VALPARAISO | Despite economic decline nationally and regionally, Indiana Gov. Mitch Daniels said the Hoosier state is making strong progress.

Daniels attended a Valparaiso Rotary Club luncheon Tuesday to give an update on the state's economy. The governor covered several topics and praised the state for its budget surplus, recent tax cuts, low unemployment rate and appeal to out-of-state businesses.

"We are in a uniquely strong position in this state because we took action," Daniels said. "If there is a recession coming, of course we're not immune. But if it is going to happen, Indiana will enter it with the strongest possible position around. ... We have a tremendous economic advantage."

Daniels compared Indiana to the Midwest and said the majority of neighboring states are struggling with large budget crises. While other states are fishing for money, Indiana is sitting on $1 billion in reserves, Daniels said.

A recent study from the Pew Research Center shows 22 states currently have a budget shortfall that totals at least $37 billion. Daniels said many states have been especially pressed for funds to be used on transportation.

"Since we passed Major Moves, about 32 states have raised their gas tax," Daniels said, noting that if Indiana had taken a different route, Hoosiers may have seen pump prices up to 25 cents higher per gallon. "We take in more money in interest (from the Major Moves money) every year than the Toll Road collected in 50 years."

Daniels also praised the new tax plan, which is expected to cut homeowner property tax bills by an average of 26 percent statewide over last year's figure. The governor said state officials have helped create a competitive tax environment that has resulted in out-of-state businesses coming to Indiana.

"The cost of doing business (here) has been rated the fourth best in the nation and the best in the Midwest," Daniels said. "People are starting to listen to our billboards that say 'Come on in.'"

When a Rotary Club member asked the governor about the state of education programs in Indiana, Daniels admitted there is much work to be done. The governor discussed streamlining school districts, hiring more teachers and investing in secondary education.

"This is the heart of what I think we ought to concentrate on for the next four years," Daniels said.