Kentucky State of the Commonwealth Address 2003

President Williams, Speaker Richards, and members of the General Assembly, Justice Lambert and members of the Judiciary, Governor Henry and other constitutional officers, my fellow Kentuckians.

For the sixth and last time, I appear before you as governor to report on the state of the Commonwealth. And in many ways, the state of the Commonwealth is good; but, as always, there are still things we need to do as a society.

You're not assembled here to address the things which are going well in Kentucky; you're here to make changes where things could be better.

But as we talk about the challenges facing the Commonwealth, we shouldn't forget about what's right in Kentucky; and that's where I want to start tonight.

I begin by thanking the members of the Kentucky General Assembly for your many, many kindnesses, courtesies, words of encouragement, helpful advice, constructive criticisms and personal friendships you've shared with me since I've been governor and even before.

As we embark upon the most difficult session that will occur in my terms as governor, I pledge to you to be understanding as I articulate my position on issues. I pledge to be open, honest, dedicated and cooperative as we work together to decide Kentucky's course for the next year and a half and, in fact, for the next generation.

I'm extremely proud of what we've accomplished working with you these last seven years. We've made major change; fundamental change, in Kentucky society. I believe that we've achieved the goal that I set for our administration seven years ago; that is "to set us on a path to raise the quality of life and standard of living in Kentucky above the national average in 20 years."

And so let us review what I believe are the successes of the past seven years that we've made possible together.

Our first major initiative was to strengthen the efficiency and operation of state government. That's been an ongoing process and should never terminate.

The foundation of this effort is the EMPOWER Kentucky initiative authorized by the General Assembly in the 1996 session.

EMPOWER Kentucky is quite simply the most innovative, effective, and successful restructuring of state government business processes in the United States.

The administrative technology of state government is vastly improved. Our employees are better trained. Our people have more and better access to their government. And the results show.

EMPOWER Kentucky has improved the efficiency of government in Kentucky by almost 600 million dollars so far, and has institutionalized over 100 million dollars a year in increased efficiencies.

One of these efficiencies is fewer employees doing more work. Results? 1,166 fewer total employees today than were on the state payroll when I assumed office on December 12, 1995. I want to repeat that statement! 1,166 fewer total employees on the state payroll today than when I took office. And we're committed to further reduce the state payroll by another 1,000 by attrition before I leave office.

Yes, we've asked our employees to do more. We improved their technology so they're more productive. We improved their physical environment so they're working in safer, more efficient surroundings.

We've straightened out the state's pay grade scale and instituted a program to keep it current.

We've achieved the state's goal of a workforce which reflects the diversity of our population. For eight consecutive six-month reporting periods we've achieved our EEO employment goals and no previous administration has met that goal for even two consecutive six-month reporting periods!!!

We've improved financial management, revenue forecasting and purchasing procedures. We've managed our way through $872 million in revenue shortfalls over the last two years without the draconian measures to cut services other states have taken.

It's easy to pick out things about state government to criticize, but the fact is we've administered state government very efficiently!!!

We've made Kentucky safer from those who would violate our laws. Some may have forgotten our omnibus criminal justice reform proposal you enacted in 1998. While it increased the penalties for serious crimes, eliminating parole for most violent offenders and sex offenders who refuse treatment, it also contained alternatives to incarceration for less serious crimes.

Our tough stance on crime includes support for Megan's Law, the .08 DUI law and expanded DNA testing.

Our laws are to be enforced without regard to race, ethnic origin or gender. That's why I directed the Justice Cabinet to develop training and a model policy prohibiting racial profiling and to collect statistics on law enforcement stops.

We've developed the Unified Criminal Justice Information System and enhanced our public defender system as we strengthened our Commonwealth Attorneys' abilities to prosecute crime. Our local police officers are better trained, our state police better equipped, our penalties for hate crimes enhanced.

We've cracked down on prescription drug abuse, improved our programs for drug abusers, strengthened homeland security, and transformed our worst-in-the-nation juvenile justice system into a best-in-the-nation model, many states are trying to emulate.

And the results of this work show. From 1995 to 1999, the crime rate decreased 10 percent. Kentuckians are safer today because of your actions of the past seven years!!

As impressive as our accomplishments are, they're threatened by our inability to pay for the incarceration of all the criminals who should be behind bars.

I must acknowledge that much of the work in criminal justice was led by a valued member of our cabinet who passed away this past year, a man who I believe was the greatest statesman of the 20th century in Kentucky, former Chief Justice and Secretary of the Justice Cabinet, the late Robert F. Stephens!!!

Through the work that Judi has spearheaded, we've made significant reforms to improve the protection of women and children.

You've supported her efforts by passing over 20 separate pieces of legislation on these issues alone.

