They say no one can serve two masters. But how about two governors — from opposing political parties? Such has been the odyssey of Henry Sobanet.
He was budget czar for former Republican Gov. Bill Owens as well as current Democratic Gov. John Hickenlooper. Holding that post at the Governor’s Office of State Planning and Budgeting (OSPB) for just one governor is enough of a distinction to evoke murmurs of awe in some circles around the Capitol. Serving in that capacity for a guv of each party has pretty much conferred on Sobanet the status of Jedi master in Colorado’s budgetary universe.
Among political insiders, Henry Sobanet long has been on the shortest of short lists of power people to know. And even if joining Hickenlooper’s staff in 2011 drew disillusioned grumbling from some fiscally conservative Republicans — who had wondered whether the onetime Owens point man ever really was their kind of guy after all — it established him as the go-to guy among all go-to guys for fiscal matters.
Hence, his latest calling, which officially begins Aug. 1. An economist by nature as well as by training and a Denverite by birth, Sobanet now will be chief financial officer for the Colorado State University System.
He talks about his approach to his work for both governors over the years, and what he expects to bring to the table in his new job with higher ed in today’s Q&A. (For more of our exchange, visit Colorado Politics.com.)
Colorado Politics: Although Colorado’s form of state government vests much of the official budget-writing responsibilities in the General Assembly and, specifically, its Joint Budget Committee, the reality is that the budget the governor proposes to the legislature each year is enormously influential. Which makes the governor’s budget chief enormously influential over all fiscal policy. You served in that capacity for years for two governors — one from each party.
Tell us about the responsibility it placed in your hands. Does the fact you served governors in both parties suggest the budget process is ultimately more pragmatic than ideological — and that party affiliation has little to do with it at the end of the day?
Henry Sobanet: There is a lot on the plate for the budget office. The calendar of deadlines is relentless, and with around $30 billion of appropriations, there are always a handful of fires, literal and figurative, to be dealing with that don’t respect deadlines in the statute. But I would add this: There are so many harder jobs in state government that don’t get nearly enough attention or accolades.
As director of OSPB, my take on the job was to immerse the culture of the office in how much of an honor it is to be an adviser to a governor. Being an adviser is completely about trust, so you have to do your homework and lay things out in a timely and complete way. I frequently referred to the governor as my “client” because it set up the idea of service and the job of presenting the pros and cons and unknowns of a situation. It became a little bit of a humorous habit, but it helped set a tone.
The skill set for cabinet members generally is what makes people successful. You have to manage up, down and around. Up, there is the chief of staff and governor; down, you have a department or section you are leading, and around are the legislature, lobbyists and customers of the department. The people who have done well 1) know this, and 2) figure out the balance.
My situation probably reflected less political bents than just having mostly similar points of view. Both Gov. Owens and Gov. Hickenlooper are business-minded, frugal and enjoy the fact case behind a decision. I was like-minded enough on those issues to have a solid foundation to work with both of them. In addition to that, the complexity of the budget and the fiscal situation has certainly increased. And so in addition to regular job skills and mind-set, the historical context and being able to recognize patterns and be creative probably helped land me both jobs.
I agree with what you are getting at — ideology will collide with reality at some point.
CP: You helped pilot the successful Referendum C for the Owens administration, the most significant embellishment on — and some say, departure from — the Taxpayer’s Bill of Rights since the groundbreaking tax-limitation policy was ensconced in Colorado’s constitution by voters in 1992. Referendum C temporarily eased some of TABOR’s fiscal restraints, but TABOR’S critics says taxing and spending limits fundamentally hamstring the state’s ability to attend to its essential duties. TABOR supporters counter that all a cash-strapped government at any level has to do is make its case to voters to raise taxes or keep excess revenue. Do you believe voters ever will agree to eliminate the policy?
Sobanet: TABOR gets most of the attention for its role in the “fiscal thicket” (TABOR, the Gallagher Amendment, and Amendment 23), but I think a bit disproportionate to the contribution. The most significant provision, the vote on taxes, is not something anyone is ever going to touch, a point that was even affirmed in the recent Democratic gubernatorial primary debates. In a downturn, when the state is below the revenue limit, the legislature and governor have flexibility with adjusting tax credits and exemptions, which came out of case law that ruled on the “mill levy freeze” lawsuit several years ago.
What has changed with TABOR since it passed is that sending a measure to the voters is itself a political problem for many. At the legislative level, there is so much pressure on GOP legislators to not even entertain sending a referred measure. So now just asking the voters gets you in trouble.
Here is the challenge ahead. The aging population and resultant impacts on both revenue and spending are going to collide with an incoherent school finance system and insufficient infrastructure spending. TABOR has its role in that. We don’t have a size-of-government problem as much as we have serious systems problem; the rules don’t make sense. If the debate could be about that, there could be more bipartisanship.
I think successful ballot issues are about accomplishing something: better roads or funding education, for example. I think a technical-fix ballot issue would be tough, especially with the higher vote requirements for amending the state constitution.
CP: Your next calling, as financial chief for the Colorado State University system, arguably will take you from the frying pan into the fire as higher ed is one of those areas that many say have been shorted by Colorado’s perennially tight budgets. What do you think you will bring to the table, and how will you help higher ed get its piece of the pie?
Sobanet: Even though higher education funding is what gets hit the most when there is a downturn, this is an exciting job for me. My knowledge of the state financial systems and issues and the work we did at OSPB on lean process improvement and performance management will be part of what I bring to the table. I understand how the policymakers at the Capitol view higher education. I want to bring more visibility to how students are served and the value-added contributions from higher education institutions to the economy and to communities. I am also looking forward to learning from my new colleagues — being around engaged and mission-minded people was part of the appeal of this job.
CP: What are some basic realities of the budget process and fiscal policy that you feel a lot of rank-and-file voters might not realize?
Sobanet: If I could wave a magic wand, the public would understand that the state constitution is not supporting their likely desire for a sensible government. As I said in the other answer, the rules of the game simply don’t make sense: simultaneous tax cuts and spending mandates. Also, the impact of the last two recessions on the General Fund (state income taxes and sales taxes) needs more awareness in the public and with policymakers. When you adjust for population and inflation, there has been very little growth since the end of the Great Recession and it really only has been the last two years or so. But the unadjusted growth rates have been significant, and it gives the impression of a bonanza.
The other thing that many people don’t realize is that over the last 20 years, the dominant tax policy in the General Fund has been tax cuts cumulatively equaling almost 9 percent of revenue. We did an in-depth discussion of this in the Nov. 1, 2017, budget request in Appendix B if people are more interested.