February 5, 2003

Budget Address

Madam President, Mr. Speaker, Madam Chief Justice, Members of the 121st Maine Legislature, distinguished guests, One month ago when I took the oath of office, I told the people of Maine that the immediate goal of my Administration were to balance the state budget and grow our economy. That pledge was the basis of my campaign. And when I said I would close the state's billion-dollar revenue gap without a tax increase, some people were skeptical. Easier said than done.

Well, they were right.

It was a lot easier to say it than to do it. But do it we must!

Tonight I'm proud to report that I am submitting for your consideration my proposed state budget for the next two years that

  • Balances the state's finances
  • Eliminates the shortfall
  • Maintains essential services while positioning the state for future growth
  • Contains no gimmicks, shutdowns or furlough days
  • And most important does not raise taxes on the people of Maine.

Before I get to the details, I want to say a few things about how we got into this financial predicament, and the philosophy I used to make the very difficult decisions to get us out of it.

But it's not all bad news. We cannot let a temporary budget problem divert us from the real challenge of growing our economy and building a foundation for future growth and prosperity.

Despite our financial troubles, we must keep our eye on creating good jobs, providing health care coverage for everyone in Maine and giving our young people the best education opportunities in the nation.

The budget I'm presenting tonight will keep us moving toward these goals.

In the simplest terms, we have a serious revenue shortfall because there isn't enough money coming into the state to pay for all the programs and services that we offer.

Almost every other state in the nation is in the same predicament. Decisions that were made when the economy was strong and the state was running a surplus seemed sensible at the time.

But when the economy softened and revenues fell, the cost of many of the programs and services that were put on the books continued to rise, leading to the shortfall.

Along with huge increases in the cost of state provided health care that are beyond our control, and cutbacks in federal support to states, Maine's revenue gap is projected to be over $1.1 billion over the next two years.

I liken this deficit to facing an economic and financial ice storm — unavoidable and unrelenting. Like the real ice storm of five years ago, it will take all of us pulling together to get us out of it.

There will be difficult days ahead, there will be sacrifices and hardship for all of us…but we will get out of it.

We will get out of it because, as during the ice storm, Maine people will pull together. We will help each other weather this financial storm.

By working together, we can solve this problem. Just like the ice storm, there will be a thaw. When this storm ends, I'm confident we'll be stronger and better prepared for the future.

The beginning of the thaw has already happened. I want to thank the leadership and members of the Maine Legislature for today passing the supplemental budget and bringing state finances into balance this year. The people of Maine appreciate your bipartisan approach.

I also appreciate the many e-mails Maine citizens have sent to our web site suggesting ways to tackle our next budget. In my inaugural address, I asked citizens from around the state to submit their ideas on how best to handle our billion-dollar deficit. The interactive budget balancing tool on my web site was intended to solicit ideas and demonstrate to the public the challenging task at hand.

Over 1000 people have sent me suggestions. The overwhelming consensus is that we can balance the budget without raising taxes.

I have gone through these messages--which I have right here. The ideas on consolidation, restructuring and making cuts were very thoughtful.

Hearing directly from people has made this difficult process more bearable. Reading these messages has further convinced me that the intelligence and capacity of Maine people can turn any challenge into an opportunity.

So what do we do? How do we solve the financial problems we face? There are really only two ways.

We can raise taxes, or we can reduce expenditures. I choose the latter. Let me tell you why.

Right now, tonight, in Millinocket, more than 1000 workers and their families face an uncertain future. The paper mill that has provided steady work and steady incomes for decades has been shut down since December.

Many of us right here in this room have worked hard to get the Great Northern mill operating once again. Today, we moved closer to a solution when the court approved the new management team and health care benefits for workers and retirees.

This is good news, and a first step toward preserving the jobs of 1000 workers and 5000 related jobs in the economy. During this past month, I have worked daily with community leaders, workers, management , unions, creditors, local hospitals and potential buyers.

Our congressional delegation–Senator Snowe, Senator Collins, Congressman Allen and Congressman Michaud –have worked closely with me. A solution would not have been possible without their efforts.

We were successful because we worked together and had someone, trusted by all sides, on the ground moving this along. That person, and the key to our success, is Jim Giffune. Jim has done an extraordinary job assessing the condition of the mill so that it is attractive to a long-term buyer. Thank you Jim for working so hard and for turning this situation around.

The plan approved by the court today –developed by Norm Ledwin, president of Eastern Maine Healthcare and Trish Riley of my office–will provide necessary healthcare coverage. This agreement was also made possible through a generous donation by the Libra Foundation.

The teamwork demonstrated in our Great Northern effort can serve as an example of how to do business here in Augusta. Still, despite our efforts, Great Northern families are making tough choices about balancing household budgets. They're canceling vacations, putting off home improvements, getting by without a new pair of shoes or a new winter coat. As the reorganization takes place, the workers in Millinocket have only one choice: to pare back. There's no way for them to give themselves a raise and bring more money into their homes. The only thing they can do is tighten their belts and reduce expenditures.

It should be no different for state government. I know the temptation is to tax our way out of our problem. That's an approach many other states are taking to face their shortfalls.

But here in Maine, I believe raising taxes at this time is the wrong way to go. It sends the wrong message to our citizens and our businesses, who, quite frankly, can't afford more taxes.

Anyone who wants to raise taxes should have to go to Millinocket or to Calais or Wilton or Freeport and look the workers in the eye who have recently lost their jobs, or their employers who are struggling or out of business, and say to them, "Oh yeah, and on top of that, we're raising your taxes too."

Now is not the time to raise taxes. Now is the time for fiscal restraint and discipline. Now is the time to show the people of Maine that we will spend their money responsibly, efficiently and effectively. We can do it.

Once the decision is made not to raise taxes, the really difficult decisions begin.

In creating this budget, I was guided by four principles:

First, I tried as hard as I could to take an objective look at government services and expenditures. In these tough budget times we must assess honestly whether Maine people are receiving the benefits they deserve from the money we spend.

Second, I applied a test of fairness. I wanted to be sure that, to the extent it makes sense, we treat recipients of services, state employees, and government agencies equally.

Third, I tried to develop this budget with compassion. Our focus must be on our fellow citizens who need our help the most.

Finally, I want Maine to take advantage of the opportunity this financial difficulty presents. Since we're forced to make changes, let's make them in ways that support our future economic growth and prevent recurring cycles of budget shortfalls.

These are the principles I applied to the budget challenge. This challenge is great. Our budget deficit represents $1000 per man, woman and child in Maine. That would cost $4000 for an average family of four.

That's a large deficit indeed. So tonight, I am submitting a balanced state budget for the next two years without raising taxes and without payroll pushes or shutdown days.

I now want to tell you the results of our budget work. Here are the details:

My budget balances the state's finances while keeping the BETR and Circuit Breaker programs untouched. We maintain and restructure the Homestead Exemption. And by delaying federal tax changes we avoid increases in state taxes.

My budget creates a tax amnesty program for a limited period and increases tax enforcement.

It does raise fees in a few areas. I accepted increases where users are not bearing a realistic share of the cost.

And it's time — finally — to get the state out of the liquor business. This budget privatizes wholesale and retail liquor operations. The private sector has proven that it can run Maine's liquor business with the same scrutiny and greater efficiency.

My proposal substantially reduces state agency budgets while maintaining the essential services of government. Unfortunately, this budget does contain some layoffs. But we worked hard to make this impact as minimal as possible.

There will be reductions of nearly 325 positions. However, almost half are currently vacant. And, we can place over half of the employees affected in other positions, with comparable salaries. I'll work closely with the state employees' union to implement these changes. The budget also provides money for retraining and other services to those who are laid off.

In addition, we are keeping Maine state government open for business. Again, there are no furlough days in my budget.

My budget also delays new and phased-in initiatives until the next biennium. At that time we can evaluate whether they should go forward. Starting new initiatives not directly related to improving our financial condition in Maine is unrealistic now.

We obtain other savings from state agencies through reduced expenditures, streamlined administrative operations, program reductions and eliminations. In essence, I am proposing to give each department the same amount of money they received last year.

I know this will not be easy, and contains sacrifices. In the midst of this challenge, I want to say how much I appreciate the hard work of state employees.

They have a unique role to play in protecting our poorest and most vulnerable citizens, and we will continue this commitment. Our goal was to have the least impact on Maine's people in greatest need.

We will not balance the budget by reducing the number of people eligible for Maine Care and Cub Care. To do so would only add to the ranks of the uninsured and that is unacceptable.

Instead, we will ask providers to accept current levels of funding. We'll ask them to do business differently to help us protect citizens in need and bring in every federal dollar available to us.

Sadly, the federal government still denies us our low cost drug program, despite hard work by our congressional delegation and DHS. As a result this budget reflects that loss of federal help. And it includes some targeted service reductions.

We all must pay our way in this budget and we will ask many Maine Care participants to make modest payments toward their care.

Our budget also realizes savings from consolidating the Departments of Human Services and Behavioral and Developmental Services. This is an opportunity to eliminate duplication and improve services to citizens.

There will be no retreat from our obligations to provide crisis services. We will ensure that our institutions are strong and that we maintain the services required to address — and resolve — the issues laid out by the courts.

For too long the Department of Behavioral and Developmental Services has been operating under court orders and settlements, spending precious dollars on court masters, lawyers, and days in court. We need to reverse this trend. Dollars must be spent on people in need. Time must be spent in managing our programs more effectively.

We will tighten controls on prescription drug costs, and we will work with you to enact mental health parity. It's the right thing to do and it will end cost shifting and save Maine Care dollars.

Keeping Maine healthy is our goal, and this budget continues Maine's leadership in using funds from the tobacco settlement on our health care needs. While changes in allocations are needed, all of the Fund for Healthy Maine dollars remain invested in health care.

Our proposal creates an affordable and responsible social services and health care budget. And it does so without reducing eligibility.

This is also important to me: Even in these difficult budget times we must make investments and provide incentives to move Maine forward.

Unfortunately, given the large portion of the state budget represented by education funding, it must play its part in addressing the shortfall. However, I am pleased to report to you that my budget provides some additional funding to education, over the flat funding required of other agencies. In fact, as a percentage of the overall state budget, education funding will increase.

My budget proposes a one percent increase over flat funding–an additional $7.5 million–in General Purpose Aid in the first year. This will allow schools time to generate efficiencies through resource-sharing that will aid them in the second year. For the second year, I propose an increase in school funding of almost $5 million.

To confront our school funding problem, we must do more. I challenge education leaders to think and act creatively, to share resources and achieve efficiencies.

In my inaugural address, I promised to create a Task Force to help us devote as much of our education resources as we can to instruction. Tonight, I am signing an Executive Order to create that Task Force. [pause here to sign the order]

The Task Force will do the legwork to help schools enhance the education of our children even in tough times. It will bring people together to protect Maine's education excellence while modernizing education administration.

We also must do all we can to invest wisely in higher education. Recently, I attended a dedication of the new Mid Coast Center for Higher Education in Bath. This co-location of higher education offerings by the University and Technical Colleges provides a model for better serving Maine people beyond high school.

At the dedication, Chancellor Westphal of the University of Maine System and President Fitzsimmons of the Maine Technical College System signed an agreement to increase cooperation and efficiency. I want to recognize Chancellor Westphal and President Fitzsimmons here tonight. They are setting an example of thinking and acting outside of traditional boxes. That is what we all need to do.

To further encourage our institutions of higher education, my budget provides $1 million in incentive funding for the University of Maine System, Technical Colleges and Maine Maritime Academy. This money will be distributed based on a demonstration of resource sharing that creates savings.

My budget also offers incentives to municipalities. While it delays the anticipated increase in municipal revenue sharing, it restores one-half of the amount in each of the next two years. All municipalities will benefit in the first year. In the second year, those who demonstrate resource-sharing that creates savings will benefit.

In this way municipal residents will benefit twice: once when local services are streamlined, and again from additional revenue sharing.

In tackling this budget, I have had the help of a dedicated staff. I want to thank Commissioner of Administration and Financial Services Becky Wyke for her tireless work. Commissioner Wyke was my first Cabinet appointment. I'm pretty proud of that choice, and I know you in the Legislature agree.

And I want to thank Becky and Chief of Staff Jane Lincoln for marshaling the team that put this budget together. These decisions to close the budget gap were very difficult. Some are sure to be unpopular.

But again, like the ice storm, this is only temporary. And even with these budget restraints, there is plenty we can do to improve opportunities in Maine.

We have a responsibility to look beyond this budget crisis and position Maine for the future. We all share the same goal: to create a strong sustainable economy in which our businesses thrive and our people prosper.

To prosper as many of our traditional jobs move overseas, our workers will need different skills and more advanced education.

For too many of our high school graduates or mid-career workers, post-secondary education is out of reach. The Maine Technical Colleges and Maine Adult Education Association have signed over 60 agreements partnering adult education programs with technical colleges. This is a step in better preparing Maine's next generation of workers.

But, each June, over 6000 students–43% of graduating seniors–leave high school and do not enroll in higher education. Maine must break this cycle.

A top goal of my administration is to bring college within reach of those who have not traditionally gone on. To do so we must offer them an affordable and accessible option. That is why I will submit legislation this session to change our technical colleges into a true community college system for Maine.

In my budget, I have included $1 million to transition our technical colleges into full community colleges. We will then join 45 other states, including every other state in New England, in having a two-year college system that offers career and transfer programs, low tuition, and a supportive environment. It is time to complete the transformation of the technical colleges and create the Maine Community College System.

Helping Maine families afford the cost of college in other ways is also important. I will submit legislation to use $50 million in Maine's tax-exempt bond authority to reduce the interest on student loans.

As we work to provide education opportunities for Maine citizens, we must lay the foundation for a strong economy in other ways. To do so, I am submitting a detailed economic development plan that includes:

  • Pine Tree Opportunity Zones that reduce taxes and offer pre-permitted construction sites in areas of Maine that need it most;
  • An International Trade Zone to take advantage of the business opportunities between Maine, the Maritime Provinces and Quebec;
  • A $70 million economic development bond for research and development and affordable housing;
  • A Blaine House Conference on Maine's Natural Resource Based Industries;
  • The continuation of BETR, the investment program that has proven itself to be an effective job creator for Maine;
  • And a One Step Initiative to better coordinate the state's economic development programs.

Let me talk briefly about all of these.

I will propose the establishment of eight Pine Tree Zones where unemployment levels are high and income levels are low. The zones will take advantage of Federal incentives already available in Maine so that we get the biggest bang for our buck.

We will establish zones in Aroostook, Androscoggin, Penobscot and Washington Counties. Four other zones will be awarded on a competitive basis. Preference will be given to applications that encourage regional cooperation.

Maine will also join with Quebec and the Maritime Provinces to create an International Trade Zone to promote joint efforts in trade, transportation and tourism. I have contacted the Premiers of Nova Scotia, Prince Edward Island, New Brunswick, and Quebec to enlist their support and coordinate our efforts.

These are positive steps we can take now to enhance our economic prospects. There is another bright spot for Maine in these troubled financial times: the state's ability to bond is in great shape. We have the capacity to make more investments in capital projects while interest rates are at an historic low.

In creating my bond package, I have been guided by four principles:

  • Bonds must provide regional benefits;
  • They must target well-defined projects ready for funding, that will provide a quick delivery of money into our economy;
  • There must be a demonstrated and compelling need for funding; and
  • Bonds must be used in ways that provide environmental or educational benefits to our state.

Governor King and the Legislature began the process of investing in Research and Development to bring Maine's economy into the 21st Century. That investment has encouraged a partnership between the University System and private research facilities like the Maine Medical Center Research Institution, the Foundation for Blood Research, and Jackson Laboratory.

This shows we can build a world-class research collaboration with spin-off development in emerging industries. In recent years, Maine has added jobs that pay an average of $47,500 in biomedical research.

In Bangor, Engineered Materials of Maine has begun manufacturing wood composite products developed through research at the University of Maine. This will provide up to 100 jobs within the first year. Other research has resulted in small business start-ups like Stillwater Scientific Instruments that opened recently in Orono.

These efforts need to be expanded. Tonight, I am proposing a $70 million economic development bond issue that includes $43 million for research and development. The funds will support the joint biomedical research efforts of the University System, Jackson Laboratory, and the other biomedical research organizations around the state. I want to thank Warren Cook of Jackson Lab who has been a strong promoter of this partnership.

Other funds will continue our research in natural resource based industries in the University System. We also establish a revolving loan fund to assist in equipping new business start-ups that have evolved from the natural resource industries research.

And, as I've said, affordable, accessible higher education is crucial to growing our economy. My economic development bond includes support for equipment needed by the Technical Colleges to move toward their new community college mission.

Housing is another key to economic development. I am proposing bond funds to stimulate development of workforce housing for renters and owners. I want to target these funds to those areas of the state were affordable housing is a major problem.

I have also included match money for municipal projects that are ready to be built, but have been stalled by local budget constraints. This will help ease the pressures on local property taxes while allowing communities to complete needed projects.

As we look to the new economy and jobs of the future, we must not forget the natural resource based industries that have long been the economic backbone of Maine. Fishing, farming, aquaculture, forestry and tourism face serious challenges today that threaten their long-term viability. Yet these industries play an important role in the economy and culture of Maine's rural communities.

I am organizing a Blaine House Conference to focus on Maine's natural resource based industries. We are planning a summit in April and a full Blaine House Conference in the fall. These industries are important to Maine, they always will be and we need to find ways to make them stronger.

Energy use is also important to the Maine economy. I'm pleased to tell you that the State will soon sign an agreement with Maine Natural Gas, the regional supplier for the Augusta area. We will become the anchor customer needed to get gas pipelines brought to the Statehouse complex to help lower our energy bills and reduce air emissions.

Saving energy saves jobs. Another initiative that has generated jobs for Maine people is the BETR program. Maine is one of only a few states in the northeast that imposes a personal property tax on machinery and equipment. This puts us at a serious disadvantage in attracting new businesses or new investment. BETR was designed to level the playing field, and it works.

Fraser Papers, located in Madawaska, is the largest manufacturer of lightweight opaque papers in North America. The Fraser paper mill is Madawaska's largest employer providing over 1000 jobs. Since 1995, BETR has enabled the company to invest $ 125 million in job retention.

Because of the BETR program, management of Interface Fabrics Group chose to invest $30 million in its Guilford plant instead of plants outside of Maine. That investment helped save the jobs of its 500 employees statewide.

At Dingley Press in Lisbon, 70 good paying jobs would have been eliminated if the BETR program hadn't been available. But as a result, in 1998 Dingley Press invested $30 million in a new web offset press, and has since added 190 new jobs. At a time when manufacturing jobs are disappearing in Maine and across the nation, we have too few tools to attract or retain good paying jobs. BETR is a program that has proven itself.

I am committed to an overall economic development strategy for Maine that is coordinated and efficient. We need a one-step process that is more user friendly. To that end, I am appointing a seven-member working group, chaired by Dana Connors, president of the Maine State Chamber of Commerce, to review our current system and report back in 90 days with recommendations to meet our objectives.

As you can see, we've set the bar high for ourselves and for our state.

It's been said that budget is policy. If so, the policy we are announcing tonight will rein in spending and invest in the future without raising taxes.

It won't be easy, but we have to do it.

I know all of you in this room have your own ideas about the state budget. You have your own priorities about cutting and spending, and they may look a little different than mine.

I look forward to working with you in the days ahead to ensure that the final budget we produce is the absolute best one for Maine.

This is a difficult time. It's a challenging time. But it's also a time of great opportunity. Our Yankee background, heritage and ingenuity equip us to meet the challenge and use the opportunity.

Last week we lowered the flag to half-staff in honor of seven astronauts who seized opportunity and took on challenges. Tonight we are raising the flag to full staff. This symbolism speaks of respect for what's lost, and the knowledge that, even in great sadness, we must look to the future.

The citizens of Maine want us to look to the future. They want us to solve our budget problems without partisanship and blame.

Maine people are watching and waiting, and we can't let them down. They are looking to us to bring our state through this financial ice storm.

We can't shrink from this responsibility. We weren't elected to take the easy way out. We were elected to make tough decisions.

With your help, and with the help of everyone in Maine, I know we can do this. Pulling together–as we did in the ice storm–we can balance this budget, put Maine on the road to better times, and create opportunity for all Maine people. Thank you.

January 20, 2004

2004 State of the State Address

Madam President, Mr. Speaker, Madam Chief Justice, members of the Legislature, distinguished guests, my fellow Maine citizens:

Twelve months ago, I had the privilege of taking the oath of office. It’s been quite a year!

We put state finances back on track. We set a spending cap for state government. We maintained our strong bond rating. And we maintained income tax indexing to reduce state taxes for Maine people by $26 million over this biennium.

I took office with a plan to create economic opportunity for all Maine people. That plan included:

  • Balancing the budget without raising state taxes
  • A Jobs Bond approved by the voters in June
  • Creating more opportunity for quality education
  • Preserving our natural resources
  • And providing accessible, affordable health care.

With your help and leadership—and with bipartisan support—we moved this economic plan forward.

Even though we’re of different parties, and come from different parts of the state, we set differences aside to do our best for Maine people.

We have implemented our plan through Research and Development bonds, Pine Tree Zones, the Community College System, and Dirigo Health. I’ll lay out the specifics of those actions in a moment.

But first, because of our efforts in working together we have some good economic news. Economist Charles Colgan forecasts that Maine could add 5000 jobs by the end of the year. That’s an increase of 1.5 percent.

And the business community reports higher confidence. Charlie Colgan predicts we’re poised for economic growth. “It’s time for some guarded optimism,” he says.

And for good reason. As we look around, there are positive signs—especially when you compare Maine with other states. Unemployment is well below the national average. Per capita income is rising faster than any other New England state.

That’s why many states are looking to Maine for answers. My primary goal—the goal we all share—is to make Maine a leader in providing opportunity for our fellow citizens. Economic opportunity is a key to all we want to accomplish. Maine people need the best chance we can give them to have a good paying job with benefits or to build a business.

To do that, we need to keep our fiscal house in order. The Fiscal Year 2004 supplemental budget now before the Legislature addresses fiscal problems that have come to light since the beginning of the biennium.

We must continue to use our Downeast ingenuity to craft the best possible budget for all Maine people.

We’ve had hard choices to make together—and we’ve made them. Education makes up 45% of our state budget.

We spend 30% of our budget on mental health and human services.

And after other commitments, that leaves just 12% of our budget for all the rest of state government—that’s public safety, economic development, environmental protection, and all the rest.

Our spending reflects the value we place on education and social services. But our tax burden is among the highest.

We must find ways to deliver these services while reducing general taxes. All parts of the state budget must contribute to the solution.

I appreciate how difficult these choices are—but they must be made.

While solving budget challenges, we’ll continue to move ahead with our economic plan. As we’ve worked together in the past, let us work together now to improve opportunities for our fellow citizens.

Maine people are showing us every day how to create opportunity and face challenges together. The residents of Canton know how to move ahead, even in difficult times.

We all remember the heavy rains of early December. Rivers and streams rose all over the state. On a bleak Thursday, the Androscoggin River flooded the entire Canton downtown. Forty homes and a nursing home were evacuated. I saw from the air houses and public buildings surrounded by water and ice, homes and farms cut-off from help.

I visited the town on Friday, and found families in disarray. But they were doing everything they could to help themselves and each other.

On Saturday, a large relief effort began. Seven state agencies, community housing programs, and volunteers met with residents to begin the recovery. State and local agencies put together funds to help.

Just as we’ve had a plan to strengthen our economy, the people of Canton have a plan for strengthening their town. Their comprehensive plan lays out a vision for a future without flood risk. That vision guides their recovery from the December flood.

Tonight, I want to recognize a person who represents the vision and community-spirit of all the people of Canton—Fire Chief Wayne Dube. Chief Dube worked tirelessly to save his town from this disaster.

Chief, would you please stand and accept our thanks for the example you set for all of us.

Here in Augusta, just like in Canton, we did important work together last year to help our State. We implemented a plan that leads in providing economic opportunity for all Maine citizens.

Last June and November, Maine voters approved nearly $150 million in bonds. Maine people chose to invest in the infrastructure and Research & Development we need for good paying jobs and benefits.

We know that R & D pays off. The University of Maine System used $10 million in bond money to leverage over $40 million in research grants and contracts. Paid research by faculty and students has launched several companies.

Like Target Technology Center of Orono. The Center has spun-off six start-ups, including Stillwater Scientific Instruments. This company is developing a device to speed up the analysis of chemical compounds.

We’re doing this, and more, from a $10 million public investment.

Our June economic development bond authorized $2 million for further investment in applied technology centers. Tonight, I’m pleased to announce that those grants have been awarded. The recipients are The Center for Environmental Enterprise in South Portland, The Composite Technology Center in Greenville, The River Valley Technology Center in Rumford, and the Thomas M. Teague Biotechnology Center in Fairfield. Congratulations to all of them.

The June economic bond also provided $2 million for Farms for the Future. Thirty-seven farms have received grants to grow their businesses.

The Gulf of Maine Aquarium received $3 million in bond money. Construction of their research laboratory is on schedule. The lab will open in January of 2005 and result in 90 research jobs.

The $6 million bond for the Municipal Investment Trust Fund helped fund needed infrastructure. From Caribou to Eastport and from Norway to Saco, parking facilities, community service centers, business parks, and riverfront improvements are being built.

This month, applications are being accepted for Pine Tree Zones. These Zones will be established in March with reduced tax burdens. This will attract business investment to areas in Aroostook County, the Androscoggin Valley, the Penobscot Valley, and Washington County.

I’m pleased that Barry McCrum, president of the Aroostook Partnership for Progress, is here. In just one year, the partnership has raised almost $1 million from the private sector.

Tonight, I’m announcing an initiative inside the Aroostook County Pine Tree Zone to reduce electric costs for new and expanding businesses. If we can make this work in Aroostook County, we can make this work statewide.

I’d like Mr. McCrum to stand and accept our thanks for his hard work.

Investing in people is a key part of my economic plan. I’ve created a Workforce cabinet, chaired by Labor Commissioner Laura Fortman. Soon this group will announce strategies to help Maine workers get and keep good paying jobs.

During the fall, Commissioner Fortman held public meetings around the state to hear from laid off workers. We need a proactive approach to workers and communities vulnerable to downsizing and closures. Developing that strategy is part of the Workforce cabinet’s charge.

Our country lost manufacturing jobs throughout the 1990s and into today. Overseas competition, a slow economy, and increased productivity have been the reasons.

We’ve had an even tougher time in Maine, especially in the paper industry. Our job losses are greater than in other areas of the United States because Maine plants are not as modern. That’s why we have to do all we can to attract investment to modernize and expand.

And investment is coming our way. Just last week National Semiconductor announced it will spend $58 million on its South Portland facility. And they’ve started adding 100 manufacturing jobs.

We need to diversify to precision and niche manufacturing. Financial services and biotech and biomedical research are other 21st century sectors to develop. Next month, I’ll be announcing Maine’s first Science Advisor to head the Office of Innovation.

