Dismal state of the state?

Dateline: Mon 04 Jul 2011


Thanks to blog reader, sister journalist and avid Democrat Kelly Jones Sharp for her link to this June 23 story in the New York Times, which takes a pretty brutal look at gains and losses in Indiana's economy under Gov. Mitch Daniels' leadership.

Key points:

“'Look, people think fiscal solvency, they think Indiana,” ...says Gov. Mitch Daniels. “People think great business climate, Indiana comes to mind. People think infrastructure, we’re exactly who they think of.'

"Because recessionary winds have not toppled Indiana’s house, this state is often overlooked in the news coverage of budget crises across the nation — particularly since its next-door neighbor Illinois offers such an outsize example of the financial ills afflicting state and local budgets.

"But Indiana is no world apart, even if Mr. Daniels would like to suggest it is. Large cracks have opened in its economic foundation, a sign of just how severe the downturn remains.

"Mr. Daniels alone cannot take all credit or shoulder blame for the health of Indiana’s economy. But it is his work here — and his reputation as a cost-cutting, tough-on-labor conservative obsessed with fiscal problems — that fueled interest in his presidential ambitions before he announced that he would not run because of family considerations.

"The state also serves as a case study of the often large tradeoffs required to balance the books when political leaders take the possibility of raising income taxes off the table. Fiscal conservatism, in other words, comes with its own costs"

Those costs include "drastic cuts to education, to social services, to public employees," says Rep. Pat Bauer, leader of the Dems in the Indiana House. Various state leaders are quoted, plus Hoosiers in the working-class trenches.

The article also points out that although Indiana's unemployment rate "is slightly better than that of its neighboring states, a striking number of people here — a significantly greater percentage than in Illinois or Ohio — have simply left the work force altogether since the dawn of the recession."

In fact, Indiana's jobless rate is 8.2; Illinois' is 8.9; Ohio is 8.6; Kentucky is 9.8; and Michigan is 10.3. (Bureau of Labor Statistics...


I asked Jones Shar for her take on the NYT piece. Her thoughts: "One in three Hoosiers are low-income, compared w/ one in four a decade earlier.

"Move here, make far less money and live with our bad air, crumbling infrastructure and all the other national rankings that show we're not competitive on a number of fronts."

Jones Sharp is working on behalf of John Gregg's campaign for governor of the state on the Dem ticket.

As an independent voter, I appreciate some of the points made by the Times reporters. However, I also recall the red ink the state was awash in during Gov. Frank O'Bannon's years in office. Questiong Daniels' fiscal chops is certainly par for the course, but there's no debating that balance the budget he did. On whose backs and at what cost is the point of the Times piece.



hendy [Member] said:

Not very many governors of Indiana have been shining stars. Daniels once called Bauer "a terrorist". Bauer isn't much to work with, either. But what's happened to Indiana statistically is significant. We're poorer. The jobs base has evaporated as labor costs moved overseas, and we've made China, Taiwan, Japan, Singapore and HK rich, while not paying the guys next door.

We tried various campaigns to outsource our own labor, leading to a BMV that was in crisis for years. We contracted with IBM for FSSA infrastructure as an outsourced service and when it went to hell in a handbasket, sued the vendor. We leased off the only toll road in Indiana, and instead of putting it into mass transit, used it to fix roads, including unpopular and unneeded new freeways.

We got mean, and voted down supporting Planned Parenthood. We got pissed off at education, and put money into charter schools instead of fixing the public schools. We know what the Bible says about those homos, so we passed a constitutional amendment forbidding all but a female and male from marrying.

We knew that unless we choked government, it might grow out of control, like those queers getting married, so we passed a property tax cap because we've bungled property taxes for a dozen years. But that's ok. You can carry your piece into the Colts Dome if you want, cause if any of those queers try to get married, there, you can shoot them 'cause we can't afford cops 'cause of the property tax caps and you can't find one that's gradjiated from high school anyway, cause the public schools are full of those kids cause Planned Parenthood ain't going to support no more condoms and BC pills.

Welcome to the rush to the bottom.

