Daniels: Time to leave partisanship behind us

INDIANAPOLIS -- Republican Gov. Mitch Daniels urged a newly divided General Assembly to cooperate in moving Indiana forward, while also using his State of the State speech Tuesday night to tout initiatives that include full-day kindergarten, outsourcing the Hoosier Lottery and raising cigarette taxes to fund health programs.\nUnlike the first two years of Daniels' term, when Republicans controlled both chambers of the legislature, House Democrats now have a 51-49 majority. Daniels catered to them on occasion and likened Indiana to a canoe that, when paddled on one side, only would "just turn in circles."\nRepublicans still rule the Senate 33-17.\n"If either side chooses to dig in its paddle stubbornly enough, it can even tip the boat over," Daniels told a House chamber packed with lawmakers, judges, state office holders and guests. "But with a common heading and a shared effort, the canoe can be the fastest boat on the water."\nDaniels had said there would be no big surprises in his 30-minute speech, and there were none. He caught lawmakers off guard by waiting until his State of the State address in 2005 by proposing a one-year income tax increase on some Hoosiers. He waited until his speech last year to propose a cigarette tax increase.\nDaniels has said that he had learned it was better to present major proposals in advance of the session so lawmakers could digest them and suggest ways of improving them -- and he did that in the weeks before the session.\nHe said 2006 had been a strong year for Indiana, in part because state government had a balanced budget after several years of deficit spending. The state is projected to take in $1.5 billion more in revenue over the next two years, and Daniels wants lawmakers to hold spending increases below that as they draft a new, two-year budget.\n"As we compete about whether Indiana will be a blue state or a red state, let's agree together that Indiana will not be a red-ink state, not in 2007 or ever again," he said.\nDaniels also touted his leasing of the Indiana Toll Road to a private company for $3.8 billion. Democrats fought bitterly last session against that plan, but Daniels said the upfront money launched a historic era of road building.\nHe also said records in economic development investments had been shattered and noted advancements in producing alternative fuels and passing telecommunications legislation that helped spread Internet broadband connections.\nBut Daniels focused most of his speech on his initiatives, including his proposed phase-in of statewide, full-day kindergarten. In what was clearly another olive branch offered to Democrats, he credited them with first pushing the proposal several years ago.\n"It was your governors, and many of your legislators still serving, who first advanced and attempted this step," he said. "You were right."\nDaniels promoted his idea of outsourcing operations of the Hoosier Lottery to a private venture for an upfront payment of $1 billion or more, with the money used to provide college scholarships for high-achieving students and attract top professors. Scholarship recipients would not have to pay back the money if they worked in Indiana for three years after graduating.\n"Let's make the dreary term 'brain drain' a forgotten phrase," Daniels said.\nDaniels and House Democrats -- especially then-Minority Leader Patrick Bauer of South Bend -- clashed often when Democrats were in the minority the past two years. During his speech, Daniels said that while both parties wanted to provide health coverage to more Hoosiers, "those calls came earlier and more often from the loyal opposition." \nBauer is speaker again as he was in 2003 and 2004, and in his leadership post sat behind the governor at the House podium. Early into his speech, Daniels reached out to him with humor by saying that something was different in the chamber.\n"Something ... something ... oh, Representative Bauer, you've changed seats! You look good up here," Daniels said. "Thank you for watching my back"