Governor Daniels' Weekly Wrap-up: 4/22/08
Volume 2, Issue 78
April 14-20, 2008
Governor outlines plan for higher education access and affordability
April 16, 2008- At a higher education conference on Wednesday, Governor Mitch Daniels outlined his goal to make higher education more affordable and accessible for Hoosier students and their families. The governor told college and university trustees, faculty and administrators attending a Commission for Higher Education conference that he wants to assure that Indiana high school graduates are guaranteed two years of paid tuition at Ivy Tech Community College (approximately $3,000 per year) or an equivalent amount to attend another Indiana college or university.
Such an opportunity would be available to families earning up to the state's median income, which is about $54,000 annually, and possibly beyond depending on the source and amount of funding that can be assembled for the program, either through new revenue sources or from moving funds from other programs that are not achieving results.
The governor also challenged the state's colleges and universities to consider their own participation in the effort to ensure that the tuition amounts the state provides remain affordable. Ivy Tech, for example, has committed to hold future tuition increases to the rate of inflation.
"We must elevate quickly the number of our young people who pursue education beyond high school. The careers of tomorrow will almost all require training beyond that available in high school today. It is our job to see these students are ready in greater numbers," said Daniels.
"I believe that if we can address the affordability issue, if we can say to every Indiana high school kid that if you graduate from high school, we will provide you the wherewithal to go to our community college, or, it's your choice and your family's choice to have that as a head start on any other school," he said.
The governor invited higher education leaders to offer input and ideas for the concept over the next several weeks.
-651,609 Hoosiers completed high school but have no college education (February 2008 Indiana Chamber of Commerce report Indiana's Adult Education and Workforce Skills Performance)
-524,029 Hoosiers have not completed high school (or equivalent) (Chamber report)
-Indiana ranks 44th among states for share of population over age 25 with a bachelor's degree (Chamber report)
-Indiana ranks 41st among states for share of working-age adults with an associate degree or higher (Chamber report)
-Indiana lags the nation in first-year retention rates at public two-year colleges with only 49 percent staying in school (Chamber report)
-Approximately two-thirds of all students borrow money to pay for college. The average debt load for a student graduating with a bachelor's degree has climbed to $20,000 up from $9,000 in 1993 (Commission for Higher Education, March 14, 2008, "Reaching Higher with Affordability")
-Over the last 10 years (1997 to 2007) tuition at Indiana's public four-year universities has risen an average of 105 percent - over the same period Hoosiers personal income grew by 44.2 percent and CPI (inflation rate) grew by 29 percent (Commission for Higher Education)
-69 percent of Indiana high school juniors from families without a college graduate in the household and 40 percent with a college graduate in the household did not think they could afford to go to college (Commission for Higher Education)
Opportunities for Hoosiers
-Each year of education beyond high school enables an individual to increase annual earnings by 10 percent.
-Better education leads to better jobs. Forty-four of the state's 50 "Hoosier Hot Jobs" in greatest demand require an education beyond high school
-The Indiana Department of Workforce Development estimates that by 2014 there will be an additional 222,410 high-wage, high-demand Indiana jobs requiring a post-secondary degree.
-According to the 2007 Kauffman State New Economy Index, Indiana ranks 16th among the states for the "fastest-growing firms," but ranks 43rd for workforce education level.
State partners with Vigo County to restore wetlands
April 15, 2008- Governor Mitch Daniels this week announced that more than 1,200 acres of floodplain will be restored to wetlands and wildlife habitat thanks to a partnership between the state and Vigo County.
"Our efforts since 2005 have resulted in twice as many protected acres of wildlife habitat than in the previous five years. This joint effort will conserve another beautiful habitat as well as enhance the quality of life for Hoosiers," said Daniels.
Daniels visited West Vigo Elementary School to present the Vigo County Park and Recreation Department with a check for $295,000 on behalf of the Indiana Heritage Trust and the Indiana Department of Natural Resources (DNR) Division of Fish and Wildlife. The funds will assist with the county's purchase of the 1,250-acre Wabash River National Road Wetland Reservation located between Terre Haute and West Terre Haute to develop into a county park.