This person will play a critical role in developing biotech and bio-med businesses. I have two goals for the position—to maximize federal funds coming to Maine, and to reap immediate returns in job growth.

The $20 million research bond passed in June has leveraged $160 million in outside funds. This money will build world-class bio-med labs in Maine over the next years.

We must continue to attract the kind of investment we need. I’ve talked about the importance of holding the line on taxes. But it’s not good enough just to hold the line.

Tonight, I ask you to repeal—finally—the personal property tax on business equipment and machinery. The tax is a burden for businesses and discourages investment, particularly in manufacturing. Getting rid of it is part of our plan to reduce taxes on working families and businesses throughout the state.

We also cannot abandon Maine’s traditional and new natural resource-based industries. In November, 700 people from across Maine joined me at a Blaine House conference about fishing, aquaculture, farming, forestry, and tourism.

We learned that the difficulties these industries face are not unique to each sector. The conference shaped some 80 ideas about ways to strengthen these businesses.

A report will be presented soon. But we’ve already begun to take action.

Our North Wood Legacy Project coordinates economic development with resource conservation. We’re promoting value-added wood products, a continuous supply of wood fiber, and “green certification” of Maine forest products. At the same time, we’re protecting our cultural and natural heritage.

We have a goal of 10 million acres of green-certified timberland by 2007. Maine is the leader in forest certification. We’ve already seen results. In the just the last 7 months, timberland owners have pledged over 1 million acres for certification.

Time, Inc., the world’s largest purchaser of certified magazine stock, increased its Maine purchases by 11% in 2003, while paper purchases dropped worldwide. This produced a 33% increase in market share for Maine mills.

In December, we closed the deal on our West Branch conservation project. Three hundred and twenty-nine thousand acres of land are being protected through a $33 million investment.

Through our Dairy Initiative the Department of Agriculture is providing $2 million in financial relief to dairy farmers. This was scheduled to end in 2003, but we’ve extended the program. We’ll continue to offset declining milk prices and work with the Legislature on a longer-term solution.

I’m also announcing a Department program to work with farmers to grow local agriculture. Our best opportunity for saving farms and starting new ones is for Maine families and businesses to buy locally grown food.

Rising land values and coastal development are putting pressure on fishing villages and harbors. I’m asking the Working Waterfront Coalition to provide an agenda of access, land-use, and tax policies to keep Maine’s commercial waterfronts in business.

Tourism leverages the natural wonders of our state. It accounts for 15% of our gross state product. We need to see tourism as one industry, not just separate businesses.

I’m asking the University of Maine and Community Colleges to consult with to develop degree programs in hospitality and tourism. And I’m asking the University of Maine to develop a center of tourism research.

In the audience is Charles Robertson, president of American Cruise Lines. Last year, his company began using Bangor as a home port. Their ships provide luxury cruises on Penobscot Bay.

This morning I met with Mr. Robertson about his plans for expansion in Maine. His interest is an example of what Maine has to offer. We must capitalize on more tourism opportunities for all regions of our state. I’d like to ask Mr. Robertson to stand to accept our greetings.

International trade and Canadian relations are also important to Maine’s economic future. My trade mission to Ireland last fall convinced me there are more markets in Europe for Maine goods. We estimate a record $7.5 million in sales in just the first 6 months after the Ireland trip. One example is Bob Zieglaar of the Telford Group, who joined me in Ireland and is here tonight. The Telford Group is a private Maine-based aviation services company with 125 employees. It has facilities at the Bangor, Rockland, and Loring airports.

In Ireland, Telford secured a contract with an Irish aircraft manufacturer to provide service. The first Irish-built aircraft arrives next week in Loring for an overhaul. This and other contracts will bring millions of dollars and highly-paid technical jobs to Maine. I ask Mr. Zieglaar to please stand in recognition of his success.

Closer ties with Canada will promote our common interests in transportation, tourism, and trade. We will complete the Northeast Canadian Free Trade Zone initiative we began last year. And I look forward to our Quebec trade mission next month and a summit with New Brunswick in May.

Any statewide economic development plan must include opportunity for all people.

In November we began a dialog with Maine’s Native Americans. This will continue. Tribal government and state government must work together. Only together will we succeed in attracting good jobs, protecting the environment, and preserving our way of life. I want to thank the five tribes for meeting with us, especially the work of Rep. Fred Moore and Rep. Donna Loring.

And I also want to recognize Chief Barry Dana of the Penobscot Indian Nation. Thank you for being with us tonight.

The Creative Economy is another important focus for Maine. Creative economy workers include computer chip designers, like those at National Semiconductor. They’re engineers, like those at Wright-Pierce in Topsham. They’re architects, like those at WBRC Architects in Bangor.

And they’re artists, craftspeople, and curators like those at the Maine College of Art in Portland and the Farnsworth Museum in Rockland.

In May, we’ll hold a Blaine House Conference on the Creative Economy at the Bates Mill Complex in Lewiston. We’ll develop strategies to help innovative workers grow Maine’s economy. Adding to the arts and culture of Maine will also aid in revitalizing our downtowns.

Last year you joined me in creating the Maine Community College System. Our goal was to create affordable higher education for high school seniors and adults who haven’t traditionally gone on to college. By the early results, we’re meeting our goal.

There are now over 1300 more Community College students than the year before—an 18% increase.

There’s been a 26% jump in students going directly from high school to a community college.

About 1000 dislocated workers are enrolled and getting a new start.

And in two years there’s been a 22% increase in community college students going on to the University to earn a bachelor’s degree.

That’s an impressive start! Behind these numbers are individual stories of determination and courage. Let me tell you about two of them.

Colleen McGarry was raised in Perry by a foster family. At 18, facing financial obstacles, she enrolled in Washington County Community College with the help of a $1000 scholarship. Her high school performance didn’t reflect her abilities. During her first semester of college, Colleen earned a GPA of 4.0. She now has her sights set on a bachelor’s degree.

Simon Roy from Sherman Mills worked 22 years at Great Northern Paper. After being laid-off, Simon, and 300 former co-workers, entered community colleges to pursue new careers. Simon travels 160 miles each day to attend Northern Maine Community College. Simon, too, is a stellar student, earning a 3.8 GPA.

Colleen and Simon are here with us tonight. Thank you for hard work. Please stand and accept our congratulations.

Tonight I am announcing a new goal. We will raise Maine’s high-school-to-college rate from 55% to 70% by the end of this decade. This will take Maine from the middle of the pack to among the bests in the nation in college attainment.

To help us toward this goal, I’m announcing a pilot project called the Early College program. The Community College System and 25 Maine high schools will target students who aren’t going on to college.

During their senior year, they’ll receive two free classes at a community college. We’ll help them through the admissions and financial aid process. And we’ll offer $2000 scholarships, about half the tuition for a two-year degree. We’ll serve about 200 students in the program, with 100 receiving scholarships.

Bernard Osher has been a tremendous contributor to our community college initiative. Community College President John Fitzsimmons and I are talking with The Osher Foundation about taking this pilot program statewide.

Success in college is supported by success in K-12 education. To have the opportunity for 21st century jobs, students need 21st century tools to learn.

We’ve committed to this by providing laptop computers to all 7th and 8th grade students and their teachers. Hamden Academy science teacher David Haggan describes laptops as moving students “light years ahead” in learning. Research on the program backs him up.

I want us to do more. I am going to present a plan to extend the laptop program into all Maine high schools. And we will begin with next year’s 9th graders.

We will also extend the use of those laptops to their parents. The Departments of Labor and Education will create worker training programs that adults can access at home on computers.

Maine is poised to develop an entire generation with one of the most marketable skills in the world. In the process, we’re becoming the envy of every other state in the nation. Our education technology partnership with Apple Computer is leading to another opportunity. Apple is working with us to establish their northeastern repair center with our Community Colleges and others. This will provide more opportunity for skilled worker development.

We must take more steps to connect all levels of public education. I’ve charged Commissioner of Education Sue Gendron—working with Chancellor Westphal and President Fitzsimmons—to create a seamless system of pre-K through post-secondary education.

Excellent education and an excellent environment are two hallmarks of our state. How we treat our environment is connected to so many other opportunities in Maine.

Energy consumption matters both to our environment and our economy. Last year I established the Office of Energy Independence and Security. Director Beth Nagusky reports we’ve made a lot of progress in just a year.

We’ve increased the state’s purchase of renewable power from Maine facilities to 40% of our electric consumption. We’ve made a 3-year electricity purchase that will save over $1 million.

We’re using a renewable fuel—made in the USA—to heat the Blaine House and other government buildings. We’ll expand the use of this fuel next year.

And I signed an Executive Order requiring all new and renovated state buildings to comply with “green” building standards.

Along with reducing energy consumption, we need to continue land preservation to keep our natural heritage.

I’ll submit a bond request that lives up to my commitment to provide $100 million for the Land For Maine’s Future program to be implemented over 5 years. This program has protected special places in all of Maine’s 16 counties—115 projects covering 192,000 acres.

And we need to do more. In the past five years, 25% of forestlands have changed hands. Public access and recreation opportunities are threatened. To promote tourism, attract young people, and support our traditional industries, we need more—not less—conservation.

Investing in Maine’s landscape is similar to other infrastructure investments. As the transportation system provides an economic foundation, so, in Maine, do our natural resources.

A sustainable environment encourages sustainable jobs. For sustainable jobs we also need affordable health care for all. You in this room and many others across Maine have done a lot to move us toward this goal.

Because of a partnership with Spring Harbor Hospital, I am announcing tonight that we’ll finally have treatment in Maine for children with mental illness and developmental disabilities. The new program will serve at least 50 Maine children and their families.

And, because of the efforts of many, we’ve finally achieved mental health parity in Maine.

Last week, we launched Maine Rx Plus to lower prescription drug prices. In partnership with over 100 Maine pharmacies, we’ll be providing discounts to seniors and working families. That’s about 275,000 people on tight budgets who can’t afford the high cost of prescriptions.

We also need to continue health reform. We need affordable health care for the well-being of workers and businesses, for all our citizens.

We are a state of small businesses. About half of Maine workers hold a job in a business with 20 or fewer employees. Those businesses represent 90% of the businesses in Maine. Over 300 small businesses and self-employed people have asked to be put on the list for Dirigo Health.

With resounding bipartisan support, we passed Dirigo Health last year. By this July, working with private insurers, Dirigo’s new health plan will be available. It will have a price small businesses and Maine people can afford.

I want to recognize Dr. Bob McAffee who chairs the Dirigo Health Board. As a former President of the American Medical Association he’s a national leader who volunteering his talents to make the Dirigo Health Plan a reality. I’d like Dr. McAffee to stand and accept our thanks.

Through the Fund for a Healthy Maine, we’ve also had success in cutting the rate of youth smoking. We’ve cut the rate by half, and that leads the nation. Adult smoking is down by 20% over 6 years, and we’ve protected people from second-hand smoke in public places.

We need to do more. Maine leads the nation in diabetes, heart disease, and cancer deaths. We have to preserve our ability to invest in health for our citizens over time. Last year I submitted a constitutional amendment to secure the Fund for a Healthy Maine. I remain committed to that bill. And I tell you the time to pass it is now!

We’ll keep working to lower costs and promote healthy lifestyle—just as we’ll keep working to improve government. Thanks to 200 Maine people who volunteered their time, we now have a roadmap to merge the Departments of Human Services and Behavioral and Developmental Services. The organization they describe is cost-effective, accountable, and responsive.

I’ll submit legislation this session to create the Department of Health and Human Services. This is not just a name change. It’s a new way of doing business. We’ll have better services and a Bureau of Children and Families. And we will have financial accountability.

I want to take this moment to introduce someone who’s working hard for Maine’s children. She shares my vision for early childhood education, literacy, arts in education, and nutrition. Among many duties, she serves as Chair of the Children’s Cabinet. The First Lady is tireless in her efforts on behalf of Maine’s children and families. I want to thank Karen for her work.

I’d also like to recognize our son Jack, who is here tonight.

We need to make sure we’re getting the best service for the least dollars at all levels of government. We can’t reduce the tax burden on Maine citizens and businesses without better coordinated and consolidated services.

My Task Force on Efficiency in Education presented its report last week. I want to thank Jim Doughty of Husson College, David Silvernail of USM, and the other five members for their work.

Since the passage of the Sinclair Act in 1957, we’ve made great strides in improving public schools. Our 4th and 8th graders score in the top five in the country. We have one of the most favorable student-teacher ratios.

Yet, while student enrollments decline, the cost of education doesn’t. We’ve had few changes in the structure of our schools since the Sinclair Act incentives ended. We must operate schools as efficiently to ensure quality education for every student.

I’ll be submitting legislation based on the Task Force report. I’ll propose Regional Cooperatives and Regional School Districts, with state funding to encourage collaboration.

We must provide essential programs and services to students all over Maine. And we must provide these services in a cost-effective way to relieve property taxes. We need a Sinclair Act for the 21st Century.

And we need property tax relief. I’ve been engaged in constructive talks with all levels of government and the business community about how to achieve this shared goal. We need to keep working together—Maine people deserve our answer to real property tax relief.

We’ll also keep looking at state government to make sure it’s serving citizens well. I’ve charged all departments to streamline their efforts, while maintaining services.

It is our intent to offer legislation to change the structure of the Worker’s Compensation Board. Injured workers and their employers deserve a system that works.

Maine citizens also deserve the best possible communication of emergency information. In these times of orange alerts and arctic cold we need coordination among our first-line responders.

Tonight I’m announcing that the Department of Public Safety will move some of its operations to 500 Civic Center Drive in Augusta. We’ll also move the Maine Emergency Management Agency to this location.

MEMA and the State Police will create an Intelligence Center. It will provide a single point to receive homeland security intelligence.

Sadly, we live in a time when our State is affected by homeland security. Many dedicated Mainers work within our borders to make our citizens safe.

Other courageous Maine people provide service to their state and country overseas. As of this month, over 1100 Maine Army and Air National Guard are deployed. Maine has the 3rd highest deployment rate in the nation.

I want to recognize the sacrifice of these fellow citizens of Maine. And not just the National Guard who are away, but the families and employers who wait for their return.

With us tonight is Sergeant Kevin Moncrieffe. Sergeant Montcrieffe has been to Kuwait, Bosnia, and Afghanistan, just returning in December. One deployment occurred 5 days after his marriage to his wife, Allison. Sergeant Moncrieffe works for Verizon Communications in Ellsworth as a service technician. He’s been there for 7 years. During all of the sergeant’s overseas duty, his Verizon manager, Jim Jordon, has held onto his job for him. Please join me in thanking Sergeant and Mrs. Moncrieffe, and Mr. Jordon, for their parts in protecting all of us.

All of us hope that the men and women serving in Iraq and Afghanistan will finish the job and come home soon. They’ve done their duty for us and now we need to do our part for them.

My administration has submitted legislation to create the Maine Military Family Relief Fund. The money would come from a check-off on our tax forms. The Fund will make grants to the families of National Guards and Reservists called to active duty.

Our Departments of Defense and Labor will hold regional briefings for employers of deployed Guardsmen and women. We’ll give them information on their employees’ missions, employers’ legal requirements, and available interim workers.

Sergeant Moncrieffe, his wife, and his boss give us another example of what Maine people are good at—facing challenges and looking for opportunities together.

Here in the State House, at work and home, Maine people stood up to some tough challenges last year. With all of the actions we took, we’ve made Maine stronger.

Providing for the common good, making people feel secure in their communities and homes—this is the central job of government. It’s why all of us are here serving our state and our people.

We need to keep investing in economic and homeland security. We need to bank on the right kind of economic development. We need to embrace opportunities, but with the right kind of safeguards.

I want to continue to work with all of you. Together we can ensure that the state of our State remains strong and secure.

Thank you.

January 25, 2005

2005 State of the State Address

MADAM PRESIDENT, MR. SPEAKER, MADAM CHIEF JUSTICE, MEMBERS OF THE LEGISLATURE, DISTINGUISHED GUESTS, MY FELLOW CITIZENS,

I WOULD ALSO LIKE TO RECOGNIZE THE FIRST LADY OF MAINE, KAREN BALDACCI, AND OUR SON JACK. KAREN’S WORK IN THE AREAS OF EDUCATION, LITERACY, WELLNESS AND NUTRITION AND LOCAL AGRICULTURE HAS GREATLY BENEFITED MAINE.

WHEN I CAME BEFORE YOU TWO YEARS AGO FOR MY INAUGURAL ADDRESS, I SPOKE OF THE MANY CHALLENGES FACING OUR STATE AND THE OPPORTUNITIES WE WANTED TO CREATE.

THE OPPORTUNITY TO BRING GOOD JOBS WITH BENEFITS AND BUSINESSES TO MAINE - TO LOWER THE COST OF HEALTH CARE; TO IMPROVE OUR SCHOOLS; AND PRESERVE OUR NATURAL RESOURCES

AT THE TIME, WE WERE FACING A BUDGET DEFICIT OF WELL OVER ONE BILLION DOLLARS.

HEALTH CARE COSTS WERE SOARING, AND PEOPLE AND BUSINESSES WERE LOSING THEIR HEALTH INSURANCE.

TWO OF OUR MAJOR PAPER COMPANIES HAD GONE BANKRUPT.

AND OUR PROPERTY TAX SYSTEM WAS OUT OF LINE WITH THE INCOMES OF SO MANY MAINE PEOPLE.

TWO YEARS LATER, THE STATE OF THE STATE IS SOUND, OUR FUTURE IS BRIGHT, AND WE’VE MADE SIGNIFICANT PROGRESS. I BELIEVE WITH YOUR HELP AND HARD WORK, MAINE IS ON THE PATH TO BECOMING A NATIONAL LEADER IN PROVIDING OPPORTUNITIES FOR ALL OF ITS CITIZENS.

I BELIEVE THIS FOR MANY REASONS.

THE TWO PAPER COMPANIES ARE BACK IN BUSINESS IN MILLINOCKET, EAST MILLINOCKET AND LINCOLN AND ARE NOW EMPLOYING 100’S OF WORKERS EARNING 1000’S OF DOLLARS AND BENEFITS, A REAL JUMP START TO THE ECONOMY OF NORTHERN AND CENTRAL MAINE. I’D LIKE TO RECOGNIZE THEM AND THEIR WORKERS AND THANK THEM FOR THEIR CONTRIBUTIONS TO OUR STATE. I WOULD LIKE THEM TO RISE AND ACCEPT ON BEHALF OF THEIR COMMUNITIES, THE WELL WISHES OF THE STATE….KATAHDIN PAPERS, ROSAIRE PELLETIER, AND KEITH VANSCOTTER OF LINCOLN PAPER AND TISSUE.

JOBS ARE GROWING, INCOME IS GROWING AND THE TAX BURDEN IS FALLING.

IN THE LAST YEAR, WE’VE ADDED NEARLY 5,000 NET NEW JOBS TO MAINE’S ECONOMY.

MAINE’S PERSONAL INCOMES AND WAGES ARE GROWING THREE TIMES AS FAST AS THE REST OF THE COUNTRY.

MAINE IS THE NUMBER 1 STATE IN NEW ENGLAND FOR AGRICULTURAL INCOME AND OUR EXPORT BUSINESS HAS GROWN THE EIGHTH FASTEST IN THE COUNTRY.

WE’VE INCREASED OUR FINANCIAL RESERVE BY $50 MILLION AND WE’VE BALANCED OUR BUDGETS WITHOUT RAISING BROADBASED TAXES. OUR STATE TAX BURDEN HAS FALLEN FROM 8TH TO 13TH IN THE COUNTRY AND UNDER MY ADMINISTRATION, THE GENERAL FUND BUDGET HAS AVERAGED A RATE INCREASE THAT IS THE LOWEST IN 30 YEARS.

ON THE DIFFICULT ISSUES OF TAXES, HEALTH CARE AND JOB CREATION, WE’VE MADE REAL PROGRESS.

THE 122ND LEGISLATURE IS OFF TO AN UNPRECEDENTED START. IN THE LAST THIRTY DAYS WE HAVE ACHIEVED WHAT WE HAVE NOT BEEN ABLE TO ACHIEVE FOR THE LAST THIRTY YEARS.

FRIDAY I SIGNED INTO LAW, LD 1 WHICH REFORMS GOVERNMENT SPENDING AND LOWERS MAINE’S PROPERTY TAXES.

THIS BILL SAVES TAXPAYERS MONEY BY ESTABLISHING SPENDING CAPS AT ALL LEVELS OF GOVERNMENT, EXPANDING THE INDIVIDUAL AND FAMILY PROPERTY TAX RELIEF PROGRAM, AND ENSURING THAT INCREASED FUNDING FOR SCHOOL DISTRICTS WILL GO BACK TO MAINE CITIZENS IN THE FORM OF PROPERTY TAX RELIEF.

I WANT TO CONGRATULATE AND THANK THE BILL SPONSORS SENATE PRESIDENT BETH EDMONDS AND HOUSE SPEAKER JOHN RICHARDSON, ALONG WITH SENATOR DENNIS DAMON, SENATOR PETER MILLS, REPRESENTATIVE RICHARD WOODBURY AND REPRESENTATIVE HAROLD CLOUGH AND THE REST OF THE JOINT SELECT COMMITTEE WHO HAVE WORKED TIRELESSLY AND HAVE SHOWN US WHAT IS THE BEST IN MAINE POLITICS. THEY HAVE RISEN ABOVE SPECIAL INTERESTS AND PARTISAN INTERESTS, AND PLACED THE PEOPLE OF MAINE FIRST. CONGRATULATIONS ON A JOB WELL DONE. I ASK THEM TO RISE AND ACCEPT THE WELL WISHES OF THE STATE.

I ALSO WANT TO CONGRATULATE OTHERS WHO WORKED FOR THE SUCCESS OF THIS PACKAGE:

BUSINESS LEADERS LIKE DANA CONNORS – CHAMBER OF COMMERCE

LOCAL GOVERNMENT LEADERS

SENIOR CITIZENS, LIKE AARP AND MANY OTHERS.

TOGETHER WE’VE ENACTED A PROPERTY TAX RELIEF INITIATIVE IN RECORD TIME THAT IS COMPREHENSIVE, BIPARTISAN, BOLD; AND INDEED, HISTORIC.

AND BY THE WAY IT SAVES PROPERTY TAX PAYERS ON AVERAGE STATEWIDE IN 2 YEARS ABOUT $207.

IT IS AT MOMENTS LIKE THESE THAT I AM ESPECIALLY PROUD TO BE YOUR GOVERNOR.

SOUNDS A LITTLE LIKE THE BEST SPORTS NEWS STORY OF THE YEAR WHEN THE RED SOX FINALLY WON THE WORLD SERIES.

SOME FANS MAY HAVE THOUGHT THE RED SOX COULD NEVER WIN. BUT THERE WERE THOSE, LIKE MANY OF US HERE IN THIS CHAMBER AND THROUGHOUT OUR STATE WHO “KEPT THE FAITH”.

JUST AS THE RED SOX PROVED THE CRITICS WRONG, MAINE CAN COMPETE AND CAN WIN.

LAST YEAR MAINE WON A NATIONAL COMPETITION AGAINST STATES ACROSS THE COUNTRY AND BROUGHT T-MOBILE TO CENTRAL MAINE.

A FORTUNE 100 COMPANY, BRINGING 700 GOOD PAYING JOBS AND BENEFITS TO THIS REGION OF THE STATE, COVERING FULL HEALTH CARE AND PENSION PLANS. AND I WANT TO RECOGNIZE CRAIG NELSON OF FIRST PARK AND JOE WISCHERATH OF MAINE & COMPANY FOR THEIR EFFORTS. PLEASE RISE AND ACCEPT THE WELL WISHES OF THE HOUSE.

AN OPERATION IN NORTHERN MAINE IS ALSO SAVING MILLIONS OF DEPARTMENT OF DEFENSE DOLLARS, WHILE SUPPORTING AMERICAN TROOPS AND PROVIDING EXCELLENT SALARIES AND FULL BENEFITS TO AROOSTOOK COUNTY WORKERS.

THE INITIATIVE AT THE FORMER LORING AIR FORCE BASE TO REFURBISH MILITARY VEHICLES FOR A FRACTION OF THE COST OF NEW VEHICLES HAS GROWN JOBS IN AROOSTOOK COUNTY FROM 50 TO 320. AND THE RECENT CONTRACT AWARD WILL ADD ANOTHER 240 NEW JOBS IN 2005.

IN THE NEXT TWO YEARS, WE HOPE TO BEGIN TO REALIZE EQUIVALENT SAVINGS IN STATE AGENCIES AND MUNICIPALITIES BY REBUILDING SCHOOL BUSES AND HEAVY EQUIPMENT VEHICLES.

THESE ARE THE TYPES OF INITIATIVES THAT WILL CONTINUE TO BUILD MAINE’S ECONOMY – HOMEGROWN AND BUILT ON MAINE VALUES AND TALENTS. I WANT TO RECOGNIZE ART CLEAVES AND HIS BROTHER GARY IN THEIR LEADERSHIP IN THAT EFFORT.

OUR ECONOMIC CLIMATE IN MAINE IS GETTING STRONGER. RECENTLY, THE CITY OF PORTLAND WAS NAMED THE NUMBER ONE MARKET IN SMALL BUSINESS VITALITY. A STUDY, CONDUCTED BY THE AMERICAN CITY BUSINESS JOURNAL, NAMED PORTLAND THE STRONGEST SMALL BUSINESS SECTOR IN THE UNITED STATES.

WHILE OTHER STATES SEE HEALTH CARE COSTS SOAR AND INDIVIDUALS AND BUSINESSES LOSE THEIR INSURANCE, WE ARE TAKING ACTION. HERE IN MAINE NEARLY 3000 PEOPLE REPRESENTING OVER 250 SMALL BUSINESSES AND NEARLY 1000 SOLE PROPRIETORS ARE ALREADY ENROLLING IN OUR NATIONALLY ACCLAIMED DIRIGO HEALTH PROGRAM. OUR PARTNER ANTHEM BLUE CROSS BLUE SHIELD IS SELLING DIRIGO IN EVERY PART OF THE STATE. DIRIGO IS AN IMPORTANT NEW CHOICE IN THE MARKET AND MAINE’S SMALL BUSINESSES ARE EMBRACING IT, PROVING THAT NOTHING SUCCEEDS LIKE SUCCESS. DIRIGO IS A FIRST STEP AND GETS BETTER AS EACH NEW BUSINESS JOINS.

MANY HAVE WRITTEN TO ME:

MAUREEN MCQUADE FROM THE INN BY THE SEA IN CAPE ELIZABETH SAYS THAT “UNTIL DIRIGO, HEALTH INSURANCE WASN’T AN OPTION FOR MANY OF HER WORKERS AND THAT WAS UNACCEPTABLE”.

CINDY NOYES OF NOYES FLOWER AND PLANT SHOP IN CARIBOU REPORTS THAT LOWER DIRIGO INSURANCE RATES HAVE ENABLED HER TO GIVE HER STAFF A RAISE.

