To create jobs, and to grow and diversify our economy, we should build on Wyoming’s natural advantages — our energy, ag, tourism, and great workforce. We should not just extract and export our energy, we should look for value-added projects that use some of our energy here. For example, our superb wind resources partner well with natural gas-fired turbines which fill out the energy stream during lulls in the wind. We should develop both wind and gas-fired turbine projects, where possible. I support current efforts for those working on such projects. And, why not manufacture wind turbine components here, too? Let’s build the items needed to develop our wind resources right here in Wyoming. This is doable. Such manufacturers are looking at Wyoming now, and I a supporter. This is an example of how we build on Wyoming’s natural advantages to diversify our economy and create jobs. I know there will be a healthy debate about wind issues — property rights, taxation, eminent domain. I hope legislation that balances all the interests and keeps Wyoming competitive will reach my desk this session. We need to continue to capitalize on our natural advantages, not only our wind but our climate. I support funding to recruit mega data centers.

In Wyoming, we have what those centers need. We have the natural advantages: we have a favorable weather climate with a low number of required cooling days; we can produce abundant, relatively inexpensive electricity; we have relative safety from natural catastrophes such as hurricanes, and we have available land. We also have an established track record with the NCAR supercomputer being built in Cheyenne. I support the allocation of $14.5 million in general funds for the recruitment of multiple mega data centers. Such centers bring support businesses and other enterprises along with them. They are a business magnet. I supported the bill passed last year that exempted qualifying computer equipment from sales and use taxes. I thought last year’s bill provided an attractive and appropriate incentive for businesses — and I would call for reasonable additions this year, like for computer software, to improve upon it. So, please take a good look at this legislation.

We must continue to support all our extractive industries. With respect to our coal and our oil and gas industries, I support research and development of carbon capture and sequestration technology. I am skeptical about man-made global warming without more and better science; but I am not skeptical about growing demand by our energy customers for cleaner coal and gas, and I am not skeptical about our oil industry’s need for carbon injection technology for enhanced oil recovery. Improved technologies provide a benefit to companies and help them remain profitable. Wyoming is on the cutting edge of many technologies. We have laws in place and projects underway. Technologies will be improved with projects — like the UW-GE coal gasification facility, the development of the DKRW project in Carbon County, and advanced research at the School of Energy Resources. Technology will help keep our energy industry competitive. I would look favorably on legislation sent my way to foster science and commercial applications remembering that advances in energy technology will only occur if energy companies remain profitable. I support continuing the manufacturing sales tax exemption. The current law has the exemption expire at the end of this year. Forty other states have this exemption and Wyoming must remain competitive. Nearly 200 Wyoming businesses already use the exemption. As we speak out-of-state manufacturers targeted by the Wyoming Business Council and my office anticipate the exemption. This includes manufacturers of wind tower components which I spoke of earlier. Without the extension, we risk the real possibility these businesses will locate in other states. I hope you will take up the issue of extending the manufacturing sales tax exemption, decide to extend it, and put a bill on my desk.

I am also keenly interested in legislation that will strengthen our ag and travel industries, which are vital to our state’s economy, and I know you will be considering such bills this session. For example, I support funding increases for a rangeland assessment and for tourism promotion. We need to make our state regulatory environment predictable and reasonable so businesses can plan and commit resources to our State. The backlogs and delays at the Land Quality Division within the Department of Environmental Quality are an immediate concern. The undue backlogs and delays need to be made a thing of the past sooner rather than later. This issue is addressed in my budget recommendations. The fact that our state is fiscally sound (and a desirable locale for so many other reasons) means that we can welcome with open arms businesses that are looking for a welcoming place.

Improving connectivity provides all sorts of possibilities. It allows us to deal with each other directly and daily, interactively, and not just between the hours of 8 and 5. It increases business productivity and access to markets. I support using technology to maximum advantage — to improve state government, to improve the business climate for tech as well as other businesses, to enrich our personal and work lives, to improve the quality of patient health care through the use of electronic health records to support better communication between physician and patient and prevent expensive duplication of testing. I support measures that will give our state the competitive edge from a technology standpoint. For example, we have already begun work with a private telecom provider to expand the high speed fiber optic footprint across Wyoming. This expansion could increase bandwidth capacity more than tenfold to an additional 11 Wyoming communities. We are also working on “lighting up” dormant or dark optic circuits that run across the southern portion of Wyoming into Salt Lake City and beyond. From an economic development perspective, this growth in connectivity will allow us the bandwidth necessary for mega data centers while also benefiting manufacturing and smaller businesses throughout our Wyoming communities.

Our interstate highways and railroad network connect us in all directions with other states and others parts of the country and should help make us a business hub. The highways, especially, are important for business, personal, and tourist travel. I support additional supplemental appropriations this year for highways. Highway construction needs a reliable source of added funding (on top of those sources that now exist like gas taxes and federal funds). The recommended $52M in supplemental funding this year makes reasonable progress on highway construction. Those dollars should be used to do what is needed most in 2011. More on this topic follows.

