Indiana House may tilt to Democrats

November 5, 2008

Indiana Manufacturers Association CEO Pat Kiely spent last evening at the governor's residence until 1 a.m. The mood was celebratory, he said, but Gov. Mitch Daniels didn't spend much time on revelry. Instead, he worked the phones, making calls around the state to learn whether key seats in the Indiana House of Representatives had swung Republican. Between calls, he discussed plans for his second term agenda with key business leaders.

This morning, control of the Indiana House is still in doubt. Kiely said the latest counts suggest a 51-49 split favoring Democrats, which implies current speaker B. Patrick Bauer, D-South Bend, would retail the gavel.

Several key races this morning hinge on fewer than 300 votes, Kiely said. Perhaps the most closely disputed is Pendleton's House District 37, northeast of Indianapolis, where Democrat incumbent Scott Reske is struggling to hold his seat against Republican Kelly Gaskill. Gaskill currently leads by fewer than three dozen votes, Kiely said, with recounts still in dispute.

"The governor obviously was very pleased," Kiely said. "Not just with the outcome, but with the fact that they ran a totally positive campaign. They ran an agenda of change and performance. In a historic year, where Indiana goes Democratic on the presidential election. He pretty much blew his opponent out. He was upbeat, but he doesn't do much celebration."

"Now he's got some political capital back in his gun," Kiely added. "And I think everyone knows the governor's not afraid to use it."

Even if the Indiana House tilts to Republicans, Daniels will have to pursue a moderate agenda, Kiely said. The majority of Indiana's U.S. representatives are now Democrats, and the win by President-elect Barack Obama was the first time Indiana ended up in the "blue" column nationally since 1964.

Kiely expects Indiana will benefit from Obama's agenda, which is likely to include an early focus on auto industry woes. Kiely noted that nearly all of the industrial Midwest went for Obama, and he expects the new president to fast-track efforts to allow General Motors Corp. and Chrysler LLC to merge, or at least alleviate their short-term cash crunch.

Despite the recessionary economy, Kiely said, Indiana is in a good position to make business gains in coming months. No leadership transition will be necessary at the Indiana Economic Development Corp., and businesses around the country already are familiar with Indiana's reputation as a low-tax, business-friendly island positioned ideally in the geographic center of the nation, he said.

Kiely expects Indiana to seize on other state's woes and gain new business operations and headquarters as they contract elsewhere.

"Wayne Gretzky said the reason he was so good at hockey was he never skated to where the puck was, but where it will be," Kiely said. "We need to position for six to nine months out. When everyone else is hitting the wall, that's when we speed up."

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