Analysis: Budget battle fought in no-man's land

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With ritual brinksmanship, finger-pointing and partisan charges, the fiscal impasse that's occupied Harrisburg reflects plenty of elements familiar from past budget fights.

But in important ways, this battle has been waged on uncharted terrain, complicating its resolution and clouding assessments of its long-term political consequences.

Traditionally, the state's most acute budget crises have developed in years in which the state was facing a deficit. More typically, in protracted fights in 1971, 1977, 1983 and 1991, the governor and the Legislature faced off over the unpleasant need to raise taxes. Gov. Ed Rendell's first state budget battle extended months past the July 2003 deadline as he and lawmakers struggled to bridge a revenue gap that eventually produced another tax increase. But while this year started off with fears of more red ink for the state, surprisingly robust tax collections produced a surplus of roughly $650 million.

So why did 23,000 state workers start their week with a temporary layoff?

"This is a strange one,'' said Terry Madonna, a political scientist and polling expert at Franklin & Marshall College. "I've never seen one work out quite this way."

The explanation for this anomalous budget year answer lies with the collision of a governor with an ambitious agenda and a Legislature changed and chastened by the aftermath of a pay raise controversy that visited unprecedented carnage on incumbents in the 2006 elections. Fifty state representatives, one-quarter of the total, took their oaths for the first time in this session; 10 percent of those sitting in the Senate were new to the chamber. The House has a new Speaker while the leadership team of the Senate's Republican majority is new to its jobs.

In the wake of his November 2006 landslide, Mr. Rendell presented them with an extensive list of proposals, including major initiatives in health care, transportation funding and economic development.

Some of them were eventually abandoned, notably the sales tax hike originally proposed to produce new General Fund revenue along with funds to allow a shift away from local property taxes. The differences among budget negotiators narrowed, but enough issues remained to threaten another forced day off for a significant portion of the state's work force.

Noting the toll on their paychecks, Mr. Rendell said late yesterday that he was, "truly sorry they were caught in the middle."

But Mr. Rendell believes that if he were to yield on his priorities in areas such as energy and development to allow a speedier budget solution now, he would lose legislative leverage for the balance of his term. Republicans, and some Democrats, argued that there would be plenty of time to deal with remaining issues in the coming months, but the administration feared that with a budget in place, and no threat to state operations, a Senate with a large GOP majority would have little incentive to bargain with Mr. Rendell in the fall.

"What both sides have said about the other is true,'' said Tony May, a Harrisburg consultant and veteran of budget battles as an aide to House Democrats and to the late Gov. Robert P. Casey.

"Number one, there's a surplus; number two, the governor is trying to force them to act on legislation they don't want to act on. He's holding their feet to the fire by denying them the ability to get out of town ... if he didn't deprive them of the budget, they'll never give him anything else."

Rep. John Maher was among many Republicans who accused the administration of stubbornness and delay.

"Quite clearly, the governor is using 25,000 people as pawns,'' Mr. Maher said "The governor has been unwilling to sit down and negotiate at all ... there's no precedent for an impasse like this with a surplus.''

The Republican caucus of the House has tried to force a vote on a stopgap spending bill that would allow state workers to return to their job, a concept with some sympathy even on the other side of the aisle. In a symbolic attempt to pressure Democrats to go along, House Republicans took their seats in the chamber yesterday, while Democrats waited for more progress from budget negotiators.

Chuck Ardo, a spokesman for Mr. Rendell, rejected the argument that the administration was holding the budget along with thousands of paychecks hostage to pet projects.

"The ancillary issues we're talking about, the governor believes they're crucial to the future of Pennsylvania -- health care, energy independence, transportation and mass transit -- these are not minor issues that can be put off until some future date without some consequence to the people,'' he said.

"We've been fighting for things that are awfully important," Mr. Rendell said last night. "These aren't trivial things."

The big cohort of new members shared broad promise of reform.

"They were elected on [platforms of] 'no-pay-hike, no tax-hike, and, if they're a Republican, 'no more deals with Rendell,' " Mr. Madonna observed.

It's noteworthy in the current dispute that the pay raise controversy brought terminal damage to many legislative careers but did no apparent harm to Mr. Rendell, the man who signed the bill. He won a second term in the same year that produced so many legislative causalities. If the same dynamic were to continue, the Legislature's Republicans could end up bearing the bulk of the blame for the state's partial shutdown even though it was arguably brought on by Mr. Rendell's decisions as well.

Mr. Maher argued, however, that Mr. Rendell had overplayed his hand, saying, "Through his bad behavior, the governor may be single-handedly rehabilitating the reputation of the Legislature."

The stakes on this perception battle are high. The public verdict on this Harrisburg confrontation will determine whether Mr. Rendell continues to make progress on his agenda.

Politics Editor James O'Toole can be reached at 412-263-1562 or .


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