Gov. Tom Wolf

Gov. Tom Wolf is due to present his next state budget proposal on Feb. 7.

(PennLive file photo)

"I'd love to be in the same situation, in the same position in Pennsyvania, to do things, that I was in my company." - Then-candidate Tom Wolf, telling the tale of the course corrections that saved his family's York County business.

Looks like Gov. Wolf has his wish.

As he starts the second half of his four-term as governor, Wolf gets to tackle a rather serious state budget turnaround effort.

Now Pennsylvania, to be clear, isn't at risk of going out of business.

But with revenues that are now projected to miss this year's projections by about $700 million, and costs for medical assistance and pensions still climbing, this is shaping up as as tough a year for budgeting as any governor could want.

And Wolf, now in his third year as governor of Pennsyvania, seems to be on the cusp of - to borrow a phrase from a year's worth of Donald Trump coverage - making his own personal pivot for his 2017-18 spending plan.

Gone is the first-time elected official who tried to meet state government where it was, and correct deficits and pay for policy objectives with major tax increases.

That way worked for earlier Democratic governors named Casey and Rendell. But, quite honestly, they weren't dealing with the vast philosophical gap between the executive and legislative branches that Wolf faces.

So, after two swings and misses at big tax packages, what seems to be shaping up this winter - according to the few details that have been publicly previewed thus far - is a budget that hearkens back to Wolf's earlier life as the quiet manager who fixed his family's business the old-fashioned way.

Identifying the problems, analyzing the potential solutions and restructuring where necessary.

We've already seen it in spades.

Wolf, two months before his budget was due, announced he was taking any proposals to raise state personal income or sales tax rates off the table.

One important note here: This will be, most believe, a "no new broad-based taxes" plan. That should not to be confused with a no new taxes plan.

Many in state government expect that Wolf will have at least four or five revenue raisers in his budget proposal, like implementation of a severance tax on natural gas production in the Marcellus Shale region.

Wolf proposed a shale tax in each of his first two years, only to be blocked by the Republican-controlled legislature.

On the expense side, it is widely believed that the governor will continue his pattern of increasing new state investment in Pennsylvania's public schools and pre-kindergarten programs.

But the typical roll-out of coming attractions this year has mostly been a celebration of coldly-efficient, cost-saving efforts.

To wit, Wolf on Thursday announced his intent to close the State Correctional Institution at Pittsburgh by June 30, realizing $80 million in annual savings in the state Department of Corrections.

The number of state employees has been frozen - for at least the rest of this budget year - at Dec. 2 levels.

And, quite by accident, Wolf's former Secretary of Drug and Alcohol Programs disclosed Wednesday a plan to fold that and possibly one or more other existing state agencies into an enlarged state Department of Human Services.

On Friday, we all learned more about that effort as the Wolf Administration emailed affected employees on its intent to merge not only Drug and Alcohol, but also the departments of Aging and Health into a new Department of Health and Human Services.

The theme seems to be that "he's going to throw everything that the Republicans have kind of been asking for at them, and see if they have the stamina to do it," one lobbyist, who asked not to identified in order to discuss what he's heard about the forthcoming budget proposal, told PennLive recently.

Another sign of the administration's new way was the hiring this fall of the McKinsey & Co. consulting firm to a short-term, $1.8 million contract to help find "operational efficiencies, cost savings, and revenue enhancements... that may be included in the governor's fiscal year 2017-2018 budget proposal."

The firm has been asked, according to a contract summary, to look for savings opportunities in agency structure, and in the state's contracting with third-party vendors.

Capital and asset "monetization" is also under study.

That could cover, as a hypothetical example, raising cash to help with budget-busting pension or other stranded costs now through a bond issue paid for by the state's future tobacco settlement payments.

McKinsey turned in its first phase report at the end of December. Presumably, it has helped guide the governor and his senior advisors as they make their final decisions about a roughly $31.5 billion budget.

Democrat leaders are watching this all warily, but they're not necessarily opposed.

"As long as we can provide the services we need to provide in an efficient and appropriate manner, I think those are smart moves," said Senate Minority Leader Jay Costa, D-Allegheny County.

Even the quest for new revenue, several sources told PennLive this week, may be taking on the sheen of downsizing.

Besides any tax proposals, those sources said, the administration may also be considering clawing back some of the hundreds of millions of dollars the state foregoes annually in tax credits and loopholes.

Industry-oriented tax credits total about $300 million this year, ranging from programs aimed at steering development into economically distressed urban and rural communities, to efforts to entice video game design businesses to Pennsyvania.

Wolf, Republican legislative sources noted, has never been a big fan of tax credits.

The conservative-leaning Commonwealth Foundation has also identified some $560 million in other industry-specific grants and subsidy programs.

Some Republicans, at least those who aren't running for governor, have expressed some early, grudging appreciation at Wolf's adjustment.

"I think Wolf is catching on that, just as in companies, sometimes you get a little bloated and you have to go back to the drawing board and see what's working and what's not," said Rep. Stan Saylor, R-Red Lion, and the new chairman of the House Appropriations Committee.

"I think he's adjusting and I commend him on that because I think that's critical to being successful in Harrisburg."

What remains to be seen is how far down this path Wolf continues to go with his Feb. 7 budget proposal, and whether the medicine Wolf has proposed provides the cure the legislature's fiscal conservatives are looking for.