North Dakota State of the State Address 2005

BISMARK, N.D., Jan. 4 Following is the text of Gov. John Hoeven''s (R) 2005 state of the state address:

Lt. Gov. Dalrymple, distinguished legislators, cabinet members, Justices of the Supreme Court, elected officials, tribal leaders, former Gov. and Mrs. Link, fellow citizens of North Dakota, and First Lady Mikey, thank you for being here today.

Before we begin, we need to take a moment to honor our men and women currently serving in uniform and the thousands of veterans who came before them.

Our National Guard, Reserves, and active duty armed forces are, today, in harms way, defending our nation and our freedoms around the globe.

They represent the best our country has to give. Our military men and women are the most capable in the world. And they are laying it on the line, everyday, for all of us.

We also need to remember the thousands of North Dakota veterans who have so bravely and selflessly served their country.

From the world wars of Europe to the jungles of the Far East, from the deserts of the Middle East to the African continent, and even here in our own hemisphere, our veterans have made the world a better place and America the great country we are today.

And we must never forget the brave soldiers who made the ultimate sacrifice - who gave their lives in service to our country. We owe them a debt we can never repay. Please keep them, and all of our soldiers, families and veterans in your hearts and in your prayers.

Will all members of the armed forces, past and present in attendance today, please stand. Please stand to represent yourselves and all those who couldn''t be here today, and be recognized.

In war and in peace, these fine men and women are on the scene, ready to serve. Even while they fight to defend our freedoms, they are also helping to bring aid to the victims of the recent disaster in the Indian Ocean. And, our prayers and assistance go out to all those affected by this tragic event, as well.

But, it is because of the sacrifices of our men and women in uniform - and the sacrifices of their families - that we are able to stand here today in a free North Dakota. We owe them so much. We must honor, remember, and do all we can to support our troops and veterans.

To that end, I am asking all of you gathered here today to help pass the Veterans Benefits bill we have proposed. In that legislation, we will give our veterans and active military from Desert Storm through today service bonuses and increased funding for tuition assistance. Our men and women in uniform deserve nothing less.

On behalf of the people of North Dakota and all America, I wish to thank you - our veterans, our military, and your families - for all you have done and all you are doing for the cause of freedom and to preserve our way of life. Thank you and God Bless you one and all.

My friends and fellow North Dakotans, the state of our state is strong.

Our state is clearly healthier than when you last assembled here, we are growing, and the future is ripe with new possibilities.

Just over four years ago, we came to the people of North Dakota and asked them to support our vision for building a brighter future for our state.

We had not just a vision, but also a plan.

The American educator W. Edwards Deming best expressed the fundamental premise behind our plan when he said: "If you always do what you always did, you will always get what you always got."

So we resolved to do things differently and we have.

We fundamentally changed the way North Dakota pursued building our economy. We created the Department of Commerce to marshal all our state''s resources into one common effort and goal. We developed a statewide strategic plan to target key industries. We brought together the public and private sectors at the local, state and federal level to work together to create more and better paying jobs. We simplified the tax system. We created new tax incentives, and we are marketing our state''s progressive business climate and exceptional workforce to the rest of the country.

Our plan had - and has - at its core, the faith that North Dakota can compete with any state in the nation. We believed in North Dakota and in North Dakotans.

And our faith has been justified.

For 2003, the most recent year for which we have statistics, North Dakota led the nation in personal income growth and was second in wage growth. North Dakota also gained more than 500 new businesses in that single year alone.

We have added thousands of new jobs while the rest of the country struggled through a recession. In fact, it was just reported that North Dakota had an increase of more than 7,000 jobs in the second quarter of 2004 compared to the same quarter last year. At the same time, total quarterly wages grew by 7 percent.

A host of companies have announced plans for expansion, including SEI, Acrylon Composites, Missouri River Ag Processing, Wurth Service Supply, Composite America, Sysco Foods, LaRinascente Pasta, Grizella, Affinity Global Solutions, Red Trail Energy, Mandaree Enterprises, Northland Products, Sabin Metal, Mid America Aviation, Spinal Design, AWM Staffing, American Express, Specialty Export, Summer''s Harvest Flour Milling, Eagle Creek Software, Precision Results, Cardinal IG, Marvin Windows, Verifications INC, and Goodrich Corp. - just to name a few.

