The Howey Report

By Brian Howey

INDIANAPOLIS – Next week, the education “revolution” begins in Indiana.

As I sat down with Gov. Mitch Daniels Wednesday afternoon, he was penning a personal note on a letter he was sending U.S. Education Secretary Arne Duncan, a man, Daniels said, who would not “qualify” to be a principal under current state guidelines.

“We have now got an all new board of education,” Daniels explained. “We’ve got an all new Professional Licensing Board. We are going to redefine what is expected of a teacher in Indiana. It’s going to revolutionize the colleges and schools of education much more in terms of content knowledge. You can’t teach mathematics you don’t know, you can’t teach history you never learned.”

Brian Howey

He talked a week after Vigo Supt. Dan Tanoos was not reappointed to the Board of Education and former Sen. Teresa Lubbers took over the reins of the Commission on Higher Education. At the time, Tanoos told the Terre Haute Tribune-Star, “It doesn’t shock me because I’ve been vocal about Superintendent Bennett’s lack of support for public education. I’m not a Tony Bennett yes-man.”

The governor said that the goal is to attract teachers from all walks of life. “No one is against learning methods or how to teach, but you better know what you’re teaching,” he said. “You’re going to see significantly easier access to the classroom for people coming from non-traditional roots. We’ve got a lot of wonderful people, very accomplished, who feel called to teach children now in mid-career or even late career. We should welcome them with open arms.”

Daniels said that he and the Board of Education will work to “minimize the hurdles” to get professionals from other areas into the classroom.

The topic was broached after State Rep. Ed DeLaney, in the final hours of the special session of the Indiana General Assembly on June 30, said on the House floor “I believe that the other side has a position on public education they have not articulated. I think there is a direct assault on public education and they won’t say it.”

“What I heard Ed quoted as saying is it’s the end of public education as we know it. To which I said, ‘I sure hope so,’” said Daniels. “The system as we know it has been failing our kids and therefore failing our state. It’s simply got to change. We haven’t declared war on anything. We’ve come to a determination to have a system that works better. This year, some people didn’t see this coming. There are very, very positive changes coming.”

The governor said that a year or so after his second term ends, he hopes Hoosiers can see “results that matter.” By that, he means “positive significant improvement in student achievement. You would see a more rigorous system with students far better prepared in math or science than they have been. He would see a system – schools – built around the student, not the adults. Meaning far smaller administration costs and personnel. More and higher quality teachers in the classroom. You want to see a revolution, there’s one coming and it starts next week.”

As Daniels finished his letter to Duncan, he noted that on education issues, his administration and that of President Obama and Duncan are in sync on issues such as length of school day and charter schools. He chided the legislative Black Caucus. “I’ve had some direct conversations with leaders of the Black Caucus. We have President Obama on one side and them on the other,” Daniels said. “It may be a little awkward for them.”

“They have been fierce defenders of the status quo. I’m trying to persuade them that they are being terribly shortsighted. This is to side with the adults, tenured jobs, administrative jobs, union jobs, but against the interests of the children.”

“Our policies are absolutely consistent with the President and Secretary Duncan,” Daniels said of federal funding that could have been jeopardized when House Democrats tried to cap charter schools.

“Arne Duncan could not be superintendent or principal in Indiana,” Daniels said of Obama’s education chief and former superintendent of Chicago schools. “He doesn’t have the right credentials.” The governor enunciated “credentials.”

Asked about how the Ball State University teachers college will have to adapt, Daniels explained, “When the Professional Licensing Board begins starting next week to redefine what is required to get a teaching license in Indiana, the schools of education are going to have to make some major changes of their own. They are not going to need as many people teaching what to me is mumbo jumbo. We’re going to expect students who want to teach spending much more of their time studying the subject they are going to be teaching in the schools.”

Does Daniels have in mind a mix of what charter and traditional public schools should be? The governor explained, “No. I don’t pretend to know. What I know is that alternative approaches are extremely popular with parents and families. I do know that the general record of these schools is superior to the old model.”

The columnist publishes at www.howeypolitics.com.

The Howey Report

By Brian Howey

KOKOMO – By the time Indiana Treasurer Richard Mourdock’s 15-minutes of fame ended Wednesday morning, Hoosiers in the largest cluster of Chrysler factories here were breathing a sigh of relief. Within hours, the merger with Fiat was a done deal and Kokomo’s industrial hum would be back.

Mourdock was left to express his “disappointment” that the U.S. Supreme Court took a pass on what essentially became a rule of law argument over one of the most compelling manufacturing and bankruptcy chapters in U.S. history. In one of the most peculiar twists in modern economic development, the state executive branch aligned itself against the automotive sector that defined 20th Century Indiana, perplexing thousands of Hoosier families who stood on the brink of a WorkOne experience from Kokomo to Columbus.

