Following is the full text of Gov. Bill Owens' State of the State address, delivered on Jan. 10:

Lt. Governor Rogers, Speaker Dean, President Matsunaka, Members of the Cabinet, Honorable Senators and Representatives, my fellow Coloradans:

Three years ago I stood at this podium and gave my first State of the State address. I knew what I wanted to accomplish but I also knew the future would hold many challenges. I expected to accomplish tax relief and education reform. I expected to get Colorado moving again, building the roads and transit that Coloradans need. I also expected more hours of meetings and fewer hours of sleep. This has all happened.

While we have faced difficult times, such as the Columbine tragedy, we have also delivered historic tax relief for hard-working families, better education for all children and smart growth to protect our quality of life.

But friends, I never expected September 11. So as we gather in this chamber to do the people's work, we do so having been struck by an enemy determined to shatter our economy and shred the very fabric of our community. And we have struck back with our military, with the spirit and determination that is uniquely American, and which lies at the heart of what it means to be a Coloradan.

The Reverend Martin Luther King Jr. once said, "The ultimate measure of a man is not where he stands in moments of comfort, but where he stands at times of challenge and controversy." Dr. King's words have never been as true as they are today. And like so much of what we read in history, we can learn from the stories of individual families men and women who have history thrust upon them. Colorado has many such citizens, and I want to recognize one special family from Aurora.

When Corporal Chris Chandler joined the Marines in 1998, he signed on to defend "against all enemies, foreign and domestic." And in fighting this war on terrorism on our behalf, Corporal Chandler was seriously wounded in a land-mine explosion in Afghanistan. On Christmas Day, the Chandler family gathered at Walter Reed Hospital in Bethesda, Maryland as Corporal Chandler received a Purple Heart, recognizing his sacrifice as a hero wounded in service to our country. Those who were there saw tears of pride in the eyes of Corporal Chandler's parents. I would like the Chandlers to know, on behalf of a grateful state and nation, that we thank you for your sacrifice, share your pride in your son's service, and wish him a speedy recovery. We are joined this morning by Corporal Chandler's mother, Rumi, and his sister, Stephanie, who is a freshman at Mesa State. I am so pleased that they were able to join us today to represent their family.

Since September 11, we have seen and heard countless stories of American families who have shown us the best of our nation. Families have drawn closer together, and there is a greater awareness of how we can help our neighbors. Just as they have so many times before most recently during the months after the tragedy at Columbine High School families in Colorado have banded together and it is because of their strength and resiliency that I am able to report today that the state of our state is strong. Like most Coloradans, I found myself on September 11 thanking God that my family was safe and turning to them for support, comfort, and a sense of normalcy.

On December 11 while remembering the victims of this tragedy on its three-month anniversary, President Bush said, "Every person who died as a result of these acts was the most important person in the world to someone." In my life, I know it is my wife and children who are most important. During the last three State of the State Addresses, I've introduced to you Colorado's First Lady, Frances Owens. Today, I want to share with you some of the work she has done for Colorado. Frances has visited scores of schools throughout the state reading to children and promoting literacy. She serves as Honorary Chair of the Early Childhood Intervention Day, and has lent her voice to public service announcements promoting literacy within the blind and dyslexic communities. Through her active involvement in Habitat for Humanity, she has helped in the building of numerous houses for low-income families in Colorado. Last month she once again participated in Operation Christmas Child where she packaged and loaded hundreds of presents for underprivileged children in Mexico. Two years ago she delivered a planeload of gifts and badly needed medical supplies to the poor in Nicaragua. Frances is not with us this morning because she is in Washington, D.C. representing Colorado at a national conference on how best to teach children about the dangers of alcohol abuse. However, I am pleased that another important woman in my life was able to join us, and that is my mother, June.

Like all families, those of us who do the people's business obviously have disagreements some more robust than others. But also like a family, when a crisis hits from the outside, when the fabric of our family is challenged, we stand together, united in the common battle. Since September 11, we have put in place new security measures in airports, government buildings and at other locations throughout our state. To coordinate this planning in Colorado, I ordered the creation of the Office of Preparedness and Security within the Department of Public Safety. The mission of this office is straightforward. Through the vision and energy of Sue Mencer, the Department's executive director a woman with twenty years of experience as a special agent with the FBI the office coordinates planning, response, and training efforts within Colorado on issues concerning terrorism and security. I look forward to working with Representative Mitchell and Senator Hagedorn as well as the entire Legislature to expand upon this Executive Order and do everything to ensure that the Office of Preparedness and Security has the tools it needs to perform the tough tasks that we expect of it. As we move forward to protect our families through new law enforcement measures, we are also aware that the after-effects of the terrorist attacks have buffeted families throughout our state.

