Articles
Governor Daniels' Weekly Update: 7/23/08
A look at news and events in the Daniels Administration
Volume 2, Issue 90
July 14-20, 2008
State's credit rating raised to AAA by Standard & Poor's
July 21, 2008-For the first time in the state's history, Indiana's credit rating has been raised to AAA, the highest rating assigned by the independent credit rating agency Standard & Poor's Ratings Service (S&P).
The upgrade from AA+, the state's rating since January 2006, "reflects the state's continued strong management that has led to the property tax reform that has realigned state and local spending and is not expected to impact the state's long-term financial performance. As well, the state's commitment to attract diverse jobs through its economic development efforts has translated into a shift away from traditional manufacturing employment," said the credit agency.
"The experts have certified what Hoosiers know, that Indiana has turned around fiscally and is turning around economically. But our own history and the current tumbles of other states show that continued careful management is key, because it's too easy for these gains to slip away," said Governor Mitch Daniels.
The rating increase means, for example, that 228 of the state's school corporations can borrow money at a lower interest rate.
The report said the administration has made significant financial management changes and strengthened budgeting practices. S&P cited four areas in issuing the AAA credit rating: stable and diversifying economic base despite continued manufacturing concentration; a conservative biennial budget that will add to the fund balance by the end of the biennium; property tax reform that has clarified the state's financial responsibilities, and low overall debt levels.
Only nine other states have a AAA S& P rating: Florida, Georgia, North Carolina, Delaware, Virginia, Maryland, Minnesota, Missouri and Utah. (See map)
Between 2002 and 2004, Indiana's rating was lowered twice. Beginning in June 2005, it has been raised three times.
Governor directs additional funds to state's Education Rainy Day Fund
July 18,2008-Governor Mitch Daniels has directed that $83.4 million be transferred from the state's general fund to the state Education Rainy Day Fund. The school reserve fund had $316.6 million, and with the transfer, the Education Rainy Day Fund, created by HEA 1001, now has $400 million. This amount exceeds the target set by the Indiana General Assembly during the 2008 legislative session and has occurred 2 1/2 years early.
Daniels said the state could make the transfer now because of the state's stable fiscal condition.
"We are determined that in difficult times, Indiana will remain in solid shape and will protect vital services, starting with education," said Daniels. "So in view of our solid condition, I have instructed the budget office to add about $84 million to the rainy day reserves for education. This goes beyond what the legislature had requested in the property tax bill of earlier this year and it takes the action 2 1/2 years sooner than was required."
Bureau of Motor Vehicles wins customer service award
July 20, 2008-The Indiana Bureau of Motor Vehicles recently received the 2008 Customer Service Excellence Award from the American Association of Motor Vehicle Administrators. The award goes to a state agency that most improves quality, convenience, and accessibility.
"I just don't know of a place anywhere in this government, or frankly in any state, which has effected so dramatic a turnaround," said Governor Daniels.
The BMV has achieved many successes over the past three years. The average wait went from 28 minutes in 2006 to just under nine minutes now. In addition, customer satisfaction has reached 97 percent.
"Let's not be satisfied," Ron Stiver, commissioner of the BMV, said. "We're going to continue to improve, we're going to continue getting better at what we do."
Governor Daniels spends the weekend on the road
July 19, 2008- Governor Daniels racked up some mileage on his motorcycle this weekend. He traveled through the northern part of the state on Saturday before making his way down to Putnam County on Sunday afternoon.
The governor spent time in the northern part of the state Saturday, making stops in Miami, Fulton and Marshall Counties.
The governor began the day in Peru, where he rode his motorcycle with members of the Indiana Patriot Guard in the Circus City Festival Parade. After the parade, he visited with local residents before heading north to Fulton County.
While in Fulton County, the governor made a stop at a farmers' market in Rochester. He also visited with Rochester residents and had lunch at the Flagpole Drive-In.
Governor Daniels ended his day in the late afternoon with a visit to the Culver Lake Fest on Lake Maxinkuckee. This year marked the 25th anniversary of the annual Marshall County event.
On Sunday, the governor made a stop at the Putnam County 4-H Fair in Greencastle. This year marked the 54th anniversary of the annual fair, and the theme for 4-H members was "Showing American Spirit." While at the fair, the governor enjoyed lunch and visited with fairgoers.
