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The State of Indiana (i /ɪndiˈænə/) is a U.S. state, the 19th admitted to the Union. It is located in the Great Lakes Region, and with approximately 6.3 million residents, is ranked 16th in population and 17th in population density. Indiana is ranked 38th in land area, and is the smallest state in the continental US west of the Appalachian Mountains. Its capital and largest city is Indianapolis, the largest of any state capital east of the Mississippi River.
Indiana has several metropolitan areas with populations greater than 100,000 as well as a number of smaller industrial cities and small towns. It is home to several major sports teams and athletic events including the NFL's Indianapolis Colts, the NBA's Indiana Pacers, the Indianapolis 500 motorsports race (which is the largest single-day sporting event in the world).
Residents of Indiana are known as Hoosiers, but the origin of the term is unknown. Many explanations are given, including the humorous ones of James Whitcomb Riley stating that Indiana pioneers would yell out "Who's There" in the wilderness or "Who's Ear?" after a brawl. The state's name means "Land of the Indians", or simply "Indian Land". This name dates back to at least the 1768 and was first used by Congress when the Indiana Territory was incorporated in 1800, before which it had been part of the Northwest Territory.
Prior to this, Indiana had been inhabited by varying cultures of indigenous peoples and historic Native Americans for thousands of years. Angel Mounds State Historic Site, one of the best preserved ancient earthwork mounds sites in the United States, can be found in Southwestern Indiana near Evansville.
The first people to live in what is now Indiana were the Paleo-Indians, ingressing about 8000 BC after the melting of the glaciers at the conclusion of the Ice Age. Divided into small groups, the Paleo-Indians were nomads who hunted large game such as Mastodons. They created stone tools made out of chert by chipping, knapping and flaking. The subsequent phase of Indiana's Native American antiquity is called the Archaic period, which occurred between 5000 and 4000 BC. They differed from the Paleo-Indians in that they used new tools and techniques to prepare food. Such new tools included different types of spear points and knives, with various forms of notches. They also used ground stone tools such as stone axes, woodworking tools and grinding stones. During the latter part of the period, mounds and middens were created, indicating that their settlements were becoming more permanent. The Archaic period ended at about 1500 BC, although some Archaic people lived until 700 BC. Afterwards, the Woodland period took place in Indiana, where various new cultural attributes appeared. During this period, ceramics and pottery were created as well as the increase of usage in horticulture. An early Woodland period group named the Adena people had elegant burial rituals, featuring log tombs beneath earth mounds. In the middle portion of the Woodland period, the Hopewell people began exploration of long-range trade of goods. Nearing the end of the stage, an exhaustive cultivation and adaptation of agriculture to grow crops such as corn and squash. The Woodland period ended around 1000 AD. The incoming period afterwards was known as the Mississippian period, which lasted from 1000 to 1650 AD. During this stage, large settlements were created that had similarities to towns, such as the Angel Mounds. They had large public areas such as plazas and platform mounds, where instrumental individuals of the settlement lived or conducted rituals.
French explorer René-Robert Cavelier, Sieur de La Salle was the first European to cross into Indiana after reaching present-day South Bend at the Saint Joseph River[disambiguation needed] in 1679. He returned the following year to gain knowledge of northern Indiana. French fur traders also came along and brought blankets, jewelry, tools, whiskey and weapons to trade for skins with the Native Americans. By 1732, the French had made three trading posts along the Wabash River with the efforts to control Native American trade routes from Lake Erie to the Mississippi River. In a period of a few years, the British arrived and contended against the French for management of the fruitful fur trade. Fighting between the French and British occurred throughout the 1750s as a result. Due to mistreatment from the British, the Native American tribes sided with the French during the French and Indian War. By the conclusion of the war in 1763, the French had lost all land west of the colonies, and control had been ceded to the British crown. Neighboring tribes in Indiana, however, did not give up and destroyed Fort Ouiatenon and Fort Miami during Pontiac's Rebellion. The royal proclamation of 1763 ceded the land west of the Appalachians for Indian use, and was thus labelled Indian territory. In 1775, the American Revolutionary War began as the colonists looked to free themselves from British rule. The majority of the fighting took place in the east, but military officer George Rogers Clark called for an army to help fight the British in the west. Clark's army won significant battles to overtake Vincennes and Fort Sackville on February 25, 1779. During the war, Clark managed to cut off British troops who were attacking the colonist from the west. His success is often credited for changing the course of the American Revolutionary War. At the end of the revolutionary war, through the treaty of Paris, the British crown ceded the land south of the great lakes to the newly formed United States. They did so without the input of the Indian tribes living in the area. The tribes were not party to the treaty. Some scholars argue that because of this lack of representation, Indian rights to the land were unfairly ceded to the US by the British Crown.
