By Eric Bradner, Evansville Courier & Press
INDIANAPOLIS - Linking the state's fiscal management now to its potential for job growth in the future, Gov. Mitch Daniels painted Indiana as primed to emerge from the dour economy in better shape than its neighbors Tuesday night in his sixth State of the State address.
"The better we handle the people's business today, the more business we will have for our people, and the more opportunity for our children, tomorrow," the Republican governor told a joint session of the General Assembly.
The governor avoided launching major new initiatives and pitched smaller changes instead as he struck the familiar chord of disciplined taxing and spending.
That won him praise afterward from GOP leaders. But Democrats hammered Daniels, who said initiatives to create jobs, which one in 10 Hoosiers currently out of work need right away, were notably absent.
The only item Daniels highlighted for the first time Tuesday night is a proposal to prevent schools from advancing third graders whose reading skills are not up to par on to fourth grade.
Daniels criticized "social promotion," saying: "If a school accomplishes nothing else in a child's decisive first years, it simply must enable him or her to read and comprehend the English language."
Under the legislation he was advocating - Senate Bill 258, which is scheduled for a hearing today in the Senate Education Committee - third graders who fail the language arts portion of the I-STEP exam would be held back. Exemptions would be made for some, such as special needs students and those who aren't primarily English speakers.
Scott Jenkins, Daniels' education policy director, said that 24 percent of Indiana's students failed the language arts section last year.
The bill would have schools evaluate students each year starting in kindergarten and would require districts to establish intensive reading intervention programs to help those who are behind grade level. It does not include funding for such programs, but Jenkins said the Indiana Department of Education would provide assistance.
"Sending an illiterate child on to higher grades is unfair to the next teacher, damaging to our state's future, but cruelest of all, disastrous to the young life being blighted by that failure," Daniels said.
He spent much of the address - 13 of the first 15 paragraphs in his 51-paragraph prepared text - comparing Indiana's positioning to other states, arguing that those here are better off than their neighbors.
"A tea bag's strength is revealed in hot water," he said. "So far, we have stood up to this recession's heat with a strength reflecting the sturdy character of Hoosiers."
Still, he acknowledged that the recession has dragged tax revenues into the gutter, forcing budget cuts that have included $150 million from Indiana's public colleges and universities and $300 million from K-12 education.
Daniels added: "Odds are the next year won't be much easier."
That's why Democrats wanted jobs programs.
"The governor always does a good job being a cheerleader for the state," said Rep. Trent Van Haaften, D-Mount Vernon. "I think we're at a time where you need to be less cheerleader and more coach."
"I heard absolutely nothing new in this speech at all," said Senate Minority Leader Vi Simpson, D-Ellettsville. "I heard no hope for the people who are unemployed."
Republican Rep. Mark Messmer of Jasper said he was pleased with Daniels' message of avoiding tax increases and keeping the state in the black.
"It's important to recognize that government doesn't create jobs; government creates the environment for job growth," Messmer said. "He's committed to that, and I'm pleased to hear it."
Daniels asked lawmakers to take a money-saving step by passing legislation to combine the administrative functions of two state pension funds, one for state employees and one for teachers.
"All that would change is the amount paid out in investment fees, when we bid the job as one large bundle," he said. "If someone's Wall Street bonus is a little smaller next year while we save Indiana taxpayers $40 or $50 million dollars, I think we can all live with that."
He also asked lawmakers to lend a helping hand to single parents by requiring casinos to confiscate the gambling winnings of deadbeat parents.
That proposal was initially opposed by the Casino Association of Indiana because it would create delays and tamper excitement. But the agency's head, Mike Smith, said Tuesday that his organization is in talks with the governor's office, indicating that the opposition might be softening.
Most of the issues Daniels touched were familiar, and his comments on them ranged from offering thanks for work already done to trying to jump-start initiatives that have appear to have stalled.
He praised lawmakers for passing constitutional property tax caps. He endorsed ethics reform legislation currently gaining steam.
He pushed along redistricting reform, an idea gaining momentum in the General Assembly, saying politics should not be part of the legislative map-making process.
"Too many times in American history, legislative boundaries have been drawn to favor haves over have-nots, ins over outs, incumbents over newcomers," he said. "The worst examples of gerrymandering and politician protection can be found in other states, but a glance at Indiana's current lines shows that they are nothing to be proud of."
