Speaker Black, Senator Basnight, Lt. Gov. Perdue, Speaker Pro-tem Morgan, Members of the General Assembly, Chief Justice Lake, Members of the Court, Council of State and Cabinet; honored guests and fellow citizens:
Before I begin, I would like to recognize my wife Mary and my son Michael, who are here with me tonight, and I thank them for their love and support.
When we last came together in this chamber, our country was under the shadow of war. Two years and 1,400 courageous American lives later, that war is still with us.
As we take time tonight to reflect on our progress here at home, let us also reflect on those who are serving so well abroad.
To the airmen at Seymour Johnson and Pope Air Force Base, the Marines at Cherry Point and Camp Lejeune, the soldiers at Fort Bragg, the National Guard and Coast Guard who are here tonight, we are proud of you.
And we are proud to be the most military friendly state in America.
Many of our brave men and women are still abroad serving with honor and dignity. We lend them our support and pray for their safe and speedy return.
But, our prayers must be coupled with action for our military families.
To that end, I ask for another appropriation this year to help our military children and spouses with expenses incurred by the long and unexpected separation.
The fight for the protection of American values is not only the duty of the military; it is the patriotic duty of all of us. Our effort to protect America's dominance in the world depends not just on the finest military, but also the finest work force in the world.
With us tonight is General Dan Hickman. He just returned after a year in Iraq as the commanding officer of the 30th infantry heavy brigade. He is the General who brought to my attention that our troops needed radios, laptops and other equipment. North Carolina ordered them and shipped that equipment over to Iraq.
But he is also Dan Hickman, Community College Vice President. He has a dual role in protecting our American values. He commands the finest military in the world, but he also trains the finest work force in the world. He performs his patriotic duty in both lines of his work. General, we will support you in both your endeavors.
The federal constitution provides for the common defense. But our state constitution provides for the education of our work force.
In this global era, freedom is not guaranteed by a strong military alone. Today, a quality work force is essential to our economic freedom.
We must raise the knowledge, talent and skill of our people.
America's competitive edge is creativity and innovation. Whether we as Americans maintain dominance in the world economy depends not on Washington, but on this General Assembly, and your colleagues in other states, to provide all Americans the education they need to compete and win in the global economy.
I cannot speak for other states, but in North Carolina, we will do our part.
Since I last spoke to you, our economy is stronger, our budget is stronger and most important, our state is stronger.
Our unemployment rate has dropped faster in the last two years than nearly every state and is now below the national average.
We have gained over 83,000 jobs, and we were in the top five in the nation in net jobs created last year.
This is no accident or stroke of luck - it is the result of tough choices and hard work.
While other states buckled under budget pressure, North Carolina refused to drop the ax on our classrooms.
Together, we have faith that investing in education will allow all of our people, in every corner of every county of our state, to fully develop their God-given talents.
That is not just an economic imperative, it is a moral imperative. It is a North Carolina value.
Four years ago, some classes had 35 students. Today in K-3, the class size is 18.
Four years ago, North Carolina was one of only two Southern states with no pre-K program. This year, over 15,000 4-year-olds will start pre-K as at-risk kids and finish as ready-to-learn students.
And our school children are making more progress than ever. Our fourth graders led the nation in math last year. Class size is down and test scores are up.
Not long ago, our college-going rate trailed the nation. But today, because we fully funded enrollment increases and kept college affordable, we are a national leader.
Our investments in Moving Ahead, highways, roads and bridges, have paid off. North Carolina goods are flowing through our ports all around the world.
Now we can do what we ought to be doing: export North Carolina products, not North Carolina jobs.
We are also using smart, targeted investments to take advantage of major business opportunities.
You have given me the flexibility we need to respond quickly to new opportunities, and I am mindful of the responsibility that accompanies this trust. Every economic development tool will be used for the public purpose of creating jobs. We cannot stop until every North Carolinian who wants a job has a job.
New names have arrived like General Dynamics, Verizon and Dell.
Longtime North Carolina companies are expanding like GE, Merck and Lowe's.