Present-day Indiana became part of the Northwest Territory in 1787. In 1800, Ohio was separated from the Northwest Territory by Congress, designating the rest of the land as the Indiana Territory. President Thomas Jefferson chose William Henry Harrison as the governor of the territory and Vincennes was established as the capital. After Michigan was separated and the Illinois Territory was formed, the size of Indiana was reduced to its current state. In 1810, Shawnee leader Tecumseh and his brother Tenskwatawa encouraged other tribes to resist European settlement into the territory. Supporters of Tecumseh formed Prophetstown while Harrison countered by building Fort Harrison nearby. The fort was often targeted by Prophetstown for attacks. Using the attacks as a reason to invade Prophetstown, Harrison went on the offensive and defeated the Native Americans in the Battle of Tippecanoe on November 7, 1811. After the attack, Tecumseh, who was away during the battle, went to different tribes to encourage them to retaliate. For nearly two years, his followers killed and kidnapped settlers and burned their homes. Tecumseh was killed in 1813 during the Battle of Thames. After his death, while some Native Americans returned to their settlements, others fled the area or were forced to go further west.
In December 1813, Corydon was established as the capital of the Indiana Territory. Two years later, a petition for statehood was approved by the Indiana legislature and sent to Congress. Afterwards, an Enabling Act was passed to provide an election of delegates to write a constitution for Indiana. On June 10, 1816, delegates assembled at Corydon to write the constitution, which was completed in nineteen days. President James Madison approved Indiana's admission into the union as the nineteenth state on December 11, 1816. In 1825, the state capital was moved from Corydon to Indianapolis and 26 years later, a new constitution was adopted. Following statehood, the new government set out on an ambitious plan to transform Indiana from a wilderness frontier into a developed, well-populated, and thriving state to accommodate for significant demographic and economic changes. The state's founders initiated a program that led to the construction of roads, canals, railroads and state-funded public schools. The plans nearly bankrupted the state and were a financial disaster, but increased land and produce value more than fourfold.
During the American Civil War, Indiana became politically influential and played an important role in the affairs of the nation. As the first western state to mobilize for the war, Indiana's soldiers were present in all of the major engagements during the war. Indiana residents were present in both the first and last battles and the state provided 126 infantry regiments, 26 batteries of artillery and 13 regiments of cavalry to the cause of the Union. In 1861, Indiana was assigned a quota of 7,500 men to join the Union Army. So many volunteered in the first call that thousands had to be turned away. Before the war ended, Indiana contributed 208,367 men to fight and serve in the war. Casualties were over 35% among these men: 24,416 lost their lives in the conflict and over 50,000 more were wounded. The only Civil War battle fought in Indiana was the Battle of Corydon, which occurred during Morgan's Raid. The battle left 15 dead, 40 wounded, and 355 captured.
