DENVER, Jan. 13 Following is the prepared text of Gov. Bill Owen's (R) 2005 state of the state address:

Lieutenant Governor Norton, President Fitz-Gerald. Speaker Romanoff, Senator Salazar, Mayor Hickenlooper, Members of the Cabinet, Honorable Senators and Representatives, my fellow Coloradans:

Let me begin by congratulating Colorado's first woman Senate President, Senator Joan Fitz-Gerald. And let me also congratulate Speaker Andrew Romanoff, and the leadership teams in both houses. I have appreciated our many productive conversations since Election Day, and I look forward to working with each of you.

We may come from different political parties. And on some issues, we may see the world a bit differently. But there are major bonds that unite us.

First, we believe in the importance of public service. In giving something back to Colorado for the many, many blessings it has given us. We know the sacrifices that public office require. And we know the deep and lasting satisfaction such service provides.

Speaking of public servants, we are joined today by 60 new county commissioners who are at the Capitol as part of their orientation program. We welcome each of you and thank you for your service to Colorado.

Let me mention one other public servant as I begin. I couldn't ask for a more effective leader to join me at the top of this Administration than Lieutenant Governor Jane Norton. I'm particularly proud of one of Jane's signature programs. She's been working to help the 800 children on Colorado's adoption waiting list. In order to encourage adoption, I urge you to enact the recommendations of her Committee to Promote Adoption, which would increase support for adoptive parents and improve the adoption process. And let me thank Representative Ted Harvey for agreeing to carry this legislation.

Jane is joined here today by two adoptive parents who are an example and an inspiration. Pastor Robert Gelinas and his wife, Barbara. They launched an initiative at their own church called Project One Twenty Seven, which brings together children who need a family with parents who can provide a loving home. They not only work in our community to promote adoption, they set an example by having adopted three young children to join their biological child.

Would you join me in giving them a warm welcome.

I also appreciate the work that First Lady Frances Owens is doing on the Colorado Quarter Project. She wanted me to thank you for all your lobbying calls. And we're also proud of the work Frances has done on behalf of developmentally disabled children. Frances, thank you.

We are also united by our commitment to public service. And by our commitment to Colorado. Each of us, regardless of party or belief, comes to work under this dome with the goal of doing what's best for our great state. This will be our common goal for the next 119 days.

Military Appreciation

There's one more thing that unites us. And that's the respect and gratitude we have for the men and women who wear America's uniform. As we meet this morning, thousands of our fellow Coloradans are stationed around the world, many in harm's way.

We think this morning of each of the Coloradans who have made the ultimate sacrifice. Patriots all, they represent the best of Colorado, and we are proud of them.

We also honor each Coloradan who has been wounded. Today, we are joined by one gallant Coloradan who was wounded in action in defense of our country.

Major Doug Paul of the Colorado National Guard is a veteran of the War on Terror in Afghanistan and Iraq. Last year, in Balad, Iraq, he was seriously wounded when a rocket exploded near him. Shrapnel lodged in his neck dangerously near an artery. Surgeons successfully removed the shrapnel. He still serves today with the Theater Special

Operations. Major Paul, thank you for your service. And welcome home.

Colorado's Economy

We meet at the dawn of a new year, one filled with possibility, opportunity and challenge. And, in this new year, we have good news to celebrate.

Jobs are up, with broad improvement across the economy. Unemployment is down almost a full percentage point to 5 percent, which is below the national average. And the forecasters at "Economy Dot Com" project Colorado job growth in 2005 at 2.8 percent one percentage point higher than the national average. In fact, the FDIC believes 2005 will be the best year in Colorado for new jobs since 2000.

We expect robust income growth, too. Colorado's per capita personal income ranks 8th in the nation. We're in the top ten states for personal income growth, with an expected growth rate of 5.6 percent, up from under 1 percent in 2002.

The Bloomberg Rocky Mountain News Index, which measures stock performance of Colorado's public companies, recently hit an all-time high, and was up 17 percent in 2004. Our state's largest companies have posted huge gains, putting many of them well ahead of their counterparts across the nation.

This probably shouldn't surprise us in light of Colorado's national reputation for economic freedom and a jobs-friendly business climate. Last year, Colorado was Number One in the North American Index of Economic Freedom, and we ranked third nationally in new job creation.

I'm also proud of the fact that our state had the second lowest rate of business closings.

