Daniels reflects on his era

The Republican is set to exit politics, move at least part-time to West Lafayette and take over as Purdue University's next president on Jan. 14, when his predecessor, Gov.-elect Mike Pence, is sworn in.

He said he's spent each of the eight years trying to address a concern that "Indiana was drifting or slipping, and that we needed to get in motion against a lot of big problems."

During his last weeks in office, Daniels invited a small group of reporters into his office for an exit interview.

"We just felt responsible for trying to push in directions we thought would be in the public interest. Now that's not the only way, of course, to approach this office. Maybe what was right for our time will not be right for other times," he said. "There was a lot of work to do and we were not a very innovative state. It was time for a lot of action."

He discussed topics ranging from his early days in office to education and transportation. He even pulled out the "Oops List" he keeps in his desk.

"I've never found 'oops' a hard word to say," Daniels said. "If you never need it, then either you're not trying anything and you never made any mistakes, or, you know, you're just not being honest with yourself."

Here are key excerpts from that hour-long conversation:

Question: Governor, when you think back over eight years, is there anything you wish you could go back and tell first-term, first-year Gov. Daniels that would have made things better or easier?

Answer: In the first year? First year was a pretty good year.

We ran with a very explicit, very detailed agenda and we went and did most of it. The ethics reforms, the economic development restructuring at least began then, obviously addressing the fiscal problems of the state and many more – daylight savings time, and on and on.

Now, I made the proposal, the sort of debt reduction proposal, about an income tax surcharge, which clearly didn't happen. But, you know, I don't regret having suggested it.

We knew the state had big fiscal problems. We didn't know how deep they were until after the election. We began to get a better sense. We were upside down on the budget. What I didn't realize was how much money they owed the schools and the universities and so forth. And I was in a hurry.

So, that didn't work out, but I don't think it did any lasting damage.

If you look at that list of 70 odd things (we ran on) from 2005, there aren't very many in the "did not succeed" column.

Q: Mike Pence always says that he wants to take the state from good to great. Now, obviously to do that he has to work on what you've left him. Is there anything left for him to take from good to great?

A: Sure there is. There always will be, but I think that we always operated around here on the notion of continuous improvement and when a department – if a department reached a certain target we set for them, we tried to raise it the next year.

A long, long way to go, yes, of course – so I think that's a good formulation. My only comment would be that when he's done with the job, I hope he's encouraging somebody to emphasize the areas where we still need improvement.

Q: Are there any areas you wish you personally had more of a chance to work on?

A: I think this increasingly visible shortcoming in terms of workforce skill. It's not a new subject, but I think it's being more and more clearly a perceived need of the state. Number one, most of the other factors that make a state attractive to business, we're pretty good at now.

Obviously, you can always get better, but cost and infrastructure and taxes and regulatory climate, all these things – we're as good as the competition or better in most of those, but we clearly aren't there in the match of skills to jobs, and it's become more visible because of the recession and the non-recovery that we're in. Unemployment remains high, so we're seeing the job openings that we still can't fill.

It just drives home the fact that with that many people looking for work and that many jobs available, we've got a real problem. So that's one, and there's nothing easy about that one. Jobs and income is a long, long-term project.

Q: Seems to me like it takes a decade for the first real assessment of governorship. That puts us in the 2020 range. The education reforms that you got through in 2011 and the administrative stuff you had done a couple years prior, how long do you think it's going to be until we have a realistic measurement of what the impact is?

A: Your time frame's probably about right. I never give up that some things can have a near-term effect. For instance, the (student) dropout bill that we passed in '06 or '07 has made a very immediate impact. We had a 10 percent improvement in graduation rates.

So, there's one. Some things you can do don't have to take 10 years.

I'll give you another one: The 'credit creep' bill we passed this year. At Purdue University, I'm proud to say on their behalf, two-thirds of the degree programs brought their programs down to 120 hours (needed to graduate).

Now it might have been two or three hours or it might have been more, but that's going to mean a lot of kids finishing a semester sooner, which means less expense. And that didn't take 10 years. I hope we're going to see a similar pattern at seven schools.

I think the social promotion bill that says that students have got to be able to read before leaving third grade, and assuming it's not somehow undone, has a chance to … have a measurable short-term impact.

But, those are exceptions, I guess. I agree with you that, in education, in particular.

I mean, look, we just got the full-day kindergarten, finally. Big deal to me. People talked about it for decades and so we finally got that done, and I think that will make a big difference for kids. But it will be years before that child who got full-day kindergarten, before the full beneficial effects are visible.

And on a lot of the reforms we just did, the first question is will they stick or will they be, somehow, subverted. If they stick, then they've got to be well implemented. And, so, those are big ifs.

Q: Everybody's trying to figure out what the future of transportation funding is for all these bridges and roads and projects that need funding. Any advice you might have for them?

