Who Is Running The Ship?

When is a cabinet not a cabinet?

The question is pertinent these days in Wisconsin as Gov. Walker does what he does best: non-stop campaigning for an election of one sort or another every two years, this time on a national level.

It’s reality that our governor is giving our state part time attention as he tackles a run for the White House, which means that the executive affairs of state devolve to his staff and to his cabinet. But, in Wisconsin in recent months, all indications point to the Walker cabinet being relatively inconsequential.

Cathy Stepp, secretary of the Department of Natural Resources, admitted to being surprised by the governor’s budget proposal to strip the Natural Resources Board of its traditional policy making role. She also does not appear to have been directly involved in the major decision to zero out the Knowles-Nelson Stewardship Fund that conserves select lands.

Similarly, Kitty Rhoades, secretary of the Department of Health and Human Services, was caught flat-footed by the budget proposal to completely revamp the state’s Medicaid program for long-term health care of the elderly and handicapped. It’s $2 billion program, so this is not a trivial matter.

Before the bombshell budget came out, Transportation Secretary Mark Gottlieb had gone public with a call for a lot more money for road building, including a higher sales tax on gasoline and a stiff fee on car sales. It may have been a straw man for Gov. Walker and the legislature to knock down, but it didn’t get five steps toward first base. The secretary must have been embarrassed.

Instead, Gov. Walker proposed in his budget a major bonding program that avoids a tax hike now but will probably raise taxes down the road.

His budget proposal to merge the public-private Wisconsin Economic Development Corporation and the Wisconsin Housing and Economic Housing Authority (WHEDA), a very different financing animal, may have been signaled to their leaders, but they couldn’t have endorsed that quarter-baked idea. WHEDA relies on bonding and lending, and any hint of political management of the now independent authority works would tank its bonding sales.

The root cause of the budget crisis is the inability or refusal of the governor’s team to deal with health cost inflation. Medicaid increases and bloated costs for covering state employees are wiping out much of the positive revenue surges from a much-improved economy.

Under managing these programs almost guarantees a budget “crisis” every two years.

And it is the semi-annual crisis that gives the governor’s team and legislative leaders the platform to make drastic moves, like whacking the university, trimming K-12, jacking public park fees and cutting their state support, and killing Stewardship.

So, adding it all up, if the cabinet is not at the center of policy in the capitol, and the governor is dancing a presidential tango, who is running the government?

Legislative leaders have stepped up, but the budget thrusts are coming from the governor’s chief of staff, Eric Schutt and his band of staffers. The staff has a huge workload, which means they are largely office-bound and therefore faceless and invisible. Pundits once called Jim Klauser the second governor when he was secretary of the Department of Administration under Tommy Thompson. Is that Schutt today?

Klauser was out and about, but when is the last time you saw one of those staff cats in your part of the state? Do you know their names?

The budget surprises and gaffes demonstrate the staff’s isolation from the citizens, from the cabinet and even from legislative leaders, who were also out of the loop on some major budget bombshells.

Chief executives of most organizations do rely on regular meetings of their top teams – their cabinets, if you will. Major initiatives are debated, challenges and vetted before being rolled out. Slap-dash management is not condoned. Nor is it healthy.

Further, top executives keep their antennas tuned to customers, vendors, to trends in the outside world and to internal organizational dynamics. Their teams bring their learnings and insights to the executive dialogue and their decision-making.

Their goal is to avoid crisis management, which has become the order of the day in Wisconsin.
There is an irony to all this. During his very recent campaign for a second term, Gov. Walker said his primary focus after election would be governing Wisconsin, because that would be the best credential if he were to run for the presidency.

How’s that working out for us?

John Torinus is the chairman of Serigraph Inc. and a former Milwaukee Sentinel business editor who blogs regularly at johntorinus.com.