We implemented the nation's first victim notification system. We substantially increased funding to spouse abuse centers and rape crisis centers. We created a new network of 15 innovative Children's Advocacy Centers.

And Judi has been a strong advocate for your efforts to establish family courts. Just this past year, she worked with UK President Lee Todd to create a first-of-its-kind Center for Research on Violence Against Women at the university.

Women and children are safer in Kentucky because of Judi's work!!!

And in spite of today's depressed economy, we've had successes in the battle to create jobs. Legislatively we've improved our workers' compensation system, revised our ten-year old economic development programs and added new ones like the highly successful Tourism Development Act, the Skills Training Tax Credit Act, the venture capital fund programs, coal industry development incentives, the economic opportunity zones programs, and the Military Affairs Commission.

We've addressed regional problems with the coal fields business park development program in east and west Kentucky as well as helping to establish major business parks in Warren, Hardin and Graves counties and several other places in Kentucky.

We have the most ambitious agricultural development initiative in the country and our statewide program of community infrastructure improvements will serve generations to come. And we've looked to the future with our New Economy initiative.

All in all we've done better growing our economy than many other states. We've been ranked 8th for capital investment, 7th for new jobs created and 2nd for business expansions. Our gross state product, average wages and per capita income are increasing faster than the national average. Our business climate is ranked better than any of our 7 bordering states. Our poverty rate has had the 12th best decrease in the nation and the percentage of Kentuckians unemployed is 15 percent below the national unemployment rate. We're growing Kentucky's economy!!!

Kentucky has had a social services program for all of my life and before. It has, for the most part, been focused on temporary relief of the symptoms of the failures of our society. Our objective has been to provide long-term solutions through a comprehensive family services approach to build on the strengths of our families. Our goal has been building self-sustaining families, not administering government handouts and we have reduced those on the welfare rolls by 52 percent.

Protecting our children and vulnerable adults from abuse and neglect and ensuring their well being has been a priority of this administration. We've increased the number of social workers, reduced caseloads and substantially increased salaries. Our Cabinet for Families and Children has gone beyond the call of duty by becoming the first voluntarily accredited state social services agency in the nation!!!

We've been among the most successful states to implement the children's health insurance program. Over 51,000 children in Kentucky have health insurance coverage today because of our work!!!

We've established an office of women's health, an office of child abuse and domestic violence prevention, improved our child protective services programs and doubled our rate of adoptions for state-committed children. Our Family Resource and Youth Services Centers are nationally recognized for their success and we've expanded them to every county in the state with a total of 775 centers.

We're reducing teenage smoking and teenage pregnancies, improving mental health services, strengthening our local health departments and we've done more to improve housing for our low-income citizens than at any other time in our history, receiving national recognition for the work of the Kentucky Housing Corporation!!!

In many ways, quality of life can't be measured in terms of dollars but you can see the difference all over Kentucky.

Our Renaissance Kentucky program is a national model for small town revitalization. Our historic preservation program, with the use of TEA-21 transportation funds, received a top award from the National Trust for Historic Preservation. Our 2020 water and wastewater initiative will ensure a healthier Kentucky for all of our people. Our efforts to save Black Mountain, the Pine Mountain Trail and Blanton Forest and a lot of the Bluegrass will give future Kentuckians opportunities that were almost lost forever.

Our efforts to reduce the adverse effects of non-coal mining, large animal feeding operations, illegal dumps, straight-pipe sewage disposal, solid waste disposal abuses, and roadside litter will forever result in a cleaner, healthier, more aesthetically pleasing Kentucky and will forever be a monument to another deceased hero of our cabinet, the former Secretary of Natural Resources and Environmental Protection, Jim Bickford!!!

And I pause to note the loss of another friend, a valued member of our administration and long-time colleague of yours, Commissioner of Parks, Kenny Rapier!!!

And I truly hope that our efforts to take a long-term strategic approach to the way we grow in Kentucky will take hold and cause us to become a state which minimizes the problems of the future by smart decisions rather than a state which can never catch up because it's consumed cleaning up the messes caused by short-sighted decisions of the past.

Yes, I'm convinced that Kentuckians will be better off in the future because of the actions we've jointly taken to address the less tangible aspects of our quality of life.

As essential as the elements of state government I've already discussed are to our long-term success as a society, our future depends on education. And from day one, I've strived to be an education governor. And from day one, you, the Kentucky General Assembly, have been by my side every step of the way.

My vision, my dedication, my determination, my inspiration to be an education governor has its origins in the courageous acts of the 1990 General Assembly and then governor of Kentucky, Wallace Wilkinson. The impending crisis in education in Kentucky in 1990 coincided with my gradual realization that although economic development in the short run can be promoted by business parks and tax incentives, in the long run it is totally dependent upon education.

