Articles
Governor Daniels' Weekly Update: 6/3/08
Weekly Wrap-up
A look at news and events in the Daniels Administration
Volume 2, Issue 84
May 26 - June 1, 2008
Governor announces 2008 Indiana Mr. Math and Miss Science
May 27, 2008- Governor Mitch Daniels made surprise visits to Zionsville Community High School and Terre Haute South Vigo High School last Tuesday to announce the inaugural winners of the annual Hoosier High School Math and Science Awards. Zionsville student Samuel Dittmer was named "Indiana Mr. Math," and Swara Kopparty of Terre Haute earned the title "Indiana Miss Science."
"It's past time to give our top math and science students at least as much praise and recognition as we have always showered on our athletes. Honestly, Indiana and America's future success is far more dependent on young people like Swara and Sam," said Daniels.
Dittmer, the Zionsville Community High School valedictorian, was selected from among 190 candidates by a panel of high school mathematics teachers, university mathematics professors, Department of Education staff, and math professionals. He scored a 800/800 on the SAT II, 5/5 on the Advanced Placement Calculus BC exam, and earned no grade lower than an "A" as a student of Zionsville Community High School.
Kopparty was selected from among 160 candidates by a panel of high school science teachers, university science professors, Department of Education staff, and science professionals. She scored an 800/800 on the SAT Physics exam, completed all science courses with a grade of "A," completed all science and math Advanced Placement exams with a score of 5/5, and has numerous competition achievements.
McGraw-Hill Education is providing each winner with a $2,000 academic scholarship.
The awards were developed with input from the Indiana Science Technology Engineering Mathematics (I-STEM) Network, the Hoosier Association of Science Teachers, Inc. (HASTI), the Indiana Council of Teachers of Mathematics (ICTM) and the Indiana Association of Public School Superintendents.
Governor to make fourth trip to Japan
May 30, 2008- Governor Mitch Daniels will meet with officials from more than a dozen Japanese companies when he travels to Japan for the fourth time the week of June 9.
"From my business experience, persistence and consistency are very important, maybe more so in Japan. We have several ongoing active conversations with Japanese companies that we believe could lead to Hoosier jobs. And, as always, it is good practice to thank our customers," said Daniels.
Honda, Toyota, Mitsubishi and Sony are among the companies the governor will meet with while in Tokyo and Nagoya. He will depart on June 9 and will return to Indiana on Saturday, June 14.
Secretary of Commerce and CEO of the Indiana Economic Development Corporation (IEDC) Nate Feltman, Executive Vice President and General Counsel Chad Sweeney and Director of International Development Steve Akard will arrive in Japan two days ahead of the governor and conduct business meetings. Three IEDC sponsors of the trip, Vectren Corporation, ProLiance Energy and Duke Energy, will send representatives who will meet with their clients while in the country. No state delegation will accompany the governor and IEDC on this trip.
Daniels will arrive in Japan the evening of June 10. The following day he will pay a courtesy call to Nippon Steel Corporation, meet with Fujio Cho, chairman of Toyota Motor Corporation as well as with leaders of Mitsui Mining and Smelting Company, Mitsubishi Corporation and Fuji Heavy Industries.
On June 12, the governor will visit Sony Corporation, meet with Honda President and CEO Takeo Fukui and finish the day with a dinner meeting with KYB Corporation.
The final day of business, June 13, the governor and IEDC officials will travel to Nagoya for several courtesy and job-prospecting calls. The group will also host a Friends of Indiana reception in the city.
Since 2005, Japanese companies have invested nearly $1.5 billion in Indiana, creating nearly 5,500 new jobs. More than 220 Japanese companies operate in Indiana. Following the governor's 2007 trip to Japan, Toyota Boshoku Corporation made the decision to locate a new seat frame production and assembly facility in Princeton, creating more than 300 jobs.
After trips to Japan and Taiwan in 2005 and 2006, Indiana became home to a new Toyota plant in Lafayette, a new Honda plant in Greensburg that will open this fall and employ about 2,000 people and suppliers to those companies, such as TS Tech and Tomasco. Indiana is first in North America in foreign investment for manufacturing jobs, according to a 2007 study from IBM.
