SALT LAKE CITY, Utah - Jan. 26 - Following is the prepared text of Gov. Gary Herbert (R) 2010 state of the state address:

Lt. Governor Bell; President Waddoups; Speaker Clark; Members of the Utah Legislature and of my Cabinet; Utah's Supreme Court justices; the State's First Lady, my wife Jeanette; my children, my mother and my fellow Utahns; I am humbled and honored to stand before you tonight as Utah's 17th Governor to offer this annual report to our great State.

Tonight, I first pay tribute to the many Utahns who have answered the nation's call to serve. Whether it's as a soldier in Afghanistan, a Utah National Guardsman in Iraq, a humanitarian volunteer in Haiti or Ambassador Jon and Mary Kaye Huntsman in the People's Republic of China, we give them all our heartfelt thanks.

I also recognize those who put their lives on the line every day to protect ours. We suffered a great loss when Millard County Sheriff's Deputy Josie Greathouse Fox of Delta lost her life in the line of duty. Her family is here with us tonight. Please join with me as we remember a life of service and pay tribute to our entire law enforcement community, whose sacrifice helps to keep us free and to keep us safe. In my inaugural address, I spoke about the importance of, and the need for, unprecedented partnerships. This will be a continuing theme for my administration. Our success will be measured by the way we unite stakeholders from across the state, and from across the aisle. We must join together to combat the challenges we face and to seize the opportunities ahead.

Over the past four months, we have formed several such partnerships. Let me highlight two of them.

First, we created the Advisory Commission to Optimize State Government. The goal of this group is to help the state do more with less in order to benefit all. It is headed by former Governor Norm Bangerter. This diverse and bipartisan group of civic and business leaders is taking an inside-out look at all areas of the state. Their efforts will improve our already well-managed state, and, now more than ever, we must achieve new levels of efficiency in state government.

Seated next to Governor Bangerter in the gallery tonight is former Salt Lake City Mayor Ted Wilson. He is leading my Balanced Resource Council. I have charged this group with building consensus on important issues, such as public lands, water, conservation and resource development.

These are matters that have become so polarized that progress has become all but impossible. This unprecedented partnership will provide a much-needed new "state of mind" on environmental issues.

This new mindset was recently successfully demonstrated by conservation groups, the Bureau of Land Management, Indian tribes, local governments and oil drilling companies. These groups came together to protect priceless Indian rock art in Nine Mile Canyon, while still allowing for responsible development of Utah's natural gas resources. This is a prime example of how partnership, combined with leadership, can achieve measurable results for our state.

Unprecedented partnerships are essential because we are facing unprecedented challenges. Although we continue to undergo tough economic times, our state - at its core - is strong. The economic tide is turning. We are poised for progress, and are, in fact, well ahead of most other states in the nation.

For the first time in three years, we are expecting an increase in revenue for the upcoming fiscal year. Housing is beginning to stabilize, the state's labor market is resilient and our unemployment rate remains below the national average. I know this is of small consolation to those who are out of work, but we will continue to make sound policy decisions to move this state - and your families - back to solid economic ground and toward a more hopeful future.

We are already taking the steps necessary to keep us in control of our own recovery.  At my direction, state agencies have implemented plans to overcome projected budget shortfalls for the current fiscal year. Cabinet leaders are carefully managing reduced budgets while maintaining vital services for Utahns. We are exercising fiscal restraint at all levels, in all branches of government.

We recognize the tough times are not entirely behind us. Indeed, our future success is, in large part, tied to how we respond to these difficulties over the remaining days of this legislative session.

Past sessions may be best remembered for the creation of a university or the implementation of a new program. I think, in these challenging economic times, the 2010 session will primarily be remembered for the adoption of a balanced and responsible state budget.

How we accomplish this in a way that provides adequate funding for education, human services, public health and safety, transportation and other critically important programs will be as challenging as any task faced by a Legislature or Governor in generations.

Tonight, I ask you to join me in this unprecedented partnership. Because, by working together, we can, we must and we will succeed!

First and foremost, we must protect public and higher education.

Utah has long been committed to funding our public schools, our colleges and universities, and our technical institutions. In fact, few states in the country spend as much of their overall budgets on education as we do. Our unique demographics - which is a way of saying we have larger families - mean we must continue to increase funding to maintain and enhance the solid education and training our students receive.

In spite of our difficult budget situation, I call upon you, our great legislators, to maintain our current level of commitment to education!

Secondly, we must balance our budget responsibly, and in a way that does not stifle an economy that is finally beginning to show signs of recovery. We need to support our hard-working citizens and businesses, not stifle them with new tax burdens. We need to help them succeed, not hamper their success. And we need to think toward the future, not just of today.

We can accomplish this, and the budget I have submitted to you offers a framework of how it can be done. At this point in time, I strongly believe the best thing we can do for our State, our citizens, and our economic recovery is to exercise continued fiscal restraint and to not raise taxes!

There are many positive things happening throughout the state. Utah continues to be one of the best states for business.