2011-07-04 09:55:03

Tom Greenacres [unverified] said:

"We know what the Bible says about those homos, so we passed a constitutional amendment forbidding all but a female and male from marrying."

Actually we don't know what the Bible says about homos. Or marriage, for that matter. Because it says NOTHING.

Queer baiting was invented for the same reason Jew baiting was invented, because weak, fearful people needed somebody to kick. And they all use the Bible to justify their wrongness.

2011-07-04 13:17:23

Whitebeard [unverified] said:

Go outside the affluent areas of Indianapolis into the smaller towns (and, of course the inner city areas) and what you see are people struggling just to survive from day-to-day. Few jobs. Fewer decent-paying jobs. No benefits or lousy benefits. Empty food pantries. Adults not eating a day a week so they will have enough food for their kids to eat. Large numbers of people not having access to good health care options literally dying because of it (which almost happened to me this past winter) and/or going bankrupt because of it.

So tell me, what HAS My Multi-Millionaire Mitch really done for Hoosiers during his dictatorship? Mostly smoke and mirrors and motorbike rides. At least I respected O'Bannon and knew he was trying to do what was best. Not what was best for the big-money corporate interests and his big-buck buddies (like MMMM).

Scary prospects are ahead if Pence becomes the next governor. He's so far to the extreme right that he'll make Mitch look like George McGovern in comparison.

2011-07-04 14:46:27

hendy [Member] said:

Amen, gentlemen. Amen. And you can still smoke. Pence wasn't always an ideologue. Let's see if we can pull out of this race to the bottom.

2011-07-04 16:39:33

Tom Greenacres [unverified] said:

I think the success of elected leaders is now measured by how little damage they do rather than how much they achieve.

2011-07-04 22:05:07

Tell The Truth [Member] said:

I was around during the O'Bannon years. (Red ink? Nah. Not much.)No governor in my lifetime has enjoyed a better relationship with the legislature.

And that august body is our real problem--we tend to elect good governors, from both parties. But the legislature is, in the immortal words of Harrison Ullman, America's worst.

On a good day.

Village idiots need their representation, but not 150 of them.

Ok, maybe 130.

They're a national embarrassment.

2011-07-04 23:38:57

DK [unverified] said:

Hendy, wake up and smell the coffee!

#1: K-12 was their own worst enemy. Where was the ISTA protesting down at the statehouse when schools were spending tens of thousands of dollars on brick/stone electronic message signs? Why weren't they down at the state house when Plainfield high school decided to build a brick bell tower...what a waste of money! Oh, lets not forget the million dollar Franklin Township football palace. Sorry, but K-12's problems are a result of K-12 spending run wild. Depending on the school system, you could likely find wasteful spending in the amounts of several hundred thousand to millions, most of it on bling. Sorry, I'm not paying for bling. Now those who make their money from the K-12 industrial complex are upset, because the rivers of money have dried up. So now they want taxes raised to obscene levels so they can keep doing what they always did: Waste money on bling.

#2: The BMV was in crisis for decades in this state, decades. Whatever Mitch has done has been a huge benefit. I no longer am force to waste gas to drive to a BMV branch for plate renewal. The increased the amount of time driver's licenses are good for. The BMV is 1,000x better under Mitch than it was with anyone before. As with any change, there will be problems initially, but the BMV easily worked those out.

We also could easily afford cops so long as we hold those over the cops responsible for how law enforcement organizations are ran. Since when do we need LEOs to be PR people when it comes to things like D.A.R.E.? Since when do we need cops, with a rank making rank wages (ie: being paid more than an LEO actually out on the street doing real police work) to supervise a group of civilians handling gun permits, auto tows, etc.? There is so much waste in law enforcement that if people knew just how many cops were given M-F desk jobs, they would be screaming. Also, why do all those M-F desk cops need a take home car with emergency lights? They will claim it would be for a call out. Turn around and ask them how long they have had their take home car since getting their desk job and how many call outs they have responded too.

