Ed Rendell likes living on a bus. He rode a bus emblazoned with his name and smiling face for 49,000 miles worth of campaigning between January of last year and Election Day, when he was chosen by Pennsylvania's voters as their new Democratic governor. A bus is a good workplace for him, he says, because he can spread out his crates full of paperwork much more easily than in the back seat of a car. There's a refrigerator full of sodas and baskets full of snacks and the satellite television usually works well enough to satisfy Rendell's lust for watching sports.

Still, it's not the amenities that are keeping him on the bus. For Rendell, the election was only a marker in what he promotes as his "campaign for change." Refusing to become a creature of the state capital, Harrisburg, with its famously lethargic political culture, he continues to ride around the commonwealth, addressing crowds, holding meetings and remaining very much a public face as he calls for major overhauls of state policies on taxes, education, health and economic development.

There is more to it than photo opportunities. Rendell will be the first Pennsylvania governor in more than a century to face a legislature controlled by the opposing party, and he has to grab at every tool he can think of to sway public opinion in his direction. "I don't like the term 'going over their heads,'" he says. "That suggests I'm not going to try to reach consensus with the legislature, and I am. What I'm going to do is keep this bus running to create an environment for change."

It's a trick that been tried before. After Republican Tom Ridge was elected governor of Pennsylvania eight years ago, he continued to fly from one region to another to rally public support for school vouchers and privatizing the state's liquor stores. But Ridge's frequent-flyer miles didn't translate into victories in the legislature, and Rendell is hearing plenty of doubts about his ability to convert public relations events--or his vote total--into a mandate. Rendell won 53 percent statewide, but he lost 49 of Pennsylvania's 67 counties and failed to sweep Democrats into power in the traditionally Republican legislative districts that he did manage to carry. "Ed Rendell does not have a mandate on anything," says Robert Jubelirer, the Republican president of the Pennsylvania Senate. "Ed Rendell's win was a personal victory for him. He's a very charming, very affable guy."

The new governor would be delighted if partisan resistance were his worst problem. Unfortunately, there is a much more serious one right in front of him: a state deficit fast approaching $2 billion. Rendell's plans to increase the state's share of education costs, lower property tax rates and give seniors help on prescription drug costs are going to run headlong into fiscal reality.

That doesn't make Pennsylvania unique, of course. Nearly every state is wrestling with deficits that threaten to become worse than the record shortfalls of 2002. And the one-time cuts, rainy day fund withdrawals, and tobacco-settlement revenue that got most states through the past last year generally won't be available in 2003.

Most of the nation's two dozen new governors ran, like Rendell, on a platform of change. But many of them, also like Rendell, face legislatures at least partially controlled by the opposing party. That fact, coupled with the need to slay the deficit dragon, has nearly all the newcomers, regardless of party, pessimistic about their chances to do much more than keep up current services. "It's pretty hard to be a visionary when you're broke," says Dick Bond, former president of the Kansas Senate.

What makes Rendell unusual among the incoming class of governors is his conviction that being broke is, in fact, the ideal condition for trying out new ideas. When things are broke, he insists, you've got to fix them.

The governor-elect steps off his bus to tell students at the University of Pennsylvania or doctors in Scranton that the tough situation he's inherited reminds him "eerily" of the challenges he faced as mayor of Philadelphia in 1992, when he took over a city suffering from record deficits and a badly eroded tax base. Rendell extracted major concessions from public-sector unions, reversed the direction of the budget numbers and restored some economic vitality to Philadelphia's downtown, and became one of the most celebrated American mayors of the 1990s. "People were fleeing the city by the thousands, and so were jobs," writes Buzz Bissinger in "A Prayer for the City," a book about Rendell's first mayoral term. "But he made all of it somehow sound like a wonderful opportunity for change and renewal."

It's a sales performance Rendell has every intention of repeating in Harrisburg. "I have a distinct advantage over most other governors," he argues, "and that is, as the kids say, 'been there, done that.'" Rendell says, "I understand you can't just cut spending and circle the wagons."


Every class of governors contains some outstanding individuals and some clunkers. Every now and then, an innovative group comes in at a time when the public is ready for innovation and the money is there to fund it. In the 1990s, a cohort of Republican governors from large and medium-sized states, led by Tommy Thompson of Wisconsin and John Engler of Michigan, helped bring about fundamental change in the nation's welfare system and reached a broad consensus on crime- fighting (including support for the death penalty). At the same time, given the rosy economy, any governor who couldn't run a surplus was in the wrong business, and many were able to increase spending on education and other programs while cutting taxes on a nearly annual basis. Those days, of course, are over. "It's just hard to see a lot of momentum," says Engler, now term-limited out of office after a dozen years. "I think governors are going to be so busy with budgets that innovation is going to be hard. We might be entering into a period of consolidation."