Also, investors are betting on Colorado real estate, buying more than $2 billion in Colorado commercial property last year twice the volume of 2003 and second best in our history.

Quality of Life

But the good news is not limited to our economy. Colorado continues to lead the country in quality of life.

In a survey by the Scripps Survey Research Institute Center, Denver and Boulder topped the list as desirable places to live, ranking first and second respectively.

The American City Business Journals rated living conditions in all 3,141 counties in Americaand Colorado outperformed all other states. In fact, nine of the top 50 best counties were in Colorado.

Colorado also continues to be among the healthiest states in the country. Colorado Springs and Denver rank third and fifth, respectively, among America's fittest cities.

That's good news.

So, with optimism for the year ahead, and with great pride in Colorado and our many accomplishments together, I stand before you this morning and report that the state of our great state is sound.

We have a solid foundation in Colorado for the work that is before us in 2005.

Economic Development

Job creation in the 21st century economy can't be business as usual. Competition is global, and it's fierce. We must aggressively support Colorado's economic pillars. Tourism and Agriculture are superb economic generators and we are all proud of these key industries. We must do all we can to support these vital Colorado industries.

But we must do more. I'm very proud that we have created an innovative economic development partnership. The Advance Colorado Center is a joint endeavor between my administration and the University of Colorado. It provides a common headquarters for business development and industry associations in key industry clusters. Its focus will be on emerging industries, such as biotechnology, nanotechnology, alternative energy and photonics. The center will be a catalyst for Colorado entrepreneurs and a model for the nation.

From my first days as Governor, I have stressed the importance of growing our technology sector. Today, Colorado's technology economy ranks third in the nation. Our work is indeed paying off.

We are also proud of the progress we are making in our aerospace industry. Lieutenant Governor Norton aggressively worked to expand this vital part of Colorado's economy. As chair of the Colorado Space Coalition, she's partnered with leaders in higher education and in our military and civilian space industry. She 's making great strides in enhancing space education and job creation in the aerospace field.

And we are proceeding with the formation of the Colorado Fuel Cell Center, which is designed to make Colorado a world leader in research, development and deployment of this cutting-edge technology.

We also need new incentives for job creation and business expansion. I thank Representative Dale Hall for authoring a Job Creation Tax Credit bill. Companies will earn the credit for each new job they create at a base salary at least 110 percent of the local county average.

As we enact these important tools to create jobs and expand our economy, we have an opportunity this year to put the lingering effects of the recession behind us. And stabilize our budget.

State Budget

You know the numbers. Amendment 23 requires sharply increased spending on K through 12 education. While federal mandates require sharply increased Medicaid spending. And common sense requires increased investments in higher education, transportation and public safety.

And it's become fashionable in many circles to blame TABOR for every challenge Colorado faces. That's not fair. And, worse, it's not accurate.

You and I know the facts. The combination of a recession, the terrorist attacks, a drop in tourism, and the effects of a devastating drought and fire season hit our budget hard. An unprecedented 16 percent drop in revenue over two years.

At the same time, we were required to greatly increase K-12 and Medicaid spending.

During this period, Colorado lacked the revenues to even reach the TABOR spending limits, much less give a refund to taxpayers. So TABOR hasn't been the reason for cuts. Until this coming fiscal year.

General Fund dollars available under TABOR after paying required Amendment 23 and Medicaid expenses -- will not keep pace with the demands on the budget. As a result, we cannot take the steps we must take to build a brighter future for all of Colorado, and particularly our children.

We can overcome this challenge this year with the plan I'm proposing a plan that addresses our real needs.

First we need to take the common-sense step of using the specific provisions of TABOR to address Colorado's investment needs. It respects the fact that every dollar in the budget belongs to hard-working Coloradans. So let's ask the taxpayers' permission to keep some of the available TABOR surplus.

Local governments have used this provision in TABOR. And voters have responded. The key is to let taxpayers know specifically what the funds will be used for.

My plan would guarantee an investment of at least $100 million per year to bond for transportation programs, creating a $1.7 billion bond issue. It will help accelerate a number of badly needed projects, and enable us to start on new projects across the state.

These funds would also help increase Colorado's investment in higher education and public safety programs that are at risk if we do not act.

This plan also proposes tax relief for working families. It makes little sense to have the state collect money from Coloradans to only then turn around and give it back. So we should take a common-sense step to prevent the government from collecting dollars it can't use. Let's roll the personal income tax rate back to 4.5 percent.