Don't even get me started on government pensions. I have no problem with a small pension, but Indiana, for some reason, can't just have one pension, where everyone gets paid the same at retirement. Nope, the pensions are based on what job you have. Firefighters, teachers, judges, prosecutors, etc. get a better pension than your regular state worker. Not only that, we just had to base pension payouts on wages, so there is a problem of wages going up, and thus future pension payout liabilities skyrocket. Don't even get me started on how some folks get promoted within various organizations to higher paying positions which only increases pension liabilities. Why should LEOs and firefighters get a pass in funding the largest ponzi scheme the world has ever known?

2011-07-05 08:20:07

Tell The Truth [Member] said:

Your pension argument is strong, DK, but: when promises are made to folks, by their government, those promises ought to be kept.

While we're at it, there should be a solid performance audit of state government jobs. I've dealt with multiple state agencies over the years--under D and R governors. The bureaucracy is massive, unproductive and expensive.

There are multiple arguments on that subject: perhaps if we cut the number of jobs, and realigned performance expectations as well as job descriptions, and paid more, we might retain some folks. Which should lead to more efficiency.

There are some state departments whose job descriptions were written when we used carbon paper and mimeographs.

The BMV example is proof that reform can be meaningful. And efficient.

Duplicate that over 100 other state agencies, and it'll make a huge difference.

But cut pensions? No. Not remotely fair. Maybe if we had one combined Pension Department, with solid actuaries and economists on staff, we might be able to accurately predict future obligations.

2011-07-05 10:13:43

hendy [Member] said:


Let me address your points by your numbering:

1) saying you're sorry is silly. It's what you believe. The baseline funding issues remain; the fact that the schools know they have to burn out their budgets or get them cut is the Pavlovian result of the legislature's lack of leadership and inability to focus on things like cooperative purchasing, and equalizing taxing districts across the states so that bedroom communities don't have unbelievable funds and poor communities have none. People burn money, equality makes it tougher to do so.

2) It's great to get plates at the BMV now because: YOU CAN'T DO IT. They don't handle plates or stickers; they're done thru the mail. They closed branches, and moved people to online resources after debacle after debacle. Then they send drivers license renewals with the wrong first name. There's a database administrator that needs a new job. The political football of which political party gets a taste of our BMW monies is insane, as is the question regarding wheel taxes, excise taxes, and other items that counties collect. It needs equalization as well.

WRT Law Enforcement, we pay cops dreck for a dirty job. Who handles the pissing matches between the rednecks we can't educate and their spouses? The drunks? The dead junkies? Cops. It's one of the toughest jobs in America. Yeah, there are a lot of desk jockies out there, but the requirements needed to get justice through the system mandates a lot of paper pushers, jail employees, and people that aren't out on the streets. Patrolmen matter, but so does the rest of the process.

WRT to pensions, a deal is a deal. People worked all of their lives for those pensions, under harrowing conditions, having to put up with a lot of ugly and mean people. You don't change the deal. Reduce it for future hires, fine. Then you risk lots more churn than the burnout rates that are already there. One of the reasons people take civil service jobs is for the benefits-- retirement among them. It certainly can't be for the pay or the happy customers. Yes, there is bureaucracy but we've also taught state employees to cover their butts because we're ready to sue them at every turn, or take a molehill and make it into a boorish mountain. I feel for some of those people. The next legislature could slash their job without any sense of what really goes on in government. I wonder how Daniels sleeps when he's lead Indiana back to Jim Crow, back to the Deep South.

2011-07-05 11:07:30

Whitebeard [unverified] said:

Wow, Hendy....TTT....DK! (and as always, Ruth),

Fascinating and enlightening discussion and debate all around. Great stuff all.

I wish you folks could be added to the line-up on that local PBS state politics show where they spend way too much of their time talking about "horse races" in election periods and Demo vs. GOP food fights.

The kind of intelligent and insightful discourse that takes place on Ruth's blog is light piercing through the darkness of superficiality and (sometimes) stupidity we've come to know with so much of our current local "news media" and especially the news analysts.

