http://www.suntimes.com/news/huntley/1808020,CST-EDT-HUNT06.articleOctober 6, 2009
BY STEVE HUNTLEY
Illinois persists in clinging to a long, if unattractive tradition of looking down our noses at Indiana. If our recent record of corruption has done nothing to shake this bias, now comes the realization that Hoosier government maintains faith with its taxpayers in a way we can only envy.
Indiana has gone from a $700 million debt to a $1 billion reserve. Its low-tax policies have been rewarded with $8 billion in foreign investment in the last two years. Census figures put Indiana as one of only three states to reverse its population out-migration. In contrast, Illinois government is drowning in $4.6 billion in red ink, and the deficit could hit $10.2 billion next year. The Land of Lincoln has fallen from 23rd to 30th in the nonpartisan Tax Foundation's ranking of state business climates. We are one of a handful of states with fewer jobs today than in 1999.
Like the country, Hoosiers suffer under the Great Recession, especially the 9.9 percent unemployed. Business commitments for $1.28 billion in investments and 14,000 jobs are down from last year.
But the credit for Indiana bucking the dreary trend of financially failing states goes to Republican Gov. Mitch Daniels, elected in 2004 after 16 years of Democrat rule. Called "The Blade" as President George W. Bush's budget director,
he took a knife to state spending. For example, in the 2009 budget, Daniels used a gubernatorial prerogative to cut $800 million in spending approved by legislators.
He has sliced Indiana's annual rate of spending growth to 2.8 percent from 5.9 percent. In Illinois, spending soared 39 percent, after inflation, over 10 years. Daniels cut 5,000 state positions while adding 1,050 child-protection workers and state troopers. He did allow a sales tax hike to 7 percent, but capped property taxes.
Daniels was in Chicago last week to address an audience eager to hear Indiana's story, the nonpartisan Illinois Policy Institute. "Our goal is to raise the net disposable income of Hoosiers," he said.
"Government's role is to create the conditions where free men and women can create wealth."Daniels travels his state on a Harley motorcycle listening to Hoosiers and advocating solutions. While cautioning that he's "guarded about what works in Indiana working elsewhere," he noted he espouses "fundamental principles that people have to relearn" after years of unchecked government check-writing.
Clearly his message is one Illinois Republicans embrace. Ask what's the big issue for the 2010 elections, and new state GOP Chairman Pat Brady says, "Jobs -- that's what I hear everywhere." It outranks corruption, though graft contributes to a poor business climate. Illinois House Minority Leader Tom Cross wryly observes Republicans can focus on jobs while Rod Blagojevich's trial next year will keep Democrat corruption in voters' minds.
Brady relishes that the leading Democratic gubernatorial candidates, Gov. Quinn and Comptroller Dan Hynes, push job-killing income tax increases in a recession.
No one likes taxes, but recall that Illinois voters in 1990 elected a governor, a Republican, who campaigned on making a temporary income tax surcharge permanent. And these two Democrats can make the tax argument as well as anyone. Quinn, as one Republican lawmaker told me, projects a strong aura of "sincerity" that helps his cause. And few know government finances like Hynes, who also has a record of opposing profligate spending. He comes to the table with a detailed plan that first cuts state spending to 2005 levels before he would raise taxes.
Quinn and Hynes push differing proposals that both claim will shift the tax burden to the rich. But Daniels reminds that's who creates jobs. "There's no way you tax a weak economy more and don't hurt poor people," he said.
He's certainly right that the best system for all is one of low taxes spread over a large base so the tax burden doesn't harm economic innovation. That's the welcome mat Indiana lays down. Illinois has a different message, says Policy Institute CEO John Tillman: "We greet entrepreneurs with a hand in their wallet."What is your view???? 
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