Speaker Richards, President Saunders and members of the General Assembly, Justice Stephens and members of the Judiciary, Governor Henry and other members of the Executive, my fellow Kentuckians.

The General Assembly has today convened in regular session to consider the state of the Commonwealth and to adopt changes in our public policies which it deems to be prudent in our continuing quest to promote the common welfare.

I’m here tonight to report to you my view of the state of the Commonwealth and to outline for the people in the broad sense, the course I think we should chart for the new millennium.

Overall, the state of the Commonwealth is good. As our nation enjoys peace and prosperity, so do we in Kentucky, perhaps in even greater measure than our fellow Americans.

Kentucky’s experiencing an economic expansion which has continued uninterrupted for 14 years.

Our population’s growing, reversing the brain drain of the eighties when many of our best and brightest left the state in pursuit of economic opportunity.

Our unemployment rate is 4.5%, the lowest it’s been in more than 20 years. We’re creating basic jobs faster than the nation as a whole. In fact, we’re fourth among the states in the number of manufacturing jobs gained during the nineties. By almost any measure of economic progress, we rank in the top ten in the country. The output of our farms, factories and mines has continued to fuel our economy and create a better life for our people.

And we’re accomplishing this in a safer environment. The number of workplace injuries and illnesses last year was the lowest it’s been in ten years. Fewer Kentuckians have lost their lives in fires this past year than in any year since records have been kept. And I’m particularly pleased to learn that our coal mines have had their safest year in history. Only five miners died in Kentucky last year. Now, that’s still five too many, but compare that to 1970 when 89 miners lost their lives in Kentucky and you can see that we’re making progress.

The first and most fundamental responsibility of government is to protect the lives of its citizens. Your Kentucky State Government’s doing that.

Yes, the state of the Commonwealth is good and it’s our responsibility to continue to invest in those policies and programs which have improved the safety and welfare of our citizens and sustain the progress that we enjoy in the Commonwealth today. The details of those policies and programs are what we’ll be debating during these next three months.

As we consider the hundreds of proposals which’ll be offered during this session, we must remember that the three fundamental functions of our government are; to protect our people and their property, improve our infrastructure, and educate our children.

Yes, our children. Not only are they the object of our affection, the reason we work from daylight to dark, the joy that makes life worth living, they’re our future, the people who’ll build the Kentucky of tomorrow, the ones we will depend on when we’re old.

Let us measure every proposal by its effect on them. Let us conduct ourselves as if our child was watching our every move. Abraham Lincoln summarized the role of the children of our society as well as any person could. Let me quote the president. "A child is a person who is going to carry on what you have started. . . sit where you are sitting, and when you are gone, attend to those things which you think are important. You may adopt all the policies you please, but how they are carried out depends on him. He will assume control of your cities, states, and nation. . . The fate of humanity is in his hands."

A hundred and thirty years ago President Lincoln understood how important our children are to the future. Let us dedicate ourselves and this session to the children of Kentucky!!!

I understand that there’re several Frankfort-area elementary school students in the Chamber. There they are, up there.

They’re here to learn how to lead Kentucky when they’re adults. Let’s give them a hand.

But for now they’re children. Together, let us build for them a Kentucky where they can grow up in safety, get a quality education, raise their families, have unlimited economic opportunities and enjoy a quality of life second to none. Let us make them proud, proud of what we do here, and proud to be a Kentuckian!!!

As we approach a new millenium, Kentucky faces a crossroads, much as we did a hundred years ago. Then, our leaders failed us and our parents paid the price. We paid, and our children will continue to pay, for the lack of vision and courage in our leaders a hundred years ago. Let the same not be said of us a hundred years from now.

There was a time when we let logging and mining despoil our environment. There was a time when thousands of Kentuckians were killed or maimed as they labored to support their families. And there was a time when we didn’t appreciate the value of an education. The fundamental cause of our economic and social problems today, is our neglect of education during the past century.

It’s not always been that way in Kentucky. Two hundred years ago we were a leader; a leader in medicine, religion, transportation, and political influence. We were also a leader in education.

Yes, if we’re going to properly serve our people, we must have a clean environment, safe communities and effective educational programs.

