In his State of the State address Tuesday, Governor Mitch Daniels proclaimed that Indiana had managed to weather the recession with a combination of fiscal conservatism and pro-growth policies. "Whatever course others may choose," he said, "here in Indiana we live within our means, we put the private sector ahead of government, the taxpayer ahead of everyone, and we will stay in the black, whatever it takes."
A governor, Daniels turned a $200 million budget deficit into a $1.3 billion surplus in five years while cutting property taxes by an average of 30 percent. As a result, "hard pressed Hoosier home- and businessowners found an additional $600 million still in their bank accounts." Indiana's property taxes are now the lowest in the union and 72 percent of the people voted to keep it that way by protecting the cuts in the state's constitution.
By getting rid red tape and reforming overly complicated tax codes, Daniels has made Indiana more attractive to businesses and the state is currently leading in private sector job growth. Adding new jobs at twice the national average isn't enough though, he said. "We did [that] in 2010, but it couldn't offset the terrible drag of a national economic ebb tide that continues to leave too many boats stuck in the muck."
While Indiana handled its drop in revenues "as any family would, as any small business would," by separating the "must do's" from the "nice to do's," as Daniels put it, the Federal Government has handled the crisis very differently. Rather than reining in spending, Washington is borrowing about one of every three dollars it spends with no end to deficit spending in sight.
Daniels is mentioned as a possible presidential contender for a reason: he understands that what's holding back job creation in the country is the administration's Big Government approach to economic policy. "Drowning in new or pending regulations and taxes, businesses, banks and investors are understandably sitting on dollars that could be putting Americans to work," he wrote in The Wall Street Journal last year. His solution? Cut taxes, cut spending, and stop writing new laws that affect business. "With or without Democratic help," he added, "Republicans should step forward with these or superior ideas."
One such superior idea he proposed to the Indiana legislature two days ago---an automatic taxpayer refund. "When the day comes again when state reserves exceed 10 percent of annual needs," he said, "it will be time to stop collecting taxes and leave them with the people they belong to."