"Without the cooperation and assistance of Governor Daniels and the state, a project of this magnitude would never have been possible," said Max Miller, chairman of the Wabash River Beautification and Development Commission Wetlands Committee. "This project is a great example of what can be accomplished when you have leaders who care deeply about conservation in our state."
TRW to expand Lafayette operations
April 15, 2008- Governor Mitch Daniels joined executives from automotive supplier TRW Automotive (NYSE: TRW) on Tuesday to announce the company's plans to expand its manufacturing operations here, creating 200 new jobs by 2011.
The FORTUNE 500 company, whose wide range of auto parts are sold to more than 40 major manufacturers worldwide, will invest more than $27 million to improve its current facilities and equip a new 300,000 square-foot facility to manufacture steering gears for heavy-duty trucks.
"We continue to outrun all of our Midwestern competitors for new job-creating investments from great companies like TRW, 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.
With a product line ranging from braking, steering and suspension systems to a full line of safety restraints and electronics, the company posted more than $14.7 billion in sales in 2007, and it is among the world's top ten suppliers of auto parts.
"The business-friendly environment and the proven success of our workforce and UAW partners made locating this new investment in Indiana a sound choice," said Dan Noe, plant manager of TRW's Lafayette operations. "We appreciate the support of both the state and local governments and look forward to welcoming our new employees to the TRW family."
The auto-systems supplier employs more than 66,000 people worldwide and more than 21,000 in North America. TRW will begin hiring manufacturing associates for the new Lafayette operations late in 2008, ahead of the facility's planned opening in the first quarter of 2009.
Building off a foundation that stretches back to the wooden wheels for Henry Ford's Model T, the company has grown to include more than 200 facilities in 27 countries around the globe. A 1960s merger with Lafayette-based Ross Gear and Tool established TRW's Indiana operations. TRW's new facility will be the second in Lafayette, which is currently the world headquarters for TRW's commercial steering division.
"Tippecanoe County is proud to have a role in TRW's continuing legacy in our community," said Tippecanoe County Commissioner John Knochel. "Tippecanoe County believes in TRW and recognizes this global company as a driving force in our labor market."
IN THE NEWS
The Martinsville Reporter-Times
April 15, 2008
By Ronald Hawkins
Editor's Note: This is part one of a multi-part series written from an exclusive interview with Gov. Mitch Daniels
In his Statehouse office, Gov. Mitch Daniels rotates the photos of private individuals who've made significant contributions to the state, but the painting of Mother Theodore Guerin stays in the center of a wall that overlooks the governor's office.
"You couldn't consciously make a dishonest decision with her looking at you," Daniels said of the Catholic saint, who was canonized in 2006.
Despite the saint's presence, the decisions the Republican governor has made in his first three-plus years in office haven't been without controversy. Privatization of state functions, road proposals and changes in the state's tax structure have drawn kudos and criticism.
In the fall, Daniels will face a Democratic challenge in his bid for re-election from either Indianapolis architect Jim Schellinger or former congresswoman and undersecretary of agriculture Jill Long Thompson.
Daniels presents visitors to his office a sheet of six color-coded maps that show Indiana as having one of the most attractive business climates in the nation. The cost of doing business in Indiana is among the four lowest in the United States, according to one. One map shows Indiana as one of the best states to do business in and others show it with the lowest unemployment rate in the region and as having the top tax climate.
Another map lists Indiana as one of the three top states in attracting jobs and investments, according to Site Selection magazine's competitiveness awards for 2006.
When Daniels travels to Japan and elsewhere to pitch the advantages of operating businesses in the Indiana, the governor uses what he calls a sound bite - "Midwest skills with Sunbelt prices."
Indiana has gained 52,600 jobs since Daniels took office, despite a decline in industrial jobs.
"The whole world, including China, is losing manufacturing jobs," Daniels said.
More products are being manufactured, the governor said, but with technology advancing, it's taking fewer people to make them.
"Indiana is doing better than anybody around at maintaining or even adding manufacturing jobs," the governor said.
Indiana is the only state in America that has added automotive manufacturing jobs, Daniels said. The new Honda and Toyota plants along with Cummins Engine expansion have moved the state from sixth to second or third in automotive manufacturing jobs.
