Thursday, Oct. 9, 2003  Volume 10, Number 9 Page 1 of 8 he Kernan brings on T Davis for key roles Howey Now Hoosers await the 2004 decision By BRIAN A. HOWEY in The brilliant addition of Kathy Davis as lieutenant governor to the fledgling Kernan administration only partial- Political ly resets the Hoosier political equation. The other shoe to either drop or make the kickoff will be Gov. ’s decision on whether he will seek a full Report term of his own, setting up a potentially riveting matchup with Republican Mitch Daniels. The Howey Political Report is published by NewsLink As Gov. Kernan introduced what he said was the most Inc. Founded in 1994, The Howey Political Report is qualified on the list “who happens to be a woman,” both he an independent, non-partisan newsletter analyzing the political process in . and Davis seemed to leave the door open for the 2004 options. “It’s not something we’re not talking a great deal Brian A. Howey, publisher about,” Kernan said before a packed Senate chambers this Mark Schoeff Jr., Washington writer afternoon. “We’ve really got our hands full running the State Jack E. Howey, editor of Indiana. This is not something we’ve had time to talk about. This is about Kathy Davis and that’s where I’d like to The Howey Political Report Office: 317-254-1533 PO Box 40265 Fax: 317-968-0487 leave it.” Indianapolis, IN 46240-0265 Mobile: 317-506-0883 Davis, who opened up her new tenure by saying, [email protected] “Hello, greetings to all of you. I’m happy to be here,” lauded www.howeypolitics.com Gov. Kernan for his “great spirit” and “leadership with skill” before adding, “We are sooo with you. My whole heart is in Washington office: 202-775-3242; Business Office: 317-254-0535. this job.” Davis described her new job as a “15-month opera- Subscriptions: $250 annually via e-mail or tion,” but after she was asked if she’d consider being on a fax; $450 annually including the HPR Daily ticket with Kernan, said, “We’ll be talking, I’m sure.” Wire. Call 317-254-1533 or 254-0535. Twisting, twisting in the wind are Democratic guber- © 2003, The Howey Political Report. All rights natorial candidates Joe Andrew and Vi Simpson, who have reserved. Photocopying, Internet forwarding, faxing or encountered the second frozen pond in the the party’s quest reproducing in any form, in whole or in part, is a viola- for a nominee, both coming from actions by the reluctant tion of federal law and is strictly prohibited without governor. The first occurred last December when Kernan consent of the publisher.

“From the time I stopped drinking, I have Ticker: Roemer’s new job p. 2 dedicated my life to helping other people. My Horse Race ‘04: A new equation p. 3 past is my greatest asset ...” City Elections: Where’s the anger? p. 5 Horse Race ‘03: SigmaSix questions p. 6 - Crown Point Democratic mayoral nominee Columnists: Carter, Colwell p. 8 Wayne Isailovich, Times of Northwest Indiana Covering 10 years of Indiana politics Thursday, Oct. 9, 2003 Page 2 of 8

withdrew from the race and the party interacted with both Statehouse waited with halted breath as Sen. Evan Republicans and Democrats. As Mayor Bayh, U.S. Rep. Baron Hill, Mayor ’s controller since 2000, she had Peterson and former House Speaker John been the administration’s point person on Gregg took a pass. budget issues. Through no fault of his own, the Davis, 46, is a native whose KERNAN KICKS OFF MAR- events since Sept. 8 with the illness and father has roots in Evansville. She studied KETING CAMPAIGN: Gov. death of Gov. Frank O’Bannon is a huge mechanical engineering at the Massa- Joe Kernan announced a blow for the Andrew and Simpson cam- chusetts Institute of Technology. She $1million marketing cam- paigns, both which have been cast in the earned her MBA at the Harvard Business paign yesterday to promote the business-friendly fea- harsh light of events beyond their control. School. Upon graduation there, she came tures of last year's tax over- Typical was the take of House to work for Cummins Inc., at a time when haul in Indiana (Associated Speaker B. Patrick Bauer, who said of the U.S. auto industry was being pressed Press). The campaign Kernan to the Associated Press, “He by Japanese automakers. She told the begins this week and would not only be the best candidate for Indianapolis Business Journal last April, includes television and our party, but would make the best gover- “I chose heavy manufacturing because I radio commercials, promo- nor for our state.” He called the selection was wondering: Did we not understand tional kiosks in airports, of Davis “a brilliant choice.” how to be competitive, or were we just direct marketing to busi- Throughout the week, those kind of not able to do it? I found we understood, ness owners and