Daniels: Indiana facing challenges, not crisis

INDIANAPOLIS – An expected reduction in school funding, a desperate need for government reform and a cry for an immediate stimulus plan did not stop Indiana Gov. Mitch Daniels from trying to calm fears during his annual State of the State Address on Tuesday.

Indiana, Daniels said, will continue to “show America where the best ideas come from.”

Daniels reassured the legislature that Indiana was merely facing challenges, not a crisis, and must deal with issues, not emergencies. Daniels guaranteed there would be no tax increases and that he would preserve the state’s rescue funds.

The governor, who is just starting his second term, compared the current economic situation to the floods of last spring and maintained that Hoosiers must persevere through the trouble.

But with a struggling unemployment fund and reluctance to tap into the state’s reserves, Indiana is not as economically comfortable as the optimistic Daniels claims, House speaker Pat Bauer said.

“It is not a rain,” Bauer said in reference to the governor’s metaphor. “It is a downpour.”
Daniels presented his vision of reducing school funding to establish an education system with smaller schools, smaller classes and more qualified teachers. He said it is essential that, even though funds will be cut, money still go to classroom learning.

“It is unacceptable that $0.39 of every dollar is spent outside of the classroom,” Daniels said. “Put the children first.”

Indiana, which spends $11,000 per K-12 student, ranks fifth nationally in education spending. States including New York, Florida and Virginia have started cutbacks similar to Daniels’ proposed plan, he said.

A system offering an automatic tax refund was also proposed, hoping to provide stability for Hoosiers. Daniels said once the government reaches the predetermined tax revenue level, all additional tax dollars would be returned to citizens.

Given the economic recession, Daniels said, now would be the right time to examine the merit of such a system.

With many distraught about the current economy, Daniels was abrupt to applaud the legislature’s execution in lowering the property tax by more than one-third in 2008. Indiana is better able to handle the recession, Daniels said, thanks to the revised property tax and the two tightest budgets in the state’s history.

Daniels also made reference to the idea of Indiana having a “crippling inferiority complex,” feeling as if it is simply “filling up the space between Cincinnati and Chicago.”

After disclosing figures on Cincinnati’s deficit and hinting at political scandal in Illinois, Daniels told listeners that the Hoosier state is not a second-tier one.

“Who here feels inferior about that?” Daniels asked.

But the state’s economy is not as secure as Daniels proclaims, Bauer said. He warned the effects of an automobile manufacturer’s collapse would be devastating, referencing the closing of a Chrysler plant in Kokomo one month after it opened.

In his closing marks, Daniels declared that Indiana would be a “state in motion” in 2009.

“Indiana, where change is much more than just a slogan,” Daniels said. “This is a year not for intermission, but for encores.”