Mr. Speaker, Mr. Senate President, Madam Chief Justice and members of the judiciary, honorable members of the Executive Council, House and Senate, and my fellow citizens of New Hampshire:
First, let me thank our great first lady, Dr. Susan Lynch. For eight years, Susan has juggled our family and her medical practice with service to organizations such as Walk New Hampshire and the Prouty. She has been a strong advocate for children and families. Thank you, Susan, for your love and support of our family and me, and for your commitment to New Hampshire.
I also want to recognize Councilor Raymond Wieczorek, who is retiring after five terms on the Executive Council and five terms as Mayor of Manchester. Ray, thank you for all of your service to Manchester and to our state.
This fall, American combat troops left Iraq after more than 10 years. Countless New Hampshire citizens have served in support of the wars in Iraq and Afghanistan, leaving their families behind as they risked their lives for all of us. In these past 10 years, 58 New Hampshire citizens made the ultimate sacrifice.
One of my most humbling and moving duties has been to represent the people of New Hampshire to the families of the fallen, to offer the heartfelt thanks of a grateful state. I have had the tremendous honor of learning about the lives, joys and loves of the people behind the uniforms. Meeting their parents, wives and children - the people, who in the words of Abraham Lincoln, have laid "a costly sacrifice on the altar of freedom."
Please stand and join me in a moment of silence for our fallen.
I am proud to serve as commander in chief of the New Hampshire National Guard. Whether they are responding here at home to a flood or ice storm or going across the world to protect us from the threat of terrorism, Guard members answer the call to serve. They and their families sacrifice so much for us, as they serve with dignity, honor and courage.
In September, Colonel Pete Corey of Littleton brought 700 members of the 197th Fires Brigade home safely from Kuwait. I'd like to ask Colonel Corey to stand so we can thank him, and all the men and women of New Hampshire who have served our nation in the armed forces.
We were led today in the pledge by David Clark, a resident of the Veterans Home and a Vietnam veteran. He is joined today by men and women from the Veterans Home who served our nation in World War Two, Korea and Vietnam.
It is easy to take for granted the freedoms that we enjoy as Americans, the freedoms that we exercise every day in this building as we debate. We must never forget that the blood, sweat and tears of our veterans paid for every one of those freedoms. Let us thank them, and all of our veterans for their service to our country, and for protecting our liberty.
It is my great honor to report to the people of New Hampshire, for the fourth and final time, on the state of our great state.
You know what I am going to say, but I am going to say it again because it is still true: We live in the greatest state in the greatest country in the world.
As Governor, I think about that every day. There is something so very special about New Hampshire. Our extraordinary and caring people. Our sense of community. Our independent spirit and Yankee frugality. The creativity and ingenuity of our people. Our strong connection to the land.
I have the opportunity to see all parts of New Hampshire: businesses and nonprofits; schools and employment offices; veterans' homes and police stations. I meet people from every walk of life — from the fourth graders whose State House tours brighten my days to the CEOs considering moving their companies to our great state.
And I can tell you that the state of New Hampshire is strong, resilient and caring.
We gather today in the State House, a powerful symbol of our commitment to citizen involvement, democracy and transparency. Its Golden Dome reaching toward the sky beckons us to aspire to great things and a greater future for our state.
In our best moments, this is a place where we find common purpose in service to our fellow citizens. Here, we can make a difference for the people of New Hampshire. But this building is only a small part of New Hampshire.
The heart and soul of New Hampshire, the true strength of our state, lie outside these doors, with our people. We see it every day, as people across New Hampshire come together in common purpose, in ways large and small, to serve our state and to serve each other.
Take the New Hampshire Food Bank, where thousands of volunteers work to make sure families don't go to bed hungry. Under Melanie Gosselin's direction, the New Hampshire Food Bank distributes 7 million pounds of food every year. Let us thank Melanie and all of the food bank's donors for their work. They show the giving soul of New Hampshire.