And let me be clear about what this plan does not do. It does not eliminate spending caps. It does not eliminate the right to vote on tax increases. It does not erase accountability to our taxpayers.

It does not gut TABOR. It preserves TABOR as a protection for Colorado taxpayers.

That's my plan.

Good ideas from both sides of the aisle to solve Colorado's fiscal challenges in the short term and the long term. I urge you to pass this plan quickly, and let's send it to voters this year.

This plan will help create a predictable funding stream for our colleges and universities. But that's only part of the challenge we face in improving Colorado higher education, and opening its doors to more young people.

Higher Education

This year, we must address the Colorado Paradox. We have more college degrees per capita than any state. Yet we lag the nation in the percentage of students who go on to higher education.

To address this need, I ask you to create Colorado Achievement Scholarship program. This program will help needy families make college a reality for their children. It tackles two of the toughest barriers to college access: lack of academic preparation and money to pay for college. Thanks to Senator Abel Tapia and Representative Dale Hall for carrying this legislation.

Let's also enact common-sense legislation sponsored by Representative Jerry Frangas and Senator Paula Sandoval that would require schools to notify parents if their son or daughter fails to register for a pre-collegiate curriculum. The parents could then ensure that their children are enrolled in the right curriculum.

We have one other agenda item for higher education, and it's vitally important. Colorado is blessed with world-class institutions. I'm proud that Nobel laureates choose to teach at the University of Colorado. And that CU produces more astronauts than any other university in the nation. One of our children attends Colorado State. From our community colleges to private colleges and universities to our public research institutions, we have much to be proud of.

But the public needs to have trust and confidence in these institutions. This year, we must open the books on the financial dealings of our universities. Creating a non-profit foundation to support the university's mission is a good thing. But the spending at those foundations must be transparent. We must enact legislation, this year, to make the expenditures of public university foundations open records under Colorado law. I thank Senator Ron Tupa and Representative Matt Knoedler for carrying this important bill.

Together, we've shown we can take the smart and tough steps needed to improve education. It's a success story that Democrats and Republicans should be proud of.

K-12 Education

I want to spend a few minutes this morning to remind us all of how far we've come together in school reform in Colorado. And why we must sustain this momentum.

It's taken two governors. And both of my terms. It's taken the support and hard work of parents, educators and business leaders throughout Colorado.

When we passed these reforms, we asked educators and parents to give this bold change a chance. To let us put it in place, and let it work. They did. And it did.

Since we passed the legislation requiring accountability and standards: 114 more schools are rated Excellent and High since the 2001-2002 school year, with almost 51,000 more students are now attending schools rated Excellent or High.

5 fewer schools are rated Low, representing 55,000 students.

There are 32 fewer schools rated Unsatisfactory, meaning that more than 7,000 students are no long attending unsatisfactory schools.

That's not all. Recent national education surveys place Colorado schools first in the nation for having the best learning climate in the country. We're also best in the nation in complying with federal requirements to put a highly qualified teacher in every classroom, and we are second best out of the 50 states in educating children challenged by poverty and other social barriers.

Friends, this is real progress progress that is due to an accountability system that points out challenges and rewards achievement. It is also due to the teachers and administrators working in our schools who have embraced standards and accountability.

Let me give special thanks to one of Colorado's most effective school administrators who has worked tirelessly to make our accountability system a success. Dr. Dwight Jones, superintendent of Fountain-Fort Carson school district, leads a district with a large number of its students having at least one parent in the military and away at war. The population is very transient. And Doctor Jones hasn't let tough challenges deter him.

One of his schools Abrams Elementary has 44 percent of its students eligible for free or reduced-price lunch. Nearly half of the students are minority children. And 57 percent have at least one parent in the military, many of whom are serving our nation overseas.

Check out these results. In fourth grade reading, Abrams went from 30 percent proficient and advanced in 1998 to 74 percent in 2004. That's a boost of 147 percent for those of you who weren't math majors. And that's 136 percentage points ahead of the state average.

Dwight Jones is here with us today on the House floor. And in the gallery, we are joined by his wife, Jennifer Jones, and by four of his best administrators. Please welcome Dr. Precious Broadnax and her assistant principal Sue Freeburg from Abrams Elementary and Kathy Van't Hul and her assistant principal Jason Crow from Patriot Elementary. Thanks for all you do for Colorado's children.