advertise- comments from Democratic legislators but making change in a big organization is ments in newspapers and business publications. It will about Kernan have essentially voiced a hard.” be targeted primarily toward “no confidence” in the Andrew and It is easy to see why Davis emerged states and cities in the Simpson campaigns at a time when both as Kernan’s choice. It is historic because it Midwest but also will seek credibility and money. breaks the male gender stranglehold on include promotions in The Davis nomination, expected to the state’s top two executive positions California and other states. be universally hailed, poses another prob- since 1816. Davis is personable, attractive Kernan said it would "high- lem for the Andrew-Simon campaign. and businesslike. Her legacy in the Bayh, light how Indiana has been Davis has already gone through the vet- O’Bannon and Peterson administrations is different than other states in ting by Indiana State Police and Kernan’s that of a fiscal conservative. these difficult times. There office, and will undergo a similar review Asked about her ability to work is nobody else who did what Indiana did last year in by the Indiana news media. with both Republicans and Democrats, restructuring taxes," Kernan In contrast, Simon has refused Davis described herself as an “engineer said during a news confer- media interviews following her July selec- and an analyst” who deals with “facts.” ence with officials from the tion by Andrew, and has yet to answer “An honest look at facts goes a Indiana Department of even the most basic of boilerplate issues long way,” she said. Commerce. (abortion, death penalty, home rule, etc., She is a bureaucrat sans political etc.) that Davis will most likely be pre- ambition, giving Gov. Kernan a variety of ROEMER TO HEAD POLICY pared to answer in the coming days. governing and political latitude during the CENTER: Former 3rd tough decisions ahead. In her budgetary District Rep. Tim Roemer roles, she has yet to help shape a tax begins a new job today as Kathy Davis president of the Center for The other jarring contrast between increase that Gov. Kernan is already under National Policy, a nonparti- Davis and Simon is the established rela- fire from the Republicans. san, public policy organiza- tionships she already brings to the table. tion based in Washington, Davis served as Gov. ’s A heavy role D.C. "I'm very excited," said budget director a decade ago that brought Her background in heavy manufac- Roemer, bubbling with her into contact not only with legislative turing gives Kernan a set of unique cre- enthusiasm for his new role leaders, but then Bayh Chief-of-Staff Bart dentials as he begins to reshape the (James Wensits, South Bend Tribune). "There's a Peterson. During the O’Bannon adminis- Hoosier economy from one dominated by tration, Davis headed the Family Social old-line manufacturing to that of an Continued on page 3 Services Administration where, again, she advanced, high-tech nature. Page 3 of 8 Thursday, Oct. 9, 2003 2004 Racing Form Indiana 2004Gubernatorial Governor 2004: Republican: Mitch Daniels, Eric Miller, Petersburg Mayor Randy Harris, Bob Parker. Democrat: Joe Andrew, State Sen. Vi Simpson, Roy Graham. 1996 Results: lot of work to do, but I'm O’Bannon (D) 1,075,342, Goldsmith (R) 997,505, Dillon (L) 35,261. 2000 Results: O’Bannon very excited about it." (D) 1,230,345, McIntosh (R) 906,492, Horning (L) 38,686. 2004 Forecast: A new day and Roemer compared his new reality has emerged for the 2004 elections. Kernan resisted the “nothing that has occurred in the job to the best parts of last 30 days” speech about his potential political future. He will be under intense pressure by being a member of people in the Democratic Party he cares deeply Congress, only "without the about to run in 2004. A Kernan-Davis ticket fund-raising." The 46-year- would be formidible, particularly if they confront old South Bend Democrat, some of the nagging problems facing the admin- who served six terms in istration. Daniels concluded his first lap around Congress from 1991 until the state at Fishers Town Hall. “I see this as a 16-month job interview, with each of our fellow 2003, will fill the prestigious citizens entitled to inspect the applicant personally. And I feel a duty, should I be hired, to be as shoes of such past center prepared and knowledgeable as one person can be about the problems and the possibilities of presidents as former U.S. each area of our large and diverse state,” Daniels told the crowd. He was visibly shaken when he Secretary of State learned of the death of the Newton-Jasper band leader who had asked him last summer if the Madeleine Albright. Roemer band could play at his inaugural. Her relatives were in the crowd at