Whether it's a small, family-owned company like PZ Printing in Carbon County, a cutting edge medical device manufacturer like Edwards Life Sciences, or an international company like Proctor and Gamble in Box Elder County, businesses have confidence in Utah as a safe and dynamic place to grow and invest.

A key area of emphasis for my administration is growing business from within. I am pleased the majority of our economic development efforts over the past two years have been centered on protecting and expanding Utah businesses.

Just last month, MediConnect Global, a homegrown medical record management firm, announced it would expand its operations in Sanpete County. This expansion will add more than 300 full-time positions in Ephraim over the next several years. This is but one example of what is happening right now in Utah.

A healthy economy is critical to Utah's unparalleled quality of life. But another factor that makes living in the Beehive State so rewarding is our access to some of the best health care in the nation. Our medical professionals and hospitals are widely recognized as among the best in the country. We understand public access to these services is critical.

Rather than simply talk - or, more accurately, sometimes fight - about health care reform, Utah has stepped forward with solutions. Thanks to the efforts of medical professionals, citizens, members of the executive branch and Lt. Governor Greg Bell, and legislative leaders like Speaker Dave Clark, the Utah Health Exchange is now open for business.

This Utah-crafted solution is an innovative approach to increase transparency in the health care system, to increase access and to increase choice. Already, hundreds of Utahns have coverage in plans they have chosen for themselves. This is a revolutionary approach to health benefits that will soon be available to even more Utahns.

Our Exchange is one example of how states can - and should - lead the nation on health care reform. We don't want or need a one-size-fits-all program that will balloon our national deficit and provide questionable care to our citizens.

Several weeks ago, I traveled to Washington D.C. and met with top leaders in Congress and at the White House. I strongly emphasized that the federal government should not do what state governments are already doing well in areas such as health care. The continued encroachment of the federal government into our businesses, our lives and our pocketbooks must be challenged.

The voices of fiscal restraint and responsibility on critical issues like healthcare cannot be ignored. We simply can't spend what we don't have, and the tax-and-spend mindset that is so prevalent in Washington is not acceptable here in Utah!

Government closest to the people is the most effective. I have been fortunate to serve at that local level. And, for the past several years, I've had the privilege of serving in state government. Over the years, I have worked with hundreds of hard-working public employees and elected officials who carry out their duties with honesty and integrity. Very seldom have I encountered situations where the ethics of those who hold the public trust has been called into question. Still, breaches do occur and questions do arise. Often, better clarity would have provided better guidance.

To set that standard for the Executive Branch, today I signed an Executive Order that reaffirms and clarifies guidelines about accepting gifts, participating in lobbying efforts and identifying conflicts of interest. Now is as good a time as any to remind all state employees what constitutes acceptable and unacceptable conduct.

I encourage you, as lawmakers, to remove any perception of possible ethical issues by implementing meaningful and substantive ethics reform. I know that work is already underway on these bills, and I look forward to signing them into law this session.

There is also good news tonight for drivers: congestion will soon be reduced on your daily commute. Construction will begin this year on the expansion of I-15 in Utah County and the Mountain View Corridor in southern Salt Lake County, and road and bridge improvements are taking place from Brigham City to St. George.

Our investment in a solid transportation network will help eliminate congestion on roads and highways, saving time and money for businesses and commuters. It will also improve opportunities for mass transit.

But with a growing population, we must do even more. Thousands of additional cars and trucks on our roads each year leads to higher levels of air pollution - especially here along the Wasatch Front and in beautiful Cache Valley.

Later this week, elected officials from across the state will join Salt Lake City Mayor Ralph Becker and me on these Capitol steps as we address our air quality issues. We're going to ask for your help. Because this isn't a partnership between government and the people - it's between friends and neighbors and co-workers and even strangers. It is a partnership with people who realize we all have a responsibility to reduce pollution and to increase the quality of the air we breathe.

While on the subject of protecting Utah's extraordinary environment and unsurpassed quality of life, let me be clear: I remain opposed to the importation of foreign nuclear waste into Utah.

Certainly, the challenges of being a state with a federally permitted nuclear waste disposal facility are complex and ongoing. My responsibilities on these issues, on the other hand, are quite simple, and they will not be compromised. As Governor, I will use all available state resources within the law to protect the health, safety and welfare of all Utahns, now and for generations to come.

Now, I'd like to expand our focus beyond the legislative session. For certainly, when the budget is adopted, the session has ended and the bills have been signed - or vetoed - other important work will remain.

I cannot say enough about the importance of supporting public education. I am bringing together individuals and groups from across the education community to craft new and innovative solutions to significantly improve the education we provide our children.

Utah teachers work hard, but they face classes that continue to grow in size, complexity and diversity. They need new tools to continue to be successful. While the solution to some problems does, in fact, come down to dollars and cents, there are other solutions that rely on common sense - not just more funding.

I am optimistic the Governor's Educational Excellence Commission, which I will personally chair, will find, develop and implement these solutions. Our state deserves a blueprint for success in education, and I believe this group will get us there.