CHANG HO YEE, A TAILOR WROTE TO THANK US. BEFORE DIRIGO HE HADN’T HAD HEALTH COVERAGE IN 7 YEARS. HE SAID HE AND WIFE WERE WELL NOW BUT DIDN’T KNOW WHEN SICKNESS WOULD COME ALONG.

THESE ARE JUST THREE EXAMPLES. REAL BUSINESSES, REAL PEOPLE, AND A REAL SOLUTION.

AND, WE’VE MADE SIGNIFICANT STRIDES IN CONSOLIDATING GOVERNMENT SERVICES, PARTICULARLY WITH THE MERGER OF THE LARGEST DEPARTMENT OF STATE GOVERNMENT HUMAN SERVICES AND MENTAL HEALTH AND MENTAL RETARDATION. I’D LIKE TO SAY THANK YOU ESPECIALLY TO THE STATE WORKERS. WITHOUT THE PEOPLE ON THE FRONT LINES, WE WOULD NOT BE GETTING THE SERVICES TO THOSE TRULY IN NEED.

BUT THERE IS MORE WORK TO DO.

MAINE MUST BE A NATIONAL LEADER IN PROVIDING OPPORTUNITIES, CREATING GOOD PAYING JOBS WITH BENEFITS.

A LEADER IN PROVIDING AFFORDABLE, ACCESSIBLE, HIGH QUALITY HEALTH CARE FOR ALL MAINE CITIZENS.

A LEADER IN EDUCATING YOUNG STUDENTS AND OLDER WORKERS ALIKE WITH THE SKILLS OF THE MODERN ECONOMY.

A LEADER IN PRESERVING AND PROTECTING OUR NATURAL RESOURCES FOR OUR CHILDREN AND THEIR CHILDREN WELL INTO THE FUTURE.

I WANT TO DISCUSS ALL OF THESE GOALS WITH YOU TONIGHT.

FIRST, HOW CAN WE PROMOTE JOBS, OPPORTUNITIES, AND GOOD INCOMES.

IT IS IMPORTANT TO INVEST IN OUR GROWING INDUSTRIES. THIS SESSION WE HAVE THE OPPORTUNITY TO INVEST IN OUR FUTURE THROUGH A STRATEGIC AND TARGETED BOND PACKAGE. WE FACE NECESSARY INVESTMENTS IN ROADS AND BRIDGES, RAILROADS, CLEAN AIR AND WATER, LAND PRESERVATION, RESEARCH & DEVELOPMENT, AND OUR UNIVERSITIES AND COLLEGES. ON BOTH SIDES OF THE AISLE, WE KNOW THAT CAPITAL INVESTMENTS ARE SOUND FISCAL POLICIES.

NEXT WEEK I WILL INVITE LEADERSHIP FROM BOTH SIDES OF THE AISLE TO MEET WITH ME TO MAP OUT A BIPARTISAN STRATEGY ON BONDING. OUR STATE DEBT PER CAPITA IS 30% BELOW THE NATIONAL AVERAGE. WE CAN’T AFFORD NOT TO INVEST IN OUR FUTURE. WE HAVE AN OBLIGATION TO INVEST IN THE FUTURE OF OUR CHILDREN AND OUR COMMUNITIES.

IN MY BOND PACKAGE I WILL STRONGLY SUPPORT BIOMEDICAL RESEARCH AND SUSTAINED RESEARCH AND DEVELOPMENT FUNDING.

RESEARCH & DEVELOPMENT PERFORMANCE IS ESSENTIAL TO THE GROWTH OF OUR NEW ECONOMY. MY LAST BUDGET PROVIDED A 40% INCREASE IN R&D FUNDING TO THE UNIVERSITY SYSTEM. BIOMEDICAL RESEARCH JOBS ON AVERAGE PAY $60,000 PER YEAR. BIOTECHNOLOGY EMPLOYMENT IN MAINE HAS TRIPLED IN THE LAST TEN YEARS. AND WE ARE JUST BEGINNING.

TONIGHT I AM PLEASED TO ANNOUNCE THREE INITIATIVES THAT WILL ENHANCE BOTH THE BIOMEDICAL SECTOR AND EASTERN AND NORTHERN MAINE BY CREATING A BIOMEDICAL TRIANGLE.

THE NEW RESEARCH TRIANGLE WILL FOCUS ON FIVE SEPARATE AND DISTINCT AREAS OF HUMAN HEALTH: DIABETES, CANCER, HEART DISEASE, OBESITY, AND OSTEOPOROSIS.

FIRST, THE UNIVERSITY OF MAINE TRUSTEES YESTERDAY ANNOUNCED THEIR INTENTION TO CREATE A NEW GRADUATE SCHOOL OF BIOMEDICAL SCIENCES AT ITS BANGOR CAMPUS.

THIS WILL JOIN A NEW COLLEGE OF ALLIED HEALTH PROFESSIONALS, ALSO AT THE BANGOR CAMPUS, A JOINT VENTURE OF THE UNIVERSITY OF MAINE AND EASTERN MAINE COMMUNITY COLLEGE. SISTER NORBERTA AND DR. CLIFF ROSEN OF ST. JOSEPH’S HOSPITAL WILL BECOME AN IMPORTANT PIECE OF THIS INITIATIVE.

THIRD, EASTERN MAINE HEALTH CARE, THE JACKSON LABORATORY, AND THE UNIVERSITY OF MAINE ARE JOINING TOGETHER TO CREATE A NEW MAINE INSTITUTE FOR HUMAN GENETICS AND HEALTH IN A PINE TREE ZONE IN BREWER.

SUPPORTED BY MY BUDGET AND BOND PROPOSAL THIS YEAR, THESE THREE NEW INSTITUTIONS WILL BUILD ON THE STRENGTHS OF BANGOR AND BREWER AND SURROUNDING TOWNS – THE JACKSON LABORATORY, MDI BIOLOGICAL LABORATORY, THE UNIVERSITY OF MAINE, AREA HOSPITALS IN NORTHERN CENTRAL AND EASTERN MAINE, AND THE COMMUNITY COLLEGE SYSTEM. THIS EFFORT, ALONG WITH SOUTHERN MAINE’S SUCCESSES, WILL PROVIDE THE CRITICAL MASS TO CREATE JOBS AND IMPROVE PUBLIC HEALTH, CREATE RESEARCH AND DEVELOPMENT CAPACITY, AND DEVELOP OUR HEALTH CARE WORKFORCE.

MY 2003 JOBS BOND SUPPORTED BIOMEDICAL RESEARCH STATEWIDE AND A NEW SCIENCE BUILDING AT THE UNIVERSITY OF SOUTHERN MAINE. OUR NEW BIOMEDICAL TRIANGLE WILL COMPLEMENT AND AUGMENT SOUTHERN MAINE’S EFFORT AND CREATE A COLLABORATIVE APPROACH TO RESEARCH STATEWIDE.

TONIGHT I AM HONORED TO RECOGNIZE THE MAYORS OF BANGOR AND BREWER – FRANK FARRINGTON AND JOE FERRIS -- WHO ARE HELPING THESE PROJECTS BECOME REALITY IN THEIR COMMUNITIES. I’M ALSO HONORED TO RECOGNIZE CHANCELLOR JOSEPH WESTPHAL, UMO PRESIDENT ROBERT KENNEDY, AND EASTERN MAINE HEALTH’S NORM LEDWIN. PLEASE STAND AND RECEIVE OUR WELCOME.

SCIENCE IS ONE PART OF OUR ECONOMIC DEVELOPMENT STRATEGY. THE CREATIVE ECONOMY IS ANOTHER.

TODAY I SIGNED AN EXECUTIVE ORDER CREATING A TWENTY ONE MEMBER MAINE CREATIVE ECONOMY COUNCIL, TO BUILD A VIBRANT ECONOMY ON A FOUNDATION OF INVESTMENTS IN OUR YOUTH, OUR CULTURAL INSTITUTIONS, ENTREPRENEURSHIP, AND TECHNOLOGY. I AM PLEASED TO RECOGNIZE JOHN ROHMAN, WHO WILL BE LEADING THIS NEW COUNCIL WITH THE DEPARTMENT OF ECONOMIC & COMMUNITY DEVELOPMENT.

OUR BUDGET PROPOSES NEW EFFORTS TO SUPPORT THE CREATIVE ECONOMY AT THE MARGARET CHASE SMITH POLICY CENTER, AT OUR FILM OFFICE, IN ARTS EDUCATION, AND AT OUR NEW OFFICE OF INNOVATION.

AS A STATE WE MUST CONTINUE TO EMBRACE ARTS, CULTURE AND TECHNOLOGY AS AN ECONOMIC ENGINE. WE MUST EMBRACE INNOVATION AND ENTREPRENEURSHIP IN OUR SCHOOLS AND WORKPLACES. WE MUST CELEBRATE THAT OUR YOUNG PEOPLE ARE THRIVING IN OUR REVITALIZED DOWNTOWNS. WE MUST CELEBRATE THAT OUR EXTRAORDINARY NATURAL RESOURCES ATTRACT NEW RESIDENTS, TOURISTS, AND THE JOBS THAT COME WITH THEM.

AS I PROMISED IN LAST YEAR’S BUDGET ADDRESS, TOGETHER WE WILL SUPPORT OUR TOURIST ECONOMY. WITH THE SUPPORT OF MY BUDGET, THE UNIVERSITY OF MAINE AND THE COMMUNITY COLLEGE SYSTEM WILL EDUCATE TOURISM WORKERS AND ENTREPRENEURS, AND LAUNCH A NEW CENTER FOR TOURISM RESEARCH IN MAINE.

WE WILL ALSO SUPPORT OUTDOOR RECREATIONAL TOURISM BY DEVELOPING A PINE-TREE PROGRAM FOR NATURAL RESOURCE BASED TOURISM BUSINESSES. MY OFFICE WILL WORK WITH REPRESENTATIVE STAN MOODY TO DEVELOP HIS PROPOSAL.

LIKE MANY OF YOU, MY PHONE CALLS ARE LOST WHILE I’M ON THE ROAD. RECENTLY, I WAS DRIVING TO PORTLAND AND MY CALL WAS REPEATEDLY LOST. THIS MADE ME THINK – WHEN WILL WIRELESS SERVICE ACTUALLY SERVE ALL OF MAINE. THERE ARE COMMUNITIES FROM CAPE ELIZABETH TO SEBEC WHERE THERE IS VERY LITTLE SERVICE. MAINE’S BUSIEST ROAD, THE TURNPIKE, IS PLAGUED BY SERVICE PROBLEMS.

PEOPLE VISITING MAINE USED TO TELL JOKES ABOUT THE OLD DOWNEASTER WHO WOULD SAY “YA CAN’T GET THERE FROM HERE.” WELL, NOW PEOPLE VISITING MAINE ARE SAYING “CAN YOU HERE ME NOW!”

MAINE’S TELECOMMUNICATIONS INFRASTRUCTURE IS SOUND. THROUGH SUBSTANTIAL INVESTMENTS BY VERIZON AND OTHERS WE HAVE A FIBER BACKBONE THAT IS SECOND TO NONE. STILL, IN THIS FAST-PACED GLOBAL ECONOMY WE CANNOT REST. WE NEED TO BUILD ON OUR FOUNDATION TO KEEP EVERY ADVANTAGE WE HAVE.

TONIGHT I AM ANNOUNCING “CONNECT MAINE,” A BROAD AND AGGRESSIVE TELECOMMUNICATIONS STRATEGY FOR THIS STATE. CONNECT MAINE WILL GIVE NEARLY EVERY MAINER THE OPPORTUNITY TO PLUG INTO THE GLOBAL ECONOMY FROM THEIR COMMUNITY. IT WILL ENSURE THAT:

90% OF MAINE COMMUNITIES HAVE BROADBAND ACCESS BY 2010; 100% OF MAINE COMMUNITIES HAVE QUALITY WIRELESS SERVICE BY 2008; AND MAINE’S EDUCATION SYSTEM HAS THE TECHNOLOGY INFRASTRUCTURE THAT LEADS THE NATION.

THE CONNECT MAINE STRATEGY WILL BE DEVISED WITH INPUT FROM PUBLIC AND PRIVATE AGENCIES OVER THE NEXT FEW MONTHS. THESE GOALS WILL BECOME REALITY WITH HARD WORK AND VISION.

HERE IN MAINE WE’VE WORKED HARD TO PROTECT HEALTHCARE AND JOBS. THE TIME HAS COME TO PROTECT ALL MAINE CITIZENS AGAINST DISCRIMINATION. HOW CAN WE SAY WE SUPPORT MAINE’S ECONOMY, WHEN WE DO NOT PROTECT AGAINST WORKPLACE DISCRIMINATION. MAINE IS NO PLACE FOR DISCRIMINATION AND I INTEND TO OFFER LEGISLATION TO PROTECT BASIC CIVIL RIGHTS FOR ALL CITIZENS.

OUR SECOND MAJOR STRATEGY IS TO CONTINUE PROGRESS ON HEALTH CARE.

WE’VE ALREADY DONE A LOT BUT DIRIGO HEALTH IS ABOUT MORE THAN AN INSURANCE CARD – IT’S ABOUT MAKING HEALTH CARE BETTER AND MORE AFFORDABLE FOR ALL OF US. ALL OF US IN MAINE KNOW SOMEONE WITH A CHRONIC ILLNESS WHICH CAN TAKE A TOLL ON THE QUALITY OF OUR LIVES AND ON OUR FAMILIES. THERE IS A TESTED, NEW WAY TO PROVIDE BETTER CARE FOR THOSE CHRONICALLY ILL. IT IS WORKING NOW IS SOME PARTS OF MAINE AND NEEDS TO BE PRACTICED EVERYWHERE IN MAINE. THAT’S WHY I’VE CONVENED A TASK FORCE OF PHYSICIANS, HOSPITALS, NURSES, CONSUMERS AND POLICYMAKERS TO CHARGE THEM TO WORK WITH MAINE’S COMMUNITIES AND ITS HEALTH PROVIDERS AND BUSINESSES. TONIGHT WE CONTINUE THE TASK OF MAKING MAINE THE HEALTHIEST STATE. MAINE’S “CARE MODEL” WILL SHOW HOW WE CARE FOR EACH OTHER AND WORKING TOGETHER WE WILL REDUCE THE RATE OF CHRONIC ILLNESS IN MAINE AND HELP MAINE’S FAMILIES STAY STRONG.

THIS ISN’T A NEW PRODUCT OR A QUICK PILL TO GET WELL – IT’S A CONCERTED NEW WAY TO DO BUSINESS TO HELP US LOSE WEIGHT, PREVENT DISABILITY AND MAKE SURE THAT THOSE WHO ALREADY HAVE A CHRONIC ILLNESS GET THE RIGHT CARE AT THE RIGHT TIME FOR THE RIGHT PRICE.

THE OTHER GREAT CHALLENGE BEFORE US IS THE COST OF PRESCRIPTION DRUGS.

WHY SHOULD A RESIDENT OF CALAIS PAY ONE PRICE FOR PRESCRIPTION MEDICINES, AND A RESIDENT ACROSS THE BORDER PAY MUCH LESS?

WE ARE REACHING ACROSS THE BORDER TO WORK WITH THE CANADIAN GOVERNMENT TO ALLOW MAINE RESIDENTS TO BUY PRESCRIPTIONS AT LOWER PRICES.

WE ARE ALSO USING THE PURCHASING POWER OF STATE GOVERNMENT TO NEGOTIATE BETTER RATES AND DISCOUNTS.

WE WON’T JUST BUY FROM CANADA. WE WILL NEGOTIATE LOWER PRICES LIKE CANADA. I HAVE RECENTLY SENT A LETTER TO OTHER GOVERNORS TO JOIN OUR INITIATIVE, AND TO BUILD UP OUR PURCHASING POWER.

SEVERAL HAVE ALREADY RESPONDED AND WE WILL INVITE MAINE BUSINESSES, LARGE AND SMALL, TO JOIN THE EFFORT AND LOWER THEIR HEALTH COSTS AS WELL.

I HAVE ALSO ASKED THE FEDERAL GOVERNMENT TO ALLOW MAINE TO REIMPORT DRUGS FROM CANADA, USING THE PENOBSCOT NATION AS A BULK WHOLESALER AND DISTRIBUTING LOWER COST PRESCRIPTION DRUGS TO PHARMACIES THROUGHOUT MAINE.

WHILE DIRIGO HEALTH REFORM IS A WORK IN PROGRESS IT’S PROGRESS IS ALREADY CLEAR. JUST ASK THE 3000 PEOPLE ALREADY ENROLLED. HEALTH REFORM IS HARD WORK BUT AS WE SUCCEED WE SEND A MESSAGE THAT MAINE PEOPLE CARE ABOUT EACH OTHER AND WILL WORK TOGETHER TO TACKLE REAL PROBLEMS.

OUR THIRD STRATEGY IS TO PROVIDE WORLD-CLASS EDUCATION TO YOUNG STUDENTS AND OLDER WORKERS ALIKE.

EIGHTEEN MONTHS AGO WE LAUNCHED THE COMMUNITY COLLEGE SYSTEM.

LAST YEAR I SET AN AGGRESSIVE GOAL TO INCREASE MAINE’S HIGH SCHOOL TO COLLEGE RATE FROM 55% TO 70% BY THE END OF THE DECADE.

COMMUNITY COLLEGES HAVE ALREADY INCREASED ENROLLMENT BY A THIRD. IN FACT SOUTHERN MAINE COMMUNITY COLLEGE IS THE FIFTH FASTEST GROWING COMMUNITY COLLEGE IN THE COUNTRY - NEARLY DOUBLING ITS DEGREE ENROLLMENT IN TWO YEARS.

TONIGHT I WANT TO BUILD ON THAT MOMENTUM AND ANNOUNCE THE EARLY COLLEGE FOR ME PROGRAM. WE WILL MATCH THE GRANT OF THE OSHER FOUNDATION AND HELP NON-TRADITIONAL STUDENTS GET INTO AND SUCCEED IN COMMUNITY COLLEGE.

I AM ALSO HONORED TO ANNOUNCE A NEW STUDENT ASSISTANCE PROGRAM OFFERED BY THE FINANCE AUTHORITY OF MAINE. LAST WEEK THE BOARD OF DIRECTORS VOTED TO AUTHORIZE $2 MILLION IN NEW SCHOLARSHIPS FOR THE SCHOOL YEAR BEGINNING NEXT SEPTEMBER.

THIS NEW SCHOLARSHIP MONEY WILL ASSIST 2,500 OF MAINE’S MOST NEEDY STUDENTS TO ACCESS HIGHER EDUCATION.

TONIGHT I AM ALSO ANNOUNCING MY SUPPORT FOR THE CREATION OF A SUNRISE BUSINESS AND CAREER CENTER. THE CENTER WILL SERVE STUDENTS FROM LUBEC TO CHERRYFIELD IN WASHINGTON COUNTY. THIS IS THE ONLY PART OF THE STATE THAT WITHOUT A VOCATIONAL EDUCATION CENTER. THE CENTER WILL PROVIDE SECONDARY EDUCATION AND CAREER RE-TRAINING FOR ADULTS ADVERSELY AFFECTED BY OUR CHANGING ECONOMY. IT WILL ALSO HAVE A SMALL BUSINESS INCUBATOR TO STIMULATE NEW JOB GROWTH IN PINE TREE ZONES ACROSS DOWNEAST MAINE.

OUR FOURTH STRATEGY IS TO PROMOTE THE ENVIRONMENT AND SUSTAINABLE DEVELOPMENT.

I’M PROUD THAT MAINE LEADS THE NATION IN THE NUMBER OF ACRES IN FORESTS THAT ARE MANAGED IN A CERTIFIED ENVIRONMENTALLY SOUND MANNER. AND, WE PLAN TO INCREASE CERTIFIED GREEN ACREAGE BY 40% BY 2007.

ALREADY IT IS PAYING OFF. BECAUSE OF THESE EFFORTS, TIME INCORPORATED HAS INCREASED ITS MAINE GREEN PAPER PURCHASE BY OVER 10%.

“MAINE GREEN” WILL BECOME A GLOBAL IMAGE.

I’M ALSO VERY PROUD OF THE HUNDREDS OF VOLUNTEERS WHO CONTRIBUTED MANY THOUSAND HOURS OF THEIR TIME TO MAKE OPERATION KEEP ME WARM A GREAT SUCCESS.

LAST FALL, WHEN HEATING OIL PRICES WENT TO $2 DOLLARS/GALLON AND FEDERAL FUNDING FOR HEATING AID WAS INADEQUATE, A PUBLIC PRIVATE PARTNERSHIP WAS CREATED.

STATE AGENCIES PACKAGED SIMPLE WEATHERIZATION KITS. CHURCH AND CIVIC VOLUNTEERS INSTALLED THEM IN HOMES OF 1,600 OF OUR MOST VULNERABLE SENIORS.

THE COST OF THE PROGRAM WAS UNDER $80,000.

THE SAVINGS TO LOW-INCOME ELDERLY WILL EXCEED $700,000 OVER THE LIFE OF THE IMPROVEMENTS. THE PROGRAM HAS PROVED SO SUCCESSFUL, AND SO MANY PEOPLE HAVE POINTED OUT THAT MANY MORE LOW INCOME ELDERLY COULD BENEFIT, THAT I PLEDGE WE WILL CONTINUE “OPERATION KEEP ME WARM”.

SOME OF THE LEADERS OF THE PROGRAM ARE HERE TONIGHT.

I WOULD LIKE TO ASK BETH NAGUSKY OF OUR OFFICE OF ENERGY INDEPENDENCE AND THE VOLUNTEERS HERE TONIGHT WHO MADE THE PROGRAM A SUCCESS TO RISE.

THANKS YOU ON BEHALF OF THE PEOPLE OF MAINE.

MONTH AFTER MONTH THE EVIDENCE GROWS THAT OUR RELIANCE ON OIL TO FUEL OUR ECONOMY MAKES MAINE MORE VULNERABLE TO FORCES WE CAN NOT EASILY CONTROL, THIS INCLUDES ESCALATING PRICES AND THE RISK OF OIL SHORTAGES. BECAUSE OF THIS I HAVE WORKED TO MAKE MAINE STATE GOVERNMENT A LEADER ON THE PATH TOWARD ENERGY INDEPENDENCE.

WE NOW PURCHASE 40% OF OUR ELECTRICITY FROM MAINE’S OWN RENEWABLE POWER RESOURCES. WE HEAT STATE OFFICE BUILDINGS WITH BIODIESEL; ALL NEW AND RENOVATED STATE BUILDINGS WILL HAVE U.S. “GREEN” BUILDING STANDARDS; AND WE ARE IMPROVING THE FUEL ECONOMY OF THE STATE FLEET BY PURCHASING MORE HYBRIDS AND SMALLER VEHICLES.

THESE ENERGY SAVING STEPS HAVE SAVED THE STATE $776,000 IN TRANSPORTATION FUEL COSTS AND REDUCED STATE GOVERNMENT GREENHOUSE GAS EMISSIONS BY 8% IN THE PAST 2 YEARS.

I AM FULLY COMMITTED TO ADVANCING THESE SUSTAINABLE ENERGY PRACTICES STATEWIDE, AND CREATING AN ENERGY INDEPENDENT MAINE THAT DEPENDS LESS ON MIDEAST OIL AND MORE ON THE RENEWABLE ENERGY RESOURCES WITHIN OUR OWN BORDERS.

I AM INTRODUCING LEGISLATION THAT GIVES MAINE PEOPLE INCENTIVES TO PURCHASE AND INSTALL SOLAR ENERGY SYSTEMS IN THEIR HOMES AND SMALL BUSINESSES. THESE INCENTIVES WILL HELP MAINE PEOPLE TO CONTROL THEIR HIGH AND VOLATILE ENERGY PRICES, AND AT THE SAME TIME IMPROVE THE AIR WE ALL BREATHE.”

OUR FINAL STRATEGY IS TO CONTINUE OUR EFFORTS TO STREAMLINE GOVERNMENT.

THE BEST THING WE IN STATE GOVERNMENT CAN DO IS TO PRACTICE WHAT WE PREACH. SO WE ARE.

THIS YEAR WE WILL CONSOLIDATE FINANCIAL, INFORMATION TECHNOLOGY, PAYROLL, HUMAN RESOURCES, AND ADMINISTRATIVE HEARINGS SERVICES.

THROUGH CENTRALIZED MANAGEMENT OF THESE BACKBONE OPERATIONS WE CAN MORE EFFECTIVELY CONTROL STATE GOVERNMENT SPENDING SAVING OVER $11 MILLION OVER THE NEXT 2 YEARS.

IN ADDITION, THE DEPARTMENT OF HEALTH AND HUMAN SERVICES IS IN THE PROCESS OF REDESIGNING ITS CHILD WELFARE SYSTEM TO REDUCE THE NUMBER OF CHILDREN THAT COME INTO STATE CUSTODY AND TO LESSEN THE TIME THAT IT TAKES TO PLACE CHILDREN IN PERMANENT ADOPTIVE FAMILIES OR TO RETURN THEM TO THEIR BIRTH PARENTS.

WE CURRENTLY HAVE 13% FEWER CHILDREN IN OUR FOSTER CARE SYSTEM THAN WE DID A YEAR AND A HALF AGO, AND WE WILL CONTINUE TO REDUCE THE NUMBER OVER THE NEXT BIENNIUM, WHILE FULFILLING OUR COMMON OBLIGATION TO PROTECT CHILDREN. THERE IS NO SOCIAL SERVICE AGENCY BETTER THAN A HEALTHY FAMILY.

WITHOUT SACRIFICING OUR ABILITY TO INTERVENE WHEN IT IS REALLY NECESSARY, WE WILL SUPPORT MORE CHILDREN IN THEIR FAMILY AND COMMUNITY. MAINERS KNOW THE VALUE OF A SAFE FAMILY, AND OUR CHILD WELFARE SYSTEM MUST SUPPORT, NOT FRUSTRATE, SAFE FAMILIES.

WE ARE NOT ALONE IN OUR EFFORTS TO REINVENT GOVERNMENT.

PEOPLE ALL OVER MAINE ARE THINKING ABOUT HOW TO DELIVER PUBLIC SERVICES MORE EFFICIENTLY.

OVER IN LEWISTON AND AUBURN THE MAYORS OF THE TWO CITIES HAPPEN TO BE BROTHERS….LIONEL AND NORMAND GUAY.

THEY HAVE SET UP A TASK FORCE CHAIRED BY JUSTICE BOB CLIFFORD AND COMMUNITY CREDIT UNION PRESIDENT DONNA STECKINO TO LOOK AT WAYS TO COMBINE SERVICES IN THE TWIN CITIES. A NEW COMBINATION OF LEWISTON AND AUBURN…..THE “LA OF THE EAST!