At Londonderry High School, 232 people, mostly high school girls - in a selfless act of giving — lined up to cut off their hair in support of those living with cancer. Students who organized the drive, along with their teacher, Steve Juster, are with us today. Let us thank them for their generosity. They show the true heart of New Hampshire.
When Tropical Storm Irene hit, it devastated a number of North Country roads right before fall foliage season. Early estimates were that it would be impossible to open some roads, including the Kancamagus Highway, until spring. That would have devastated our tourism business. But employees at the Department of Transportation partnered with private contractors to open the Kanc in just 15 days.
Dennis Ford and John Paul-Hilliard, are two of the DOT maintenance supervisors who led the efforts to reopen roads damaged by Irene. Let us thank them and their crews. They show the strength of New Hampshire.
The people of New Hampshire work together every day to solve problems and to make our state a better place. In our work over the next year, let us take our inspiration from them. Let us find, under this Golden Dome, that same sense of common purpose that unites our citizens.
Many New Hampshire families have experienced hard times in the last several years. Some have lost their jobs. Some have lost their homes. Many have seen their savings dissipate. Even though our unemployment rate is one of the lowest in the nation, too many of our neighbors are still looking for work. We cannot rest until every person who wants a job can find a job here in New Hampshire.
Our first priority remains putting people back to work. And we have a strategy here in New Hampshire that has made us a national leader.
We've invested in our students and our workers. We've ensured that state government is open and accessible to citizens and business leaders. We've worked to protect our quality of life and environment. We've kept state taxes among the lowest in the nation. And we've traditionally recognized that state government has basic responsibilities it must meet and fund.
If you look at any national statistic, you can see that our strategy is working. We have the fourth lowest unemployment rate in the nation. We are routinely ranked among the most livable, healthiest and safest states. We've been named the best state in the country to raise a child four years in a row.
So as the husband of a physician, I urge us to adopt the cardinal rule of medicine: First do no harm. We can build on our success, but overall New Hampshire has a strategy that is working. Let's not mess it up.
Our greatest economic asset is our people. We have a responsibility to them, and to our state's economic future, to make sure New Hampshire workers have the skills they need to compete for good jobs.
My background is in manufacturing, and I understand the special value that comes from making things. Manufacturing is still the heartbeat of New Hampshire's economy. Its value is firmly rooted in our history, and in our ethic of hard work.
From the Manchester mills, today a center for high-tech ingenuity, developing products that are changing the world â€¦ to Gorham, where the reopened paper mill is once again producing high-quality paper goods. Manufacturing is alive and growing throughout our state.
Manufacturing creates good-paying jobs that help families build better lives. But manufacturing, like every industry today, demands workers with new, more advanced skills. That is why we are investing in building the workforce to meet the needs of today's manufacturing companies.
Albany International, a nearly billion-dollar company, could have located anywhere in the world, but its leaders chose New Hampshire. To ensure Albany has the workforce it needs, we're partnering with the company to create an advanced composites training program at the Great Bay Community College. That is one of the reasons why Albany is bringing hundreds of jobs to the City of Rochester.
As part of our efforts to get people back to work, we launched New Hampshire Working. This program has already helped avert the layoffs of more than 1,200 workers. It has helped companies hire hundreds of people by allowing up to six weeks of on-the-job training for people collecting unemployment. And this fall, we launched its final component, which is helping unemployed workers assess and upgrade their job skills.
Other states are now looking to emulate New Hampshire Working, and we're going to keep building on this innovative effort to help people get back to work.
Through our job-training program, we've partnered with companies like New Hampshire Ball Bearing in Peterborough and Osram Sylvania in Hillsboro, to make sure their workers are able to tackle today's job requirements. In all, we've trained nearly 12,000 workers at close to 200 companies.
Job training works for our businesses and our workers. If we invest in our people, we'll keep those good jobs right here in New Hampshire.
Building our future workforce starts with making sure all of our children receive a good education, from kindergarten to high school graduation, and through college if that is the course they choose.