And I am pleased to share with you this morning a special announcement.

Bobcat has long been a shining example of the best of what North Dakotans can achieve. They are a world-class organization, manufacturing a host of products, including skid-steer loaders and compact excavators right here in North Dakota and shipping them all over the world.

It is no secret that Bobcat is a major and growing force in North Dakota''s economy. In just the last year, Bobcat has added more than 300 new, good paying jobs in Fargo, Gwinner, and Bismarck. With sales of more than $1.7 billion, they now employ more than 2,650 people in North Dakota. They are truly a testament to what is possible to accomplish in our great state.

With us today are the CEO of Bobcat, Mike Ryan, and with him, the mayor of Bismarck, John Warford.

These two gentlemen are here to announce that in the coming year, Bobcat and their suppliers will be adding more than 100 new jobs in Bismarck alone. These new, good paying jobs are the product of Bobcat''s continued success in the world market and the hard work of leaders at the local, state and federal level to help retain and grow this incredible company''s presence in North Dakota.

This further expansion by Bobcat represents the kind of business growth and expansion we are seeing throughout North Dakota as a result of our aggressive economic development efforts and solid teamwork.

Thank you, Mike, for Bobcat''s continued investment in North Dakota, and thank you, Mayor Warford, as an integral player in our statewide economic development team.

Would you both please stand and be recognized.

As I stand before you today, the real progress we''ve made over the past four years continues. We have even begun to reverse our state''s population loss. The US Census just reported that North Dakota''s population is growing for the first time since 1996. And we''re growing in the 24 to 64-year-old age group, a demographic critical to economic vitality.

When it comes to stemming out-migration, especially in our young people, we are making a real difference in people''s lives. I recently spoke with the parents of a North Dakota born and Minnesota educated college graduate.

This family had always hoped their daughter, Jody, could come home to North Dakota after graduation to pursue her career and raise her family.

But their daughter was convinced that there wouldn''t be opportunity for her back home.

This talented young person had received offers from Arizona, Chicago and elsewhere around the country. And on the eve of her decision of which offer to accept, she received a call from a North Dakota company in the process of adding to their staff and expanding their business.

Not only was it a job offer in North Dakota but also one with a better compensation package than any other opportunity she had before her. I am glad to report that Jody is now living and working in North Dakota. And her mom and dad are very happy. As a dad myself, I share their joy.

This story is just one of many similar stories of new opportunity found across North Dakota. And with renewed commitment, determination and investment, it will be just one of thousands of similar success stories to come.

Further evidence of our expanding economy can be found in our sales and income tax revenues. As a result of growing revenues and good fiscal management, we will close this biennium with an ending fund balance of nearly $130 million, the largest in 20 years. And our state''s revenues are projected to be strong through the next biennium - growing by an additional $80 million or more.

We have achieved these results through aggressive economic development efforts - and we have achieved them without a tax increase.

Our economic growth and conservative fiscal policies have enabled us to advance a prudent executive budget for the next biennium. One that allows us to provide for the basic needs of our people without cuts in programs and services.

It has enabled us to advance a budget that continues to hold the line on taxes, and actually reduces the tax burden on our hard working citizens. And our economic growth has provided the resources we need to invest in our future and take our economic development efforts to the next level.

The investment in economic growth I am talking about is no different than the investment any business must make to grow and thrive.

Businesses must invest in products and people in order to create new wealth. So it is with the state of North Dakota. We must invest in our future...the people, the tools, and the opportunity to compete, if we are to truly build a higher standard of living.

Our country''s economic growth over the last 50 years has been fueled by new and emerging technologies. The jobs of the old production economy have been replaced with the careers of the new technology-based economy. Our competition is not just regional or national, but global.

Economists now predict that 75 percent of the S&P Fortune 500 companies in the year 2020 will be comprised of companies that don''t even exist today.

North Dakota must come to the table as a player and full participant. Ready to do what it takes to prosper in the next generation. Ready to take advantage of the new opportunities.

So the question I ask today is: "When is it our time? When will we rise to our true potential? When is it North Dakota''s turn to help lead the country''s developing economy? When will we have the strength and the will to do what must be done to truly build the future of this great state?"

To realize the true potential of our state, we must invest in our priorities - priorities that will help us build the best business climate in America.