TONIGHT I AM PLEASED TO ANNOUNCE $15,000 TO SUPPORT THESE COLLABORATIVE EFFORTS OF LEWISTON AND AUBURN THAT WILL LEAD TO SO MANY OTHER NEW OPPORTUNITIES. I’D LIKE TO ASK THE MAYORS GUAY TO RISE.

ALL OF THESE EFFORTS WILL PAY OFF IN THE LONG RUN.

BUT THAT’S THE MAINE WAY, THE MAINE SPIRIT.

AS I SPEAK TO YOU THIS EVENING, CITIZEN SOLDIERS OF THE MAINE NATIONAL GUARD ARE DEPLOYED IN IRAQ AND AROUND THE WORLD.

WHEN THE 152D MAINTENANCE COMPANY LEAVES THIS SUNDAY MORNING FOR TRAINING BEFORE THEIR DEPLOYMENT TO IRAQ, THE MAINE ARMY NATIONAL GUARD WILL HAVE MOBILIZED AND DEPLOYED OVER 65% OF THEIR ORGANIZATION.

AS A STATE, WE HAVE SHARED IN THEIR HIGHS AND LOWS DURING THIS PERIOD TO MOURN THE LOSS OF MANY WONDERFUL PEOPLE.

I HAVE SPOKEN WITH MANY OF THE SOLDIERS AND MANY OF THE FAMILIES.

THEY DO NOT SEEK PUBLICITY.

THEY JUST WANT TO DO THEIR PART TO DEFEND THEIR COUNTRY TO HELP OTHERS IN THE WORLD.

WHEN ASKED WHAT WE AT HOME CAN DO TO ASSIST THEM, THE ANSWER IS ALWAYS THE SAME – “TAKE CARE OF THE FAMILIES”.

AND WE WILL DO OUR PART.

TO PROTECT MILITARY FAMILIES AND THOSE RETURNING FROM DEPLOYMENT, I AM PROPOSING

  • TO MAKE PERMANENT THE WAIVER OF CONTINUING EDUCATION REQUIREMENTS FOR PROFESSIONAL LICENSING OF THOSE SERVING OVERSEAS
  • TO RELIEVE BUSINESSES OF UNEMPLOYMENT CHARGES WHEN A SOLDIER RETURNS FROM THEIR DEPLOYMENT
  • AND IN OUR BUDGET, WE PROPOSE A SPECIAL LICENSE PLATE. THE FUNDS RAISED FROM THE SALE OF THE PLATE WILL GO TOWARDS THE FAMILY SUPPORT GROUP THAT HELPS THE FAMILIES OF SOLDIERS WITH MEDICAL, FINANCIAL, SCHOLARSHIP AND EMERGENCY ASSISTANCE.

THESE ARE SMALL THINGS.

BUT THEY MATTER – BECAUSE WE ARE ALL FAMILY IN MAINE.

THAT’S WHY WE’RE ALL HERE TONIGHT.

I WOULD LIKE TO ASK GENERAL LIBBY TO RISE.

TO MAKE PEOPLE’S LIVES BETTER.

IT’S NOT ABOUT POLITICS.

IT’S NOT ABOUT PERSONAL GAIN.

IT’S ABOUT KEEPING TRUE TO THE TRADITION WE HAVE BEEN GIVEN.

GOVERNOR PERCIVAL BAXTER ONCE SAID:

“TO COME TO KNOW MAINE AND ITS PEOPLE IS A WONDERFUL EXPERIENCE FOR THE ALMIGHTY HAS LAVISHLY BESTOWED HIS BLESSINGS UPON US.”

WE ARE ALL BLESSED.

EVERYONE IN THIS CHAMBER….EVERYONE WATCHING AND LISTENING AT HOME TO LIVE IN THIS WONDERFUL STATE.

LET US DEDICATE OURSELVES TONIGHT, AS THE MEN AND WOMEN OVERSEAS HAVE, TO KEEP THE BLESSING ALIVE FOR FUTURE GENERATIONS.

THANK YOU AND GOOD NIGHT.

January 18, 2006

2006 State of the State Address

Madam President, Mr. Speaker, Madam Chief Justice, members of the Legislature and distinguished guests.

Good evening my fellow citizens.

Tonight, I am proud to report that the state of this State is strong, secure and healthy.

  • More people are working than ever before.
  • More of our children are going to college.
  • More families are healthier and have health care.
  • More families are getting tax relief.
  • And – Empire Falls won two Golden Globes.

That’s some of the good news.

But this past year, in fact the past three years, have not been short on challenges.

  • When I took office, we inherited a $1.2 billion revenue shortfall ---that’s 20 percent of the state budget.
  • The rainy day fund had a zero balance.
  • When I came into office, we were borrowing $275 million to pay bills from one year to the next.
  • And on top of that, several paper companies announced they were going to foreclose ---and that my friends, was the first day.

I recalled what my mother used to say about hard work growing up in a small business family. She said “It never hurt any of us to work hard and it instilled good values.” When Mainers face challenges, we work hard together to get it done. We balanced the budget without raising a broad-based sales or income tax, and we’ve continued to do this every year since.

We’ve reduced our borrowing by more than half.

Today, with my proposed supplemental budget we save another $35 million to put in the rainy day fund, growing our reserves from zero to over 100 million dollars in just three years.

During my Administration, we have cut the size of State Government by more than 600 positions.

I want to thank State workers who went without a pay raise for two years to help balance the budget. It helped us move the state in the right direction. I want to thank them for their high quality work and dedication to the people of Maine.

In Penobscot County more than 1,400 Mainers whose jobs were threatened by bankruptcy are still working at paper mills in Lincoln, Millinocket and Old Town. That’s $75 million in direct payroll - with a ripple effect that reaches across central and northern Maine. And for the mill that didn’t re-open in Brewer, this budget appropriates 500 thousand dollars to redevelop that site to make it a job generator once again.

Together we successfully took on the Department of Defense when they tried to close our three military bases. We saved 4,800 jobs in Kittery and almost doubled the jobs in Limestone.

Joining us tonight in the gallery are representatives from these two places, Paul O’Connor and Dave Schofield from the Kittery Metal Trades Union and Carl Flora representing Limestone workers. I ask that they please rise and accept the greetings of the chamber.

I stand before you tonight to let you know that Maine’s finances are healthier.

In fact, over the past four years State Government spending has grown at just over three percent. That’s the lowest increase in spending in over thirty years.

In fact, the Maine state budget growth is the eighth lowest of all fifty states according to a survey by the National Governor’s Association.

In addition, we put spending caps at the local, county and state level. LD 1 increased direct property tax payments to Maine residents; 225,000 people are now eligible for direct property tax rebates.

While keeping spending down, we were able to invest almost $300 million additional dollars in local education.

Evidence shows that in many towns LD 1’s increased education funding resulted in property tax relief.

Over the next three years, millions of additional state dollars will flow to schools and towns. But there is even more progress to make.

I will support legislation to provide property tax relief as LD1 is fully implemented to require that 90 percent of that full funding be returned directly to Maine taxpayers in the form of lower property taxes. We can do this while continuing our tradition of excellence in education.

We must do more. Tax rates are only part of the problem. The other is the assessed value of your property. I don’t think anybody should be taxed out of their home because someone paid an outrageous price for the house next door. That’s why I’ve proposed a constitutional amendment that will put in place a fair and workable way to value property and keep taxes low.

Maine’s economy is healthy. And that is because of Maine people.

Increasing every Mainer’s opportunity for a good paying job continues to be my top priority.

People are the most important resource in my economic plan. We are moving toward a knowledge-based economy. In that economy, Maine people are our new economic engines. Today we have more people in our community colleges, more investments in research and development, and more technology for businesses and people. We are getting our children ready for school with early child care, increasing the number of students in college with loans, and training our adult workers with new skills and creativity.

Maine will triumph in global competition if we continue to invest in our citizens. We need to give people the tools to maximize their full potential and realize their dreams. Every young person should have the option to stay in Maine to build a career and a family.

We kept our mills and bases open because of the quality of our people – the quality of our workers. Chairman Principi of the BRAC Commission called Maine workers the “gold standard”.

We must do more to train our workers and upgrade their skills. We must to more to reward work and workers. Maine men and women should be able to earn a living wage so they can support their families. There is no safety net better than a job with benefits and training.

Our minimum wage should not lag behind other states in our region. I ask for your support to increase Maine’s minimum wage over the next two years to keep pace with the cost of living.

The Milken Institute, a non-partisan research organization, says Maine was one of five states last year who did the most to reduce the cost of doing business. In fact, it now costs less to do business in Maine than any state in the northeast.

Maine’s unemployment taxes are among the lowest in the nation.

And, Maine’s workers’ compensation costs have gone from among the highest in the nation in the 1990’s to within the national average today.

When we compete nationally we can win and attract Fortune 100 companies.

In a Pine Tree Zone in Oakland, T-Mobile is hiring nearly 800 new workers with health care benefits.

T.D. BankNorth just last week announced the addition of more than 100 new jobs in Lewiston at the Bates Mill Complex bringing their total in Maine to over 2,700. They could have grown anywhere in the Northeast, but they chose Maine.

Over the past three years, over fourteen hundred new small businesses were launched in Maine and small businesses created nearly five thousand new jobs.

In Patten, Maine, Anderson Hardwood Flooring is opening a plant that will employ forty to fifty people.

The Jackson Labs in Bar Harbor is announcing that they will be adding several hundred new jobs over the next five years.

Tomorrow I will announce that Idexx Laboratories in Westbrook will begin a multi-million dollar expansion resulting in several hundred new jobs over the next few years.

While our economic plan is working, the rising tide of our economy must reach every corner of the state. If we stay the course of our plan with investments and hard work, we will grow 25,000 new jobs in Maine in the next five years.

As part of my economic plan, last fall I presented the State Science and Technology Plan that calls for Maine’s annual investment in research and development, including both private and public funding, to reach $1 billion by 2010.

Maine currently ranks tenth in the nation in non-profit R&D activity, but we need to do more to compete. My budget includes a down-payment – matching money for marine research in the Gulf of Maine and for new businesses launched by the University of Maine.

Now more than ever, we must continue strategic investments in research & development and infrastructure. After today, I’ll be proposing additional investment tools.

My Pine Tree Zone economic program is creating more than 3,000 jobs throughout the state.

Tonight I ask for your support in expanding Pine Tree Zone eligibility in Washington County, and designating Pine Tree Zones in the Midcoast to redevelop Brunswick Naval Air Station once it’s closed.

My budget also provides a military retirement tax exemption. This exemption will benefit the military men and women of the Brunswick Naval Air Station who want to stay in Maine, and will attract other high skilled military retirees returning from overseas.

Thank you Speaker Richardson and President Edmonds for your leadership in Midcoast redevelopment efforts.

In the Gallery are other leaders helping us in the Midcoast -- Bill Babin, union President a member of my Advisory Council. They are excited about the future of the Midcoast. They have accepted the challenge of leadership. I ask that they please rise and accept the greetings of the Chamber. In Skowhegan and Waterville, novelist Richard Russo and the award winning film “Empire Falls” brought $34 million to our economy. We have a growing number of media production firms in studios all across Maine. My budget fully funds the “Maine Attraction” Film Tax Incentive.

To further support the creative economy, I am also proposing an investment one-half million dollars in community grants to preserve and grow our cultural heritage.

Job growth also depends upon sound tax policy. It is time now to eliminate the personal property tax on new business investments. It is time. I appreciate the bipartisan leadership effort to make it happen.

Last year I came to you with a bold proposal to “Connect Maine” – to serve 100% of Maine communities with cell phone coverage by 2008, and 90% of Maine homes and businesses with broadband by 2010.

We’re ahead of schedule on both and will meet the broadband goal later this year. We’ve made a lot of progress, but there is more to do.

Later this month, I will submit "Connect Maine" legislation to further expand the availability and quality of broadband and wireless phone service throughout the state.

Speaking of infrastructure, I ask for your support as we rebuild our roads and bridges. Facing reduced federal funds and inflation, the Department of Transportation was forced to postpone $130 million in road and bridge projects which would support more than 1000 construction jobs. Thank you Senators Damon and Savage and others for your hard work on a task force to restore these projects.

Maine’s educational system is healthy.

We know that the success of each Maine person matters. Skills and knowledge will define our ability to compete in the new economy.

If you want to succeed – if you want your children to succeed - education is the foundation of that success. Maine’s schools and teachers are truly exceptional.

  • Our reading and science scores are among the nation’s best.
  • Our math scores are up and more of our students are going to college.
  • In February, the College Board will recognize Maine’s success for increasing the number of high school students taking college level placement courses.

With the help of educators and Legislators, we’ve done much over the last three years to support education at all levels.

We’ve adopted new early childhood education standards to focus young children in all parts of Maine.

People who have quality early childcare and education have a better shot succeeding.

Many people have worked long and hard to promote care and education during early childhood. Tonight, I want to recognize two people for their contributions.

The First Lady is a champion for youngsters. I want to thank her for her work on behalf of children, Steve Rowe, our Attorney General also knows from his job, in the courts, what a difference early quality childcare can have in a youngster’s life.

I ask that they accept the greetings of the chamber.

I’m further directing the addition of a child care development expert to the Brunswick Naval Air Station re-use planning groups.

Quality care requires qualified caretakers. That’s why my budget will include $1.5 million of increased scholarship funding for students who enter child care professions. As any working parent will tell you… finding quality, affordable child care is one of the biggest obstacles they face. Tonight I’m asking the Legislature to join me in supporting an expansion of the Child Care Tax Credit. This half-million dollar investment will provide immediate relief for Maine’s working families.

I support bringing together child care, Head Start, health, counseling, adult education and other services into one location. I commend Bucksport for its model, the Bay Area Early Childhood Network.

I want to give all places in Maine, especially in rural Maine, opportunities to make schools centers of their communities in new ways. Tonight, I am directing the Commissioner of Education to recommend school construction that includes these regional resource hubs.

I understand that sustaining small schools is vital to many communities. That’s why I am including in my budget an additional $3 million to support high performing small schools.

Right now we’re leading the nation in investing education dollars in the classroom. Only two states --- Maine and New York – put more than 65% of their education budgets into instruction. We need to continue that effort.

It’s already happening in Maine with the Western Maine Collaborative, The Penobscot River Partnership, The Sebago Alliance and The Casco Bay Alliance.

To help further that, I am restoring $1 million for the Fund for Efficient Delivery of Educational Services and $1 million for the similar Fund for Local and Regional Services to help our schools and towns.

Quality education also requires excellent teachers. Teachers are our students’ most valuable resource. I appreciate the outstanding job these dedicated hard-working professionals do every day to teach the next generation of Maine citizens. We ask, and expect, a lot from our teachers. In return, we must support their work.

The average teacher salary in Maine is under $27,000. For our students, we must recruit and retain the best and the brightest. My budget proposes raising starting teacher salaries to $30,000 starting next year.

We must also be careful that emphasis on testing doesn’t overwhelm teachers’ time and ability to educate and giving teachers time to teach. We must be accountable and report on student achievement, but we can meet that obligation in new ways.

The Commissioner of Education has modified the Maine Educational Assessment to reporting requirements at all levels. This will reduce the need for more testing at the local level.

Therefore, I’ve directed the Commissioner to submit to the Legislature a moratorium on our current local assessment. Three years ago we transformed higher education in Maine by establishing the Maine Community College System. It has been a great success. Enrollment has increased 42%.

The Early College for ME program has helped many first generation college students make the transition to a community college. One parent said this program: “Gave our daughter the chance her father and I never had.” Tonight I’m proposing to add another $500,000 for college level courses for high school students.

Saving for college has also been a barrier for too many Maine families. I’m pleased to announce tonight that the Next Generation Program is going to give every baby born in Maine this year a $50 grant to open that first college savings account.

And to make college more affordable, I am also proposing we expand the student loan deduction.

And it will open the doors of education wider than ever before.

Learning never ends. Maine must support the educational aspirations of our seniors. The Osher Lifelong Learning Institute at the University of Southern Maine provides educational opportunities for nearly 5,000 Maine adults, ages 50 and older. The Foundation named the Institute as a “National Center” for 73 such programs throughout the country. My budget provides financial assistance for USM to take on this new role.

From early childhood to our senior years, Maine people want and need educational opportunities. I’m pleased with all we’ve done. Maine must not only be prepared, but with these initiatives, we will be prepared.

Maine people are healthier.

Accessible, affordable, quality healthcare is critical to the health of our citizens and health of our economy. That’s why I brought forward a comprehensive package in Dirigo Health Reform.

Dirigo is more than just an insurance product it’s about improving the quality of our health. It’s about reducing healthcare costs and making Maine the healthiest State in the nation.

Despite budget challenges we faced early on, we have retained our commitment to our tobacco settlement funds, spending them for critical preventive services. We also supported grassroots efforts through our Healthy Maine Partnerships and Community Health Coalitions.

Our investments in tobacco prevention are showing results. Last week, Maine was named number one in the country and received straight A’s from the national lung association for our success in reducing teenage smoking. We’ve cut smoking by teenagers in half since 1997.

This will pay huge dividends, not just for the teens themselves, but in lower health care costs down the road. That’s why I’ll ask the Legislature to provide $4.6 million to the Fund for a Healthy Maine to assure our ability to continue important prevention services critical to our efforts.

We have made great strides in other areas of healthcare as well.

Accessing critical health and social services in the communities we live in is about to become a whole lot easier. Maine will become the 15th state to offer statewide 2-1-1 services.

By just dialing 2-1-1 or going online you will be connected to over 5,500 local crisis centers, employment support, and other health and social services. A pilot program will start next month in Washington and Cumberland Counties.

The State of Maine recently joined Maine’s ten United Ways and various non-profit and corporate supporters, to provide the resources necessary to take 2-1-1 Statewide by July of this year.

And I just want to take a moment and recognize the incredible and demanding work performed by those in the healthcare field. These are not easy times whether you are a State trying to meet costs or whether you are on the frontlines of providing health care.

We recognize there is a high demand for health care professional education in Maine. My budget provides $750,000 to educate more nurses at both the University of Maine and the Community College System.

Healthcare continues to push itself to the forefront.

Recently, we stepped in to assure that all Maine seniors are protected and they get the drugs they need during the difficult transition to the Federal Medicare Part D drug program. Maine was the first state in the nation to take action and today over 20 states have joined us.

The problems have been very real for our seniors. Within hours of this new program taking effect, my phone rang and on the other end was a woman who couldn’t get her medication for kidney dialysis because the Feds had signed her up for the wrong plan. With our help she got what she needed. But she and the thousands of other Mainers who were in similar situations should never have to face that crisis to begin with.

We are going to make sure the Federal Government meets its obligations to all Maine people.

But no matter how much we invest in public health and prevention the simple fact remain---without health coverage people wait too long to get care, show up too late in costly emergency rooms, and pay the highest price for that care. The cost of being uninsured in human terms is great—people end up suffering from illnesses and disabilities that could have been avoided, and the financial cost is real and paid by all of us.

Each year we spend over $175 million on bad debt and charity care—that means each of us who has health insurance is picking up the cost.

That’s something we could avoid if all of us had health insurance. And that is the goal of Dirigo.

A recent report by the Kaiser Family Foundation tells us that Maine is one of only 11 states, and the only one in New England – that reduced the rate of people without insurance in the last four years.

Our answer is two fold ---Dirigo works and Dirigo saves money.

Today over 10,000 Maine people and 2,000 businesses across the state have enrolled in Dirigo Health. We’re expanding to cover more Maine families.

Dirigo saves money. Rate increases for small business are half what they cost last year.

The Superintendent of Insurance identified nearly $44 million in savings in the healthcare system because of Dirigo. Those are real savings that belong in your pocket, not in the pocket of an insurance company. Therefore, I intend to support legislation to require insurance companies to pass those savings back.

But that is not enough. We need to create transparency in the health insurance market so you know what you are paying for.

Health reform is really hard work, and it takes time. But, already we are seeing success not only in the DirigoChoice product, but in the broader Dirigo reforms.

Dirigo is about innovation – doing whatever needs to be done to expand coverage to more working families. We will build on our success and take the next important step.

We were successful a decade ago in creating a new solution to deliver workers’ compensation—The Maine Employers Mutual Insurance Company. Tonight I am starting the process to make sure Dirigo can expand affordable coverage for more Maine citizens.

I have asked Steve Tringale, a nationally respected health insurance expert, to work with my health care team. They will being to examine if and how Dirigo can build a new model to deliver health insurance in Maine – a model of Maine, by Maine, for Maine.

When it comes to affordable healthcare for Maine families and businesses, I will leave no stone unturned. When it comes to the health and wellbeing of our people, our economy and our state, we must also protect and preserve our natural resources.

We are working towards cleaner air for all Mainers. We have placed stringent standards on vehicle emissions.

We are in the forefront of state and regional efforts to reverse global warming through reductions in greenhouse gas emissions.

And we are taking toxic materials out of our environment through the nation’s first program to recycle old computers and televisions, and through new measures to reduce the amount of toxic mercury and lead in our land, air and water. Maine leads in conserving and protecting land for our children and for future generations. In the last three years, we completed land conservation projects totaling more than 700,000 acres.

Maine is a leader in sustainable forestry. More than 7 million acres, or 40 percent of our working forest is certified as sustainably managed…..and that’s good for the environment and the economy.

When I took office the subject of energy wasn’t a hot button issue. Even so, I created the Office of Energy Independence and Security. I knew that increasing our independence and efficiency along with tapping into our renewable energy resources would be good for Maine.

Today energy costs are on everyone’s mind. As the first order of business in 2006, this Legislature in a bipartisan effort joined with me to provide $5 million to help people who needed help paying their fuel bills. My Administration negotiated with Citgo so that millions of gallons of heating oil, at a discounted rate, could be delivered quickly and efficiently to those most in need.

My goal is to keep people safe, warm and secure.

The people of Maine have stepped up, too. School children, small businesses and volunteers have winterized seniors’ homes throughout Maine. Those same people are contributing to the fuel fund. The Eastern Maine Funders Initiative alone has raised over one-half million dollars in charitable contributions. I say thank you, to the United Way and Maine people for making a difference.

Maine State Government is leading by example. We reduced travel, tripled the number of hybrid vehicles in the State fleet, and expanded the State’s vanpool program. By instituting these measures early – before the current energy price crisis---the State has been able to save 300,000 gallons of fuel, and putting our electricity purchase out to bid will save us $4 million by June of this year.

Over the past three years I have advanced policies and programs to make the entire state more energy independent: we now have a solar rebate program, natural gas conservation program, a wind program in Mars Hill and a tax exemption for those producing biofuels in Maine.

This year I will be introducing a comprehensive energy bill to expand the use of renewable energy, stabilize electric costs, and adopt statewide efficiency standards for appliances.

Before I close, we welcome this evening those who represent proud Wabanaki nations. We mourn the passing of Passamaquoddy Governor Melvin Francis. To his wife and children and people, we send our thoughts and prayers.

Finally, in 2005, the Soldiers and Airmen of the Maine National Guard served both the State of Maine and our great nation with pride and distinction.

The Maine National Guard deployed over four hundred men and women throughout the world.

Their distinguished service has not come without cost. Four Soldiers from the 133rd did not return to Maine. Twenty-two other Maine Soldiers, Airmen, Marines, and Seaman from active and reserve forces also made the ultimate sacrifice for their nation. Tonight I am pleased to announce that I will support legislation to provide life insurance for servicemen and women who are put in harm’s way.

Joining us tonight is the Commander of the 133rd Engineer Battalion, Lieutenant Colonel John Jansen. Also joining us tonight is Mrs. Lori Jones, wife of First Sergeant Michael Jones of the 133rd who died in March in New York upon returning home. He embodied the ideal of a true U.S. Soldier. These three represent the Battalion and all of the Soldiers, Airmen, and families who serve and sacrifice. I ask them to rise and accept the appreciation of all gathered here.

These brave soldiers risk their lives each day for a better America. I ask each of us to reflect on their sacrifice and consider our own pledge to public service....to our duty to help create a better Maine. Some things divide us. But much more joins us together.

My father used to ask me, what have you done for the people today? I hope in the year ahead we can ask ourselves the same question and pledge to work together to make Maine's families and communities stronger for an even brighter future for Maine.

I am proud and confident about Maine’s future.

The state of our state is indeed strong, secure and healthy. Thank you. And good night.

January 3, 2007

2007 Inaugural Address

Inaugural Address January 3, 2007 Governor John Baldacci

Madam President, Mr. Speaker, Members of the Legislature, Secretary of State Dunlap, Treasurer Lemoine, Attorney General Rowe, State Auditor Douglas, Congressman Allen, Governor Brennan, Governor King, Governor Doyle, Chief Francis, Chief Nicholas, Chief Commander, Chief Phillips, my wife Karen, son Jack, members of the National Guard, foreign dignitaries and distinguished guests:

As we gather here, 365 Maine men and women of the National Guard are serving their state and nation in Iraq and Afghanistan. I call your attention to the vacant row of seats to my right in honor of their absence.

We remember and honor their families who sacrifice so much while their loved ones are deployed. We pause to remember those who paid the ultimate sacrifice and their families.

This Inauguration of Maine’s Governor signifies the end of a long campaign that highlighted many of Maine’s challenges. It also signifies the beginning of a term in which all of us, together, must get to work and address those challenges and to improve the quality of life for Maine’s children and families.

First, though, I want to say thank you.

Thank you to the people of Maine for having faith in me to finish the job I started four years ago.

Thank you to my opponents – and there were many of them – for waging a spirited but principled campaign of issues and ideas. While we disagreed on many things, we all agree on working to make Maine a better place than it already is. This goal has brought us here tonight and will guide us in the days ahead.

I’ve learned a lot in the last four years – about government, about Maine people, and about Maine’s place in the world.

Maine has become a very different place than it was when I began serving on the Bangor City Council or representing the Second District in Washington.

Maine remains a beautiful place to live, work and raise a family – the best place in the world!

But Maine, like many areas of the country, is more and more influenced by outside forces that have given way to a different brand of politics than we’re used to – more partisan, more divisive and, ultimately, more detrimental to our democracy.

We recently witnessed this divisive atmosphere in the lengthy and expensive campaign over the so-called Taxpayer Bill of Rights, a property-tax reform proposal that had its origins outside of Maine.

Maine voters rejected this idea.

But I’ve heard what Maine people are saying - loud and clear, and the debate over property taxes won’t end there.

The time has come to enact a property tax relief policy that is by Maine people for Maine people!

But before I talk more about that, there are a few other things I want to say. After all, this is my last Inaugural Address and the last elective office I will hold.

The political campaigns that were just completed served many important purposes, the most important of which is giving the voters clear choices on how their state will be governed and managed in the years ahead.

But in the age of 10-second sound-bytes and carefully crafted TV commercials, these campaigns have a downside.

All you hear are claims about what’s wrong with Maine.

You hear about its high tax burden, its ailing economy. You hear about out-of-control government spending, about young people leaving Maine in droves, about Maine’s inability to compete with other states and other countries.

