Gov. Otter's State of the State speech

| January 9, 2012 7:30 AM

Mr. Speaker, Mr. President, Honorable Justices, my fellow constitutional officers, distinguished

legislators and members of my Cabinet, honored guests, friends, my family and our First Lady ... my fellow

Idahoans.

I am here today to report on my view of our state, and to provide you with recommendations for the

coming year.

It is my pleasure to report that Idaho, having been tested by the Great Recession, now is emerging

leaner, stronger, more resilient and better prepared to compete, prosper and prevail in the years to come.

Thank you for your leadership and for your partnership in guiding Idaho through a trying time for the

people we serve, and for your civic virtue in staying true to our Idaho values.

I'm also proud and humbled to report today the successful and honorable homecoming of the men and

women of the Idaho National Guard's 116

Cavalry Brigade Combat Team.

We also recently welcomed home about 100 Idahoans who were deployed to Iraq with the Army

Reserve's 391

Engineer Company.

But it is my solemn duty to report that two of our courageous war fighters with the 116

Armored Cav

lost their lives defending freedom during 2011 in a country half a world away. I ask that you keep Specialist

Nathan Ryan Beyers, Specialist Nicholas Wayne Newby and their loved ones in your thoughts and prayers as

you continue your work.

Along with Staff Sergeant Jason Rzepa, who was wounded and received the Purple Heart, they were

among more than 1,500 Idaho members of the 116

who put their lives on the line for us.

And they weren't alone. Specialist Robert Dyas of the 1

Infantry Division; Corporal Devin Daniels of

the 82

Airborne, and Corporal Ryan Sharp of the 1

Infantry Division each gave the last full measure of

devotion in defense of liberty during 2011.

They were our sons and our fathers, our brothers and our teachers, our students and our friends. They

each will be sorely missed.

Now most of our valiant soldiers are home, once again helping make Idaho the best place in the world to

live, to work and to raise a family. Unfortunately, that's not yet true of Sergeant Bowe Bergdahl of Hailey. He

remains in the captivity of a Taliban-supported terrorist network in Afghanistan.

I know you join me in continuing to pray for his safe release and speedy return home.

Among those troops who have returned home, grateful for their freedom, far too many did so without a

job.

That will change, because it must change. I believe we all can agree that these men and women have

faced too much hardship fighting abroad for us to ask them to face more hardship back here at home.

And so I am pleased to report to you today that the Department of Labor, the Division of Veterans

Services, the Military Division, the Department of Commerce, the Department of Education and all State

agencies are joined in the task of addressing that challenge.

Ladies and gentlemen, the Hire One Vet effort is more than the right thing to do. It is our responsibility

to ensure that our troops have the tools they need to resume their productive civilian lives. So I encourage you

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to help however you can, and to continue making good on our shared commitment to those who safeguard our

country's future.

Their plight is our plight. And their success is our success. I cannot put it any plainer than that.

Those veterans, and our children, are at the heart of the Idaho I want to see by the end of my second

term as your Governor.

I want to see an Idaho that is more independent, dynamic, diverse, and built on a foundation of freedom,

personal responsibility and public accountability. I want to see an Idaho focused not on scarcity or what we

lack, but on a more prosperous and hopeful future for all of us.

It's with that Idaho in mind that I set my top two budget and policy priorities for 2012 and this

legislative session. And the reality is, those two priorities are inseparable - jobs and education.

Almost everything we do this year will have an impact on those two priorities, which I'm confident you

share. But let's talk first about the philosophy that underpins those priorities - the philosophy that has seen us

through one of the worst economic downturns in American history.

About 14 months ago the people of Idaho elected us with the understanding that we would make

economic growth and the creation of more career opportunities the centerpiece of our State government agenda.

They entrusted us to deliver on our pledge to bring them a more efficient, effective and smaller State

government, and to protect Idaho's hard-working taxpayers.