I also support funding for water development projects. Water is a precious resource in the arid west. We need to use all our allocated amounts under the various compacts and court decrees. Water projects spur economic development across the board — for energy, ag, tourism, industry. Our cities, towns and counties need additional revenue. We saw this most starkly last year. I support a legislative fix that would provide this revenue. Specifically, I support diverting one half of 1 percent of the statutory severance tax on minerals and splitting it into thirds — one-third to local governments, one-third to highways, and one-third to the state’s rainy day fund. This is money that will be used not only to invest in infrastructure, not only to invest in our localities, but also to invest in savings. A good investment all the way around! The projected distribution would be about $52.15 million to each of the three recipient categories.

I would like to see a greater percentage of the local government share go to fund projects — that is, 75 percent should be put towards capital construction and 25 percent for operations. I would like to see this investment — the one-half of 1 percent of the severance tax divided into thirds — be made permanent or long-term with a sunset date 7 years down the road in 2018. I recognize there is disagreement about this proposal as there should be, because this is a great deal of money. We all agree that money should be wisely invested. Some want to place all that money into the rainy day fund. There is no question that our rainy day fund can serve us well during tough times when the price of our natural resources has declined. I have faith in Wyoming, and while we have had wise investments from our Treasurer’s office for many years, we also have to be aware that in these shaky times — where major financial companies, where auto manufacturers, where not just companies but entire countries are failing — even the best investment decisions carry risk not seen for many decades. We have seen the results of these tumultuous times for outside investing. As of now we are back in the black, but in the past year and a half we have seen unrealized losses from state investments, as of June 30, 2009, of over $647 million. The realized losses were $201 million. This illustrates the volatility in markets. We cannot take the risk out of investing in the markets and with my proposal we will continue investing in the market via the rainy day fund, but we will also broaden our investment to Wyoming.

We all care about local governments. This body has a history of supporting local governments in the past. So during this critical time, do we continue along those lines — investing all of that money in companies that may be in other states and other countries or do we believe in Wyoming? Do we believe in Wyoming enough — our people, our towns, our counties, our small businesses, and our future — to put Wyoming first? My proposal invests in local government, in infrastructure, in our highways and bridges and continues to invest in our rainy day account as well. It addresses my goals of economic development, in that our local governments can do all the beautification projects they want but if they don’t have adequate water, sewer, roads, bridges, and landfills, recruitment and retention of businesses is near impossible.

One third of this money will go to the Department of Transportation to address the needs of our roads and bridges. We can disagree how much is needed, we can also disagree on other funding options, but hopefully we can agree that without safe, adequate roads, economic development and the enjoyment of our state will be diminished. Hopefully we can also agree that for the executive branch to defer maintenance on our roads is not fiscally strong, it is operationally weak. If we don’t invest today, we will require those that follow us to invest many more dollars in the future. I urge you to consider this method of funding our roads. One-third of the money will go to local government

It ia is curious to me how many agree with me that the states are the backbone of the country, that people closest to the problems are the best decision makers to solve a problem, and yet when talking about providing greater control to the locals in terms of money, they shy away. In making your decision, remember that just as some of us view the federal government with a skeptical eye so too does a city council member look at Wyoming’s capitol. Do we trust local governments in the way we would ask Congress to trust us? We should, and this one-third is a way to show our faith in local governments. If not made permanent, a seven-year sunset provision is a reasonable compromise that would give the legislature the opportunity to consider the matter again, but also show an ongoing commitment to local governments and allow for adequate planning and investment. If you do not agree with my proposal, find an alternative because we want and need predictable funding for local governments and for highways.

Last week I announced my support for legislation that would consolidate the Department of Workforce Services and the Department of Employment. I have reappointed Joan Evans as Director of Workforce Services — she is an excellent agency head. I have also appointed Joan to serve as Director of the Department of Employment. I hope you will send me a bill that consolidates these agencies. We will create a one-stop shop for related employment matters, reducing dual administrative costs. I have chosen Tom Forslund to head the Department of Health. He is a proven administrator with an established track record of building reserves and careful budgeting year after year as City Manager in Casper. I would ask you to take a look at the Department that Tom Forslund is inheriting. It is a big, unwieldy agency. It gobbles up more and more of the budget pie each year. We should take a serious look at reorganizing the Department of Health but I would like Mr. Forslund involved in the process. In the meantime, I would ask for authority to allow me to appoint the head of the Health Care Financing Unit and have that person report directly to me. I’m responsible for state agencies. Legislation is being drafted that would provide me greater latitude in appointing people within agencies. My responsibility to make sure people within agencies are fiscally responsible, provide outstanding service, and follow a vision for the state goes hand in hand with my ability to appoint. I ask for your support for this effort.