Following the American Civil War, Indiana industry began to grow at an accelerated rate across the northern part of the state leading to the formation of labor unions and suffrage movements. The Indiana Gas Boom led to rapid industrialization during the late 19th century. In the early 20th century, Indiana developed into a strong manufacturing state. The state also saw many developments with the construction of Indianapolis Motor Speedway and the takeoff of the auto industry. During the 1930s, Indiana, like the rest of the nation, was affected by the Great Depression. The economic downturn had a wide-ranging negative impact on Indiana, such as the decline of urbanization. The situation was aggravated by the Dust Bowl, which caused an influx of migrants from the rural Midwestern United States. Governor Paul V. McNutt's administration struggled to build a state-funded welfare system to help the overwhelmed private charities. During his administration, spending and taxes were both cut drastically in response to the depression and the state government was completely reorganized. McNutt also ended Prohibition in the state and enacted the state's first income tax. On several occasions, he declared martial law to put an end to worker strikes. World War II helped lift the economy in Indiana, as the war required steel, food and other goods that were produced in Indiana. Roughly 10 percent of Indiana's population joined the armed forces while hundreds of industries earned war production contracts and began making war material. The effects of the war helped end the Great Depression.
With the conclusion of World War II, Indiana rebounded to levels of production prior to the Great Depression. Industry became the primary employer, a trend that continued into the 1960s. Urbanization during the 1950s and 1960s led to substantial growth in the state's urban centers. The auto, steel and pharmaceutical industries topped Indiana's major businesses. Indiana's population continued to grow during the years after the war, exceeding five million by the 1970 census. In the 1960s, the administration of Matthew E. Welsh adopted its first sales tax of two percent. Welsh also worked with the General Assembly to pass the Indiana Civil Rights Bill, granting equal protection to minorities in seeking employment. Beginning in 1970, a series of amendments to the state constitution were proposed. With adoption, the Indiana Court of Appeals was created and the procedure of appointing justices on the courts was adjusted. The 1973 oil crisis created a recession that hurt the automotive industry in Indiana. Companies like Delco Electronics and Delphi began a long series of downsizing that contributed to high unemployment rates in manufacturing in Anderson, Muncie, and Kokomo. The deindustrialization trend continued until the 1980s when the national and state economy began to diversify and recover.
With a total area of 36,418 square miles (94,320 km2), Indiana ranks as the 38th largest state in size. The state has a maximum dimension north to south of 250 miles (400 km) and a maximum east to west dimension of 145 miles (233 km). The state is bordered on the north by Michigan, on the east by Ohio and on the west by Illinois. The Ohio River separates Indiana from Kentucky on the southern border. Indiana is one of eight states that make up the Great Lakes region. The state includes two natural regions of the United States, the Central Lowland and the Interior Low Plateau. The average altitude of Indiana is about 760 feet (230 m) above sea level. The highest point in the state is Hoosier Hill, which is 1,257 feet (383 m) above sea level. Only 2,850 square miles (7,400 km2) have an altitude greater than 1,000 feet (300 m) and this area is enclosed within 14 counties. About 4,700 square miles (12,000 km2) have an elevation of less than 500 feet (150 m).
The till plains make up the central allotment of Indiana. Much of its appearance is a result of elements left behind by glaciers. The area includes some low hills and the soil is composed of glacial sands, gravel and clay, which results to exceptional farmland in central Indiana. The unglaciated segment of the state carries a different and off-balance surface, characterized in places by profound valleys and expeditious streams. A limited area in the southeastern area of the state possesses these types of characteristics. The soil is fertile in the valleys of Indiana, most notably Whitewater Valley which is known for its prodigious farming. In northwest Indiana, there are various sand hills and dunes, due in some measure to a former extension of the lake and wind action. In the basin of the Kankakee River there is an extensive scope of lakes, marshes and prairies. In northeastern Indiana there is a region of tall moraines, one of which is 200 to 500 feet (61 to 150 m) deep, 25 miles (40 km) wide and stretching across a distance of 100 miles (160 km).
The Wabash River, which is the longest free-flowing river east of the Mississippi, is the official river of Indiana. At 475 miles (764 km) in length, the river bisects the state from northeast to southwest before flowing south, mostly along the Indiana-Illinois border. The river has been the subject of several songs, such as On the Banks of the Wabash, The Wabash Cannonball and Back Home Again, In Indiana.
The Kankakee River goes through northern Indiana and serves as a demarcating line between suburban northwest Indiana and the rest of the state. There are over 1,000 lakes in Indiana. Tippecanoe Lake is the deepest lake in the state reaching depths at nearly 120 feet (37 m)) while Lake Wawasee is the largest natural lake in Indiana.
