Mitch Daniels

opened his eight and final state of the state address Tuesday

with a joke.

"A reporter asked recently, 'What

keeps you up at night?"' I replied that I generally sleep well, but if I

ever do have trouble, I don't have to count sheep. I count all the states

I'm glad I'm not the governor of."

He offered plenty of bragging rights as written by various

worldwide media lauding Indiana's progress on several fronts, including fiscal

fitness and educational reforms.

Daniels highlighted the state's balanced budget, safety

reserves, AAA credit rating, the lowest property taxes in the nation, the lowest number of state workers per capita in the nation,

and a net gain in state population — including among college graduates.

He said Indiana directs the nation's higher percentage of a state budget to

education - more than 56 percent.

In a win for the Central Indiana mass


lobby, Daniels said, "We should trust the people of Central

Indiana with the decision whether to raise local dollars for mass transit if

they believe it crucial to their future quality of life."

The governor also emphasized:

- A 2012 investment of $1.2 billion in road and bridge

construction, the sixth straight record-setting year.

- In 2011, every Indiana community met all national air

quality standards for the first time in the history of the Clean Air Act.

- Clearing out the last of a 550-case backlog of old, and

therefore less strict, environmental permits, and are now the only state

completely current.

- Conservation efforts, including the establishment of 100

contiguous miles along the Wabash River under protection.

- A Bicentennial Nature Trust with a starting infusion of

$20 million from existing state funds.

Suggestions for lawmakers included toughening the state's

human trafficking laws, addressing "credit creep" whereby colleges

increase the number of credit hours necessary to earn a degree and directing

more state aid to the victims of the Indiana State Fair stage collapse.

Daniels offered special recognition of Chief Justice Randall Shepard, who plans to retire this spring.

"Part of Justice Shepard's legacy will be the landmark report that he and former Governor Joe Kernan co-authored, proposing overdue modernization of our pioneer days structures of local government," Daniels said.

"One way to honor this great public servant will be to advance more of the sensible and needed reforms set forth by the Kernan-Shepard Commission. I ask this Assembly to do so, on their own merits but also in recognition of this historic public servant."

He also offered an impassioned justification for his support

of a right-to-work


as both an issue of fairness and of job creation. Outside the chambers

of the din of protesting opposition roared up and down throughout his speech,

reaching a fevered pitch of condemnation when he exited the chamber and support

when Democratic leaders followed.

A complete transcript of the governor's remarks follows the video:



JANUARY 10, 2012

Members of the General Assembly,

honored guests, fellow citizens. For an eighth time, and the

final time, you afford me the unrivaled privilege of this podium.

As it's my last such chance to express my appreciation for the public service

you each perform, and to Hoosiers for hiring me twice so I could try to perform

my own, I'll start with a heartfelt thank you.

But the time for reminiscing will come later, much

later. Tonight, and all nights in today's Indiana, must be about the

future, where we are and where we are going.

A reporter asked recently, "What keeps you up at night?"

I replied that I generally sleep well, but if I ever do have trouble, I don't

have to count sheep. I count all the states I'm glad I'm not the governor


Around the time I first took office, a radio caller expressed

a fairly common sentiment. He said "I like

what you say you stand for, but Republicans, Democrats, nothing ever

changes. Nothing's ever different." I recall responding, "Sir,

I'm careful not to promise what I'm not sure can be delivered. But I'll

promise you one thing. In a few years, you may disagree with decisions we've

made, or actions we've taken. But you will not think nothing's


I'm pretty sure that good man would agree tonight that

things are very different in Indiana now. Then, we were broke and other

states were flush. Tonight, while states elsewhere twist in financial

agony, Indiana has an honestly balanced budget, a strong, protective reserve in

our state savings account, and the first AAA credit rating in state history,

one of just a handful left in America. Our credit is better – imagine this – than that of

the federal government.

Another host of states raised taxes again last year, while

Hoosiers are taxed at the lowest levels in a long time, thanks in part to the

lowest property taxes in the nation.