2011-07-05 11:34:29

Jason [unverified] said:

If I can butt in:

2) I believe it was O'Bannon who spent about $30 million on the BMV STARS system and then let it sit on a shelf for a few years. When the old system had to go (previously information was logged by an individual's SSN, after 9/11 that's a no-no), they implemented STARS and so far it's like untangling a cheap 50-year-old garden hose. I do my BMVing in the late morning during the week so I can't speak to the average wait time, ease of use, etc.

There's a tendency to treat "government pensions" as a unified entity for ease of argument. Many states, to include our neighbors, have a 20-and-out, 100% pay and benefits the day you walk out the door program that is killing them. Many municipal governments in Wisconsin have this program and we know how well they've been able to meet their demands. Illinois has very extravagant pensions for many of their chosen as well. I believe Chicago Alderman can retire at full pay and benefits after 3 years of service, for example. In Indiana all the PERF programs I know of have a reduced payout based on years of service with a mandatory minimum age for collection. The only fund that's hurting is that of the teachers, but that's because they threw all their money into all that exotic mortgage crap. I see the reduced payout as a tradeoff for a guarantee of solvency.

Any politician is going play fun with numbers when it comes to expected rates of return, stealing money out funds that are running a temporary surplus, etc. Don't blame that on the program itself, however.

Minus the sensationalism, I agree with Mr. Greenacres in that the Midwest is hurting, and we're in the Midwest. The only reason we haven't succeeded in completely sinking our ship is the fact that states like Illinois and Michigan are doing MUCH worse than we are. The only "jobs" we're really creating are those we're grabbing from surrounding states who are even more fiscally mismanaged than we are. Blame Mitch? Only for saying he could fix it.

2011-07-05 12:20:10

Tell The Truth [Member] said:

So, Jason, we don't suck the worst? That's it?

Interesting political bumper sticker: "Indiana, Half as Bad as Michigan, One-Third Less Crappy Than Illinois."

The brain drain continues. (sigh)

And as for state employees: there are a lot of good ones, to be sure. But my experiences, over almost 40 years and multiple agencies, is far from impressive. The turnover must be massive.

The efficiency is just not there. And I hate broad brushes, with a passion, but this one sticks; state personnel need and deserve a complete overhaul of their pay, job descriptions, pensions, the whole nine yards. Performed by a team of outside folks, who have this expectation of government;

It needs to properly compensate its workers, who need to perform often-dull tasks proficiently.

2011-07-05 15:32:32

Whitebeard [unverified] said:

One thing I might add to the state government pension discussion:

I know an older public school teacher (Indiana) who is approaching retirement and will get only about 30-35 percent of her current salary in pension and no health insurance help. That's after 30 years of teaching.

I know of a worker who is retiring from an Indiana federal facility soon and will be collecting 80 percent of his salary as pension as well as full health care coverage.

I don't think our teachers/state government employees are getting fat on their pension checks. Far from it. Many of them are getting very skinny.

2011-07-05 18:36:08

hendy [Member] said:

@Jason, we can go way back in the wayback machine if you'd like, but I think the scope of reference in the article cited was Daniels. Does Indiana have a history of doing things like docking teenagers serving as lifeguards in pools for political patronage? Yes. My sister was docked. The BMV has been awful.

A quick couple of anecdotal citations: my ex didn't send in a proof of insurance form for an accident my son had. Four years later, and about four grand later, it was fixed. His experience was horrible enough to not want to return to Indiana, even tho his license is now fixed. Second citation: it took me about 17 months to get a plate for a motorcycle that I'd purchased. It didn't have a title, but did have a notarized bill of sale (it was exempt when made), and a State Police inspection. Then came the process of, well, it wasn't in the computer, so each surrounding state had to be queried by mail. Imagine the sloth of not one, but four external BMVs looking for something, by mail.

O'Bannon was a nice guy and a bit of a hack. He died in service, so I'll be gentle. But not with pensions.

You see, Indiana like a lot of other states incurred liability for pensions BUT DIDN'T FUND THEM. Just like a lot of corporations (United Airlines comes to mind), they just kind of ignored putting enough money aside until the liability was a number that would scare the Pope, and he's probably going to Heaven.

