Governor urges restraint, says tough choices are opportunties for progress

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By Eric Bradner, January 14, 2009

The governor’s fifth State of the State Address focused on crafting the state’s next biennial budget in the shadows of an economic crisis that has bled state coffers and forced him to slash $763 million in spending already this year.

 

He said the budget he has proposed to lawmakers is “full of hard decisions and unwelcome choices. He said he’d put several of his initiatives – including funding full-day kindergarten and college scholarships – on hold, and asked legislators to do the same.

 

Instead, he asked legislators to seek ways to make the dollar stretch further. He said he wants the state to spend more education dollars “in the classroom” rather than on administrative functions, and backed a set of local government reforms as well.

 

“We must never miss a chance to move, to make improvements, to modernize,” Daniels said. “Doing so while others are paralyzed will demonstrate yet again that ours is a state where change is much more than a slogan.”

 

The 3,000-word speech lasted 25 minutes, and the governor was interrupted for applause 20 times. While most of the speech was serious, several lines drew laughter, and certain sections sought to uplift Hoosiers.

 

In the speech, Daniels set forth a framework for a balanced budget “despite the daunting projection that revenues will still be lower two years from now than we were told to expect in this fiscal year.”

 

His $28.3 billion budget slashes funding for state agencies by 8 percent, higher education spending by 4 percent and cuts or eliminates certain other programs. But it protects current spending levels on K-12 education, public safety, Medicaid and child welfare.

 

As he focused several minutes of his speech on education, he painted flat-lining K-12 spending as a victory for Indiana relative to other states that are forced to cut school spending.

 

“In this environment, protecting education funding at this year’s levels would be a significant victory and we should aim for it,” he said.

 

He refuted calls from Democrats to tap the state’s $1.3 billion reserve bank account, saying the state must safeguard that reserve in case of a greater economic downturn.

 

“If we ran through our balances now,” he said, “where would we be if better times did not return soon?”

 

He urged lawmakers to support a constitutional amendment to make the property tax caps of 1 percent for homes, 2 percent for rental property and 3 percent for businesses instituted last year permanent.

 

He backed local government reform initiatives based on the proposals of a commission chaired by former Democratic Gov. Joe Kernan and Indiana Supreme Court Chief Justice Randall Shepard. Those reforms would replace county commissions with single county executives and would allow that executive to appoint currently elected offices such as surveyor, assessor and coroner.

 

And he said the state needs to spend more of its education money in the classroom. “The goal is smaller schools, smaller classrooms, more and better paid teachers, better academic opportunities for our kids, through lower overhead,” Daniels said.

 

 

House Speaker Pat Bauer, D-South Bend, called Daniels’ address “evasive” and said the governor went for “applause lines” rather than substance.

 

“It’s an artful dodge of the problem [of employment],” Bauer said.

 

Bauer has called for Daniels to use some of the state’s $1.3 billion reserve for initiatives to spur job creation.

 

“We must refocus on jobs and the economy,” Bauer said. “I didn’t hear anything about that, and I will tell you that there are ways of using the money we have to stimulate the economy.”

 

Senate Minority Leader Vi Simpson, D-Bloomington, called Daniels’ speech a “missed opportunity.”

 

“This is a time when we should be stepping forward boldly to put together a stimulus package for the economy of the state of Indiana, and instead tonight the governor has chosen to step backward,” Simpson said.

 

House Republican leader Brian Bosma, of Indianapolis, said Daniels “set the right tone.”

 

“Indiana, as we look around the rest of the nation, is really in an enviable position,” Bosma said. “The governor continues to challenge us to do our best, even in difficult times, and he is so right in that regard.”

 

Senate leader David Long, R-Fort Wayne, backed the governor’s call to resist suggestions from House Democrats that the state dip into the state’s back-up fund.

 

“To suggest now that we dip into the rainy day fund … I think is imprudent,” Long said.

 

Sen. Luke Kenley, R-Noblesville, said that Gov. Mitch Daniels’ speech included all the points Daniels has previously iterated but was surprised by Daniels’ “very specific and very strong” ideas for education reform.

 

“I would say from the reaction of the House Democrats that he’s going to face a challenge on almost every one of those fronts right now,” Kenley said, “and I think that their lack of applause from time to time was not necessarily due to the fact that they won’t be doing those things in the end, but they intend to inject their own ideas into the solutions before they say, ‘We agree.’”