MUNSTER | Indiana Gov. Mitch Daniels is optimistic about the state changing for the better.
During a lengthy briefing with Times editors Wednesday, Daniels weighed in on such topics as the controversy surrounding the state's approval of a permit for BP's Whiting Refinery to increase discharges into Lake Michigan -- and the criticism the decision brought from Illinois politicians -- and government reform, transportation, education and taxes.
He even gave his picks for a Chicago Bears-Indianapolis Colts Super Bowl rematch.
The governor said his top three priorities for the next legislative session are simple.
"Property taxes and ditto, ditto.
"The immediate goal this year is to provide greater protection and relief, particularly to those who got extraordinarily high bills," he said.
Daniels said the problems surrounding property taxes could prove to be a blessing in disguise.
"For the first time, a lot of people are energized and can relate to it as something (in government) that pertains to them," he said. "I hope that they will be energized to take a lot closer look at how money is spent in their community and to understand that as spending goes up, my taxes go up."
On taxes and government reform:
Daniels appointed former Indiana Gov. Joe Kernan and Indiana Supreme Court Chief Justice Randall Shepard as co-chairmen for the Indiana Commission on Local Government Reform. The commission is charged with providing recommendations for a more cost-effective local government structure. The group's proposals are due to the governor by the end of the year.
Daniels said he does not want to get ahead of the commission's work but does believe there are problems in the school and township structures that must be addressed.
"We have too many school districts in the state," he said. "We could be paying teachers more if there were less money in the administration."
Currently, 60 cents of every education dollar in the state is going to the classroom. The national average is 68 cents, he said, with the highest states hitting the 80-cent mark.
"Any progress here would be huge," Daniels said.
A 1 percent increase in funding to the state's schools could equal the hiring potential for 1,500 additional teachers, he said.
"Anything we could do in this direction would be tremendous," he said.
Daniels said he has heard suggestions that the state take over Gary's failing school system, but isn't certain how that would work.
"What does it mean to take over the school system?" the governor asked. "How do I know it would be better if we did? That's one thing I confess to not knowing very much about."
He also said some serious questions need to be asked about the township government system, calling it, "highly suspect."
The inequities in the property tax system must be addressed, he said, but where will the trade off be?
Daniels continues to favor income tax as a method for property tax relief throughout the state, saying, "The straight and most immediate route to property tax reduction is to use the income tax route."
With the local-option income tax, every county has the option, he said.
Daniels said on average, a 0.5 percent increase in the local-option income tax translates to a 30 percent reduction in property taxes.
"If we want significant property tax relief right now, that's the way to do it," he said. "You won't get real big relief in any place that doesn't use it."
On criticism from Illinois politicians about the BP permit:
Indiana has been under fire from some Chicago area politicians -- including U.S. Sen. Dick Durbin, D-Chicago, U.S. Rep. Rahm Emanuel, D-Chicago, Chicago Mayor Richard M. Daley and Illinois Gov. Rod Blagojevich -- over its permit allowing BP's Whiting Refinery to discharge more pollutants into Lake Michigan.
Daniels said he has not spoken personally with any of his critics.
"Maybe I should," he said.
Daniels said he was "very surprised" by the negative reaction to the permit approval.
"I thought everyone agreed this was a good deal," he said.
Daniels continued his defense of the Indiana Department of Environmental Management's permit ruling.
"They are more interested in a clean environment than anyone you'll ever meet," he said. "They put BP through the ringer for two years. ... Who made the decision? Devoted, career public employees who are trained in the science and are deeply committed."
Daniels again used the analogy of speed limits to describe the BP discharge issue, saying the refinery will be below the legal limits for the discharges and therefore should not and can not be penalized under current law.
"We don't normally arrest people for going 20 in a 30-mph zone in this state," Daniels said.
"If 30 mph is suddenly discovered (to be) too fast and it should be 10, let's have a good, scientific reason why."
Science and the facts, Daniels said, take a back seat "when U.S. congressmen are on the loose."
"Some of the things are just so counterfactual," he said. "Chicago puts far more into the water than BP would."
Some Michigan lawmakers now are jumping on the Indiana-bashing bandwagon, but Daniels said he has not heard from them personally.
"They've got to clean up their own act first before they start lecturing us," he said.
Daniels said it is the responsibility of the state, BP and third parties like the press to educate the public on the science involved in the permitting process.
On standardized school construction:
Daniels said he is looking into what some states refer to as Little Red Schoolhouse bills to see how standardized school construction might work in Indiana.
In general, the policies involve a number of state-approved, standardized designs for school buildings that can be modified within approved limits to meet the needs of an individual school corporation.
The benefit, Daniels said, is eliminating the costs involved in designing the buildings.
The state's average cost of a school construction project is 48 percent higher than the national average, he said.
"Without anybody quite noticing, we fell into the practice of building them huge and building them with frills and it's a huge issue," he said. "There's clearly an element of keeping up with the Joneses going on."
The governor said many small, struggling towns are getting into the business of building giant, extravagant schools as well.
"If they've got one spectacular building, it's the school," he said. "You can't say build the coffee bar and a bigger football field than the town next door and say, 'By the way, I'm mad about my property taxes.' You can't have it both ways."
The governor stopped short of saying he would support or initialize legislation requiring standardized construction for schools, saying only, "I'm looking at it."
On the Toll Road privatization:
Daniels said the transition has not been as smooth and he would have hoped.
"I don't like the delays some people are experiencing as the company is implementing the I-PASS," he said. "The signage isn't good enough. People wind up in the wrong lane. They've got to do better and I've sent them several messages about that."
He said he has heard that some of the unions were upset that not all of the work was being handled by union workers, but their arguments are unfounded.
"It's a trivial, little portion," he said. "It's Hoosiers doing the work. It's not 'Buy American' preference. It's 'Buy Indiana' preference. They are pouring a lot of money into this state, as we told them to do."
Daniels said he got a call from Indiana State Treasurer Richard Mourdock last month reminding him that it was the anniversary of depositing the Major Moves check.
"Indiana collected more in interest in one year than the Toll Road collected in 50 years," Daniels said.
On the Illiana Expressway:
Daniels said he knows where the Illiana Expressway project went wrong.
"Too suddenly suggesting a complete loop," he said. "That's what spurred most of the yelling and I understand that."
Daniels said traffic congestion is about more than just being late to work.
"It's a major economic issue in this country," he said, citing the economic loss from poor productivity and increased fuel costs.
The way to fix that, he said, is to divert truck traffic to faster routes to get them out of the way of the average driver.
He said he would like to continue looking at options to have the expressway go all the way to Interstate 94.
"I hope we can keep the conversation going," he said.
"I think we came to a good outcome," he said. "Let's set aside the eastern portion for now. Let's look at different ways you could do it. My suspicion is the western part makes a lot of sense."
On Methodist Hospital's Gary campus:
Daniels weighed in on a proposal to privatize the Methodist Hospital's Gary campus with the construction of a new hospital and partnership with Indiana University Northwest for the development of a four-year medical school and teaching hospital.
"There may be a better alternative, but that's a model we know can work and can work very well," the governor said.
On a Bears-Colts Super Bowl rematch:
Daniels is friends with the families of Chicago Bears quarterback Rex Grossman and Indianapolis Colts quarterback Peyton Manning.
He said he is a fan of both teams, but thinks Chicago might have the edge this year.
"I'd love to see them both get back there," he said.