Our citizens expressed strong support for our emphasis on government doing more with less, as they

have done, and our steadfast focus on living within the people's means. They embraced our ideas, encouraged

our efforts, and recommitted along with each of us to putting the politics of the past in the past.

And they endorsed our opposition to federal programs and policies aimed at imposing greater burdens

on taxpayers, locking up our natural resources with regulatory roadblocks, imposing top-down mandates, and

creating one-size-fits-all government "solutions" to our challenges.

Thanks to your leadership and an understanding of our constituents' needs that I believe only citizen

legislators can possess, the result is a State government that does not face, and will not face, the staggering

deficits, layoffs, shutdowns, tax increases and other problems that are plaguing many other states.

But keeping our head above water in difficult times isn't good enough - not for us, and not for the

people of Idaho. We are not here just to get by. We are here to help enable the people we serve to get ahead!

My three broad priorities when voters first elected me Governor were to encourage economic

opportunity, ensure responsible government, and empower Idahoans to be the architects of their own destiny.

Those remain the foundation of my approach to this job.

But circumstances have converged to raise the stakes.

You will continue to see my administration focus on re-establishing the proper role of State government

in our lives. And you will continue to see our extraordinary Idaho independence and self-reliance assert itself in

response to federal intrusions on our sovereignty and liberties.

But you also will see a greater emphasis on ensuring the efficiency and prudent frugality that we've

established in every agency of State government during the past three years become standard procedure.

What we had to do then will become our new normal going forward.

And you will see a greater emphasis on building innovative public-private partnerships that leverage our

limited resources toward advancing and achieving our shared goals. That's especially true when it comes to

fulfilling the benchmarks of Project 60, putting more of our 65,000 unemployed Idahoans back to work, and

preparing our citizens to fill more of the 18,500 jobs that now remain vacant in Idaho.

That's not just jawboning or wishful thinking. We're taking concrete steps to address the fact that

employment growth - a lagging economic indicator - has been "lagging" far too long.

Unemployment is slowly starting to decline. We've seen some good news in recent months, with our

jobless percentage at its lowest rate in two years. But unemployment remains at an unacceptable level.

And while what government can do is limited, as it should be, we can and will do a better job of

reaching out to our businesses and employers as partners in this effort.

That starts at the top, and now Project 60 has a new ramrod. Jeff Sayer has taken over as Department of

Commerce director. He brings with him a wealth of private-sector entrepreneurial experience, as well as

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renewed energy, enthusiasm and commitment to actively engaging with the people who make our economy and

our communities work.

And it's already making a difference.

Jeff is joining Roger Madsen at the Department of Labor, Bill Deal at the Department of Insurance,

Brian Ness at the Transportation Department, Celia Gould at the Department of Agriculture, Gavin Gee at the

Department of Finance, our colleges and universities and others to provide employers, job seekers and

businesses looking to grow with the tools they need to succeed.

Jeff and Roger in particular also are working closely with local economic development professionals and

community leaders all over Idaho. Their job is ensuring that we are fully prepared to take advantage of

economic opportunities, and create even more with a well-trained and motivated workforce, targeted

infrastructure investments and minimal government red tape.

They understand that the role of government - effective government - is not to create dependency, but

rather to facilitate opportunity.

Is that the right path forward? Ask the hundreds of people who will be working for the new Chobani

Greek yogurt plant being built in Twin Falls. In fact, ask anyone benefiting from the incredible economic

growth and increasing business diversity being made possible by the success of our Idaho dairy industry.

Ask the hundreds of Idaho citizens who are drawing paychecks and paying taxes as a result of growth at

ON Semiconductor in Pocatello, or the new Allstate regional customer service center in Chubbuck.

Ask any of the employees or supporting businesses benefiting from the growth of Ground Force

Manufacturing in Post Falls or its new Under Ground Force expansion. Ask Scentsy, or any of the health

science, research and technology businesses choosing to expand into The CORE in Meridian.