I am proud that, because of the steps we have taken together over the past three years, Colorado has fared better than many other states in terms of our economy and jobs. But, when it comes to our economy, "good enough" is never good enough. Our unemployment rate in Colorado may well be only 4.7 percent, but to those who are unemployed, it is 100 percent. In spite of a challenging economic environment, let us take confidence and comfort in the fact that Colorado's evolution to a major international technology hub is responsible for a greatly diversified economy. Still, more needs to be done and my Administration is committed to eliminating the continuous cycle of boom and bust, which for more than a century has characterized Colorado's economic landscape.

One of our keys to economic recovery is boosting Colorado's tourism industry. Last year, travelers in Colorado spent over $7 billion, adding $19 million per day to our state's economy. Because of tourism's importance, I convened in October the Governor's Conference on Tourism, which was attended by more than 400 Coloradans. From this meeting came a series of recommendations to help ensure the tourism industry's continued vitality recommendations that we are putting into effect today. These steps build on our efforts to re-establish and fund the state's seven travel regions, which enable all parts of the state to promote tourism attractions, destinations and activities in their communities. We also redesigned Colorado's tourism website. If you haven't yet clicked on www.colorado.com, you should. It's now the country's most popular tourism web site.

Over the past two months I have traveled with members of my Cabinet throughout Colorado to host economic roundtables and hear directly from Main Street about the challenges we face. During meetings in Limon, Grand Junction and Windsor, I have been reminded of the optimism and energy that is the hallmark of the Western entrepreneur. Tomorrow I will be continuing these forums in both Pueblo and Colorado Springs. It's this can-do spirit that built Colorado into the magnet for jobs and families that it is today, giving us the best business climate in the entire country. I'm proud that we have earned that ranking from the Corporation for Enterprise Development, and you should be, too. Thanks to the landmark tax relief package that together we enacted, we're driving costs of creating jobs even lower one reason for our state's economic success.

That's only part of the good news. Through tax incentives, our enterprise zone program has targeted rural areas and urban neighborhoods that need an economic boost. The result 3,000 rural and 2,000 urban employers created 14,000 new jobs in 2001. Our Economic Development Commission has funded numerous projects all over Colorado, many of which are in the rural areas of the state. And, in our struggling agricultural communities, I was pleased to sign legislation granting $14 million in permanent tax relief.

I think you will also agree that it is vital that rural Colorado has access to high-speed Internet connections. The economic future of our rural communities depends on being connected to the information economy. Therefore, I ask the legislature to fund the continuing efforts to wire rural Colorado through the Multi-Use Network. We also recognize that economic development is a global endeavor, which is why I led delegations last year to Germany and Mexico two of our most important trading partners. I want to thank Senator Hernandez and Representatives Coleman, Mace, Nunez and Tapia for joining me on the trip to Mexico. I especially appreciate your assistance in promoting the strong bonds of friendship between Colorado and Mexico.

Friends, because we did not spend every dollar collected during the good times because we were prudent and conservative Colorado is taking the blows of the post-September 11 national downturn, yet still standing strong. Of even more importance, we are seeing early signs that an economic recovery will occur this year. But let's not kid ourselves. The economic shockwaves from the terrorist attacks have had a significant impact on our budget and revenue projections. Like any strong family that finds itself in tough times, however, we are tightening our belts. The actions we took together last September, combined with the reductions I have put into place since then, have placed Colorado in a strong position to deal with the revenue shortfalls. The economic and fiscal challenges we face are just that challenges to be met and overcome. Our choices are more difficult, our resources more limited, but we must not pull back from the steps Coloradans are depending on us to take.

As you know, education remains a central focus of my Administration, and working together we have already taken some of those steps toward improving Colorado's public schools. For too long, the education debate has been marked by two opposite positions one proposing more funding with no structural change and accountability, the other demanding structural change and accountability without the money needed to make those changes work. We have bridged that gap, and I again thank you for your help in making Colorado's education reform an example for the nation to follow. It is no accident that much of what is in the national education act just signed by President Bush concepts such as standards, accountability and testing are already in place and working here in Colorado. We have fully-funded K-12 education three years in a row. This means that Colorado schools today are receiving $700 million annually in new funding more than 11 percent above inflation and student enrollment growth combined. And these three years of full funding occurred after a decade when full funding was not accomplished one single time.

