Gov. Rendell has finally put a price tag on the “pain.”

That would be the pain he intends to inflict on state workers in order to balance the 2009-2010 budget in what is a dismal economy with state revenues falling week after week.

The governor set off a firestorm on Tuesday when he told KDKA radio that his proposed new budget, to be introduced on Feb. 3, would include layoffs of between 1,000 and 2,000 state workers – or 2.6 percent of the 78,000-person state payroll.

“There will be layoffs, significant layoffs,” Rendell told KDKA radio host Marty Griffin.

But layoffs could happen even before July 1, the start of the new budget. Within hours, the governor’s senior staff provided the state unions with the required 30-day notification of potential furloughs to state workers. Among the options are “rolling shutdowns” where each non-essential agency of state government would take regular hits in shutting down for days at a time with workers going unpaid in those periods. Union leaders immediately cried foul and said the Democratic governor was using state workers as pawns as he did two summers ago in a budget showdown with the Legislature over funding for mass transit. At that time, workers were furloughed for one day (although Rendell ended up paying employees for the missed work day) as the General Assembly compromised on the Rendell’s demands.

Earlier this month, in first raising the prospect of layoffs but not attaching numbers to it, Rendell said he wanted “no whining” from state workers or others that would be affected by his budget cuts.

To which David Fillman, president of AFSCME Council 13, which represents the majority of state workers, said in a reply recorded by WGAL-TV (Harrisburg-Lancaster): “I’ll whine, scream and holler when it comes to laying off workers.”

The Patriot-News of Harrisburg calculated that a layoff of 2,000 state workers based on average payroll costs of $66,000 per worker (wages and benefits) would amount to about $132 million in annual savings – far from enough to close the estimated $2.3 billion budget gap.

So speculation immediately began on whether Rendell is shrewdly trying to outmaneuver Senate Republicans whose leader Joe Scarnati has pledged no tax or fee increases in the coming budget. Rendell is in the middle of his second term and can not seek re-election whereas lawmakers face voters every two or four years.

One long-time observer told Capitolwire, the state’s preeminent internet news service, the move could be intended to make Democrats and union-friendly Republicans prefer to raise taxes or make other concessions to him rather than face the wrath of the state’s unions.

And, of course, it all plays against the backdrop of Rendell bypassing his self-imposed state hiring freeze to give a $95,000-a-year state tourism job to former state Rep. Dan Surra, D-Elk, an ally who lost his bid for re-election – a move seen as outright cronyism.

The Surra issue has gotten under Rendell’s skin as he reacted badly to reporters’ questioning of the hiring at a Farm Show news conference earlier this month. But the issue continues to be burn as the governor has been flayed by columnists and editorial writers statewide as a hypocrite. A Patriot-News call-in survey published Jan. 28 found Central Pennsylvania readers were against the hiring of Surra by a 76 percent to 24 percent margin.

Also last Tuesday, state Rep. Dwight Evans, D-Phila, the chairman of the House Appropriations Committee, told the media that the state’s budget shortfall is likely to be in the $5.5 billion range spread over two years and he sees a sizeable tax increase as inevitable. “I believe there will be some sort of tax increase in order to solve this problem,” Evans told reporters. “But a tax increase should be a last, last, last resort.” The state’s two largest or board-based taxes are the personal income tax and the sales tax.

Dwight Evans

The personal income tax (PIT) was last raised in January 2004 from 2.8 to 3.07 percent where it has remained. The state sales tax is six percent in 65 counties of the state and seven percent in Philadelphia and Allegheny County.

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Back to the Future
The Insider takes a “time tunnel” look at how the 2010 governor’s race has parallels with 1978

Could next year’s general election to select a new governor be a replay of one 32 years ago – an all-Pittsburgh contest.

Well, it could if the two current party front-runners can retain their statuses and win their respective party’s nominations in the spring of 2010.

And next year could even resemble the 1978 contest more closely when you consider that both races could feature a Republican prosecutor who made his name by corruption busting and a Democratic “mayor” who contends his able administration of a local government makes him the best choice to be Pennsylvania’s next chief executive. If the 2010 contest were held today, the GOP front-runner would be state Attorney General Tom Corbett, a native of Pittsburgh’s northern suburbs best known for his Bonusgate investigation. The Democratic front-runner, most observers agree, is Dan Onorato, a former Pittsburgh city council member elevated to an executive position when he became Allegheny County Executive in 2003. Onorato is fond of telling audiences who do not understand his present job that he is the “mayor” of Allegheny County, a government that serves 1.2 million people and that the post is akin to being the mayor of Philadelphia. In 1978, the Democratic contender was former Pittsburgh Mayor Pete Flaherty, the self-styled “Nobody’s Boy” – a popular city council member who bucked the party establishment twice to win the Pittsburgh mayor’s office and again to become its gubernatorial nominee in a three-person primary. The Republican nominee was Dick Thornburgh, who wore thick spectacles and was labeled by the press as the “gray flannel” candidate. The WASP-ish Yale-educated Thornburgh was a former U.S. attorney in Pittsburgh known for bringing down corrupt Democrats and later as a No. 2 person in the U.S. Justice Department under President Ford.

Tom Corbett Dan Onorato

In addition to his local popularity, Flaherty had one earlier statewide outing when he ran for the U.S. Senate against Republican Dick Schweiker in 1974, a year after his re-election as the city’s mayor.