'State boosts rainy day fund for education'
Evansville Courier and Press
July 18, 2008
By Bryan Corbin
In light of the state's budget surplus, Gov. Mitch Daniels today ordered an additional $33.4 million transferred into the state's Education Rainy Day Fund, on top of $50 million already scheduled to flow into that account, to protect against future funding shortfalls.
The state has rainy day reserves set aside for education and other purposes to guard against a downturn in funding. "We are determined that in some difficult times, Indiana will remain in solvent shape and will protect vital services, starting with education," Daniels said today in his Statehouse office.
In the House Bill 1001 property-tax relief package that passed in March, the Indiana General Assembly ordered that $50 million be transferred from the state's general fund to the Education Rainy Day Fund no later than December of 2010; but Daniels' action today accelerates that by two and a half years and adds an additional $33.4 million.
"The General Assembly said, 'Move $50 million from your checking account to your savings account by December of 2010,' and that's what he did, early," said Ryan Kitchell, director of the Office of Management and Budget.
That brings the total in the Education Rainy Day Fund to a total $400 million.
Thursday, State Auditor Tim Berry released state budget figures showing that at the end of the fiscal year, June 30, Indiana still had a surplus of $321 million, in contrast to surrounding states whose state governments are in deficit.
"Although we finished the (fiscal) year in solid shape, much better than in our competitors (in other states), '09 shapes up to be at least as difficult as '08 was," Daniels said today.
State earns S&P's top credit score for 1st time
Indianapolis Star
By: Jeff Swiatek
July 22, 2008
Indiana has earned the highest credit rating from Standard & Poor's for the first time, an achievement that should save the state and its public school systems millions of dollars a year in interest on bonds.
The upgrade to an AAA rating by S&P, a rating held by only nine other states, was announced Monday by the governor's office. The new rating should pay its first benefits Thursday, when the state refinances some of the debt on Lucas Oil Stadium.
The financing charge on the $850 million in variable-rate notes for the new stadium and Indiana Convention Center expansion should drop by about a tenth of a percentage point because of the credit upgrade, said Ryan Kitchell, director of the Office of Management and Budget.
That should save the state $850,000 a year over what it would have paid on the stadium and convention center debt under the previous rating, Kitchell said.
The stadium and convention center debt is among $3.46 billion in current state municipal debt -- which also pays for prisons and state park lodges -- that should be reduced through lower interest rates when refinanced.
School systems also should enjoy lower interest rates on their bond issues, because their ratings are tied to the state's creditworthiness. State universities are separately rated by S&P and other credit companies, so they won't share in Indiana's improved credit score.
Gov. Mitch Daniels portrayed S&P's higher rating as a sign that his administration has improved the fiscal management of state government and strengthened Indiana's economy since he was elected four years ago.
"I am just thrilled with the news," he said. "This is the best indication I can think of that we are making progress on those two fronts."
It's the third time S&P has upgraded the state's credit rating since Daniels took office.
"Many other states have passed us going in the opposite direction," said the Republican governor, who is up for re-election this fall. "It doesn't take much" for a state's credit rating to be cut, he said.
"One reckless budget and even a short time of anti-growth economic policies can undo all the progress that's occurred," Daniels said. "It's easy to fall into the trouble our neighbors and two-thirds of the states are in."
S&P cited Indiana's recently altered property tax system, which capped home property taxes at 1 percent of assessed value; the state's low debt; and a stable economy with a greater diversity of job types as some of the main reasons for its upgrade.
Jeff Harris, a spokesman for Daniels' Democratic opponent, Jill Long Thompson, said the upgrade "is certainly a positive thing for the state. However, I think there are more important landmarks to look at."
He said the state's economy has worsened, with Indiana suffering the nation's biggest jobless rate gain in June. The state's unemployment rate climbed to 5.8 percent in June, up from 5.3 percent in May.
Plus, Harris said, "Mortgage foreclosures and bankruptcies are up. They tell you a very different story from the one Mitch Daniels is trying to present."
The upgrade by S&P, the largest provider of independent credit ratings for governments and public agencies, comes after a rigorous analysis of the state's finances.
"They came in and asked a lot of questions," Kitchell said of S&P's analysts.
'BMV's customer satisfaction rate on the rise'
The Chicago Tribune
July 20, 2008
By Mike Smith, AP Political Writer
The Bureau of Motor Vehicles used to be the butt of jokes when it came to Indiana government agencies, with a reputation for low morale, long waits and scandal.
