Madam President, Mr. Speaker, Madam Chief Justice, members of the Legislature, members of the Cabinet, distinguished guests and my fellow citizens:
We come together tonight as Maine stands on the verge of a new era.
The choices we make in the coming days will help to define who we are as a State, and what we hope to become.
I will not splash varnish on the hard truths before us.
Home heating oil and gasoline prices are at record highs.
Winter, just a few weeks old, has already shown its teeth.
The national economy is struggling under the weight of declining home values.
State revenues are not immune from the national condition and are falling short of expectations by $95 million dollars. We are forced to make hard decisions and set priorities.
And we remain a country at war, with men and women called to duty in far-off and dangerous lands.
Every word I have spoken is the inescapable truth. But there’s more to Maine’s story than those challenges we face.
In the five years since I first addressed you as Governor, much has changed in Maine.
Today I am proud to say that we are better prepared and more able to weather economic storms.
You, my friends, have done much of the hard work. You have not only balanced budgets, and demanded efficiencies. You’ve also come together – often in a spirit of bipartisanship — to solve problems.
Five years ago, we faced a $1.2 billion dollar budget gap.
Our financial reserves were gone.
The State was borrowing hundreds of millions of dollars just to keep the lights on. Our credit rating was headed down.
Those days are gone – hopefully banished forever.
Today, we have rebuilt our reserves to almost $160 million dollars, and no longer take out payday loans to keep government open.
We have closed that budget gap and by the end of next year we will have invested more than $1 billion new State dollars in local education.
And we have done it all without raising the sales tax or income tax.
I want to repeat that, because it’s something the entire State should be proud of.
We have invested more than $1 billion new dollars in local education, rebuilt our reserves and stopped short-term borrowing.
Standard and Poor’s has raised our financial rating.
All without raising the sales or income tax.
That, my friends, is an accomplishment.
It has put us in a position of strength to deal with a fickle national economy.
Tonight, standing before you and with full knowledge of the challenges we face, I report that the State of this State is strong and determined to meet the future head on.
The revenue downturn we face in the two-year budget is a serious challenge that demands action.
On Dec. 18, I issued an executive order that reduced State spending by $38 million dollars for the rest of this fiscal year.
The Constitution of Maine requires the governor to ensure the State budget is balanced.
Every part of State government was called upon to make recommendations on how to reduce spending while maintaining their core missions.
I understand that these decisions touch real lives.
The cuts were not easy, but we are moving forward in a way that makes sure that we can protect our most vulnerable citizens while also meeting my Constitutional duty.
On that point, according to the Kaiser Foundation, Maine ranks first among the States in Medicaid spending for children, second in Medicaid spending for adults and fifth in Medicaid spending for the disabled.
Overall, according to Kaiser, Maine spends more per Medicaid enrollee than any other State.
So, tomorrow, when I unveil the details of my revisions to the two-year budget I can promise you this:
We will not pull the safety net out from under our most vulnerable citizens.
We will not take from our financial reserves to balance the budget.
And we will not increase taxes.
If we are to have the resources to invest in higher education, economic development and universal health care, we cannot continue to spend millions on systems built in the 1950s.
We must transform government at all levels. We must strengthen it to meet the demands of a new age. And we must prioritize our spending.
Government has an important role to play, but it cannot be all things to all people.
At the same time, beware of quick fixes and people who promise gain without change. They sell a bill of goods layered in promises that cannot be kept.
They say: You can have it all. The decisions aren’t difficult.
We all know that’s not true. The decisions ARE difficult.
We’ve made them and will continue to make them.
Since taking office in 2003, we have reduced the rolls of State government by more than 600 jobs. We have merged two major State departments, eliminating a commissioner, deputy commissioners;
And we have centralized back-office and administrative functions in all State departments. In just the first two years, that saved $11.5 million dollars.
It’s not the stuff of headlines. It’s good government, and it’s done.
Last year, the Legislature passed a truly historic reform of local education.
The new law reduces the number of school administrative units from 290 to 80.
School administrative units: That’s a mouth full. It sounds very government-like, very bureaucratic.
That’s because it is.
And that’s the problem.
Since the early 80s, the number of students in Maine has declined by almost 40,000 and is expected to decline by 20,000 more in the next five years.
During the same time, the number of school administrators has increased by 400.
For 50 years, we have done the same old thing, the same old way, and it hasn’t produced the excellence and results that we need.
It’s not sustainable and drains resources from students and teachers.
Now we are on our way to a new structure that will better serve our people. It will save taxpayers money and provide a better education for our children.
Legislation introduced this year and already approved by the Education Committee will further strengthen the new law.
Even so, the fighting around it has not stopped.
We cannot return to the dysfunction of the past.
In 1937, President Franklin Roosevelt talked about the tendency of government to fall victim to inertia and to retreat from important gains when put under pressure by powerful special interests.
“Shall we pause now and turn our back upon the road that lies ahead?,” he asked. “Shall we call this the promised land? Or, shall we continue on our way?”
As President Roosevelt knew then and the people of Maine know today, progress and growth are in front of us, not in the past.
As President Roosevelt said then, “We will carry on.”
In August, we began a conversation about the way we treat inmates in our prisons and county jails and about the financial hardships created by our current, fragmented system.
It is bad for taxpayers and bad for mentally ill and drug-addicted prisoners who do not get the care they need to break the cycle of crime.
It must change.
Tomorrow I will submit legislation to unify the state prison system with the 15 county jail administrations.
The plan has evolved from when we first began talking about it. We have listened to concerns from counties. And we have made changes to improve our plan.
I would like to say tonight that all the differences between the counties and the State have been resolved. They haven’t.
But I can say that progress has been made. Sheriffs and commissioners have come a long way from the starting point, and so have we. I believe that common ground is still possible.
And I believe a solution exists that will save taxpayer money and improve the treatment of the people in our care.