We owe it to our students, and to the future of our State, to provide an education that prepares our youth to compete in the global marketplace. This will not happen, however, without renewed and sustained emphasis in the areas of science, technology, engineering and math. Indeed, many of the jobs available today - and those our students will seek in the future - already require these skills.

I call upon students, caregivers, parents, educators and business leaders to join me in addressing the critical need to immerse our students in these fields of study. If we all pitch in with the spirit of commitment this state is known for, we can be leaders in providing the most prepared and productive workforce in the nation. This is not just an investment of dollars, but of time, energy and innovation from all of us.

Also tonight, I call on the Utah Board of Regents and the Commissioner of Higher Education, Bill Sederburg, to present me with a report, due this fall, that shows how our colleges and universities plan to meet the growing need for students with associate's and bachelor's degrees to address the workforce demands of Utah employers in the 21st century.

On this front, I'm proud to say tonight that we are taking steps in the right direction. The recently launched Utah Cluster Acceleration Partnership provides a way for critical industry groups to communicate their current and future workforce needs to our educational institutions.  This partnership will be the mechanism for education to hear, anticipate and answer industry's needs.

The Utah Cluster Acceleration Partnership is a true collaboration - with leaders from industry, state government, higher education and our research community - all working together to significantly increase the economic impact of our most important industry clusters.

Let me offer just one example. Utah's aerospace and defense-related industries generate billions of dollars in revenue annually and employ tens of thousands of Utahns across the state in high-paying jobs. This is good - but we can do even better. Private and public leaders have teamed up with Weber State University to increase the size of the aerospace industry in Utah. By focusing on workforce needs in this area, we will develop the talent and innovation necessary to become the premier player in the aerospace industry. As this happens, Utah becomes more than a place companies would like to be, it becomes a place they need to be.

Long-term planning is critical to Utah's continued success. I've outlined initiatives for education and economic development, and would like to conclude with my plan for energy.

Tonight, I am announcing what I hope will be one of the most impactful economic initiatives ever undertaken in our state. It is one that we in Utah are uniquely positioned to accomplish - it is the Utah Energy Initiative.

I am assembling the best minds in the state and charging them with creating a 10-year strategic energy plan whose purpose is threefold: to ensure Utah's continued access to our own clean and low-cost energy resources; to be on the cutting edge of new energy technologies; and to foster economic opportunities and create more jobs.

We have a rich abundance of diverse natural resources - everything from traditional fuels such as oil, gas and coal to renewables such as solar, wind and hydroelectric. Two new wind projects north of Milford and in Spanish Fork Canyon are now producing electricity. Geothermal is rapidly coming online. Blending solar and biomass with traditional fuels at existing generation sites shows great potential. Simply put, few other states have the energy resources with which we, in Utah, have been blessed.

But it is the innovation and the entrepreneurial spirit of Utah that truly distinguishes us. We have some of the best research and technology minds in the world. We must further harness and empower them. We must also engage Utah's rural areas in this effort, as there is no one who has more know-how, or more at stake, than those communities in Utah whose lifeblood is - and has historically been - the energy industry.

Just three months ago, Utah State University announced a partnership between the State, the Department of Energy and the Uintah Basin communities to construct a 70,000 square foot Entrepreneurial and Energy Research Center. The project's funding included a $15 million donation from Vernal resident Marc Bingham.

What a perfect illustration of how government at all levels can work together with universities, industry and the private sector to accomplish together what none could achieve individually.

We are uniquely positioned in the Western Energy Corridor, which stretches from Canada on the north to New Mexico on the south. We have the generation capacity and the transmission systems, and we are at the crossroads of the energy commerce and transportation infrastructure. Billions of dollars of future capital investment will be required to maintain and expand our infrastructure. Regulatory systems must be in sync with our long-term energy vision.

As a state, one of our true economic competitive advantages is our relatively low cost of power. Our energy plan must focus on maintaining affordability, encouraging capital investment and protecting our environment. I will do my part to provide leadership both here in the state and also at the national level, through such alliances as the Western and National governors associations.

Utah can - and must - be at the forefront of solving the world's energy challenges.

We've come a long way since pioneers were required to toil and sweat and sacrifice to build homes and farms and communities in what was then the Utah Territory. Since that time, our people have done much to make us a great and significant state. That work continues today. It continues in this Capitol building and in homes and schools and offices and factories across the state.

Our best days are indeed ahead of us. I am bullish on Utah, and I have high hopes for our economic future. This optimism is based on data, good data, facts which show Utah turning the corner in the very near future. If Utah were a stock, and I were your stockbroker, I'd say buy!

As Governor, I promise that, working with you, Utah will continue along the path of fiscal responsibility for which we are known. Through selflessness and working together in unprecedented partnerships, and in unprecedented ways, we will find renewed hope and also ensure that Utah remains the greatest State in this nation.

Thank you. May God continue to bless the Great State of Utah.