Consumer products manufacturer to bring 190 jobs to Elkhart
May 29, 2008- Governor Mitch Daniels joined executives from consumer products manufacturer KIK Custom Products last week to announce the company's plans to consolidate some of its contract manufacturing of personal care and household products in Elkhart, expand its operations and create approximately 190 new jobs by the end of 2009.
The maker of brand name personal care and household products for global companies such as Johnson & Johnson, L'Oreal, Proctor & Gamble, and Unilever, is expected to invest more than $7 million to build and equip three new production lines, three new gashouses and a new compounding operation at the company's existing 1.2 million square-foot facility.
"We continue to outrun all of our Midwestern competitors for new job-creating investments from great companies like KIK Custom Products, but we can't let up for a minute. We must continue to look for and land new opportunities to further strengthen and develop Indiana's economy," said Daniels.
KIK Custom Products, which currently employs 700 in Elkhart, expects to begin hiring line technicians, mechanics, forklift drivers, line operators and packers in the next 60 days, ahead of the start of new production scheduled for late summer.
Governor helps dedicate Benton County wind farm
May 29, 2008- Governor Mitch Daniels joined Benton County residents, elected officials and representatives from BP Alternative Energy North America and Dominion Resources last week to commemorate the construction of the 50,000 acre Fowler Ridge Wind Farm in Benton County.
Phase one of the Fowler Ridge Wind Farm is expected to employ approximately 350 workers at the peak of construction. The project will employ a full-time staff of more than 12 workers to monitor and maintain the 222 wind turbines on-site after phase one has become fully operational.
"This will be one of the biggest wind farms of its kind," said Daniels. "We need more energy, more homegrown energy and cleaner energy. This is a big deal"
The two-phase project will eventually produce enough carbon-free electricity to power more than 200,000 average American homes.
Governor's schedule for June 3-4
Tuesday, June 3
- Governor Mitch Daniels will meet with media members after hearing a presentation from Elkhart community leaders and Ivy Tech Community College officials who want to build a new Ivy Tech campus building in Elkhart. The group wants the governor to know more about the proposed $22.8 million, 70,000 square foot facility which would serve as a full-service campus for the community.
4:15 p.m.
The Greater Elkhart Chamber of Commerce
418 South Main Street
Elkhart
Wednesday, June 4
- Governor Daniels will join BMV Commissioner Ron Stiver and BMV employees to formally dedicate the new South Bend license branch. The new branch is located in downtown South Bend within walking distance of public transportation and other public services.
9:30 a.m.
603 South St. Joseph Street
South Bend
- The governor will give brief remarks and accept the Trailblazer Award at the 16th Annual Corporate Luncheon hosted by the Muncie Chapter of the Indiana Black Expo.
11:30 a.m.
Horizon Convention Center
401 South High Street
Muncie
IN THE NEWS
'The Road to Riches for Pennsylvania'
Barron's Magazine
By Andrew Bary
June 2, 2008
The Keystone State would be better off if it went ahead with a plan to lease the Pennsylvania Turnpike to an investor group. So, why the delay?
Pennsylvania Governor Ed Rendell's proposal to lease the Pennsylvania Turnpike for 75 years to an investor group for an upfront payment of $12.8 billion looks like a great deal for the cash-strapped state. Pennsylvania plans to use the money for repair and maintenance of its aging roads, bridges and public-transit network.
The financial case for leasing the Turnpike is compelling because the highway doesn't make much money and requires significant capital investment. The 498-mile turnpike was the country's first major toll road and superhighway; its first section of 159 miles was completed in 1940.
The turnpike buyers, led by Abertis, a Spanish operator of toll roads, and a Citigroup infrastructure fund, have committed to spend $5.5 billion on capital improvements. Much of that will go toward rebuilding most of the turnpike, including the main 359-mile stretch that crosses the state from the New Jersey to Ohio borders. Only about 10% of the turnpike had undergone reconstruction as of May 2007.
Rendell's agreement requires the approval of the Pennsylvania legislature. The odds of an OK may be no better than 50-50, however, because lawmakers are afraid of the political fallout from selling the famed highway; a 75-year lease is tantamount to a sale. In New Jersey, Gov. Jon Corzine's plan to sell or lease the New Jersey Turnpike met with fierce opposition, forcing Corzine to back down.
