INDIANAPOLIS | Despite a bankrupt unemployment fund and ballooning jobless rate, Gov. Mitch Daniels continues to argue Indiana is in better shape than most states.
The Republican governor appeared on CBS' "Face The Nation" Sunday morning with Ohio Gov. Ted Strickland and New Jersey Gov. Jon Corzine, both Democrats, to discuss the federal stimulus package. Daniels told host Bob Schieffer that Indiana still has a balanced budget and a strong reserve, "but it won't last if the erosion of the economy continues at the present rate."
What about Indiana's $4 billion share of $787 billion economic recovery bill?
"We'll take it," Daniels said. "In our case, we'll try to invest it for the future of our state. We don't have the holes to fill that other states do, but that doesn't mean that we can't, I hope, use it to leave permanent assets behind, whether they're roads and bridges or better prepared teachers, so that we're a strong Indiana when this is over."
State Rep. Scott Pelath, a Michigan City Democrat, said he was glad to see Daniels did not join Republican Govs. Haley Barbour, of Mississippi, and Bobby Jindal, of Lousiana, who have said they plan to reject some of the federal dollars. Still, Pelath complained that Daniels came off as indifferent during the brief interview.
"We really have people hurting right now," Pelath said. "I think I would have liked to see a little more enthusiasm for these programs that have an opportunity to put people back to work."
Indiana lost 18,700 jobs in December, swelling the state unemployment rate from 7.1 percent to 8.2 percent, which tied with South Carolina for the largest percentage jump in the nation.
Indiana is borrowing from the federal government to prop up its unemployment trust fund, which went bankrupt after legislators allowed worker benefits to exceed employer taxes the past eight years.The state could owe $50 million in interest by year's end.
Daniels in December ordered more than $760 million in state spending cuts designed to keep the current budget in balance. But state revenues plunged $142 million below projections in January, and if that trend continues, Indiana could have a $400 million deficit when the current budget expires in July.
Pelath called it "just plain wrong" for Daniels to point to the state's $1.3 billion in rainy day reserves and claim that Indiana is doing better than other states.