In Wyoming it is my belief the vast majority of teachers and administrators are doing a good job. But we recognize we are spending on a Cadillac education plan and not getting Cadillac results. We all know we need to do better. We should not accept the average. And we should be bold in our approach. From where I sit education is too important to remove any debate from the table; there are no sacred cows. From money spent building schools to block grants provided to districts — let’s look at everything. It is also fair to look at changing teacher contracts, but a simple statutory change to alter teacher contracts without more is not a cure-all. Great teachers should be rewarded. Poor teachers should be removed. But, as you consider teacher contracts, it should not be done in a vacuum. We do not want teachers fired for the wrong reasons or for no reasons. What criteria should be used? We want greater accountability and accountability can only come from removing teachers for the right reason; that is that they are not doing a good job teaching. To determine the quality of teaching requires an objective standard. Failing the use of an objective standard we presume the infallibility of administrators. We need a testing program that is administered in a way that will measure students and teachers alike in a manner that clearly identifies both success and problems. The issue of charter schools is one I’m interested in moving forward. It is my belief that charter schools could provide some new ideas to be used at traditional schools. For this model to work, the charter schools cannot cherry pick the best students. We all talk about local control, but I expect school districts to use block grants — state money — in ways that put our students in the best position to succeed. We cannot provide endless funds to school districts without results. I look forward to working with the legislature and with Superintendent Hill on all education issues.

As I said in my inaugural address, the federal health care bill may be the best Congress could do — it is not the best we can do. Therefore, I support legislation that would establish a litigation fund related to the federal health care law. As you no doubt know, I have taken steps to join the Florida lawsuit against the Affordable Care Act. I understand the criticism in doing so — some because they like the Act, some because of the cost associated with the lawsuit. I do not like the Act — in my view it is bad policy and too costly. This law will significantly increase our Medicaid rolls. Mississippi, for example, forecasts the overall cost to implement the Affordable Care Act in that state will be $1.7 billion over ten years, including $443 million in year 10 alone. While the federal government has committed to the bulk of the cost associated with the Medicaid expansion the last I checked the federal government has significant financial problems. On top of that, the federal promise does not cover all the additional expenses.

Concerning the cost of the lawsuit, the current prediction is that it will cost us $1,000 dollars and the Attorney General has been told it may cost more but not a lot. But, frankly, even for a much larger amount I am willing to fully test the legality of the law because it has implications beyond health care. While this is a Tenth Amendment issue, this law should be tested with the same force as if the First or Second Amendments to our Constitution were being eroded. I believe that the rights of the states remain important not just for legal principle but because I believe the states can do a better job. Comparison of Wyoming’s checkbook to Congress’ checkbook is evidence we can and we have. I hope I will have your support in standing firm for Wyoming. It is not enough to say “no." We should continue to seek state solutions even as we fight the federal law.

I support legislative proposals that advance state health care solutions, including expansion of the Healthy Frontiers pilot project begun last session. That project has passed the initial test and is currently enrolling participants in both Cheyenne and Casper. The expansion will give us the data and the experience that we need to develop more effective and less costly health care options.

There are other areas that require Wyoming to be proactive. We are small in number but strong in our contribution to this country, and our voice should be heard. Challenges to our ability to manage our wildlife, to produce our energy, to regulate our water and air quality, should not go untested. We demand a balanced approach that protects our beautiful state yet allows for mineral development. It is the citizens of Wyoming, from those interested in conservation to those interested in development; those Wyoming people, us, it is we who should have the debate and make the decisions for Wyoming. The more we turn the issue of balance over to D.C. the more the debate will be taken from our mouths, from these halls, from this building and moved to Washington where only three of our citizens, our congressional delegation, will be joined in the debate while the rest of us are relegated to listeners. As I said in my inaugural address, the best solutions for Wyoming come from Wyoming. I would ask for your support to keep Wyoming’s voice strong.

There are other pressing issues, too. The death rate for misuse of narcotic prescription drugs exceeds all other illegal drug and drunk driving deaths combined. We need to better monitor narcotic prescription drugs at point of contact to prevent abuse and lower the death rate. Other pressing matters include health issues, ag issues, law enforcement issues, our aging population. I would look closely at legislation you put before me that addresses them.

Though there is much to consider, I’m a conservative by nature. On both sides of the aisle, we have conservative and practical people. In this general session, I ask for an approach that begins the process of efficient, streamlined government. I will tell you that from my point of view I’m interested in laws that will help those who cannot find work. I’m interested in laws that do not make small business owners shudder wondering what new rules and regulations will come out. We should pay attention to what matters most. This body has and will continue to set an example of vigorous but always civilized debate, and all of us are proud of the example you set. Let’s provide a framework where individuals through hard work, innovation and dedication can enjoy the freedoms of Wyoming.

Thank you for the opportunity to address you in this chamber, on your home court, so to speak. It has been an honor and a pleasure. You are always welcome in my office, and I would be privileged to have you visit me. The boxes are unpacked, the welcome mat is out and the welcoming Matt is in, and the door will be open. May we have the vision, the courage, and the faith to make wise decisions? May God bless us all, our great state, and our great country. Thank you.