Indiana has a humid continental climate, with cool winters and warm, irriguous summers. The extreme southern portion of the state is within the humid subtropical climate area and receives more precipitation than other parts of Indiana. Temperatures generally diverge from the north and south sections of the state, with the annual mean temperature being 49°F-58°F (9°C-12°C) in the north and 57°F (14°C) in the south. While temperatures can fall below 0°F (-18°C) in the winter, the average in January ranges between 17°F (-8°C) and 35°F (2°C). Average temperatures during July differentiate from 63°F (17°C) to 88°F (31°C). The record high temperature for the state was 116°F (47°C) set on July 14, 1936 at Collegeville. The record low was -36°F (-38°C) on January 19, 1994 at New Whiteland. The growing season typically spans from 155 days in the north and 185 days in the south. While droughts occasionally occur in the southern region, rainfall totals are administered equally throughout the year. Precipitation totals range from 35 inches (89 cm) near Lake Michigan to 45 inches (110 cm) along the Ohio River, with the state averages to 40 inches (100 cm). The annual snowfall in Indiana averages less than 22 inches (56 cm) and the average wind speed in the state is 8 miles per hour (13 km/h). Indiana is one of the most tornado-prone states in the country, ranking sixth in a list by VorTek, an Alabama company. The city of South Bend was ranked the 14th most tornado-prone city in the country, ahead of cities such as Houston and Wichita. The same company also published a list of the most tornado prone cities and states in April, with Indiana coming in first and South Bend ranking 16th. Despite its vulnerability, Indiana is not a part of tornado alley.
As of 2008, there were 6,376,792 people residing in the state. The population density was 169.5 persons per square mile. The racial makeup of the state was 88.0% White, 9.1% African American, 1.4% Asian, 1.2% from a biracial or multiracial background and 0.3% Native American. Hispanic or Latino of any race made up 5.2% of the population. The Hispanic population is Indiana’s fastest growing minority. In the state, 24.9% of the population are under the age of 18, 6.9% are under the age of five and 12.8% are 65 years of age or older. The median age is 36.4 years. In 2005, 77.7% of Indiana residents lived in metropolitan counties, 16.5% lived in micropolitan counties and 5.9% lived in non-core counties.
German is the largest ancestry reported in Indiana, with 22.7% of the population reporting that ancestry in the Census. Persons citing American (12.0%) and English ancestry (8.9%) are also numerous, as are Irish (10.8%) and Polish (3.0%).
The center of population of Indiana is located in Hamilton County, in the town of Sheridan. Population growth since 1990 has been concentrated in the counties surrounding Indianapolis, with four of the top five fastest-growing counties in that area: Hamilton, Hendricks, Johnson, and Hancock. The other county is Dearborn County, which is near Cincinnati. Hamilton County has also been the fastest growing county in the area consisting of Indiana and its bordering states of Illinois, Michigan, Ohio and Kentucky and the 27th fastest growing county in the country.
In 2005, the median household income for Indiana residents was $43,993. Nearly 498,700 Indiana households had incomes from $50,000 to $74,999, accounting for 20% of all households. Hamilton County’s median household income is nearly $35,000 higher than the Indiana average. At $78,932, it ranks seventh in the country among counties with less than 250,000 people. The next highest median incomes in Indiana are also found in the Indianapolis suburbs; Hendricks County has a median of $57,538, followed by Johnson County at $56,251.
Although the largest single religious denomination in the state is Roman Catholic (836,009 members), most of the population are members of various Protestant denominations. The largest Protestant denomination by number of adherents in 2000 was the United Methodist Church with 288,308. A study by the Graduate Center found that 20 percent are Roman Catholic, 14 percent belong to different Baptist churches, 10 percent are other Christians, nine percent are Methodist, and six percent are Lutheran. The study also found that 16 percent are secular.