That starts with education - both K-12 and higher education.

In an information age, in a technology-based global economy, we must have the most productive and best-educated workforce.

To paraphrase the great British Prime Minister Benjamin Disraeli, "Upon the Education of the people of this country, the fate of this country depends."

Education is critical not only to each one of us individually, but also to build the economic vitality of our state.

To provide our children access to the best education and educators possible, we have proposed increasing funding for elementary and secondary education by more than $75 million over the next four years.

This investment will provide further compensation increases for teachers, funding for joint power agreements to help maintain educational quality, and supplemental payments to help foster greater funding equity among our school districts.

It also means increased funding for technical education to equip our youth with the increasingly complex skills they will need in North Dakota''s growing, and more diverse, economy.

The funding we have committed to education in North Dakota is substantial, but the truly significant point here can''t be measured in dollars and cents.

If we''re going to create the best business climate to create higher paying jobs and retain our young people, we''re going to have to build a workforce prepared for the opportunities of the future. That means the best schools and the brightest teachers educating the best and brightest students.

Furthermore, our commitment to education must extend beyond K-12 schools. That is why we have proposed an increase of nearly $29 million for higher education. This investment will help keep college tuition affordable for all families.

But higher education is not only a training ground for life - it is also an engine of growth for our entire state.

Virtually every business I talk to either has a link or is looking to develop one with our universities. That includes research and development for new products and services, on-going education and workforce training, and access to an exceptional quality of life.

To truly build the best business environment, we must link our campuses to the private sector. Our Centers of Excellence program will do just that.

Centers of Excellence are partnerships between higher education and business to create new, good paying jobs.

These hubs of research and technology commercialize their work into products and services, and they provide a nucleus for business clusters across our state.

They represent a significant force for economic growth - not only in North Dakota, but also across America.

Centers of Excellence have been the engines of dynamic economic activity in North Carolina, Texas, Massachusetts, California, and Minnesota.

The state of Utah, which is a relatively small state like North Dakota, has a Centers of Excellence program. Their research universities have produced the Jarvik artificial heart and CD-ROM technology.

Our own Centers of Excellence program has already begun to yield impressive results.

The NDSU Technology Park has leveraged state, federal and private industry partnerships to commercialize new products in electronic controls and nanochips with companies like Phoenix International and Alien Technology. Phoenix International alone employs more than 500 people; 200 of them are engineers, and the company is making the most advanced electronic controls for heavy equipment worldwide.

At UND, the Aerospace program, the Center for Innovation, and the Energy and Environmental Research Center are working with dozens of companies across North Dakota to create new products, new services, and new enterprises - meaning new careers for North Dakotans. In fact, the Princeton Review just ranked UND 14th on its list of the 25 most entrepreneurial campuses in the country, ahead of Stanford and many other outstanding universities. And our other campuses are participating too.

At Valley City State University, Eagle Creek Software just announced they will be locating in the Rural Technology Center. This Minnesota-based company is expanding there to utilize the high speed Internet connections and hire students trained at Valley City in computer software support and development.

In the Nesson Valley near Williston, NDSU has partnered with Williston State College, Montana State University, and the North Dakota Ag Extension Service to develop a research facility for crops under irrigation, vital to bringing more value-added ag processing to the region.

The reality is, we have just begun and there is much more we can do.

To capitalize on the potential for economic growth, states around the country are investing in Centers of Excellence with their universities.

In Connecticut and Oregon, business and government leaders are developing Centers of Excellence for advanced manufacturing, the life sciences, information technology, and other critical and emerging business clusters. Texas is seeking $300 million to expand their program and California just approved $900 million to fund biotechnology being developed jointly by the campuses and companies in their state.

The high quality jobs and careers of the future will be cultivated in these types of programs.

I say - let''s develop those careers right here - in North Dakota.

That is why we have proposed expanding our Centers of Excellence initiative as a $50 million program. Further, we will leverage our state''s investment on a 2 to 1 basis, with private sector and federal dollars, to make $150 million available for these dynamic enterprises.

This leveraging effect will also draw more investment dollars into North Dakota. Like the Renaissance Zone program, which has been successful across our state - from Fargo to Watford City - the payback is a growing economy and more careers in North Dakota.

