An outsider’s plan tests Dover insiders

In his first months, Markell looks to strike a balance

By GINGER GIBSON — Tuesday, April 28, 2009

The News Journal

From the top floor of the state Capitol, Gov. Jack Markell holds court in his office, ready to defend salary cuts and other cost-saving measures he has proposed and to discuss the trouble his sports-betting proposal has found in the Legislature.

Before Markell speaks, the former Nextel executive organizes his three cell phones — one for family, one for business and a BlackBerry for e-mails — on the glass top of the large desk he inherited with the office he assumed three months ago.

Flanked by advisers and staff who largely fit his self-professed outsider status, Markell fields questions about his decision to hold firm on his plan to cut state salaries by 8 percent while appearing willing to negotiate with the state’s casinos.

Despite the barrage, though, he slips off his shoes and calmly shoots back answers — always returning to the same theme, “I’m doing this for the taxpayers.”

As the Legislature returns today from a two-week break, Markell will renew his fight to get his sports-betting bill — which nearly died in committee just before the break — approved by the Legislature. As one of the first major proposals of his administration, it could be a harbinger of difficulties ahead as he tries to convince lawmakers to approve his plan to close the state’s roughly $700 million budget deficit.

The former business executive, who marks his 100th day in office Wednesday, entered a new world when he crossed from leadership in the private sector to leadership of a state — and even his decade spent as state treasurer, training for his current role, couldn’t prepare him entirely for the differences.

He is trying to maintain his public popularity in an economy that demands unpopular decisions, learning to work with a Legislature long accustomed to a different style of governing, and finding out as he goes just how well he can apply his corporate sensibilities to running a state.

“I talk[ed] about my vision of making Delaware’s government more efficient, more effective, more responsive and more responsible,” said Markell, who today will deliver his first State of the State address. “People are now seeing that I’m standing up to those goals, and I’m making tough choices.”

When a company’s executive announces pay cuts, there’s generally little recourse outside union negotiations. When a Delaware governor makes that move, there are 62 lawmakers to persuade and threats of being voted out of office.

Before announcing he intended to make across-the-board pay cuts in state salaries, Markell tried to warn every constituent group. Between January and March, he delivered his “Reality Check” presentation more than 60 times to prepare people for the drastic measures that would be required to fix the deficit.

Repeating that “tough decisions” were coming didn’t seem to make the proposed pay cuts any more palatable when he announced them.

“A good-faith effort’

Markell knew he would be walking into hostile territory when he decided to hold open meetings with state workers in their office buildings — their home turf — after announcing the cuts.

Standing with no podium or table between him and workers at those early April meetings, Markell said he found the process productive, just listening to the complaints of angry workers and offering the best answers he could.

Theresa Bradley, 42, of Wilmington, who works on a contract basis in the Department of Finance, appreciated the effort. Many of her co-workers found the information helpful, she said, especially those nearing retirement with questions about their pensions.

“He handled it well,” Bradley said. “They were really informed.”

Republican Sen. Colin Bonini, Dover South, a perennial critic of Democratic administrations, commended the governor for meeting with residents and state employees.

“I don’t always agree with him,” Bonini said, “but I think Jack has really made a good-faith effort to go to the people and that’s refreshing.”

At Markell’s April 6 meeting with state employees in Wilmington, though, the words of one employee seemed to hang unanswered in the room: “The Legislature won’t let you do this.”

Trying to find allies

Markell’s relationship with the Legislature has been a sticking point thus far.

“I think he’s probably beginning to realize the Legislature is not as cooperative as he would like,” Bonini said. “As we get closer to June, my guess is the Democrats will line up.”

Part of that might come from the way Markell assumed his office.

When Markell defied Delaware Democratic leaders to run for governor, he wasn’t just separating himself from the former administration, but from the entire party. Most members of the General Assembly, particularly the politically entrenched Senate, threw their support behind his opponent, former Lt. Gov. John Carney.

Delaware State University political science professor Sam Hoff said while Markell is working with a Democratic-controlled Legislature, most of them weren’t his supporters during the election, and political animosity remains.

“If you’re not close to your own party, you end up building short-term coalitions [in the Legislature]. That is awful difficult to sustain for a full four-year term,” Hoff said. “I’m not saying he doesn’t have allies, he certainly has a different type of relationship.”

The day Markell’s sports betting proposal was filed in the Legislature, even the bill’s sponsor, House Majority Leader Rep. Pete Schwartzkopf, D-Bethany Beach, was criticizing elements of the plan he didn’t think were going to work.

Dissension from the sponsor was both unusual and telling: Markell already has conceded several key elements of the bill under heavy lobbying from Delaware casinos and still almost saw it die when tensions between his office, the casinos and the Legislature came to a head.

Some legislators say the schism exists in part because the new governor isn’t reaching out to them enough.

It was only hours before releasing his proposed budget cuts that Markell revealed his plans to the Legislature — a departure from his predecessor, Gov. Ruth Ann Minner, who often kept lawmakers in the know during the decision-making process.

“I’m disappointed that he has not included the Legislature a little bit more in his deliberations and proposals, especially the minority party,” said House Minority Leader Richard Cathcart, R-Middletown. “I’m not convinced he’s including [the majority party], either.”

Cathcart said the breakdown of the sports betting bill is emblematic of the problems Markell will continue to face.

“I think he and his staff are struggling, as any new administration would be expected to struggle a little bit, on how best to deal with the Legislature,” Cathcart said. “Some of that is to be expected. But he’s got people on his staff who have had this type of experience before.”

Straight to the people

Former North Dakota Gov. Ed Schafer knows about going from the private sector to the public sector — he was an executive with cleaning-products manufacturer Gold Seal Co., in Bismarck, N.D., before becoming governor in 1992 — and he learned how to push his agenda even when the Legislature wasn’t entirely on board.

He said he was able to get his goals accomplished by going around the Legislature and straight to the people — something Markell has shown he’s willing to do.

“If I thought we should go in a certain direction and the Legislature was going in a different direction, I was able to go out and sell my point of view,” Schafer said, agreeing that Markell’s approach is similar. “The governor has that ability because you run a campaign statewide, the people have accepted that and then, all a sudden, the Legislature isn’t letting you do what you were elected to do.”

Schafer, who also served as U.S. Agriculture secretary under former President George W. Bush, said lawmakers and governors have different perspectives and goals — a legislator is looking out for the constituents and has to respond to complaints from a small group while the governor is often looking at the big picture.

“There should be a natural tension between the legislative branch and the executive branch. They’re the short-termers. They look at things on a cycle-by-cycle basis, deliver the programs, balance the budget,” Schafer said. “The governor has to say, ‘Here’s the long-term aspects of what we’re doing, here’s how it affects the whole state.’ Getting together is how you develop good public policy because it should be a blend of both.”

Markell’s Chief of Staff, Tom McGonigle, said opposition from lawmakers is not just expected, it’s necessary.

Markell says the biggest difference in running a large company and running state government isn’t dealing with employees or negotiating with lawmakers — its about the decision-making process.

“It’s the different attitude toward failure,” Markell said.

In business, risks are taken to get ahead of the competitor or drive up profits, he said. In government, failure has to be avoided because of the impact it could have on people and the competing interest of “equity, justice and fairness.”

Hoff agreed, saying while many business principles translate to government, the bottom line moves.

“If you lose site of the impact of those sorts of decisions, it’s not just a bottom line, it’s about people and affecting people’s lives.”