Fishers. And it’s becoming credited Albright and former clear that if Kernan runs, there will be no cakewalk in 2004. General Status: Tossup  U.S. Rep. John Brademas, a member of the center's board, with helping to con- David Goodrich of the Central demands highly skilled workers as the vince him to take the job. Indiana Corporate Partnership wrote in manufacturing process takes shape; prod- this week’s Indianapolis Eye cover story, ucts can also demand better prices in a FSSA UNDER CRIMINAL about the continued erosion of Indiana’s limited marketplace. Higher wages and PROBE: Warrants have been issued in relation to a old line manufacturing, “For our elected higher profits result. criminal investigation into officials, this means an electorate uneasy “The serial/automated phase is the fraud allegations and possi- about their own economic prospects and downward slope of the process. The man- ble misuse of public money concerned about their children’s future. At ufacturing process is streamlined, more at the state Family and the same time, state government battles a competitors enter the market, and prices Social Services mounting budget deficit, driven by the are forced down as supply meets demand. Administration, Marion shrinking tax base — these factors come Automation reduces the needed skill level County Prosecutor Carl together to form a ‘perfect storm’ going of the workforce. Products are commodi- Brizzi said Monday (Associated Press). Brizzi into the 2004 election cycle.” tized, and the only way for manufacturers said search warrants Goodrich cites Michael Hudson of to maintain profit margins is to cut operat- approved by a judge have Rolls-Royce America detailing two criti- ing costs.” been executed in conjunc- cal phases of the Indiana economy. “Mike Goodrich notes, “In a nutshell, this tion with Indiana State asserts that the production of a given is Indiana’s underlying problem. Too Police investigators. But he product can generally be divided into two many of the products we manufacture are said the warrant information eras — the craft/pilot phase and the seri- mired in the serial/automated phase, and was under seal, and he al/automated phase,” Goodrich explained. the best way to reduce costs is to cut jobs declined to say how many warrants were served, when “The craft/pilot stage is the research and or find cheaper labor markets in Mexico they were served or give development stage, where a concept or China.” other specifics. He said a comes off the drawing board or computer Davis’s engineering background, grand jury has not been screen, prototypes are developed, and the her experiences with Cummins where he convened to consider evi- first generation of products is made avail- first job was to design engines with a 30 dence, and he would not able to consumers. Of course, this phase percent decrease in costs over a 30-month continued on page 4 Thursday, Oct. 9, 2003 Page 4 of 8

period when the Indiana manufacturing professional with many talents. Her fiscal base was under duress two decades ago, background will be an asset to the new and her participation on the government administration. We look forward to work- tax/spend side of the equation will give ing with the lieutenant governor as we Gov. Kernan a knowledgeable partner as attempt to confront the state’s problems.” he tries to reignite the state’s battered Indiana Republican Chairman Jim say whether he expected economy. Bauer called Indiana’s fiscal cri- Kittle Jr. who again leveled shots at the that to occur. Andrew sis due to “national policies.” Stoner, a spokesman for new governor for raising the potential of Gov. Joe Kernan, said the tax increases due to poor revenue streams, investigation was at least Looming FSSA scandal said, “I commend Gov. Kernan for nomi- partially related to how And then there is the looming nating a qualified public servant as lieu- some money was spent on FSSA scandal and potential indictments. tenant governor. As head of the IMPACT, a job-training pro- The IBJ story notes that after Davis Department of Commerce, Katherine gram. He said the agency took over FSSA, “Ten weeks into the job, Davis faces a difficult task in rebuilding was cooperating fully with an economy that ranked first in the nation the investigation. FSSA Dan Rather was showing film on national in job loss and last in job growth.” spokesman Scott TV of staff at our New Castle State MacGregor said the agency Developmental Center abusing our resi- also was conducting an dents,” Davis recalled. So she oversaw a A fledgling administration internal investigation. "I major transition in the way the state Kernan’s picks this week have sig- can't answer specific ques- served those with developmental disabili- nalled his willingness to confront a variety