In Indiana, It’s Still the Economy

December 4, 2005

Andrea Neal column for Oct. 19 and thereafter
730 words

Editors: This is the last of three columns focusing on specific issues in Indiana’s governor’s race.

INDIANAPOLIS – By now, every Hoosier has heard the statistic. The average Indiana worker earns only 88 cents for every dollar earned by the average American.

The challenge for Indiana’s next governor? Turn that statistic into a competitive advantage.

After all, it doesn’t cost as much to do business here. Combine that fact with Indiana’s premier location (the crossroads of America is almost as marketable as the coasts) and Indiana has a decent economic development strategy.

Indiana’s next governor needs to have a real economic development strategy. It’s time to stop the decline that has forced so many of our young people to look for work elsewhere.

After crisscrossing the state, both major candidates for governor understand that the economy remains issue No. 1 for voters. This is especially so in counties where unemployment exceeds both the state average and national unemployment rate –- places like Randolph County in east central Indiana with a 7.3 percent jobless rate and Vermillion County on the western border where unemployment is 8 percent.

Mitch Daniels, Republican candidate for governor, sees opportunity in such places. He relishes a story he heard on the campaign trail, told by a man whose family had just moved with friends from Phoenix to Gosport in Owen County, southwest of Indianapolis.

"I said, ‘Are you moving home? Is this where your family is?’" Daniels recalls. "’No,’ he said, ‘none of us had ever been to Indiana. We just finally decided Phoenix was no place to raise kids. We got on the Internet and looked at every state from Alaska to Florida. The first criterion was crime rates. In Phoenix we had crime, we had high cost of living, we had congestion. The second thing we looked at was housing cost.’" After conducting an exhaustive search on the web, the families bought sight-unseen two houses in the Gosport area and, in their own words, are living happily ever after.

"There’s an upside to being down," Daniels continues. "You can create opportunity for more than just a single family. You can create that kind of opportunity for people who might want to start a business affordably or move one. You can lower your cost structure a lot in the right circumstances bringing business from certain places to Indiana right now."

Republican Daniels has proposed a comprehensive economic development program designed to leverage Indiana’s cost-of-living advantage with job-creation tax credits and regulatory relief. Among other things, Daniels wants to "pre-permit" new business sites so companies can open quickly without bureaucratic delays. And he’d like to capitalize on the crossroads location with two initiatives: one to sell Indiana as the location of choice for agricultural and food processing companies and the other to attract motor sports teams, suppliers and cutting edge automotive technology jobs.

As the incumbent, Gov. Joe Kernan paints a rosier picture of the state’s economy. But, like Daniels, he’s got a litany of suggestions for strengthening it, some of which he’s implemented in recent weeks.

Among them: "Business Actions Teams" that go to work the moment they hear of a plant closing or mass layoff and "Trade Impact Site" designation for communities that face layoffs so they can streamline regulatory decisions that might delay future use of the sites by new businesses.

Being a crossroads "is an accident of our geography but one that gives us an advantage over other parts of the country," says Kernan, who points to two recent laws –- elimination of the business inventory tax and the gross receipts tax –- as major steps toward a more vibrant business climate.

"The next steps are to make sure we remain competitive in terms of our tax environment as well as our regulatory environment. And to make sure we’ve got infrastructure in place." That, Kernan says, means completing such projects as the I-69 extension and the new Ohio River bridges.

For much of the past decade, Hoosiers have endured one depressing economic statistic after another. Since 2000, Indiana has lost more than 100,000 jobs. Average income for Hoosiers is almost $2,500 less than for the average American.

Today, Indiana has an $800 million budget deficit that would not exist if only employment and business income were higher.

Task for the next governor: Turn this lemon into lemonade.

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