There is no more powerful an advocate for quality education than a parent armed with facts. With solid information, moms and dads can have a real dialogue with teachers. And they can compare the performance of schools to chart the best course for their children.

This morning, I want to make one point crystal clear.

This accountability system works. That's what we're seeing in the numbers. And that's what teachers and parents are telling us.

Some may believe that 2005 is the year to slow down our testing program, or weaken our accountability system. They would be wrong. I will oppose any effort to weaken our reforms or take tools out of the hands of our parents and teachers. We will not turn back.

Health Care

Providing quality education is one way Colorado is helping our children. Improving access to quality health care is another.

Last year, voters approved an initiative that will inject $175 million in new dollars into our budget. These new dollars give us the chance to expand health care services to some of Colorado's most vulnerable citizens, including our poorest children. And to take long overdue steps to reform some of our public programs.

Since I have been governor, I have made the expansion of the Child Health Plan Plus, or CHIP PLUS, a major priority. We have made more families eligible. And we have included additional services, including pre-natal care and dental care. I propose that we use a portion of these funds to provide CHIP PLUS coverage to thousands of Colorado children.

We also have an opportunity to address a gap in Medicaid. Every year, hundreds of Colorado women under the age of 40 are diagnosed with cancer but are ineligible to receive treatment. Let's use these dollars to make them immediately eligible for treatment.

Improving the accessibility and availability of health care in Colorado is a key opportunity we can address with these dollars. I applaud legislation sponsored by Senator Groff, Representative Marshall and Representative Hoppe that will address underserved populations.

Another underserved population lives in rural Colorado. For many families, even routine care can be hundreds of miles away. Fortunately, technology is advancing so rapidly that we can use telemedicine to bring modern care to rural communities. A world-class cancer specialist in Denver can diagnose a patient outside Delta. An obstetrician in Colorado Springs can help a woman on the Eastern Plains who's having a tough pregnancy.

I propose that we devote $3 million this year to rural health care initiatives, including a telemedicine pilot project for rural Colorado.

Today, only one in four women eligible to receive screenings for breast and cervical cancer get those screenings. We must increase that percentage.

There is much more we can do with these dollars. Expand screenings for diabetes, high blood pressure and cholesterol levels, and colorectal cancer.

Let me inject a word of caution ...$175 million is a lot of money. And the temptation is to spend it. To spend it all now. And to spend it all fast. That would be a huge mistake.

Why?

We know from the experience of other states that tobacco tax revenue drops over time. Economics tell us that higher taxes will cause people to quit smoking. And the programs we will invest in will cause more to quit. Those are both very good outcomes. Consumption in New Mexico dropped by more than a third in six months. And, in Wyoming, it dropped 73 percent over the same period.

This drop in consumption of course, reduces revenue.

That's why we must adopt a plan that is sustainable. I propose that we set aside $45 million the first year to create a Trust Fund to help support program expansions in the future. And, equally important, protect the General Fund from additional burdens in the years to come. We all know what happens to the budget when voter initiatives require spending that our revenues can't sustain. Let's learn from our past experiences.

This plan is responsible. It is achievable. It is sustainable. And it will accomplish many important goals for the health of our fellow Coloradans.

Colorado's Environment

In 2004, we took a giant step forward to conserve our state's unique and treasured open spaces, to allow countless Coloradans to enjoy this land for generations to come. In December, our investment in open space grew by historic proportions with Great Outdoors Colorado investing $60 million in 18 projects statewide to preserve more than 80,000 acres. During our administration, GOCO has invested, on average, more than $14 million annually. That's helped us preserve nearly 360,000 acres over the past five years. I'm proud of the legacy we're leaving for our citizens, our economy and our environment.

State agencies have found that there are many business practices that both save money and are good for the environment. For example, the Colorado Department of Public Health and Environment installed energy efficient lighting that has already saved about $100,000. And it reduced annual energy usage by 1.2 million kilowatt hours. We will spread this "greening government" initiative throughout the executive branch. <

Water

A remaining environmental challenge is water.

Since 1988, the Legislature has introduced 23 out-of-basin water transfer proposals. All failed. Yet the need for real solutions remains. This year, we have a chance to enact lasting solutions to benefit all of Colorado.

I am proposing that the General Assembly pass legislation creating Inter-Basin Water Compacts between the various water basins. These would be long-lasting consensus agreements, similar to the Colorado River Compact between Colorado and our neighboring Western states.

