The TASC List: Lessons to be learned from Indiana

Mitch Daniels is best known for his two terms as governor of Indiana and as a potential Republican candidate for president in 2012. He became president of Purdue University in January this year.

He is also the author of Keeping the Republic: Saving America by Trusting Americans, published in 2011.

The book’s title is from a statement attributed to Benjamin Franklin. After the Constitutional Convention in 1787, Franklin was asked what kind of government was created. He replied, “A republic if you can keep it.”

Mitch Daniels is extremely concerned about the current state and direction of our republic. Early in the book he discusses what he calls “The Great Inversion” (government dominating the people) and, closely related, “The Shrunken Citizen.” The book also covers the program he followed as governor of Indiana.

Why should Wilton residents be interested in this book? The answer lies in the relative fiscal conditions of Indiana and Connecticut and the paths followed by Mr. Daniels and Gov. Malloy. Public employee union dominance of state legislatures is a major factor in the differences between the two states.

On his first day in office (January 2005), Mr. Daniels decertified all government employee unions by executive order, removing the requirement that state employees pay union dues. Dues-paying union membership subsequently dropped 90% among state employees. One of Mr. Malloy’s first acts was to grant unionized state employees a four-year guarantee against layoffs.

When Mr. Daniels took office, Indiana’s biennial budget projected a two-year deficit of $800 million. He called for spending cuts, tight control of spending increases and selective tax increases. The legislature approved $250 million in spending cuts. Mr. Daniels renegotiated 30 different state contracts with savings of $190 million. A $300 million surplus resulted.

In his two terms, Mr. Daniels reduced the state employee headcount 18% and employee costs 25%. Indiana achieved the lowest state employee cost per capita of any state. On Feb. 1, 2011, Mr. Daniels signed right to work legislation. Indiana became the first state in a decade to do so. Indiana closed the 2012 fiscal year with reserves of more than $2 billion. Revenue was $500 million more than expenses and taxpayers received a small refund mandated by Indiana law.

Mr. Malloy, on taking office, initiated the largest tax increase in Connecticut history. Our state’s miserable financial condition results in only $.03 of every dollar Wilton taxpayers send to Hartford being returned as state aid. Connecticut’s highest-in-the-nation debt per capita includes $40+ billion which doesn’t appear on the state’s financial statements, mostly unfunded pension and post-retirement health care obligations to state employees. Since 1992 state employee retiree health benefits have increased by 981% and pension costs have climbed 583%.

Mr. Daniels did a lot more than cut costs while he was governor of Indiana. The state’s motor vehicle department went from a mess to being rated as the nation’s best. Innovative health plans were introduced for Hoosiers starting with Health Savings Accounts and a parallel plan, HIP for Healthy Indiana Plan, providing coverage for 132,000 uninsured workers. Participants were able to purchase private health insurance with a subsidy from the state.

Mr. Daniels was a leader in privatization. He pushed through the requirement for voters to have state-issued photo ID. Economic growth was the major focus of Mr. Daniels’ two terms. Every part of the state government was charged with making its operations business friendly and doing everything possible to attract new businesses to the state.

There isn’t room in this review for the many other topics covered in Mitch Daniels’ book. So let’s conclude with a quote from his last page:

“The coming debate is not really about … tax policy or health care or energy choices. [All discussed in the book.] It is about things more fundamental: Who is in charge, the people or those who supposedly serve at their sufferance? What kind of people will we Americans be, free and proud citizens who control our own lives and decide for ourselves …? When we have answered those questions best, we will have the enormous satisfaction of being able to say, Ben, we kept it.”

Curtis Noel, a longtime resident of Wilton, is affiliated with TASC (Toward A Stronger Community).