While other state governments stiff their vendors, close

parks, delay tax refunds, and ignore unacceptably poor service levels, Indiana

state employees are setting national standards for efficiency.

Tonight, Hoosiers are served by provably the most productive

government workers anywhere. Indiana has the fewest state employees per

capita in the country, the fewest we've had since 1975. And yet our parks

have never been in better shape, your tax refund comes back twice as quickly as

it used to, and the average customer got in and out of a license branch last

month in less than 14 minutes.

I'm not the only one to notice. In a national survey

last summer, 77 percent of Hoosiers described their state government as "efficient,"

far above most states and the second-highest rating in the nation.

Uniquely in public sector America, Indiana now pays state

workers on a performance basis, so those doing the best job are properly

rewarded for their superior efforts. But I know that the reward they

value as much as money is simple recognition from the citizens they serve, and

I hope you'll show them right now that you value them and their hard work as

much as I do.

Careful stewardship of the taxpayer's dollar, and ceaseless

efforts to improve public services, are matters of duty, and basic good

government. But they are not the fundamental goals of public life.

They are just means to the real goal, which is to make of our state a place of

opportunity, and upward mobility, and a better standard of living. A

place where young people, and people not so young,

know that they can start with nothing and make a good life. From our

administration's first day, this has been the central objective around which

everything else was organized.

We have worked relentlessly to move Indiana up the list of

great places to do business. We set out to build the best sandbox in

America, a place where men and women of enterprise knew that, if they risked a

buck on their idea or their dream, they would have the best possible chance to

get it back, with something left over they could use to hire the next Hoosier.

We have made steady progress, coming from nowhere to the top

tier in every ranking: No. 6 according to the nation's site selectors, No. 6

according to CEO Magazine, No. 5 according to real estate decision makers.

But it isn't nearly enough. It was our ironic bad luck

to create a top economic climate just as the nation plunged into its worst

modern recession, and business investment slowed to a crawl: we became

the prettiest girl in school the year they called off the prom.

Despite these headwinds, our recently strong state revenues

show that something positive is happening to Hoosier incomes. In 2010,

the most recent data we have, Indiana incomes grew at the eighth fastest rate

in the country.

Here's another encouraging sign: more people are

moving into Indiana than moving out. Our population is growing at the

fastest rate from Iowa to Maine. Maybe best of all, thousands more

college graduates moved into our state last year than moved out.

There is no better indicator of economic promise in today's world than success

at attracting top talent, and we are.

We are not where we want to be, nowhere close.

But with a welcoming business climate, enormous investments in new public

infrastructure, and a stable fiscal picture, we are poised for more progress,

and better days.

Beyond the statistics lies a more basic difference in the

Indiana of today: we are now, indisputably, seen as a leader. In

hundreds of articles about fiscal prudence, economics, transportation,

corrections, child protection, we are cited constantly now as an example for

others to examine. From Cleveland: "Ohio should follow Indiana's

lead and dive in." From Detroit: "Indiana has many of the

answersÉas seen in Indiana it certainly is possible." From North

Carolina: "Fortunately, there's no need to speculate about how a state

might proceed...Indiana has already done it."

It's more than words. We now experience the sincerest

flattery all the time: our Economic Development Corporation has been copied by

Ohio, Wisconsin, Michigan, Iowa among others; our corrections programs by

Oregon; our employee health care by Oklahoma, Missouri, and Florida; our performance-based

personnel policies by Tennessee and Wyoming; our air quality modeling and

permitting by Kentucky and South Carolina; our online university, WGU Indiana,

by Texas and Washington. And, at every governors meeting, someone says "If only we could pull off a deal half as good as

Indiana did with its Toll Road."

The latest realm in which Indiana is now a leader is perhaps

the most important. From coast to coast, others are praising our reforms

of public education. One national magazine wrote that Indiana has gone "from

the backwaters of education reform in America to the front." The

Fordham Institute said "No one has been more

successful in providing a comprehensive reform plan for a system that is

failing America's children." And then there's this, from even

further away: the Daily Telegraph of London wrote that in education, "England

would do well to follow Indiana's lead."

