LITTLE ROCK, Ark. - Jan. 13 - Following is the prepared text of Gov. Mike Beebe's (D) 2009 state of the state address:

Click here to access the governor's Web page and view or hear the address.

Mr. President, Mr. Speaker, Ladies and Gentlemen of the House and Senate, Constitutional Officers, Mr. Chief Justice, Members of the Court, Distinguished Guests, Friends, and Fellow Arkansans:

On behalf of our State, I begin by saying thank you. Thank you to all Arkansans who have served and continue to serve so honorably throughout the world, especially in Iraq and Afghanistan. We are proud of our men and women in uniform and humbled by their devotion to duty. On a very personal note, I want to thank all my fellow citizens for the extraordinary kindness and support they have shown to Ginger and me these past two years. We are forever grateful for their friendship. And all of us who sit in this Chamber know how important our people back home are to our continued success.

I stood here before you two years ago and laid out my administration's commitments, commitments we have honored: responsible stewardship of taxpayer dollars, restoring faith in state government, investing in education and economic development, improving health care and generally improving the quality of life of our people.

Despite our nation's struggle with an economic slide unmatched since the Great Depression, Arkansas continues to make advancements in education and attract new businesses. Still, the impact of the global recession has reached within our borders, and it's not yet over. The fallout from the national economic downturn will be our biggest challenge this year and in this legislative session, but our charge and our responsibility remain unchanged.

We must remain firm in providing not only the services our people depend on from their State, but also in striving to make them even better, even in tough economic times. We must prepare Arkansas and her children today for whatever the world may bring tomorrow.

Together, we've begun that preparation. Presented with a one billion dollar surplus in the 2007 legislative session, we took the responsible step of dedicating roughly half of that money for school facilities. This investment helped end the prolonged legal battles of the Lake View case and put us on the right path toward excellence in education for all our children. Arkansas is today building new, state-of-the art schools and enhancing existing facilities, even in the face of this international economic crisis.

A common thread runs through our fiscal policies and sets Arkansas apart from other states, a thread spun from the wisdom of careful budgeting. By holding to our traditions of budget stabilization and conservative forecasting, we now find ourselves in an enviable position. Other state governments are convening this month. They must decide how deeply to cut state programs, what services to terminate, which teachers to lay off, which scholarships to cut, and which nursing homes to close. We don't face these precarious decisions in Arkansas, but we still face serious challenges.

There are only two areas in my balanced budget where I have proposed real increases in funding. Those are for public education and for the Division of Children and Family Services.

It is no surprise that public education remains my first, and my highest, priority for Arkansas. It remains our constitutional obligation and it is our moral imperative to provide the best education possible for our children. In my proposed budget, we have again reached beyond the legal definition of "adequacy" that you all determined and toward excellence by providing school districts with additional per-student funds. If approved annually by the Legislature, we will add 234 dollars of additional per-student funding over the next two years, and will give school districts additional one-time enhancement money of 35 dollars per student.

Providing excellence in grades K through 12 is only one piece of our education commitment. We have made quality pre-kindergarten education available to all at-risk children, and this will pay dividends for decades to come. We will stand fast on that commitment. Quality pre-k instruction has a positive ripple effect throughout our education system as a whole and the academic life of any single student. It creates a richer learning environment that better prepares our children to succeed throughout elementary and secondary grades, reducing the need for remediation, and allowing entire classes to learn at a faster pace.

As our schools improve and better prepare our students for college, so, too, must our higher-education system better prepare our workforce for the competition of a global job market. Arkansas holds its own nationally when it comes to enrolling college students. Where we fall to the bottom is in our inability to graduate those students, to get degrees in their hands, and put them on stronger footing to begin their careers.

Two primary factors keep us at the bottom of that list. Some students are not adequately prepared when they enter college; others run out of money before they can graduate. We're addressing preparation through increased overall funding, through pre-k, through Smart Core and stronger college prep programs, and now through pilot programs for after-school and summer learning. These will all be beneficial.

But, even our best-prepared students sometimes struggle to afford the pursuit of a college degree. We need to improve our scholarship programs so that scholarships reach more students, and so that the amount of assistance they receive is greater.

In 2007, we initiated a need-based financial-aid program in Arkansas, the GO Opportunities Grant, to make college more attainable for students who show potential for success in professional and technical careers, even though they may have been late bloomers academically. It's a good start, but this program must be broadened to include more non-traditional students, to help additional students in two-year programs, and to expand the total financial support available.

