SANTA FE, N.M. – Jan. 18 – Following is the prepared text of Gov. Susana Martinez's (R) 2011 state of the state address:

Lieutenant Governor; Senate President Pro Tem; Mr. Speaker; Democratic and Republican leaders; esteemed members of the New Mexico legislature; honorable members of the judiciary; former governors; distinguished guests; the state’s first gentleman, my husband, Chuck Franco; my fellow New Mexicans. Thank you for the high honor of addressing you this afternoon. It is my privilege to stand before you as New Mexico’s 27th Governor.

I would like to begin by taking a moment of silence to remember our neighbors in Tucson, Arizona who were the victims of a brutal and heinous act of violence. We grieve for those whose lives were cut short. And we pray for those who have lost loved ones and are recovering from their injuries. Today, we begin to write a new chapter in New Mexico’s history. By working together, we will take our state in a new direction: embracing bold change over the status quo, choosing progress over complacency and putting aside partisan differences to achieve lasting results for New Mexico families. As I said during the campaign, the challenges that confront us cannot be overcome by simply replacing one party with another. They can only be overcome when Republicans and Democrats — the Governor and the Legislature — come together to put New Mexico first. I am committed to doing just that; and I ask you to join me.

It’s easier to take the reins when times are good. When revenues are high and jobs are plentiful. But, that’s not the hand we are dealt. We face a tough road ahead, one which demands shared sacrifice. But that tough road can turn into a path to prosperity if we have the courage to take decisive action. As I said in my inaugural address, these challenges shouldn’t scare us. They should inspire us to step forward and prove equal to the task. This is what New Mexicans have done in the past. And this is what we will do now. That is why during these difficult times, we must be grateful for this opportunity to lead because it has been given to us at a time of great consequence. At a time when it matters most. And with that, we must turn to the issue that supersedes all others when it comes to the state of the state.

And we must not sugarcoat it: New Mexico is in a state of financial crisis. We face an historic budget deficit that will require candor to address and courage to resolve. No more shell games. No more rosy projections. We must tell New Mexicans the truth: our financial house is a mess and it’s time we clean it up. The day I was elected Governor, the state’s budget deficit was estimated at just over 200 million dollars. A week later, it doubled and grew to almost half a billion dollars. In the past, New Mexico’s serious budget problems have been papered over with unrealistic projections and temporary infusions of Federal stimulus dollars. This allowed politicians to shirk responsibility and avoid tough decisions. But I am here to tell the people of New Mexico that the days of kicking the can down the road are over. We have all been elected to take action. We may not be responsible for creating this financial crisis but we are all responsible for solving it.

During difficult economic times, balancing the budget is not easy, but how we choose to go about the task is critical because our budget blueprint is a statement about our values. That’s why my budget protects core priorities like classroom spending in education and healthcare for those most in need. By making cuts elsewhere, my budget only requires the education bureaucracy to trim 1.5 percent from the administration. Only 1.5 percent. Now, you’ve heard some special interest groups say this can’t be done. They claim there is no waste in the bureaucracy. Not even 1.5 percent. I don’t buy it and neither do the people of New Mexico. New Mexicans are not fooled when bureaucrats, whose salaries are many times that of the average teacher, claim the only place to cut is from the classroom. They’re not fooled when a school district spends hundreds of thousands of dollars on PR staff and then claims it has nowhere to cut but the classroom. Or when school districts waste education dollars hiring lobbyists but then claim that the budget must be balanced by cutting teachers.

The truth is, the waste is there and it must be eliminated. In order to protect classroom spending in education and basic health care for those most in need we must find savings elsewhere. That’s why I propose reducing the state’s film subsidy from 25 percent to 15 percent, which is where it first started. This has been incorrectly referred to as a tax credit. It has nothing to do with taxes. The way it works is when a film is made in the state, New Mexico taxpayers cover 25 percent of the costs. It’s a simple and straight-forward subsidy — 25 cents on the dollar. And it’s been taken advantage of … One film company spent $100,000 chartering an actor’s private jet and New Mexico taxpayers paid $25,000 of it. We have a responsibility to see how each and every tax dollar is being spent … How many jobs are being created and whether we’re getting a good bang for our buck. Eight states have reduced, suspended or completely eliminated their film subsidies. Studies found them too expensive for the few jobs they created. I support the film industry and support maintaining the incentive at 15 percent. But in these tough times, when New Mexicans are facing an historic budget deficit, I cannot support subsidizing the expense of Hollywood by cutting programs like child care services for working moms.