So there's this cathartic realization moment when you look at the number, and it's grown sooooo big, that you can't get your mind around it. And the liability is coming due. People worked faithfully based on the deals that they made. Were the deals too generous? Maybe. But consider the pay grades for people that slog a lot of work under vastly demanding circumstances. That was the deal. And the bill is coming due-- not as badly for Indiana as some states, which were even more generous, and ignored funding as tho it didn't exist.

Here's the big 800 pound gorilla standing in the corner, that's an anathema to every pseudo-conservative out there: higher taxes. Insolvency isn't an option. The greed machines will meet the sands of dishonesty and it will grate and grind them into pulp. Do you think there's insurrection NOW? Just wait until you can't pay a teacher that worked for forty years, her just and due pension.

This isn't Chicago, and we don't have the machine that Illinois has. In some cases, pensions are over the top in Indiana. But the base pay was miserable; the payout isn't as tough as it looks. No one wants to use that electronic spreadsheet function called "future value of an annuity" because NO ONE PLANS IN THIS STATE. It's all fire control. No leadership. Just like the urban decay of Indy's sewers. The citations are endless. All to get re-elected? No, because as PT Barnum's buddy cited: there's a fool born every minute. Feed them what they want to hear.

2011-07-05 19:31:34

hendy [Member] said:

Take a look at the traditional property tax funding districts, like the ones in Marion County. For years, tiny Crows Nest (located just a mile N of Ruth) had a tax rate that was far less than say, 22nd and Alabama. This despite the fact that Crows Nest at the time had the highest per-capita income in the State!

Everyone seems in a desperate mode to hold onto wealth, what little there is of it, for their children, or the next 9/11, or the next mortgage scam. Yet the liabilities are clear, and the dependencies on things like casino money is tenuous at best! Illinois and Kentucky are legalizing basic casino gambling, and what little revenue we've gotten will be slowly gnawed at by the surrounding states-- not that we should have come to depend on GAMBLING REVENUE anyway!

As I went down I-465 this afternoon, I believe that it has been under constant construction in the 40 years that I've been driving it. It's still too small. Why? NO ONE PLANS IN THIS STATE. No one wants to be the bad guy that says, hey, it's time we paid the piper and we're going to have to raise taxes to do it.

No, not those poor smokers, and those people that buy sports tickets! Spare them! Please! No, no, not my parent's homestead that I got for FREE through the NO DEATH TAXES TRUST FUND!

If you point the finger at about anyone, you'll find some sacred cow that cannot be touched. Yet everyone needs to put the money in; it's why we do governance in the first place. Yet there isn't one set of cojones in the entire piece of work at the NW corner of Capital and Washington that will tell it like it is. Least of them: Daniels.

2011-07-05 19:41:54

Tom Greenacres [unverified] said:

You are right as usual, hendy. But while there may not be cajones in abundance in the State House, there also are low testosterone levels in Hoosierland at large. Leaders with big stones invite gelding by the herd.

Until enough folks are riled up enough to grab their pitchforks and light the torches, there's little to no political motivation to go out on a limb and propose drastic change.

I was surprised to see a story in the Star today about a legislator with MS suggesting that the decriminalization of marijuana should be on the table. (Of course there is a strong element of self interest in his suggestion.)

There are radical suggestions for change suggested on this blog. And politicans are being criticized for their lack of creativity, or stomach for making needed and long overdue changes. But we're all frogs in a pot and the water is still slow to get fatally hot; we won't know in any case until it's too late. Meanwhile, what good does it do to flog Mitch? Better to blame indifferent voters, party loyalists, and Hoosiers who would rather fret about the possibility they may have to be content with college sports sans Pacers and Colts.

2011-07-05 20:12:28

Whitebeard [unverified] said:

Tom, good stuff you wrote.

But I still want to "flog Mitch" in a literary sense. Helps with my high blood pressure.

Man, I could probably use some of that medicinal reefer, especially if they managed to weed out those chemicals in it that cause memory loss (bad enough that way as it is).