But that is not all we've accomplished. We recognized that Colorado's illiteracy challenge demanded special attention and by creating the Read to Achieve program we are committing $20 million per year toward our goal of ensuring that every Colorado student is able to read at or above grade level by fourth grade. We have already awarded Read to Achieve grants to nearly 28,000 students in 550 schools in 111 districts, totaling over $33 million. That is something of which we can all be very proud. We have also seen tremendous success with the first ever school accountability reports, which helped usher in a new era of standards and accountability. I want to read to you a quote on education reform that I saw recently. "I challenge every community, every school and every state to adopt standards of excellence; to measure whether schools are meeting those standards; to cut bureaucratic red tape so that schools and teachers have more flexibility for grass-roots reform; and to hold them accountable for results." This is not a quote by Secretary of Education Rod Paige, nor is it a quote by William Bennett. It isn't even a quote by President Bush. It is a quote from former President Clinton's 1996 State of the Union address. Clearly this issue crosses partisan boundaries, and it is not a new concept.

Our desire to help schools that are struggling is heartfelt and the results are tangible. I visit schools throughout Colorado constantly and I see the improvements and the efforts to improve first-hand. I also know that there are too many schools beating the odds for us to call them "exceptions." This is the new spirit at work in our public schools. We need to let the increased funding and accountability work. Our teachers and principals are making a difference for children. They have met the challenge of our school accountability system, leading to headlines about how schools are working overtime to improve. Several days ago Education Week magazine announced the results of its fifth annual "Quality Counts" survey, where it ranks the fifty states by various educational measures. I am proud that Colorado's program of standards and accountability ranked eighth best of the 50 states, and that we are the twelfth best state in improving teacher quality. Combine this with what the Heritage Foundation calls the best accountability report in the country, and we do have many reasons to be proud. Nancy Degurse Principal of Hoehne Elementary, located just east of Trinidad was quoted in the Denver Post recently as saying "I really believe students rise to the level of expectations." Principal Degurse is exactly right and I know that with the tireless efforts that our teachers and administrators are putting into their schools Colorado students will exceed our expectations.

We all know that education doesn't take place just during school hours under the watchful eye of educators. We know that children learn on the Internet, and what a powerful and positive tool it can be. But, as any parent will tell you, children need protection when they're on-line. A recent study reported that fully one-quarter of young Internet users reported exposure to unwanted sexual material and 79 percent of teens accessing pornography did so from school computers. To quote a recent article in the Democratic Leadership Council's magazine the New Democrat Blueprint "If we can't ban content, then we need to find a way to give parents and the public institutions to which they entrust their children such as libraries and schools the ability to keep kids from seeing age-inappropriate content." As parents, we can and must police the use of the Internet on our home computers. But what about the computers in public schools and libraries computers paid for by taxpayers? It is essential that we take steps to shield children using taxpayer-funded computers from being exposed to pornography, hate and violence. We can take the positive step to require filtering technology on these computers. We almost achieved this common-sense goal last year, but, unfortunately, the bill was killed in the Senate. For the protection of Colorado's children, please send me this bill this session and I will sign it.

We also need to make sure that working parents know that their children are safe during the high-risk hours between the time they are let out of school and when their parents get home. That is why we have invested millions of dollars in after-school programs all over Colorado through the Fund for Colorado's Future. We are providing at-risk children with homework help, CSAP preparation, and enrichment activities such as art or recreation. One community receiving funding serves Sierra Grande Junior/Senior High School. Under the leadership of its principal, Stephanie Howard, Sierra Grande has used its funds to focus on reading, writing, math and science, as well as on social skills instruction. In fact, two-thirds of the students at Sierra Grande Junior High were involved in some aspect of the after-school programs last year, and I am pleased to say that they are again receiving funding this year so that they can continue and build upon these programs. Ms. Howard is giving the kids in her town something to look forward to and she is offering them not only educational opportunities, but also opportunities to improve their self-esteem. She is a true inspiration to the people at her school and in her community. Please join me in welcoming this morning Stephanie Howard, and join me in thanking her for what she does for our children.

