Kernan predicts recovery

Speaking to the Indiana Chamber of Commerce Wednesday, Gov. Joe Kernan outlined his plan for Indiana's economic recovery and emphasized the progress the state has made.\nKernan spoke on a day when Indiana received some bad fiscal news. In January, the state again took in $21.5 million less revenue than expected, but Kernan was upbeat about the economy, noting that Indiana is currently the 10th best state in economic activity.\n"Here in Indiana, we've seen signs that things are turning around," he said.\nThe key word for the speech was investment. Kernan talked about how economic investments in Indiana have paid off and encouraged continued investment for the future.\nKernan said the major investments have been in life sciences, higher education and new businesses. He also said Indiana should invest in its children's education by passing his full-day kindergarten bill, but a lack of Democrats present in the House Wednesday caused the bill to be defeated.\nOne of the major improvements he noted was the increase in life sciences industry in Indiana. He said 16 new life sciences companies were formed in Indiana during the year -- four coming from outside the state.\nTechnology firms have also helped, Kernan said, as Indiana now has six certified technology parks and is hoping to add more.\nAnother way to increase investment, he said, was the new venture capital tax credit, which has currently given more than $3 million worth of tax credits to Hoosiers.\nOne area where Indiana is performing well but often gets overlooked is exports, Kernan said. Initial statistics for 2003 say Indiana has shipped more than $4.4 billion worth of exports.\n"On a level playing field, we can compete with anybody," he said. "We have more international offices than any other state in the Union, besides Pennsylvania."\nKernan said he imagines Indiana will have another record year for exports for 2003.\nLarry Davidson, IU professor of business economics and public policy, said he follows the state's exports regularly and expects Indiana to continue to perform well.\n"Indiana has a continued ability to sell goods abroad even when other states are in trouble," he said. "The statistics I do have indicate very strong export sales growth. That aspect has done well."\nKernan pointed out that the Midwest is far behind the rest of the nation in economic recovery but said that shouldn't be the case for long.\n"Indiana is outperforming all of its neighbors," he said. "Indiana and the Midwest will not be lagging behind the nation next year."\nKernan also defended recent tax cuts and tax restructuring, saying they will not affect Indiana's budget negatively for the next term.\n"Our budget will be in the black, and we will not raise taxes to do so," he said.\nOne of the keys to make sure Indiana continues to grow, Kernan said, was to focus on increasing business investments. He said Lt. Gov. Kathy Davis comes from a strong business background and will hopefully be able to handle Indiana's budget and economy the same way she succeeded in the private sector.\nHe urged the Indiana Chamber of Commerce to be "peddlers" and "salesmen" for Indiana, trying to push new businesses in order to enhance the state's economy.\n"We don't want to take steps back," he said. "We are determined to do everything we can to enhance Indiana companies."\nEconomics Professor Peter Olson said he thinks the economy is getting better and agrees that investment is the key to economic growth. Still, he said he would rather private citizens invest more than the government.\n"Say they try to put money in your research, well, that research could go to someone else. How does the government know who to pick?" he said. "I think the market can do a better job."\n-- Contact managing editor Adam Aasen at aaasen@indiana.edu.