THE YEAR AHEAD will bring greater changes to Beacon Hill than any other time over the past 12 years. You have to go back to 1991 to find the last time a new governor came in simultaneously with a new legislative leader. That’s when William Weld became governor and Charles Flaherty replaced George Keverian as House Speaker. This year, of course, Mitt Romney is our new governor, and outgoing Senate president Tom Birmingham will be replaced by Senator Robert Travaglini (his election as Senate president doesn’t become official until New Year’s Day, after the Phoenix goes to press).

Both periods have something else in common: a budget crisis. Weld came to office during a devastating recession that affected just about every industry in the region. The current economic slump has been much more narrow — the unemployment rate is a manageable five percent. But the budget deficit is one of the worst we’ve ever seen. Beacon Hill insiders are already starting to warn that the state may be grappling with a budget deficit of as much as $3 billion. What follows is a look at what we can expect from the leaders of the three branches of state government in 2003.

Executive office

In the coming year, Mitt Romney will have to move beyond the rhetoric — such as "gang of three" and "clean up the mess on Beacon Hill" — that worked so well for him during his election campaign. A former business executive who spent the bulk of his career with Bain Capital, Romney’s most recent executive experience was as president of the Salt Lake City Winter Olympics. With this background, his governing style remains a big question mark. One of the places where we can look for clues to what kind of governor he’ll be, however, is in his father’s tenure as governor of Michigan. During a November interview with the Boston Globe, Romney said as much: "I was very close to my dad, and I look at him as a role model, as a mentor, as a person who I would very much like to be like. He in many respects was unique in so many dimensions. I can’t possibly be as great as he was, but I aspire to be like he was in many ways."

The way Romney won elective office and what he faces today as governor bear resemblances to his father’s rise to governor and the challenges he undertook. Like his son, George Romney first won office in 1962 on a platform of economic revitalization. Unemployment rates were creeping up in Michigan. The state’s finances were a mess. George Romney’s campaign slogan was "Get Michigan on the move!" An executive with American Motors Corporation, he’d never held elective office before and campaigned on the vague slogan of offering "leadership."

The slowdown in Michigan’s economy and George Romney’s personal popularity enabled him to defeat a Democratic incumbent, John B. Swainson. Once elected, according to Romney: A Political Biography by D. Duane Angel (Exposition Press, 1967), the new governor asked each department to slash 10 percent from its budget and selected a private task force of experts to study ways to deliver state services more cheaply and efficiently.

Mitt Romney faces similar challenges and seems to be taking cues from his father’s way of doing things. He’s already made clear that he intends to shake things up from an organizational point of view. Two weeks ago, in the Nurses Hall of the State House, Romney announced a new structure for his governing team. He would rely on two key aides — Douglas Foy, the president of the Conservation Law Foundation, and Robert Pozen, the former vice-chairman of Fidelity Investments — to serve as "chiefs" to whom other department heads would report. Foy’s title will be chief of Commonwealth development; Pozen’s, chief of commerce and labor. In the administrations of Paul Cellucci and Jane Swift, department heads had to lobby the governor directly to forward their agendas. Romney’s scheme is intended to bring efficiency to his administration.

"What I want to make sure we do is that what we have is not a governor with so many people reporting to him that he basically has to abdicate management to silos that are running independently, sometimes even conflicting with each other, sometimes even suing one another," Romney said. "I want instead to make sure we have all these agencies working together in a unified position. At the governor’s level, we will have a single voice and a single vision."

Former governor Michael Dukakis employed a similar system somewhat successfully in the 1980s, when Catherine Dunham served as the governor’s chief health-and-human-services adviser and Al Raine served as his economic adviser. Dukakis implemented the system after being too weighed down in his first term, from 1974 to 1978, by the thousands of little decisions that his underlings required him to make. Romney has devised a set-up whereby two trusted deputies will be empowered to make vast organizational changes at state agencies without the governor’s involvement in every decision. And neither Foy nor Pozen have any incentive — in the form of future elective ambition or political favors to pay — to pack their underlying agencies with patronage hires, as has been the case during the past 12 years on Beacon Hill.

There was a preview of the tension and conflict to come over the next year during a Romney press conference held on December 19. As Romney spoke to the news reporters and supporters who packed Nurses Hall, State House employees, some of them working for the legislature, peered down at their new governor from the floors above, eager to catch a glimpse of what the outsider would bring to their building. Near the end of the proceedings, when some 20 elderly activists wearing Santa hats filed into the hall to protest budget cuts, Romney’s press aide, Eric Fehrnstrom, sensed trouble and cut off further questions from the press. For a brief moment, Romney was confused (his press conferences are usually held in controlled environments, such as conference rooms, where he can avoid spontaneous contact with the public). He asked Fehrnstrom how they would get out of there — the remark was picked up on the microphone — and Fehrnstrom led Romney up the ornate staircase to the third floor, where his office will be.

The next day Romney named Fehrnstrom, a veteran of the Treasury administration of Joe Malone, as his communications director. The move seemed to be a recognition that for all his outsider appeal, Romney knows he needs at least some staffers with an understanding of how to make their way around Beacon Hill (both literally and figuratively). Fehrnstrom; Beth Myers, Romney’s newly named chief of staff; and Beth Lindstrom, who will be director of consumer affairs, all worked for former state treasurer Joe Malone. Malone’s tenure, of course, was besmirched by the $9.4 million embezzlement scandal perpetrated by one of his allies. While none of the former Malone staffers now being appointed had links to the embezzlement scandal, it is nonetheless interesting that Romney seems so much more eager to work with Malone veterans than with those who earned their stripes with Weld, Cellucci, or Swift. (The most notable exception to this rule, of course, is the appointment of Eric Kriss as secretary of administration and finance. Kriss served in the same post during Weld’s first term.)

The appointments appear to reflect a sense that much of what took place during Weld’s final years in office, as well as in the administrations of Cellucci and Swift, involved, at best, missed opportunities. It’s also worth remembering that the Republican bench in Massachusetts is not that deep. Politically seasoned Republican staffers can come only from one of two relatively small factions — Malone, who helped build up the state Republican Party in the 1980s, or Weld/Cellucci/Swift. Also, the Malone people were on the outs with Swift prior to Romney’s getting into the governor’s race in March 2001. So they were the Republican activists who warmed to him first and most enthusiastically.

That said, how Romney addresses an executive branch that has become bloated with Republican appointees — many of them veterans of the past three administrations — will be among the most interesting political developments to watch in the coming months. Romney, after all, was elected as an outsider committed to a mandate of cleaning up Beacon Hill. During the December 19 press conference, when he was asked how he hoped to govern as an outsider even as he dealt with the need to keep experienced people in government, he answered vaguely, invoking the value of having a "diverse team in place."

"Behind me you see a group of people of very different backgrounds," he said, emphasizing the outsiders he had invited to join his administration: "On the one hand the chief of the Conservation Law Foundation.... On the other hand, you see the president of Fidelity."

Pozen and Foy are both very solid picks. But what will be more illuminating is when and if Romney decides to take on Massport, a bloated bureaucracy with one of the worst reputations in the nation, tied to one of the worst days in American history: September 11, 2001. Stronger men than Romney have seen their political lives shattered by going after the entrenched interests at Massport.