The Pennsylvania Turnpike proposal faces better odds partly because a key alternative, putting tolls on Interstate 80, which crosses the state about 60 miles north of the turnpike, is unpopular with residents along that highway and may not gain necessary federal approval.
Leasing the Pennsylvania Turnpike "is a good idea," says Peter Samuel, editor of TollRoadsNews, an online newsletter that tracks the global highway industry. "The state can do a lot with that money that it can't get from the profits of the Turnpike, which aren't large at all."
The Pennsylvania Turnpike privatization would be the largest ever in the U.S., ahead of a $3.8 billion deal for the Indiana Toll Road in 2006 and the $1.8 billion purchase of the Chicago Skyway in 2005. Barron's wrote a cover story on the trend two years ago ("Paying Up1," May 8, 2006), suggesting that state and local governments should consider selling roads because global infrastructure companies are willing to pay enormous prices for American roadways.
Here's why the Pennsylvania Turnpike sale looks so attractive. In the 12 months ended February, the road generated about $600 million in revenue and $360 million in earnings before depreciation expense. The purchase price of $12.8 billion is equal to a steep 21 times revenue and 36 times cash flow. These multiples, while less than the 40 times revenue paid in the Indiana and Chicago deals, are high at a time when most publicly traded companies are valued at under 10 times cash flow. It's also a good price because the credit crunch has made it harder to finance highly leveraged transactions.
PENNSYLVANIA WILL GET only $10.5 billion upfront, because a portion of the lease payment will be set aside to pay off the $2.3 billion of existing turnpike bonds. The effective purchase price is much higher than $10.5 billion, however, because the consortium has committed to spend $5.5 billion on capital improvements. This figure is based on the present value of capital spending over the life of the lease.
Depreciation expense, which totaled $200 million in the Pennsylvania Turnpike's fiscal year ended in May 2007, is no phantom cost, given the wear and tear from the 185 million vehicles that use the roadway each year.
To pay for the purchase, the Abertis consortium plans to put up $6 billion in equity and issue $8.5 billion of debt, leaving itself a sizable cash reserve. The annual interest expense could total $500 million, or nearly as much as last year's turnpike revenue. This alone highlights the lease's appeal to the state, which could generate 5% to 10% returns on the upfront payment, depending on how well it's invested.
The state benefited from strong interest in the turnpike, including a $12.1 billion bid from a Goldman Sachs group. The Abertis consortium's bid was aggressive because of growing global competition for infrastructure projects. Also, the buyers are betting on a 25% toll increase scheduled for 2009. Abertis is assuming turnpike revenue rises next year to $780 million and that cash flow increases to $570 million. This cash-flow projection seems aggressive because it assumes a decline in operating expenses relative to 2007.
The Abertis group may be assuming it can run the toll road more efficiently than the Pennsylvania Turnpike Commission, which long had a reputation for political patronage and no-bid contracts. The commission has been cleaning up its act in the past decade.
ONE NEGATIVE FOR THE buyers is that annual toll increases will be capped at the higher of 2.5% or the U.S. inflation rate. Other road deals allowed tolls to rise in line with the growth in U.S. nominal GDP, which has been averaging 5.5%.
The current car toll of about seven cents a mile is lower in inflation-adjusted terms than the 1940 toll of a penny a mile, or $1.50 for the original 159-mile stretch of roadway. Despite the high toll initially, the turnpike proved far more popular than anticipated as drivers, used to slow, crowded and dangerous two-lane highways, flocked to the four-lane artery. Another novelty: It allowed motorists to traverse the entire length without encountering a traffic light or railroad crossing. The first turnpike section cost $76 million, or less than $500,000 a mile. The current reconstruction may cost $10 million a mile.
The Bottom Line:
Pennsylvania could earn 5% to 10% a year on the $12.8 billion it would garner from leasing its turnpike. That's more than it makes now from the roadway, which needs costly repairs.
The Abertis consortium sees a low-double-digit return on its equity over the life of the 75-year lease. The actual return is uncertain and will be weighted heavily to the back end of the lease. Initial returns could be negative given the heavy interest expense. The Abertis group also is assuming the risks of sharply higher construction costs. That's not trivial, given the doubling of steel prices this year. Turnpike traffic, has been little changed in recent years.