A growing number of students also qualify for state merit scholarships. However, many of these scholarships never reach students who qualify for them, and even when they do, there's often not enough money to sustain enrollment in the face of rising tuition costs. I want to rectify that troubling dilemma, as well.

The lottery, approved by our voters, can help. Our first step is to structure the lottery to be as efficient and as transparent as possible. We must then open up the doors of higher education to students who qualify for both need-based and merit-based aid, while increasing scholarship amounts. We have a unique opportunity to address both of those problems, that is the amount of the scholarship and the number of people who are entitled to the scholarships. Reducing the financial burden of our college students can help them focus on their studies, rather than on how they will pay for school next semester. Our work to ease that burden must be approached responsibly. When we promise scholarships, the money must remain available if the students remain qualified.

What that really means is making sure that the funding is there for expanded scholarships before we make them that promise. Some of you were here in 2000, when we had to take back money or reduce scholarships because we didn't have the money to complete the promises. That's not going to happen with this General Assembly, and it's not going to happen with this administration.

Scholarships are only beneficial, however, when students can access them. We need simpler paperwork. I'll go further and say we need and less paperwork, with the State stepping up to provide a single application listing the college assistance available, rather than students and their families struggling to seek out their best match for financial aid. Just as all of you, just as the Lieutenant Governor, just as the Speaker, I want every Arkansan who has earned it and wants to go, to have the chance to get a college degree. That's what Arkansas is all about, that's what America is all about.

We will also adjust the higher-education funding formula to stress graduation rates, rather than the number of students that happen to be on campus. For too long, that formula has emphasized enrollment numbers over degrees. Shifting some of the funding formula's weight from the beginning of the school term to its successful conclusion of that term will provide a financial incentive for our colleges and universities to increase graduation rates.

Along with the expanded funding for public education, I also want to significantly increase resources for the Division of Children and Family Services. Every state struggles to serve children who, through no fault of their own, find themselves wards of the State. However, the strain upon DCFS and its subsequent inefficiency have recently emerged in stark relief. After working closely with DHS officials on a top-to-bottom review of this division, I am confident that they are taking dramatic steps that will improve the service for, and protection of, the vulnerable children in our care. Our next step is to increase skilled personnel, provide additional money to reduce caseloads, and stem the turnover of qualified, caring people who too often burn out in an overworked and understaffed system. We will also increase the visibility and accountability of the system by sharing more information with the public.

I was disappointed when voters passed an initiated act last November limiting the number of Arkansans who may qualify to become foster and adoptive parents. Before Act 1, we already had three times more foster children than we had qualified homes available. Now our ability to place these children is further impeded. It is imperative for those who supported shrinking the pool of potential foster parents to realize that the number of young and vulnerable Arkansans needing foster care will only continue to grow, and action must now follow their words. More than ever, we need Arkansas families to open their hearts and their homes to give these children the chance to grow up in safety and security, with devoted families who can raise them with care and compassion.

While my budget does call for increased funding for education and for DCFS, we're holding the line everywhere else and recommending that we set aside funds in case dire budget forecasts become reality. We've saved enough money to cover gaps in key areas, especially in Medicaid and in our prison system. I would authorize the use of these "rainy-day" funds with the consensus and oversight of this Legislature.

This is a departure from my philosophy of not using one-time surplus money for ongoing revenue needs. However, a recession is, by its nature, a temporary phenomenon. As the national economy recovers and Arkansas's economy continues to grow, we anticipate that these will be one-time expenditures.

Even if we spend some savings shoring up state services, funds remain available for general improvement. And this brings me to the second cornerstone of my administration: economic development. This may be the longest gap in any speech I've given between the first mention of education and the first discussion of economic development. The two are indeed intertwined and inseparable, and I stand by my assertion that one cannot fully succeed without the other.

I am proud to say that, through the tireless work of the Arkansas Economic Development Commission and the Legislature's willingness to provide the tools we need to be competitive, Arkansas continues to attract new jobs and industry from throughout the United States and, indeed, from around the world. Just last week, we announced the arrival of Caterpillar in North Little Rock with plans to create 600 jobs and invest $140 million.

Last month, Cooper Tire decided that not only would they keep their 1500 employees in Texarkana, but would add as many as 250 more in the coming year. Last summer, Hewlett-Packard announced 1200 technology jobs in Conway. All this economic expansion and more in Little Rock, West Memphis, Rogers, Jonesboro, Booneville and throughout Arkansas, adds up to $2.7 billion of new investment and 19,000 new jobs for Arkansas.