We must be ever vigilant in our effort to preserve our environment. There’re lots of things that are unique about Kentucky and one of them is the beauty of the rural parts of the Commonwealth. In fact, that’s the most common first response I get when I’m introduced to new people as I travel the world on behalf of Kentucky. "Oh, it’s such a beautiful state" is a recurring response. If we’re going to continue to enjoy the unique beauty which is Kentucky, then we’re going to have to continue to regulate polluting activities, protect our forests, and preserve our wildlife.

This better Kentucky I speak of must have safe streets and communities. We must not tolerate those individuals who threaten our property and our very lives because they have no respect for our laws!!!

We must address our criminal justice system, and I don’t mean just build more prisons. We must also make our courts more efficient, our punishments more relevant and our police officers better paid!!!

If we’re going to reduce criminal behavior by adults, we have to start with our children. Our prisons are full of adults that we failed when they were children. We must take our juvenile justice system from among the worst in the nation to among the best. We must have a system to treat our children, not just warehouse them. We must give our judges more tools to treat children on a case-by-case basis, we must have effective in-community treatment programs, and we must start the treatment after the first crime, not after the first murder!!!

We may have some adults who are so far gone that prison is the only way to protect ourselves from ‘em, but I refuse to give up on our kids!!!

We must not only make our communities safe from pollution and crime, we must make our people feel safe. No matter what else you may have, if you feel insecure, then you can’t enjoy life.

And we must make our homes safe. If you can’t feel safe in your home, where can you feel safe? And yet domestic violence and child abuse are making some of our homes a living hell for many adults and, yes, for all too many of our children. Parents who abuse their children aren’t fit to be parents and any male who would hit a women is not worthy to be called a man!!!

We must drive home one message, violence is not the answer!!!

Yes, we have challenges, but we also have opportunities. If we’re going to build a new Kentucky for a new millenium, we must invest in our communities: roads, water, sewer, and recreational, cultural and entertainment facilities. And there’s never been a better time to invest. Not only do we have a substantial one-time cash surplus developing, we’ll probably never find interest rates lower, or Kentucky’s credit higher. Yes, well developed communities are essential to our economic and social progress.

But most of all we must continue to invest in the education of our children. As important as education has been in the past, it’ll be doubly important in the future.

Eight years ago, in its finest hour, this legislature moved Kentucky from the back to the front in elementary and secondary education improvement in America. It made Kentucky the leader, in developing a new education system to serve our nation in a new millenium. While the time has come to make improvements which time and experience have made apparent, this is no time to retreat and we will not retreat!!!, We’ll continue to improve!!!

Less than a year ago we made a similar commitment to postsecondary education, and the time has now come to fulfill the commitments made in May. We will live up to those commitments, too!!!.

Not only must we ensure that our institutions of postsecondary education serve the needs of our people and businesses, we must also ensure that every Kentuckian can afford a postsecondary education. The time has now come for Kentucky to begin a major new initiative, to help the students of Kentucky and their parents pay the cost of a postsecondary education!!!

Today, our society needs to have all our people educated to a higher level, a level which will more specifically prepare them for today’s world of work. If we’re going to maximize participation, we must not only make postsecondary education more accessible, we must also make it more affordable!!!

The willingness to address this issue will be the litmus test of our commitment to a new future for Kentucky.

Yes, there're many issues for us to address during these next three months. I've alluded to several of them and there are many more - like safe schools, teachers salaries, benefits for laid-off workers, and of course, health care insurance.

Yes, the challenges of these next three months are formidable and the resources are very limited. Frugal administration and sound fiscal policy is going to result in a substantial cash surplus at the end of this fiscal year. Not only will we be able to refund over $250 million in taxes improperly collected from Kentuckians in past years, we’ll also be able to increase our reserve for emergencies and still invest tens of millions of dollars of cash in basic infrastructure. But I must caution you, that recurring revenue to continue existing programs or start new ones will be extremely limited. Our strong economy would’ve created substantial increases in revenue but during these four years of our administration, we’re reducing or eliminating six taxes, an overall General Fund tax cut of over 4%, a return of almost 300 million dollars a year to you, the taxpayer, that you can spend on your family. This is the largest tax cut in the history of the Commonwealth and we can all take credit for it!!!

