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INDIANAPOLIS — Gov. Eric Holcomb plotted a straight and steady course to the future for Indiana's ship of state Tuesday in his third annual State of the State address to the General Assembly.

The Republican reiterated his commitment to taking Indiana "to the next level" by calling on lawmakers to continue investing in education and workforce training programs; infrastructure, such as rural internet access; and Hoosier health, including programs to reduce the state's worst-in-the-Midwest infant mortality rate.

The biggest surprise in Holcomb's 32-minute speech was his plan to free up funds at Indiana school corporations by reducing what districts pay in pension contributions for most teachers to 5.5 percent of salary, instead of the current 7.5 percent.

Holcomb said the state is prepared to allocate $150 million from its projected $2.2 billion budget reserve to the teacher pension account, which would bring it to 100 percent-funded status and permit the mandatory contribution rate to be reduced.

The governor said school districts should use the savings to increase teacher paychecks, along with the money they'll receive from the 2 percent elementary and high school education funding boost in each year of his proposed two-year state budget.

"A strong economy depends on a world-class workforce. That workforce depends on a great education. A great education depends on great teachers," Holcomb said.

"One way to attract and retain more of those teachers is to make teacher pay more competitive."

Holcomb said he's establishing the Next Level Teacher Pay Commission, led by Indianapolis businessman Michael L. Smith, to devise a sustainable, long-term plan for lawmakers to consider enacting in 2021 that would make Indiana teacher pay more competitive with neighboring states.

"Once again, Indiana will show the way we solve challenging issues together," Holcomb said.

High-quality workforce

Other priorities identified by the governor included exempting military pensions from state income tax to attract what Holcomb described as "some of the most experienced, focused and loyal workers anywhere."

"Last year, I said that developing a 21st century workforce is the defining issue of the decade. Nothing has changed my opinion or my focus on building a Hoosier workforce that can outcompete anyone, anywhere, any day."

To that end, Holcomb urged lawmakers to continue requiring students to undertake career training as early as possible in their educations and to increase funding for adult education and job training programs, so at least 60 percent of Hoosier adults earn a high-value credential beyond a high school diploma.

He also said Indiana can't forget Hoosiers serving time in state prisons or locked in the prison of drug abuse, and called for the expansion of job training programs at the Department of Correction and improved access to drug treatment programs statewide.

"The number of opioid prescriptions is down, communities are forming their own systems of care and we are getting drug data faster than ever before," Holcomb said.

"But better data means we have more information about the extent of the issue, and it shows we still have a long way to go."

Holcomb additionally said he remains committed to the long-term project of implementing the 20 consultant recommendations to improve the Department of Child Services, and to ensure more babies celebrate their first birthdays by launching an assistance program for high-risk pregnant women.

He also urged the Republican-controlled General Assembly to enact a bias crime penalty enhancement so Indiana no longer is among the five states in the nation lacking hate crime protections for vulnerable groups.

Bias crime legislation repeatedly has failed to garner majority support at the Statehouse in prior years due largely to Republicans refusing to extend protections to lesbian, gay, bisexual and transgender individuals on the same basis as other protected characteristics.

"Standing strong against targeted violence motivated to instill fear against an entire group is the right thing to do," Holcomb said.

The governor explained that if all these programs work as they should, Indiana will have an improved quality of life and be in a better position to attract soaring businesses, such as Northwest Indiana's Fair Oaks Farms, whose owners, Mike and Sue McCloskey, sat in the House gallery for the governor's speech.

"When they wanted to expand their business, they chose Indiana because our prime location enabled them to reach the most customers," Holcomb said.

"They stayed in Indiana because we don't hold them back with high taxes and regulations, we cheer on their success."

Mixed reaction

Following the speech, Democratic legislative leaders praised Holcomb's commitment to improving teacher pay and enacting a bias crime statute.

However, both Senate Democratic Leader Tim Lanane, D-Anderson, and House Democratic Leader Phil GiaQuinta, D-Fort Wayne, questioned whether Holcomb ultimately will be able to win over enough representatives and senators from his Republican Party to see bias crimes written into law.

"He delivered the message with some force, and I perceived that it was one of his lines that got the most applause, which I think reflects that the people of the state of Indiana believe it's time for us to have a meaningful hate crime," Lanane said.

"The governor emphasized quality of life, well that is a way to improve the quality of life in our state — get us off the list with a meaningful hate crime law."

At the same time, the Democratic leaders said they were disappointed Holcomb chose not to address other state issues they see as pressing, including the need to preserve health coverage for Hoosiers with pre-existing medical conditions, increase the minimum wage beyond $7.25 per hour and reform the legislative redistricting process.

Indiana Forward, an organization of business and community groups promoting a bias crime statute, said in a statement that it was pleased by Holcomb's "strong and unwavering support" for the legislation.

"With bias crimes on the rise in Indiana and around the country, Gov. Holcomb's leadership on this issue should not go unnoticed," the group said.

"The time is now to move Indiana Forward, and we hope our lawmakers will answer Gov. Holcomb's call for leadership and pass a strong bias crimes law that leaves no Hoosier behind."

Kyle Hupfer, Indiana Republican Party chairman, said Holcomb's address "proved yet again that he is armed and ready to tackle the issues facing Indiana with ideas that will deliver measurable and positive results for all Hoosiers."

"There's a reason why Gov. Holcomb’s approval rating stands at 65 percent," Hupfer said. "He is delivering on behalf of Hoosiers in every corner of the state, and tonight he did it again."

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Statehouse Bureau Chief

Dan is Statehouse Bureau Chief for The Times. Since 2009, he's reported on Indiana government and politics — and how both impact the Region — from the state capital in Indianapolis. He originally is from Orland Park, Ill.