A: It's a really big question for the nation and Indiana has spent 10 years in the sunshine, so to speak, in a unique zone where we're building at all-time record rates. As people keep noticing, we're going to rejoin the rest of the 49 states here in a little while at normal funding levels, and normal isn't very good.

I think a big part of the answer – it's been for us – is other people's money. That is to say, public-private arrangements. Look how we're building the East End bridge over the Ohio (River). It's going to get built faster, by the way cheaper, but it'll be built on someone else's capital. It's going to be paid for with user fees. Sometimes that could be the answer.

If people will be simply a little bit open-minded to new approaches like this – which I've been pointing out for six years, are completely customary in the rest of the world; only in America do we think the only way to build a road is the gas tax – it may not be a complete answer, but that's got to be part of the answer.

It's been very vexing to me that at least up until now, the people who have had power over this in Congress have been so determined to keep their clutches on the situation that they've prevented a lot of important infrastructure from being built.

Q: Should Indiana have a death penalty? And talk about the times that matter has been on your desk.

A: I've said before that, even though I haven't held office, you have general sense of things you deal with, but two exceptions, big exceptions, things you don't think about, are soldiers' funerals and death sentences. Anybody that says they don't feel some ambivalence about that subject, I don't understand.

I think it's, if you don't feel conflicted about it, on one side or the other, maybe you should think a little harder. Where I came to rest on that one, sometime ago … was that it was not for me or any one person to make that judgment. It needs to express the moral sentiments of the state through the democratic process and, for now, at least in this moment, or the last I've seen, a very large majority of our fellow citizens believe that, at least occasionally, in the most heinous of cases, that that penalty can be appropriate. So, I didn't think it was for me to substitute any view I had for that.

As a practical manner, this subject is diminishing. I'm not sure when the last time … any Indiana court or judge or judge and jury imposed the death penalty on somebody. If it's happened in the last few years, I've missed it.

Future governors will have few, maybe none of these to deal with.

Q: Give us an overview of the health of individual Hoosiers. We've had the smoking ban, we've had the federal health care law that's coming, the Healthy Indiana program, childhood obesity. Give us an overview from what you're seeing from the unique perch that you've had.

A: This probably belongs on the list of answers to … areas where we just didn't get enough done.

We have tried, this business of personal health habits and so forth. Now, it wasn't a surprise, but that doesn't make it any less discouraging.

I've reminisced many times. We started what's the now INShape Indiana program and with great fanfare, we had celebrities and athletes, because a lot of people were interested in this. We had a great thing over at NIFS (National Institute for Fitness and Sport), where I worked out for the last eight years, and I told everybody that day, you know, of all the changes we try to bring, and all the initiatives that we launch, this will be the least controversial and the hardest.

In other words, I don't know anybody who doesn't think, in general, that this was a good thing to work on, but you're just really up against it, when you try and move large, large, numbers of people to change the habits of a lifetime.

The recent data we've seen is pretty discouraging. Some of it didn't ring quite true. The last data we saw had smoking rates really have changed in Indiana. They had 26 percent. I haven't seen that in three years. I think that's way behind. The last data public we had was close to 20. Still above the national average, but definitely down.

Anyway, I don't dispute the fact that we're just not as healthy a state as we should be or need to be. But, you know, we've done everything we know how to, we can think of, let me put it that way. Someone smarter is going to have to work on this.

Q: Has right to work hurt the unions in any way?

A: Not that I'm aware of. Not in any way.

Obviously it doesn't hurt the right to unionize, the right to collectively bargain, totally unaffected. We pointed out, when the bill was being discussed, there are a number of right-to-work states with higher rates of unionization than Indiana had without such a bill. So, I mean, no, I'm not aware that it has. That's not its intention.

Q: Why is it that Hoosiers underestimate or sort of downplay and are more humble than other states, like a New York?

A: All I know is that our state, I always used to say, is like an under-performing business. We've got assets.

In '04, I would sometimes say, "It's a good thing we're not publicly traded." By the way, this is interesting because I used to use Michigan as the example. You wouldn't today. This was just eight years ago. But I would say, "It's a good thing because, you know, Michigan would make a hostile tender offer and they'd buy us and consolidate the headquarters to Lansing."

And I said, "What do I mean? We've got great assets, like balance sheet, and a lousy income statement. We've got great assets. We've got location, low costs, great universities, but we're not performing."

Q: What have you added this year to your "oops" list?

A: Was the question disappointments or mistakes? Because they're both here.

Something I should have mentioned more often, we really worked on the recidivism rate at DOC (Department of Corrections) and it's only come down about a point.

So there's one. There's a lot of things going on, a lot of moving parts there. But there's one that, from the very beginning, we've worked and worked. We've had more education programs and we have more work-release programs and we've got more substance abuse programs, but it's just been really stubborn.