What Real Leadership Looks Like

Conn Carroll on Mitch Daniels:

When he was sworn into office in January 2005, the state of Indiana faced a $600 million deficit and a subpar AA S&P credit rating. While other states like Illinois and Michigan wildly increased spending in good economic times, Gov. Daniels did the opposite. Between 2005 and 2008, he reduced the state’s rate of spending growth from 5.9% to 2.8% saving $450 million.

Per-capita state government spending in Indiana has fallen eight spots and is now the sixth lowest in the nation. By 2009, the state sported $1.3 billion in cash reserves and an AAA rating. All this was accomplished while Daniels, working with an opposition-controlled lower house, enacted the largest tax cut in Indiana history, slashing property taxes by a third.

On his first day in office, Daniels issued an executive order stripping government unions of their power to collectively bargain. The decision has not only cost the left's perpetual dependence machine millions in taxpayer-funded union dues, but also enabled the state to cut costs by instituting a "pay-for-performance" personnel system. Without a burdensome labor contract, Daniels slashed government employment rolls from more than 35,000 to 30,454, a 14% reduction. As a result, Indiana now has fewer state employees than it did in 1982.

When the Great Recession hit, the historically high-cash reserves that Gov. Daniels had built buffeted the state through tough times. While 40 other states have raised taxes during this recession, Gov. Daniels made it clear to the Democrats in the statehouse that that was not an option for Indiana: “We will not make this recession worse by adding one cent to the tax burden of our fellow citizens.”

Instead Daniels has found ways to cut even more spending. All state agencies were forced to cut spending by 10%. The state sold two-thirds of its airplanes and thousands of other vehicles. State employees did not receive a pay raise in 2009 or 2010. Gov. Daniels even sacrificed himself, cutting his own pay for both 2009 and 2010.

While the surrounding rust-belt states of Illinois, Michigan and Ohio have suffered through unemployment rates well above 10%, Indiana’s rate has been close to the national average of 9.7%. Meanwhile, the July 2010 Department of Labor State Employment report shows that the state has created more jobs over the past year than any state but Texas, and that its over-the-year percentage increase in employment is second only to Kentucky.

Finally, before the phrase "Obamacare" had ever crossed anyone's lips, Daniels had already enacted free-market friendly patient-centered healthcare reform. His Healthy Indiana Program (HIP) helps Hoosiers who do not qualify for Medicaid to enroll in individual health-savings accounts.

The state then contributes up to $1,100 per enrollee to these accounts on a sliding income-dependent scale. These dollars are controlled, and owned, by the individual to spend on health services as he or she sees fit, with almost no interference from government or insurance-company bureaucrats. The plan was immensely successful. Interest in the program was so high that the state had to suspend enrollment (because of federal regulations) a number of times. Today there are almost 50,000 Hoosiers enrolled in the plan.