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Indiana governor's race a litmus test for change

Mike Smith

Harley-riding, business-minded Republican Mitch Daniels roared in as Indiana's governor four years ago and shook up a state averse to change at a dizzying pace.

He canceled state workers' bargaining rights on his first day and never slowed down, erasing a $600 million budget shortfall in his first year, winning approval of statewide daylight saving time after a three-decade battle and hiring private companies to manage state resources in a quest for savings and efficiency.

But in a year in which change is a key theme in the presidential race, President Bush's former budget director finds himself in a surprisingly close race against an underfunded opponent who gets more comments about her short hairstyle than about many of her proposals.

Three recent statewide polls show Daniels and former congresswoman Jill Long Thompson in a tight race, one of five competitive governor's races nationwide this year.

Daniels has raised millions more than his opponent and has blitzed the state with campaign ads since March. But he is feeling the effects of the crumbling economy and anti-Republican sentiment that is expected to make this a big year for Democrats, even in traditionally red states.

Indiana hasn't chosen a Democrat for president since Lyndon Johnson in 1964, but Republican John McCain and Democrat Barack Obama are running about even in the state.

Daniels "is fighting a really difficult political environment," said Robert Dion, a professor of American politics at the University of Evansville. "You certainly can't count out Jill Long at this point, but if she wins, it will be in spite of her campaign that we've seen."

Long Thompson served in Congress from 1989 to 1995 and was an undersecretary for the U.S. Department of Agriculture during the Clinton administration. She narrowly won a contentious May primary, but her cash-strapped campaign hasn't been able to keep up with Daniels and took its ads off the air for six weeks after Labor Day.

Critics say her approach has been long on attacks against Daniels but short on specific reasons she would be a better governor. The Indianapolis Star, in endorsing Daniels, called Long Thompson's run "one of the more ineffective and frustrating statewide campaigns in memory."

She insists Daniels' brand of change isn't what Indiana needs and believes she can capitalize on the momentum Obama has generated in the state, which has seen voter registrations soar to a record of nearly 4.5 million.

"This is the first time I've ever run with the tide running in my direction," she said. "It's really fun."

Daniels says he inherited a state that was essentially bankrupt and that his changes have positioned the state to withstand the nation's economic turmoil better than its neighbors.

Chief among those are his decisions to outsource many duties traditionally overseen by state government. He leased the Indiana Toll Road to a foreign, private group for 75 years in exchange for a $3.8 billion upfront payment that has helped shore up the state's infrastructure. The state also hired private companies to run a prison and determine who is eligible for welfare benefits.

The latter change rankled many advocates for the needy, who say the "welfare modernization" effort has instead been a setback that has left many struggling to get the benefits to which they are entitled.

"We run into problems on almost every application we file," said attorney Keith Huffman, whose staff in northeastern Indiana's Wells County has had to navigate the changes on behalf of clients who receive Medicaid.

Long Thompson calls the outsourcing push "privatization madness" and has vowed to stop it.

Daniels concedes many of the changes have unsettled Indiana residents, but he believes the result is more efficient government.

"Standing still was a losing strategy, and Indiana had to get moving," he said. "If we try a lot of things, of course we're going to disagree from time to time, but I just hope everybody will accept the sincerity with which we are doing it. We have no agenda but to make this a better state."

There's still plenty of work to be done.

Indiana's jobless rate was 6.2 percent in September, up from 5.6 percent at the start of 2005. The manufacturing-heavy state has lost 20,000 jobs this year alone, in large part because of declines in the auto industry. The state ranks in the top 10 for home foreclosures.

Daniels points to nearly 33,000 jobs the state has gained since he took office in January 2005, including a new Honda plant that is expected to employ 2,000 by mid-2009.

Long Thompson, who grew up on a farm, says her opponent — a multimillionaire former executive for pharmaceutical giant Eli Lilly & Co. — is out of touch.

"Gov. Daniels would have you believe that everything is going pretty well here in Indiana," she said. "Well, he needs a reality check."

Therese Wojik, 50, of the Indianapolis suburb of Carmel concedes the state has lost a lot of jobs. But the investment firm employee applauds Daniels' job-creation efforts and said she likes his pace of change.

"Sometimes it pays to move a little bit faster and not stay as stable as maybe some people would like," she said.

Even so, Daniels acknowledges that this could be a tough year for Republicans. He's counting on plenty of ticket-splitters in a state that does not require residents to declare a party when registering to vote.

"Everything we've seen shows that the new voters favor Sen. Obama and favor us by a large margin," he said. "I think that particularly younger voters are less ideological. They are inclined to change, and they have seen a lot of change in Indiana."

The Associated Press