The days when education debates started and stopped at

dollar signs are over, and high time. From President Obama down, everyone

now recognizes that leaders in education are defined not by what they put in

but by what they get out. But just for the record, and despite

frequent misrepresentations to the contrary, Indiana is a leader in what we put


With this year's spending increases, plus the additional

funds we requested for full day kindergarten, K-12 spending is now 56 percent

of the entire state budget, the highest percentage of any state in the

nation. No state anywhere devotes more of its state funds to education.

But that's not why others are following Indiana. It's

our new commitment to rewarding the best teachers, liberating principals and

superintendents, and providing low- and middle-income parents the same choices

as their wealthier neighbors; that's what has caught the world's

attention. And this year, when we end the cruel, defeatist practice of

passing children who cannot read into fourth grade, and when our most diligent

students begin to graduate from high school in 11 years, and get a head start

on college costs with the dollars they earned through their hard work, others

will take notice of Indiana yet again.

There are few subjects more studied, or more intriguing,

than leadership. Leaders come in many forms and often from unexpected

directions. But some qualities are common among them, and one is that

leaders never loaf. They never slip into complacency, settle for things

as they are, or stop pursuing innovation and excellence of result. If

they do, leadership will pass, and new leaders surpass. Leaders who loaf

aren't leaders for long.

Along with all the accolades, Indiana now bears this burden

of leadership, the duty to keep pressing ahead.

This administration will not loaf. We have made out a

long list of self-assignments for our eighth and final year. Our

Economic Development Corporation captured a record 219 new jobs transactions in

2011; we have raised the bar to 250 for the year ahead.

We will press hard to accelerate further the

ahead-of-schedule, under-budget delivery of our Major Moves transportation

program. In 2012, we will invest $1.2 billion in road and bridge

construction, the sixth straight record-setting year.

The last contract on the Hoosier Heartland Corridor will be

let next summer and the entire project finished by 2013. The last

contracts on U.S. 31 from South Bend through Kokomo will be let this year, and

we have accelerated completion of the entire corridor into 2015. I-69

will be open for traffic from Evansville to Crane, as

will the entire Fort to Port highway in Northeast Indiana. The Sherman-Minton

Bridge will be rebuilt and reopened by March and, upriver, an agreement on a

new bridge from Utica to Louisville will be in place, cementing Indiana's place

at the forefront of the public-private partnership movement.

We will build the state's 3,000th mile of bike

and hiking trails, and reach our goal of a trail within 15 minutes of every


Unknown to most citizens, the air and water of Indiana is

now the cleanest in living memory. In 2011, every Indiana community met

all national air quality standards for the first time in the history of the

Clean Air Act.

Last year, we wiped out the last of a 550-case backlog of

old, and therefore less strict, environmental permits, and are now the only

state completely current. Our goal for 2012 is to

maintain this status and, if national limits are lowered yet again, to find a

way to meet those standards, too.

We will complete our successful overhaul of what was once

America's worst welfare system when, in February, the 10th and final

region is converted to our reformed, public-private system. Backlogs have

been slashed by 80 percent, timeliness and accuracy have soared above national

averages, and last October the program earned a cash

bonus and an award for most improved in the nation. We have set

high targets for continued improvement in 2012.

The same is true of our campaign to conserve Indiana's

natural heritage. The last seven years have seen new records for

protection of wetlands and habitats, 50,000 acres by the end of this year,

highlighted by the largest such project ever at Goose Pond. In 2011, we

launched new waterways conservation projects the size of three Goose Ponds in

the Muscatatuck Bottoms, and five Goose Ponds along

the Wabash Corridor. Before long, Hoosiers will be able to travel over

100 miles down our state's signature river and never leave a protected


Our coming Bicentennial gives us an ideal opportunity to

extend this historic era of reverence for the beauty God bestowed on

Indiana. I have appointed a commission of a dozen illustrious citizens,

led by my partner Becky Skillman, and by the legendary Congressman Lee

Hamilton, to guide the great celebrations to come.