To protect priorities, we must do away with the waste and excess that has defined the past and whose absence will improve our future. And I began by reducing the governor’s budget. I cut overall salaries within my cabinet by 10 percent. I will reduce the number of political appointees in state government by at least 20 percent. I have invited New Mexicans to share their ideas for cutting waste by emailing me at CutWasteTips@state.nm.us. And so far, over 750 New Mexicans have done just that. Many of those who emailed suggested cutting unnecessary state vehicles. I agree. And I ordered a one-year moratorium on all new state car purchases, except for law enforcement. We must all do our part. At a time when New Mexicans are struggling to make ends meet their Governor should not be leading a life of privilege. That’s why I cut costs at the Governor’s residence by 55 percent — permanently eliminating the positions of two personal chefs. The first gentleman will just have to help out with the cooking. And we will get rid of that ultimate symbol of waste and excess, we will sell the state’s luxury jet.

We must remember that the long-term solution to our budget woes is economic growth. We increase revenue by helping small businesses create new jobs — not by government creating new taxes. Let me speak plainly: New Mexicans are not under-taxed. The government has simply over-spent. I applaud the Legislative Finance Committee for putting forth a budget proposal that doesn’t include tax increases and doesn’t try to raid the permanent fund. Unfortunately, some are still pushing tax hikes: Doubling the tax when you buy a car. Taxing job creators. Even taxing the Internet. To make them sound better, some call them “revenue enhancements.” They can be called many things but they will all be vetoed. These are difficult economic times. Families are hurting, many are out of work. Many more are only one paycheck away from losing their car or their home. We owe it to them to make the necessary changes to turn our economy around.

I’ve long said that government doesn’t create jobs. Government creates the environment where small businesses can create those jobs. We must recognize that in a global economy, businesses will choose to locate and expand in areas that encourage — not impede — job growth. When a company is deciding whether it will operate in Albuquerque or Denver… in Roswell or Midland… in Farmington or Laramie, the deciding factor often comes down to the state’s tax structure and regulatory policies. For too long, we’ve seen jobs leave New Mexico because neighboring states are more business-friendly and it’s not just our jobs we’re losing to neighboring states. Too many of our sons and daughters are forced to move out of New Mexico in pursuit of those jobs. If our state is going to compete, if we’re going to ensure our children can find a good-paying job close to home when they graduate, then New Mexico must become more business-friendly.

Less than two weeks ago, I announced that Union Pacific Railroad will move its hub from El Paso, Texas to Santa Teresa, New Mexico. More than 3,000 jobs will be created for the construction with 600 permanent jobs. To close the deal, we must put New Mexico on even footing with Texas and eliminate the tax on locomotive fuel. But we must do much more than provide targeted tax credits to certain industries. That’s not the “be all and end all” of economic development. We must set the stage to make wholesale changes to our tax structure and become more competitive with our neighbors. That’s how we’ll help all small businesses grow. I believe that government’s role is to provide a hand-up, not a hand-out.

When people are out of work, we must provide a safety net for the unemployed worker to ensure people can continue to feed their families and meet the needs of their children. But we must do more than just hand out unemployment checks. We must also help people get back to work. That’s why I propose encouraging small businesses to hire unemployed workers by covering part of their salaries for the first six months through the unemployment fund. This will help the state by getting people off the unemployment rolls; it will help small businesses by making it easier for them to grow. And it will help families by getting more New Mexicans back to work. And we must refocus our mission outward — on helping small businesses grow. That’s why we’ll cut wasteful programs that do little for job creation. And redirect resources to open an Office of Business Advocacy within the Economic Development Department. We’ll do more, with less. Much like caseworkers in a Congressional office, this office will help small businesses break through regulatory roadblocks.