The state, however, can't just look to manufacturing jobs for future employment, Daniels said.
"We have to have a multi-part strategy if we we're going to provide the right kind of jobs and opportunities for our kids," he said. "As hard as we're working on manufacturing, we're working just as hard on distribution and logistics."
Amazon just announced it would be adding a 1,200-job distribution site close to Lebanon, the governor said. The state has gained 10 major distribution facilities that will take advantage of Indiana's great roads.
The state also is working hard at life sciences as an alternative to lost jobs, he said.
"Look at what happened at Thomson," Daniels said. "The world went by old fashioned picture tube television. It's nobody's fault. Technology moved beyond.
"So the Thomson plant in Bloomington closed. In that plant, Cook Pharmica is moving. That's a microcosm of what has to happen to the Indiana economy.
"We've got to be better than the competition in making a home for new jobs. ...We're in constant competition, but we're winning."
Government, however, can't keep a losing business in business, Daniels said.
"At its best what state government can do is build the best environment for new jobs," Daniels said. "That's what those maps say."
The task of attracting more business to the state "will never be done as long as one person is unemployed or underemployed," Daniel said, "but we're dramatically improved over where we were three years ago."
The state doesn't have enough money now to build Interstate 69 through Morgan County to connect with I-69 on the northeast side of Indianapolis, but the revenues generated from the lease of state toll roads is generating revenues that will make that possible, the governor said.
"It's enough to make the project possible when it was impossible before," Daniels said. "We have enough money in the bank to build very substantial pieces and it will be finished - as any project would be - out of future revenues as they arrive.
"Never in the history of the state have we ever had all the money in the bank. We've got a third to 40 percent already in the bank."
That money should take construction east from Evansville to north of Crain Naval Depot, the governor said.
"After 40 years maybe of talking about it, it starts this summer," Daniels said. "You talk about continuous improvement, there's not a better example than INDOT.
"INDOT had been doing things the old way. That meant never having enough money to go around. Now they have a brand new situation with billions in the bank."
Interstate 69 will be a big plus for the state, the governor said.
"Of course. If we didn't think so, we wouldn't do it. You look up the corridor of (Interstate) 65 and we just announced thousands of jobs up by Lebanon.
"Look at Honda where they located, right on (Interstate) 74. Three-quarters of Indiana has superb interstate access. ...
"The one quadrant that's left out is the southwest. It's not a coincidence that that's our poorest area. ... It's about lifting up a part of our state that needs it. It's fallen to us to get the job done."
The planned path of Interstate 69 through Morgan County was finalized by Gov. Frank O'Bannon.
"I didn't plan that route," Daniels said. "If it came up to us to pick a route, we might have picked something different, I don't know. ... We didn't pick the route, we didn't write the federal law."
If the route or the way to pay were significantly changed now, it would "back that up for 10 to 20 years," the governor said.
A revival of the Indiana Commerce Connector proposal that the governor introduced in November 2006 won't happen anytime soon, Daniels said.
"Maybe some distant day, I don't know," Daniels said. "At some stage, it will make sense for through truck traffic not to go through Indianapolis. ...
"I think there's a major chance of job growth if you directly connect the interstates we have, but here and now's not the time. We heard the folks say it's not the time."
By Ronald Hawkins
Editor's Note: This is part two of two in a series written from an exclusive interview with Gov. Mitch Daniels
If Gov. Mitch Daniels is re-elected, improving education will be his top goal, the governor said.
Some educators have said they are worried that the shift of revenue from property taxes to the sales tax will hurt education.
"They shouldn't worry," the governor said in an interview this week. "State government now pays 85 percent. It will still be a top priority."
A lot is spent on education, about $1 1,000 per child, but how it's spent needs to be examined, the governor said.
"I'm for that (spending)," Daniels said. "We should make it more as we can afford it.
"The huge opportunity in education is to spend more of it on education. We're spending 60 percent outside the classroom."
If that number is lowered by reducing overhead, it could help the state reach the governor's goals of more teachers, better paid teachers, smaller schools and smaller classrooms, he said.
"Construction is part of it," Daniels said. "We have built - without realizing it - the most expensive, custom-made, elaborate buildings in America.