Even efforts to improve things drew scathing criticism. Thousands of people were outraged when more than 20 license branches were closed in 2005. A conversion to a new computer system in 2006 resulted in weeks of problems and hours-long waits at some branch offices.
State officials now say the agency has turned a corner.
The average wait time at the state's 140 branches has declined from 28 minutes in 2006 to less than nine minutes now. And through thousands of surveys of BMV customers, about 97 percent so far this year have rated their experience at a BMV branch as either excellent, above average or satisfactory.
BMV officials say that's partly due to new options for motorists, including appointments available at many branches, enhanced online services and 176 non-branch locations where at least some services are offered.
"I just don't know of a place anywhere in this government, or frankly in any state, which has effected so dramatic a turnaround," Gov. Mitch Daniels told about 300 BMV employees at a recent town hall-style meeting. "Indiana BMV -- turnaround of the century!"
Those employees applauded when Daniels announced that Indiana's BMV had won the 2008 Customer Service Excellence Award from the American Association of Motor Vehicle Administrators. The award is presented to the state agency that most improves the quality, convenience and accessibility of motor vehicle services.
The turnaround began when Daniels appointed Joel Silverman to take over the BMV shortly after taking office in early 2005.
Silverman said he had inherited a broken agency. Morale was low, computer technology and record-keeping were antiquated, many branches were dingy, and the agency was reeling from a scam in which bogus visas and passports were used to acquire Indiana licenses.
He replaced several top officials and implemented a dress code that requires branch workers to wear khakis and navy blue shirts. Worker training was intensified.
Silverman also closed more than 20 branches in 2005 to shift money and manpower elsewhere in hopes of improving efficiency and reducing wait times at some of the state's busiest branches. Thousands of people, including many legislators, denounced the closings, saying they would require people to travel longer distances to a branch.
In 2006, conversion to a new computer system led to long lines at branches. Police had difficulty accessing accurate driver records and county taxes weren't distributed on time.
It was so bad that Daniels and Silverman apologized to many angry motorists through letters, e-mails and phone calls. Silverman later resigned, but not before he initiated something the agency had not been doing -- surveying its customers.
Those surveys ask people who have visited branches to rate such things as staff friendliness, staff's ability to provide knowledgeable service and how their visit was overall -- excellent, above average, satisfactory or needs improvement.
The percentage rating overall service as satisfactory or above has increased from 84 percent in 2006 to 94 percent in 2007 to 97 percent from January through June of this year. It dipped to 73 percent in August 2006, a peak time for problems with the new BMV computer system.
BMV officials attribute the rate of satisfaction to initiatives largely designed to reduce wait times.
People can visit the agency's Web site and check current wait times at branches. They also get a $5 discount for renewing registrations online and can set up online accounts to conduct several transactions. And there are now 165 auto dealerships that offer onsite vehicle titling and registration.
Current BMV Commissioner Ron Stiver said such options have reduced branch visit times, which are measured from the moment a person checks in with a branch employee to the time the transaction is completed.
"If I had to pick one that is the strongest predictor of a customer's overall satisfaction, it is visit time," he said.
Last Tuesday morning, the true waiting time for many people at a large Indianapolis branch was more than nine minutes. At 9 a.m., 20 people waited in line to get checked in -- time not reflected in the way the BMV calculates visit times.
But Tuesdays and Saturdays are typically the busiest days at branches, and July 15 was one of 19 staggered deadlines this year for renewing registrations.
Paula Vandevanter of Indianapolis said she spent about 30 minutes in the branch to register and title a new car.
"But once you got up to sign in, it was a very short wait period," said Vandevanter, who rated her visit as above average.
"They were very friendly, not like it used to be," she said.
Holly Peele, manager of the BMV branch in Columbus, said morale was high among its 22 employees.
"The comment cards that come back to the commissioner are very important to them," she said. "That's why if you come to Columbus you're going to get excellent customer service."
Like Daniels, Stiver commended those at the recent BMV meeting for their work. But he also challenged them to raise the bar.
"Let's not be satisfied," he said. "We're going to continue to improve, we're going to continue getting better at what we do. So is anyone satisfied yet?"
Employees responded with a resounding "No!"
"Good answer, guys," Stiver said. "Great job. Get back to work."