And we will soon have the only statewide biomanufacturing job-training network in the world. North Carolina is now poised to become the world leader in biomanufacturing, with new jobs not just in the Triangle but throughout the entire state.
Today, companies can take advantage of a broader R&D tax credit to make sure their most creative work stays here.
Today, according to Ernst & Young, North Carolina has one of the lowest tax burdens on business.
We continue to be ranked at the top in business climate because we keep skills high and cost low. We want to make it easy for business to create jobs not just so business will profit but so our people will prosper.
In the end, everything that we do must be about making for a higher and better quality of life for our people.
And, we have not forgotten those who built this country. Today, according to the AARP, we have the best drug coverage for seniors in America. North Carolina is proud to lead the nation in providing for the greatest generation.
And we will not forget the great generations to come. We have fully funded our Health Choice program for over 124,000 children. In North Carolina, no child should be left behind in health care either.
But here is the good part: we did all this while restoring fiscal discipline, cutting waste, and putting a cap on government growth.
North Carolina made real and sustainable progress.
That means the funds will be there to provide these important programs in years to come, in good times and in bad.
Let us continue our progress aggressively, but within a new era of realism that guarantees the promises we make today will not be broken tomorrow.
Real vision demands that we make tough choices. Real vision is responsible and it is paid for.
We have met the challenges of the past four years, but we still have much to do.
Too many of our 9th graders are not completing high school on time. As the economy changes, our schools must change, too.
We must raise our high school graduation rate dramatically and quickly. We have great universities, great community colleges, early childhood and now great elementary schools. There is no excuse not to have great high schools too.
The high schools we have simply will not meet the demands of the global economy.
Twenty-first century schools must teach 21st century skills.
I want all ninth graders to hear this. By the time you reach 12th grade, no matter where you live, you will have the opportunity to receive a two-year college degree with just one extra year of school. A new partnership with high schools, community colleges and universities holds great promise for fully developing our state's talent.
You funded these pilot programs last year. This innovative project is called Learn and Earn. Learn more and earn more.
We are taking this initiative statewide over four years. Everybody wins. Our work force gets better skilled and more attractive. And students get a better education, and a better job.
And we are moving forward on other high school reforms too. With help from the Gates Foundation, we are building smaller schools within a school, so the students know the teachers and the teachers know the students.
These schools will focus on areas such as health sciences, biotechnology, and information technology, the very fields that have the most growth potential. And the students will work in these sectors as part of their education.
Students then see the connection between the courses they take and the jobs they want. It makes school relevant for them and they do not drop out.
If we keep their interest, we will keep them in school. And soon, the best-educated work force in America will be found within the borders of this state.
Today, the economy demands that everybody participate. There is no room for error.
It is past time that we provide adequate funds to those counties that lack the ability to provide for themselves.
Just as we will be judged individually by how we treat the least of our brethren, so shall we be measured as a state.
We cannot pretend that low-wealth and at-risk schools are not a problem. And it cannot be solved by a judge's decision or my executive order. To have a fair shake in life, these disadvantaged kids need the power, the commitment and the compassion of this General Assembly.
We cannot support a system of education that discriminates against even one child in North Carolina.
My budget will fully fund the low-wealth formula over two years, an increase of over 50 percent, to see that all children receive the same opportunities as the rest of North Carolina, not because it is law, but because it is right and just and fair.
But let this much be clear, when we offer opportunity, we will demand real accountability.
We can do a better job with the money we have. Our children deserve more and so do our taxpayers.
The state has too many different funds for at-risk kids with too little accountability. I want to pull this money together under one formula with one set of requirements and a lot of accountability. That is the only way to find out what works and what does not. Then we can invest in a proven strategy that helps all children meet high standards and reach their full potential.
We know that when our children have access to good teachers, they succeed. But right now we only produce one-third of the teachers we need. This business model will not work. We have to change it.
We are bringing together our community colleges with our universities to educate teachers in the communities where they are needed most. If you let teachers learn close to their homes, they will stay there and teach. This partnership has worked well on a pilot basis.
