2016 in the presidential contest will do the trick.
A top of the ballot landslide would affect the balance of power in the U.S. Congress but might not translate as neatly into state legislative math. Pennsylvania is a centrist, perhaps slightly left of center state. In an election with Trump or Cruz getting soundly beaten by Hillary Clinton there will be Republican legislators in play in areas like suburban Philadelphia, but there may also be some Democrats in play in parts of western or northeastern Pennsylvania, particularly where the anti-trade message of Trump resonates.
This is speculation but my point is this: A strategy that assumes a shift of power in the state legislature is more prayer than strategy. A pivot in Wolf’s political fortune has to begin by assuming that the legislative math may not be radically altered.
There are three things the Governor can do to re-boot: 1) re-staff, 2) build relationships with all his allies, and 3) construct a grand compromise with his adversaries. In that order.
Senior Advisors: Tom Wolf needs new senior staff without an ideological axe to grind or personal political ambitions. This was the problem with former chief of staff Katie McGinty and former director of policy John Hangar. He needs staff with more operating and negotiating gravitas to reenergize his political brand. And most importantly such new staffers have to be able to go at their boss, who is gaining a reputation for not listening to any advice that does not support his viewpoint.
As a business and civic leader in York, Wolf was always a big fish in a small pond. He has had nobody to push back at him or run interference for him as he makes an adjustment to a much larger pond; particularly one with a culture that is thoroughly dominated by legislators.
All his allies: Wolf ‘s budget proposals gave priority to labor unions (particularly the teacher’s unions) and lower income urban communities. Other parts of the Democratic Party and the large number of independents (including many owners of small businesses) who voted for him have had much less of a voice in budget priorities. To the astonishment of many, the business guy from a small town is governing further to the left than most imagined. There is nothing wrong with that; his values are his values. But he is prioritizing being right on his terms over winning for the Commonwealth.
To turn around his political fortunes, Wolf needs to bring the other Democrats and the state’s large independent constituencies on board by listening to their concerns on taxes, small business growth, pensions, government funding priorities, and even some hot button issues like school choice. If he cannot do that, he will be vulnerable to a Democratic opponent (let alone a Republican) in a few years. But more importantly he will have trouble getting more of his budget priorities passed over the next three years.
A Grand Compromise: Governor Wolf has been right to highlight the state’s structural deficit and seek more education funding. And he has been right to point out that any solution will involve more revenue. Moreover, he is right to note that his concerns are being reflected in bond agency reviews of the state’s finances.
But his lack of interest in the spiraling pension fund mess, his early proposal to borrow $3 billion for pension fund obligations, and the size of the revenue hikes he sought, go a long way toward revoking the fiscal watchdog image he fashions. You cannot rail against the structural deficit and pretend all is well with unfunded pension liabilities.
It is time to own up to this dilemma and propose a broader bargain that would be an equally hard pill for Democrats and Republicans to swallow. A stable revenue source, the deficit, school funding, pension reform, and, yes, even the liquor stores have to be on the compromise agenda. There is no longer any choice for the Governor if he wants to lead the Commonwealth.
Would the Republicans go along? Hard to say, given that so many have made no new taxes into an article of religious faith.
It could be that many will be more apt to shape a compromise on revenue after the November elections, which would mean another late budget. Or it could be that the right give and take on pensions and state stores might shift the whole conversation.
Either way, the job of a leader is to test the waters with proposals that allow everyone to win, while everyone also loses. Otherwise the only losers will be Wolf and the citizens of the Commonwealth. That is how it has been for the first 15 months of his administration. It is time to turn the page.
Header image: Gov. Wolf/Flickr