Brian Howey

Or, as an emotional Gov. Mitch Daniels put it at Greensburg last November when Honda opened up its new plant there and the storm clouds gathered over Detroit, “If you build a great product and deliver value to your customers,” the economic rewards will come. “Our state should take some inspiration from that. Maybe to some extent their competitors should too.”

President Obama found himself in a situation where no matter what he did, there would be torrents of criticism following. In the wake of Chrysler, he gave the UAW and his own government ownership while cherry picking secured creditors.

With the Supreme Court final lifting of the stay on Chrysler, the White House was jubilant. “Not a single court that reviewed this matter, including the U.S. Supreme (Court), found any fault whatsoever with the handling of this matter by either Chrysler or the U.S. government,” White House spokeswoman Amy Brundage said. Chrysler is now poised to be “viable” company.

Even with Chrysler’s short-term survival, the old-line auto sector’s industrial footprint in Indiana will shrink, as will personal income after all the layoffs and UAW concessions. And raising personal income was one of Gov. Daniels top goals back in 2004. Others thought he couldn’t resist rubbing out an old GOP rival – the UAW.

Mourdock, too, was looking into the ether. “The future ramifications of the court’s decision on the capital markets remain to be seen,” he said. “From the onset of the case, I have fought for Indiana’s retired teachers, retired state policemen, and Hoosier taxpayers. I have no regret for having done so.”

And, thus, the final economic and political chapters of this amazing saga won’t be known for years, though by the end of the terms of President Obama, Gov. Daniels and Treasurer Mourdock, new trend lines will emerge.

Will Obama’s decision to use more taxpayer money and a stunningly expedited bankruptcy process create the “new” Chrysler/Fiat that, as Lee Iacocca did after Sen. Dick Lugar’s reprieve a generation ago, might bring billions of income and tax revenue to Hoosier workers and governments?

Or will Daniels’ preference to accentuate the emerging 21st Century Indiana companies like EnerDel, Bright Automotive and Electric Motors prove prescient if Chrysler and General Motors become stagnated money pits, managed by quasi-government bureaucracies, prolonging the agonizing atrophy that began shortly after the first oil shocks three and a half decades ago?

Daniels will never face voters again (if he and his top strategists are to be believed in the wake of all the “Draft Mitch” presidential-mania). Mourdock will face voters, either in a re-election bid or his own gubernatorial run.

Fate could swing both ways for Mourdock, the Chrysler-driven geologist who manages Indiana’s investments. Anyone who knows Mourdock believes he has stood on principle as opposed to political grandstanding. Yet his choices seemed to be made in the black and white of fiduciary duty over what the Detroit newspapers revealed as “risky” investments in waning Chrysler in the first place. A liquidated Chrysler would have, theoretically, created far more damage to Hoosier pensioners, governments and taxpayers than the few millions he stood up to save. How wise was that?

The fact that Mourdock spent at least $2 million to take the case to the Supreme Court leaves him open to future political attack. A stagnated Chrysler-Fiat might bring a political reprieve. If it turns out to be a successful Iaocca redux, Mourdock could be consigned to ridicule for years to come as the man who tried to kill the Ram, the Jeep.

There were also some interesting twists to Indiana’s government structure. According to the Indianapolis Star, Daniels signed off on Mourdock’s legal adventures. What if Daniels hadn’t? Hoosiers would have witnessed a divided executive branch, fueling the reform notion that state government would best run in a presidential-type administration where the buck stops with the governor. In this case, the buck stopped with a treasurer in an office Hoosier Democrats hardly ever credibly contest.

Daniels has become famous for grasping difficult, intractable problems (highway funding, stadium-building, and stadium board bailouts) and finding unique solutions (Major Moves, the eight-county food and beverage tax funding Lucas Oil Stadium). He took a pass on Chrysler and GM, presumably because his future eye sees nothing but trouble for the taxpayer even with the “new” GM and Chrysler. I kept waiting to see if Daniels could coax $5-$6 million out of the Indiana Economic Development Corporation (largely missing in action when it came to retaining GM and Chrysler plants) to refund any pension fund losses.

Instead, the governor stood mostly mute. He let the treasurer do most of the talkin’ as Republican and Democrat mayors, councilmen and commissioners shuddered at the glancing catastrophe.

The columnist publishes at www.howeypolitics.com

THE HOWEY REPORT

By Brian Howey

INDIANAPOLIS – Choose a word to describe our big dysfunctional Statehouse family? How about “bellicose?”