I watched with admiration from the sidelines as you debated and decided upon the very future of Kentucky with KERA. I've said it before and I'll say it again, the Kentucky Education Reform Act is the greatest display of statesmanship and confidence in the people of Kentucky that I've seen in my lifetime. Your example has guided me every day that I've been governor. I applaud those still in this body who crafted, voted for and led to passage this historic legacy!!!

While I can claim no fathership of KERA, I do claim guardianship during these past seven years. Taking office just as the reaction to the unprecedented changes required was reaching its crescendo, our administration and bipartisan leadership in each chamber staved off the reactionaries, made the necessary adjustments, and secured KERA as the nation's most comprehensive and most successful reform of elementary and secondary education. Turning around such a fundamental societal foundation as education is, at best, slow; but at last, after twelve tumultuous years, the results are undeniable.

By every gauge available, Kentucky schools are better, much better, than they were; and they're getting better every day. We were the first in the nation to complete our schoolroom technology program. Our first-in-the-nation Virtual High School and our statewide Virtual Library are just two examples of how technology has improved Kentucky schools. Our after-school and summer school extended services tutoring program is making every effort to leave no child behind. Our school standards are the highest and our accountability program copied by state after state. Our school safety program is leading edge and our high school completion rate is now above the national average!

Our students are now performing above the national average in math, science, and language arts; who would have ever thought that that turn-around could happen here in Kentucky, the state that twelve years ago could only say "thank God for Mississippi." The people of Kentucky will be forever indebted to those of you who made it happen.

While I was a bystander when the KERA decision was made, I was watching and learning. As I studied ways to create jobs, I realized that in this day and age, a K-12 education was just a foundation upon which a more detailed and focused educational experience must be built for an individual to be prepared for success in our terribly complex, information-based economy of today.

And so I determined, long before I took the oath of office, that I would be the champion of postsecondary education. And there again, the members of the Kentucky General Assembly were my allies. As we debated and refined and improved our proposal, many of you were the driving force. And even after you passed it, there was lots of work to do to get it implemented; and again you've been there.

My time as the chief shepherd of postsecondary education is drawing to a close. New leadership of the Council on Postsecondary Education is on the way. Most every university as well as KCTCS has new leadership. This legislature must assume the role of guardian of postsecondary education as the inevitable reaction to change manifests itself.

Having had less time to produce results than KERA, our efforts are none-the-less receiving similar national acclaim and have produced stunning results. Among them are: enrollment in our public colleges and universities is up 20%; 46% in our Community and Technical Colleges.

Bucks for Brains has increased our endowed faculty by 400 percent and has attracted some of the nation's brightest minds. Research is up 41 percent and our Virtual University is bringing education to 10,000 students in every part of the Commonwealth. Our Kentucky Virtual Library is providing access to library services statewide, at an average of 1,100 searches every hour of every day of the week.

Again, these results are the legacy of bipartisan cooperation between both chambers of the General Assembly and our administration.

As K-16 education began to flourish in the land of the Bluegrass, I and other leaders began to realize that we'd started in the middle and that there was important work that needed to be done on each end of the life-long learning continuum.

And so in the 2000 session we addressed early childhood development and adult education, here again, making leading edge innovations that are already producing results.

155,000 women receiving help in pre- and post-natal child care, universal newborn hearing screenings, 17,000 more children immunized, universal eye examinations, better child care, scholarships for child care providers, 6,000 families receiving parenting assistance; just some of the accomplishments of our early childhood development program which is rated one of the best in the nation.

The same goes for adult education. Enrollment is up 69 percent and we've seen a 57 percent increase in the number of GEDs awarded; almost 21,000 Kentucky adults getting a high school credential.

Family literacy enrollment doubled and is now available in all 120 counties. And our Kentucky Virtual Adult Education website is the first of its kind, allowing adults to learn any place, any time, at their convenience. Again, the product of bipartisan cooperation between the executive and legislative branches of government!!!

Yes, I'm proud of what we've done and I hope that you are too because it was truly a joint venture in which we all participated and we all caused it to happen.

In spite of problems and setbacks, it's been a good seven years for Kentucky and a good seven years for me. But you're not assembled here to dwell on past successes. You're here to address today's challenges and tomorrow's promises. There are many issues that you'll address before the end of the March but there's one issue that'll dominate this session; and that's the budget.

I respect the independence and equality of the executive and legislative branches of government, as well as the judicial.

I fully understand that you have the authority to determine public policy and I have the responsibility to execute it. I also recognize our responsibility to work together to solve problems. I'm ready to do my part.

