State Budgets,Governors,and Their Influence on “Big-Picture Issues”

Abstract

Studies of state budgeting focus on gubernatorial power primarily by examining executive influence over appropriations to individual agencies or programs. They also view executive versus legislative budgeting as a short-term zero-sum game. An alternative approach is to look at budgeting from a long-term perspective centered on “big-picture” elements of a state’s financial position. This case study takes this perspective by looking at Delaware Governor Pete du Pont’s tenure (1977-1985) when he engineered a remarkable, long-term financial turnaround in the face of economic stagnation, undisciplined spending, historically weak financial management, and divided government. His leadership resulted in balanced budgets, repeated tax cuts, upgraded bond ratings, and reduced unemployment. The case illustrates how governors can impact “big-picture” issues with influence extending well beyond their tenure in office. An examination of du Pont’s leadership style suggests strong similarities to leaders studied by Jim Collins who have transformed other organizations. Looking at the effectiveness of du Pont’s leadership style suggests that clear priorities, bipartisan solutions, and altering the institutional framework for tax and spending decisions can contribute positively to influence over “big-picture” issues of state finance.