Other great Idaho companies like MetaGeek in Boise, Dynamis in Eagle, and PNW Arms in Potlatch

also have the potential to substantially change our economic landscape.

Those examples, and many more, are tangible results of Idaho's entrepreneurs stepping up and

expressing confidence in our future. And the key to their willingness to stake their future on Idaho is the degree

to which we make a commitment to being partners for progress.

Partnership is the key to a new program you'll be hearing more about in the weeks and months to come.

It's called IGEM, for Idaho Global Entrepreneurial Mission. It's patterned on successful programs in Utah and

Virginia. A similar concept is being applied in Colorado, and industry increasingly is wrapping its arms around

the idea.

So we're not reinventing the wheel here. In fact, our agriculture industry has had similar programs in

place for years. We're just perfecting it for our universities, our communities, and more of our Idaho businesses.

IGEM involves industry, entrepreneurs, higher education, the Idaho National Laboratory and the Center

for Advanced Energy Studies. Together, their focus will be on creating value on our campuses that will help our

existing businesses grow, nurture the startup of new businesses, and create more jobs and opportunities for

Idaho.

That will require a genuine commitment, some targeted investment and, perhaps most importantly, a

significant cultural change in how our universities approach research and working with industry.

I appreciate our university presidents and the State Board of Education for partnering with us in that

process. And I urge you to act decisively in support of the legislative efforts that IGEM will require. That

includes funding collaborative research aimed at job creation.

Public schools throughout Idaho also are undergoing cultural and technological changes as we continue

implementing the Students Come First reforms that you approved last year.

I'm committed, along with Superintendent Luna, to ensuring the success of those reforms. That's why

my budget calls for fully funding Students Come First, including its technology and pay-for-performance

elements.

The modest but targeted and responsible General Fund increase I'm proposing for public schools is the

right path forward. It will help our limited taxpayer resources go farther and make our K-12 education system

more effective and customer-driven.

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Most importantly, fully funding Students Come First will help ensure the success of our Idaho students

in an increasingly complex, connected and competitive global marketplace.

Preparing Idaho students for the wider world and for reaching their greatest potential right here at home

is a constitutional responsibility for State government. And like supporting our veterans, it also happens to be

the right thing to do - for our families, our communities, our economy, and our future.

When it comes to education, we cannot rely on the policies of the past to prepare our children for the

possibilities of the future.

That's why I'm additionally proposing to fully fund the cost of enrollment growth going forward at our

universities, colleges and community colleges. And it's my recommendation that we fully fund the cost of

moving into and operating new facilities on those schools' campuses.

In that way we'll be addressing the top priorities identified by the presidents at those institutions.

Now I'd like to say a few words about our community colleges. Specifically, I want to mention an

extraordinary example of collaboration between North Idaho College, the College of Southern Idaho and the

College of Western Idaho.

As you know, there is a pressing need for more workforce training. In fact, the explosive growth of

demand here in the Treasure Valley prompted the presidents and board chairs at NIC and CSI to actually defer

their share of an additional $1 million in proposed funding for Fiscal 2013.

They said they would rather see the extra money go to the College of Western Idaho, which as you know

is one of the fasting-growing community colleges in our nation's history. So with gratitude for their selflessness

and appreciating their foresight, I'm honoring that request in my budget recommendation.

Ladies and gentlemen, I was at St. Maries High School a few weeks ago to mark the statewide

completion of our Idaho Education Network's Phase One efforts. All 194 Idaho high schools now are connected

to the IEN - almost a year ahead of schedule and 16 percent under budget.

In St. Maries, Principal John Cordell and Superintendent Joseph Kren have been champions of using

technology and distance learning to improve and expand student achievement. The culture at St. Maries High,

as is the case with so many of our schools throughout Idaho, has been one aimed at enhancing student

achievement through a variety of learning options despite their remote and rural nature.

