FRANKFORT, Ky. (AP) - Gov. Steve Beshear warned Monday that
Kentucky faces tough financial times ahead but offered words of
optimism that the state may be strengthened by the hardship.
In his first State of the Commonwealth address, Beshear lamented
a "budget crisis" that he said will "reduce our ability to make
major new investments in some important priorities." The speech
mirrored others he has given since taking office last month.
"It is my duty and my responsibility to inform you that we have
some tough times ahead," he said. "The revenue outlook is grim.
Because of the economic slowdown, the cooling of the housing
market, oil prices and a gap between what we spend and what we
earn, we are facing an unprecedented budgetary shortfall."
Beshear, who received a standing ovation when he arrived to
speak to a joint session of the House and Senate shortly after 7
p.m. EST, said raising taxes will be a last resort. And he made no
mention of his proposal to legalize casinos in the state, a move
that the Democratic governor says could generate $500 million a
year in additional revenue for state government.
"So that leaves cutting government spending," Beshear said.
"We can bring more efficiency out of state government, and I
intend to do just that."
Though necessary, Beshear said spending cuts will require
Following is the text of Gov. Steve Beshear's prepared remarks
for his State of the Commonwealth address:
Mr. President, Mr. Speaker, distinguished members of the
Kentucky General Assembly, Lt. Governor Mongiardo, Constitutional
Officers, Honorable Members of the Court of Justice, honored
guests, including Kentucky's First Lady and my fellow Kentuckians.
I stand before you in these financially demanding times proud to
be your governor and proud to be a Kentuckian.
Those of us in this Capitol have accepted a responsibility of
public service. None of us takes it lightly and each of us is
motivated from the heart.
I know each of you feels as I do - grateful for the opportunity
we have to give something back to this great Commonwealth.
The towering statue of Abraham Lincoln watching over the
entrance hall of this majestic structure has seen generations of
Kentucky leaders grapple with the problems of their day.
President Lincoln - whose birth in Kentucky nearly 200 years ago
we begin celebrating next month - is a prime example of one who
deeply believed in his cause. But he also believed - as much as
anyone ever has - that we are stronger together than we are alone.
None of us has all the answers. What we do have are our
I will never hesitate to express what I believe, and I expect
the same from you. But I also pledge to listen.
We will not always agree, but we must join together to get the
important work of Kentucky done!
Only through the collective efforts of everyone in this room -
and the citizens all across the commonwealth who have entrusted us
with this responsibility - can we meet the significant challenges
we face, and then move Kentucky forward.
Frankly, the state of this commonwealth is not acceptable!
However, despite obvious problems, I remain filled with hope and
optimism for the future, because I know that we can meet this test
with determination, honesty and unity.
We're going to need each of those qualities, and more, in the
weeks and months ahead.
It is my duty and my responsibility to inform you that we have
some tough times ahead. The revenue outlook is grim.
Because of the economic slowdown, the cooling of the housing
market, oil prices and a gap between what we spend and what we
earn, we are facing an unprecedented budgetary shortfall.
While this is a situation I inherited, it is my job to fix it -
and that is exactly what I intend to do.
It is not a time for whining or "woe is us" - it is a time for
leadership, bold action and temporary cost cutting.
We have two options: raise taxes, or cut spending.
If the Commonwealth of Kentucky were a family, and we realized
we were spending more than we could afford, we'd have no choice but
to tighten our belts.
Well, even though state government is not a family, it's about
time we began acting more like one. After all, it is the people's
money, and I know you all agree that we need to be as efficient as
possible when it comes to taxpayer dollars.
Raising taxes is and will continue to be a last resort as long
as I'm governor.
So, that leaves cutting government spending. We can wring more
efficiency out of state government and I intend to do just that.
It's common sense, but it will require some painful sacrifices.
I intend to be a fiscally responsible steward of this
government. I would much prefer to be standing here today talking
to you about all the new investments we're making, but much of that
will have to wait for another day.
In the short-term, this budget crisis will unfortunately reduce
our ability to make major new investments in some important
priorities - my priorities.
However, the need to lower prescription drug costs for our
senior citizens will not go away!
The need to increase college aid and job training will not go
The need to send colleges and universities better prepared
students will not go away!
The need to invest in new 21st century jobs will not go away.
And, I remain fully committed to those priorities.
Ironically, the revenue situation I inherited becomes a golden
opportunity to change the way we do business in Kentucky.
It is an opportunity to make every state agency leaner, more
efficient and more responsive.
It is an opportunity to begin preparing Kentucky to compete in
the new economy.
It is a way to focus on economic development that will create a
stronger economy with jobs of the future rather than those of the
As I said in my inaugural address only a few weeks ago, we have
an opportunity to be America's next frontier.
Kentuckians are blessed with a strong work ethic.
We are blessed with natural resources just waiting for
conscientious investments from both the public and private sectors.
We are blessed with unique cultures, energy resources, some
Fortune 500 companies, an equine industry of immense importance and
a thriving arts scene.
We are blessed with a sound agricultural community that is also
focusing ahead rather than behind. Though its size may have
diminished somewhat, the end product has been remarkable.
We are blessed with dedicated teachers and administrators in our
K-12 educational system, and with institutions of higher learning
committed to excellence.
We are blessed with patriots from all branches of the military
as evidenced by Kentucky's contributions to the global war on
The service of our National Guard in these perilous times merits
our deepest appreciation.
Yet, right now, we're falling farther behind. Today, the
commonwealth still lacks the necessary economic infrastructure to
be competitive in the global economy.
Our people also lack trust in their government, and it is
critical that trust and credibility be restored if we're to
accomplish anything else.