Pennsylvania needs to act quickly because the Abertis deal is binding only until late June. Rendell said he thinks that a decision might not come until September. The legislature would be wise to approve the deal before the Abertis consortium has second thoughts about its lucrative offer.
'Truth Editorial: KIK move shows cooperation'
The Elkhart Truth
June 1, 2008
Gov. Mitch Daniels and Mayor Dick Moore are unlikely political bedfellows. But the two came together Thursday afternoon to help announce the expansion of Elkhart's KIK Custom Products, the former Accra Pac Group.
The city and the state offered the company a series of incentives, including a local tax abatement of about $1.6 million, $470,000 in state performance-based tax credits and up to $137,500 in state training grants from the Indiana Economic Development Corp.
The combination of assistance might have saved the company, which employs 700 people in Elkhart, from moving elsewhere. The City With a Heart was in competition with Danville, Ill., for a $24 million expansion that will mean 190 new jobs paying a decent average wage of about $13.85 per hour. Company officials said $10 million will be spent immediately. The new jobs should be filled within two years, beginning this July.
Our gain is a loss for KIK's Rhode Island facility, however, which will be shutting down and displacing 400 employees. Most of those operations will move here. Nevertheless, the jobs are a gain for Elkhart's economy at a time when things on the manufacturing front aren't looking very strong -- especially in the RV market.
Give credit where credit is due. Moore said during this mayoral campaign that he didn't favor tax abatements. The KIK situation shows that he's willing to use the tool when necessary to keep business growing.
And Daniels and his IEDC stepped in to help as well, boosting the chances for the company to remain and grow here. The IEDC will monitor the company to make sure it meets hiring requirements imposed by the state's incentives.
Another encouraging sign from Thursday's announcement came from KIK president and CEO Jeff Nodland. He addressed safety concerns at the plant, which undoubtedly once again will trouble neighbors as they realize KIK is adding more aerosol lines to its 1.2 million-square-foot facility. As Accra Pac, the company was the site of deadly explosions in 1976 and 1997.
Nodland said the company has made a lot of progress on safety at the local plant, investing $4 million in detection equipment, ventilation, emergency shutdown and fire-suppression systems. KIK has obviously taken some positive steps to keep it from happening again.
The KIK expansion is a positive on several fronts -- it creates jobs in a city that recorded a 6.2 percent unemployment rate in April; it shows that the state is willing to use economic development money to help this area; and it proves that Democrats and Republicans can put their differences aside to help the community.
Benton wind farm celebrated today
The Lafayette Journal and Courier
By Max Showalter
May 29, 2008
FOWLER - Dean Childress could soon be harvesting wind along with corn and soybeans on the 200-acre family farm he operates north of here.
Three of 222 turbines that represent the first phase of the Fowler Ridge Wind Farm project are slated to be placed on his farm, with annual lease payments made by the developers - BP Alternative Energy and Dominion.
"I'm really excited about the whole project. It's good for the community and the environment, and it's putting Benton County on the map," said Childress. He attended today's ceremonies that signaled the start of the county's latest wind farm project.
"They say if (the turbine) doesn't turn we'll get a minimum of $5,000 per unit, per year. It only goes up from there and we all know how the wind blows in Benton County."
The first phase of the wind farm project will produce 400 megawatts of electricity and is expected to be operational by the end of the year.
Phase two is expected to generate an additional 350 megawatts of power, and construction could begin as early as next year.
When fully operational the project will generate enough electricity to power more than 200,000 average homes.
"This will be one of the biggest wind farms of its kind ... and has the possibility to grow beyond what is planned at this time," said Gov. Mitch Daniels, who rode his motorcycle to the ceremony. "We need more energy, more homegrown energy and more cleaner and greener energy."
Fowler Ridge Wind Farm is expected to create more than 300 jobs for construction workers to erect the turbines and approximately 50 full-time positions.
'$900,000 will help blaze trails'
City funds and possibly private donations will supplement money received from state grant
The Indianapolis Star
May 28, 2008
By Francesca Jarosz
Westfield's fledgling trail system will get a boost from a $900,000 state grant that will help build the Monon Trail from 161st Street to Ind. 32.
The city has contracted for a land survey to help determine the entire cost of that leg of the project. About $100,000 from city funds could go toward building it, and more private funding could be needed.
Construction is expected to begin before the end of the year, said Curt Cooley, Westfield Parks Department director.
