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Daniels discusses state's economy during visit

Friday, July 16, 2010

Gov. Mitch Daniels explains a point to members of the Clay County Chamber of Commerce Friday. Jason Moon Photo. [Order this photo]
Indiana Gov. Mitch Daniels believes Indiana is in a good position to come out of the recession in excellent shape.

On Friday, Daniels paid a visit to Brazil to speak to members of the public and the Clay County Chamber of Commerce at the St. Vincent Clay Hospital.

He informed the audience his belief of the state being in good shape despite the current rough road of the economy.

"In the year we just finished, we took in $1 billion less," Daniels said. "Well, that's life in a recession."

However, despite the numbers, Daniels believed cuts made in the past few years have made a big difference.

He explained to the audience the state operated in the black in 2001-02 but Indiana was in the red from 2003-05.

However, according to Daniels, the state has operated in the black since 2006.

He said state government cut spending by 48 percent and used 52 percent of its reserves to continue to operate in the black.

And he added the budget for the upcoming fiscal year gives hope.

"The budget we're working with predicts revenue will go up," he said. "I think there's a chance but it's still less than it was six years ago. We hope it turns around."

Daniels told the audience Friday the state was broke in 2005 when he arrived in office.

"We slammed the brakes on spending," Daniels said. "We thought (2005) was tight. But look at the last two years."

Continually dipping into reserves is something Daniels said he did not want to do.

"When the savings account is gone, your taxes go up," he said. "We have been working inside extremely hard, cutting at the state government level."

Despite the possible gloom, Daniels insisted Indiana is in much better shape than other states.

"What is going on in other states is catastrophic," he said, adding taxes have not been raised in Indiana while other states have reflected the burden to residents.

"We don't think it's a very good thing to (raise taxes on citizens) during hard times," he said.

Daniels said when he took office, his No. 1 priority was to help Hoosiers "raise their net disposable income."

"I said if we get that right, things will begin to take care of themselves," he said. "Indiana looks pretty good."

He pointed to the state's AAA credit rating, which has made Indiana look more attractive to businesses. Because of this, Daniels said he believes the state will come out of the current recession quicker than other states.

"I always talk about building the best sandbox in America," he said. "I think we're getting there."

He then opened the forum to the public and was asked several questions.

One resident asked how the federal government's health care bill would affect Indiana.

"For the moment, it's not our largest problem," Daniels said.

However, he said the bill could cost Hoosiers billions in the future.

"We will do the best job we can in our two-and-a-half years to prepare for that era," Daniels added.

He also commended Clay County for having one "unified" school system while other counties across the state have multiple systems.

"You do better here," he said. "Your central office costs are cut in half."

Daniels was asked about local governments and his position.

"We're living with a system that was devised in the 1800s," he said.

Daniels pointed to a commission he appointed a couple of years ago spearheaded by former Gov. Joe Kernan.

The commission provided several recommendations to streamline local government and Daniels said some have already been implemented.

"We'll never do all of those things," he said. "But I think we should go further."

Daniels suggested some local government, such as township systems, are "outdated."

"I think some of this ought to be updated," he said.

A handful of residents also wanted to know Daniels position regarding the recent immigration law the state of Arizona implemented.

"Personally, I believe immigration has been positive for our country," he said. "But that doesn't mean we can let people just wander in.

"Arizona had every right to pass it and I think it's very unfair to attack them."

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