I live in constant, chronic, often mind-numbing physical pain and turn down all of the prescription narcotics offered to me by licensed M.D.s. I'd rather be a grumpy numbskull-in-pain than a pain doper in rehab.

Hendy, great stuff as usual. Would you please consider running for governor? I'll put your sign in my front yard.

2011-07-05 20:35:13

indykjsharp [unverified] said:

"And the great owners, who must lose their land in an upheaval, the great owners with access to history, with eyes to read history and to know the great fact: when property accumulates in too few hands it is taken away. And that companion fact: when a majority of the people are hungry and cold they will take by force what they need. And the little screaming fact that sounds through all history: repression works only to strengthen and knit the repressed. The great owners ignored the three cries of history. The land fell into fewer hands, the number of dispossessed increased, and every effort of the great owners was directed at repression."

John Steinbeck, The Grapes of Wrath

2011-07-05 22:06:38

Whitebeard [unverified] said:

You're talkin', Indykjsharp. You're talkin' my language. Bobby Kennedy language. I wore his button back in the '60s. He got killed along with John, Martin, and on and on and on. I believe monk Tom Merton was a victim, too, for his outspoken pacifism and defiant opposition to the Vietnam War.

The 1930s "Grapes" film, with Henry Fonda, is in my Top 10. So is the book. Nothing has changed. Folks still drivin' to find the picking field where they'll get paid for their sweat and where they won't be raped by narcissistic capitalism. Maybe earn enough at the end of the day to get more than a couple pounds of hamburger from the company store.

I like the old Pete Seeger song based upon the writings of the South American poet who expresses the privilege he has in being poor and sharing that noble calling.

My grandparents spoke about FDR in hushed tones. My Dad, a decorated WWII combat vet, said the only time he cried before his mother's death was when he cried when he heard about FDR's death on an old Crosley radio.

Jesus was poor. So am I. Pretty good company, I'd say.

Love the Springsteen song. Waitin' for the last to be first and the first to be last ... and waitin' for the ghost of old Tom Joad.

2011-07-05 23:25:39

Tom Greenacres [unverified] said:

The Romans gave their citizens bread and cicuses to distract them from their misery. The Republicans have focused on Social Issues and the Dems, Stimulus, in an attempt to distract us from our misery.

It only works temporarily. Steinback recognized this. Others of us still do not.

2011-07-06 07:48:30

indykjsharp [unverified] said:

"We Knew They Got Raises. But This?"
"Who Doesn't Pay Federal Income Taxes (Legally)" http://economix.blogs.nytimes.com/2011/06/28/who-doesnt-pay-federal-income-taxes-legally/

2011-07-06 09:42:59

Jason [unverified] said:

T3, that's exactly what I'm saying. Nobody is doing well in today's environment. You have states out there with unemployment rates that, with any truth in terminology, are probably nearing 20%. You have local governments that can't even cut checks to pay their employees. Here's a dirty little secret nobody seems to want to point out: government cuts may create a few jobs and balance a budget, but they're painful and require sacrifice. We've been living in LaLa land for so long on borrowed money nobody seems to know how to take bad news anymore. Could things be done better? Of course, but that's always the case with any kind of government work, you get politics in the gears and they get muddled.

Hendy, like I said I spend one day a year at the BMV, and two days every fourth year. I go during the day and the rare time there's a wait I take a number and come back. I've heard anecdotal horror stories from many people before Daniels, during his tenure, and I will continue to regardless of who takes his place. I deal with the BMV on a professional level on a daily basis, and my experience has been nothing short of blind stupidity. Like I said, it was that way before and I don't see it changing.

2011-07-07 12:49:26

Tom Greenacres [unverified] said:

I find the BMV process immeasurably improved under Daniels. The only thing to make it better might be to offer services again through AAA.

In the 1960s-70s, the branches were given as a reward to party faithful. Thus you could be served in a ramshackle house or rundown storefront, owned by a party hack, and rented to the DMV at userious rates. The respective county chairmen received the franchise, which was worth a lot of loot.

2011-07-08 03:45:45

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