If a small business needs help with a permit or license, this office will help. If a company is looking to locate in New Mexico and needs research, this office will help. The big corporations have teams of lawyers and accountants to help them. It’s the small businesses — the mom and pop shops — the small start-ups that get lost in the layers of red tape. We will help them and in doing so, send a loud and clear message that New Mexico is open for business. One of the greatest and costliest challenges small businesses face is the fact that each agency creates its own maze of red tape. When a small business needs to get a permit from one state agency, they must abide by one process. And when that same small business needs a permit from another state agency, the process is completely different and they have to jump through a whole new set of hoops. So, I propose standardizing these administrative practices by passing the Red Tape Reduction Act. This will help small businesses understand regulatory guidelines and make complying with them less expensive, less time-consuming and less complicated. Time is money. And the more money a small business saves, the more employees they can hire.

That’s why the very first executive order I signed created a small business task force to review regulations over the next 90 days. We will maintain common-sense protections for consumers, workers and our environment. Rational regulations will remain, but irrational red tape will be cut. To be clear, regulations such as Pit Rule 17 and Cap-and-Tax do not move us toward a cleaner environment. Instead, they move jobs to the other side of the state line. New Mexico is a beautiful state and protecting the environment and developing our natural resources are not mutually exclusive goals. We can achieve both and we must achieve both. But that requires basing environmental regulations on sound science — not on political ideology.

But turning our economy around involves more than just tax reforms and cutting red tape. In order to attract and retain the jobs of tomorrow, we must make education reform a priority today. When it comes to educating our children, we can no longer throw more and more money at the same system and expect different results. A recent report by Education Week gave the system a failing grade — that’s an “F” — on student achievement. Unless we take decisive action to improve our schools, history will judge us harshly and rightfully so. To reverse years of decline, we must place a command-focus on student performance and progress not just on how much money we’re spending. Too many are afraid to focus on student achievement, so we shuttle too many kids to the next grade, even if they haven’t learned the basics. That implicitly tells little boys and girls that it’s okay that they don’t achieve. My fellow New Mexicans, telling children, regardless of how subtle, that they are not capable of achieving is morally wrong. We must end the culture of low expectations. Stop accepting failure.

This session, I propose a comprehensive reform package that will transform our schools. Our “Kids First, New Mexico Wins” plan is comprised of four key initiatives. First, we will get money out of the bureaucracy and into the classroom. Today, only 61 cents of every education dollar makes it to the classroom. Wasting money on lawyers in the Public Education Department in Santa Fe does nothing to help a child read in a Farmington classroom. By cutting waste and inefficiency in the bureaucracy, we will increase the percentage of funds that reach the classroom. So our kids will benefit. Second, we will adopt an easy-to-understand, easy-to-implement system of grading. Schools will be assigned letter grades A, B, C, D or F. And these grades will be posted to the Web. That’s real accountability that will yield real results.

Greater accountability will ensure we identify struggling students in all grades. And focus attention on the lowest-performing 25 percent of students. We will get them help immediately. Just as we’ll target struggling students with immediate help, so too will we target failing schools with immediate intervention. Currently, it takes approximately five years to identify and intervene in a failing school. Five years. We can’t wait that long to help these kids. That’s why they lose hope, that’s why they drop out. Third, we will end social promotion, the practice of passing children from one grade to the next before they have mastered the basics. The New Mexico “Ready for Success” initiative will get struggling students the help they need before we pass them on to the next grade. We aren’t doing our kids any favors by thrusting students who aren’t ready to advance into an environment where we know they have little to no chance for success. Those kids fall further and further behind, they start seeing their dreams slipping out of reach. They get frustrated and disappointed and many eventually give up. But by identifying a student’s challenges in the early grades, we can give them the help they need and lay a strong foundation as they move to the next grade.

Finally, we will reward New Mexico’s best teachers. The most important people in the lives of our students are parents and teachers. The quality of our teachers is the key to improving our quality of education. A system that evaluates and rewards excellence will attract the best and brightest to New Mexico classrooms. As I stated just days ago, “Nothing we do is more indispensable to our future well-being or will receive more attention from my administration than guaranteeing our children a quality education.” Just as I view educating our children as a core function of government, I also believe providing public safety is one of our central responsibilities.

For 24 years, I dedicated my life to being a voice for those who couldn’t speak for themselves. I specialized in prosecuting child abuse and child homicide cases. And I saw first-hand how criminals who got off light, later ended up committing unspeakable acts of violence. That’s why I oppose balancing the budget by opening the prison gates and letting felons out of prison early. We must always strive toward making our state a safer place. That’s why today, I am calling for the expansion of Katie’s Law. As many of you know, Katie’s Law is named after Katie Sepich, a New Mexico State University student who was brutally attacked, raped and murdered in 2003. I personally prosecuted that case and convicted the killer. The only reason that killer was caught was because of a DNA match years later. That’s why we worked so hard to pass Katie’s Law in the first place.