All of this has the effect of making us more pessimistic about our future. It zaps our can-do spirit and makes Maine seem a much gloomier place than it really is.

I know this may shock you, but not everything you hear in a political campaign is 100% accurate.

This was clear from the recently completed independent Brookings Institution report that exploded many myths about Maine. The Brookings study has given us not just a blueprint to improve our economy, but a way to lift the extensive pessimism that permeates this state.

You might have heard that people are leaving Maine, but in fact we have the fifth highest rate of any state in the country of people moving into our state. Who are these people moving to Maine? Many are highly educated, upper income individuals looking for all the things that Maine has to offer that they can’t find anywhere else. And where are they coming from? More than half of them are coming from Massachusetts and New Hampshire, two states that are often held up as states Maine needs to emulate.

But if that’s true, why are so many people leaving those states and choosing to come to Maine? Because Maine has what the world wants: quality of life; a “gold standard” workforce. And we can compete globally.

We are the eighth fastest growing state in exports in the United States. Foreign Direct Investment magazine ranked Maine's quality of life as the best in the nation. And Inc. Magazine included Portland, Lewiston-Auburn and Bangor in its listing of the top cities for doing business and attracting entrepreneurs in America.

Large international companies competing on a global scale have located here and are thriving. TD Banknorth, National Semiconductor, and others employ thousands of hard-working Mainers. Their entrepreneurial spirit is mirrored in our home-grown small businesses criss-crossing the state: Oxford Aviation in Sanford; Sea Run Holdings of Eastport; and Maine Mutual Insurance Group of Presque Isle.

You’ve heard about Maine’s high tax burden – the amount of taxes Maine people pay relative to their incomes.

But you probably didn’t hear that Maine’s tax burden is coming down while incomes are on the way up. In fact, Maine’s average income is at an all-time high, and our goal is to keep it going higher. If we can raise the average Maine income just a few thousand dollars while keeping taxes in check, our tax burden will fall to somewhere in the middle of the 50 states, and we wouldn’t be having this debate at all.

So it’s not enough to simply address our high taxes. We’re going to have to address growing our incomes, too. I’ll discuss how we intend to do both in a minute.

You might have heard that state spending is out of control. But in fact, over the past four years, we have established the lowest average spending rate increase in the last 30 years. We’ve capped government spending at all levels. We’ve put $140 million in our rainy day fund and paid off a quarter of a billion dollar credit line.

You might have heard that we sorely lag behind in jobs, but resident employment has grown by 32,000 workers in the past four years. There are more Maine people working now than ever in our state’s history.

You may have heard that there is no strategic plan for growing Maine’s jobs, but we recently competed for and won a $15 million federal grant to support and expand Maine’s leadership in the boat building industry, adding over 2,000 jobs in seven years.

Does all of this mean that we really don’t have to worry about taxes and spending, or the state of our economy? Absolutely not!

But it doesn’t mean that everything is bad, or that we’re not doing anything right.

The fact is we are doing a lot of things right. But we must do more. And Maine can do it.

To accomplish this will take our coordinated efforts. I look to work with the people of Maine to help us along our path. I recently reached out to the president of the Maine State Chamber of Commerce, Dana Connors, and their members to work together to promote Maine businesses, workers and job growth. Thank you, Dana, for your help and commitment. Together, we will succeed in bringing more business to Maine, and in putting more quality Maine workers in good paying jobs.

Maine can do it. We can solve our problems and face our challenges. We need to celebrate our accomplishments, celebrate our achievements. We need to lift the cloud of pessimism that hangs over our state.

Maine is a leader once again on energy. Businesses are now flocking to Maine to harness our clean renewable energy resources: our wind, our tides, and our wood and wood wastes. Development of these energy resources will put money into the pockets of Mainers rather than exporting them out-of-state and overseas. We have come a long way on the road to energy independence, and I will continue to move us in that direction.

We’ve protected our environment. This year we completed the vision of Percival Baxter by adding Katahdin Lake to the Baxter State Park. We continue to protect traditional land uses – like hunting and fishing, and have added three-quarters of a million acres of land to preserve Maine’s way of life for the future.

When we in Maine look back at the first years of this new century—an era driven by technology and innovation and a knowledge-based economy—one critically important action will stand out: the creation of Maine’s Community College System. In just four years, thousands of citizens - hard working Maine people displaced from traditional manufacturing jobs, young high school graduates unsure of their future, underemployed adults struggling to make ends meet - have flooded our community colleges. Enrollment has soared by 47%. Our community colleges are building new skills for a new economy, and a brighter economic future for our entire state.

The University of Maine system enrolls 34,000 students. The vast majority of these are Maine people: your sons and daughters, nieces and nephews, friends and neighbors. Most of these students build their careers in Maine. By focusing on quality education, and pursuing R&D to create private sector jobs, the University has an important impact on Maine’s future.

And the fact is we’ve provided property tax relief to over 200,000 Maine households by doubling the individual Property Tax and Rent Refund Program, and tax relief to all Maine homeowners by increasing the homestead exempt valuation up to $13,000. And we increased the amount of state aid to education by replacing local property tax dollars with $800 million in new state funding and putting spending caps on state, county and local government. But more must be done.

The people of Maine have spoken again and again of our collective need to stop the skyrocketing costs of property taxes.

At the state level, we can – and we must - do something. It must be bold and it must send a strong signal that we cannot continue doing business as usual.

We must support excellence in education; not excess administration.

Maine has twice the number of school district officials per student than the national average. We spend $2,000 more per student than the national average, and pay our teachers $7,000 less.

We can and we will do better.

My plan will reduce the number of superintendents from 152 to 26. Establishing 26 regional centers similar to the technology centers, that now serve the state. We will save a quarter billion dollars in the first three years of operation alone.

With the budget I will be submitting Friday, the State will have met the commitment that the people of Maine voted for – to have the State pay 55% of local education costs.

But this year I am going to insist that the savings available from increased funding be directly passed on to taxpayers for immediate property tax relief. If it’s not guaranteed, I will veto the legislation.

But I believe that’s still not enough.

After listening to thousands of people all over the state, I am insisting that we move forward to freeze property valuations on homes of permanent Maine residents for tax purposes. This must be done to prevent people from being tax valued out of their homes. Permanent Maine residents will have their property tax valuations frozen until such time as they sell their property, then the valuations on that property can and should rise.

This freeze is a vital component of our overall tax and spending priorities.

Of course there will be opposition to this. I expect it. I welcome it.

Change is always threatening but it is time we put the needs of permanent Maine residents ahead of all the special interest groups and ahead of those who benefit from the ever rising property tax burden.

Enough is enough.

Here is where I stand. I ask Maine people to stand with me if they believe, as I do, that we need to look out for year-round permanent Maine residents.

The people of Maine require a bold initiative, and the package I am presenting: reducing state and school administrative costs; fulfilling the promise of state funding of local education to 55%; guaranteeing savings be passed along to residents; and freezing permanent residents’ property valuations for tax purposes – achieves this. We cannot continue the status quo and I won't stand for it!

But we can’t stop there.

We must raise the average income of Mainers to reduce the tax burden, too. It takes both sides of the ledger.

We will raise incomes by making investments in key areas to prepare Maine people for good-paying private sector jobs. I want to thank Karen Gordon Mills for Chairing the Council on Jobs, Innovation and the Economy and jump starting this effort.

Our people can compete anywhere in the world, but we need to build our capacity and our competitive edge in the global marketplace.

We will do this by committing to investments in innovation and research and development that fuel private sector jobs and economic growth.

We will expand Pine Tree Zones enabling companies in Maine to have a level playing field and attract new business to this state.

We will do this by making commitments in education through 50% tuition reimbursement at community college rates for those students who couldn’t afford to on otherwise and who attend a state college or university. We will open the doors to higher education wider than ever before, so students are ready to learn and ready to succeed here in Maine.

We must change the status-quo in Augusta. We must look at things from a different perspective. And tonight I want to challenge Maine people to have the courage to change as well, in your own communities, whether that means partnering with other communities, sharing services, or joint purchasing. We have to use our God-given Yankee ingenuity – something no one else possesses, to accomplish this change.

Maine is truly at a crossroads.

Our people are experiencing the transition from an old economy to a new one. In the past our economy relied heavily on manufacturing to create wealth. Today we are moving to a new focus on innovative products and knowledge-based services. This change has brought pain and dislocation but it also heralds the possibility of a prosperous future for all Mainers.

In this new economy, Maine stands head and shoulders above any state in the nation. Our good people and strong communities, along with our natural beauty and small town character, have become scarce resources in a crowded world. The Maine brand represents quality, pride, integrity, innovation and craftsmanship – things that the world today needs and wants more of. These are Maine’s competitive assets in the new 21st century economy.

If we preserve and enhance these unique assets, if we can develop and attract the kinds of businesses – from biotechnology to alternative energy, from new forest products to specialty foods – it will offer a truly sustainable prosperity.

This means high quality, high paying jobs for our generation and the next. It means a thriving and innovative business climate, so that our young people want to stay here and raise their own families. It means that if we make the right choices, the 21st century is Maine’s century. It means: Our time has come.

God bless Maine, and may her and your spirit together provide the light around the world for a brighter future for all.

January 5, 2007

Statewide Budget Address

Hello. I am Governor John Baldacci. Thank you for joining me tonight. Thank you to the tv and radio stations for carrying this live.

Today I delivered to the Legislature my proposed budget for the next two years. It’s important for you to know how your tax dollars will be spent and the choices that lie ahead for all of us.

By making the right choices for this state we can seize that opportunity and make this century – Maine’s Century.

First and foremost, we need real property tax relief and we need to grow incomes for all of Maine’s people.

More needs to be done to relieve Maine’s property tax burden, but our resources are not unlimited. To do more we must reduce administration at all levels of government including reducing central school administration. We should be about excellence in education; not excess in administration.

The largest single component of the state budget is local education spending. With this budget the State will have met the commitment that you, the people of Maine voted for – fulfilling the promise of state spending on local education to 55%. That represents about $800 million new dollars over a four year phase in.

We need to ensure that money being spent on education is used to support students and teachers in the classroom. In Maine, we spend $2,000 more per pupil than the national average, and pay our teachers $7,000 less. We have 152 superintendents overseeing 290 separate administrative units at a considerable cost. I am proposing – as part of my “Local Schools, Regional Support” initiative, to reduce the number of administrative units to 26.

My Initiative, will: o Keep local schools open! o Boost classroom resources and improve student outcomes. o Enhance local oversight, with more involvement from parents through local advisory boards.

The benefits of Local Schools, Regional Support Initiative are: o A full-time principal for every school. o Increased teacher salaries and increased professional development funds for those teachers. o Major expansion of the laptop initiative so that all students from grades 7-12 will have access to laptops so they can better connect to the global economy. o A 50% tuition reimbursement for students who might not otherwise have been able to afford college at community college rates. o Much of this savings, one hundred seventy million dollars in the first two years of operation alone, will be available for property tax relief.

This plan will achieve the excellence in education we have been striving for in Maine. It will strengthen local involvement in K through 12 education and will open the doors to higher education wider than ever before, so students are ready to learn, and graduate ready to succeed here in Maine.

The second largest component of state spending is in healthcare. MaineCare, Maine’s Medicaid program, costs $1.4 billion over the next two years. Through MaineCare we provide critical access to physical and mental health services for our most vulnerable citizens: nursing home and prescription drugs for our elderly and disabled, and health care services for many of Maine’s children.

In part because of the rural nature of our population, our costs are rising faster than the national average. We must get our health care costs under control, but I am determined that the safety net will not be pulled out from under our most vulnerable citizens.

We must improve our administration, oversight and controls of this program.
The status quo can not continue here. Period! I will demand more savings, I will insist on more savings.

My budget will provide for effective medical management for adults receiving MaineCare, and will transition all other health services to a better management of care so that we’re giving the right care at the right time – care that’s affordable and accessible.

The changes in how we do business will save taxpayers more than $70 million over the next two years. Over time the benefit of these savings will increase.

This budget will also ensure that hospitals are paid more adequately and timely, so costs are not shifted to private companies and individuals. Our doctors and nursing homes will be paid better for the care they provide.

I also had asked the Department of Health and Human Services to reduce administration, and this budget proposes to eliminate a deputy commissioner, a director of special services, as well as streamlining to consolidate 3 offices with other operations.

In order to meet our responsibilities to fully fund education, representing about $200 million new dollars over a six year period; and because of the need to protect healthcare benefits for Maine people, I am recommending a $1 increase in the tobacco tax.

The cigarette tax also addresses a serious public health problem that costs Maine people $554 million each year in direct health care costs. But it’s about more than dollars and cents – it’s about saving lives. In Maine, over 29,000 children alive today will die prematurely from smoking.

Maine has been a leader in education and prevention on tobacco cessation. My budget also provides over $8.5 million for smoking cessation programs through the Fund for a Healthy Maine.

In addition to the administrative savings we have sought in Education and Health and Human Services, my budget continues to streamline other departments of State government.

We have already eliminated 600 state positions and saved 11 million dollars in the last budget cycle.

During the next two years, I will propose the consolidations of two state departments: Economic and Community Development and Professional and Financial Regulation to form one Department of Commerce with a focus on business activity.

As a result of these changes and other reorganizations within State government, we will eliminate several high level administrative positions as well as other administrative staff.

This is part of the continuing effort to change the status quo in Augusta and to deliver quality services in a more affordable way.

With this budget, the State will have met the commitment that the people of Maine voted for – to have the State pay 55% of local education. That equates to $200 million in new state funding that replaces local property tax dollars.

But this year I am going to insist that the savings available from increased funding be directly passed on to taxpayers for immediate property tax relief. If it’s not guaranteed, I will veto the legislation.

But I believe that’s still not enough.

After listening to thousands of people all over the state, I am insisting that we move forward to freeze property valuations on homes of permanent Maine residents for tax purposes. This must be done to prevent people from being tax valued out of their homes.

This freeze is a vital component of our overall tax and spending priorities. It and it alone sends the message that we cannot have business as usual. We need to take a bold step to show all of our people we are serious about their property taxes.

Of course there will be opposition to this. I expect it.

Change is always threatening but it is time we put the needs of permanent Maine residents ahead of all the special interest groups and ahead of those who benefit from the ever rising property tax burden.

Enough is enough.

We need to change the way we do business.

It’s not enough to simply address our high taxes. We’re going to have to address growing our incomes, too. My budget increases access to higher education. We will appropriate $14.4 million to the University of Maine System; $11.7 million to the Maine Community College System; and the Maine Maritime Academy by $2.1 million. Additionally, my budget commits to raising our investments in research and development by $5 million; and in our growth clusters by $8 million. These investments will help to fuel private companies growing private sector jobs in Maine.

Maine is truly at a crossroads.

In this new economy, Maine stands head and shoulders above any state in the nation. Our good people and strong communities, along with our natural beauty and small town character, have become scarce resources in a crowded world. The Maine brand represents quality, pride, integrity, innovation and craftsmanship – things that the world today needs and wants more of. These are Maine’s competitive assets in the new 21st century economy.

This means high quality, high paying jobs for our generation and the next. It means a thriving and innovative business climate, so that our young people want to stay here and raise their own families. It means that if we make the right choices, the 21st century is Maine’s century. It means: Our time has come.

Thank you and goodnight.

May 12, 2007

University of Maine at Presque Isle Graduation

President Zillman, honored guests, graduates and families, thank you for sharing this special day with me.

I would like to recognize Stephen Richard and Joan Benoit Samuelson, who are receiving honorary degrees today.

Stephen sets an amazing example with his commitment to Presque Isle and Aroostook County. For more than three decades, he has helped the people of this community improve their lives.

Joan is a native Mainer who has made her mark as a world-class marathoner. She won the Gold Medal at the 1984 Olympics in Los Angeles. She did it just days after having knee surgery. Joan is an inspirational ambassador for her sport, for physical fitness and for Maine.

It is an honor to be here with all of you to celebrate the Class of 2007.

In a commencement address not unlike this one today, the famous cartoonist and Doonesbury creator Garry Trudeau said: “Commencement speeches were invented largely in the belief that outgoing college students should never be released into the world until they have been properly sedated.”

Given that task, I’m confident that over the next two hours of my speech I can get the job done.

For many of you, the road toward today began four years ago when you entered the University of Maine at Presque Isle as freshmen.

For others -- those on what I call the John Baldacci track -- it might have taken a little longer.

Today, we pay tribute to the work you have completed.

But we also recognize and celebrate the endless opportunities that stretch out before you.

As you sit out there listening – wondering just how long I will actually talk before you receive the degree you have worked so hard for – I want you to know that for you the world is boundless.

No doors are closed. No dreams are out of reach. Everything is possible.

Graduation is as much about what CAN BE and what WILL BE as it is about what has been.

After today, many of you will reach beyond Presque Isle and the places you call home. You will strike out on your own, leaving behind the safe and the comfortable.

Life stretches before you like chapters in a great novel, and it is both scary and exciting to know that all you’ve read so far is the introduction. The best parts are waiting to be discovered.

I know without any doubt that the Class of 2007 will accomplish great things.

You will leave your mark on Maine and on the world. You are destined for great things.

Now I’d like to say a few words to mom and dad, grandma and grandpa and to all the uncles, cousins, nephews and nieces, husbands and wives that are here today.

These graduates have made you proud. But they did not get here by themselves.

Your support has made today possible. When you first read “Go, Dog Go” or “Blueberries for Sal” to your little baby, you were laying the foundation for today.

When you taught your toddler to play by the rules and to be considerate of other people’s feelings, you were laying the foundation for today.

When you convinced them to stick with those music lessons or to study a little harder or try a little more, you were laying the foundation for today.

And when you opened your hearts – and your wallets – to help your kids go off to college, you were laying the foundation for today.

As the humorist Erma Bombeck once said, “Graduation day is tough for adults. They go to the ceremony as parents. They come out as contemporaries. After 22 years of child-raising, they are unemployed.”

The child-raising may be over, but the work of being a parent never ends. You have done a great job. And the proof is sitting right here in cap and gown.

You deserve a round of applause.

As a family, I believe we have two primary responsibilities: To prepare our children for a bright future and to preserve and protect our natural resources for future generations.

Because you have chosen to attend the University of Maine at Presque Isle, I know that you understand the second.

Aroostook County is like few places in the world. Its wilderness and wildness have captured the imagination of poets, and are held dear even by people who have never had the opportunity to visit.

You have gone to school in a unique place, surrounded by natural beauty and by people who understand the importance of community.

It takes a certain hardiness of spirit to live and work in Northern Maine. Nobody makes it on his or her own. Neighbors look out for neighbors, and there’s a real sense that everyone is in it together.

That special sense of place exists all over Maine.

But there’s no guarantee that it will survive the quick pace of change the state is facing. In parts of the state, particularly around our lakes and rivers, along the coast and in Southern Maine, there is tremendous pressure being placed on communities.

The characteristics that set the state apart – that have drawn people from around the world – are in jeopardy.

But it’s not too late to make sure that Maine’s natural beauty and resources are protected.

That’s were you come in. Like no generation before you, you understand the impact that people have on the world.

You recognize the need for conservation and for protecting the environment.

In Maine, we’re doing the difficult work to protect our most valuable assets. We’ve protected the Allagash Wilderness Waterway and fulfilled Governor Baxter’s dream by adding Katahdin Lake to Baxter State Park.

During a time of great upheaval and when great tracts of land have changed hands, Maine has been able to protect hundreds of thousands of acres of land.

We’ve made sure that it’s not only going to be there for you, but also for your kids and grandkids.

And we’re taking steps to combat the single biggest environmental threat facing the planet, climate change.

Maine is part of the Regional Greenhouse Gas Initiative, a partnership between states in the Northeast that will reduce the emissions of the pollution that causes climate change.

We’re also working to promote clean, renewable sources of energy such as wind power. This year Maine reached an important milestone. 100 percent of the power used to run State buildings comes from renewable sources.

It’s all part of our State’s efforts to become energy independent, which is vital for our economic, environmental and physical security.

Maine has been, and continues to be, an environmental leader.

Just this week I signed an executive order that will help our state capitalize on its potential for wind power.

And I support the idea of a wind turbine project right here on the campus of the University of Maine at Presque Isle that would help meet the power needs for the campus.

Maine must be aggressive in pursuing alternative sources of energy.

While the environmental implications are clear, it’s also crucial for our economic health.

In the past, we have been presented with a false choice between having jobs and a clean environment. In this case, you really can have it all.

Don’t take my word for it. Look around the world and you can see it.

In the United Kingdom, the economy has grown by 50 percent, but their emissions of greenhouse gases have gone down. They have committed to wind power and it’s paying dividends – cleaner air and water and new jobs.

The story is similar in Denmark. The economy is growing, but the environment isn’t paying the price.

The same natural resources that paved the way for Maine’s economy in the past can be put to work again today – only this time it will be in pursuit of clean, renewable energy.

We have great potential for more hydro, tidal and wind power, and the resources to become a major center for the production of biofuels.

As we grow this technology, new jobs, good jobs will come with it.

You and your generation will lead the way into this transition and into the new industries that are created.

In recent years, Maine has faced increased pressure from around the world. The world is a much smaller place than it was just a short while ago.

People, money, ideas and goods can move around the world at lightening speed. In today’s information oriented world, old distances and borders fade away.

Rapid globalization has left many communities struggling to adapt. We’ve seen cheep imports take a toll on Maine companies and products.

But for all the challenges of globalization, the interdependence it spawns also creates incredible opportunities. As for our other priority: Making sure that Maine’s kids have a bright future, today’s graduating class proves that we are doing a lot of things right.

You are sitting here today on the verge of a great adventure. You are ready. I expect great things from you.

But, Maine cannot rest on your success. We must continue to push the boundaries.

A good education doesn’t happen by accident. Maine has some of the very best teachers, professors and colleges in the country, but we haven’t always treated them like we should.

If we want the Class of 2012 to be as prepared as the Class of 2007, we have to support our universities and community colleges.

We have to make sure their doors are open to every Maine student, and that they can continue to prepare them for a rapidly changing and exciting world.

That means Maine must do a better job of supporting its institutions of higher learning. We haven’t always done a good job providing our universities and colleges with the financial support they deserve.

We can do better, and I promise that education will remain one of my top priorities for the rest of my time in office.

There’s a quote attributed to Mark Twain that fits perfectly with today’s event: “Twenty years from now,” Twain said, “you will be more disappointed by the things you didn’t do than the ones you did. So throw off the bowlines, sail away from the safe harbor. Catch the trade winds in your sails.”

At times in your life, you will feel the powerful pull of inertia, begging you to stay still, to remain where you are and what you are.

Don’t be satisfied and don’t be afraid.

Great accomplishments sometimes require us to leave the safe and well-worn path. At times, we have to risk failure, embarrassment or rejection.

I will tell you -- as someone who has lived his life in the public eye -- not one of those is a fatal ailment. They only feel like it.

The best ideas often live right outside of our comfort zones. We have to stretch out to reach them.

We have to challenge the status quo and the conventional wisdom. We have to look beyond the moment, and sometimes we have to take a chance.

I’ll leave you with one last thought, from poet Henry David Thoreau, who came to Maine and made the North Woods famous: “Go confidently in the direction of your dreams. Live the life you have imagined.”

Congratulations Class of 2007. Godspeed as you chase your dreams.

January 9, 2008

State of the State Address 2008 Part A

Governor John E. Baldacci State of the State January 9, 2008

Madam President, Mr. Speaker, Madam Chief Justice, members of the Legislature, members of the Cabinet, distinguished guests and my fellow citizens:

We come together tonight as Maine stands on the verge of a new era.

The choices we make in the coming days will help to define who we are as a State, and what we hope to become.

I will not splash varnish on the hard truths before us.

Home heating oil and gasoline prices are at record highs.

Winter, just a few weeks old, has already shown its teeth.

The national economy is struggling under the weight of declining home values.

State revenues are not immune from the national condition and are falling short of expectations by $95 million dollars. We are forced to make hard decisions and set priorities.

And we remain a country at war, with men and women called to duty in far-off and dangerous lands.

Every word I have spoken is the inescapable truth. But there’s more to Maine’s story than those challenges we face.

In the five years since I first addressed you as Governor, much has changed in Maine.

Today I am proud to say that we are better prepared and more able to weather economic storms.

You, my friends, have done much of the hard work. You have not only balanced budgets, and demanded efficiencies. You’ve also come together – often in a spirit of bipartisanship -- to solve problems.

Five years ago, we faced a $1.2 billion dollar budget gap.

Our financial reserves were gone.

The State was borrowing hundreds of millions of dollars just to keep the lights on. Our credit rating was headed down.

Those days are gone – hopefully banished forever.

Today, we have rebuilt our reserves to almost $160 million dollars, and no longer take out payday loans to keep government open.

We have closed that budget gap and by the end of next year we will have invested more than $1 billion new State dollars in local education.

And we have done it all without raising the sales tax or income tax.

I want to repeat that, because it’s something the entire State should be proud of.

We have invested more than $1 billion new dollars in local education, rebuilt our reserves and stopped short-term borrowing.

Standard and Poor’s has raised our financial rating.

All without raising the sales or income tax.

That, my friends, is an accomplishment.

It has put us in a position of strength to deal with a fickle national economy.

Tonight, standing before you and with full knowledge of the challenges we face, I report that the State of this State is strong and determined to meet the future head on.

The revenue downturn we face in the two-year budget is a serious challenge that demands action.

On Dec. 18, I issued an executive order that reduced State spending by $38 million dollars for the rest of this fiscal year.

The Constitution of Maine requires the governor to ensure the State budget is balanced.

Every part of State government was called upon to make recommendations on how to reduce spending while maintaining their core missions.

I understand that these decisions touch real lives.

The cuts were not easy, but we are moving forward in a way that makes sure that we can protect our most vulnerable citizens while also meeting my Constitutional duty.

On that point, according to the Kaiser Foundation, Maine ranks first among the States in Medicaid spending for children, second in Medicaid spending for adults and fifth in Medicaid spending for the disabled.

Overall, according to Kaiser, Maine spends more per Medicaid enrollee than any other State.

So, tomorrow, when I unveil the details of my revisions to the two-year budget I can promise you this:

We will not pull the safety net out from under our most vulnerable citizens.

We will not take from our financial reserves to balance the budget.

And we will not increase taxes.

If we are to have the resources to invest in higher education, economic development and universal health care, we cannot continue to spend millions on systems built in the 1950s.

We must transform government at all levels. We must strengthen it to meet the demands of a new age. And we must prioritize our spending.

Government has an important role to play, but it cannot be all things to all people.

At the same time, beware of quick fixes and people who promise gain without change. They sell a bill of goods layered in promises that cannot be kept.

They say: You can have it all. The decisions aren’t difficult.

We all know that’s not true. The decisions ARE difficult.

We’ve made them and will continue to make them.

Since taking office in 2003, we have reduced the rolls of State government by more than 600 jobs. We have merged two major State departments, eliminating a commissioner, deputy commissioners;

And we have centralized back-office and administrative functions in all State departments. In just the first two years, that saved $11.5 million dollars.