As a first initiative, I have asked them to oversee a

Bicentennial Nature Trust, a statewide project to protect still more of our

most precious natural spaces. On our 100th birthday, Indiana launched its

state park system. A statewide conservation initiative is a fitting

sequel and bequest from our second century to our third.

We have identified state funding, within existing resources,

of $20 million, but that must be just a beginning. The Trust is intended

to inspire others, and to match their donations of land or dollars in a

continuing statewide surge of conservation. The Commission joins me in

challenging citizens, businesses, and in particular our unique network of

county community foundations, to identify and fund local projects that will

safeguard places of beauty for future generations.

In this Assembly, you too must set big goals. We

should, at long last, enact a law to protect workers and patrons across Indiana

from the hazards of second-hand smoke. Public support has grown, and so

has the evidence of health risk to workers. It is time to move this

long-sought objective to the finish line.

We should – no, we must– strengthen our laws against the horrid

practice of human trafficking, and we must do it in time for the Super Bowl,

the kind of event at which the exploitation of young women is rampant in the

absence of such a tough law.

We should assist students with the cost of higher education

by empowering our Higher Ed Commission to limit the "credit creep"

which unduly increases both time to graduation and

student expense. Undoubtedly, some degrees will continue to justify more

than the traditional 120 credit hours. But schools requiring 126 hours

for a degree in sociology, or 138 hours in special education, or 141 hours in

music education, should have to explain why all that time and student expense

is necessary, especially when other colleges offer high quality programs in

less time and cost.

We should deepen the state's response to the terrible

tragedy that befell so many at last summer's Indiana State Fair. A

catastrophe so singular merits unique treatment, and I hope you will augment

the amounts already provided the victims and their families by the state and

private donors.

And we should trust the people of Central Indiana with the

decision whether to raise local dollars for mass transit if they believe it

crucial to their future quality of life.

Within weeks, one of the great public careers, and perhaps

the greatest judicial career, our state has known will come to a close.

Chief Justice Randy Shepard, let tonight be one of

many occasions on which a grateful and fortunate state thanks you for a quarter

century of fairness, firmness, and farsightedness on our highest bench.

Part of Justice Shepard's legacy

will be the landmark report that he and former Governor Joe Kernan

co-authored, proposing overdue modernization of our pioneer days structures of

local government. One way to honor this great public servant will be to

advance more of the sensible and needed reforms set forth by the Kernan-Shepard Commission. I ask this Assembly to do

so, on their own merits but also in recognition of this historic public


Because economic opportunity, and building America's best

home for jobs, is the central goal of all we do, every year should include a

bold stroke to enhance it. This year, the choice of actions has become


In survey after survey, by margins of 2 to 1 or more,

Hoosiers support the principle known as Right to

Work. After a year of studying the proposal, I agree.

The idea, that no worker should be forced to pay union dues

as a condition of keeping a job, is simple, and just. But the benefits in

new jobs would be large: a third or more of growing or relocating businesses

will not consider a state that does not provide workers this protection.

Almost half our fellow states have right to work laws.

As a group, they are adding jobs faster, growing worker income faster, and

enjoying lower unemployment rates than those of us without a law. In

those ratings of business attractiveness I mentioned, the only states ahead of

us are right to work states.

What every economic development expert has testified to, we

have learned from firsthand experience: over seven years and well over a

thousand job competitions, we have found that, when Indiana gets a chance to

compete, we win two out of three times. But too often we never get a

chance, because a right to work law is a requirement. Especially in this

poor national economy, a state needs every edge it can get.

Everyone knows that, among the minority favoring the status

quo, passion on this issue is strong, and I respect that. I did not come

lightly, or quickly, to the stance I take now. If this proposal limited

in any way the right to organize, I would not support it. But we just

cannot go on missing out on the middle class jobs our state needs, just because

of this one issue.

For the sake of those without jobs, and those young people

just beginning the ascent of life's ladder, I ask you to remove this obstacle

and make Indiana the 23rd state to protect the right to work.