The champions for that cause are the parents of Katie, Dave and Jayann Sepich, and they are with us here today. Their efforts led to the passage of Katie’s Law in New Mexico and similar laws across the country. Today, Katie’s Law requires criminals arrested for certain felonies to submit to DNA testing. It is a great achievement, but more is needed. This session I call on the legislature to build on the success of Katie’s Law by expanding it to require all those arrested for a felony to submit to DNA testing. We’ll solve more cases, take more criminals off the streets and provide more justice for those who can no longer speak for themselves. There are other areas in crime where we can enact tougher reforms.

We must target repeat drunk drivers. It seems like every time we pick up the paper we read of another repeat drunk driver who has racked up yet another DWI. And we ask, “What is he still doing behind the wheel?” One reason is that our laws for repeat drunk drivers are not strong enough. We should seize vehicles of repeat drunk drivers and increase mandatory prison time. Let’s get them off the streets and away from our families. We should also send the message that some crimes deserve the ultimate punishment. When a monster rapes and murders a child or a criminal kills a police officer, the death penalty should be an option for the jury. That’s why I am calling on the legislature to repeal the repeal and reinstate the death penalty.

And as we strive to make these bold changes and enact reforms, as we ask New Mexicans to trust us, we must set an example with honesty and integrity. Unfortunately, public confidence in state government has eroded. In recent years, too many have violated the public trust. Politicians have treated taxpayer money as their own and rewarded cronies. Decisions have been made to benefit the powerful and the connected, while New Mexico families pay the price. It is our shared responsibility to restore confidence and faith in elected office. I promised in my inaugural address that members of my administration would serve no interest other than that of the public. That’s why I propose prohibiting members of my administration and the legislature from lobbying for two years after leaving state government. There must be no question that public officials are serving only the interests of the public, not positioning themselves for a big payday with a special interest group. I signed an executive order prohibiting state agencies from hiring lobbyists. Representing the people of the state is the role of elected and appointed officials — not lobbyists. Going further, I propose tougher punishments against public officials who break the law.

Corruption is a crime, not an ethical dilemma. Those guilty of corruption are criminals and they should be treated as such. First, we must institute criminal penalties for public officials who know about, but fail to report, pay-to-play activity. Public officials don’t have the luxury of turning a blind eye. Second, when public officials are found guilty of corruption they should be immediately removed from office, receive mandatory prison time and be forced to surrender their pension. Third, it is imperative that we formally adopt legislation that prohibits the State Investment Council, or any state investment agency, from paying finder’s fees to those who help direct state investments. “Finder’s fees” can easily become nothing more than kickbacks — pay-to-play with the pensions of our teachers and police officers. It must be banned and we must get their money back. And fourth, it is time to establish a Public Corruption Unit in the Department of Public Safety. They will investigate allegations of public corruption and help bring to justice those who violate the public’s trust. We must also operate state government in an open and transparent manner. For that reason, I signed an executive order prohibiting state agencies from frivolously using executive privilege to block open records requests.

The public has a right to know exactly what their government is doing. In addition to fighting corruption and increasing transparency, another way to earn back the trust of New Mexicans is to start applying common sense in the laws we pass and the policies we pursue. That means when people have to show a photo ID to rent a movie, it’s not too much to ask to show a photo ID to vote. And if we’re going to tell New Mexicans we’re serious about securing the border, we must stop giving driver’s licenses to illegal immigrants.

My fellow New Mexicans, we face many challenges. Times are tough. But while the challenges are daunting, the opportunities are real. The opportunity to put aside our partisan differences. The opportunity to put our financial house in order. The opportunity to truly reform education by putting students first. The opportunity to create a business-friendly state where small businesses flourish and children no longer have to leave New Mexico to find a good job. So we must not be intimidated by the challenges. Instead, we must have the courage to confront them and the wisdom to seize the opportunities they present. As I said during the campaign, it’s our state and working together, we will take it back. Thank you. God Bless. And let’s get to work.