Now let's give credit where credit is due. This success would not have been possible without the Governor's Quick Action Closing Fund, which you created as a tool in the last session. You made these tools available for the State of Arkansas to be competitive; you trusted me; I asked you to do that, and you did it. And I ask you to replenish it this time with $50 million over the next two years, so that we can continue to be competitive and continue this progress. Through our strategic plan for economic development, we will position Arkansas to be at full speed when the recession lifts - and it will lift - and we will continue working to defy the global economic downturn today.

As we put more Arkansans to work, the struggling economy means that more Arkansans now must get back to work. As we celebrate the arrival of new jobs, we also empathize with friends and neighbors who have lost their jobs to closures and outsourcing. This makes our ability to educate, train, and re-train our workforce that much more valuable. Our Workforce Cabinet agencies continue working together to provide efficient and effective programs that prepare Arkansans for employment.

I have spoken repeatedly about restoring our people's faith in their government and the individuals they elect to lead it. Last year showed us a presidential campaign with strong words and accusations on all sides. It showed us scandal and corruption in respected seats of power. It reinforced the cynicism of those who already doubted their leaders. Restoring confidence is a commitment we owe to our citizens and our democracy. To Arkansas's leaders assembled before me, I say we must seek every opportunity to cooperate when addressing our State's challenges. When we cannot agree, we must debate with respect and dignity. Above all, we must be reasonable and realistic in the promises we make. There was a line in a speech that John F. Kennedy was to deliver on the day he died. It said "Leadership and learning are indispensible to each other." Listen to your constituents; be willing to learn from one another, and from history. While being guided by our hearts, we must lead with our minds to navigate our State through good times and bad, together.

When I ran for governor, I made a promise to attack Arkansas's regressive grocery tax. Attempts to remove or reduce this tax had failed for decades, because the revenue it generated proved too precious to give up. But, together with the General Assembly, we passed the largest package of tax cuts in Arkansas history, including reducing that grocery tax by half. Today's economic climate will not allow us to completely eliminate the tax this year, but even under pessimistic forecasts, we can afford an additional one-penny decrease. This easing of the grocery tax will provide our citizens with additional relief for basic necessities. But even more important than the relief it provides, even more important than the revenue that is lost, even more important than the sheer numbers - it shows our continued dedication to eradicate this onerous tax and restore our people's faith in their government and their leaders, by doing what we said we were going to do. It's more important to keep your word than anything else, and that's what we need to do in this session. I know it's going to be tough for some of you, but I ask you to join me - we can do this, we can afford to do this, and I ask for your help.

This faith has been tested enough of late. Oil prices skyrocketed in 2008, and we shook our heads and sometimes our fists at the record prices we paid for gasoline and diesel over the summer. Six months later, we are shaking our heads again as those same prices plummet to levels we thought would never return. However, we know that gas prices won't stay low, because oil-producing countries won't let them. OPEC has already reduced supply in an effort to bring back higher prices and increase profits. In our nation, this activity would be prosecuted as an anti-trust violation. When a collection of foreign nations is involved, it amounts to international blackmail.

We can't change OPEC, but as Arkansans and Americans, we can change the game. By continuing to develop alternative energies, we lessen our dependence on fossil fuels and shrug off the grip of foreign powers. That money can go into the pockets of farmers, timber growers, and innovators in Arkansas and throughout America, creating jobs while we become better stewards of our environment, our resources, and our national security.

Alternative fuels are only part of the solution. We must conserve energy and operate more efficiently to preserve our natural resources and to lower costs. Arkansas recently formed a partnership with the Clinton Climate Initiative, a joint effort that gives us the guidance and purchasing power to construct and retrofit buildings for energy efficiency without additional cost to taxpayers. State government will lead by example, conserving both our natural resources and our tax dollars.

Arkansas sits amidst the Fayetteville Shale, a rich source of natural gas and a welcome boost to our economy.

This year, we will see new revenue from the severance of this natural resource, money destined to improve our highways. The amount of revenue is tied to the price of natural gas, which has swung just as wildly as oil prices.

Still, we will see tens of millions of dollars in new money for state and local roads. Additionally, this money will fund new resources for the Arkansas Department of Environmental Quality to regulate and monitor these drilling operations and safeguard our Natural State.

We have the opportunity, in this session, to take our next big step forward as a State. We've started the climb from the bottom of national rankings in both education and economic development. You might have seen this week we were ranked 10th in that overall report card on education - who ever thought Arkansas would be 10th? Now it is time to do the same for the health of our citizens. Education lasts a lifetime and new jobs can take lives to new and prosperous heights. But by improving the health of our citizens, we can free them from ailments that threaten their well-being and help prevent chronic illnesses that are so devastating and so costly.