tions about what may have ties, implementing a system that closed of problems head-on, beginning with occurred, but we are look- the institutions and moved the people into Cheryl Sullivan’s selection to head the ing into several aspects private residences, where they received with our relationship with troubled FSSA for a second time. The some vendors, including outside assistance as needed.” Davis nomination seems to speak, “I’m whether payments to those Davis told the IBJ, “I have always here to fill a role” as opposed to elevating vendors were appropriate," leaned into what it was I didn't under- a personality that would bring along a he said. stand, so that I will be forced to learn.” potentially hindering political network and consitutency. FIRM IN FSSA PROBE HAD Path to approval Davis translates into “options” for TIES TO FORT WAYNE Gov. Kernan. As the engineer/bureaucrat, MAYOR: The Marion County Gov. Kernan said he had talked she could easily step aside for a more prosecutor is investigating with Davis early on his his LG search last a state agency's purchase week. He said others he talked with for political choice (i.e., see Vice President of nearly $200,000 worth of the job led him to back to her. The key Nelson Rockefeller in 1976) if Kernan training from a Fort Wayne- moment occurred on Wednesday when he decided to run. But it would be easy to based firm with ties to personally walked a letter asking her to envision Davis translating into a campaign Mayor Graham Richard, an join the administration. role She was warmly received by both Indianapolis TV station Her response? “I was thrilled when Republicans and Democrats on the Senate reported. WISH-TV reported he asked me,” David beamed. floor this afternoon. Kathy Davis is unlike Monday that the Family and any lieutenant governor Indiana has seen Social Services Initial reaction to the Davis selec- (though Kernan noted that both he and Administration's purchase tion has been universally good. Senate of Six Sigma training from President Pro Tempore Robert Garton had Davis had served as controllers of South The TQM Network was promised Gov. Kernan a quick passage of Bend and Indianapolis, respectively). being probed because the his nominee. He told WTHR-TV that What Hoosiers witnessed this week spending appears to have there would be “no problem with was the passing of the torch, from the skirted state procurement approval,” and added that he felt Davis is O’Bannon administration to the loyal lieu- rules, which require addi- “highly competent” and is not a “caretak- tenant who is taking the vestiges of the tional scrutiny if they top er.” old and placing them in the hands of capa- $75,000. TQM, a consulting State Sen. , R- ble and proven technocrats in the vast firm, was started by Richard more than a decade ago, Bedford, said Davis will be quickly bureaucracies that may ultimately deter- approved in the Senate. “Kathy Davis is a mine Indiana’s future course.  continued on page 5 Page 5 of 8 Thursday, Oct. 9, 2003

Voter ire seems to be dissipating in cities

By BRIAN A. HOWEY “Voters seem to have gone from blaming Last summer ... you could hear it in mayors and anyone else they can find to Bloomington ... “I’m mad as hell and I’m believing it’s more of a national or state but he severed all ties to the not going to take it any more!” issue.” That’s good for mayors; ominous non-profit company when And Bloomington: “I’m mad as for state legislators in 2004. he became mayor in hell and I’m not going to take it any Incumbent mayors around the state January 2000, TQM President Dale Siegelin said more.” appear to have deflected the property tax Monday. And Indianapolis: “I’m mad as anger. Evansville is the place where it hell and I’m not going to take it any more! flared up most prolifically last summer. STATE REVENUES STILL Throw the bums out!” But both sides - Republican Mayor Russ BELOW FORECAST: Gov. But now, as Hoosiers stand less Lloyd Jr., who pushed for tax restructur- Joe Kernan said Monday than a month away from electing mayors ing, and State Rep. Jonathon Weinzapfel that the State Budget and city councils, some the anger seems to who voted for it - could be said to be Agency's revenue numbers have dissipated. equally culpable. for September show that “It’s kind of faded away in the past But the Evansville race doesn’t Indiana took in $40.7 mil- appear to be turning on that issue. lion, or 3.8 percent, less two months,” said one campaign operative than it had anticipated for who spoke off the record. “There’s kind of the month. And for the first a numbness out there when it comes to the Jobs, jobs, jobs quarter of FY04, which economy and jobs.” Throughout the state, Republican ended in September, the Our take on the political environ- candidates