St. Maries already is working with North Idaho College, Lewis-Clark State College and other

curriculum providers to demonstrate that the possibilities are limitless with an innovative and open mind. And

there are plenty of those throughout Idaho, eager for the chance to expand their horizons as our Students Come

First efforts will enable and empower them to do.

Like our students, Idaho's State government also must be prepared for the challenges ahead. Your

understanding of the need to work for the best while preparing for the worst gave us the ability to draw more

than $381 million from our various reserve accounts over four budget years.

Those funds were essential in helping Idaho weather economic hard times without anything like the

dislocation and draconian measures that some other states were forced to take. That money helped us keep our

credit rating high and our debt-level low. It helped us keep our taxes in check and our eyes on emerging from

this extended downturn with a balanced and structurally sound budget. And we all know that's a prerequisite for

the growth and renewed prosperity we need.

That's why the budget I'm submitting to you proposes to begin refilling our reserve accounts in

preparation for the next unforeseen "rainy day." My Executive Budget calls for setting aside a total of $60

million in the Public Education Stabilization Fund, the Budget Stabilization Fund, and the new Higher

Education Stabilization Fund.

That will help us maintain the kind of fiscal stability, certainty and responsibility that Idahoans deserve

and employers look for in their State government. And that's what Idaho citizens will keep getting under my

administration, with your help and continuing support.

By contrast, that's not what the American people are getting from Washington, D.C.

Despite the hard work of our fine congressional delegation, Idaho's brightest spot on the federal level in

2011 was doing what the courts refused to do. Congressman Mike Simpson deserves our praise and our thanks

for his successful legislation restoring State management of wolves.

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It helps that Mike was a former Speaker of this House. With that experience, and his growing influence

in Congress, he knows what it takes to get things done that reflect the priorities and needs of the people back

here at home. I'm proud that we are represented in Washington, D.C. by four experienced legislators who

served with distinction in this building.

On the other end of the spectrum, as you know, the Obama administration's so-called "Patient

Protection and Affordable Care Act" mandated establishment of a health insurance exchange in each state.

I have struggled with the federal imposition of this mandate, in part because Idaho was exploring ways

to create its own market-based health insurance exchange long before the federal law was adopted.

Still, last September I allowed State agencies to apply for a grant to prepare for the federal law while we

continue fighting it in court. My decision to allow the application to be submitted simply preserved the

opportunity for you and all Idahoans to discuss our options and decide what's best for our citizens.

In the next few weeks we will continue to have those discussions - weighing all our options and the

potential outcomes associated with each of them. But it's also important to remember that those discussions

will be taking place in the context of the U.S. Supreme Court agreeing to consider the lawsuit that Idaho and 25

other states filed to protect the 10

Amendment rights of Idaho, and of the people, to choose.

My goal is to collaborate with you today on a principled path forward, so we're prepared for the health

care environment that we'll have tomorrow. I look forward to hearing from you, and the people we serve, about

our State role in ensuring that environment makes health care more accessible and affordable for all Idahoans.

Of course, health care is only one of the challenges that lay ahead for us.

We have little control over the vagaries of the world and national economy. But we can ensure that

economic opportunity finds a welcoming home here in Idaho. Ladies and gentlemen, that's why I'm proposing

that we set aside $45 million for tax relief in Fiscal 2013.

I have been discussing the form of that tax relief for some time now, with legislative leaders, business

groups, tax experts and our citizens. There remains a wide diversity of opinion on how best to target tax relief.

There are plenty of ideas, and just as many ways for us to crunch the numbers.

But there's also broad consensus on the need to reduce the burden both on our hard-working taxpayers

and on those employers who are looking for opportunities to grow our economy while creating careers and

livelihoods.

I look forward to hearing your proposals and working with you on responsible and forward-looking

ways to keep more of our taxpayers' money in their pockets, where it will do our communities and our people

the most good.

Beyond Idaho's borders, we are not tasked with addressing the shortcomings of the national

administration or the consequences of its inaction and misplaced priorities. What we can do, and all we should

seek to do, is set the best example possible of prudent, responsible, responsive and effective State government.

