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Mitch’s major moves

Governor leaves lasting legacy, not all good

Gov. Mitch Daniels’ eight-year tenure as governor will be remembered for the extraordinary number of significant changes he orchestrated that will affect Hoosiers for many years.

The breadth and depth of his initiatives may well be unmatched by any governor, certainly those in the post-World War II era.

Daylight saving time. The Toll Road lease. A state-run health insurance plan for lower-income Hoosiers. Privatization of certain government welfare duties. New resources to protect children. Property tax caps. “Open-shop” legislation inaccurately described as “right to work.” Strict identification requirements to vote. An end to wide-open slot machine gambling in bars. And big changes in education policies.

But his great success in enacting his agenda won’t necessarily translate into great improvements in Hoosiers’ lives, particularly in the long run. Many of his accomplishments carry costs of unintended consequences, some that Hoosiers have already paid for and many more that will became apparent later, perhaps even decades from now. For example, the 75-year Toll Road lease was designed to fund road projects for just 10 years – and has fallen short of even that goal.

The hard-charging governor has a reputation for direct talk, which tweaked his opponents but served him well in pushing big ideas through a sometimes-combative legislature. Hoosier politicos will be watching to see how Daniels adapts his approach after he begins duties as president of Purdue University.

Here’s a look at some of the major changes enacted under Daniels’ direction:

Healthy Indiana Plan. Daniels considers this one of his most successful – and underappreciated – accomplishments, and with good reason. First proposed more than 18 months before Barack Obama was elected president, the plan began in 2008 and used federal Medicaid money and Indiana’s share of money from a tobacco settlement to provide health insurance for more than 100,000 lower-income adults who did not have coverage available through their employers. The future of the plan is uncertain because federal officials extended the plan only through 2013 – very likely because of uncertainties over how the Affordable Health Care Act will affect the plan.

Daylight saving time. Still relatively fresh from his politically brilliant campaign for governor that produced a convincing victory, Daniels made perhaps the ultimate show of confidence by tackling a proposal that had bounced around the Statehouse for decades and was destined to upset roughly half the population. Though his predecessors kept mostly a hands-off approach to the controversial subject, Daniels embraced it and scored one of his first big legislative victories in 2005, his first year in office. Though statewide daylight saving time has not produced the economic boom that advocates predicted, neither has it produced the widespread outrage or problems that detractors were sure would occur.

Above all, it produced long-needed consistency in relation to the rest of the nation.

Toll Road lease. One measure of the controversy and importance of this lease is the fact that it is still making news more than six years later. Daniels has attended a number of ribbon-cuttings for roads largely financed by the $3.8 billion, 75-year lease, including the U.S. 24 Fort-to-Port project, the Indiana 25 Hoosier Heartland Corridor and the I-69 extension. All were part of the governor’s ambitious, 10-year Major Moves roadway plan that counted on using existing revenues for maintenance and lease proceeds for construction.

But Major Moves is also making news because seven years in, the maintenance money has dried up. Critics have said the long-term lease was a large price to pay for such short-term achievements, with a recent academic paper saying it will essentially force future generations to pay for today’s projects. Daniels, though, points to the roads built under Major Moves: “Whatever else happens, they’ll be there for all times.”

Though some Democratic opponents did themselves no favors by their xenophobic rants against leasing the road to a foreign consortium, lingering protest did help the party win control of the Indiana House in the 2006 elections.

Child protection. Few issues better reflect Daniels’ power to think big and help Hoosiers but to downplay or disregard unintended consequences. With counties struggling to hire enough caseworkers to investigate claims of child abuse and neglect and to care for the victims, Daniels created a new Department of Child Services and moved the responsibility from the county level to state government. Along the way, he added 400 much-needed caseworkers.

But with the new resources came more bureaucracy, and the establishment of a centralized 800 number to report suspected child abuse has been a well-documented failure that arguably endangers children. And many social workers and other advocates of children say efforts to cut spending have resulted in fewer children receiving the court protections they should be getting.

Welfare modernization. Similarly, Daniels seemed to ignore objections to his plans to move the process of determining welfare eligibility from county welfare offices to a contractor that took applications by phone and over the Internet. For months, would-be welfare recipients and advocates complained that calls were never returned, even when the state’s contractor set specific phone “appointments.”

Untold backlogs and bureaucratic errors later, Daniels continued to defend the privatization plan almost to the day he scrapped the state’s contract with IBM. Though the state sued to recoup more than $400 million, a judge has ordered the state to pay IBM $12 million, plus Indiana has spent $8 million on legal fees – so far.

Gambling crackdown. Soon after taking office, the chairman of the Alcohol and Tobacco Commission talked with Daniels about the proliferation of illegal slot machines in numerous Indiana bars and received his support for an excise police crackdown.

Months after Daniels won election, he drew immense grief for taking away a pastime of fellow Hoosiers, particularly in northeast Indiana, where the machines were referred to by the brand name of Cherry Masters. Many blamed him for bars closing after losing the steady stream of income. But Daniels was absolutely right to enforce the law.

Property tax caps. Daniels led the fight to put limits on property tax bills. One welcome result was to give more consistency and certainty to property taxes, which had fluctuated wildly.

But the little-told secret about the law was it marked a vast transfer of tax burden from wealthier to lower-income Hoosiers. People with the most expensive homes benefit most from the caps. The accompanying 17 percent increase in the state’s sales tax to 7 percent – one of the nation’s highest – falls disproportionately on lower-income Hoosiers.

The new limits also cut money available to local governments for police, fire and other vital services. Schools have less available for buildings. And the limits also have all but forced local officials to raise local income taxes.

Targeting unions. Advocates of the “right to work” legislation disingenuously claim it wasn’t an anti-union bill. Of course it was. The law prohibits employees from being forced to pay union dues or shop fees, which are essentially a lower fee intended to pay a union the cost of negotiating a contract but not for its political activities. Perhaps Daniels will be proven right and the law will help the state’s economic development. But it will also lead to lower wages in a state where the average pay is already well below the national average.

And the numerous changes in education – already thoroughly discussed on these pages – also served to drastically weaken the once-powerful Indiana State Teachers Association as well as public education in general.

The fiscal state. Opponents will argue mightily about what it took – particularly budget cuts that hurt schools, human services and others – but Indiana state government under Daniels unquestionably is on better footing than most other states. And that fiscal health is good for economic development – companies don’t want to come to states with questionable finances that could lead to big tax hikes.

“That will translate into more jobs, and that will translate into more income,” Daniels said. “Businesses notice triple-A credit ratings.”

Regardless of the costs of some of his initiatives, the pace of change under Daniels was extraordinary, and his focus on fiscal issues left the state so flush with cash that Hoosiers will receive a tax rebate next year.

Tracy Warner, editorial page editor, has worked at The Journal Gazette since 1981. He can be reached at 461-8113 or by email, twarner@jg.net.

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