"We're way above the national average in size and cost per square foot. We've begun challenging that as new ones come along and in the last couple of years they've started to come down quickly toward that national average."
Daniels said school construction costs are the biggest driver of higher property taxes. Construction costs, however, aren't the only problem, he said.
"We've got the third worst ratio in America of teachers to non-teachers on school payrolls," Daniels said. "We've got a whole lot of other people doing something other than teaching kids."
Improving teaching quality is crucial, the governor said.
We need to take every step we can to improve teacher quality. "You can have a rundown building and tattered textbooks, but if you've got a great teacher kids are going to learn," Daniels said.
While some states were raising taxes for road and other improvements, Indiana has been able to avoid increasing gas taxes and has cut property taxes, the governor said.
"Thirty-two states have raised gas taxes, but we won't," Daniels said. "We have billions in the bank without a penny of tax increase or a penny of borrowing."
A Democratic proposal that calls for no sales tax on gasoline when its price is $2.75 or more per gallon is worthy of consideration, the governor said.
"That would take legislative change," Daniels said. "I'm always looking to reduce taxes. You just saw the biggest tax cut in lndiana history. ..."I will tell you that some people imagine that there's a big windfall of state revenue, but there isn't. People are scrimping on other things or they're buying less gasoline. So sales tax revenue is a little below projections. ...
"It was no easy thing to balance the budget of this state from bankruptcy three years ago. ... We're running government more like a business. We want to be very careful not to go back in the red."
It was a cooperative effort between Democrats and Republicans that brought about property tax reform, the governor said. And that's what made the recent short session of the Legislature pleasing.
"Every taxpayer should be (pleased)," Daniels said. "When I got here, the old timers said we don't do anything in these short sessions. "I said 'Why? We've got a lot to do, we've got a backlog of issues here.' Both our short sessions have been action packed and this one was historic."
Indiana's property taxes are now among the lowest in the United States, he said. Additionally, the legislation approved provides protection for taxpayers with caps, which only a couple of states have.
Cooperation between Republicans and Democrats is "the best way to get anything done," Daniels said. "That's what's been happening. The third and fourth consecutive honestly balanced budgets, new health care plan for the uninsured, the Healthy lndiana Plan, property tax reduction, all done with great, large, bi-partisan majorities."
The short session began work on the Kernan-Shepard "Streamlining Local Government" report that had 27 recommendations for changes in local government, most of which called for consolidation of county offices and schools. Daniels said he thought consensus might be reached in 2008, but it would be 2009 before any action was taken.
The 2008 short session, however, saw the Legislature act on the recommendation that state government absorb the cost of child welfare as part of the property tax bill.
Eliminating township assessor positions also was recommended and that was acted on. There had been about 1,100 people assessing property in the state, the governor said, but that number will be reduced by approximately 1,000.
The report also recommended consolidation of 9-1-1 emergency services.
"They took a long step to consolidation of 9-1-1 services," Daniels said. "You know we had one county in the state with 19 9-1-1 services. Forget the wasted money, we've had people lose their lives because they called 9-1-1 and got routed to the wrong district."
This year, the legislature passed a law that requires all counties to consolidate into a single 9-1-1 call center by 201 2. For example, in Morgan County, there are three dispatch call centers, one with the Mooresville police, one with the Martinsville police, and one with the Morgan County Sheriffs Department.
The vast majority of the recommendations should be enacted "because we have too many of everything and they all cost the taxpayer money," Daniels said. "It's led to waste and confusion.
"I've been all over the state for five years. I hear in one case we're closing this school because they're aren't enough kids, but they're building a huge one a mile away. Why? Because it's two different school districts.
"You have this fire station and there's another one three blocks from here and they're both buying new trucks. Why? Because it's two different districts. ... You go to most states in this country and they'll say, 'What's a township?"'
In Mooresville, two fire stations for Brown Township Fire and Rescue are both less than six blocks from the Mooresville Fire Department station. The Washington Township Fire Department is located less than a quarter of a mile north of the Martinsville Fire Department's city service area.
After 150 years, it's time to overhaul that system, the governor said.
Daniels campaign funds
Gov. Mitch Daniels' re-election campaign has more than $5.2 million cash on hand, according to the Daniels' campaign.