The expansion of the Centers of Excellence program is included in a comprehensive package of economic development legislation forwarded by House Majority Leader Rick Berg and the interim legislative committee on economic development. Their proposed legislation is the product of the Legislature''s statewide Business Congress authorized last session.

In addition to Centers of Excellence, the legislation includes a range of initiatives that invest in our people and our future. These include more venture capital and investment tax credits for small business to support the kinds of entrepreneurial activities that produce new wealth and new opportunities for our people.

The legislation also establishes a North Dakota American Indian Business Development Office to help develop more Native American enterprises, both on and off the reservations.

To make real progress in North Dakota we need to tap the skills, talents, and energies of all of our people, including our native peoples. The success in recent years of native businesses like Laducer & Associates in Mandan, and Mandaree Enterprises on the Three Affiliated Tribes Reservation are models of what can be achieved.

The bill also creates a procurement information Web site, where potential vendors of products and services can find opportunities to secure state business. Our goal, always, is to help North Dakota businesses. This site will make it easier for our business community to know what the state''s needs are and how best to compete for contracts.

And it establishes a "Business Hotline" that will provide prospective companies both in North Dakota and elsewhere with practical information about our state''s outstanding business climate.

Finally, all economic development is local, and the state Commerce Department is there to support our communities in their development efforts. To further that effort, the legislation establishes a training program for local economic developers throughout the state.

The initiatives outlined in this legislation represent a shared agenda of the executive and legislative branches, and we must work together for the good of North Dakota to make it happen.

And to ensure that North Dakota''s investment in economic development continues to pay the dividends our citizens deserve and expect, we are also advancing legislation to provide greater accountability. Our proposal includes requirements for written business agreements, job creation, wage reporting, and clawback provisions if goals are not met.

We can reach our potential, but to do so, we must reach within ourselves. We must summon the strength, the will, and the faith to move forward be invest in our future. We must, for the sake of all North Dakotans, say, "Our time is now!"

Another bold initiative, one critical to realizing our potential in energy development, is the creation of a transmission authority.

America has a rapidly growing appetite for energy. North Dakota has the means to feed that demand with environmentally friendly, domestic energy. We have hundreds of years of supply of coal and limitless potential from wind.

Our single greatest challenge is the ability to move power to markets outside North Dakota.

A transmission authority could jump start that process and expedite the kinds of large investments we need to expand our current transmission capacity. Increased capacity is essential if we hope to build new coal-based power plants and develop wind farms across North Dakota.

This session, we will advance a bill to establish a North Dakota Transmission Authority within the state Industrial Commission to promote investments in new transmission lines across North Dakota and beyond.

The authority would serve as a catalyst for new investment, and provide low cost financing to help North Dakota''s generation be competitive with local generation in surrounding states.

It would also serve as a partner to investors, providing access to public sector financing not available otherwise, and helping to develop right-of-way for new transmission.

But the reality is, our opportunity for growth from energy development extends far beyond just the wind farms and power plants themselves. Envision, if you will, industrial parks developed around our power plants - accessing our low cost energy and available water resources for value-added processing or manufacturing.

We are, in fact, bringing two of our targeted industries together - energy and value-added agriculture - to create new opportunity.

Today, a group of entrepreneurs is nearing its goal for a new $78 million ethanol plant in Richardton. Last month, they began preparing the site for the project.

This 50 million gallon-per-year plant will employ 36 people, and use 18 million bushels of corn each year, with 133,000 tons of North Dakota lignite as boiler fuel.

In short, we will be using a North Dakota fossil fuel to help turn North Dakota corn into a renewable fuel that can be used across the country. That''s good for the rural community of Richardton, good for our farmers, good for our lignite industry, and good for our country.

As we work to develop our energy industry, we also must recognize that agriculture will always be fundamental to our economic base. To strengthen that base, we must continue to build opportunity in both production agriculture and value-added agriculture for our farmers and ranchers.

That''s why we have worked hard to open markets around the world for North Dakota''s farmers and ranchers.

We have opened doors for wheat, barley, peas, lentils, alfalfa, and other commodities in Cuba, China, Taiwan, and Japan, and we will continue to forge ahead in these and other markets through our expanded North Dakota Trade Office.