The Monon in Westfield was among 28 projects to receive part of $19 million in grants from the Indiana Department of Natural Resources. The grants, announced by Gov. Mitch Daniels' office last week, will add 104 miles of trails and 26 miles of land for trails to the 400 miles of multiuse trails in place statewide.
The allocation comes as part of Hoosiers on the Move, a 10-year plan that calls for every Indiana resident to be within 15 minutes of a trail.
"It's a wonderful expression by the state of Indiana to enhance our economic and recreational development," said Westfield Mayor Andy Cook. "It's basically saying to our young people, 'Stay in Indiana.' "
The city is banking on trails to play a critical role in its economic future and the development of its downtown, where the centerpiece will be an intersection of the Monon and an east-west trail called the Midland Trace, which runs south of Ind. 32.
Through grants and cooperation from developers, Westfield has been building the Monon from 146th Street north. Construction on the first leg to 156th Street will begin late this summer with a federal grant and $250,000 from the Lilly Endowment that was awarded in December.
The section from 156th to 161st was constructed as part of an agreement with Precedent Development, which built the Viking Meadows subdivision.
The city plans to extend the Monon up to 216th Street. A loop of the trail from 161st will wind off the path northeast to Union Street to connect with the Midland in Westfield's renovated downtown.
Meanwhile, the city is trying to identify gaps in its multiuse paths and has begun engineering for the first two miles of the Midland from Gray Road to Union.
The challenge, city leaders say, is finding funding. While the downtown effort is handled through a separate group, the majority of Westfield's trail infrastructure relies heavily on land donations, grants and cooperation from developers, such as Precedent, to help put the trails in place.
The parks department, which operates on a thin budget supported mostly by park impact fees, is charged with maintaining the trails.
Cook said he'd like to see a more firm financial plan established to help support the trails and parks system. He said the city could add a property tax levy, but he would like to establish a parks foundation to solicit private funds to support the system.
"We have a very, very basic budget in Westfield, and the basic budget is to provide basic services, which are really public safety oriented," Cook said. "The development of these trails is part of a communitywide effort -- wherever we can find the funding."
'South senior claims 'Indiana Miss Science' award'
Governor visits school to present inaugural award
The Terre Haute Tribune-Star
By Sue Loughlin
May 27, 2008
TERRE HAUTE - Swara Kopparty, a Terre Haute South Vigo High School senior, is the first winner of a new, statewide award aimed at recognizing Indiana's top science student.
Gov. Mitch Daniels made a surprise visit to Terre Haute South on Tuesday to announce that Kopparty is "Indiana Miss Science," the inaugural winner of the annual Hoosier High School Science Award.
The award was kept a secret until Daniels' announcement. "I had no idea . Thank you for this honor," Kopparty said during an assembly in the high-school auditorium. The graduating senior - who has no classes this week - thought she was going back to school to give an interview for her accomplishment as a 2008 co-valedictorian.
Kopparty was selected from among 160 candidates by a panel of high-school science teachers, university science professors, Department of Education staff and science professionals. The winners were chosen solely on the basis of academic achievement and test scores.
Selection criteria included SAT, ACT and Advanced Placement scores, awards and prizes earned and grades in science.
The governor told her, "We are so proud of you. We know so much hard work has gone into this. You have taken what must be tremendous talent that God gave you, but you have developed it . We know that great, great things await you."
The governor said he hopes her accomplishment will serve as an example and help motivate other students to work harder at science and math, potentially leading them to better jobs and a better life.
While Kopparty plans to attend Harvard University, Daniels told her he hopes she eventually comes back to Indiana. "We need all the brilliant, talented, hard-working people like you that we can get," he said.
At Harvard this fall, Kopparty plans to major in physics and minor in economics and computer science. She is an Indiana Academic All-Star; president of Terre Haute South's Asian-American Club; and the recipient of numerous awards in science.
The awards include Intel Science Talent Search semifinalist; Indiana Junior Science and Humanities Symposium champion; and best of show at the West Central Indiana Regional Science and Engineering Fair. She recently participated in the Intel International Science and Engineering Fair in Atlanta.
She has attended the prestigious and highly competitive Research Science Institute at the Massachusetts Institute for Technology and has done research in both chemistry and mathematics.
