Indiana Gov. Mitch Daniels hosted an end-of-the-year conference call with several media outlets Monday afternoon. Topics of discussion ranged from infrastructure projects, to school funding and the expectations for the upcoming General Assembly session.
One topic germane to Southern Indiana residents was a possible change in the Ohio River Bridges Project that could reduce the number of lanes on the proposed east-end bridge from six to four, and still require local residents to pay tolls to cover a gap in funding.
Ohio River Bridges Project
While Daniels said everybody agrees they would like the lowest tolls possible to help fund the Ohio River Bridges Project — the Louisville and Southern Indiana Bridges Authority has set a target rate of $1 for frequent commuters — finding ways to rescope the project to reduce the cost was a topic of discussion when he met with Gov. Steve Beshear, D-Ky., last week to discuss the plan.
Indiana has already earmarked more than $1.1 billion toward the project — which is coming from Major Moves funding by leasing the Northern Indiana Toll Road — for the $4.1 billion project to construct an east-end bridge, downtown bridge and reconstruct Spaghetti Junction in Louisville.
Combined with Kentucky’s funding and federal dollars that are already in place, an estimated budget shortfall of $2.2 billion exists and will be covered by tolling vehicles crossing the new structures, the bridges authority proposes.
To likely lessen the amount being paid in tolls, and the overall cost of the project, Daniels said a couple of the changes would be on the Kentucky side of the project, but included the discussion of a cost-cutting measure that would reduce the number of lanes planned for the east-end bridge. The original plan for the project called for a six-lane bridge and approach — three lanes in each direction — but it could be reduced to a four-lane bridge.
No decision has been made on officially changing the project and Daniels said he is “very sensitive” to the concerns that have been brought up by the residents of Southern Indiana in relation to the bistate bridge project.
Addressing the budget
A priority for Indiana, as it is for many other states, is ensuring the state’s budget for 2011 stays in line. The state is in better fiscal shape than many of its neighbors, but it has not escaped its share of cuts.
Daniels said that the cuts made this year and essentially freezing spending in the state’s budget has set Indiana up well to avoid making additional cuts. Indiana has a base of state spending that if the national economy doesn’t turn back into recession, the state revenues should catch up, he said.
“I’m optimistic that we’ll be able to continue to manage our fiscal affairs,” he said.
Local governments, however, including Clark County have been struggling to deal with a shrinking budget and many local governments have complained about financial constraints related to the imposition of the state’s property tax caps.
Daniels said recently in an Associated Press report that he would back a plan that would allow local governments in Indiana to ask for a state takeover and declare bankruptcy if the municipality runs out of funds. The bill would allow for the local government — if the state acting as an emergency manager cannot address the finances — to be allowed to seek federal bankruptcy protection.
Indiana law doesn’t allow Hoosier governments to declare bankruptcy.
When asked about the proposed change Monday, Daniels said, “it seems like a useful precaution.”
Another plan Daniels expects to address next year also affects how local government operations may be conducted.
Kernan-Shepard recommendations
Daniels said he plans to revisit some of the recommendations offered in the 2007 Kernan-Shepard report.
“We’ll start where we left off,” he said, referring to four initiatives that died in the House of Representatives and will be reintroduced when the legislature reconvenes next month.
The four initiatives Daniels referenced included a conflict of interest safeguard, which would prohibit employees of a local government unit from profiting off of their position or serving as elected officials within the same local government unit. Conflict of interest also is related to a second action, nepotism, in which local government officials have placed family members or friends in positions of power.
The third topic that likely will be addressed is the elimination of all township government, which would transfer the responsibility for administering the duties of township government to the county executive, according to the report. Daniels admitted that there has been some difficulty generating public support for the idea, due to a small, outspoken group that has stalled moving forward with the plan.
The final recommendation that will likely be addressed once the next legislative session convenes is related to shrinking government, converting the county executive into a single individual instead of the three-member body — known as the commissioners.
“It will get a hearing,” he said. “You can count on it again being emphasized in the state of the state speech.”
Education
Also a repeated emphasis in Daniels’ administration is education reform, including changes to more rigorous teacher and administrator evaluation systems and accelerated graduation opportunities for high school students. The changes are central pieces to Indiana’s 2011 Education Agenda and were passed by the Indiana Education Roundtable in early December, according to the state’s website.
The roundtable’s recommendation in favor of revamped teacher and administrator evaluations calls for an annual performance review based on measures of content knowledge, instructional skill, classroom management, student academic achievement and leadership effectiveness, according to the website.
Positioning high school students for post-secondary education was also a goal outlined in the educational reforms.
Daniels said the educational changes are cost-neutral and some provide a cost reduction. And for universities that were forced to make cuts because of state reductions, he said it may have been something that was overdue.
“Sometimes [cuts required] leads to businesses or governments taking actions they should have taken before,” he said. “I think they should do more of what they did pretty well last year,” he said referring to how state universities addressed cuts in 2010.
Growth of institutions such as Ivy Tech Community College across the state prompted questions about moving similar institutions to a different type of funding, but Daniels said it would remain status quo for now.
“We’ve been trying to bring about a more ... holistic approach to higher education,” he said.
But post-secondary education costs are often secondary to pleas made by local school districts asking for additional funding revenue. Those requests for funding have faced some opposition, with initiatives in wealthier districts failing that in the past have commonly passed school referendums.
A referendum for an added tax in Clarksville Community School Corp. was voted down earlier this year.
“If there is a trend, it’s a little more skepticism about school’s demands for more and more money,” Daniels said.
Addressing unemployment
A final topic Daniels touched on was reforms slated for Indiana’s unemployment fund. The changes proposed would put the fund back in the black in the first year, which is 2012, and paying back what is borrowed in the next several years, he said.
According to an AP report, since 2000 the state has gone from a $1.6 billion surplus in its unemployment fund to borrowing $1.9 billion from the federal government to keep making payments.
Likely solutions to closing the funding disparity are raising the rate businesses are charged, increasing the amount workers pay into the system and possible cuts to unemployment benefits.
“If you’re going to have the highest benefits, you’re going to have to have the highest premiums,” Daniels said in the interview with AP. “If you want moderate premiums, you have to have moderate benefits.
“You’re going to have to bring those two together somewhere in the middle.”
But the position of the state of Indiana is an enviable one, compared to some of its neighboring states.
“People are beginning to notice now, some states are headed for a seemingly impossible corner,” Daniels said.
He added that he would be against Indiana providing a bailout for other states, which may be called for because of its stronger financial position.
The state’s growth was also supported by the numbers returned in the 2010 census.
“Indiana grew faster than any state from Iowa to Maine,” Daniels said. “I’m not sure what that means, but that can’t be bad. You can’t grow an economy with a shrinking population.”
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