It’s not the stuff of headlines. It’s good government, and it’s done.

Last year, the Legislature passed a truly historic reform of local education.

The new law reduces the number of school administrative units from 290 to 80.

School administrative units: That’s a mouth full. It sounds very government-like, very bureaucratic.

That’s because it is.

And that’s the problem.

Since the early 80s, the number of students in Maine has declined by almost 40,000 and is expected to decline by 20,000 more in the next five years.

During the same time, the number of school administrators has increased by 400.

For 50 years, we have done the same old thing, the same old way, and it hasn’t produced the excellence and results that we need.

It’s not sustainable and drains resources from students and teachers.

Now we are on our way to a new structure that will better serve our people. It will save taxpayers money and provide a better education for our children.

Legislation introduced this year and already approved by the Education Committee will further strengthen the new law.

Even so, the fighting around it has not stopped.

We cannot return to the dysfunction of the past.

In 1937, President Franklin Roosevelt talked about the tendency of government to fall victim to inertia and to retreat from important gains when put under pressure by powerful special interests.

“Shall we pause now and turn our back upon the road that lies ahead?,” he asked. “Shall we call this the promised land? Or, shall we continue on our way?”

As President Roosevelt knew then and the people of Maine know today, progress and growth are in front of us, not in the past.

As President Roosevelt said then, “We will carry on.”

In August, we began a conversation about the way we treat inmates in our prisons and county jails and about the financial hardships created by our current, fragmented system.

It is bad for taxpayers and bad for mentally ill and drug-addicted prisoners who do not get the care they need to break the cycle of crime.

It must change.

Tomorrow I will submit legislation to unify the state prison system with the 15 county jail administrations.

The plan has evolved from when we first began talking about it. We have listened to concerns from counties. And we have made changes to improve our plan.

I would like to say tonight that all the differences between the counties and the State have been resolved. They haven’t.

But I can say that progress has been made. Sheriffs and commissioners have come a long way from the starting point, and so have we. I believe that common ground is still possible.

And I believe a solution exists that will save taxpayer money and improve the treatment of the people in our care.

President Lincoln wrote to Congress in 1862: “The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise with the occasion. As our case is new, so we must think anew and act anew.”

You don’t have to face the deepest crisis in the history of the Republic – as Lincoln did – to understand the necessity of thinking about old problems in new ways.

We live in a complex world that requires government to carry an increasing load. Natural resource and environmental issues demand experts with broad experiences.

In a time of declining revenues and increasing financial pressures in other areas of the budget, we can’t continue funding silos that keep our experts separate and our attentions divided.

It’s been more than 30 years since we developed our approach to the stewardship of Maine’s natural resources.

In those three decades, the world has changed dramatically. There have been amazing advances in science and technology.

And Maine’s natural resource agencies haven’t been allowed to keep up. The structure hasn’t kept up pace with the changing times.

Already, we’ve brought together those agencies’ back-office staffs, accountants and IT experts. We created a single natural resource service center to do all those jobs that aren’t part of the agencies core responsibilities.

That’s done. But we need to do more.

In my budget, I will propose a process that will result in no more than two natural resources agencies, where today we have four.

We will seek efficiencies and combine programs that shouldn’t be separated by bureaucracies.

I know that I don’t have all the answers, but I do believe we can find them together.

The merger process will seek input from those willing to come to the table.

Our goal is to enhance the services provided to natural resource-based businesses; To increase outdoor recreation; And to improve natural resource management.

We need to end the duplication in administration that stands in the way.

Our efforts are not confined to a single area of government. We are looking at government at every level, and we’re looking for improvement.

Earlier this month, Maine selected a private company, Unisys Corporation, a nationally respected company, to fix a troubled part of the Department of Health and Human Services.

For almost three years, we have struggled with a Medicaid computer system that has never lived up to expectations. It’s caused countless headaches and heartaches for Maine businesses and created financial difficulties for the State.

With this work, we will move on to a better way of doing business.

I am also proposing a reorganization of the upper and middle management at Health and Human Services that will give my commissioner the flexibility she needs to run Maine’s largest department.

It will empower frontline workers, reduce from 10 to 6 the number of central offices in the agency and consolidate management at the regional level.

To be successful, you must be able to adapt. We will give them that ability.

But success also depends on innovation.

Maine has led the country on health care reform, an innovation that matters to families and businesses alike.

When the federal government passed a poorly designed Medicare drug benefit that actually hurt some senior citizens in our State, Maine stepped forward to ease the transition.

When the federal government failed to deliver on affordable health care, Maine stepped forward.

We will continue to step forward.

In my budget, we will bring together three of the largest purchasers of health care in the State for a new initiative to save taxpayer money and provide better care to consumers.

The Maine State Employees Health Commission, the University of Maine System and the Maine Education Association will join forces and put their enormous buying power to work to lower prescription drug costs.

This cooperative effort will save money for thousands of workers who need medicine, for taxpayers whose dollars contribute to the system and it will increase the amount of money available to fund health care for retired teachers.

More than 28,000 Mainers have been insured through our Dirigo Health program. We’ve extended coverage to more families and more small businesses, and we’ve done it in a way that has saved millions of dollars in health care spending.

Last year, we were close to taking the next step with Dirigo. This year, we’ll do it.

I will support Legislative efforts to provide meaningful market reform that will make coverage more affordable for individuals.

And I will work with the Legislature to find a new way to fund Dirigo that is less contentious and more sustainable.

I believe health care is a fundamental and basic right. Every man, woman and child should be able to count on receiving the care they need when they need it.

I am very pleased that the Dirigo Health Agency has contracted with a new partner, Harvard Pilgrim Health.

Harvard Pilgrim is a nonprofit health plan that is consistently ranked No. 1 by consumers nationally. The company brings new and important competition to Maine’s health care marketplace.

I’m pleased to welcome Harvard Pilgrim to Maine, and I want to recognize in the gallery the company’s CEO, Charlie Baker. We’re glad you’re here, and we look forward to working with you.

Charlie, I ask you to rise and accept the greetings of the Chamber.

When I think about what matters most to me, and to the people I meet when I travel around the State, it’s not the ins and outs of a particular policy. It’s not the details that we will wring our hands over from now until April.

What matters most is more basic. It’s family and friends.

Tonight, as I speak to you, Maine has 102 members of the National Guard deployed overseas.

Soon, more men and women will be joining them.

This month 130 members of the 126th Aviation Regiment from Bangor will go to Iraq for the second time. These men and women save lives by putting their own at risk; they fly into danger to rescue other soldiers.

Another 16-person team of National Guard Soldiers will also leave this month for Afghanistan to train that country’s military.

They deserve our appreciation; they deserve our support. Please join me in saluting their service and sacrifice by recognizing Major Brian Veneziano, the commander of the 126th.

Please rise and accept the greetings of the Chamber.

These brave men and women want the same things as you and I: A good job with benefits, a college education for their kids, and to know that their families are nearby and secure.

Family is the most important thing.

Yesterday, my wife and I celebrated our 25th anniversary. It has been an amazing journey.

You could not have a first lady more committed to Maine’s children, to education and to the State. She is a tireless advocate for literacy, and promotes Maine wherever she goes.

I’d like to ask Karen to stand and be recognized by the Chamber.

My family’s not that much different than a lot of others in Maine.

We have our family discussions, agreements and disagreements.

But I have never lost sight of what it means to work hard and still struggle to pay the bills.

I have met countless men and women who play by the rules, go to work everyday and still can’t seem to get ahead.

In 1965, President Johnson understood the great divide in our country and spoke about it.

He said: “In a land of great wealth, families must not live in hopeless poverty. In a land rich in harvest, children must not go hungry. In a land of healing miracles, neighbors must not suffer and die unattended.”

If President Johnson were speaking today and lived in Maine, I think he would have added at least one more line:

In a land of technology, science and abundant natural resources, no family should go to bed wondering if their fuel oil will last until morning, worried that they will wake up cold.

I know families and businesses are struggling with high energy costs.

I have talked to the truck drivers and small business owners who are being pushed to the brink.

And I have heard the call for help.

We will answer that call.

My administration began working on this problem when the weather was still warm and before oil topped out at $100 dollar a barrel.

Working with the United Way, Eastern Maine Funders and the Maine Community Action Agencies, the Keep Maine Warm Fund has raised more than $1 million dollars to provide emergency fuel assistance.

The effort is gaining momentum.

I am pleased to announce tonight that LL Bean will be making a contribution of $250,000 to the Keep Maine Warm Fund, joining such organizations as Irving Oil, The Libra Foundation, The Fisher Foundation, Wright Express, Maine Bank and Trust, and TD Banknorth.

I’d like to thank Leon Gorman, LL Bean’s chairman, for his company’s efforts. Please stand Leon, and accept the greetings of the Chamber.

The Fund is an example of Mainers taking care of Mainers.

I know not everyone is able, but I’d ask those of you who can to join the effort to Keep Maine Warm by making a charitable contribution to this very worthy cause.

Working closely with Maine’s Congressional Delegation, we will continue to put pressure on Washington to release funding for energy assistance.

The money’s there; and we need to put it to work.

I have signed an executive order making it easier for companies to make small fuel deliveries to families in need.

I have sought relief for truck drivers devastated by high diesel costs. During this session, I will submit legislation to help safeguard the forest products industry, which has been particularly hard hit and is so important to our rural economy.

We are doing what we can for as many people as we can. And those efforts will not cease.

For too long, our country and our state have been dependent on costly foreign oil.

Eighty percent of Maine’s homes are reliant on oil for heat.

As prices have risen, we have sent billions of dollars out of state to pay for it. Money that otherwise would have remained with the families and businesses in Maine.

We must move forward aggressively to heat our homes with resources we have or can make right here.

We have made great strides in the development of wind energy. We cannot be shy about new projects. We will rewrite the rulebook to make wind power development easier without compromising our environment.

Maine has tremendous potential for wind power. Already $2 billion worth of investments have been approved or are awaiting consideration. And an equal amount is being explored.

Just last week a new project on Stetson Mountain won approval. We can harness the tremendous power of the wind and tides to power our industries and light our homes.

And we are also working closely with Maine’s Native American Tribes to support and promote alternative energy projects.

The future rests within reach, and we must seize it.

Tonight, I am announcing a “Wood-to-Energy Initiative” to bring Maine-made sources of heat to the homes and businesses of Maine.

This partnership will bring together the public and private sectors to explore what is possible and what is practical.

I have asked Maine entrepreneur Les Otten, who is here tonight, to bring together business leaders and our Department of Conservation to lead my Administration’s efforts on a conversion initiative that will use our forests and natural resources to relieve consumption of nonrenewable oil.

As a first step in this Initiative, my Administration will pursue a transition to biofuels such as wood pellets and wood chips.

We will identify those state buildings where conversion to wood pellets, wind or other renewable sources of energy can reduce costs by 30 to 50 percent.

This not only saves money for Maine taxpayers, it generates the investment and business activity to grow Maine’s economy.

The lessons learned from these demonstration projects will be made available to every home owner and business in Maine. As part of this Initiative, we will identify and promote the financial tools to enable Maine homeowners and small businesses to move away from their reliance on costly foreign oil.

We can encourage the alternative energy industry in way that benefits Maine without disadvantaging existing businesses reliant on wood for other products.

We are already working on a collaborative effort with New Brunswick and Nova Scotia that will take stock in our natural resources and develop new technologies and new market opportunities.

We should look to our Canadian neighbors for new partnerships that can reduce the cost of electricity in Maine and help us to better understand the energy potential of our forests.

In this energy crisis, we will develop renewable sources of energy made in Maine, by Maine businesses for Maine people.

I was still a young boy when President Kennedy was elected in 1960. My father served as a delegate for him at the national convention. Kennedy’s words still hold power today.

He said: “The dynamic of democracy is the power and the purpose of the individual, and the policy of this administration is to give to the individual the opportunity to realize his or her own highest possibilities.”

It’s an ideal that helps guide us today.

Through our workforce training initiatives, investments in research and development, and Pine Tree Economic Development Zones, we want to enhance the power of the private sector to create good jobs with good benefits.

Between November 2006 and November 2007, Maine’s economy created 4,400 new jobs despite slow growth in New England and nationally.

Since 2003, Maine’s economy has created more than 24,000 new jobs.

Our incomes have grown.

And we’ve empowered our people to become entrepreneurs.

According to the Kauffman Foundation, Maine ranked in the top five in 2006 for people who, for the first time, started their own new businesses.

This is the spirit of Maine.

In November, voters approved a $55 million dollar investment that will help those entrepreneurs develop new ideas and bring them to the market.

It’s the kind of investment that turns good ideas into good jobs.

This significant infusion of resources would not have been possible without Karen Mills and my Council on Jobs and Innovation, which she led.

Karen, thank you very much for your leadership.

Our people are strong, they are resilient and they should not be underestimated.

Given the chance, they can achieve great things.

I know it, I’ve seen it. There’s evidence of it in every part of Maine.

In Brewer, Cianbro Corporation will be creating hundreds of new manufacturing jobs.

In Lincoln, Millinocket, East Millinocket and Old Town, mills threatened with extinction are alive and successful. People are back to work.

In Belfast, athenahealth, an impressive company, has created 200 new jobs with more to come.

Maine was able to beat out Massachusetts, Rhode Island, New Hampshire, Vermont and New York to attract this company.

When Maine learned that MBNA, a major employer in the State, was merging with Bank of America, there was a lot of pessimism and worry about the future.

And for good reason. There was no secret that MBNA’s workforce would be reduced and that facilities would be closed.

Now, with athenahealth and other new companies, we have successfully put people back to work in former MBNA facilities in Farmington, Portland, Presque Isle, Fort Kent, Rockland and now Belfast.

The jobs that were lost will be grown back. And hope has replaced despair for those communities.

We know we can do it.

But we must redouble our efforts to spur economic development. We cannot be lulled into a posture that sees us only able to lurch from one crisis to the next.

We must be prepared to stop trouble before it arrives at our doorstep.

I’ve asked my economic development Commissioner John Richardson and Maine State Chamber of Commerce President Dana Connors to work with the Legislature to change the way we do business for business.

We can better serve Maine’s business community with a local and regional emphasis and greater co-ordination and partnership.

We need to move our economic development efforts away from Augusta and into the communities and regions where it can do the most good.

The State’s top economic development priority should be to provide them with the support, resources and vision to help them accomplish their goals.

We all understand the Maine economy is in a time of dramatic, even historic, change.

And we all understand that our future economic success will be built upon the foundation of our people and the special qualities that define our neighborhoods, towns and our state.

People are drawn to Maine. We have what they’re looking for and what’s missing from their everyday lives.

Look at tourism, one of the bedrocks of Maine’s economy.

Last year alone, almost 42 million people visited our State.

They come for our natural beauty, our people and our vibrant historical and cultural sites.

Last year, voters showed that they understand that. They approved significant investments in conservation and in our environment. Soon, that money will be put to work.

Economic prosperity demands that we invest in our workforce, in our open landscapes, and in our historic downtowns.

Even now, we cannot become so focused on today that we sacrifice the investments that will make us stronger tomorrow.

When I visit places like Lewiston and Auburn, Biddeford and Saco and Waterville, I see the enormous potential for redevelopment. The Hathaway Creative Center in Waterville is a prime example of what is possible.

Tom Niemann is here tonight. Thank you very much.

That’s why I am supporting an historic rehabilitation tax credit. For a modest investment, we can attract millions of dollars worth of growth, which will bring new jobs, new revenues, affordable housing and new life to our cities and towns.

It’s my goal that children start school ready to learn, and graduate from college ready and able to succeed here in Maine.

Early childhood was the heart of my economic Summit held in November. More than 200 Maine business and community leaders came together to understand the positive economic returns from early childhood investments.

I will continue to work with those Mainers to transform the Children's Cabinet Task Force on Early Childhood into a Children's Growth Council.

We can propel the powerful momentum of the Summit into our communities.

Through the power of community, we can create a legacy for our children.

Not long ago, Maine lost one of our most generous and inspiring leaders – speaking of children - Harold Alfond, the man who built Dexter Shoe.

It’s impossible to estimate Harold’s impact on Maine. He has touched so many lives and so many communities with his leadership and his philanthropy.

Harold challenged us all to do more, to build partnerships and to overcome hurdles.

Harold didn’t go to college, but he recognized early on that the days of making a good living with just a high school diploma were disappearing.

But Harold wasn’t blind to life’s hard realities. For some families, the promise of college is financially out of reach.

With the Alfond College Challenge that he established, the dream is a little closer.

The Challenge provides a $500 dollar education grant to every child born in Maine that will help them start a college savings account.

It began last week in Augusta and will expand statewide in 2009. And no, you don’t have to name your first child Harold.

Working through the Finance Authority of Maine and in cooperation with Maine’s hospitals, families in this State will have been given a head start on higher education.

In his book, Harold wrote that he hoped to retire 10 years after he passed away. He was serious and Maine will be a much better place because of it.

Harold’s son, Bill Alfond, and his wife, is in the gallery tonight. Please stand and be recognized by the Chamber.

Last year, the Legislature overwhelmingly approved Opportunity Maine, a tax credit program that will help students overcome college debt if they live and work in the State after graduation.

With these tax credits, we will keep more of our home-grown graduates here, and open the door of opportunity for the next generation of Maine entrepreneurs and leaders.

My friends, I am filled with hope. We are taking the steps necessary to grow our economy and improve the lives of the people of Maine.

We are streamlining government and cutting administration.

And we’re controlling spending.

We are investing in education and innovation so our children and families can succeed here in our state.

We are helping increase incomes by creating good jobs with good benefits.

That’s the roadmap that gets Maine where it needs to be.

This year, the Legislature will be called upon to take bold action, to protect the gains that have been made and to push forward on the reforms that will guide State government into the future.

We must ask ourselves: What do we want State government to do? What is fundamental to the health and welfare of our people?

We cannot be content with a legacy of work undone.

We owe it to our children, and we owe it to our State.

That is our task. That is our duty.

God Bless you and God Bless the State of Maine.

Thank you.

Good night.

State of the State Address Part A

January 9, 2008

State of the State Address 2008 Part B

Governor John E. Baldacci State of the State January 9, 2008

Madam President, Mr. Speaker, Madam Chief Justice, members of the Legislature, members of the Cabinet, distinguished guests and my fellow citizens:

We come together tonight as Maine stands on the verge of a new era.

The choices we make in the coming days will help to define who we are as a State, and what we hope to become.

I will not splash varnish on the hard truths before us.

Home heating oil and gasoline prices are at record highs.

Winter, just a few weeks old, has already shown its teeth.

The national economy is struggling under the weight of declining home values.

State revenues are not immune from the national condition and are falling short of expectations by $95 million dollars. We are forced to make hard decisions and set priorities.

And we remain a country at war, with men and women called to duty in far-off and dangerous lands.

Every word I have spoken is the inescapable truth. But there’s more to Maine’s story than those challenges we face.

In the five years since I first addressed you as Governor, much has changed in Maine.

Today I am proud to say that we are better prepared and more able to weather economic storms.

You, my friends, have done much of the hard work. You have not only balanced budgets, and demanded efficiencies. You’ve also come together – often in a spirit of bipartisanship -- to solve problems.

Five years ago, we faced a $1.2 billion dollar budget gap.

Our financial reserves were gone.

The State was borrowing hundreds of millions of dollars just to keep the lights on. Our credit rating was headed down.

Those days are gone – hopefully banished forever.

Today, we have rebuilt our reserves to almost $160 million dollars, and no longer take out payday loans to keep government open.

We have closed that budget gap and by the end of next year we will have invested more than $1 billion new State dollars in local education.

And we have done it all without raising the sales tax or income tax.

I want to repeat that, because it’s something the entire State should be proud of.

We have invested more than $1 billion new dollars in local education, rebuilt our reserves and stopped short-term borrowing.

Standard and Poor’s has raised our financial rating.

All without raising the sales or income tax.

That, my friends, is an accomplishment.

It has put us in a position of strength to deal with a fickle national economy.

Tonight, standing before you and with full knowledge of the challenges we face, I report that the State of this State is strong and determined to meet the future head on.

The revenue downturn we face in the two-year budget is a serious challenge that demands action.

On Dec. 18, I issued an executive order that reduced State spending by $38 million dollars for the rest of this fiscal year.

The Constitution of Maine requires the governor to ensure the State budget is balanced.

Every part of State government was called upon to make recommendations on how to reduce spending while maintaining their core missions.

I understand that these decisions touch real lives.

The cuts were not easy, but we are moving forward in a way that makes sure that we can protect our most vulnerable citizens while also meeting my Constitutional duty.

On that point, according to the Kaiser Foundation, Maine ranks first among the States in Medicaid spending for children, second in Medicaid spending for adults and fifth in Medicaid spending for the disabled.

Overall, according to Kaiser, Maine spends more per Medicaid enrollee than any other State.

So, tomorrow, when I unveil the details of my revisions to the two-year budget I can promise you this:

We will not pull the safety net out from under our most vulnerable citizens.

We will not take from our financial reserves to balance the budget.

And we will not increase taxes.

If we are to have the resources to invest in higher education, economic development and universal health care, we cannot continue to spend millions on systems built in the 1950s.

We must transform government at all levels. We must strengthen it to meet the demands of a new age. And we must prioritize our spending.

Government has an important role to play, but it cannot be all things to all people.

At the same time, beware of quick fixes and people who promise gain without change. They sell a bill of goods layered in promises that cannot be kept.

They say: You can have it all. The decisions aren’t difficult.

We all know that’s not true. The decisions ARE difficult.

We’ve made them and will continue to make them.

Since taking office in 2003, we have reduced the rolls of State government by more than 600 jobs. We have merged two major State departments, eliminating a commissioner, deputy commissioners;

And we have centralized back-office and administrative functions in all State departments. In just the first two years, that saved $11.5 million dollars.

It’s not the stuff of headlines. It’s good government, and it’s done.

Last year, the Legislature passed a truly historic reform of local education.

The new law reduces the number of school administrative units from 290 to 80.

School administrative units: That’s a mouth full. It sounds very government-like, very bureaucratic.

That’s because it is.

And that’s the problem.

Since the early 80s, the number of students in Maine has declined by almost 40,000 and is expected to decline by 20,000 more in the next five years.

During the same time, the number of school administrators has increased by 400.

For 50 years, we have done the same old thing, the same old way, and it hasn’t produced the excellence and results that we need.

It’s not sustainable and drains resources from students and teachers.

Now we are on our way to a new structure that will better serve our people. It will save taxpayers money and provide a better education for our children.

Legislation introduced this year and already approved by the Education Committee will further strengthen the new law.

Even so, the fighting around it has not stopped.

We cannot return to the dysfunction of the past.

In 1937, President Franklin Roosevelt talked about the tendency of government to fall victim to inertia and to retreat from important gains when put under pressure by powerful special interests.

“Shall we pause now and turn our back upon the road that lies ahead?,” he asked. “Shall we call this the promised land? Or, shall we continue on our way?”

As President Roosevelt knew then and the people of Maine know today, progress and growth are in front of us, not in the past.

As President Roosevelt said then, “We will carry on.”

In August, we began a conversation about the way we treat inmates in our prisons and county jails and about the financial hardships created by our current, fragmented system.

It is bad for taxpayers and bad for mentally ill and drug-addicted prisoners who do not get the care they need to break the cycle of crime.

It must change.

Tomorrow I will submit legislation to unify the state prison system with the 15 county jail administrations.

The plan has evolved from when we first began talking about it. We have listened to concerns from counties. And we have made changes to improve our plan.

I would like to say tonight that all the differences between the counties and the State have been resolved. They haven’t.

But I can say that progress has been made. Sheriffs and commissioners have come a long way from the starting point, and so have we. I believe that common ground is still possible.

And I believe a solution exists that will save taxpayer money and improve the treatment of the people in our care.

President Lincoln wrote to Congress in 1862: “The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise with the occasion. As our case is new, so we must think anew and act anew.”

You don’t have to face the deepest crisis in the history of the Republic – as Lincoln did – to understand the necessity of thinking about old problems in new ways.

We live in a complex world that requires government to carry an increasing load. Natural resource and environmental issues demand experts with broad experiences.

In a time of declining revenues and increasing financial pressures in other areas of the budget, we can’t continue funding silos that keep our experts separate and our attentions divided.

It’s been more than 30 years since we developed our approach to the stewardship of Maine’s natural resources.

In those three decades, the world has changed dramatically. There have been amazing advances in science and technology.

And Maine’s natural resource agencies haven’t been allowed to keep up. The structure hasn’t kept up pace with the changing times.

Already, we’ve brought together those agencies’ back-office staffs, accountants and IT experts. We created a single natural resource service center to do all those jobs that aren’t part of the agencies core responsibilities.

That’s done. But we need to do more.

In my budget, I will propose a process that will result in no more than two natural resources agencies, where today we have four.

We will seek efficiencies and combine programs that shouldn’t be separated by bureaucracies.

I know that I don’t have all the answers, but I do believe we can find them together.

The merger process will seek input from those willing to come to the table.

Our goal is to enhance the services provided to natural resource-based businesses; To increase outdoor recreation; And to improve natural resource management.

We need to end the duplication in administration that stands in the way.

Our efforts are not confined to a single area of government. We are looking at government at every level, and we’re looking for improvement.

Earlier this month, Maine selected a private company, Unisys Corporation, a nationally respected company, to fix a troubled part of the Department of Health and Human Services.

For almost three years, we have struggled with a Medicaid computer system that has never lived up to expectations. It’s caused countless headaches and heartaches for Maine businesses and created financial difficulties for the State.

With this work, we will move on to a better way of doing business.

I am also proposing a reorganization of the upper and middle management at Health and Human Services that will give my commissioner the flexibility she needs to run Maine’s largest department.

It will empower frontline workers, reduce from 10 to 6 the number of central offices in the agency and consolidate management at the regional level.

To be successful, you must be able to adapt. We will give them that ability.

But success also depends on innovation.

Maine has led the country on health care reform, an innovation that matters to families and businesses alike.

When the federal government passed a poorly designed Medicare drug benefit that actually hurt some senior citizens in our State, Maine stepped forward to ease the transition.

When the federal government failed to deliver on affordable health care, Maine stepped forward.

We will continue to step forward.

In my budget, we will bring together three of the largest purchasers of health care in the State for a new initiative to save taxpayer money and provide better care to consumers.

The Maine State Employees Health Commission, the University of Maine System and the Maine Education Association will join forces and put their enormous buying power to work to lower prescription drug costs.

This cooperative effort will save money for thousands of workers who need medicine, for taxpayers whose dollars contribute to the system and it will increase the amount of money available to fund health care for retired teachers.

More than 28,000 Mainers have been insured through our Dirigo Health program. We’ve extended coverage to more families and more small businesses, and we’ve done it in a way that has saved millions of dollars in health care spending.

