An e-mail from Indiana State Senator David Long (R-16th):
Long: Indiana Gets Three Doses of Good News About Economic Health, Recovery
(June 22, 2011) – Indiana recently got three doses of good news – all indicating the state’s economy may be getting healthier and possibly recovering from the prolonged national recession, because of our exceptional people and policies. Indiana’s prognoses were in spite of misguided federal remedies – seemingly endless bailouts and borrowing.
INDIANA LEADS GREAT LAKES REGION IN GROWTH: First came news from the U.S. Bureau of Economic Analysis showing Indiana’s real gross domestic product (GDP) grew at a remarkable rate of 4.6 percent in 2010. In comparison, other states averaged 2.6 percent GDP improvements. Leading contributors to the national upturn in economic growth came from the durable-goods manufacturing, retail trade, finance and insurance industries. Durable goods led the U.S. recovery in 2010 and were major economic contributors in seven of the eight regions and 29 states. Indiana and Oregon led the nation in durable-goods manufacturing with statistically twice the growth of our closest state competitors in that industry: Michigan, Tennessee and Wisconsin. In all, Indiana’s GDP in 2010 grew at a rate faster than any other state in the Great Lakes region (Indiana, 4.6 percent; Michigan, 2.9 percent; Wisconsin, 2.5 percent; and Illinois, 1.9 percent). Nationwide, only New York and North Dakota experienced GDP growth outpacing that of Indiana.
S&P AFFIRMS INDIANA’S “AAA” CREDIT RATING: Then, Indiana’s credit was reaffirmed as “AAA,” the highest rating granted by Standard and Poor (S&P). Only nine other states nationwide achieved this honor; no other Great Lakes state fared as well. In fact, S&P ratings for Illinois, Kentucky and Michigan all worsened. Wisconsin has not yet been rated. Analysts attributed Indiana’s excellent showing to our state’s increasingly diverse economy; a biennial state budget maintaining solid levels of reserves; proactive state budget management, including a willingness to reduce government spending and cut taxpayer costs; and sustaining low overall state debt obligations. With its triple-A credit rating, Indiana will be able to borrow money at lower interest rates for Hoosier taxpayers than those in states with worse ratings. Indiana school corporations also benefit, because their credit ratings are tied to those of our state government. Local units of government across Indiana will also directly or indirectly benefit from the Hoosier state’s admirable fiscal performance and reputation. A strong credit rating is advantageous to Indiana in negotiating with employers considering whether or not to establish, relocate or expand in the state. Clearly, it signals to established and potential business ventures that our state provides certainty and stability. Taxpayers can take satisfaction in the fact our state government is well run – not just on the word of politicians and pundits, but by an analysis of an internationally recognized, independent credit association. For Indiana to achieve and maintain S&P’s top rating through challenging recessionary years are noteworthy and signals of excellent stewardship.
INDIANA MANUFACTURING, LOGISTICS POISED FOR RECORD YEAR: Ball State University and Conexus Indiana followed with an analysis of the strengths, challenges and opportunities for Indiana’s manufacturing and logistics sector and forecast an upcoming “record year.” The report card gave the Hoosier state “A” grades in manufacturing share, logistics focus, global export/investment position and tax climate. Indiana already had a competitive advantage in logistics (warehousing, transportation and distribution) based on our position as the “Crossroads of America,” but Hoosier employers and officials are making smart decisions to keep our edge. Eliminating and avoiding inventory taxes are key to the continued success of manufacturers and logistical companies based here. While Indiana generally ranks in the top tier of states in terms of tax rates, the report predicts the recently enacted corporate income tax restructuring (HEA 1004) should bolster the state’s competitiveness nationwide and worldwide, making Indiana increasingly attractive to employers looking to invest and expand.
Short of exposure to more federal disappointments and debt, indications are that at least for now, Indiana seems to be recovering faster than most and better than expected. Inside-the-beltway experts would do well to note these improvements resulted from pro-growth, low-tax policies – prescribed by our state’s people and applied by common-sense Hoosier policymakers.