I have a new prized possession. It is a letter,

written to his parents by a young clerk named A.B. Carpenter, on February 12,

1861. Amid updates about haircuts, colds, and headaches, young Mr.

Carpenter reported the following: "There isÉconsiderable excitement

concerning a couple of legislators who went to Kentucky to fight a duel.

Mr. Heffern, a Democrat, slandered and abused Mr. Moody, a Republican in a speech and Moody challenged

him. He accepted and choosed bowie

knives. They went to Kentucky last Friday night and have not been heard

from since."

And we think we have disagreements! When we do, I hope

we'll keep them not only in state, but also in this Chamber, where the people's

business is supposed to be settled.

Mr. Carpenter's letter wasn't mainly about duels or

haircuts. He wrote it because he had gone to see the newly-elected

President, Abraham Lincoln, who had spent that day, his 52nd

birthday, in Indianapolis. Young Carpenter described Lincoln's arrival at

Lafayette Road, the procession down Washington, Pennsylvania, Ohio and Illinois

Streets to the Bates House hotel.

Seeing the new President filled Carpenter with hope, he

said, that "(S)oon our

government will be remodeled." I like the term. These measures

I have mentioned are part of our continuing remodeling project.

In three weeks, the entire world will fix its eyes on this

city, and our state. It should be a magic moment,

I hope a matter of pride to every Hoosier everywhere.

But the Super Bowl didn't get here overnight. Indy's

selection followed decades of constant striving, and building, and reforms to

make our capital the vibrant, livable model city it has now become. No

one leader, or group of leaders, made it happen. The work was passed from

hand to hand, administration to administration, generation to generation, and

in no era did the people of Indianapolis rest, or settle, or loaf. So it

will have to be with the construction of the great Indiana we are determined to


I carried here from its place on my desk an atomic clock,

given me by a friend who served a sister state as governor with great

distinction. It sits directly in front of me each day, counting down the

days, hours, minutes, and seconds until I turn over these duties and return to

private life. It is there to remind me to use every moment as well as I

can to make Indiana a place of greater promise and prosperity. Silently,

it challenges me to search each day for the next improvement, the next efficiency,

the next breakthrough, the next stroke of Indiana


Yes, these nights are about the future, but I do look back

at past speeches, if only to avoid repeating myself. In one, I recounted

telling an East Coast CEO who wondered what Indiana was known for that one day

he wouldn't have to ask. Tonight, he doesn't.

In another, I said I hoped we would become bolder in our

embrace of change, take our motto from the inspiring athletes of the Special

Olympics, and be a braver state. Tonight, we are.

In the very first of these meetings, I invited you and every

Hoosier listening to join us in rejecting mediocrity, demanding excellence,

aiming higher. Tonight, we do.

In a column titled "Indiana promises a better future,"

a young graduate student, a lifelong resident of a neighboring state, wrote to

the Indianapolis Star that she had made a critical life decision. She

would take her new degree and move to Indiana. She cited our "fiscally

responsible choices," our "economic integrity," our avoidance of

the "out-of-control spending we see in so many other states."

She concluded by predicting that more talented young people would make "that

short drive down I-69 to a more promising future."

That is the state we have dreamed of. A state that

magnetizes people of talent, and the risk-taking capital that seeks to employ

them. A state of growth.A state of hope.A state of

promising futures.

We are not yet fully that state.

But we are so much closer to it. We have leapfrogged other places, passed

more competitors than Tony Stewart at Homestead. We are certainly,

irrefutably, different.

Until it became real, I never imagined that, for eight

fulfilling years, I would be given the chance to help make Indiana

different. On the night it became real, I resolved to use every day, take

every action, make every change that might make our

state a place of promising futures.

I now have 369 days, __hours, ___minutes, and __seconds left

as the people's employee. I pledge to use every one of them, as

wisely as I can, in the service of those who sent us to this chamber. I

ask you to do likewise, to be the kind of leaders the new leadership state of

Indiana now expects us to be.

God bless this Assembly and this great state.


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