We have also worked hard over the past year - and will continue that effort - to make sure our producers have a level playing field in the world market - whether it''s for beef, wheat, sugar beets, or any of our other high quality commodities.

We will continue to work hard to ensure that the railroads serving North Dakota treat us fairly in their pricing and shipping practices. To that end, we have earmarked nearly $1 million in our executive budget to pursue our rail rate case with the Surface Transportation Board.

And we will continue to build on the comprehensive programs we have developed for value-added agriculture, like ethanol and biodiesel, to generate more income and employment opportunities for our producers and rural communities.

North Dakota and America owe a great deal to the men and women who work the land and ensure that our foods are safe, affordable, and of a quality unequaled anywhere in the world. Our farmers and ranchers produce the very best in food, fuel, and fiber - and we must put forth our very best to support them.

My friends and fellow North Dakotans, the point is this: If we are to fully participate in the economy of tomorrow, we must do all of these things today.

If we want the jobs of the future in North Dakota - if we want to raise a generation of farmer entrepreneurs, software developers, mechanical engineers, biologists, agronomists, chemists, and other highly paid professionals - and if we want them to live and work in North Dakota - then we must commit to creating those careers here in North Dakota.

What is the alternative? The alternative is to lag behind the country in wages and good jobs.

The alternative is to place an ever-increasing tax burden on an increasingly older population.

The alternative is the out-migration of our best and brightest - to continue to provide our youth with an outstanding education at one of North Dakota''s 11 first-rate universities- and then send them elsewhere - to contribute to the prosperity of Minneapolis or Denver, or to Utah, Connecticut, Oregon, or Texas. Our commitment to education, Centers of Excellence, the Business Congress initiatives, a Transmission Authority, energy, and agriculture is critical for North Dakota to create an environment of opportunity - to further grow and diversify our economy, to give our people the standard of living and quality of life they deserve.

But to take advantage of these opportunities, we must have the vision and the courage to do what is necessary to succeed. We must believe in the people of our state and give them the tools to realize their true potential. We must rise to the challenge. We must answer the question: "When is our time?" with the resounding answer: "Our time is now."

For the next biennium, we have put forth a prudent and conservative budget with increased spending well within revenue projections.

In fact, the largest part of increased spending will replace lost federal money or maintain current levels of programs and services without cuts.

At the same time, we will do more to protect our citizens from crime, support quality healthcare, provide an increase in pay for state employees, and deliver high quality nursing home and community-based care for our seniors. Even so, we will hold more than $60 million in reserve.

Due to our growing economy, we can continue to hold the line on taxes and provide tax relief where possible and prudent.

We have already provided tax relief for our farmers and tax incentives for small business. We have already simplified the individual and corporate income tax code. And we have provided property tax relief by increasing state funding for education and revenue sharing for cities and counties. We will do more by doubling the Homestead Tax Credit and by repealing the Unemployment Insurance offset to Social Security for working seniors.

Our goal is to continue to reduce the tax burden on North Dakota citizens, while building opportunity and our quality of life.

The simple economic truth is that the only way we can ever truly hope to achieve a higher standard of living and sustainable tax relief is through a growing economy. To do so, we must continue to be prudent in our fiscal policies, and we must invest in growing our economy. We have laid out a plan to accomplish it. And we will accomplish it - if we work together, and if we have the will to act.

Wherever I go across North Dakota, a sense of progress and possibility is evident.

Several weeks ago, I stopped by a local store to buy a hunting license for my son, Jack. A gentleman walked up to me and said: "John, you know, I returned to North Dakota to live in Belfield. I''ve moved around some, but now I can really sense that we''re making progress in North Dakota."

My friends and fellow North Dakotans, we are making real progress because we have taken action to make a change our fate...but our work is not yet done.

As I speak to you this afternoon, our favorable business climate, our low taxes, our effective economic development policies and our exceptional people have put us in a position to realize our true potential.

We stand on the brink of new possibilities and of a truly new, brighter future for our state and our people. We must use this time, this opportunity, to move our state forward. The people who elected us expect it...they demand it...they deserve it.

Now is the time to realize our potential. Now is the time to expand opportunity in our state. Now is the time to give our people the standard of living and the quality of life they deserve.

Let us resolve today to work together and make it happen.

Thank you. May God Bless North Dakota, and may God bless America.
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