Indiana is home to the St. Meinrad Archabbey, one of two archabbeys in the United States and one of 11 in the world. Two conservative denominations, the Free Methodist Church and the Wesleyan Church, have their headquarters in Indianapolis as does the Christian Church. The Fellowship of Grace Brethren Churches maintains offices and publishing work in Winona Lake. Huntington serves as the home to the Church of the United Brethren in Christ. Anderson is home to the headquarters of the Church of God. The headquarters of the Missionary Church is located in Fort Wayne. The Friends United Meeting of the Religious Society of Friends, the largest branch of American Quakerism, is based in Richmond, which also houses the oldest Quaker seminary in the United States, the Earlham School of Religion. Indiana is home to an estimated 250,000 Muslims. The Islamic Society of North America is headquartered in Plainfield.
With a population of 795,458, Indianapolis is the largest city in Indiana and 13th largest in the United States. Three other cities in Indiana have a population greater than 100,000: Fort Wayne (251,247), Evansville (116,253) and South Bend (104,069). Since 2000, Fishers has seen the largest population rise amongst the state’s 20 largest cities with an increase of 69.1 percent. Hammond and Gary have seen the largest population declines regarding the top 20 largest cities since 2000, with a decrease of -6.8 and -5.9 percent respectively. Other cities that have seen extensive growth since 2000 are Noblesville (39.4 percent), Greenwood (26.3 percent), Carmel (21.4 percent) and Lawrence (9.3 percent). Meanwhile, Evansville (-4.2 percent), Anderson (-4 percent) and Muncie (-3.9 percent) are cities that have seen the steepest decline in population in the state. Indianapolis has the largest metropolitan area in the state and 33rd largest in the country. It consist of Marion County and eight surrounding counties in central Indiana. Altogether there are 13 metropolitan areas in Indiana.
The Governor of Indiana serves as the chief executive of the state and has the authority to manage the government as established in the Constitution of Indiana. The governor and the lieutenant governor are jointly elected to four-year terms, with gubernatorial elections running concurrent with United States presidential elections (1996,2000,2004,2008, etc). The governor may not serve more than two consecutive terms. The governor works with the Indiana General Assembly and the Supreme Court of Indiana to govern the state and has the authority to adjust the other branches. Special sessions of the General Assembly can be called upon by the governor as well as have the power to select and remove leaders of nearly all state departments, boards and commissions. Other notable powers include calling out the Indiana Guard Reserve or the Indiana National Guard in times of emergency or disaster, issuing pardons or commuting the sentence of any criminal offenders except in cases of treason or impeachment and possessing an abundant amount of statutory authority. The lieutenant governor serves as the President of the Senate and is responsible for ensuring that the senate rules are acted in accordance with by its constituents. The lieutenant governor can only vote to break ties. If the governor dies in office, becomes permanently incapacitated, resigns or is impeached, the lieutenant governor becomes governor. If both the governor and lieutenant governor positions are unoccupied, the Senate President pro tempore becomes governor.
The Indiana General Assembly is composed of a 50-member Senate and 100-member House of Representatives. The Senate is the upper house of the General Assembly and the House of Representatives is the lower house. The General Assembly has exclusive legislative authority within the state government. Both the Senate and House of Representatives can introduce legislation, with the exception that the Senate is not authorized to initiate legislation that will affect revenue. Bills are debated and passed separately in each house, but must be passed by both houses before they can submitted to the Governor. The legislature can nullify a veto from the governor with a majority vote of full membership in the Senate and House of Representatives. Each law passed by the General Assembly must be used without exception to the entire state. The General Assembly has no authority to create legislation that targets only a particular community. The General Assembly can manage the state's judiciary system by arranging the size of the courts and the bounds of their districts. It also can oversee the activities of the executive branch of the state government, has restricted power to regulate the county governments within the state, and has exclusive power to initiate the method to alter the Indiana Constitution.