We've increased funding for our public schools, invested in modernizing the facilities at our colleges and universities and, at long last, made kindergarten available to every student in every community in New Hampshire.
Education opened up a whole new world of opportunity for me. I want every child in New Hampshire to have that same chance, especially a high school graduation.
That's why we increased our compulsory attendance age from 16 to 18. We invested in alternative education programs. And as a result, we have cut our annual dropout rate in half.
At a time when high school dropout rates are of epidemic proportions in other states, here in New Hampshire, we've lowered our high school dropout rate to a remarkably low 1.16 percent. We've made so much progress because teachers and schools — from the PASS program in Manchester to the Bud Carlson Academy in Rochester - have made eliminating high school dropouts their goal too. They've brought commitment and creativity to the effort to help every child succeed.
While we have one of the lowest dropout rates in the nation, there was a slight up tick this year. We should re-examine recent cuts to the dropout prevention programs that help teachers keep students engaged in school. This is a fight our state can't afford to lose.
Every New Hampshire child should graduate from high school.
To strengthen opportunity for all our students, we need flexibility to direct more aid to communities and children with the greatest needs.
That is hard to do under the current Supreme Court rulings, which require the state to spend the same base amount for every student in every town. That is why I believe we need a constitutional amendment.
I support a bipartisan amendment that would improve our ability to give every child the opportunity for a quality education. I remain committed to working with any legislator who shares the goal of an amendment that allows us to target state education aid and affirms the state's responsibility to our schools. And I will oppose any amendment that would allow the state to abandon its responsibility for educating our children.
Our teachers are the heart and soul of our schools. I love teachers.
They invest so much of themselves in helping young people learn. At Windham High School, the passion and energy of this teacher is inspiring students to love science. Please join me in welcoming Bethany Bernasconi — New Hampshire 2012 teacher of the year. Teachers like Bethany are what help make a school great.
But no matter how great the teachers, it can be hard for children to learn in dilapidated buildings. Over the past decade, state funding for building aid has doubled, but there are still some districts that haven't been able to afford to fix even the basics at their schools.
We need to put in place a reformed building aid program. I support legislation that will establish a building aid budget, prioritize projects, and increase the match available to school districts with the greatest needs. Every child in New Hampshire should receive a quality education in a good school building.
To compete in the future, New Hampshire will need more workers with backgrounds in science and engineering, technology and math. That's why so many businesses have joined with programs like FIRST Robotics to inspire students to pursue careers in these fields.
Many of those jobs will require higher education, which is why we must make it financially possible for more students to go to college. The most recent budget reduced state funding to our public colleges and universities by half. This is exactly the type of shortsighted reduction that undermines our economic strategy and jeopardizes our vitality for years to come.
That reduction hurt New Hampshire students and families struggling to pay tuition. Some students may not be able to afford college at all. There may be fewer spaces for New Hampshire students at our own colleges.
These cuts hurt businesses trying to grow in New Hampshire — and send the wrong signal to the companies we are trying to attract. An educated workforce is the core of our state's successful economic development strategy. For our economic future, we must make it a priority to restore funding for higher education.
In addition to educating our future workforce, our public colleges are economic engines in other ways.
Two years ago, we partnered with the University of New Hampshire to create The Green Launching Pad. The Launching Pad works directly with start-up companies and entrepreneurs, connecting them with faculty and students to provide expert assistance, and with business mentors and angel investors. Since its inception, the Green Launching Pad has helped to launch 11 companies in New Hampshire, and every one of those companies has created jobs.
At EnerTrac in Hudson, they developed remote monitoring technology for fuel tanks. This breakthrough technology is allowing their customers to become more efficient, reducing operating costs by as much 40 percent.
When EnerTrac was chosen to participate in the Green Launching Pad, the fledgling company had just three employees and just 200 monitors installed. Now it has 25,000 monitors in place, 140,000 units on order — and the "help wanted" sign is out.