Now all of our university campuses will begin programs with community colleges in every corner of this state so that teachers can get their degree from a licensed university in their community and children can get the teachers they need in their schools. This plan will increase the number of new teachers by 64 percent each year.
And even the best teachers cannot control every aspect of a student's life. Life outside of school matters as much as the classroom, if not more. That is why we mandated character education.
If we are to close the achievement gap, increase the graduation rate, and prepare every student for the global economy, we must address the whole child.
As a prosecutor for 15 years in our state courts, I saw thousands of young children come to court with their parents, and you could literally pick out the kids who were not going to make it, not even have a chance. It was obvious to everyone in the courtroom from me to the clerk to the judge.
If we know we have a problem then we have a duty to address it and a duty to fix it.
We need social service and school staff working together in our schools to connect students and their families to the help they need. The services are already available in every county. We just have to connect them with the schools.
We cannot educate a child without the help and cooperation of parents.
Clearly, most parents are trying to raise their children right and get them a good education.
But some ignore their parental responsibilities. There is a child neglect statute on the books in this state. For those parents who intentionally interfere with their child's education, we will use that law to protect that child's right.
Teachers are held accountable for educating our children in school. We as parents should be held accountable for our children at home.
Reforming high schools.
Requiring more accountability for more resources.
Providing more teachers.
Meeting the needs of our children.
And, improving our skills in the global economy.
That is a formula for success that leads to progress. This is what it takes to protect American values. This is what it takes to be One North Carolina and a stronger America.
But our education plans do not stop in high school.
This year, more students will enter college than ever before.
More students will need financial aid. Washington just cut that aid to over 15,000 North Carolina students, the help they really need to go to college. In this knowledge-based economy, we will have to provide the funds.
So our message to these students is simple: stay in school and study hard. Washington may leave you on the curb, but North Carolina will not. Our budget will fund what Washington shamefully cut.
And I commend the Board of Governors for their support this year. Tuition cannot go up every single year, and it will not go up in my budget.
More community colleges need equipment for training. Otherwise, they have to wait-list students. My budget will make these investments.
And it is not just equipment; people make the difference in community colleges. My budget will continue the progress to get community college pay up to the national average.
This package of educational initiatives and reforms I have outlined tonight, from pre-K to the university, is critical to our state, especially in the global economy.
We have no choice but to provide the resources necessary to meet those demands.
So where do we get those resources? You know my idea.
Rest easy, my budget will not include an education lottery.
You have fronted money from the general fund for More at Four, reduced class size and school construction. From day one, I have said an education lottery should pay for these items. This lottery issue is not going away. Only the money for the education lottery is going away, from our state to other states every single day.
Since I delivered my first state of the state address, hundreds of millions of North Carolina dollars have gone to education in South Carolina, Georgia, Virginia and Tennessee. Our people are playing the lottery. We just need to decide which schools we should fund, other states or ours.
I am for funding our schools.
And we cannot talk about our needs and ignore health care. Costs are rising by double digits.
The bad habits of some drive up costs for all. This must change.
The time has come to significantly increase the cigarette tax and reduce teen smoking.
And the time has come for those cigarette companies who are not part of the original tobacco settlement agreement to make payments for the disease they cause and to abide by the same advertising restrictions that prohibit marketing to children like other companies have to do.
We have come so far these past four years through focus and discipline.
State spending growth has been the lowest of any four-year period in the past 50 years.
We have turned deficits to surpluses and overcome adversity at every turn.
But let us never forget the recent past.
We must abide by a reasonable spending cap. We can never let the overspending of the nineties occur again.
Efficiency and reasonable cuts are the new realities of budget life, and we can make it work.
We kept spending growth down, while test scores went up.
We cut spending and still raised college enrollment. We sustained our investments without sticking it to those who will come after us.
Continued progress must be a North Carolina hallmark.
We cannot be satisfied with the status quo or to measure our progress against neighboring states, but we must look across the nation and across the ocean to other countries to take our measure.
We cannot hesitate in our journey to build One North Carolina or our patriotic duty to build a better America.
With faith in God and confidence in our ambition, let us work together on these mighty goals, they are worthy of this great state.