Duane Morris is one of those Philadelphia law firms with powerful corporate clients in energy, telecom and other big Pennsylvania industries, and partners active in both political parties. They'll be at the yearly Pennsylvania Society festivities (in Manhattan, of course, because where else could Pa. politicians and their patrons possibly party?) this weekend to press for influence with those close to Democratic Gov.-elect Tom Wolf and the new Republican legislative leaders.
The firm says there's a waiting list for its Friday night reception at 21. Before they left town, I met with Tom Ellis (R), a past Montgomery County commissioner, and Alan Kessler (D), whose Rendell and Clinton ties got him onto the U.S. Postal Service board, to ask where Pa.'s headed. Highlights:
(Can Democrat Wolf get anything done with a Republican General Assembly?) Kessler: I think he'll follow the game plan Ed Rendell followed when he was elected mayor: go upstairs and befriend the guy... you opposed in two elections. Tom Wolf understands what he's up against and will do what he has to.
Ellis: The House and Senate are more conservative than they were in the last administration. The power has moved out of the Southeast (Philadelphia and its relatively liberal suburbs). It's much more in the Center and West of the state.
(Republican Tom Corbett could barely get bills passed. Won't it be worse for Wolf?) Gov. Corbett started out with an issue with House members: He had prosecuted a number of them. And he put somebody in charge who had been involved in that. So there was a level of trust he never really got to. I'm not sure he reached out enough to the legislative leaders as he needed to do, to get things passed.
Kessler: I'd agree. This Democratic Governor might get along better with these Republicans. They know each other's thought processes. Wolf is a businessman. You find that a little more among Republicans than Democrats. And he's from York County, a conservative, middle-of-the-state area. He may have more in common with this (General Assembly) leadership, than the outgoing governor has. Look what he did after Election Night. He didn't wait for the congratulatory calls. He reached out to the Republican leadership. He started that relationship Day One.
(Won't they fight about labor legislation?) Ellis: Paycheck Protection (limiting political use of public employee dues by unions) is an issue in the House and the Senate more than in the Commonwealth as a whole. Right to Work, I haven't heard that mentioned by the delegation.
(Any chance State Sen. Dominic Pileggi, R-Delco, deposed by his fellow Republicans, could join with other suburban Senators to make common cause with the minority Democrats on some issues?) Kessler: There is talk. But they are so focused on the budget, from now through February and into March, I don't think other issues will come forward yet.
(Will Wolf cut spending, or raise taxes?) Ellis: He can do a pension bond issue, if he can get it through the legislature. The House might go along. (Gov Corbett) wanted a pension fix. The one who didn't want (a pension bond) was (Corbett's budget secretary) Charles Zogby. Zogby didn't want to increase the debt. And is now the right time, when the market is at a record high?
I was at Ballard in Philadelphia when the Philadelphai bond issue went through with Kidder Peabody. Those are tough to do. (The fees were very high, more than $30 million, for a $1 billion issue). It was they way they diversified the market, the way they sold it.
(What else can they cut? Don't we have too many state colleges, most of them losing students?) Ellis: I don't see those cuts happening. (Like shutting libraries in the city, the neighborhoods freak out?) Something like that.
(What else, besides a gas extraction tax?) Kessler: He could try raising the personal income tax.
Ellis: I think he'll try to do the pension bond first. (Will they invest the bond issue in private funds, like Philadelphia did, and get crushed by a market downturn, like Philadelphia did?) The Auditor General (Democrat DePasquale) is oppose to hedge funds completely. Montgomery County has touted (stock and bond) index funds. I can tell you, at the Septa pension fund, we look every quarter to make sure our private managers are doing better than the market. Our gain was 26 percent last year. Montgomery County had 16 percent. You can't just invest in index funds, you have to hedge in case the market drops.
Kessler: At the state, it's budget, budget, budget, and then job creation. Tom Wolf will probably say what Democrats are saying on all levels: be more focused on middle class stuff.
He's talked a great deal about education, I know there's a whole network of people who say, 'Don't forget about us,' even if education is Number One. Tom Wolf has said he wants to transition to full Medicaid expansion. What is the reaction to that going to be? And remember, Philadelphia has a mayor's election coming up. There are all kinds of rumors, no matter who the Democrat is, other people are running as Republicans or independents. You hear Bill Green, you hear Sam Katz...
(Do Pennsylvania corporations get the government they pay for?) Remember, David L. Cohen (of Comcast) thought at one point that Corbett was going to get re-elected. And Obama, he hasn't done them any favors (see the President's support for "Net neutrality" regulation, which Comcast opposes).