GOVERNOR OVERPLAYS POLITICAL HAND;
2007-08 BUDGET ACCORD RESULTS
July 2007
By VINCENT P. CAROCCI
As budget fights in this
state come and go, the 2007-08 version, while prolonged a bit, was far from the
donnybrook it could have become. The turning point came at 12:01 AM the morning
of July 9 when Gov. Edward G. Rendell overplayed his political hand and, in the
absence of an agreement to his liking, ordered the furlough of 24,000 state
employees his Administration had classified as “non-essential.” That act, more
than any single other, brought the impasse to a head. Within 24 hours, an accord
in principle was reached with legislative Republicans. But not the one the
Governor had been pursuing so steadfastly.
To recap: Rendell, his Democratic-controlled House of Representatives and the
Republican majority in the Pennsylvania Senate still were at loggerheads when
the midnight June 30 deadline came and went without a new budget in place. The
Governor was insisting the final settlement include not only the spending plan
for 2007-08, but also an array of other policy initiatives he advance in his
broad and ambitious Budget/State of the Commonwealth address in February to a
joint session of the General Assembly, to include an alternative energy strategy
and universal health care. Republicans, meanwhile, were equally adamant that the
negotiations focus primarily, if not solely, on budget matters, to include the
thorny and expensive issue of highway/mass transit funding. At that point, and
in that climate, it appeared lines were very close to being drawn in the sand.
The Governor, for his part, appeared to be spoiling for a fight. He seemed to
delight in reminding whatever audience was at his command that as Mayor of
Philadelphia, he took a 42-day transit strike in a city where mass transit was
so integral to the economy and the quality of life for all of southeastern
Pennsylvania. If anyone thought a shutdown of state services would, in contrast,
be too difficult for him to endure in pursuit of his broad policy agenda, he
warned them to think again. There was a discernible “bring-it-on/make-my-day”
tone to his remarks. One could almost visualize him rolling up his sleeves in
anticipation of the bare-knuckles (political style) tussle to come.
Rendell had good reason to believe he was entering the fray from a position of
strength. After all, he had just won his re-election bid by a 61-39 margin the
previous November. His race against Republican Lynn Swann was over before it
started. Victors in those circumstances often are prone to misreading their
standing in the arena of public opinion. Remember Richard Nixon vs. George
McGovern in 1972? We know how that played out, don’t we.
Additionally, his foil in this budget debate was a General Assembly, that while
politically divided between a Democratic House and a Republican Senate, still
was reeling as an institution in the wake of the aftershocks of the aborted 2005
pay raise. From the governor’s vantagepoint, the legislature must have seemed
like an inviting target. It usually is, but was even more so now because of the
lingering backwash from the pay grab.
But the suspicion here is that there was another executive-legislative standoff
that influenced the governor’s strategizing. Perhaps more so than anyone could
have presumed. That one came about a decade ago when former President William
Jefferson Clinton and former House Speaker Newt Gingrich faced off in a
threatened budget shutdown of the federal government. Gingrich, in one of his
rare political miscalculations, gambled that the American people would not miss
the federal bureaucracy and the services they provided every day to average
Americans across the country. So he allowed the institution to close for lack of
funding authorization. The nation howled in protest. That brought Gingrich and
his congressional Republicans sheepishly back to the table. Clinton emerged the
clear victor in this test of political wills. It’s doubtful the lesson was lost
on Ed Rendell.
Rendell, in fact, is to politics in Pennsylvania what Bill Clinton was to
politics in the nation. His easy way with people and his zest for the political
give and take of the process replicate Clinton’s in so many respects. “Slick
Willy”…”Fast Eddy!” It’s no accident they each came by their political monikers
honestly.
So it’s not a stretch, as June turned into July with no budget agreement in
hand, to suggest that Rendell truly believed what worked for Clinton at the
national level a decade ago would work for him now at the state. Thus,
furloughing 24,000 state employees and blaming Republican obstructionism for the
it must not have seemed to he and his advisers to be too much of a political
risk for them to take.
It was a rare political miscalculation for the governor. The furloughs were
unprecedented in Pennsylvania political history. The Commonwealth had
experienced some heated and extended budget fights in the recent past. Most
contentious among them: The 1970-71 conflict which actually carried over from
one calendar year to the next and ultimately resulted in the enactment of the
state’s first personal income tax; an epic 12-month struggle in 1974; and, most
recently the eight-month vitriol of 1991. But as testy and drawn out as these
confrontations were, furloughs were never part of the mix. (In 1991, the late
Gov. Robert P. Casey had to order a brief period of payless paydays for state
employees, including himself and his senior staff, but the Commonwealth and its
workforce still continued to function daily.)
The principal difference between these confrontations and the current edition
was one of available revenues. In each of the three instances cited, the issue
was one of raising the necessary taxes to erase a revenue deficit and balance
the budget. The Rendell furloughs, in contrast, came at a time when the
Commonwealth had a $650 million surplus on hand at the end of the fiscal year.
The distinction was critical to the outcome.
It wasn’t 12 hours after the Governor issued his furlough notice before even his
legislative allies were taking to the floor of the Senate and House to decry the
layoffs as unjustified, unnecessary and indefensible. It was not so much what
was happening to state employees that turned the tide. (Despite their dedication
to their jobs, state employees as a class still do not rank high on the scale of
public esteem.) What mattered more in this instance were the routine services
they were providing daily to routine Pennsylvanians: Drivers’ licenses…auto
registrations…visits to or accommodations at Pennsylvania’s state parks. These
services now were being denied for no reason other than political deadlock. The
protests began to pour into the state Capitol almost as soon as the plug was
pulled. That was enough to get both sides back to the table in earnest.
When the bargaining resumed, both sides gave a little, as inevitably they must.
Rendell deferred on pressing his major ancillary demands—most notably,
alternative energy and universal health care—in return for the Republican
commitment to take the issues up again in the Fall. Republicans agreed to
restore some of the more significant cuts in Rendell’s budget request—pre-K
funding and laptop computers in the high schools, primarily among them. The
outline of a deal took shape. “Eddie, this is it,” wily Senate negotiator Vince
Fumo advised the governor. “You got to take this…” “Eddie” did just that. He
took it. The principals shook hands. The workforce was back at its station in 24
hours. On the morning of July 17, two and one half weeks after the deadline, the
governor signed a $27.5 billion budget into law.
Within minutes of the agreement being announced, the inevitable
“who-won/who-lost?” analysis began to flow from the punditry and chatting
classes. From this corner, the most succinct conclusion would be this: The
Governor won on details. Governors always do. After all, 95 percent of most
budgets are enacted in exactly the terms the chief executive proposed. There’s a
lot to talk about in that 95 percent.
On principle, the
Republicans won this time around. They entered the budget marathon committed to
no new taxes; a reduced rate of growth in spending; and restraints on unlimited
borrowing. They succeeded in each of those three objectives. Moreover, some $300
million of the $600 million-plus surplus was reserved for next year’s budget. As
Fumo, as proliferate a spender of available revenue and then some as there is,
himself acknowledged: “I never walked away leaving $300 million on the table.”
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