Daniels' campaign reported raising $1,546,061 from 2,808 contributions in the first quarter of 2008 in a report filed with state election officials Tuesday morning.
The Daniels campaign's $5.2 million cash-on-hand is $2 million more than the campaign had at this point in 2004.
Ninety-five percent of all contributions this quarter came from in-state contributors. The campaign has received more than 59,000 contributions since its inception in 2003.
Privatization and improving state services
Daniels said he wants to see continuous improvement in government services and in the use of taxpayer dollars. "We want to maximize our strength," Daniels said.
The Daniels administration is regularly looking at performance reports in order to improve those services, he said.
"Every department now we measure," Daniels said. "In business, where I came from, we used to say if you're not keeping score, you're just practicing."
Daniels said he was pleased, for example, that the average visit to the Bureau of Motor Vehicles has been reduced to less than 10 minutes.
"Next year I want to be better than that," the governor said. "Customer satisfaction now is 97 percent. Next year we'll set the bar at 98 or 99.
"Continuous improvement is the rule of life if you want to do well in this life."
For the state to do well, the goal should be to determine how services can best be performed. Privatization is sometimes the answer, he said.
"First of all, there is nothing new about it." Daniels said. "Government has been hiring private companies building roads, schools, for a long time.
"With us, it's purely practical. If the best way to improve the worst child protection system was hire 800 caseworkers, we did. I thought the state police needed to be stronger, we hired 260 more of them. "
On the other hand, the private sector can in many cases serve lndiana better. Daniels said, "If we can save tens of millions of dollars by hiring Hoosiers in the private sector to cook food in prisons or sort and deliver mail or provide health care in our jails or do computer work in our worst in America welfare system, if we can do that and improve services and save tens of millions, why wouldn't you?" The idea is to use the private sector to save taxpayers money.
"We've saved a bucketful," Daniel said. "There's only one reason to oppose that and it is you love big government and you love patronage. But that's the old system and we came here to reform."
Daniels is proud of many things his administration has accomplished during its first three plus years, but the one thing he's most proud of is a change in morale, he said.
"There's a long list, but I think as opposed to favoring one of the children over another, I guess I'll say I hope by doing dozens of things we've begun to build a sense of optimism and can-do spirit," Daniels said. "We can grab our problems by the lapels and make a positive difference. I hope we're becoming a more optimistic, somewhat less cynical state."
The governor keeps a list of mistakes he's made in side drawer of his desk, he said.
"I get them out for a laugh and remind myself not to repeat them," Daniels said. "We knew we'd make mistakes, but we were going to act.
"Our entire approach has been to take problems head-on, do the best thing we can see to do, recognizing some of those things will be second or third best, if we have to go back and improve them, we'll try something different. ... We know we're not perfect, we never expected to be."
The presentation of the lndiana Commerce Connector idea was something that might have been done better, he said.
"Our mentality is mistakes are inevitable unless you are so timid you just pull up the covers and don't anything," Daniels said. "That's what got lndiana in the fix we were in.
"People who can't name their mistakes interest me. They're either not being honest with themselves or they've just been too timid to ever try to do much. What you want to do is get it right more than wrong, try not to repeat a mistake and learn from it.
"Keep a sunny disposition and get on to the next challenge."
April 20, 2008
By: James Boyd
Gov. Mitch Daniels wants to guarantee some Indiana students the chance to pursue higher education by offering them $6,000 over two years to help them work toward a college degree.
The idea, which is in its developmental phase, would ensure Hoosier students could obtain at least two years of paid education at one of the state's Ivy Tech Community College branches, or they could apply the aid to any other college or university in Indiana. Money would be guaranteed to families who earn less than $54,000 annually, the state's median income. How the state will come up with that money remains unseen, though for Daniels, the ideal scenario could entail the privatization of the state's lottery system.
Daniels introduced the idea this past week at a higher education conference at IUPUI.
"We must elevate quickly the number of our young people who pursue education beyond high school," Daniels told university presidents, trustees, and faculty members. "I believe that if we can address the affordability issue, if we can say to every Indiana high school kid that if you graduate from high school, we will provide you the wherewithal to go to our community college, or it's your choice and your family's choice to have that as a head start on any other school."
