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Q&A with Henry Sobanet | Colorado’s fiscal Jedi moves on

Author: Dan Njegomir - July 30, 2018 - Updated: August 10, 2018

revenueFormer state budget chief Henry Sobanet, now en route to his next calling: CFO for the Colorado State University system. (File photo by Joey Bunch/Colorado Politics)

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 — keeper of the keys to Colorado’s fiscal star chamber — 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 fora guv of each party has pretty much conferred on Sobanet the status of Jedi master in Colorado’s budgetary universe.

His is hardly a household name, to be sure, but among political insiders, Henry Sobanet long has been on the shortest of short lists of power people to know. The political press corps also was fascinated with Sobanet, perceiving him as one of the real power brokers behind the curtain. Newsies by and large respected him for his keen knowledge, detailed explanations and frank discussions about the state’s myriad budget dilemmas. (See Lynn Bartels’s recent blog post for a snapshot of Sobanet’s rapport with the press.)

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. (Hickenlooper fondly bid him adieu in June). An economist by nature as well as by training, a rock musician by choice — read on for details — 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; what he expects to bring to the table in his new job with higher ed — and his recent gig with a Led Zeppelin cover band — among other matters in today’s Q&A.

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.

Henry Sobanet

  • Chief financial officer of the Colorado State University System (beginning Aug. 1).
  • Director of the Governor’s Office of State Planning and Budgeting, 2004-07 and 2011-June 2018. Deputy director 1999-2004.
  • President of Colorado Strategies LLC, consulting on economics, public affairs and strategic management, 2007-2011.
  • Previously an economist with the Colorado Office of Legislative Council.
  • B.A. in economics, University of Colorado Boulder; master’s in economics, University of Colorado Denver.

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: Who were some of the easiest legislators to work with on budget matters over the years? What were some challenges in dealing with each of the two parties in budget talks?

Sobanet: Darn it.  The dog ate my notes on the first question. It was a really good answer too! Seriously, I don’t want to inadvertently leave someone off the list. I do need to say that I am very grateful for the warm sendoff from the recent members of the Joint Budget Committee. They did a resolution and we took a picture together. That was most unexpected and really touching.

Overall, I have good memories of my legislative relationships and experiences. I definitely have some continuing friendships as a result. I wish more people could see how legislators do their work, especially the Joint Budget Committee members.

As far as challenges with dealing with the parties, my experience was indeed being an intermediary between chambers and sometimes helping legislators navigate their internal caucus politics.  What served me best was just keeping a lot of conversations “in the vault.” The intra-party fights were the ones that at times took the most energy. A recent issue has been that more legislators want to craft the budget. That didn’t affect me as much as it did Joint Budget Committee members, but that new energy did affect the cadence and flow of the budget talks.

Once I was able to get to know new legislators and vice versa, challenges were minimal.  Obviously there were a few bitter debates from time to time, either pure politics or separation-of-powers issues, but the garden variety work was mostly business-like. When things get really stuck, you get the principals involved — governor, speaker of the house, president, etc. It was very rare that something could not get solved that way.  The recent and continuing disagreement on prison-bed needs is a good example of something that will spill over to the new administration.

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.

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.

CP: You grew up in Denver, but your parents were immigrants to the U.S. Tell us a little about your heritage and what influence your upbringing had in orienting you toward a career in public service?

Sobanet: My family probably was like many first-generation families, and as an adult my appreciation for what they chose to do grows all the time. My parents started small businesses; Dad had a clothing and tuxedo rental store, and Mom ran and worked in beauty shops. They worked hard to assimilate and give me and my brother the opportunities they wanted for themselves.  We had a high value on education and hard work in our family. My brother and I were very much “encouraged” to follow the college-and-then get-a-job track.

I think their appreciation for what America represented probably influenced my time in public service, but really I was just trying to get my career started when I took my first job at the Colorado Legislative Council.  I had applied to other places, too, and at that time in the early 1990s it was tight, so landing something was the first goal. But after that, I definitely was interested in the work and found it rewarding. I also loved having my consulting practice.

What is interesting now to me is the overlap with a having a mission and being around motivated people.  It is such a luxury to get to even think about that compared to what my parents did.

CP: Are there facets of Henry Sobanet that would surprise a lot of people if they knew about them? Things that might dispel the image of a dispassionate, numbers-crunching, wonkish policy guru?

Sobanet: I take all of those traits as compliments by the way. Outside of work, my wife and I enjoy hiking and traveling. My big hobbies are golf and guitar. For the last few years, I have played acoustic guitar with a singer mostly for fun but sometimes the odd house party.

Recently, I got to sit in as a “sideman” guitar player in a pro-level Led Zeppelin cover band for about 15 or so gigs. That was a remarkable experience — way beyond what my skill level would have justified, but the leader of the band is my long-time teacher and he gave me a shot (also my fee was really low). The amount of work to get ready just to play at the local bar is surprising. But it is a joyful outlet, so much so that I am currently starting a cover band that will play popular rock songs.

Dan Njegomir

Dan Njegomir

Dan Njegomir is the opinion editor for Colorado Politics. A longtime journalist and more-than-25-year veteran of the Colorado political scene, Njegomir has been an award-winning newspaper reporter, an editorial page editor, a senior legislative staffer at the State Capitol and a political consultant.