in Fort Wayne, Lafayette, state is a total of $128.2 mil- ment is similar. Early this summer, the Jeffersonville and elsewhere were pushing lion, or 4.9 percent, below expectation was that voters might lash out jobs plans. Economic development seems forecast. While year-to-date FY04 revenues are up 7.3 at the first politician they could find over to be the big issue as manufacturing jobs percent over the same peri- the steady loss of jobs (370 at Slater Steel continue to leave Indiana. od of FY03, the governor in Fort Wayne this week), and the jobless In the last month, a number of simi- reiterated that the state is recovery. lar job initiatives have been introduced by providing significant addi- That was evident with Indianapolis Democratic mayoral candidates around tional property tax relief Mayor Bart Peterson, who rushed a TV the state. compared to last year. and radio campaign as angry citizens Indiana Democrats appear to be "State spending was based filled up the gym at Broad Ripple High most active in Evansville and Lafayette, on these forecast targets, School and an auditorium at Butler where they sense they can make major so missing the marks - no matter how often or to what University to vent on the skyrocketing pickups, and in Anderson, where they are degree - is significant," said property taxes. Both Peterson and his trying to defend an open city hall, and Kernan. "Clearly, our econo- opponent, Marion County Treasurer Greg Elkhart where former Mayor Jim Perron is my is not picking up speed Jordan, put out dueling plans on how to in a hotly contested rematch with Mayor as quickly as the revenue keep taxing districts from spending more Dave Miller. Democrats also believe they forecast committee had esti- money and raising more taxes. have a good chance of defeating New mated. We're off in all of the But recent polls show Peterson on Albany Mayor Regina Overton in what big categories," said the verge of a landslide re-election. has long been a Democratic city. Kernan. "And because this Part of the dissipation in anger The best prospects for Republican quarter includes the month of September - a historically could be due to several reasons: the death pickups appear to be in Fort Wayne with important month in terms of of Gov. Frank O’Bannon, that caused both Linda Buskirk’s rematch with Mayor revenue generation - this is Republicans and Democrats to pause. Graham Richard, LaPorte with challenger cause for concern." Campaign activities were, for the most, Lee Morris, Anderson with Kevin Smith, part suspended. Then there’s the “anger Marion with challenger Wayne Seybold BOSMA SAYS KERNAN transferral” concept. and Crown Point with Dan Klein where The campaign operative explained, Mayor James Metros is retiring.  continued on page 6 Thursday, Oct. 9, 2003 Page 6 of 8 2003 Racing Form 2003 Indiana Mayoral Races Anderson Mayoral: Republican: Kevin Smith. Democrat: Robert W. Rock. SHOULD MAKE MORE Independent: Linda Haynes. 1995 Results: Lawler (D) 9,411, Graham (R) 8,817. 1999 CUTS: House Minority Results: Lawler (D) 8,395, Czarniecki (R) 7,002 Haynes (I) 1,950. 2003 Forecast: While Leader Brian Bosma, R- WISH-TV was breaking a story about SigmaSix in the FSSA investigation, Rock was makiing Indianapolis, said the State presentations to police and fire groups about the training benefits of the SigmaSix program. Budget Agency, which Mitch Daniels made an appearance to support Smith. “We're very flattered that Mitch Daniels Kernan controls, can make would come to Anderson to support the mayoral race,” said Smith. “He came all the way from any needed cuts to address Washington, D.C., from his past work, to Anderson. I'm very pleased with that.” General revenue shortfalls by with- Status: Tossup. holding money set aside in Crown Point Mayoral: Republican: Dan Klein. Democrat: Wayne Isailovich. 1999 the 2003-05 budget Results: Metros (D) 3,005, Kemp (R) 2,671. 2003 Outlook: Since announcing his candidacy in (Indianapolis Star). "He has January, Isailovich has campaigned as a fiscal conservative who will defend taxpayers against what he needs to get the job wasteful government spending (Casey Newton, Times of Northwest Indiana). But his opponent done, if he has the will to describes him as just the opposite - a man who landed a fat contract for his business through a use it," Bosma said. "He political connection and then failed to account for the work he did when his patron left office. At can always spend less." issue is the four-year, $480,000 contract Isailovich won for his Merrillville business, Addiction Kernan acknowledged as and Behavioral Counseling Services, to provide counseling to inmates at the Lake County sher- much, saying the adminis- iff's work release program.Incoming Sheriff Rogelio