Kentuckians deserved this relief but, as Lloyd Hall used to say, "You have to take the bone with the pork chop." The net result of these tax cuts is a revenue growth next year of only 4.1%. With 3% inflation, a 4% increase in elementary and secondary education, and a hundred million new dollars already committed to postsecondary education, any new programs must be paid for by reducing the cost of existing programs. We’ll be proposing new expenditures, but this budget will not be without pain.

We need to work together, to make the best use of the taxpayer’s money, and that’s what I’ve been trying to do as I’ve kept you informed about the finances of the state and asked for your suggestions.

Many of you’ve told me that you’ve had more input into this budget than ever before and I’m glad, because you know best the needs of the people and we want to propose a budget that meets those needs as best we can with limited resources. We’re considering all your requests as we prepare the budget. We obviously won’t be able to accommodate all of ‘em but we will try to be fair. I’ll be talking to you in detail about the budget in a couple of weeks, but I hope I’ve given you and the people of Kentucky a brief overview of some of the things that that budget proposal will contain.

I think I’ve met with every legislator who’s requested a meeting to discuss the budget or other policy issues. It may’ve been at seven o’clock in the morning or eleven o’clock at night but my door’s been open to you and that’ll continue to be the case throughout this session. Your work will be my entire focus during these next three months.

As we get fully engaged in the serious debates that are about to begin, I invite you to discuss with us your opinions, even if you disagree with us - especially if you disagree with us. You may change our minds, or we may change yours, or we may continue to disagree, but at least we’ll have a better understanding of each other’s positions.

The time has now come to work together. I call on all of us; me, my cabinet secretaries, all of you, to approach this session without regard to politics and without regard to political considerations even though I fully recognize that we’re working in a political arena.

I think I’ve demonstrated that I intend to be a strong leader of my party and I expect the leaders of the Republican Party to be the same. I recognize that our two-party system is an integral and very important part of our democratic system of government and partisanship has its place but this legislative session is not one of them!!!

I think I’ve demonstrated my willingness and ability to work with Republicans, in this legislature, in my cabinet, in the business community, and in local government. I’m prepared to continue this very positive relationship.

Most issues we’ll face in this session shouldn’t be partisan. The education of our children, shouldn’t be partisan. Crime in our streets, shouldn’t be partisan. The health of our people, shouldn’t be partisan.

It’s my intention to work with all members of this General Assembly on an equal and non-partisan basis, facing each issue on its merits. I call on all of you to do the same. Let us forget personalities. Let us forget past conflicts and battles. Let us put aside political aspirations and let us refrain from partisan demagoguery!!!

Over these past two years, we’ve gotten to know each other much better. I and my administration are better prepared to do our jobs; we’ve learned from our mistakes. We’ve proven ourselves to be honest and reliable. We may not have always been right , but we’ve always tried to do what’s right as we saw it at the time. I feel the same way about you.

I think the people expect us to work together, even if we can’t always agree. In my judgement the people will hold each of us responsible for any attempt to take political advantage of the work we’ll be doing here in Frankfort during the next three months. I commit to you that I won’t do that.

In conclusion, let me say that I understand and accept the fact that you, the General Assembly, have the last word. That’s your responsibility. It’s my responsibility to establish the starting point for many of these important issues we’ll be addressing. I expect to be actively engaged in all of the important debates during this session. I expect to win some and lose some. But most of all, I expect us together to make all Kentucky a winner!!!

We didn’t come here to be spectators. We came here to participate and to act. What we do in this session will affect our people for a hundred years. What we fail to do could haunt us even longer.

These last two years have been the most enjoyable and productive of my life. Every success our administration has enjoyed, has been made possible by this General Assembly. I think our greatest success has been the cooperative relationship we’ve built, based on equality and mutual respect. I look forward to continuing to work with you in that same spirit of cooperation and mutual respect during these next three months.

A friend of mine once said, "We have three choices in life. We can make things happen, we can watch things happen, or we can wonder what happened."

I came here to make things happen. I know you did too. If we work together in common cause, forgetting ego and political gain, we can make a difference in the lives of all Kentuckians. That’s what the people of Kentucky expect; that’s what our children deserve, and we should deliver no less!!!

Good night and God bless you.