I believe in balanced budgets. I am proud of the work we've done to maintain a balanced budget in these difficult times. As a result of our strong financial management, we ended fiscal year 2011 with a surplus.
As we look at the current fiscal year, 2012, there are some promising signs. In addition to carrying forward a surplus, business taxes, which are the state's biggest revenue source, are running 6.4 percent ahead of last year.
But there are challenges as well.
Starting with the $14 million deficit the legislature built into its budget for 2012.
The 10-cent cut in the tobacco tax has wiped out much of the gains in business tax revenues. Already, tobacco revenues are running $13 million below last year.
As a result of a federal audit of the 2004 uncompensated care program for hospitals, the federal government will reduce its Medicaid payments to New Hampshire by $35 million over the next three years. Through strong management and slowing caseload growth, the Department of Health and Human Services has absorbed this year's federal reductions without additional program cuts.
The current budget dramatically reduced uncompensated care payments to hospitals. As a result, hospitals have been challenging current and past Medicaid Enhancement Tax payments. We have resolved the major issues with the federal government, and we expect the hospitals to now meet their obligations.
But the legislature must also consider how to repair this fractured relationship with our major health care providers.
With the 2011 surplus, and assuming the hospitals pay the taxes they owe, we should be able to end fiscal year 2012 balanced. That's my goal because that is in the best long-term interests of New Hampshire.
I am proud that New Hampshire has among the lowest state taxes per capita in the nation. I have been and remain committed to vetoing an income or a sales tax.
There are tax reductions that can spur job growth here in New Hampshire. Innovative companies create jobs and lay the foundation for a stronger future for our state. Five years ago, we put in place a research-and-development tax credit to attract companies to create the products of the future here in New Hampshire.
This year, I am proposing we double the research-and-development tax credit.
This is a tax credit that works to help create jobs; the same cannot be said of the cut in the tobacco tax.
The cut in the tobacco tax was nonsensical. That money would have been better spent on our community college and university systems, for example. We should roll it back, and use the revenue to invest in our economic future.
A good transportation network is the lifeblood of our economy. It is critical for transporting goods, for ensuring an enjoyable experience for our visitors, and for the quality of our citizens' lives. We've made great progress in the past seven years.
By 2013, traffic will be flowing on a wider and safer Spaulding Turnpike, opening up new economic development opportunities from Rochester to Portsmouth. The Airport Access Road was completed ahead of schedule and under budget, bringing new opportunities to businesses in Greater Manchester. To reduce traffic for our visitors and our residents, we've installed open road tolling in Hampton and will complete open road tolling in Hooksett by mid-2013.
Everywhere I go, I hear about the difference that these transportation projects made for our people and businesses.
On all these projects, we came together, made the difficult decisions on how to pay for them, and made them happen. That is what we need to do with the widening of Interstate 93 from Salem to Manchester.
Interstate 93 was built in the early 1960s for 20,000 cars a day. Now, we can see as many as 100,000 cars a day around Salem.
With the available funding, the Interstate 93 widening will sputter to a dead stop in Windham. Delaying this project hurts our citizens who must commute on this road every day. It hurts the businesses that depend on Interstate 93 to transport goods. It hurts our tourism industry. And it undercuts the economic development of land that would be opened with a new Exit 4a.
Right now, bids for road construction projects are coming in nearly 10 percent below estimates. The cost of capital is at an all-time low. And key permits will expire in 2020. Smart financial sense says we should be pushing forward with this project now, while it is less expensive.
Last year, I called on the legislature to come together to fund the expansion of Interstate 93. Not only did the Legislature not act on Interstate 93 funding, it cut overall highway fund revenue by $90 million.
Words alone will not raise the $365 million needed to complete this project. I am willing to put reasonable options on the table. I am asking the legislature to do so as well. If we come together and show the necessary political will, we can complete the widening of Interstate 93 through Manchester in just four years. The people of New Hampshire are waiting.
We can and we should finish widening Interstate 93 by 2016.
We hear from some a lot of anti-government talk â€" but that doesn't make much sense.
