The state of Indiana has finished the 1997 calendar year in one of the best fiscal positions ever enjoyed by any state government. Revenue and spending figures announced in mid-December project a surplus of more than $1.6 billion by the end of the current fiscal year next June 30.
That figure -- some $500 million more than the optimistic forecast of last July -- is primarily the result of tax revenues that are higher than were expected and of lower-than-estimated Medicaid expenditures.
By any measurement, Indiana is booming, and a unique opportunity is knocking on the Hoosier State's door. However, even in good times, leaders have to make tough decisions. In the case of this fiscal windfall, the state has three basic options:
Actually, this surplus is so large that a combination of all three options is possible. However, the most important step is to recognize that we have a clear responsibility to develop a strategy to allow our state to make the most of this opportunity. We should be asking ourselves right now how these funds can be used to improve the state's business climate, to create better jobs with better futures for Hoosiers.
A state with the kind of fiscal resources Indiana enjoys is in a strong competitive position. We can look across the spectrum of the global economy and decide what sectors of business and industry would suit our economic future best. We can develop a plan designed to develop or attract to our state the kind of firms we need. At the same time, we can improve the climate for existing businesses, so that their investments in the state can grow.
From my perspective as president of Purdue University, I certainly see higher education playing a key role in whatever the state does. However, I recognize that our universities are only one of the priorities the state must consider in planning its future.
Without question, an important factor for any corporation making operational decisions is the quality of the higher education system in the state. This is especially true of firms with high growth potential, because they tend to be the ones that employ highly educated workers. However, the education level of the work force is only one consideration.
Purdue has developed a variety of ways to work productively with both large and small companies. These include the Technical Assistance Program, which gives small firms access to Purdue expertise for problem solving, and direct partnerships for teaching, such as the aviation maintenance education program operated in conjunction with United Airlines and the in-plant Statewide Technology effort that Delco employees enjoy in Kokomo. The University also a growing outreach presence in the K-through-12 school system.
Purdue's new food science and biotechnology complex, now under construction, will bring tremendous benefits for the state's food processing industry, a business sector with huge international growth potential and for which Indiana is very well positioned to become a leader.
These are just a few examples of Purdue's numerous efforts to support economic development. Other state institutions have their own important programs that provide similar support. Indiana's colleges and universities are unique in their ability to provide a high return on our investment in them. Higher education is only one of the things our state's leaders must take into account in planning for the future, but it is one of the keys to future prosperity, and we must not fail to invest in it wisely.
Purdue's victory in the Alamo Bowl game was a great finish to a storybook season for Boilermaker football, and the trip to San Antonio was delightful for the thousands of fans who attended the game. Coach Joe Tiller and his staff, along with our players, are to be congratulated for an outstanding effort!
My best wishes for a happy and prosperous 1998!
Steven C. Beering