Another threat to the security and peace of mind of many Colorado families is the high price of health care. Too many Coloradans do not have health insurance, and those who do are faced with tremendous increases in their premium costs. Families in our rural communities often struggle to even find a doctor or medical provider who is convenient and accessible. Thus, I am asking this legislature to make improving health care for Colorado's families a priority this legislative session. Even in this challenging budget year, we must demonstrate the leadership and resolve to continue to do what is right for families in Colorado. Last year, we reduced annual premiums for the Children's Health Plan, eliminated annual fees for families with incomes up to 150 percent of the federal poverty level, established a premium holiday to increase enrollment, and added a dental benefit to the program. These changes resulted in a 40 percent increase in CHIP enrollment so that today nearly 40,000 previously uninsured children in Colorado have health care coverage. Building upon this success, we need to provide low-income pregnant women with vital prenatal coverage for their unborn children. We all know that mothers who receive good prenatal care have healthier pregnancies and healthier babies. In my budget proposal, I earmarked $18 million to provide 3,300 low-income women in Colorado who are currently uninsured with prenatal care through the CHIP program. I thank Representative Clapp and Senator Owen for sponsoring this important legislation and I urge you to pass it this session.

Because our rural hospitals are the lifeblood of many of our small towns, we have placed over 40 doctors, nurses and physicians assistants in rural areas or places with underserved populations. We are also providing education loan repayments for dentists and dental hygienists serving low-income clients, and are providing tax credits to dentists who practice in underserved rural areas. Last year, Majority Leader Spradley carried a rural health care bill that I was proud to support. Once again I am joining with Lola as well as Senator Hagedorn to call for more rural health care reform. For example, we need to allow nurses who live in nearby states to work in Colorado. When you live in Wray, Colorado on the Eastern Plains, the closest home-visit nurse may be in Kansas. We should allow this nurse to help patients right here in Colorado. We also need to allow health insurers to offer their plans across state lines. If an insurance company is trying to establish a provider network in southern Colorado, we should recognize that northern New Mexico is a lot closer to Southern Colorado than is Denver, and that a state border should not stand in the way of better medical care.

Of course, health care must be affordable. Double-digit cost increases have placed huge burdens on our families and businesses. I know this because the rates that I pay to insure my family have gone up just as have yours. This must be the year when we finally pass legislation that allows Coloradans to buy a low-cost, basic health plan. Here's my idea for this change: The only health insurance policy we allow our citizens to buy today is a "Cadillac" policy, loaded up with all the extras in coverage, whether you need those or not. And if you can't afford that "Cadillac" policy, you are out of luck. Yet for many Coloradans it is better to have a good, solid Chevy than no car at all. Let's work together this year to provide more choices in health insurance for our fellow citizens. Let's allow for a health plan that provides good, basic coverage at a more affordable cost, and allow Coloradans to then add to this basic coverage with the options they need.

But even if we could provide a more affordable health insurance plan, many small business owners I talk to tell me that the cost of offering health insurance remains unaffordable. That is why I believe when our budget returns to surplus that we should expand both accessibility and affordability by providing a tax credit for small employers who offer health insurance to their workers. Coloradans are telling us that they are concerned about the high cost of health insurance. Working together we can help make health insurance affordable again in Colorado.

At the same time, it is important that we address during this session this rise in auto insurance rates in Colorado. Colorado currently has the twelfth-highest auto insurance rates in the country, according to the National Institute of Insurance Commissioners. I remember a time when I was serving in the legislature when we had the tenth lowest. Last year I signed an extension of Colorado's no-fault auto insurance system to give you time to come up with an alternative to work on a plan to offer both accessible and affordable auto insurance to all Coloradans. We can do better, and we should do better this session.

We've shown time after time how we can together in a bipartisan fashion address issues vital to Colorado. One of the best examples is how we have together crafted a new approach to Colorado's transportation challenge that is finally putting us on the road to real progress. Over the past three years we have faced the fact that making Colorado a leader in the 21st century depends on creating a 21st century transportation system. I am proud that, during the first three years of my Administration, we have more than doubled our transportation funding to an average of $1.2 billion annually the last three years, up from an average of $573 million the previous ten years.

This increased investment has benefited projects statewide, and has been done without any increase in taxes. In the Denver area, we have broken ground on T-REX, a project that was delayed for many years due to a lack of funding. Now we are in the midst of both major highway expansion and light rail construction. Had we not adopted our bonding program approved by 62 percent of Colorado voters I believe that this project and more than twenty others across Colorado would still be stuck on hold.

As massive as it is, T-REX is only one of the many projects around Colorado that we will complete many years sooner. The Colorado Department of Transportation had reported that it would take 50 years to complete its 28 high priority projects. Now, most of these projects will be completed in just ten years. And, T-REX represents just 10 percent of the total budget for these projects that are located throughout Colorado. But we are still playing catch-up because, in years past, Colorado failed to invest in transportation.