The Indiana Supreme Court is made up of five judges with a Court of Appeals composed of 15 judges. The governor selects judges for the supreme and appeal courts from a group of applicants chosen by a special commission. After serving for two years, the judges must acquire the support of the electorate to serve for a 10-year term. In nearly all cases, the Supreme Court does not have original jurisdiction and can only hear cases that are petitioned to the court following being heard in lower courts. Local circuit courts are where the majority of cases begin with a trial and the consequence decided by the jury. The Supreme Court does has original and sole jurisdiction in certain specific areas including the practice of law, discipline or disbarment of Judges appointed to the lower state courts, and supervision over the exercise of jurisdiction by the other lower courts of the State.
The state is divided into 92 counties, which are led by a board of county commissioners. Most counties in Indiana have their own circuit court with judges that are elected for six-year terms. Approximately one-fourth of them have superior courts and a few of the densely populated counties have juvenile courts, criminal courts and probate courts. County officials that are elected to four-year terms include an auditor, recorder, treasurer, sheriff, coroner and clerk of the circuit court. All incorporated cities in Indiana have a mayor and council form of municipal government. Towns are governed by a town council and townships are governed by a township trustee and advisory board.
From 1880 to 1924, a resident of Indiana was included in all but one presidential election. Indiana Representative William Hayden English was nominated for Vice-President and ran with Winfield Scott Hancock in the 1880 election. In 1884, former Indiana Governor Thomas A. Hendricks was elected Vice-President of the United States. He served until his death on November 25, 1885, under President Grover Cleveland. In 1888, Indiana Senator Benjamin Harrison was elected President of the United States and served one term. He remains the only U.S. President from Indiana. Indiana Senator Charles W. Fairbanks was elected Vice-President in 1904, serving under President Theodore Roosevelt until 1913. Fairbanks made another run for Vice-President with Charles Evans Hughes in 1912, but they both lost to Woodrow Wilson and Indiana Governor Thomas R. Marshall, who served as Vice-President from 1913 until 1921. Not until 1988 did another presidential election involved a native of Indiana, when Senator Dan Quayle was elected Vice-President and served one term with George H. W. Bush.
Indiana has long been considered to be a Republican stronghold, particularly in Presidential races, but the Cook Partisan Voting Index (CPVI) now rates Indiana as only R+5, a smaller Republican edge than is assigned to 20 of the 28 "red" states. Indiana was one of only ten states to support Republican Wendell Willkie in 1940. On 14 occasions has the Republican candidate defeated the Democrat by a double digit margin in the state, including six times where a Republican won the state by more than 20%. In 2000 and 2004, George W. Bush won the state by a wide margin while the election was much closer overall. The state has only supported a Democrat for president five times since 1900. In 1912, Woodrow Wilson became the first Democrat to win the state with 43% of the vote. 20 years later, Franklin D. Roosevelt won the state with 55% of the vote over incumbent Republican Herbert Hoover. Roosevelt won the state again in 1936. In 1964, 56% of voters supported Democrat Lyndon B. Johnson over Republican Barry Goldwater. 44 years later, Democrat Barack Obama narrowly won the state against John McCain 50% to 49%.
While only five Democratic presidential nominees have carried Indiana since 1900, 11 Democrats were elected governor during that time. Before Mitch Daniels became governor in 2005, Democrats had held the office for 16 consecutive years. Indiana elects two senators and nine representatives to Congress. The state has 11 electoral votes in presidential elections. Seven of the districts favor the Republican Party according to the CPVI rankings. However, there are five Democrats serving as representatives compared to four Republicans. Historically, Republicans have been strongest in the eastern and central portions of the state, while Democrats have been strongest in the northwestern part of the state. Occasionally, certain counties in the southern part of the state will vote Democratic. Marion County, Indiana's most populated county, supported the Republican candidates from 1968 to 2000, before backing the Democrats in the 2004 and 2008 elections. Indiana's second most populated county, Lake County, is a strong supporter of the Democratic party that has not voted for a Republican since 1972. In 2005, the Bay Area Center for Voting Research rated the most liberal and conservative cities in the United States on voting statistics in the 2004 presidential election, based on 237 cities with populations of more than 100,000. Five Indiana cities were mentioned in the study. On the liberal side, Gary was ranked second and South Bend came in at 83. Regarding conservative cities, Fort Wayne was 44th, Evansville was 60th and Indianapolis was 82nd on the list.