Government, after all, is all of us, the people of New Hampshire. And it exists to serve all of us. Responding to fires. Keeping our streets and neighborhoods safe. Caring for our sick and elderly. Protecting our clean air and water.
Our focus shouldn't be on attacking government. It should be on improving government.
That's why we are making it easier for businesses to navigate state government with a new online Business One Stop. This One Stop will provide business owners with streamlined access to the steps they need to take to open or expand a business, including one licensing system for all our boards and commissions.
This is just one of our efforts to make government more transparent and to improve how we provide critical services. We've cut outdated programs. Eliminated unnecessary offices. Centralized purchasing. Put more services, like driver's license renewals, online. Reduced personnel. Under Chief Justice Dalianis, the courts are moving forward with restructuring and e-court efforts. And we've put the state checkbook online so that taxpayers can see where their dollars are being spent.
Now, we are working to consolidate our human resources and back office functions across state government. The Department of Health and Human Services is moving forward with implementing Medicaid managed care.
At the Department of Corrections, we've issued requests for proposal to examine new approaches to running our corrections system.
State agencies are working hard to do more with significantly fewer people. We need to devote our employee resources to providing direct services to our citizens, rather than writing reports that no one reads.
That is why I am proposing streamlining legislation to eliminate or reduce the frequency of 100 time-consuming reports; reduce the paperwork it takes to buy small items; and combine the administrative functions of 34 boards and commissions into a new Office of Professional Licensure.
These efforts have taken a lot of work from employees across state government, starting with our agency heads. In tough times, they have worked with creativity to ensure the state provides crucial services. Our agency heads work well together and are absolutely dedicated to the people they serve. I'd like to ask them all to stand, so we can thank them.
Sadly, it has become too commonplace to attack public employees, and that needs to stop.
In these hard times, our state employees, our teachers, our firefighters and police officers, are working harder than ever to provide good services, to educate the next generation, to keep us safe. Join me in thanking those who serve all of us.
I respect the contributions of all of our workers, and I will never take away their right to organize.
Too many families lost their homes because of deceptive mortgage practices. But we have tied the hands of the Attorney General in protecting these consumers. Almost alone in the nation, because of a change in law a decade ago, our Attorney General lacks the authority to prosecute unfair and deceptive trade practices in industries like banking.
The Executive Council and I have spent a lot of time looking at this issue. We stand united in calling on the legislature to restore to the Attorney General the power to protect consumers wronged by abusive mortgage practices.
Helping those hurt by the mortgage crisis is an important step toward economic recovery, and we need to act now.
As we look to continue to build our economy, we need to consider the non-governmental costs that impact a company's ability to grow and compete. On the top of that list: health care.
The problem with health care in our country is not that we don't spend enough money. There is enough money in the system. We are not just spending it efficiently. Changing that is all of our responsibility: consumers, providers and insurance companies.
Through the Citizens Health Initiative, we've been working to spur change in our health care system. We've just completed a promising medical home pilot, paying providers a small monthly fee so that they can spend time managing and coordinating the care of their patients.
Medical homes, done right, can lead to better and less expensive care. The results are promising, and individual insurers, providers and our Medicaid program are working to expand this model across the state. My goal is to continue to build on the pilot to move New Hampshire away from the inefficient fee-for-service model, which rewards utilization, to a model that rewards good care and saves us money.
As we innovate with our health care system here in New Hampshire, we must also consider the impacts of reforms nationally.
States like Utah have adopted health insurance exchanges because they benefit businesses and citizens.
A well-designed health insurance exchange can make it easier for businesses to compare and obtain affordable health insurance. And I certainly don't think we want the federal government to design an exchange for us. That is why must move forward — now — with designing our own exchange right here in New Hampshire.
Over the past eight years, we've worked together to preserve thousands of acres of open space; to reduce mercury pollution; to protect our clean waters.
We're building a new energy future, with an energy efficiency fund to help businesses and residents cut their energy costs, and new standards that are spurring renewable energy projects.