The $6,000 would pay for two years of study at any Ivy Tech location, or could be used toward any other Indiana school, public or private.
At IU-Bloomington, the aid would amount to almost half of the annual tuition cost for an in-state student. This year, tuition was $7,837 for an Indiana resident. But with IU's Matching the Promise campaign, students in lower-income families are already paying a deeply discounted sticker price. This past fall, students from about 1,000 families with annual incomes of less than $50,000 paid an average price of $341. And that included room and board. Daniels' idea to privatize the lottery died last year, but he said he may bring it back to the table. It could generate between $1 billion and $2 billion annually if adopted, according to figures from the governor's office.
Jane Jankowski, Daniels' spokeswoman, said the governor wants to hear input from higher education officials. "He wants to get more input to sort of flesh out the idea and then move it forward," Jankowski said. "His thought process is to have legislation ready to go (next January) to be introduced then." She said the funding source will have to be identified, but it may not come from privatizing the lottery. "The assignment we have is to sort of explore our revenue options," she said. "It may be that we have some other programs in state government that are underachieving, and we might be able to utilize funding there. It's something we'll be looking at."
Lafayette Journal & Courier
By: Max Showalter
With Gov. Mitch Daniels participating, a ceremony this afternoon officially announced plans to expand the TRW Commercial Steering Systems' presence in Lafayette.
The 106-year old company will continue its manufacturing operations on the north side of the city and will spend a combined $29 million to boost production at current site and to equip an additional 200,000-square-foot facility in the U.S. 52 Industrial Subdivision. The new site is along U.S. 52, just outside Lafayette's southern city limits.
The new facility will create 200 new jobs by 2010. The hourly employees will be represented by United Auto Workers Local 531.
Much of the work will center around assembling a new gear for Ford Motor Co.
"The business-friendly environment and the proven success of our work force and UAW partners made locating this new investment in Indiana a sound choice," said Dan Noe, plant manager of TRW's Lafayette operations. "We appreciate the support of both the state and local governments and look forward to welcoming our new employees to the TRW family."
Daniels said this afternoon's announcement is the latest in a string of favorable economic developments for Indiana.
"We continue to outrun all of our Midwestern competitors for new job-creating investments from great companies like TRW, but we can't let up for a minute," he said.
"We must continue to look for and land new opportunities to further strengthen and develop Indiana's economy."
The Indianapolis Star
April 16, 2008
By Erica D. Smith
Two steelmakers today said they will expand their existing I/N Kote operations in New Carlisle, creating 100 jobs by 2010 and doubling the production of galvanized steel.
Luxembourg-based ArcelorMittal and Japan-based Nippon Steel Corp. will invest more than $240 million to build and equip a 240,000-square-foot facility in Northern Indiana.
The facility will house a continuous galvanized steel line that will be able to produce 480,000 tons a year.
The steelmakers plan to break ground on the project later this year with eyes toward opening in 2010. Hiring of operations and maintenance associates will start later this year.
I/N Kote currently employs more than 200 in New Carlisle.
"This is a great day for I/N Kote, our employees, the city of New Carlisle and the state of Indiana," said Chris Richards, general manager of I/N Kote. "This is an exciting opportunity for all of our stakeholders."
I/N Kote produces about 450,000 tons of galvanized and galvannealed steel annually. With the new facility, it will supply cold-rolled coils from ArcelorMittal's Indiana Harbor and Burns Harbor operations, plus ArcelorMittal and Nippon Steel's operation in New Carlisle.
The Indiana Economic Development Corp. offered I/N Kote up to $4.8 million in performance-based tax credits and up to $100,000 in training grants based on the company's job creation plans. St. Joseph County will provide property tax abatement.
The expanded I/N Kote facility will preserve 400 jobs at ArcelorMittal's operations in East Chicago and Burns Harbor, officials said.
"It's yet another big win for the Indiana economy, one with special excitement because it involves one of our long-standing leading corporate citizens," Gov. Mitch Daniels said in a statement.
Daniels last year met with ArcelorMittal's CEO, Lakshmi N. Mittal, as part of the governor's European trade mission.