This plan has been crafted by one of Colorado's most respected leaders, former Speaker Russ George, who today leads the Department of Natural Resources. Let me thank Senator Abel Tapia and Representative Josh Penry who are carrying this innovative plan.

Public Safety

Our environment is only one aspect of our world-class quality of life. Public safety is another. We have worked together to make Colorado safer from terrorism and to crack down on crime and illegal drugs.

I am proud to welcome a new member to our state law enforcement team in Colorado. Following the election of Attorney General Ken Salazar to the United States Senate, I looked for a respected, seasoned prosecutor to fill Ken's shoes. I found that man in John Suthers. He is experienced. He is fair. And he will make us all proud as he works to protect the people of Colorado. I urge the Senate to quickly confirm him as our next Attorney General.

Please welcome John Suthers.

Conclusion

Throughout this session, we will have successes to celebrate. And let's face it some disagreements to work through.

Ladies and gentlemen, of the more than 100 elected officials in this Chamber this morning only two of us, myself and Senator Lew Entz have been here since 1982. And we're still here.

We've seen a lot in these 23 years. And during all twelve years I served in the House and Senate, we had a Republican majority with a Democratic governor. Yet as a Republican I was able to pass and have Democratic governors sign important legislation. E470. Charter schools. A complete re-write of our child abuse statutes. Tort reform.

I enjoyed working with my friends Dick Lamm and Roy Romer to enact good laws. So I'm optimistic that we will work well together and have a very productive session.

But I'll also tell you that I had some bills vetoed. People of good will disagree sometimes. These vetoes came because the Governor disagreed with my bills. And you will have some bills vetoed. But my pledge is, when we do disagree, we'll do it without being disagreeable.

However, we all must draw lines. I agree with President Reagan who once said, "We will compromise. But we will not compromise our basic principles." I won't, either.

Colorado is a leader in tort reform. We will not retreat.

Colorado is a leader in common sense workers' compensation policy. We will not retreat.

Colorado is a leader in school choice, charter schools and home schooling. We will not retreat.

Colorado is a beacon, a safe haven from Internet taxation. We will not retreat.

So if you ask me to compromise on principle, I will get out the veto pen. And, just as I did with Governors Lamm and Romer, I hope that we will disagree as friends and as Coloradans.

Ladies and gentlemen, we all sometimes believe that this gold dome, and what happens underneath it, is the center of the universe.

But guess what? It isn't.

Make no mistake. The work we will do here over the course of these 120 days is important for Colorado's future.

But there are also lives being lived outside this Capitol, with great acts of character and courage. And these stories help us keep our perspective in the months that lie ahead.

Let me tell you about Matt Casias.

On a crisp Thursday afternoon last October, Matt was working at his print shop on Santa Fe Drive. He looked out his window and saw a woman being mugged. Three men were assaulting her, struggling with her for her purse.

That was all Matt needed to see. He jumped up, ran into the street and in the words of one of his workers, "just barreled into the guy."

He stopped the mugging. Brenda Turner was safe. And Matt was shot in the chest.

He's on the mend. And this split-second heroic decision might tell us all we need to know about this man.

But there is much more.

He's an entrepreneur, who started his business Power Imaging just about a year before. And, like many small business people, he had no health insurance.

Understand this. He ran into the middle of a mugging, and went after armed attackers, with no concern about his own health.

He's a single Dad, whose daughter is named Faith.

He'd had a scrape with the law as a teenager, and didn't want other young people to repeat his mistakes. So he turned part of his business into a boxing gym, to give young men a way to build character, and provide an oasis in a culture that sometimes offers dangerous choices.

This morning, I am proud to present Matt Casias with the Governor's Medal of Valor. Not simply for his actions in saving Brenda, but for all he does for his family, his community and for Colorado. He is an example for all of us.

In the early 20th century, British Prime Minister David Lloyd George said, "What is our task? To make Britain a country fit for heroes to live in." Heroes like Matt Casias. And the members of the Colorado National Guard, like Major Doug Paul, who serve us at home and abroad. The educators, like Dwight Jones and his staff, who work everyday in our classrooms. The moms and dads of Colorado

Friends, this is our charge, our task, in 2005. Together, we must work to make Colorado stronger, and more prosperous. We must open new doors to our young, and create new opportunities for Colorado families. We must make Colorado a beacon, a "fit place" for heroes like Matt Casias to call home.

Thank you. God bless all of you. And may God bless Colorado and the United States of America.