Now, we have new wind plants under construction, as well as a new biomass plant that will help create 400 construction jobs in Berlin and contribute enough home-grown energy to power about 70,000 homes.
These were bipartisan efforts, because New Hampshire citizens have long recognized that we have a responsibility to cherish and preserve our natural resources.
I strongly believe that the New Hampshire environment that we give to our children and grandchildren should be just as good, if not better, than the one given to us. That is why I will stand firm against bills that undermine our environment.
One of the biggest issues facing our state and our environment is the proposal for the Northern Pass. I support bringing more renewable power to our state. It is in our long-term interests to diversify our power sources, and we should not dismiss out of hand the idea of hydropower from Canada.
But the proponents of Northern Pass need to listen better. This project cannot happen without local support. And it should not happen with eminent domain.
As lawmakers, we have a responsibility to think of the long-term consequences of our actions, that is why I oppose expanded gambling.
New Hampshire has developed a brand that has led to our economic success.
I do not believe that the monetary benefits of expanded gambling outweigh the risks that it poses to New Hampshire's quality of life, our existing businesses and workers, and our economic future. That is why I will veto legislation allowing casinos in New Hampshire.
I am proud that New Hampshire is one of the safest states in the nation. That's due in large part to the dedicated work of the members of our law enforcement community, and the smart and sensible laws that we've put in place.
I support the right of our citizens to bear arms. We have had a long bipartisan tradition of reasonable laws that balanced the rights of gun owners with the needs of public safety.
Unfortunately, there is a rash of proposed legislation that would undermine our tradition, from a bill repealing gun licenses, to a bill repealing background checks, to a bill forcing colleges to allow guns in classrooms and dorms.
We should always make public safety our highest priority. These bills are wrong for public safety and they are wrong for New Hampshire.
New Hampshire has a long and proud tradition of fighting for the rights of all people. And a tradition of leaving people alone to pursue their own happiness. As Governor, I intend to uphold that centuries-old tradition. I will stand firm against any legislation that would strip any of our citizens of their civil rights.
Finally, I'd like to talk about how we deal with each other, and the people we serve.
There's a harshness in the air, in the tone and nature of our communication, and particularly within this building, that's not healthy for our people or our democracy. We can disagree, without demonizing one another.
Vigorous debate is important, but our citizens expect us to behave with dignity and respect. They expect us to look for common ground and common purpose. We can find inspiration and models to follow in our people, who show us every day how to come together.
Dorothy and Walter Peterson are role models of mine because they have always put public service first. We lost Walter in the last year, but his memory and his example live on. Dorothy and Walter never let political defeats lead to bitterness. They never let politics stand in the way of service. They always looked to find ways to bring unity. Please join me in thanking Dorothy Peterson for all her years of service.
Our citizens have shown us over and over again that when we stand together we can win any battle.
When the federal government threatened to close the Portsmouth Naval Shipyard, the workers, lawmakers, local businesses and the community at large came together to fight to keep it open. It seemed like we had everybody against us: the Navy, the Secretary of Defense, the whole Pentagon. But we had the facts, and we had unity. And together, we kept open the best shipyard in the country.
We have with us today two of the workers who helped lead that fight, Paul O'Conner and JJ Joyal.
Now, there are plans for a new round of base closures. Well we stand ready. We're not going to let them close our shipyard! This is not a partisan issue. On this, I know all of New Hampshire will stand together.
Let's get out the t-shirts and the buses. Let's get ready to showcase our wonderful shipyard workers. Let the federal government try. We're going to win again — together.
That's how New Hampshire succeeds. I believe the interests that unite the people of our state are greater than those that divide us.
I am ready and eager to continue to work with you to make state government more efficient; to rebuild our roads and bridges; and to strengthen our economy and help our people get back to work.
That's where I hope we put our focus in the coming year. If we work together, in the great tradition of New Hampshire, I believe we can find areas of common ground to build a stronger future for all of our citizens.