That's why I announced just last week a comprehensive ethics
package that includes a constitutional amendment to limit a
governor's power to pardon.
It also reduces the governor's influence in making appointments
to the Executive Branch Ethics Commission and requires more
disclosure of donations to a public official's legal defense fund
while banning lobbyists and those doing business with the State
I am hopeful that these measures will restore some of that trust
in government, which is so critical to our success.
This legislation has bipartisan support. And as I have been
saying for months, it shouldn't matter if an idea is a Democratic
or a Republican idea, as long as it's a good idea that makes a
positive difference for Kentucky.
It is time to take full advantage of the untapped resources of
our people and use them to help Kentucky become America's next
That is our best hope of competing, not only with our neighbors,
but also with the rest of the country and the world.
As we examine the condition of our state, we find many positive
aspects, but unfortunately, there are also major concerns.
Last year one report ranked us 47th worst in overall innovation
capacity. Another ranked Kentucky 49th out of the 50 states on
And a study commissioned by the Kentucky Science and Technology
Corporation suggests that our present "business as usual" course
would take the commonwealth more than 150 years just to reach the
current national average in per capita income.
Absent a bold new direction of innovation, creativity and 21st
century thinking, Kentucky stands little chance of being
economically successful in the new economy.
Is anyone here willing to accept this as our destiny? I
certainly am not!
The days of fretting about how we are doing against border
states are long over and a waste of time.
Something has to change. The ramifications are huge and will
help determine how successful Kentucky becomes in the future.
Therefore, reengineering Kentucky's economy from within must be
among the highest priorities.
If we do this, we will be able to afford additional investments
We'll be able to make health care accessible to all.
We'll be able to invest more in job training.
We will be better prepared to attack the large unfunded
liability in our state's retirement systems.
And our young people will be more likely to stay in Kentucky,
thus keeping our families together!
Ideas are the foundation of any new economy.
Research and technology, biotechnology, nanotechnology,
alternative energy - here are areas we must compete in, especially
with energy, given our natural resources.
Encouraging new ideas, entrepreneurs and creative thinkers is
what others have been doing with great results. Kentucky has no
more time to play catch-up.
In Shakespeare's Julius Caesar, Brutus had the right idea when
he said: There is a tide in the affairs of men. Which, taken at the
flood, leads on to fortune; Omitted, all the voyage of their life
... Is bound in shallows and in miseries. On such a full sea are we
now afloat, And we must take the current when it serves, Or lose
Brutus was referring to a battle, but what we face is no less
Unless we get our financial house in order and chart a new
course, Kentucky stands little chance of succeeding in this new
Gary Hamel, the internationally known business author and
innovation strategist, in his book, "Leading The Revolution,"
targets specific words as keys to success. Those words? Dream,
create, explore, invent, pioneer, imagine.
These are qualities that once were associated with Kentucky and
Kentuckians. And they can be again!
It's time to recapture that spirit and create a new Kentucky.
This applies to state government as well. Government can and
must be more accountable, more efficient and more innovative.
That's why we will be looking for good ideas from every possible
source, especially from within state government.
We're looking for results through creativity, economic savings
Whether you're a state employee or an average citizen, if you
have an idea, please contact us. No idea is too big or too small if
it will help to make our government work better.
In 2008 and beyond, the only true long-term advantage any
organization or government has is to be on a sound financial
footing and to out-think the competition.
If not, you're doomed to mediocrity.
As I look at the state of the commonwealth I see far too many
Kentuckians on Medicaid. I see a growing drug problem in the
smallest communities as well as our largest cities.
I see basic service needs going unmet.
I see infrastructure neglect demanding solutions.
I see the fears of so many elderly who aren't sure whether they
can afford a decent meal or essential prescriptions.
I see unlimited requirements and painfully limited resources.
But I also see something else.
I see committed Kentuckians who want change.
I see opportunities, not barricades.
I see the potential for cooperation, not partisan bickering.
I see a budding realization that we must generate more
investments and jobs from existing businesses and pave the way to
create new industries and businesses. We must better utilize our
research institutions to encourage the growth of the industries of
Success today is not about slogans or a few additions to our
Rather it's about a top-to-bottom infusion of imagination - a
different way of thinking about things - from economics and
government management to education and transportation.
It's about helping our existing companies do better and grow
It's about attracting new talent while keeping our own right
here at home.
It's about creating a culture of invention, entrepreneurship and
Silicon Valley, North Carolina's research triangle, Northern
Virginia's high-tech corridor. These areas are engines of economic
growth for their states. They are engines of job creation and
A growing number of countries overseas are being reinvented
through innovation and fueled by imagination. Their governments
have changed philosophies, with leaders willing to think more
broadly while making investments in the future.
Yes, I have been handed an unprecedented financial problem to
deal with, but the silver lining is that it will force us to change
for the better, and grow.
If we can show Kentuckians that we can balance the budget in
tough times and once again place Kentucky on a sound financial
foundation, that we're changing the way their government operates,
that we're more accountable, and are putting the people first, then
we've made a solid start.
This crisis can indeed be a positive turning point for Kentucky!
Let me make one thing clear ... the status quo is not an option
and it is not one my administration will tolerate.
Yes, a severe challenge does confront us. A challenge for all of
us to broaden our thinking, to consider new ideas and work together
in moving Kentucky forward.
My fellow Kentuckians, if we all work together, there is no
obstacle that can stop us. If we all work together, then the state
of our commonwealth will become very strong.
Very strong indeed.
Thank you, God bless and goodnight.
(Copyright 2008 by The Associated Press. All Rights Reserved.)