Wolf Faces Tall Challenges as He Takes His Oath

Gov.-elect Tom Wolf pledged throughout his campaign to provide "a fresh start" for Pennsylvania.

He vowed to increase funding for public schools, make the state's tax system fairer, increase the minimum wage, impose tough new ethical rules for public officials, limit political campaign contributions, liberalize the state's voting laws and preserve public employees' pensions.

It's a crowded agenda -- a full plate even for a seasoned government hand. And Wolf, despite his decades of running his family's business, is a rookie whose only previous state government service is the less than two years he served as revenue secretary in Gov. Ed Rendell's administration.

These are some of the challenges the Democrat faces as he prepares to take his oath on Jan. 20:

STATE BUDGET

The $29 billion budget that Republican Gov. Tom Corbett will leave for Wolf uses one-time revenues and accounting maneuvers to patch a $2 billion hole in the state's spending plan for the year ending June 30. Barring an unexpected surge in revenue, that could translate into a more than $2 billion deficit for 2015-16.

Adding to the financial pressures are tens of millions in unanticipated costs and dips in tax collections for this year, such as $95 million that was to have come from natural gas-drilling leases on public lands but is in limbo because the plan is tied up in litigation, according to the Corbett administration.

The taxpayers' growing share of state and school employee pensions will continue to drive up costs. Another of Wolf's early tasks will be negotiating new labor contracts with unions representing tens of thousands of state employees whose current pacts expire at the end of June.

The Independent Fiscal Office projects tax collections will increase by less than 3 percent a year through mid-2016 while spending increases by more than 4 percent, driven mainly by rising public pension fund payments, inflation and a growing population of elderly people who require care.

MAKING NEW FRIENDS

Republicans who control the General Assembly expanded their majorities in both chambers in this year's election -- a political reality that will test Wolf's diplomatic skills as he joins the debate over how to erase the huge structural deficit.

Wolf has appointed a task force to recommend possible solutions, but is keeping any proposals under wraps. Spokesman Jeffrey Sheridan says his boss regards the deficit as "the No. 1 problem to solve"' but his top priorities are imposing a 5 percent severance tax on natural gas extraction to pump up public school funding.

GOP leaders say consideration of any tax increase must follow action on their deficit-fighting agenda, which includes a possible overhaul of public pensions and the privatization of the wholesale and retail sale of liquor and wine -- plans that foundered even with a Republican in the governor's mansion.

Wolf hosted a mid-December dinner for legislative leaders from both parties as a gesture of cooperation.

"There's a shared sense of crisis around this deficit," Sheridan said.

PROMISES, PROMISES

As governor, Wolf can fulfill a handful of his campaign promises on his own authority.

Since the election, he has banned members of his transition team from accepting gifts and, once sworn in, vows to issue an executive order extending that ban to all employees of the executive branch. Also by executive fiat, he plans to bar no-bid contracts with private law firms and impose new competitive bidding requirements to make the hiring of outside legal counsel by state agencies more transparent.

But promises that require bipartisan support likely will face a much steeper climb. Proposals to increase Pennsylvania's minimum wage and limit campaign contributions have gone nowhere in the Legislature in recent years. And Wolf has yet to flesh out his plan to overhaul the state income tax to shift more of the burden onto the wealthy and potentially raise billions to increase the state's share of public school funding.

CABINET APPOINTMENTS

Nearly two months since Election Day and just weeks before he will take the oath of office, Wolf has not yet announced his first Cabinet nomination, although he has said he hopes to have named those department and agency heads by inauguration day.

Sheridan declined to discuss the search process or its status.

Eighteen of the Cabinet positions require confirmation by a simple majority vote of the state Senate.