Republican Senate Appropriations Chairman Luke Kenley has been using phrases like “veto override” and “doomsday scenario” when it comes to passage of a biennial budget by June 30. “We are in uncharted territory,” said Kenley, whose most ardent admirer these days is Democratic House Speaker B. Patrick Bauer. “I want to know what the options are.”

When Gov. Mitch Daniels was in New Albany this past week, he noted a $1.1 billion drop off in revenues. He called last month’s defeated budget “a disaster” and said, “There will be more than a billion dollars less money coming in than the legislature was pretending at the time. So fine, let’s deal with this unpleasant reality.”

The House Black Caucus appears to be at odds with Speaker Bauer over the Gary casino move and the Capital Improvement Board bailout. Senate President David Long said on Thursday those issues are off the table.

Brian Howey

House and Senate Republicans are feuding over the budget and the Unemployment Insurance fund. The Chamber and the Indiana Manufacturers Association are upset with Daniels and Senate Republicans over the UI. The Chamber chose the word “outraged” to describe its feeling and rounded up venerable Republicans like John Mutz, John Hiler and Allan Hubbard to urge a Daniels veto, which was subsequently ignored.

Sens. Kenley and fellow Republicans Brandt Hershman and Dennis Kruse took the highly unusual step of issuing a 15-point paper in which they addressed “many of the negative comments” that “are being leveled by the same interest groups who years ago helped to carefully craft the system that is now bankrupt” (i.e. their usual election allies the Chamber and IMA). The business groups fear the $700 million “tax increase” could push more embattled companies over the brink.

Then there is the stunning Indiana State Teachers Association’s meltdown. The ISTA has been taken over by the National Education Association after its appalling insurance losses that led to Executive Director Warren William’s resignation in disgrace. This will be an Indiana chapter in the excesses of Wall Street. Hoosier taxpayers in 90 school districts may possibly be saddled with the costs of ISTA’s more than 4,000 risky trades that resulted in a $67 million deficit.

That, in turn, could provide a fascinating chapter in the crucial 2010 battle to control the Indiana House. Democratic candidates taking ISTA/NEA money – the Mother’s Milk of the Bauer House dynasty – may have to defend that connection to bailout-fatigued Hoosier voters in a dozen or so swing districts that will ultimately determine who draws the election maps for the coming decade.

It’s too early to characterize this as a political disaster, but it might be. Particularly when you take it in tandem with the United Auto Workers – another Democratic ally – that will now own two auto companies.

The state’s two front line agencies for the poor and unemployed – Family Social Services Administration and Workforce Development – are under fire as the Daniels’ administration modernization efforts are being severely tested under historically challenging circumstances.

The FSSA’s modernization has resulted in a worsening error rate of 12 percent as 75,000 people out of 623,000 may have been “improperly” denied aid, according to the Fort Wayne Journal Gazette. That disgraceful statistic is up from 5 percent in the previous fiscal year. State Sen. Vaneta Becker, R-Evansville, had a bill squelched that would have returned caseworkers to the counties. Becker charged, “Republicans in Senate leadership chose to ignore the issue. I don’t understand the reticence, the lack of initiative, by the Senate to act on this issue.”

The IMA can’t hide its contempt for Workforce Development, with Vice President Brian Burton accusing that agency of bypassing two state oversight boards in responding to the U.S. Labor Department’s recent findings that the state agency miscalculated jobless benefits, broke federal laws in awarding contracts, and violated other federal rules. “I think we need a full airing of this,” Burton insisted at a meeting of the State Workforce Innovation Council, according to the Associated Press.

DWD’s Theresa Voors responded by saying that federal feedback has been “very positive” and State Rep. Randy Borror, R-Fort Wayne, said he has “full faith” in the agency and that violations “will be corrected in a timely manner.”

So this is the crisis atmosphere that I forecast as the auto sector began to collapse. With auto plants from Fort Wayne to Bedford idled and scores of suppliers from Kendallville to Corydon facing oblivion, the worst-case scenario is here.

While the Obama administration’s catch phrase is “a crisis is a terrible thing to waste,” the Indiana Statehouse is wallowing in this one. Calls during the session for the powers-that-be to come together in a crisis council were ignored. Treasurer Richard Mourdock’s attempt to derail the Chrysler bankruptcy is a classic case of how coordination could have helped. Now the crisis deepens with profound fissures coursing through and between friends and foe.

I could make an intellectually-based forecast on how this coming special session will turn out, but I won’t. I might have better results hiring a bipolar chimp and providing him with a dartboard with various outcomes. The danger there is how many from the executive and legislative branches might get hit as they scramble in the crossfire?

The columnist publishes at www.howeypolitics.com