Last year, we were close to taking the next step with Dirigo. This year, we’ll do it.

I will support Legislative efforts to provide meaningful market reform that will make coverage more affordable for individuals.

And I will work with the Legislature to find a new way to fund Dirigo that is less contentious and more sustainable.

I believe health care is a fundamental and basic right. Every man, woman and child should be able to count on receiving the care they need when they need it.

I am very pleased that the Dirigo Health Agency has contracted with a new partner, Harvard Pilgrim Health.

Harvard Pilgrim is a nonprofit health plan that is consistently ranked No. 1 by consumers nationally. The company brings new and important competition to Maine’s health care marketplace.

I’m pleased to welcome Harvard Pilgrim to Maine, and I want to recognize in the gallery the company’s CEO, Charlie Baker. We’re glad you’re here, and we look forward to working with you.

Charlie, I ask you to rise and accept the greetings of the Chamber.

When I think about what matters most to me, and to the people I meet when I travel around the State, it’s not the ins and outs of a particular policy. It’s not the details that we will wring our hands over from now until April.

What matters most is more basic. It’s family and friends.

Tonight, as I speak to you, Maine has 102 members of the National Guard deployed overseas.

Soon, more men and women will be joining them.

This month 130 members of the 126th Aviation Regiment from Bangor will go to Iraq for the second time. These men and women save lives by putting their own at risk; they fly into danger to rescue other soldiers.

Another 16-person team of National Guard Soldiers will also leave this month for Afghanistan to train that country’s military.

They deserve our appreciation; they deserve our support. Please join me in saluting their service and sacrifice by recognizing Major Brian Veneziano, the commander of the 126th.

Please rise and accept the greetings of the Chamber.

These brave men and women want the same things as you and I: A good job with benefits, a college education for their kids, and to know that their families are nearby and secure.

Family is the most important thing.

Yesterday, my wife and I celebrated our 25th anniversary. It has been an amazing journey.

You could not have a first lady more committed to Maine’s children, to education and to the State. She is a tireless advocate for literacy, and promotes Maine wherever she goes.

I’d like to ask Karen to stand and be recognized by the Chamber.

My family’s not that much different than a lot of others in Maine.

We have our family discussions, agreements and disagreements.

But I have never lost sight of what it means to work hard and still struggle to pay the bills.

I have met countless men and women who play by the rules, go to work everyday and still can’t seem to get ahead.

In 1965, President Johnson understood the great divide in our country and spoke about it.

He said: “In a land of great wealth, families must not live in hopeless poverty. In a land rich in harvest, children must not go hungry. In a land of healing miracles, neighbors must not suffer and die unattended.”

If President Johnson were speaking today and lived in Maine, I think he would have added at least one more line:

In a land of technology, science and abundant natural resources, no family should go to bed wondering if their fuel oil will last until morning, worried that they will wake up cold.

I know families and businesses are struggling with high energy costs.

I have talked to the truck drivers and small business owners who are being pushed to the brink.

And I have heard the call for help.

We will answer that call.

My administration began working on this problem when the weather was still warm and before oil topped out at $100 dollar a barrel.

Working with the United Way, Eastern Maine Funders and the Maine Community Action Agencies, the Keep Maine Warm Fund has raised more than $1 million dollars to provide emergency fuel assistance.

The effort is gaining momentum.

I am pleased to announce tonight that LL Bean will be making a contribution of $250,000 to the Keep Maine Warm Fund, joining such organizations as Irving Oil, The Libra Foundation, The Fisher Foundation, Wright Express, Maine Bank and Trust, and TD Banknorth.

I’d like to thank Leon Gorman, LL Bean’s chairman, for his company’s efforts. Please stand Leon, and accept the greetings of the Chamber.

The Fund is an example of Mainers taking care of Mainers.

I know not everyone is able, but I’d ask those of you who can to join the effort to Keep Maine Warm by making a charitable contribution to this very worthy cause.

Working closely with Maine’s Congressional Delegation, we will continue to put pressure on Washington to release funding for energy assistance.

The money’s there; and we need to put it to work.

I have signed an executive order making it easier for companies to make small fuel deliveries to families in need.

I have sought relief for truck drivers devastated by high diesel costs. During this session, I will submit legislation to help safeguard the forest products industry, which has been particularly hard hit and is so important to our rural economy.

We are doing what we can for as many people as we can. And those efforts will not cease.

For too long, our country and our state have been dependent on costly foreign oil.

Eighty percent of Maine’s homes are reliant on oil for heat.

As prices have risen, we have sent billions of dollars out of state to pay for it. Money that otherwise would have remained with the families and businesses in Maine.

We must move forward aggressively to heat our homes with resources we have or can make right here.

We have made great strides in the development of wind energy. We cannot be shy about new projects. We will rewrite the rulebook to make wind power development easier without compromising our environment.

Maine has tremendous potential for wind power. Already $2 billion worth of investments have been approved or are awaiting consideration. And an equal amount is being explored.

Just last week a new project on Stetson Mountain won approval. We can harness the tremendous power of the wind and tides to power our industries and light our homes.

And we are also working closely with Maine’s Native American Tribes to support and promote alternative energy projects.

The future rests within reach, and we must seize it.

Tonight, I am announcing a “Wood-to-Energy Initiative” to bring Maine-made sources of heat to the homes and businesses of Maine.

This partnership will bring together the public and private sectors to explore what is possible and what is practical.

I have asked Maine entrepreneur Les Otten, who is here tonight, to bring together business leaders and our Department of Conservation to lead my Administration’s efforts on a conversion initiative that will use our forests and natural resources to relieve consumption of nonrenewable oil.

As a first step in this Initiative, my Administration will pursue a transition to biofuels such as wood pellets and wood chips.

We will identify those state buildings where conversion to wood pellets, wind or other renewable sources of energy can reduce costs by 30 to 50 percent.

This not only saves money for Maine taxpayers, it generates the investment and business activity to grow Maine’s economy.

The lessons learned from these demonstration projects will be made available to every home owner and business in Maine. As part of this Initiative, we will identify and promote the financial tools to enable Maine homeowners and small businesses to move away from their reliance on costly foreign oil.

We can encourage the alternative energy industry in way that benefits Maine without disadvantaging existing businesses reliant on wood for other products.

We are already working on a collaborative effort with New Brunswick and Nova Scotia that will take stock in our natural resources and develop new technologies and new market opportunities.

We should look to our Canadian neighbors for new partnerships that can reduce the cost of electricity in Maine and help us to better understand the energy potential of our forests.

In this energy crisis, we will develop renewable sources of energy made in Maine, by Maine businesses for Maine people.

I was still a young boy when President Kennedy was elected in 1960. My father served as a delegate for him at the national convention. Kennedy’s words still hold power today.

He said: “The dynamic of democracy is the power and the purpose of the individual, and the policy of this administration is to give to the individual the opportunity to realize his or her own highest possibilities.”

It’s an ideal that helps guide us today.

Through our workforce training initiatives, investments in research and development, and Pine Tree Economic Development Zones, we want to enhance the power of the private sector to create good jobs with good benefits.

Between November 2006 and November 2007, Maine’s economy created 4,400 new jobs despite slow growth in New England and nationally.

Since 2003, Maine’s economy has created more than 24,000 new jobs.

Our incomes have grown.

And we’ve empowered our people to become entrepreneurs.

According to the Kauffman Foundation, Maine ranked in the top five in 2006 for people who, for the first time, started their own new businesses.

This is the spirit of Maine.

In November, voters approved a $55 million dollar investment that will help those entrepreneurs develop new ideas and bring them to the market.

It’s the kind of investment that turns good ideas into good jobs.

This significant infusion of resources would not have been possible without Karen Mills and my Council on Jobs and Innovation, which she led.

Karen, thank you very much for your leadership.

Our people are strong, they are resilient and they should not be underestimated.

Given the chance, they can achieve great things.

I know it, I’ve seen it. There’s evidence of it in every part of Maine.

In Brewer, Cianbro Corporation will be creating hundreds of new manufacturing jobs.

In Lincoln, Millinocket, East Millinocket and Old Town, mills threatened with extinction are alive and successful. People are back to work.

In Belfast, athenahealth, an impressive company, has created 200 new jobs with more to come.

Maine was able to beat out Massachusetts, Rhode Island, New Hampshire, Vermont and New York to attract this company.

When Maine learned that MBNA, a major employer in the State, was merging with Bank of America, there was a lot of pessimism and worry about the future.

And for good reason. There was no secret that MBNA’s workforce would be reduced and that facilities would be closed.

Now, with athenahealth and other new companies, we have successfully put people back to work in former MBNA facilities in Farmington, Portland, Presque Isle, Fort Kent, Rockland and now Belfast.

The jobs that were lost will be grown back. And hope has replaced despair for those communities.

We know we can do it.

But we must redouble our efforts to spur economic development. We cannot be lulled into a posture that sees us only able to lurch from one crisis to the next.

We must be prepared to stop trouble before it arrives at our doorstep.

I’ve asked my economic development Commissioner John Richardson and Maine State Chamber of Commerce President Dana Connors to work with the Legislature to change the way we do business for business.

We can better serve Maine’s business community with a local and regional emphasis and greater co-ordination and partnership.

We need to move our economic development efforts away from Augusta and into the communities and regions where it can do the most good.

The State’s top economic development priority should be to provide them with the support, resources and vision to help them accomplish their goals.

We all understand the Maine economy is in a time of dramatic, even historic, change.

And we all understand that our future economic success will be built upon the foundation of our people and the special qualities that define our neighborhoods, towns and our state.

People are drawn to Maine. We have what they’re looking for and what’s missing from their everyday lives.

Look at tourism, one of the bedrocks of Maine’s economy.

Last year alone, almost 42 million people visited our State.

They come for our natural beauty, our people and our vibrant historical and cultural sites.

Last year, voters showed that they understand that. They approved significant investments in conservation and in our environment. Soon, that money will be put to work.

Economic prosperity demands that we invest in our workforce, in our open landscapes, and in our historic downtowns.

Even now, we cannot become so focused on today that we sacrifice the investments that will make us stronger tomorrow.

When I visit places like Lewiston and Auburn, Biddeford and Saco and Waterville, I see the enormous potential for redevelopment. The Hathaway Creative Center in Waterville is a prime example of what is possible.

Tom Niemann is here tonight. Thank you very much.

That’s why I am supporting an historic rehabilitation tax credit. For a modest investment, we can attract millions of dollars worth of growth, which will bring new jobs, new revenues, affordable housing and new life to our cities and towns.

It’s my goal that children start school ready to learn, and graduate from college ready and able to succeed here in Maine.

Early childhood was the heart of my economic Summit held in November. More than 200 Maine business and community leaders came together to understand the positive economic returns from early childhood investments.

I will continue to work with those Mainers to transform the Children's Cabinet Task Force on Early Childhood into a Children's Growth Council.

We can propel the powerful momentum of the Summit into our communities.

Through the power of community, we can create a legacy for our children.

Not long ago, Maine lost one of our most generous and inspiring leaders – speaking of children - Harold Alfond, the man who built Dexter Shoe.

It’s impossible to estimate Harold’s impact on Maine. He has touched so many lives and so many communities with his leadership and his philanthropy.

Harold challenged us all to do more, to build partnerships and to overcome hurdles.

Harold didn’t go to college, but he recognized early on that the days of making a good living with just a high school diploma were disappearing.

But Harold wasn’t blind to life’s hard realities. For some families, the promise of college is financially out of reach.

With the Alfond College Challenge that he established, the dream is a little closer.

The Challenge provides a $500 dollar education grant to every child born in Maine that will help them start a college savings account.

It began last week in Augusta and will expand statewide in 2009. And no, you don’t have to name your first child Harold.

Working through the Finance Authority of Maine and in cooperation with Maine’s hospitals, families in this State will have been given a head start on higher education.

In his book, Harold wrote that he hoped to retire 10 years after he passed away. He was serious and Maine will be a much better place because of it.

Harold’s son, Bill Alfond, and his wife, is in the gallery tonight. Please stand and be recognized by the Chamber.

Last year, the Legislature overwhelmingly approved Opportunity Maine, a tax credit program that will help students overcome college debt if they live and work in the State after graduation.

With these tax credits, we will keep more of our home-grown graduates here, and open the door of opportunity for the next generation of Maine entrepreneurs and leaders.

My friends, I am filled with hope. We are taking the steps necessary to grow our economy and improve the lives of the people of Maine.

We are streamlining government and cutting administration.

And we’re controlling spending.

We are investing in education and innovation so our children and families can succeed here in our state.

We are helping increase incomes by creating good jobs with good benefits.

That’s the roadmap that gets Maine where it needs to be.

This year, the Legislature will be called upon to take bold action, to protect the gains that have been made and to push forward on the reforms that will guide State government into the future.

We must ask ourselves: What do we want State government to do? What is fundamental to the health and welfare of our people?

We cannot be content with a legacy of work undone.

We owe it to our children, and we owe it to our State.

That is our task. That is our duty.

God Bless you and God Bless the State of Maine.

Thank you.

Good night.

State of the State Address 2008 Part B

January 9, 2008

State of the State Address 2008 Part C

Governor John E. Baldacci State of the State January 9, 2008

Madam President, Mr. Speaker, Madam Chief Justice, members of the Legislature, members of the Cabinet, distinguished guests and my fellow citizens:

We come together tonight as Maine stands on the verge of a new era.

The choices we make in the coming days will help to define who we are as a State, and what we hope to become.

I will not splash varnish on the hard truths before us.

Home heating oil and gasoline prices are at record highs.

Winter, just a few weeks old, has already shown its teeth.

The national economy is struggling under the weight of declining home values.

State revenues are not immune from the national condition and are falling short of expectations by $95 million dollars. We are forced to make hard decisions and set priorities.

And we remain a country at war, with men and women called to duty in far-off and dangerous lands.

Every word I have spoken is the inescapable truth. But there’s more to Maine’s story than those challenges we face.

In the five years since I first addressed you as Governor, much has changed in Maine.

Today I am proud to say that we are better prepared and more able to weather economic storms.

You, my friends, have done much of the hard work. You have not only balanced budgets, and demanded efficiencies. You’ve also come together – often in a spirit of bipartisanship -- to solve problems.

Five years ago, we faced a $1.2 billion dollar budget gap.

Our financial reserves were gone.

The State was borrowing hundreds of millions of dollars just to keep the lights on. Our credit rating was headed down.

Those days are gone – hopefully banished forever.

Today, we have rebuilt our reserves to almost $160 million dollars, and no longer take out payday loans to keep government open.

We have closed that budget gap and by the end of next year we will have invested more than $1 billion new State dollars in local education.

And we have done it all without raising the sales tax or income tax.

I want to repeat that, because it’s something the entire State should be proud of.

We have invested more than $1 billion new dollars in local education, rebuilt our reserves and stopped short-term borrowing.

Standard and Poor’s has raised our financial rating.

All without raising the sales or income tax.

That, my friends, is an accomplishment.

It has put us in a position of strength to deal with a fickle national economy.

Tonight, standing before you and with full knowledge of the challenges we face, I report that the State of this State is strong and determined to meet the future head on.

The revenue downturn we face in the two-year budget is a serious challenge that demands action.

On Dec. 18, I issued an executive order that reduced State spending by $38 million dollars for the rest of this fiscal year.

The Constitution of Maine requires the governor to ensure the State budget is balanced.

Every part of State government was called upon to make recommendations on how to reduce spending while maintaining their core missions.

I understand that these decisions touch real lives.

The cuts were not easy, but we are moving forward in a way that makes sure that we can protect our most vulnerable citizens while also meeting my Constitutional duty.

On that point, according to the Kaiser Foundation, Maine ranks first among the States in Medicaid spending for children, second in Medicaid spending for adults and fifth in Medicaid spending for the disabled.

Overall, according to Kaiser, Maine spends more per Medicaid enrollee than any other State.

So, tomorrow, when I unveil the details of my revisions to the two-year budget I can promise you this:

We will not pull the safety net out from under our most vulnerable citizens.

We will not take from our financial reserves to balance the budget.

And we will not increase taxes.

If we are to have the resources to invest in higher education, economic development and universal health care, we cannot continue to spend millions on systems built in the 1950s.

We must transform government at all levels. We must strengthen it to meet the demands of a new age. And we must prioritize our spending.

Government has an important role to play, but it cannot be all things to all people.

At the same time, beware of quick fixes and people who promise gain without change. They sell a bill of goods layered in promises that cannot be kept.

They say: You can have it all. The decisions aren’t difficult.

We all know that’s not true. The decisions ARE difficult.

We’ve made them and will continue to make them.

Since taking office in 2003, we have reduced the rolls of State government by more than 600 jobs. We have merged two major State departments, eliminating a commissioner, deputy commissioners;

And we have centralized back-office and administrative functions in all State departments. In just the first two years, that saved $11.5 million dollars.

It’s not the stuff of headlines. It’s good government, and it’s done.

Last year, the Legislature passed a truly historic reform of local education.

The new law reduces the number of school administrative units from 290 to 80.

School administrative units: That’s a mouth full. It sounds very government-like, very bureaucratic.

That’s because it is.

And that’s the problem.

Since the early 80s, the number of students in Maine has declined by almost 40,000 and is expected to decline by 20,000 more in the next five years.

During the same time, the number of school administrators has increased by 400.

For 50 years, we have done the same old thing, the same old way, and it hasn’t produced the excellence and results that we need.

It’s not sustainable and drains resources from students and teachers.

Now we are on our way to a new structure that will better serve our people. It will save taxpayers money and provide a better education for our children.

Legislation introduced this year and already approved by the Education Committee will further strengthen the new law.

Even so, the fighting around it has not stopped.

We cannot return to the dysfunction of the past.

In 1937, President Franklin Roosevelt talked about the tendency of government to fall victim to inertia and to retreat from important gains when put under pressure by powerful special interests.

“Shall we pause now and turn our back upon the road that lies ahead?,” he asked. “Shall we call this the promised land? Or, shall we continue on our way?”

As President Roosevelt knew then and the people of Maine know today, progress and growth are in front of us, not in the past.

As President Roosevelt said then, “We will carry on.”

In August, we began a conversation about the way we treat inmates in our prisons and county jails and about the financial hardships created by our current, fragmented system.

It is bad for taxpayers and bad for mentally ill and drug-addicted prisoners who do not get the care they need to break the cycle of crime.

It must change.

Tomorrow I will submit legislation to unify the state prison system with the 15 county jail administrations.

The plan has evolved from when we first began talking about it. We have listened to concerns from counties. And we have made changes to improve our plan.

I would like to say tonight that all the differences between the counties and the State have been resolved. They haven’t.

But I can say that progress has been made. Sheriffs and commissioners have come a long way from the starting point, and so have we. I believe that common ground is still possible.

And I believe a solution exists that will save taxpayer money and improve the treatment of the people in our care.

President Lincoln wrote to Congress in 1862: “The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise with the occasion. As our case is new, so we must think anew and act anew.”

You don’t have to face the deepest crisis in the history of the Republic – as Lincoln did – to understand the necessity of thinking about old problems in new ways.

We live in a complex world that requires government to carry an increasing load. Natural resource and environmental issues demand experts with broad experiences.

In a time of declining revenues and increasing financial pressures in other areas of the budget, we can’t continue funding silos that keep our experts separate and our attentions divided.

It’s been more than 30 years since we developed our approach to the stewardship of Maine’s natural resources.

In those three decades, the world has changed dramatically. There have been amazing advances in science and technology.

And Maine’s natural resource agencies haven’t been allowed to keep up. The structure hasn’t kept up pace with the changing times.

Already, we’ve brought together those agencies’ back-office staffs, accountants and IT experts. We created a single natural resource service center to do all those jobs that aren’t part of the agencies core responsibilities.

That’s done. But we need to do more.

In my budget, I will propose a process that will result in no more than two natural resources agencies, where today we have four.

We will seek efficiencies and combine programs that shouldn’t be separated by bureaucracies.

I know that I don’t have all the answers, but I do believe we can find them together.

The merger process will seek input from those willing to come to the table.

Our goal is to enhance the services provided to natural resource-based businesses; To increase outdoor recreation; And to improve natural resource management.

We need to end the duplication in administration that stands in the way.

Our efforts are not confined to a single area of government. We are looking at government at every level, and we’re looking for improvement.

Earlier this month, Maine selected a private company, Unisys Corporation, a nationally respected company, to fix a troubled part of the Department of Health and Human Services.

For almost three years, we have struggled with a Medicaid computer system that has never lived up to expectations. It’s caused countless headaches and heartaches for Maine businesses and created financial difficulties for the State.

With this work, we will move on to a better way of doing business.

I am also proposing a reorganization of the upper and middle management at Health and Human Services that will give my commissioner the flexibility she needs to run Maine’s largest department.

It will empower frontline workers, reduce from 10 to 6 the number of central offices in the agency and consolidate management at the regional level.

To be successful, you must be able to adapt. We will give them that ability.

But success also depends on innovation.

Maine has led the country on health care reform, an innovation that matters to families and businesses alike.

When the federal government passed a poorly designed Medicare drug benefit that actually hurt some senior citizens in our State, Maine stepped forward to ease the transition.

When the federal government failed to deliver on affordable health care, Maine stepped forward.

We will continue to step forward.

In my budget, we will bring together three of the largest purchasers of health care in the State for a new initiative to save taxpayer money and provide better care to consumers.

The Maine State Employees Health Commission, the University of Maine System and the Maine Education Association will join forces and put their enormous buying power to work to lower prescription drug costs.

This cooperative effort will save money for thousands of workers who need medicine, for taxpayers whose dollars contribute to the system and it will increase the amount of money available to fund health care for retired teachers.

More than 28,000 Mainers have been insured through our Dirigo Health program. We’ve extended coverage to more families and more small businesses, and we’ve done it in a way that has saved millions of dollars in health care spending.

Last year, we were close to taking the next step with Dirigo. This year, we’ll do it.

I will support Legislative efforts to provide meaningful market reform that will make coverage more affordable for individuals.

And I will work with the Legislature to find a new way to fund Dirigo that is less contentious and more sustainable.

I believe health care is a fundamental and basic right. Every man, woman and child should be able to count on receiving the care they need when they need it.

I am very pleased that the Dirigo Health Agency has contracted with a new partner, Harvard Pilgrim Health.

Harvard Pilgrim is a nonprofit health plan that is consistently ranked No. 1 by consumers nationally. The company brings new and important competition to Maine’s health care marketplace.

I’m pleased to welcome Harvard Pilgrim to Maine, and I want to recognize in the gallery the company’s CEO, Charlie Baker. We’re glad you’re here, and we look forward to working with you.

Charlie, I ask you to rise and accept the greetings of the Chamber.

When I think about what matters most to me, and to the people I meet when I travel around the State, it’s not the ins and outs of a particular policy. It’s not the details that we will wring our hands over from now until April.

What matters most is more basic. It’s family and friends.

Tonight, as I speak to you, Maine has 102 members of the National Guard deployed overseas.

Soon, more men and women will be joining them.

This month 130 members of the 126th Aviation Regiment from Bangor will go to Iraq for the second time. These men and women save lives by putting their own at risk; they fly into danger to rescue other soldiers.

Another 16-person team of National Guard Soldiers will also leave this month for Afghanistan to train that country’s military.

They deserve our appreciation; they deserve our support. Please join me in saluting their service and sacrifice by recognizing Major Brian Veneziano, the commander of the 126th.

Please rise and accept the greetings of the Chamber.

These brave men and women want the same things as you and I: A good job with benefits, a college education for their kids, and to know that their families are nearby and secure.

Family is the most important thing.

Yesterday, my wife and I celebrated our 25th anniversary. It has been an amazing journey.

You could not have a first lady more committed to Maine’s children, to education and to the State. She is a tireless advocate for literacy, and promotes Maine wherever she goes.

I’d like to ask Karen to stand and be recognized by the Chamber.

My family’s not that much different than a lot of others in Maine.

We have our family discussions, agreements and disagreements.

But I have never lost sight of what it means to work hard and still struggle to pay the bills.

I have met countless men and women who play by the rules, go to work everyday and still can’t seem to get ahead.

In 1965, President Johnson understood the great divide in our country and spoke about it.

He said: “In a land of great wealth, families must not live in hopeless poverty. In a land rich in harvest, children must not go hungry. In a land of healing miracles, neighbors must not suffer and die unattended.”

If President Johnson were speaking today and lived in Maine, I think he would have added at least one more line:

In a land of technology, science and abundant natural resources, no family should go to bed wondering if their fuel oil will last until morning, worried that they will wake up cold.

I know families and businesses are struggling with high energy costs.

I have talked to the truck drivers and small business owners who are being pushed to the brink.

And I have heard the call for help.

We will answer that call.

My administration began working on this problem when the weather was still warm and before oil topped out at $100 dollar a barrel.

Working with the United Way, Eastern Maine Funders and the Maine Community Action Agencies, the Keep Maine Warm Fund has raised more than $1 million dollars to provide emergency fuel assistance.

The effort is gaining momentum.

I am pleased to announce tonight that LL Bean will be making a contribution of $250,000 to the Keep Maine Warm Fund, joining such organizations as Irving Oil, The Libra Foundation, The Fisher Foundation, Wright Express, Maine Bank and Trust, and TD Banknorth.

I’d like to thank Leon Gorman, LL Bean’s chairman, for his company’s efforts. Please stand Leon, and accept the greetings of the Chamber.

The Fund is an example of Mainers taking care of Mainers.

I know not everyone is able, but I’d ask those of you who can to join the effort to Keep Maine Warm by making a charitable contribution to this very worthy cause.

Working closely with Maine’s Congressional Delegation, we will continue to put pressure on Washington to release funding for energy assistance.

The money’s there; and we need to put it to work.

I have signed an executive order making it easier for companies to make small fuel deliveries to families in need.

I have sought relief for truck drivers devastated by high diesel costs. During this session, I will submit legislation to help safeguard the forest products industry, which has been particularly hard hit and is so important to our rural economy.

We are doing what we can for as many people as we can. And those efforts will not cease.

For too long, our country and our state have been dependent on costly foreign oil.

Eighty percent of Maine’s homes are reliant on oil for heat.

As prices have risen, we have sent billions of dollars out of state to pay for it. Money that otherwise would have remained with the families and businesses in Maine.

We must move forward aggressively to heat our homes with resources we have or can make right here.

We have made great strides in the development of wind energy. We cannot be shy about new projects. We will rewrite the rulebook to make wind power development easier without compromising our environment.

Maine has tremendous potential for wind power. Already $2 billion worth of investments have been approved or are awaiting consideration. And an equal amount is being explored.

Just last week a new project on Stetson Mountain won approval. We can harness the tremendous power of the wind and tides to power our industries and light our homes.

And we are also working closely with Maine’s Native American Tribes to support and promote alternative energy projects.

The future rests within reach, and we must seize it.

Tonight, I am announcing a “Wood-to-Energy Initiative” to bring Maine-made sources of heat to the homes and businesses of Maine.

