Daniels says Indiana is a much different state than it was in 2005, when he took over from Democrat Joe Kernan.

“Then, we were broke and other states were flush,” Daniels said. “Tonight, while states elsewhere twist in financial agony, Indiana has an honestly balanced budget, a strong, protective reserve in our state savings account, and the first AAA credit rating in state history, one of just a handful left in America. Our credit is better – imagine this – than that of the federal government.”

Among other things, Daniels touted Indiana property tax rates, which he says are the lowest in the nation.

“We have worked relentlessly to move Indiana up the list of great places to do business,” Daniels said. “We have made steady progress, coming from nowhere to the top tier in every ranking: No. 6 according to the nation’s site selectors, No. 6 according to CEO Magazine, No. 5 according to real estate decision makers. … 

“Here’s another encouraging sign: More people are moving into Indiana than moving out. Our population is growing at the fastest rate from Iowa to Maine.”

But Daniels joked on how, just as Indiana’s economic picture was improving, the nation’s was not.

“We became the prettiest girl in school the year they called off the prom,” he said.

Daniels says Indiana is now seen as a leader in business and education reforms, increased public education spending and improved environmental track record.

“We are now, indisputably, seen as a leader,” Daniels said.

Although Daniels touted Indiana’s $1.2 billion investment in road and bridge construction, he made no mention of projects in Northwest Indiana or plans to rebuild the Cline Avenue bridge, which runs through East Chicago and Hammond. Area leaders have made the bridge’s return a priority, but the state’s latest proposal is to build a toll-road, which would likely mean expending fewer state dollars.

The governor mentioned a need for Hoosiers to continue donating to a fund for victims of last summer’s stage collapse at the Indiana State Fair.

But Daniels’ comments about and support for right-to-work legislation captured the most attention and disdain from the hundreds of pro-union workers at the Statehouse Tuesday evening. And, although House Democratic leader Patrick Bauer of South Bend attended the governor’s speech, many Democrats did not.

State Rep. Mara Candelaria Reardon (D-Munster) told WBEZ she did not attend because she felt Republicans denied the public’s right to voice opinions on the right-to-work bill. Democratic leaders have asked the Republican leadership to hold public hearings on the hot-button issue, but those leaders pressed on. Just hours before Daniels’ address, a majority on the House’s labor committee voted to send the bill to the full House, which could vote on the measure by Friday.

“I really decided not to go because I was incensed by the way the public was not given a voice,” Reardon said. “They (committee members) gave six minutes to a policy that will have long-reaching effects on the state of Indiana. They (Republicans) chose to ignore their voices.”

State Rep. Scott Pelath (D-Michigan City) said he was most proud of protesters who attended Daniels’ address but spoke loudly against right-to-work.

“The State of the State was not the story tonight. The story was the thousands of citizens, including whole families, who filled the statehouse who came to protest this so called right-to-work which will drive down wages,” Pelath said. “The sound of Democracy is beautiful music.”

Indiana State Rep. Charlie Brown (D-Gary), who did attend the governor’s address, said he thought the speech was confusing in that the governor touted the state’s sound fiscal policy but then talked about how badly the state needs right-to-work in order to attract business.

“It was kind of a mixed message,” Brown said.

Brown does support Daniels’ call for a statewide smoking ban, which Daniels mentioned in a list of lingering legislative items on his remaining agenda. Brown has pushed for such a ban for years but met stiff resistance from business groups, including casino interests, which argued Indiana would lose tourism dollars to states that did not restrict smoking.

Bauer, meanwhile, took fault with Daniels’ descriptions of Indiana as a magnet for new jobs and expanding personal incomes. Bauer pointed to the state’s current 9 percent unemployment rate, compared to the 5.5 percent jobless rate when Daniels took office.

Indiana House Speaker Brian Bosma (R-Indianapolis) plans to reconvene the House at 12:30 Central time Wednesday, but it’s unknown if Democrats will return.