Dominguez asked the commissioners not to tration has cut $1 billion in vote on Isailovich's contract until he could review Isailovich's work. But when he went to spending since 2000. "If we review the records, he said, they were nowhere to be found. “I don't believe they were lost, but had spent all of the money they weren't here,” Dominguez said. “I simply that was appropriated in the asked him for the records. I would think that last three years, we'd be out whatever he sent to the previous sheriff, he of business today," he said. would have had a copy of those records. I would Kernan won't rule out a tax not ask for specific client information, but rather increase. "There has been statistical data on the type of counseling they no discussion about raising provided -- pretty basic stuff.” Isailovich staunchly defended the work his company did for the taxes," Kernan said. "That county. “From the time I stopped drinking, I have dedicated my life to helping other people,” he is certainly not on my list of said. “My past is my greatest asset. I've dealt with the problems in my past. I've learned from things that we want to do." them and continue to learn from them. ... Since I've been in this business, we've helped thou- Republicans say they hope sands of people. We've taken drunken drivers off the road. We've educated individuals that have he keeps it that way. had problems.” Primary Status: TOSSUP. Indiana's last round of tax Evansville Mayoral: Republican: Mayor Russell Lloyd Jr.. Democrat: State Rep. increases came in 2002 Jonathon Weinzapfel. 1995 Results: McDonald (D) 19,162, Frary (R) 9,565. 1999 Results: when the General Lloyd (R) 15,980, Borries (D) 15,461. 2003 Forecast: Teamsters Local 215 endorsed Lloyd on Assembly, at Kernan's Sunday, saying the mayor helped improve a bad working relationship with past administrations request, raised business and is viewed as a “humble, decent, honest guy” (Evansville Courier & Press). The Teamsters income, cigarette, gambling did not endorse Lloyd or his Democratic opponent Rick Borries four years ago, but the union and sales taxes to help plug decided Lloyd had earned its support, which is “really based on his record and his dealings with the budget deficit, reduce us,” Teamsters President Chuck Whobrey said. General Status: Leans Weinzapfel. reliance on property taxes Fort Wayne Mayoral: Republican: Linda Buskirk. Democrat: Mayor Graham and overhaul business Richard. 1995 Results: Helmke 21,909, Essex (D) 11,033, Kempf (L) 1,029. 1999 Results: taxes to lure new invest- Richard (D) 21,607, Buskirk (R) 21,531. 2003 Forecast: The Marion County prosecutor is ment. Bosma said he would investigating a state agency's purchase of nearly $200,000 worth of training from a Fort Wayne- encourage Kernan not to based firm with ties to Mayor Richard, an Indianapolis TV station reported. WISH-TV reported renege on those changes -- Monday that the Family and Social Services Administration's purchase of Six Sigma training or seek higher taxes. But from The TQM Network was being probed because the spending appears to have skirted state the revenue shortfalls call procurement rules, which require additional scrutiny if they top $75,000. TQM, a consulting into question whether firm, was started by Richard more than a decade ago, but he severed all ties to the non-profit Page 7 of 8 Thursday, Oct. 9, 2003 company when he became mayor in January 2000, TQM President Dale Siegelin said Monday. Republicans are pointing out that Richard has refused to release his personal finance informa- tion and plan to press the mayor on that issue. Mayor Richard was admitted to Parkview Hospital on Friday for tests and observation. He has been released and is recovering at home. His doctors have diagnosed an infection, which is being treated with antibiotics, his staff stat- ed in a press release. He anticipates a complete recovery and will resume his schedule shortly. In the meantime he is in regular communication with his staff to ensure all City functions con- tinue properly. General Status: Tossup. Indiana can ride out the bud- Indianapolis Mayoral: Republican: Treasurer Greg Jordan. Democrat: Mayor get until after next year's Bart Peterson. 1995 Result".025 th.44 Tf 6.39oldsmnica(ern 64,209, (ChiBar.519 (RepublicN0,5N0, Ddelection, oernaLlic7,175rdan.)]TJ /TT6 said Kevin 1-88 10J 0 -1.2 TD 91995 Resucan: )Tj /TT4 1 Tf 6.39old(art Peteepublic102,87 20Gilroy 64,20983,044,riarns benaLlic7,77220GibeteepuOP)ayor) Tf 6.J 0 -1.2 TD 0 2,145rson. Brinegar, president of the Indiana Chamber of Commerce. "Riding this out seems to be the desire of elected officials," Brinegar said. "But the revenue fore- cast was pretty modest to begin with, and we've experi- enced a considerable amount of bleeding."