Daniels encouraged lawmakers to continue toward local government reforms he has long advocated, based on the recommendations of a blue-ribbon panel chaired by former Gov. Joe Kernan and Indiana Chief Justice Randall Shepard, an Evansville native.
He said lawmakers should eliminate the three-member township advisory boards in Indiana's 1,006 townships - the purpose of Senate Bill 240, which has already advanced past the Senate Local Government Committee - and shift their duties to the county level, where decisions "can be made rationally and for the maximum benefit of all citizens.
"In the process, we can save millions and delete 3,000 more political offices for which there is rarely any competition, anyway."
Daniels pushed for changes beyond the township level, as well.
He suggested that lawmakers shift municipal and school board elections to the fall of even-numbered years in order to reduce the number of elections Indiana holds.
Doing so "would not only boost turnout for these important offices, it would save tens of millions of dollars for our hard-pressed local governments," he said in his prepared text. "This may be, as we say, a short session, but we can still take a long stride toward modernization of our top-heavy and expensive local government."
Daniels said if decision-makers in his office and in the General Assembly maintain low taxes and fiscal discipline, in a year, Indiana will be a place where "the bright, the enterprising, the young, the created are gravitating."
House Speaker B. Patrick Bauer, D-South Bend, said prior to the speech that he hoped the governor would advocate tapping into reserve funds set aside for future transportation projects in order to boost public works funding now, creating jobs in the process.
Daniels, though, did not include such an initiative. Before the speech, his chief of staff, Earl Goode, noted that Indiana is spending more than $1.4 billion gained from the lease of a Northern Indiana tollway, plus $438 million in federal stimulus money, on road construction and improvement this year.
Goode said the federal government has approved, and state and local governments in Indiana are currently working on, 854 projects - most in the nation. That wasn't enough to placate Bauer.
"What [Hoosiers] do not need to hear is another recitation of that tired old saying: 'We're doing better than our neighboring states.' What is happening in Michigan, Ohio and Illinois isn't helping people in Indiana," Bauer said.
He said House Democrats still believe in spending some of the state's savings on a public works program now.
"It will provide good-paying jobs for Hoosiers now, and provide the types of upgrades to our roads, streets, bridges and utility systems that can pave the way for increased economic development in years to come," he said.
House Minority Leader Brian Bosma, R-Indianapolis, said Indiana should make "the private sector thrive" in order to create more jobs.
"Indiana is leading the Midwest in so many categories that despite the difficult times, as the governor said, we really are a 'peony in a parking lot,'" he said.
Senate President Pro Tem David Long, R-Fort Wayne, said Daniels' speech rightly focused on Indiana's positioning to attract new businesses.
"We are distinguishing ourselves from our neighbors in the Midwest," Long said. "We are doing something about jobs."
Senate Tax and Fiscal Policy Chair Brandt Hershman, R-Wheatfield, approved of Daniels' message.
"When you consider Indiana's relative position as compared to states like California and New York who are basically in fiscal ruin, Indiana comes out very well indeed," Hershman said.
Senate Appropriations Chair Luke Kenley, R-Noblesvile, said he thought Daniels' speech was "aggressively positive."
"When you're a state that is struggling, it is good to see a leader who is confident and looking forward," Kenley said.
House Assistant Minority Leader Eric Turner, R-Cicero, shared his support for the speech, calling it "terrific."
"The governor has talked consistently about being the first in the nation out of the recession and leading the way ... providing for the future for jobs, and the way you do it is keeping taxes low, keeping your budget in check and making it attractive for business and industry to come to Indiana," he said.
Rep. Scott Pelath, the Michigan City Democrat who is No. 2 on the House Ways and Means Committee, said he was in "disbelief" over some points the governor made.
"Spending time on wonkish matters was not what I wanted to hear from him tonight," Pelath said. "The governor said nothing about job creation. We can always find points to agree, but it's hard to get through what he didn't do well."
Rep. Peggy Welch, D-Bloomington, agreed with Pelath's assessment of the speech.
"The governor definitely knows how to turn a phrase and he knows how to paint pretty pictures," she said. "He was talking to us about bold moves, but I didn't hear anything bold about how we're going to create jobs in the state."
The Franklin College Statehouse Bureau contributed to this report.