When it comes to faces and party labels, there's no question that this is a year of tremendous change in statehouse politics. Not only is the Class of 2003 the largest cohort of new governors in the nation's history, it is one created by an unmistakable voter demand for fresh leadership. Twenty of the 24 new governors are succeeding incumbents of another party. Four of them beat sitting incumbents. Of the 20 states where the governorship was left open, only Rhode Island, Massachusetts, South Dakota and Oregon voted to keep the same party in office. Republicans broke decades-old Democratic monopolies on the governorships of Georgia, Hawaii and Maryland, while Democrats took power in states as conservative as Kansas, Oklahoma and Wyoming. There is a sense of generational change as well; Oklahoma and Minnesota elected the first governors in America born in the 1960s.


But for all the exchanging of seats, there's very little sense that a revolution is at hand. Republicans Don Carcieri of Rhode Island and Linda Lingle of Hawaii ran explicitly against the prevailing Democratic political powers in their states, yet have promised to do little more than perform "big audits" to ferret out waste in the budget. Democrat Rod Blagojevich in Illinois railed against what he called the corruption and mediocrity of three decades of Republican governors, yet appointed Jim Thompson, the GOP governor for half that period, to head his transition team.

A similar story can be told in Maryland, where Republican Bob Ehrlich ran ads about Maryland Democrats'"culture of corruption" but is appointing Democrats to key state posts. "Obviously, because of the political culture that does exist, he can't make wholesale changes in the way government is run," says William Burns, of the Maryland Chamber of Commerce. In the words of Ehrlich himself, "you have to live in the land of the real."

Even in Georgia, where Republican Sonny Perdue ousted Democrat Roy Barnes to become the first Republican elected governor since 1868, there's little evidence that the conqueror has many grand ambitions for the office. If anything, he would like to scale back its powers. "I think generally we'll see less eagerness to go into new policy areas," says Charles Bullock, of the University of Georgia. "Perdue said he did not believe the governor was the fount of all knowledge, that he wanted to hear what the public wanted."

Polls show that what the public wants most of all, in Georgia and everywhere else, is solutions to the problems of education and health care. But it's not at all clear that big new ideas are emerging in either of those areas. The states are having a hard enough time merely gathering the data on pupil performance that the 2002 federal education law demands. Most have developed extensive programs of standardized testing, but they will not find it easy to meet all of the congressional requirements without spending additional money few seem to have.

Meanwhile, states are coping with double-digit annual increases in Medicaid costs, brought on in part by expansions in eligibility over the past decade. Even so, the political battle over cutting the rolls has yet to be joined. New governors are talking wistfully about their hopes that the federal government will increase its share of Medicaid payments.

And while it's obvious that budgets need drastic action, there appears to be little stomach for raising taxes. Virtually all new governors, including Democrats such as Blagojevich in Illinois and Jennifer Granholm in Michigan, who ended long periods of Republican control, have pledged not to raise broad-based taxes. Instead, state government is becoming more dependent than ever on the wages of sin. Cigarette-tax increases are the only ones that legislative majorities in most places can be counted on to support.

If the new governors aren't going to raise taxes, and revenues aren't matching current obligations, where are they going to cut? All the newcomers will discover quickly that their options for significant budget reduction aren't very plentiful. Once states have written the obligatory checks to school districts, colleges, localities and health providers, more than three-quarters of their budgets are already gone. In California, for instance, the state budget is $79 billion, but only $18 billion of that amount funds state operations--the agencies and programs that the state government actually runs on its own. Given that California is facing a budget deficit estimated at $21 billion, there's no way the state can dig itself out of its hole by making a few cuts around the edges. (The state could lay off every one of its workers and still be $6 billion short.) And most other states are in roughly the same situation.

During the past year, moreover, governors who decided to take budget- cutting seriously didn't find many allies. The Michigan legislature overrode Engler's attempt to cut $845 million in aid to localities (a $53 million cut was approved in December). Wisconsin Governor Scott McCallum's plans to force localities to consolidate by eliminating $1 billion in state aid was a political disaster, contributing to his dubious distinction as the only incumbent Republican governor in the country to lose last year.


Rendell knows all about the difficulties of budget-cutting, and he has heard Engler's prophecy that the next few years will be a time for consolidation, not innovation. But he doesn't believe it. What Rendell believes is that the state's enormous problems present him with a "golden opportunity" to make big changes. During his run for governor, he constantly cited the most depressing statistics, not to make the situation sound bleak or demoralizing but to make the case for change. Things might look hopeless in Harrisburg in 2003, Rendell says, but the situation is not so much darker than the mess he inherited in Philadelphia in 1992.