KITTLE BLAMES KERNAN FOR TAX INCREASES; OPPOSES FUTURE HIKES: Indiana Republican Chairman Jim Kittle Jr., called on Hoosiers to oppose possible tax increases by Gov. Joe Kernan (HPR). “Indiana faces major budget problems, but Hoosiers should oppose Gov. Kernan’s suggestion for another tax increase. Joe Kernan engineered one of the largest tax increases in Indiana history,” said Kittle. “That didn’t fix Indiana’s budget problem. Now, only a few weeks after becoming governor, he’s already sug- gesting the need for another tax hike.” While Kernan initi- ated the tax restructuring process in October 2001, the final plan was forged by Senate Finance Chairman Larry Borst, R-Greenwood, and was passed by the Republican Senate and the Democratic House, observed HPR’s Brian Howey. Asked about the role of Borst and Senate Republicans in the

continued on page 8 Thursday, Oct. 9, 2003 Page 8 of 8

2002 tax restructuring Cameron Carter, Indianapolis Eye - these contracting opportunities, as well as process, Kim Preston of the The recent announcement by the Indiana simplifying the process for state govern- Indiana GOP’s press office Department of Workforce Development ment contracts, so that more Indiana firms explained this morning, (DWD) that it would be contracting with can compete. And, Republican opponents “Republicans had been an India-based firm for a multi-million of the now Kernan administration who pushing for tax restructur- dollar, multi-year upgrade of the DWD’s reflexively attacked the DWD decision ing in better fiscal times (and those, like me, who defended it) need when a net tax increase may computerized claims processing system to remember core GOP values such as not have been necessary, was bad news for Indiana’s technology and Senate Republicans community — especially those who have commitment to market-based economics, pushed to make the restruc- struggled to find work since the dot-com free trade, government efficiency, and fis- turing that finally passed as bubble-burst. My view is that an Indiana cal responsibility on behalf of taxpayers. revenue neutral as possi- company should have received this work, The Tata decision was the right decision ble.” In reality, Sen. Borst but the essential fact is no Indiana compa- — for now. Let’s make sure that all that didn’t support tax restruc- ny bid for it. Therefore, keeping this busi- can be done is done to allow Hoosiers first turing until February 2002 crack at such contracts in the future. and Senate President Pro ness with an Indiana company was not an Tempore Bob Garton didn’t option. Tata’s bid was $8 million to $23 signal his support until May million less than its next closest competi- Jack Colwell, South Bend Tribune - of 2002 after months of flag- tor’s, and Tata has experience performing Republican leaders of course don't want ging revenues and just prior similar work for other states (New Kernan to be their opponent in the gover- to the historic special ses- Mexico, Montana and Pennsylvania) with nor race. Not only would he be an able sion, Howey observed. superior performance evaluations. It is candidate, but he now would be a candi-  also important to note that Tata is an date with zooming name recognition as Indiana employer despite being an over- the new governor and a favorable image seas company, and reportedly has indicat- for the way he took over duties from the ed a willingness to recruit within the state, stricken O'Bannon. Many Republicans -- as well as rely upon its present workforce and many Democrats, too -- believe that to fulfill the contract. Under these circum- Kernan is the only Democrat who could stances, awarding a contract is a relatively win the governor race next year. That easy decision — and one that must be could well be true. Will he run? It still made with the Hoosier taxpayer in mind. seems doubtful. But it is possible. He and Even if these were not taxpayer dollars at Maggie will ponder that this weekend and stake, any savvy business owner looking perhaps beyond that for a bit. But if he for a service provider would come to the doesn't run, it will have nothing to do with same conclusion: “I’m choosing the less fear of being roughed up by Kittle or expensive firm with a proven track record Republican TV spots. After all, Kernan and good references.” The DWD’s deci- was roughed up for 11 months by his cap- sion is understandable and defensible in tors after his plane was shot down over this context, but not necessarily justified North Vietnam. After that, being hit with in the long run. Indiana technology firms words about a Golden Drain Award proba- and workers currently grousing about the bly won't have much effect.  Tata contract need to take a long, hard look at themselves and the industry while realizing that globalization is here to stay. State decision-makers need to revise their procedures for advertising and promoting