February 29, 2008


Hoosier Fixer: Indiana governor Mitch Daniels has brought a corporate mentality to the job of streamlining state bureaucracies. (Christy Hall Robinson, February 29, 2008, The American)

Government is “the last monopoly,” he said, and it “lacks accountability.” The only way to make it effective is to “implant” a system of accountability to measure and count results as businesses do, because “what gets measured gets done.” For example, Daniels said, a visit to the Indiana Bureau of Motor Vehicles—the kind of trip most Americans dread—now has an average wait time of eight minutes and ten seconds, down from over 40 minutes. Customer satisfaction has surged to 97 percent. The fact that Daniels refers to patrons of the bureau as “customers” speaks volumes about his corporate mentality.

During his tenure, Indiana has reduced the number of state employees by 10 percent. This reduction, even with the institution of a pay-for-performance system that provides much larger rewards for good workers, has allowed Daniels to operate with a state payroll that is lower than it was four years ago. Daniels’s emphasis is on “managing for results,” and he is not necessarily against government doing the job. But if the private sector is more capable of administering a project effectively, reducing costs, and operating “at the speed of business, not the speed of government,” he supports privatization. That is why IBM has replaced the state bureaucracy in administering welfare programs—which has saved Indiana roughly $1 billion. Daniels also brought $4 billion to the state by privatizing Indiana’s toll road, and he deregulated the telecommunications industry.

Daniels joked that he achieved success through what might appear to be a “very mysterious process,” but the practical reforms he implemented to control annual expenditures and streamline government operations are rooted in basic business principles. When Daniels became governor in January 2005, the state’s deficit was $600 million. Within one year of his inauguration, Indiana had a $300 million surplus. Cutting employees and expenditures was not the only contributing factor. Under Daniels, Indiana has improved its business tax climate, attracted a surge of foreign investment (particularly from Japan), and brought its unemployment rate to the lowest level in six years.

One big project Daniels hopes to finish this year is property tax reform. He plans to offer Indianans immediate relief on property taxes by using the revenue from an increased sales tax along with part of the state’s $300 million budget surplus, and he hopes to put a permanent cap on property taxes starting next year.

He'd bring John McCain the sort of comprehensive Third Way vision his campaign currently lacks, but it's hard to see a modern political pairing of two little bald white guys.

Posted by Orrin Judd at February 29, 2008 2:10 PM

Is it against campaign finance laws to spend political donations on Rogaine?

Posted by: Brandon at February 29, 2008 5:47 PM