"Make no mistake," he said at his inauguration as mayor that year, "our situation is worse that we thought it could ever be." Rendell devoted his first six months in office to creating a sense of urgency in addressing Philadelphia's chronic problems. He plans a repeat performance for the entire state. "He has shown in his previous history that he has no problems at defying institutions and individuals to get what he wants," says Terry Madonna, a political scientist and pollster at Millersville University. "He'll use every nickel of bonded indebtedness to engage the state in expansive economic development, creating partnerships with the private sector, exactly what he did in Philadelphia."

Rendell drew the lesson from Philadelphia that the way to get out of a tough financial situation is to grow out of it. His plans for stimulating Pennsylvania's economy do include raising about $1.5 billion worth of bond money. "When you're looking at a $2 billion deficit, spending $100 to $200 million to float a bond is difficult but not impossible," Rendell says, "and you've got to do it." In order to sell that package, Rendell rode his bus to three regional economic development summits around the state before his inauguration, with eight more summits to follow. His method is to listen to local ideas for regional recovery and to solicit support for his bond package from business groups and other interested parties while local legislators are sitting in the room.

Certainly Pennsylvania could use a growth spurt. If you paint a picture of the commonwealth by the numbers, you'll have a grim portrait. Pennsylvania ranks 49th out of the 50 states in population growth, 48th in economic growth and second, after Florida, in its concentration of senior citizens. Its best-educated young adults are draining away. "You're essentially losing twice," says Penn State sociologist Gordon DeJong. "You're losing those young people, the best and the brightest. But then their children are born somewhere else, too."

And Pennsylvania hasn't invested very heavily in educating the children who stay behind. The commonwealth lurks in the bottom five in aid to higher education, and its per-pupil spending for elementary and secondary education, on a district-by-district basis, is the fourth most inequitable in the nation. In contrast to their counterparts in neighboring New Jersey and Ohio, Pennsylvania's political leaders have never been forced by the courts to confront disparities in school funding.

The state currently picks up about a third of the bill for K-12 schooling. Its share of education costs has declined over the past decade, and its reimbursement formula hasn't changed for years, meaning that districts that are growing don't receive any additional funds. Rendell would like to raise the state's total share to 50 percent, in order to cut back on property-tax rates assessed by local districts, which have increased by an average of 44 percent over the past decade.

But while everyone agrees that property tax rates are too high, there's no agreement on what to do about them. Rendell pledges to call a special session on the subject early in his term, but that is no innovation. Property-tax reform has been a much-debated issue in the state for more than 30 years. In 1989, Governor Robert Casey pushed a ballot referendum to shift school funding from property taxes to an increased state income tax; it lost by a margin of 4 to 1.


Rendell believes public opinion is such that he can now achieve a swap in funds "without any major trauma" but concedes that structural changes to relieve the inequities in school funding will be much tougher to bring about. Property values have not been reassessed in some counties for 30 years, making the switch to a statewide system much more complicated. During the 2002 campaign, Republicans argued that Philadelphia stood to gain disproportionately from such a switch, tapping the strong out-state resentment of Rendell's home city. "If he wants to start making structural changes, I don't think he's going to be able to do it," says Jubelirer, the state Senate president. "I've already told the schools in my district, get ready to tighten your belts."

Jubelirer's main concern is that Rendell's plans, coupled with a deficit environment, will lead to increased taxes, which he says "nobody is in the mood for." Even some of the new governor's allies predict that his education plans will cost much more than his estimated $1.5 billion, which he claims he can finance with slot machine revenue and savings from procurement and other management reforms.

Then there is the prescription drug issue. Regardless of the accuracy of his projections, Rendell will have to find additional money to make good his plan to raise the income limit on seniors receiving assistance with their drug purchases. Jim Redmond, vice president of the Hospital and Healthsystem Association of Pennsylvania, noting that the state is about to lose a funding mechanism that has allowed it to draw down additional federal funds for Medicaid, says that "Rendell is going to be put to a real test just to maintain where we are, let alone expanding prescription drugs."


Given all these hurdles--the lack of money and the lack of proven political support for his platform--there's little wonder why Rendell maintains his familiar position on the bus, hoping he can drum up enthusiasm and, by changing perceptions about what the state can accomplish, move an agenda aimed at ending the state's long period of stagnation. Even if things break right, it won't be an easy sell-- "We're not the Philadelphia city council," Jubelirer warns. Rendell agrees, knowing it's his job to woo many more Republican supporters than he's ever had or than anyone believes he can find in Harrisburg. But Rendell has a knack for winning people over and sharing credit with nominal opponents, and he is already busy touting ideas from Republican legislators that he can use on the big issues of education and health care.

The whole program may not succeed, but while other governors are hugging the shore, Rendell will be reaching out for deep water. It worked in Philadelphia, and it made him governor and established him as a star on the national Democratic stage. "If we are able to change things in Harrisburg, I'll be able to improve people's lives on a much wider scope than in Philadelphia," Rendell says, smiling into the sun that's lowering over the Poconos and his bus. "I've always liked challenges."