Thornburgh got a geographic advantage in his multi-candidate primary when he became the sole Western Pennsylvania candidate in a field that included three Philadelphia-area Republicans, including Arlen Specter, now the state’s longtime senior U.S. senator.

But he started the general election at an extreme disadvantage. His internal polling just after the primaries showed him down by 32 points with Flaherty at 55 percent and Thornburgh at 23 percent and the rest undecided.

According to his biography, “Where the Evidence Leads,” Thornburgh and his wife, Ginny, were so despondent by the results they resigned themselves to a campaign with a goal of “avoiding a humiliating defeat.”

But Jay Waldman, a longtime Thornburgh aide and now his campaign manager, devised a strategy they hoped would overcome the disadvantages and he presented it to the candidate in July of 1978.

The first and most prominent was to de-emphasize his Pittsburgh roots and become the candidate of Eastern Pennsylvania. Thornburgh directed almost all his campaign efforts toward the Philadelphia region, especially its then-heavily Republican suburbs.

Thornburgh was also told to disown then-Philadelphia Mayor Frank Rizzo, a divisive figure who was despised by the city’s African-America community because of the perception he was racist. Rizzo had a measure on that ballot in that election that would have allowed him to seek a third-term by revising the city charter limiting mayors to two terms. Thornburgh came out against the Rizzo tactic.

Finally, Thornburgh aides were dispatched to do a minute examination of Flaherty’s record as mayor. When Flaherty exaggerated his record – as he was prone to do – Team Thornburgh leaped on it and discredited him in the media as well as in its paid advertising.

Flaherty also carried two liabilities into the election that were not of his making but for which he paid a political price. The second term of then-Democratic Gov. Milton Shapp’s administration was considered a failure, with numerous of his top executives charged with corruption. Thornburgh’s message of “cleaning up Harrisburg” was able to resonate with the public.

Secondly, one of Flaherty’s primary opponents was former Auditor General Bob Casey who came in second (but who would win the governorship eight years later in 1986). However, a Pittsburgh school teacher and ice cream shop owner also named Bob Casey placed his name on the ballot for lieutenant governor and voter confusion led to his selection in the Democratic primary.

Team Thornburgh pounded the unqualified Bob Casey mercilessly while its own No. 2 person was Bill Scranton III, the son of the popular former Republican governor from the 1960s.

For this article, The Insider interviewed two campaign insiders from that election, one in each camp, and they both corroborated the general narrative of Flaherty losing his lead while Thornburgh slowly built up his.

Also, because of his maverick image, Flaherty was slow to embrace the party establishment, costing him time, money and momentum as the election neared. He also relied on a largely unschooled and inexperienced campaign team, headed by his wife, Nancy.

“Pete underestimated the size and scale of a statewide race for governor,” said the Flaherty insider. “He treated the campaign the same as if he was trying to win 32 wards in the city of Pittsburgh.”

The Flaherty partisan also noted that the former mayor was hampered by black opposition to his candidacy because as mayor he was a strong opponent of busing to integrate Pittsburgh’s public schools, which was ordered by the federal court. Flaherty’s position helped him in white wards but he was openly reputed by such prominent blacks as Harvey Adams, then the president of the Pittsburgh chapter of the NAACP. Adams went to Philadelphia and spoke out against Flaherty.

By late October, public Gallop polling showed Thornburgh just four percentage points behind Flaherty. The gap had been closed.

On election night, the networks astonishingly called the race for Thornburgh by 9:30 p.m., an hour and a half hour after polls closed. The Republican won by nearly a quarter million votes statewide, sweeping the Philadelphia suburbs, keeping Flaherty’s margin down in Allegheny County and – most crucially – limiting the Democrat to a 35,000 plurality in Philadelphia where it had been predicted Flaherty would win by 200,000 votes.

Now, 32 years later, will a Corbett-Onorato race have a similar outcome? It’s unlikely.

Statewide, Democrats now have a 1.2 million voter registration edge as compared to 800,000 in 1978. And the once reliably “fertile Republican crescent” of four suburban counties surrounding Democratic Philadelphia has gone largely blue, with both Montgomery and Bucks counties having more registered Democrats than Republicans.

No doubt, Onorato, like Flaherty, will build his campaign around his achievements as county executive. At the moment, there is no evidence he will tend to overstate his record as Flaherty did.

At the moment, Onorato has only outraged two constituencies in Allegheny County and that is tavern and restaurant owners who are subject to a per-drink tax that the Legislature forced on Onorato as his own alternative to raising property taxes for the county’s local share of mass transit. Without those local funds, the state will not release its larger portion for mass transit.

The other group that might have a gripe against Onorato is bus drivers. Onorato has opposed the terms of the present union contract in Pittsburgh as overly generous and has demanded concessions from the unions in its next contract as his price for releasing local transit funds collected under the drink tax.

And you can bet that the quick-learning Onorato will not repeat the other mistakes that Flaherty made in 1978. He has proven to be an astute fund-raiser and he is attempting to build a statewide coalition of Democratic (and general election) support, even before his formal announcement likely later this spring

On the other side, Corbett does not (yet) have the corruption busting credentials that Thornburgh was able to boast. He has indicted 12 Democrats in his office’s Bonusgate investigation but so far there are no convictions and he has not yet publicly fingered any Republicans.

So for now, expect both men to pay attention to their “day” jobs and avoid any mistakes that would derail them from the front-runner status for their respective party nominations next spring.