An insider’s tips for Pa.’s incoming governor

Dear Gov.-elect Corbett:

As your inaugural approaches, here are a few tips on running Pennsylvania, from someone who worked for most of the last eight years to help Ed Rendell do that:

It’s going to be tempting to try the Chris Christie approach, which has earned the New Jersey governor so much press.

It’ll be tempting to follow his Bread and Circus principles – distract the masses with bombastic stunts that trick voters into thinking you cut spending, even as their overall taxes go through the roof and state debt soars toward the heavens. This strategy didn’t work for the Romans and it’s not likely to work for Christie, either.

By contrast, there’s the Bob Riley approach. As a member of Congress from Alabama, Riley was well known as an anti-tax deficit hawk. But later, as governor of Alabama, he realized that tax-cut rhetoric doesn’t balance a budget. He did the unthinkable. He restructured his state tax system to balance the budget, fund the schools and finally, to make sure everyone paid a fair share.

High risk, high reward

In Pennsylvania, Gov.-elect Corbett, you must embark on a strategy that may at first seem suicidal.

In your first year, you must move to limit campaign contributions, increase the transparency of political donations, and restrict donors from receiving any government contracts for at least three years.

Legislators will resist and howl, but you can never forget that you alone must be the adult in the room. Just like a healthy dose of discipline helps children grow up to be more sensible adults, discipline in campaign finance will make our legislature and statewide elected officials more sensible, too.

Let’s face it. You won in large measure due to the largess of natural gas drillers, of companies that profit by privatizing public schools, and of course the traditional line up of law firms and lobbyists. But I can tell you that it won’t be long before your obligations to these donors will bite you in a most uncomfortable location. I’ve seen it happen.

It’s not farfetched to assume that you will find yourself having to clean up a huge natural gas disaster that spoils the Delaware watershed or defending increases to Medicaid providers funded by cuts in health care to the poor.

Fairer taxes for home-grown businesses

I can guarantee you that before you know it you will wish you free of servitude to the unfettered campaign finance machine. And based on my first-hand experience in our state capitol, you will need to be liberated from the forces of narrow self-interest if you have any hope of enacting a balanced budget.

To do that, you must turn your attention to making Pennsylvania’s tax system fair for Pennsylvania businesses and our middle-class families. That’s the only way you can build the coalition needed to pass a realistic balanced budget. Our middle-class families and home-grown businesses are shouldering more than their fair share of the state tax burden.

Here’s the math: Nearly seven out of 10 corporations that do business in our state pay no corporate tax. That means that the three that do pay have an unacceptably high tax rate – and apparently lousy accountants as well. If we close the tax loopholes that advantage companies who do business outside the state, we can lower the rate for all companies and give our native Pennsylvania firms a fighting chance of survival, or better yet, growth.

And while we are at it, let’s close the S-Corp loophole that law firms and medical practices use to avoid two thirds of the taxes they should be paying. If these sorts of firms were paying their fair share, Pennsylvania’s corporate tax rate could be cut by two-thirds and still generate enough to balance the budget.

On the personal income tax side, the problem is this: Retirement income isn’t taxed, neither is unearned income. Affluent retirees with ample stock portfolios still pay nothing. Meanwhile, hard-working Pennsylvanians are sending 3 percent of their annual income to the state. Those who benefit from this tax loophole will claim its constitutional heresy to tax this income, but they are flat out wrong. The law isn’t on their side; inertia and a whole bunch of lobbyists are.

Now you see why we need to start your term with a good campaign finance reform strategy.

Schools a place to shine

This is an ambitious legislative agenda that will take years to enact. So let me offer one area where you can demonstrate quicker progress. Believe it or not, our state is a national model for how to invest in public education and get results.

For every percent of increased state funding for schools, we saw student performance increase by the same percentage. No other state can make that claim and in no other state has there been as much improvement in student achievement in the last eight years. Clearly we can accelerate our progress, but to do that you must be willing to build on what Gov. Rendell put in place in the last eight years.

Focus on what works.   Get Pennsylvania a real teacher evaluation system that is implemented in every district with competence and rigor so that good teachers are rewarded and bad teachers are removed from teaching. Take tenure away from principals so that their annual pay increases and contract renewal are based in large measure on increased student performance.

And where schools fail to improve after two years, a thoughtful improvement strategy must be instituted. Options can include making the school a charter, terminating all building staff and starting over. Charters are great where they work. But we have too many failing charters to assume that that model is the silver bullet. Turning around schools is not easy. 

Add these reforms to those already in place, you can steal the mantle of “Education Governor” from Ed Rendell.

Be like Dick Riley, not Chris Christie.   For all his press clippings, Christie will face a tough re-election campaign as New Jerseyans figure out how much they will be paying for his fumbles for generations. Riley barely won his first run for governor, but shellacked his re-election opponent by 16 percent. His approach was win-win, for him and for Alabama. You can do the same.

Donna Cooper is a senior fellow at the Center for American Progress in Washington, D.C.  She served as Pennsylvania’s secretary of planning and policy during the Rendell administration.