Mitch Daniels: Northwest Indiana must seize this golden opportunity

2011-02-20T00:00:00Z Mitch Daniels: Northwest Indiana must seize this golden opportunityBy Gov. Mitch Daniels
February 20, 2011 12:00 am  • 

If an Illinois exodus is under way, Northwest Indiana must be ready to capitalize.

After years of overspending, our neighbors to the west have hit a breaking point. Illinois' leaders, looking to fill a $15 billion budget hole, just passed the largest tax increase in their state's history, on top of other recent increases.

Personal income taxes will rapidly rise by 66 percent; corporate taxes will crest to 45 percent. Added up, that's a $6.5 billion increase that will cost more than $500 per person.

Businesses there soon will pay one of the highest combined national-local tax rates in the world. Counting taxes, workers' compensation, unemployment insurance and all the other costs government puts on business, it already was two-thirds more expensive to hire someone in Illinois than Indiana. And now ...

As a fed-up Chicago businessman looking for a more hospitable home recently wrote to the Indiana Economic Development Corporation: "Welcome to the Prairie State. Come for the corruption, stay for the taxes."

Let me stress that I believe in self-government. Illinoisans are fully entitled to choose a path of bigger government, higher spending and higher taxes if they like.

But common sense says over time there's a price for that in lost jobs: If you make it more expensive to hire workers, fewer workers will be hired.

Illinois citizens and job creators already are heading for the exits. Just recently the owner of Champaign-based sandwich maker Jimmy John's announced his company will relocate to a state with lower taxes (I called him the next day). More are sure to follow.

And when they do, we need to be prepared to welcome them across the border. Thankfully we are in position to do so. According to The Tax Foundation, Forbes, Site Selection magazine and many other ratings, Indiana is home to the Midwest's best tax and business climate, a status strengthened by our well-deserved reputation for keeping government accountable and lean. People know Indiana's low taxes are likely to stay that way.

Because of this, and in contrast to Illinois (where property taxes are five times higher than ours), Indiana's population is the fastest growing from Iowa to Maine. Indiana is one of only three states that has shifted from more people moving out to more people moving in during the past few years.

Illinois' choice only enhances our advantage in recruiting and retaining business. And our Northwest is the area best positioned to benefit.

But as firms prepare to flee a bad business climate, they won't be looking for an area that mirrors their current home. Northwest Indiana, with its long history of high-taxing local government, often operated for personal advantage and not public interest, unfortunately fits that image.

In 2010, the Indiana Economic Development Corporation signed agreements for more than 200 business expansions or consolidations into our state. Only 13 were in the Northwest. Of 23,265 new jobs committed to the state, only 1,617 were in this region.

To too many firms our Northwest corner resembles Illinois more than it does the rest of Indiana.

As I have said before, in addition to its many blessings, democracy also entitles voters to all the crooked and wasteful government for which they want to pay. Our neighbors have unwisely exercised that option. If we are to be the recipient of their soon-to-be lost jobs, we will need to do better.

And if the Northwest's communities are to realize their potential, they must undertake a serious and sustained effort to reform their local governments and to pursue policies that invite new business rather than drive it away.

Northwest Indiana can align itself with (and greatly aid) the rest of our state, and prosper in the process. Or it can follow the Illinois model and watch a golden opportunity evaporate into thin air.

I have long advocated the importance of Northwest Indiana to Hoosiers elsewhere. I will continue to do so. We won't be the great state we can truly be until every part of Indiana is a fully prosperous part of the Hoosier family. Illinois has provided us with a timely chance to make that happen. Let's not let it go to waste.

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