We can nurture and celebrate our private-sector success. We can encourage collaboration and

partnership while protecting individual freedom. We can foster and remove impediments to opportunity. And

we can seek to more equitably reward our most valued State employees for continuing in public service.

To that end, I'm proposing that we set aside $41 million from the General Fund in Fiscal 2013 to reward

our most deserving employees, including our public school teachers.

But that reward should be structured in such a way that it gives management as much flexibility as

possible. It also should be in the form of one-time payments, and it should be conditioned on tax revenues

meeting our projections.

Before I go on, I'd like to take just a moment to recognize and offer my personal thanks to a long-time

public servant who has been a mentor, a leader and a dear friend for generations of Idahoans.

General Darrell Manning is one of the most committed, conscientious and common-sense people I've

ever had the privilege of knowing. He served in both chambers of this Legislature. He was Idaho's first

Transportation director, and he's been a valued advisor and confidante of Governors and legislators for decades.

His recent decision to retire as chairman of the Idaho Transportation Board leaves a vacuum of

knowledge, experience and institutional memory that will be difficult to fill. I am proud to have served by his

side, and pleased to know that he will continue to answer my calls for his sage counsel.

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General Manning, please stand and be recognized as we applaud your work for the people of Idaho.

With General Manning's support, I also want to announce today that Region 3 Transportation Board

member Jerry Whitehead has agreed to take over as chairman effective in February.

I know you join me in welcoming Jerry to this new responsibility. And I ask you to join me in pledging

our support and assistance to Jerry, the Transportation Board and Director Ness as they work as a team to

develop plans and priorities for this essential part of our economic infrastructure.

It's been that team concept that has enabled us to refine our State government's processes these past few

years. We've made them more transparent, seamless, responsive and stable. Most importantly, we have become

better stewards of the taxpayers' money. And that's served to strengthen the foundation on which public

confidence is built.

That's what being a laboratory of the republic really means. And it's what Idaho is perfectly suited to

contribute to our national discussion.

Speaking of teams, last summer my staff and I visited with Boise State football coach Chris Petersen.

We asked the Coach how he's been able to keep upgrading the Broncos' success on the field. We asked

how he's been able to build a national reputation for excellence with what's considered limited resources by

today's college football standards.

What I took away from his answer was this: FOCUS.

Focus on the challenges at hand.

Focus on leveraging your strengths.

Focus on improving every day.

Focus on what you can control.

And focus on helping individual players understand how they can help achieve team goals while

reaching their own academic and athletic potential.

That's a pretty good formula for success. It's a high standard, but one which I know everyone here today

is committed to achieving for the people we serve.

Keeping faith with the Idaho way of life we inherited, and which we want to pass on, demands nothing

less. That way of life is characterized by our Idaho values, including our independence, our spiritual strengths,

our strong belief in self-determination, and our enduring love of liberty. Those values in turn are driven by faith

in the broader American ideal that we as individuals have both the ability and the responsibility to make our

future better than our past.

The responsibility we share as political leaders is to ensure that every individual Idahoan has the

opportunity to realize that goal. To do that, we must be united to overcome common challenges. We must be

consistent in nurturing success, and most of all we must be resolute in protecting our citizens in their efforts.

Ladies and gentlemen let me close today by expressing my sincere gratitude to you for agreeing to be a

part of this process.

Thomas Jefferson wrote an 1801 letter that nicely expresses the importance of integrity to the workings

of government. He wrote, and I quote, "Of the various Executive duties, no one excites more anxious concern

than that of placing the interests of our fellow citizens in the hands of honest men with understanding sufficient

for their station."

And I would add today, "honest WOMEN."

My friends, you have the understanding, the perspective, and the love of our State and our nation far

more than "sufficient" for your station, and far more than "sufficient" for the challenges of the times in which

we live.

Thank you and Godspeed.

Now, let's get to work!