In 2000, Indiana had a work force of 3,084,100. The total gross state product in 2005 was US$214 billion in 2000 chained dollars. Indiana's per capita income, as of 2005, was US$31,150. A high percentage of Indiana's income is from manufacturing. The Calumet region of northwest Indiana is the largest steel producing area in the U.S. Indiana's other manufactures include pharmaceuticals and medical devices, automobiles, electrical equipment, transportation equipment, chemical products, rubber, petroleum and coal products, and factory machinery.
Despite its reliance on manufacturing, Indiana has been much less affected by declines in traditional Rust Belt manufactures than many of its neighbors. The explanation appears to be certain factors in the labor market. First, much of the heavy manufacturing, such as industrial machinery and steel, requires highly skilled labor, and firms are often willing to locate where hard-to-train skills already exist. Second, Indiana's labor force is located primarily in medium-sized and smaller cities rather than in very large and expensive metropolises. This makes it possible for firms to offer somewhat lower wages for these skills than would normally be paid. Firms often see in Indiana a chance to obtain higher than average skills at lower than average wages.
Indiana is home to the international headquarters of pharmaceutical company Eli Lilly in Indianapolis, the state's largest corporation, as well as the world headquarters of Mead Johnson Nutritionals in Evansville. Overall, Indiana ranks fifth among all U.S. states in total sales and shipments of pharmaceutical products and second highest in the number of biopharmaceutical related jobs.
Indiana is located within the U.S. Corn Belt and Grain Belt. The state has a feedlot-style system raising corn to fatten hogs and cattle. Along with corn, soybeans are also a major cash crop. Its proximity to large urban centers, such as Indianapolis and Chicago, assure that dairying, egg production, and specialty horticulture occur. Other crops include melons, tomatoes, grapes, mint, popping corn, and tobacco in the southern counties. Most of the original land was not prairie and had to be cleared of deciduous trees. Many parcels of woodland remain and support a furniture-making sector in the southern portion of the state.
Indiana's economy is considered to be one of the most business-friendly in the U.S. This is due in part to its conservative business climate, low business taxes, relatively low union membership, and labor laws. The doctrine of at-will employment, whereby an employer can terminate an employee for any or no reason, is in force.
Indiana has a flat state income tax rate of 3.4%. Many Indiana counties also collect income tax. The state sales tax rate is 7%. Property taxes are imposed on both real and personal property in Indiana and are administered by the Department of Local Government Finance. Property is subject to taxation by a variety of taxing units (schools, counties, townships, cities and towns, libraries), making the total tax rate the sum of the tax rates imposed by all taxing units in which a property is located. However, a "circuit breaker" law enacted on March 19, 2008 limits property taxes to one percent of assessed value for homeowners, two percent for rental properties and farmland and three percent for businesses.
Indiana does not have a legal requirement to balance the state budget either in law or its constitution. Instead, Indiana has a constitutional ban on assuming debt. Indiana has a Rainy Day Fund and for healthy reserves proportional to spending. Indiana is one of the few states in the U.S. which do not allow a line-item veto. Indiana does not use Generally Accepted Accounting Principles.
Indiana's power production chiefly consists of the consumption of fossil fuels, mainly coal. Indiana has 24 coal power plants, including the largest coal power plant in the United States, Gibson Generating Station, located across the Wabash River from Mount Carmel, Illinois. While Indiana has made commitments to increasing use of renewable resources such as wind, hydroelectric, biomass, or solar power, however, progress has been very slow, mainly because of the continued abundance of coal in Southern Indiana. Most of the new plants in the state have been coal gasification plants. Another source is hydroelectric power.
Solar power and wind power are being investigated, and geothermal power is being used commercially. New estimates in 2006 raised the wind capacity for Indiana from 30 MW at 50 m turbine height to 40,000 MW at 70 m, which could double at 100 m, the height of newer turbines. As of the end of June 2008, Indiana has installed 130 MW of wind turbines and has under construction another 400 MW.