Providing new and better health-care programs that offer more options is an investment that we cannot afford to ignore.

Our State is becoming a shining example for attacking the problem of uninsured children. Ten years ago, nearly one in four Arkansas children had no health insurance. Through the ARKids First program, we have provided care to tens of thousands of Arkansas children. New statistics show that a decade later, the percentage of uninsured Arkansas children has fallen into single digits. Still, nearly 70,000 children in our State remain without health insurance, and we can continue chipping away at that number by increasing the maximum eligible income to 250 percent of the federal poverty level.

Arkansans must have more home-health programs. More options for outpatient treatment will keep our loved ones in familiar surroundings and out of institutions, whenever possible. Our community health centers, which are best suited to provide basic health services directly to Arkansans, need more resources to help more people.

I am excited about a UAMS residency program taking shape in Northwest Arkansas. It will prepare new doctors and other health professionals by providing the experience they need to finish their medical education and care for patients throughout Arkansas. The State will keep its promise to match the enthusiastic private fundraising efforts already undertaken to initiate the satellite program. But ongoing funding must be provided to keep it operational.

We can expand our statewide coordinated school-health system to provide new resources and equipment for our school nurses and in-school mental-health services for our children. We can explore new outlets of care for autistic children. We can step up our fights against breast, cervical, prostate, and other cancers. Our health-education centers, the AHECs, can expand preventive-care programs that keep our people healthy and reduce state Medicaid costs. We can give thousands of Arkansas, who can't afford regular dental care, relief from persistent pain and infections that cause other health problems. We can fight hunger, a daily drain on the health and wellness of so many Arkansans. We can make annual flu vaccines available to every man, woman, and child who wants one, again reducing the toll of lives lost and taxpayer money spent.

And, we can save lives through the establishment of a statewide trauma system.

When traumatic accidents occur on our roads, on our farms, at our businesses, and in our homes, the first hour of response can determine the difference between life and death.

Trauma is the leading cause of death among Americans ages 1 through 34. With a fully functional trauma system in place, first responders can more easily ascertain where to deliver a critically injured patient to receive the best treatment.

We can pay for this entire health-care package, everything I've just outlined, with a 56 cent increase to Arkansas's cigarette tax and a reform of the smokeless tobacco tax.

By their nature, tobacco taxes are a dwindling revenue stream as higher prices, prevention, and cessation reduce the number of tobacco users. However, the savings that decreased smoking will bring to our health-care system will be a welcome offset to any revenue lost from decreased tobacco sales. Caring for tobacco users costs an estimated $620 million a year in Arkansas. By simultaneously reforming our tax on smokeless tobacco, we will prevent driving young people away from increased cigarette prices and directly to another harmful form of tobacco.

Improving our health-care system will increase productivity at our businesses and decrease the need for remediation in the classroom. It will make our citizens, and our bottom line, healthier.

These are the times that display our mettle as citizens and our capabilities as leaders. Arkansas's unique position in this economic climate means we can still push forward toward excellence in education. We can still attract new jobs and have an able workforce ready to succeed. We can continue to attack the most regressive tax on our people. We can better protect the health of our citizens. Arkansans, who are the victims of traumatic accidents or who have conditions that hamper their everyday lives, deserve a more accessible health-delivery system to help them lead better lives. We can foster research and development to bring alternative energies and fuels to power our economic engine and conserve our resources. We can graduate more college students while securing the jobs that will keep them home to prosper in Arkansas. We can reform protective services for children in the State's care. We can support and nourish the faith of those who have given us the task of responding to their needs through responsible leadership.

We can accomplish all of these goals, even while facing the toughest economic time in two generations. Finding success among prosperity is admirable, but if we can capture success and continue moving Arkansas forward during a national recession, it will be a landmark of true achievement. Join me, and we will show our people in Arkansas, that you can receive a better education, you can find a better job, and you can lead a healthier, better life. And most importantly, we can restore in their minds and in their hearts the understanding and the idea that the institutions which have held this country together for over 200 years - the republic form of government which elects people to look out for their interests and to exercise their will; the democratic process that says we never lose faith with the people that we represent, and that we do what we tell them we're going to do - can restore the faith in our leaders and in our government, and reduce that cynicism that is such a cancer and which must be combated. Together, the men and women of the Senate and the House of Representatives can chart the course that will impact so many future generations - so that you can put your head on your pillow, and you can say you did your duty, you made Arkansas a better place.

God bless you all.

Thank you.