By DEANNA MARTIN
INDIANAPOLIS (AP) — Republican Gov. Mitch Daniels said benefits will have to
be cut for people who are out of work and unemployment insurance taxes on
businesses will have to be raised to repair the state’s out-of-balance
The changes are part of Daniels’ legislative agenda for 2011, when
Republicans will control the House, Senate and governor’s office. He also
wants to expand charter schools, establish merit pay for teachers, abolish
parts of local government, pass a balanced budget without a general tax
increase and make changes to criminal sentencing laws.
“We are really excited about the chance for Indiana to surge forward on all
of these fronts,” Daniels told reporters in his office Thursday as he
discussed his priorities.
Daniels said the state’s unemployment insurance fund — which pays out more
in benefits than it gets in taxes from businesses and is relying on money
borrowed from the federal government to stay solvent — can’t be fixed by
simply raising business premiums.
“There are going to have to be changes in both directions,” he said.
But Democrats — who were relegated Tuesday to the minority and will have no
control in state government in 2011 — said unemployed residents are already
struggling to survive on the current maximum benefits of $390 a week.
“It’s going to be disastrous,” said outgoing House Speaker Patrick Bauer,
D-South Bend, who will become House Minority Leader in January.
Daniels didn’t have specifics on how much he wanted to cut benefits or raise
unemployment insurance taxes on businesses. But he said he’ll work with
lawmakers to find common ground.
An economic forecast released Thursday by Indiana University economists
predicted the state would see slow job growth and only a slight decline in
its unemployment rate of more than 10 percent during the coming year.
State revenues are about even with forecasts and are showing slight growth
over last year’s numbers. Daniels said the state is financially stable right
now, and that lawmakers must pass a new balanced, two-year budget without
any general tax increases. He also suggested a state spending cap that would
give taxpayers a refund if state government was collecting more money than
Daniels has already cut spending by hundreds of millions of dollars to
balance the state’s books, including $300 million from public schools. But
Daniels said Thursday he didn’t expect any further cuts to K-12 education
given current revenues.
Daniels’ agenda does include plenty of changes for schools, however. He said
he was open to vouchers that would help parents pay for their children to go
to private schools, and wants to expand the number of charter schools in
Indiana and establish merit pay for teachers. Daniels also suggested a
program that would let high school students graduate in 11th grade, and then
use the money that would pay for their senior year toward post-secondary
Bauer said much of Daniels’ education agenda aims to privatize schools.
“I think that’s dangerous,” he said.