My transportation plan is simple stop balancing the budget on the back of transportation. It is time for transportation to have an equal seat at the table when it comes to our state budget. A study by the Legislative Council found that 15 percent of the state sales tax comes from auto-related purchases such as tires, batteries and vehicles. But roughly ten percent of the sales tax is devoted to transportation. Drivers in Colorado are providing 15 percent of the sales tax revenue, but the state is using only 10 percent for transportation. That has to change. Therefore, we need to increase from 10 percent to 15 percent the amount of money from sales taxes going into transportation. This will generate billions of new funding dollars for transportation over the next 20 years.

And we should do more. Once we are past our current economic slowdown and I believe that this turnaround will occur sooner rather than later we need to put transportation and capital construction on a level playing field. For every dollar that goes into construction of state buildings, an equal amount should go toward improving our transportation system. I look forward to working with Representative Joyce Lawrence and the Capital Development Committee on this effort to make transportation and capital construction equal partners in our budget process. For the short term, we need to provide a guarantee that at least $100 million of the general fund revenue will be allocated to transportation each year. This guarantee is essential if we are to continue improving transportation systems around the state.

We often hear about the size of our 20-year transportation shortfall. A careful analysis of the state's 20-year transportation plan shows a large number of proposed projects at the city, county and state level. To assume that the state must fund these local projects is to simply misunderstand what the study showed. Some are the state's responsibility to fund, but others are the responsibility of local jurisdictions and districts, such as RTD. As we have already demonstrated, increased transportation funding can and must be accomplished by reprioritizing the state budget and without increasing taxes.

In a nation at war, it is important to remember that crime and illegal drug use don't take a holiday. While crime has declined in recent years, there is a new danger in our neighborhood and I would ask for your help to address this issue this legislative session. We need to fight the increase in the manufacturing, trafficking and use of the horribly addictive drug methamphetamine. I am pleased that two bills with bipartisan support will be introduced this session to help in this effort. The first is the "precursor bill," which will create a class five felony for the possession of materials widely used to manufacture methamphetamine with the intent to use the product as a precursor to any controlled substance. The second bill concerns meth laboratories, and it will make it unlawful to possess the chemicals, supplies or equipment with the intent to manufacture a controlled substance. I have set aside almost $1 million in my budget to pay the costs of these bills. I appreciate the bipartisan support for this legislation, and I ask you to pass these bills and give law enforcement the tools it needs to battle the scourge of methamphetamine.

The threat of terrorism here at home has increased the number of law-abiding citizens throughout the nation who have sought to purchase a firearm for self-defense. In Colorado we lack a uniform legal standard for the issuance of a right to carry permit, and I propose that we create one. As both the Denver Post and the Rocky Mountain News have editorialized, this haphazard approach of laws needs to be changed. An example of this patchwork is the police chief from rural Colorado who regularly travels to Denver to dispense right to carry permits to law-abiding citizens. I want to work with you to create a uniform shall-issue "right to carry" standard this session.

I also hope that the legislature will try once again to reach agreement on the difficult issue of redistricting. I know well the challenge I was a member of the conference committee on redistricting in 1992 but I also know it is our responsibility to redistrict, not the court's. We have 15 days let's get to work.

Finally, let me end where we began: with the spirit of ordinary Coloradans who are answering the call to duty in extraordinary times. For generations to come, Americans will take pride in how our military and civilian personnel have responded to September's tragedy. The brave men and women serving in our armed forces are on watch and are ready for duty during this time of challenge. I was pleased to work with Representative Bill Sinclair on numerous projects that help bring Colorado's veterans the recognition they deserve, one of which was changing the name of the Department of Military Affairs to the Department of Veterans and Military Affairs. Also, last month I directed all department heads and presidents of colleges and universities to grant administrative leave and to expand their current annual leave-banking programs to state employees called to active military service in connection with September 11.

I know I have asked a lot of you this morning a lot from this legislature and a lot of the people of Colorado. But I know that, by working together, we can meet any challenge. And we can ensure that Colorado remains the best place in the country to live and raise a family. I am reminded of words that could have come from one of the many speeches that have been given since September 11, but they didn't. These words were spoken by Franklin D. Roosevelt to the Joint Session of Congress on December 8, 1941. President Roosevelt told Congress that, "With confidence in our armed forces; with the unbounding determination of our people; we will gain the inevitable triumph."

Friends, despite all the challenges we face, and despite the uncertainty that lies ahead, I can report that the state of our state is strong, and that "with the unbounding determination of our people, we will gain the inevitable triumph."

Thank you, God bless America, and God bless this great State of Colorado.