Our present fiscal crisis calls into question our continued ability to execute our existing public policy, because, to be very plain about it, we don't have enough money. We're not alone; 49 other states have severe revenue problems, most are in worse shape than Kentucky. Thirty-two (32) states have raised taxes. This is the worst fiscal crisis in Kentucky since World War II. The same is true for most of the states.

Some may say the state's current budget problem is the result of overspending. Well, let's look at why spending has increased. We have, since I've been in office, increased spending on criminal justice by 75 percent, the most of any area of government; and we still don't have enough money to house all the prisoners the courts are sending to prison.

We've increased Medicaid spending 64 percent; and the Medicaid budget is still $450 million short. We've increased spending on education 28 percent, and we still aren't fully funding the increased enrollment in K-12 or postsecondary education.

The increased spending for all the rest of government has been just 14 percent, in the face of inflationary increases of 19 percent.

We're going to find it awfully difficult to cut more out of our budget without substantially affecting service delivery.

I'll also remind you that we've implemented 26 tax cuts which will reduce taxes almost $500 million in FY 04. And over the past 7 years these tax cuts have saved Kentucky taxpayers 2 billion dollars!

Our administration has done all we know to do during these last two years of national economic slowdown to keep the commitments we've made through past legislative actions; and until December 18th, the day we began to release prisoners, we'd been able to live within existing resources without making any meaningful cuts to essential government services that you'd mandated us to provide.

We can no longer do that. We as a people must make a fundamental decision within the next three months. Will we increase revenue to fund our existing commitments or will we reduce our commitments to things like education, public safety, social welfare, public regulation, public infrastructure and cultural enrichment to a level that can be sustained by current revenue. We must look at the long-term effects of either of those courses of action, or a combination of the two.

For my part, I presented to you one year ago the minimum budget that I thought we should have if we don't want to go backwards. That budget had no new programs and no expansions of existing programs. You thought we needed to do more and added over $100 million to that budget.

I must remind you that that budget reflected our cuts of 2 percent to Medicaid and Higher Education. It reflected a 5 percent cut to all the rest of state government except K-12 education. It was my goal then and it is still my goal tonight to not make any cuts in our education programs!!!

And tonight we know that our revenue is $500 million short of what it takes to fund that budget. But as I review that budget, even if it were fully funded, it wouldn't fund today's estimate of the cost of our needs in Medicaid or prisons. In fact, it doesn't fully fund the Basic SEEK per-pupil-in-average-daily-attendance appropriation that it authorizes; and it doesn't fully fund the increased enrollments at our colleges and universities.

Now I know things have changed. But that budget proposal must be the starting point. With your help, I'll propose modifications that the changed situation necessitates. Perhaps we can agree on more places to cut. We may have to consider more revenue. I solicit your input.

This must be a joint exercise. It must be bipartisan. Each chamber must be involved. Each political caucus of each chamber must be involved. I encourage you to begin joint hearings of your Appropriations and Revenue committees to inform the public of the effects of the potential cuts, which will have to be made, to live with existing revenue.

We need an equally public debate of potential new sources of revenue. We need a thorough public discussion of both sides of the issue.

I'm prepared to lead. I ask for advice from the General Assembly.

In every major initiative of our administration, including every budget proposal I've presented to you, I've had extensive, bipartisan input from the legislature before it was introduced. I need the same cooperation now.

I'll do what I can, but ultimately the responsibility lies with you. In 11 months, I'll be gone. You'll still be here. The new governor shouldn't have to deal with an under funded budget or no budget at all. This crisis must be solved before then.

I'm going to reserve final judgement until I hear all the voices of Kentucky. I urge you and the people to do likewise; because this is a difficult dilemma we find ourselves in. There is no easy answer. The political perils are on both sides of this crisis.

I have but one responsibility for the next eleven months; that is to be the best governor I can be. For the next three months, I offer to work with you to give you and the people of Kentucky the best advice I can offer.

We must commit ourselves to transferring to the next governor a government that has a budget which can fund the commitments that that government has made, whether those commitments are the commitments we have today, or the reduced commitments which will be necessary if we're to live with current revenue.

This should not be the problem of the next governor. It is our problem. It arose on my watch; and it should be solved on my watch. With your help, and the guidance of the people of Kentucky, we will solve it. We must solve it. Our people deserve no less!!!

As I close this, my last State of the Commonwealth Address, I again thank all the members of the General Assembly, current and past, who've strengthened me, challenged me, supported me, and made me a better governor. I've been enriched beyond measure by the experience of working with you.

And to the people of Kentucky, I'll be forever grateful for the confidence you have three times shown in me. Please know this: as your children and grandchildren take their place in the Commonwealth going to school, entering college, going to work, raising a family our work has been for them. Our legacy is what we tried to build on their behalf. And it is to them that I dedicate the entirety of my two administrations as governor.

Good night, God bless you, and God bless America.
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