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InfoUSA CFO duking it out with incumbent Johanns for Nebraska governorship.
CFO.com Staff, CFO.com | US
May 16, 2002
Stormy Dean, CFO of database giant InfoUSA, is angling to make a most unusual career move.
Dean will square off with Republican Gov. Mike Johanns this fall for the governor's job in Nebraska. As far as anyone can remember, an acting CFO has never won a U.S. gubernatorial campaign.
Dean handily won the Democratic nomination in the Cornhusker state. In the primary election on Tuesday, Dean defeated a self-employed jewelry salesman named Luis Calvillo, who referred to himself as a "Latino, Virgin Mary crusader." We're not sure what party that is.
The incumbent Johanns won with the Republican race with a whopping 87 percent of the vote in the Republican race.
But CFO Dean has already criticized Johanns for his handling of the economy in Nebraska. He's also rebuked the incumbent for failing to keep state legislators from increasing the sales and income tax in Nebraska. Those raises were needed to help make up for shortfalls in the state's tax revenue.
Indeed, as a financial operation, Nebraska isn't doing so hot of late. The state is currently operating in the red, with a budget deficit of $220 million.
In early April, Dean criticized Johanns for having a "secret tax plan" to deal with that shortfall. Dean's claim came after Johann's indicated that he'll look at a broad reform of Nebraska's tax code next year.
"Is this some sort of secret tax plan?" Dean asked. "If not, the governor needs to reveal the details." Reportedly, Dean has intimated that Johanns is making a "no new taxes" pledge during the campaign, but may be planning tax increases once re-elected.
"So I ask again, where does the governor really stand on the tax issue? Tax reform will mean new taxes," Dean stated, according to Statepaper.com. "Governor Johanns knows it, but won't admit it."
Officials in the Johanns campaign deny any secret tax plan. They've also asked Dean to detail his own scheme for dealing with Nebraska's budget deficit. To date, Dean has not released such a plan.
According to Statepaper.com, however, the InfoUSA CFO has endorsed a concept called zero-based budgeting. With zero-based budgeting, state agencies will not get automatic budget increases every year. Instead, they will have to start from scratch -- and justify each dollar of spending.
Dean knows a little something about running a tight ship. Revenues at InfoUSA dropped from $305 million in 2000 to around $290 million in 2001. Nevertheless, the company, which provides CRM and marketing databases to businesses, managed to boost gross earnings by $5 million. The reason: InfoUSA's cost of revenues dropped by more than 20 percent.
So what are Dean's chances of winning? Hard to say. Johanns remains fairly popular in the state -- despite the bump-ups in taxes. Nevertheless, the last three incumbent governors of Nebraska have all lost their reelection bids. Local observers point out that those GOP governors lost their races mostly because of the financial state of the state and tax concerns. Those issues would seem to be tailor-made for a CFO.