Additionally, Kopparty was selected to attend the International Summer Science Institute, which will take place this summer at the Weizmann Institute of Science in Israel.
Kopparty enjoys playing the piano and painting in her spare time.
After the award ceremony, Kopparty said she is glad to see academic accomplishment recognized through the new awards.
In describing her success, she said, "Science is a passion of mine." Her future career goals could include NASA or research.
Kopparty is the daughter of Bhaskara Kopparty and Surekha Kopparty. "She worked hard and she was really interested in what she was doing," Bhaskara Kopparty said. The school and her teachers also provided much support, he said.
After the program, Daniels discussed why he instituted the Hoosier High School Science and Math awards. Earlier in the day, he presented the math award to Samuel Dittmer of Zionsville Community High School.
"We need to celebrate academic achievement much more than we have in this state," Daniels said. "We're great at recognizing athletic achievement. Everybody can name Mr. Basketball."
A few months ago, someone asked Daniels why there wasn't a similar award for the state's top-performing math and science students. "In the long run, that's more important to whether Indiana progresses and our economy grows than anything that happens athletically," he said.
He believed the idea to have such an award was a good one, "So we moved on it right away."
He hopes Indiana citizens and students pay attention. "Our future rides so much more on the math, science and general academic achievement of our young people, which is not what it needs to be yet," he said. "Indiana doesn't have a bigger sports fan than I am. But what really counts more than that in the long term is whether more young people do what Swara has done."
Brandon Sorge, one of the judges, said Vigo County had several applicants for both awards, and as a group, they were "phenomenal" and the best group of applicants from any school district in the state.
Superintendent Dan Tanoos described Kopparty as an outstanding student, a role model and a well-rounded person. "This is a fantastic thing for Swara, her parents and the school corporation," he said.
As part of the award, McGraw-Hill Education provided Kopparty with a $2,000 academic scholarship.
The awards were developed with input from the Indiana Science Technology Engineering Mathematics Network, the Hoosier Association of Science Teachers Inc., the Indiana Council of Teachers of Mathematics and the Indiana Association of Public School Superintendents.
'ZCHS valedictorian earns state's 1st Mr. Math award'
The Indianapolis Star
May 29, 2008
By Robert Annis
Just call him Mr. Math.
Zionsville High School senior Sam Dittmer earned another feather in his cap Tuesday morning when Gov. Mitch Daniels surprised this year's valedictorian with the first Indiana Mr. Math award.
Dittmer received a standing ovation from his peers. It was a moment he nearly missed.
Dittmer didn't feel well over the weekend and he almost didn't come to school Tuesday, he said.
"I told my mom, and she said that it was one of the last days of school and it was important to be here," he said.
Daniels also presented a Miss Science award to Terre Haute South Vigo High School senior Swara Kopparty.
Daniels said a conversation with a friend prompted him to create the awards.
"He asked how is it we know the names of all the Mr. Basketballs, but we don't have a Mr. Math or a Mr. Science," Daniels said. "It was a good idea, so we acted on it promptly."
The awards were developed with input from the Indiana Science Technology Engineering Mathematics (I-STEM) Network, the Hoosier Association of Science Teachers, (HASTI), the Indiana Council of Teachers of Mathematics (ICTM) and the Indiana Association of Public School Superintendents, according to a release from the governor's office.
Daniels said he hoped young Hoosiers would aspire to be Mr. Math or Miss Science as much as Mr. Basketball, noting academic achievement is very important.
Nearly 200 students applied to be the first Mr. Math, but Dittmer has the credentials to back up the title. Among his many accomplishments at ZCHS, Dittmer earned several math awards, including first place at an IUPUI math competition last year and a national first place in an individual round of the American Regions Math League in 2006. A three-time qualifier for the USA Math Olympiad, he recently placed 25th in another nationwide math test.
Dittmer's parents, Phil and Janet Dittmer, were among a few who knew about Daniels' visit in advance. While proud of his accomplishments, they praised their son's desire to make the world a better place.
"People like solving problems," Janet Dittmer said. "He's good at it. But he wants to use those skills and talents to help others. He wants to do good in the world."
In addition to the award, Dittmer also received a $2,000 scholarship from McGraw Hill representative Mike Houston. Dittmer will attend Brigham Young University in the fall on a full-ride scholarship.
