Daniels makes stop

Gov. Mitch Daniels says he knows that reductions in state spending have sometimes been painful, but that Indiana is better off than much of the United States.

"We're fighting it the best we can," Daniels said during a brief stop in Jay County Tuesday afternoon.

"There are not many states we'd trade places with. We've had to make some reductions but compared to cuts elsewhere they're pretty small."

State tax revenues have plummeted as a result of the national recession, leading to significant reductions across the board, including support for public education.

"March was the first month in a year and a half that we took in as much money (in tax revenue) as a year before," Daniels said. "We'll be using every penny of the ($1.3 billion) reserves we built up to bridge us over."

Daniels defended the decision to shift the entire public school general fund to state sales tax revenues instead of property taxes.

"I think it was fortuitous timing," he said, though no one knew at the time that a recession was on the horizon. "We were leaning too much on property taxes."

Had the change not been made, the governor said, "The schools would've kept on spending and raising taxes. ... There's an awful lot of money in education that doesn't make it to the classroom."

At the same time, property tax caps are now making the state more attractive for business expansion, Daniels said.

The governor acknowledged that federal stimulus dollars were helping the state bridge the revenue gap but remains critical about how Congress went about crafting the economic stimulus plan.

"I was careful not to criticize the idea of doing something fiscally to go along with what the Federal Reserve was doing, but what Congress finally did was pretty ill-conceived," Daniels said. "It wasn't what they did, it was the way they did it."

While the Daniels administration has emphasized spending cuts, many other states have tried to raise revenue with new taxes.

"You're seeing a lot of states in their desperation invent new types of taxes," the governor said. When they do that, "it makes us a little more competitive" in Indiana.

Daniels said that not only is he not interested in a run for the presidency, he's also not interested in following Sen. Richard Lugar in the Senate when Lugar's term expires.

"I'm glad good people like Sen. Lugar pursue legislative office, but it's not for me."[[In-content Ad]]