This partnership will bring together the public and private sectors to explore what is possible and what is practical.

I have asked Maine entrepreneur Les Otten, who is here tonight, to bring together business leaders and our Department of Conservation to lead my Administration’s efforts on a conversion initiative that will use our forests and natural resources to relieve consumption of nonrenewable oil.

As a first step in this Initiative, my Administration will pursue a transition to biofuels such as wood pellets and wood chips.

We will identify those state buildings where conversion to wood pellets, wind or other renewable sources of energy can reduce costs by 30 to 50 percent.

This not only saves money for Maine taxpayers, it generates the investment and business activity to grow Maine’s economy.

The lessons learned from these demonstration projects will be made available to every home owner and business in Maine. As part of this Initiative, we will identify and promote the financial tools to enable Maine homeowners and small businesses to move away from their reliance on costly foreign oil.

We can encourage the alternative energy industry in way that benefits Maine without disadvantaging existing businesses reliant on wood for other products.

We are already working on a collaborative effort with New Brunswick and Nova Scotia that will take stock in our natural resources and develop new technologies and new market opportunities.

We should look to our Canadian neighbors for new partnerships that can reduce the cost of electricity in Maine and help us to better understand the energy potential of our forests.

In this energy crisis, we will develop renewable sources of energy made in Maine, by Maine businesses for Maine people.

I was still a young boy when President Kennedy was elected in 1960. My father served as a delegate for him at the national convention. Kennedy’s words still hold power today.

He said: “The dynamic of democracy is the power and the purpose of the individual, and the policy of this administration is to give to the individual the opportunity to realize his or her own highest possibilities.”

It’s an ideal that helps guide us today.

Through our workforce training initiatives, investments in research and development, and Pine Tree Economic Development Zones, we want to enhance the power of the private sector to create good jobs with good benefits.

Between November 2006 and November 2007, Maine’s economy created 4,400 new jobs despite slow growth in New England and nationally.

Since 2003, Maine’s economy has created more than 24,000 new jobs.

Our incomes have grown.

And we’ve empowered our people to become entrepreneurs.

According to the Kauffman Foundation, Maine ranked in the top five in 2006 for people who, for the first time, started their own new businesses.

This is the spirit of Maine.

In November, voters approved a $55 million dollar investment that will help those entrepreneurs develop new ideas and bring them to the market.

It’s the kind of investment that turns good ideas into good jobs.

This significant infusion of resources would not have been possible without Karen Mills and my Council on Jobs and Innovation, which she led.

Karen, thank you very much for your leadership.

Our people are strong, they are resilient and they should not be underestimated.

Given the chance, they can achieve great things.

I know it, I’ve seen it. There’s evidence of it in every part of Maine.

In Brewer, Cianbro Corporation will be creating hundreds of new manufacturing jobs.

In Lincoln, Millinocket, East Millinocket and Old Town, mills threatened with extinction are alive and successful. People are back to work.

In Belfast, athenahealth, an impressive company, has created 200 new jobs with more to come.

Maine was able to beat out Massachusetts, Rhode Island, New Hampshire, Vermont and New York to attract this company.

When Maine learned that MBNA, a major employer in the State, was merging with Bank of America, there was a lot of pessimism and worry about the future.

And for good reason. There was no secret that MBNA’s workforce would be reduced and that facilities would be closed.

Now, with athenahealth and other new companies, we have successfully put people back to work in former MBNA facilities in Farmington, Portland, Presque Isle, Fort Kent, Rockland and now Belfast.

The jobs that were lost will be grown back. And hope has replaced despair for those communities.

We know we can do it.

But we must redouble our efforts to spur economic development. We cannot be lulled into a posture that sees us only able to lurch from one crisis to the next.

We must be prepared to stop trouble before it arrives at our doorstep.

I’ve asked my economic development Commissioner John Richardson and Maine State Chamber of Commerce President Dana Connors to work with the Legislature to change the way we do business for business.

We can better serve Maine’s business community with a local and regional emphasis and greater co-ordination and partnership.

We need to move our economic development efforts away from Augusta and into the communities and regions where it can do the most good.

The State’s top economic development priority should be to provide them with the support, resources and vision to help them accomplish their goals.

We all understand the Maine economy is in a time of dramatic, even historic, change.

And we all understand that our future economic success will be built upon the foundation of our people and the special qualities that define our neighborhoods, towns and our state.

People are drawn to Maine. We have what they’re looking for and what’s missing from their everyday lives.

Look at tourism, one of the bedrocks of Maine’s economy.

Last year alone, almost 42 million people visited our State.

They come for our natural beauty, our people and our vibrant historical and cultural sites.

Last year, voters showed that they understand that. They approved significant investments in conservation and in our environment. Soon, that money will be put to work.

Economic prosperity demands that we invest in our workforce, in our open landscapes, and in our historic downtowns.

Even now, we cannot become so focused on today that we sacrifice the investments that will make us stronger tomorrow.

When I visit places like Lewiston and Auburn, Biddeford and Saco and Waterville, I see the enormous potential for redevelopment. The Hathaway Creative Center in Waterville is a prime example of what is possible.

Tom Niemann is here tonight. Thank you very much.

That’s why I am supporting an historic rehabilitation tax credit. For a modest investment, we can attract millions of dollars worth of growth, which will bring new jobs, new revenues, affordable housing and new life to our cities and towns.

It’s my goal that children start school ready to learn, and graduate from college ready and able to succeed here in Maine.

Early childhood was the heart of my economic Summit held in November. More than 200 Maine business and community leaders came together to understand the positive economic returns from early childhood investments.

I will continue to work with those Mainers to transform the Children's Cabinet Task Force on Early Childhood into a Children's Growth Council.

We can propel the powerful momentum of the Summit into our communities.

Through the power of community, we can create a legacy for our children.

Not long ago, Maine lost one of our most generous and inspiring leaders – speaking of children - Harold Alfond, the man who built Dexter Shoe.

It’s impossible to estimate Harold’s impact on Maine. He has touched so many lives and so many communities with his leadership and his philanthropy.

Harold challenged us all to do more, to build partnerships and to overcome hurdles.

Harold didn’t go to college, but he recognized early on that the days of making a good living with just a high school diploma were disappearing.

But Harold wasn’t blind to life’s hard realities. For some families, the promise of college is financially out of reach.

With the Alfond College Challenge that he established, the dream is a little closer.

The Challenge provides a $500 dollar education grant to every child born in Maine that will help them start a college savings account.

It began last week in Augusta and will expand statewide in 2009. And no, you don’t have to name your first child Harold.

Working through the Finance Authority of Maine and in cooperation with Maine’s hospitals, families in this State will have been given a head start on higher education.

In his book, Harold wrote that he hoped to retire 10 years after he passed away. He was serious and Maine will be a much better place because of it.

Harold’s son, Bill Alfond, and his wife, is in the gallery tonight. Please stand and be recognized by the Chamber.

Last year, the Legislature overwhelmingly approved Opportunity Maine, a tax credit program that will help students overcome college debt if they live and work in the State after graduation.

With these tax credits, we will keep more of our home-grown graduates here, and open the door of opportunity for the next generation of Maine entrepreneurs and leaders.

My friends, I am filled with hope. We are taking the steps necessary to grow our economy and improve the lives of the people of Maine.

We are streamlining government and cutting administration.

And we’re controlling spending.

We are investing in education and innovation so our children and families can succeed here in our state.

We are helping increase incomes by creating good jobs with good benefits.

That’s the roadmap that gets Maine where it needs to be.

This year, the Legislature will be called upon to take bold action, to protect the gains that have been made and to push forward on the reforms that will guide State government into the future.

We must ask ourselves: What do we want State government to do? What is fundamental to the health and welfare of our people?

We cannot be content with a legacy of work undone.

We owe it to our children, and we owe it to our State.

That is our task. That is our duty.

God Bless you and God Bless the State of Maine.

Thank you.

Good night.

January 9, 2008

State of the State Address 2008 Part D

Governor John E. Baldacci State of the State January 9, 2008

Madam President, Mr. Speaker, Madam Chief Justice, members of the Legislature, members of the Cabinet, distinguished guests and my fellow citizens:

We come together tonight as Maine stands on the verge of a new era.

The choices we make in the coming days will help to define who we are as a State, and what we hope to become.

I will not splash varnish on the hard truths before us.

Home heating oil and gasoline prices are at record highs.

Winter, just a few weeks old, has already shown its teeth.

The national economy is struggling under the weight of declining home values.

State revenues are not immune from the national condition and are falling short of expectations by $95 million dollars. We are forced to make hard decisions and set priorities.

And we remain a country at war, with men and women called to duty in far-off and dangerous lands.

Every word I have spoken is the inescapable truth. But there’s more to Maine’s story than those challenges we face.

In the five years since I first addressed you as Governor, much has changed in Maine.

Today I am proud to say that we are better prepared and more able to weather economic storms.

You, my friends, have done much of the hard work. You have not only balanced budgets, and demanded efficiencies. You’ve also come together – often in a spirit of bipartisanship -- to solve problems.

Five years ago, we faced a $1.2 billion dollar budget gap.

Our financial reserves were gone.

The State was borrowing hundreds of millions of dollars just to keep the lights on. Our credit rating was headed down.

Those days are gone – hopefully banished forever.

Today, we have rebuilt our reserves to almost $160 million dollars, and no longer take out payday loans to keep government open.

We have closed that budget gap and by the end of next year we will have invested more than $1 billion new State dollars in local education.

And we have done it all without raising the sales tax or income tax.

I want to repeat that, because it’s something the entire State should be proud of.

We have invested more than $1 billion new dollars in local education, rebuilt our reserves and stopped short-term borrowing.

Standard and Poor’s has raised our financial rating.

All without raising the sales or income tax.

That, my friends, is an accomplishment.

It has put us in a position of strength to deal with a fickle national economy.

Tonight, standing before you and with full knowledge of the challenges we face, I report that the State of this State is strong and determined to meet the future head on.

The revenue downturn we face in the two-year budget is a serious challenge that demands action.

On Dec. 18, I issued an executive order that reduced State spending by $38 million dollars for the rest of this fiscal year.

The Constitution of Maine requires the governor to ensure the State budget is balanced.

Every part of State government was called upon to make recommendations on how to reduce spending while maintaining their core missions.

I understand that these decisions touch real lives.

The cuts were not easy, but we are moving forward in a way that makes sure that we can protect our most vulnerable citizens while also meeting my Constitutional duty.

On that point, according to the Kaiser Foundation, Maine ranks first among the States in Medicaid spending for children, second in Medicaid spending for adults and fifth in Medicaid spending for the disabled.

Overall, according to Kaiser, Maine spends more per Medicaid enrollee than any other State.

So, tomorrow, when I unveil the details of my revisions to the two-year budget I can promise you this:

We will not pull the safety net out from under our most vulnerable citizens.

We will not take from our financial reserves to balance the budget.

And we will not increase taxes.

If we are to have the resources to invest in higher education, economic development and universal health care, we cannot continue to spend millions on systems built in the 1950s.

We must transform government at all levels. We must strengthen it to meet the demands of a new age. And we must prioritize our spending.

Government has an important role to play, but it cannot be all things to all people.

At the same time, beware of quick fixes and people who promise gain without change. They sell a bill of goods layered in promises that cannot be kept.

They say: You can have it all. The decisions aren’t difficult.

We all know that’s not true. The decisions ARE difficult.

We’ve made them and will continue to make them.

Since taking office in 2003, we have reduced the rolls of State government by more than 600 jobs. We have merged two major State departments, eliminating a commissioner, deputy commissioners;

And we have centralized back-office and administrative functions in all State departments. In just the first two years, that saved $11.5 million dollars.

It’s not the stuff of headlines. It’s good government, and it’s done.

Last year, the Legislature passed a truly historic reform of local education.

The new law reduces the number of school administrative units from 290 to 80.

School administrative units: That’s a mouth full. It sounds very government-like, very bureaucratic.

That’s because it is.

And that’s the problem.

Since the early 80s, the number of students in Maine has declined by almost 40,000 and is expected to decline by 20,000 more in the next five years.

During the same time, the number of school administrators has increased by 400.

For 50 years, we have done the same old thing, the same old way, and it hasn’t produced the excellence and results that we need.

It’s not sustainable and drains resources from students and teachers.

Now we are on our way to a new structure that will better serve our people. It will save taxpayers money and provide a better education for our children.

Legislation introduced this year and already approved by the Education Committee will further strengthen the new law.

Even so, the fighting around it has not stopped.

We cannot return to the dysfunction of the past.

In 1937, President Franklin Roosevelt talked about the tendency of government to fall victim to inertia and to retreat from important gains when put under pressure by powerful special interests.

“Shall we pause now and turn our back upon the road that lies ahead?,” he asked. “Shall we call this the promised land? Or, shall we continue on our way?”

As President Roosevelt knew then and the people of Maine know today, progress and growth are in front of us, not in the past.

As President Roosevelt said then, “We will carry on.”

In August, we began a conversation about the way we treat inmates in our prisons and county jails and about the financial hardships created by our current, fragmented system.

It is bad for taxpayers and bad for mentally ill and drug-addicted prisoners who do not get the care they need to break the cycle of crime.

It must change.

Tomorrow I will submit legislation to unify the state prison system with the 15 county jail administrations.

The plan has evolved from when we first began talking about it. We have listened to concerns from counties. And we have made changes to improve our plan.

I would like to say tonight that all the differences between the counties and the State have been resolved. They haven’t.

But I can say that progress has been made. Sheriffs and commissioners have come a long way from the starting point, and so have we. I believe that common ground is still possible.

And I believe a solution exists that will save taxpayer money and improve the treatment of the people in our care.

President Lincoln wrote to Congress in 1862: “The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise with the occasion. As our case is new, so we must think anew and act anew.”

You don’t have to face the deepest crisis in the history of the Republic – as Lincoln did – to understand the necessity of thinking about old problems in new ways.

We live in a complex world that requires government to carry an increasing load. Natural resource and environmental issues demand experts with broad experiences.

In a time of declining revenues and increasing financial pressures in other areas of the budget, we can’t continue funding silos that keep our experts separate and our attentions divided.

It’s been more than 30 years since we developed our approach to the stewardship of Maine’s natural resources.

In those three decades, the world has changed dramatically. There have been amazing advances in science and technology.

And Maine’s natural resource agencies haven’t been allowed to keep up. The structure hasn’t kept up pace with the changing times.

Already, we’ve brought together those agencies’ back-office staffs, accountants and IT experts. We created a single natural resource service center to do all those jobs that aren’t part of the agencies core responsibilities.

That’s done. But we need to do more.

In my budget, I will propose a process that will result in no more than two natural resources agencies, where today we have four.

We will seek efficiencies and combine programs that shouldn’t be separated by bureaucracies.

I know that I don’t have all the answers, but I do believe we can find them together.

The merger process will seek input from those willing to come to the table.

Our goal is to enhance the services provided to natural resource-based businesses; To increase outdoor recreation; And to improve natural resource management.

We need to end the duplication in administration that stands in the way.

Our efforts are not confined to a single area of government. We are looking at government at every level, and we’re looking for improvement.

Earlier this month, Maine selected a private company, Unisys Corporation, a nationally respected company, to fix a troubled part of the Department of Health and Human Services.

For almost three years, we have struggled with a Medicaid computer system that has never lived up to expectations. It’s caused countless headaches and heartaches for Maine businesses and created financial difficulties for the State.

With this work, we will move on to a better way of doing business.

I am also proposing a reorganization of the upper and middle management at Health and Human Services that will give my commissioner the flexibility she needs to run Maine’s largest department.

It will empower frontline workers, reduce from 10 to 6 the number of central offices in the agency and consolidate management at the regional level.

To be successful, you must be able to adapt. We will give them that ability.

But success also depends on innovation.

Maine has led the country on health care reform, an innovation that matters to families and businesses alike.

When the federal government passed a poorly designed Medicare drug benefit that actually hurt some senior citizens in our State, Maine stepped forward to ease the transition.

When the federal government failed to deliver on affordable health care, Maine stepped forward.

We will continue to step forward.

In my budget, we will bring together three of the largest purchasers of health care in the State for a new initiative to save taxpayer money and provide better care to consumers.

The Maine State Employees Health Commission, the University of Maine System and the Maine Education Association will join forces and put their enormous buying power to work to lower prescription drug costs.

This cooperative effort will save money for thousands of workers who need medicine, for taxpayers whose dollars contribute to the system and it will increase the amount of money available to fund health care for retired teachers.

More than 28,000 Mainers have been insured through our Dirigo Health program. We’ve extended coverage to more families and more small businesses, and we’ve done it in a way that has saved millions of dollars in health care spending.

Last year, we were close to taking the next step with Dirigo. This year, we’ll do it.

I will support Legislative efforts to provide meaningful market reform that will make coverage more affordable for individuals.

And I will work with the Legislature to find a new way to fund Dirigo that is less contentious and more sustainable.

I believe health care is a fundamental and basic right. Every man, woman and child should be able to count on receiving the care they need when they need it.

I am very pleased that the Dirigo Health Agency has contracted with a new partner, Harvard Pilgrim Health.

Harvard Pilgrim is a nonprofit health plan that is consistently ranked No. 1 by consumers nationally. The company brings new and important competition to Maine’s health care marketplace.

I’m pleased to welcome Harvard Pilgrim to Maine, and I want to recognize in the gallery the company’s CEO, Charlie Baker. We’re glad you’re here, and we look forward to working with you.

Charlie, I ask you to rise and accept the greetings of the Chamber.

When I think about what matters most to me, and to the people I meet when I travel around the State, it’s not the ins and outs of a particular policy. It’s not the details that we will wring our hands over from now until April.

What matters most is more basic. It’s family and friends.

Tonight, as I speak to you, Maine has 102 members of the National Guard deployed overseas.

Soon, more men and women will be joining them.

This month 130 members of the 126th Aviation Regiment from Bangor will go to Iraq for the second time. These men and women save lives by putting their own at risk; they fly into danger to rescue other soldiers.

Another 16-person team of National Guard Soldiers will also leave this month for Afghanistan to train that country’s military.

They deserve our appreciation; they deserve our support. Please join me in saluting their service and sacrifice by recognizing Major Brian Veneziano, the commander of the 126th.

Please rise and accept the greetings of the Chamber.

These brave men and women want the same things as you and I: A good job with benefits, a college education for their kids, and to know that their families are nearby and secure.

Family is the most important thing.

Yesterday, my wife and I celebrated our 25th anniversary. It has been an amazing journey.

You could not have a first lady more committed to Maine’s children, to education and to the State. She is a tireless advocate for literacy, and promotes Maine wherever she goes.

I’d like to ask Karen to stand and be recognized by the Chamber.

My family’s not that much different than a lot of others in Maine.

We have our family discussions, agreements and disagreements.

But I have never lost sight of what it means to work hard and still struggle to pay the bills.

I have met countless men and women who play by the rules, go to work everyday and still can’t seem to get ahead.

In 1965, President Johnson understood the great divide in our country and spoke about it.

He said: “In a land of great wealth, families must not live in hopeless poverty. In a land rich in harvest, children must not go hungry. In a land of healing miracles, neighbors must not suffer and die unattended.”

If President Johnson were speaking today and lived in Maine, I think he would have added at least one more line:

In a land of technology, science and abundant natural resources, no family should go to bed wondering if their fuel oil will last until morning, worried that they will wake up cold.

I know families and businesses are struggling with high energy costs.

I have talked to the truck drivers and small business owners who are being pushed to the brink.

And I have heard the call for help.

We will answer that call.

My administration began working on this problem when the weather was still warm and before oil topped out at $100 dollar a barrel.

Working with the United Way, Eastern Maine Funders and the Maine Community Action Agencies, the Keep Maine Warm Fund has raised more than $1 million dollars to provide emergency fuel assistance.

The effort is gaining momentum.

I am pleased to announce tonight that LL Bean will be making a contribution of $250,000 to the Keep Maine Warm Fund, joining such organizations as Irving Oil, The Libra Foundation, The Fisher Foundation, Wright Express, Maine Bank and Trust, and TD Banknorth.

I’d like to thank Leon Gorman, LL Bean’s chairman, for his company’s efforts. Please stand Leon, and accept the greetings of the Chamber.

The Fund is an example of Mainers taking care of Mainers.

I know not everyone is able, but I’d ask those of you who can to join the effort to Keep Maine Warm by making a charitable contribution to this very worthy cause.

Working closely with Maine’s Congressional Delegation, we will continue to put pressure on Washington to release funding for energy assistance.

The money’s there; and we need to put it to work.

I have signed an executive order making it easier for companies to make small fuel deliveries to families in need.

I have sought relief for truck drivers devastated by high diesel costs. During this session, I will submit legislation to help safeguard the forest products industry, which has been particularly hard hit and is so important to our rural economy.

We are doing what we can for as many people as we can. And those efforts will not cease.

For too long, our country and our state have been dependent on costly foreign oil.

Eighty percent of Maine’s homes are reliant on oil for heat.

As prices have risen, we have sent billions of dollars out of state to pay for it. Money that otherwise would have remained with the families and businesses in Maine.

We must move forward aggressively to heat our homes with resources we have or can make right here.

We have made great strides in the development of wind energy. We cannot be shy about new projects. We will rewrite the rulebook to make wind power development easier without compromising our environment.

Maine has tremendous potential for wind power. Already $2 billion worth of investments have been approved or are awaiting consideration. And an equal amount is being explored.

Just last week a new project on Stetson Mountain won approval. We can harness the tremendous power of the wind and tides to power our industries and light our homes.

And we are also working closely with Maine’s Native American Tribes to support and promote alternative energy projects.

The future rests within reach, and we must seize it.

Tonight, I am announcing a “Wood-to-Energy Initiative” to bring Maine-made sources of heat to the homes and businesses of Maine.

This partnership will bring together the public and private sectors to explore what is possible and what is practical.

I have asked Maine entrepreneur Les Otten, who is here tonight, to bring together business leaders and our Department of Conservation to lead my Administration’s efforts on a conversion initiative that will use our forests and natural resources to relieve consumption of nonrenewable oil.

As a first step in this Initiative, my Administration will pursue a transition to biofuels such as wood pellets and wood chips.

We will identify those state buildings where conversion to wood pellets, wind or other renewable sources of energy can reduce costs by 30 to 50 percent.

This not only saves money for Maine taxpayers, it generates the investment and business activity to grow Maine’s economy.

The lessons learned from these demonstration projects will be made available to every home owner and business in Maine. As part of this Initiative, we will identify and promote the financial tools to enable Maine homeowners and small businesses to move away from their reliance on costly foreign oil.

We can encourage the alternative energy industry in way that benefits Maine without disadvantaging existing businesses reliant on wood for other products.

We are already working on a collaborative effort with New Brunswick and Nova Scotia that will take stock in our natural resources and develop new technologies and new market opportunities.

We should look to our Canadian neighbors for new partnerships that can reduce the cost of electricity in Maine and help us to better understand the energy potential of our forests.

In this energy crisis, we will develop renewable sources of energy made in Maine, by Maine businesses for Maine people.

I was still a young boy when President Kennedy was elected in 1960. My father served as a delegate for him at the national convention. Kennedy’s words still hold power today.

He said: “The dynamic of democracy is the power and the purpose of the individual, and the policy of this administration is to give to the individual the opportunity to realize his or her own highest possibilities.”

It’s an ideal that helps guide us today.

Through our workforce training initiatives, investments in research and development, and Pine Tree Economic Development Zones, we want to enhance the power of the private sector to create good jobs with good benefits.

Between November 2006 and November 2007, Maine’s economy created 4,400 new jobs despite slow growth in New England and nationally.

Since 2003, Maine’s economy has created more than 24,000 new jobs.

Our incomes have grown.

And we’ve empowered our people to become entrepreneurs.

According to the Kauffman Foundation, Maine ranked in the top five in 2006 for people who, for the first time, started their own new businesses.

This is the spirit of Maine.

In November, voters approved a $55 million dollar investment that will help those entrepreneurs develop new ideas and bring them to the market.

It’s the kind of investment that turns good ideas into good jobs.

This significant infusion of resources would not have been possible without Karen Mills and my Council on Jobs and Innovation, which she led.

Karen, thank you very much for your leadership.

Our people are strong, they are resilient and they should not be underestimated.

Given the chance, they can achieve great things.

I know it, I’ve seen it. There’s evidence of it in every part of Maine.

In Brewer, Cianbro Corporation will be creating hundreds of new manufacturing jobs.

In Lincoln, Millinocket, East Millinocket and Old Town, mills threatened with extinction are alive and successful. People are back to work.

In Belfast, athenahealth, an impressive company, has created 200 new jobs with more to come.

Maine was able to beat out Massachusetts, Rhode Island, New Hampshire, Vermont and New York to attract this company.

When Maine learned that MBNA, a major employer in the State, was merging with Bank of America, there was a lot of pessimism and worry about the future.

And for good reason. There was no secret that MBNA’s workforce would be reduced and that facilities would be closed.

Now, with athenahealth and other new companies, we have successfully put people back to work in former MBNA facilities in Farmington, Portland, Presque Isle, Fort Kent, Rockland and now Belfast.

The jobs that were lost will be grown back. And hope has replaced despair for those communities.

We know we can do it.

But we must redouble our efforts to spur economic development. We cannot be lulled into a posture that sees us only able to lurch from one crisis to the next.

We must be prepared to stop trouble before it arrives at our doorstep.

I’ve asked my economic development Commissioner John Richardson and Maine State Chamber of Commerce President Dana Connors to work with the Legislature to change the way we do business for business.

We can better serve Maine’s business community with a local and regional emphasis and greater co-ordination and partnership.

We need to move our economic development efforts away from Augusta and into the communities and regions where it can do the most good.

The State’s top economic development priority should be to provide them with the support, resources and vision to help them accomplish their goals.

We all understand the Maine economy is in a time of dramatic, even historic, change.

And we all understand that our future economic success will be built upon the foundation of our people and the special qualities that define our neighborhoods, towns and our state.

People are drawn to Maine. We have what they’re looking for and what’s missing from their everyday lives.

Look at tourism, one of the bedrocks of Maine’s economy.

Last year alone, almost 42 million people visited our State.

They come for our natural beauty, our people and our vibrant historical and cultural sites.

Last year, voters showed that they understand that. They approved significant investments in conservation and in our environment. Soon, that money will be put to work.

Economic prosperity demands that we invest in our workforce, in our open landscapes, and in our historic downtowns.

Even now, we cannot become so focused on today that we sacrifice the investments that will make us stronger tomorrow.

When I visit places like Lewiston and Auburn, Biddeford and Saco and Waterville, I see the enormous potential for redevelopment. The Hathaway Creative Center in Waterville is a prime example of what is possible.

Tom Niemann is here tonight. Thank you very much.

That’s why I am supporting an historic rehabilitation tax credit. For a modest investment, we can attract millions of dollars worth of growth, which will bring new jobs, new revenues, affordable housing and new life to our cities and towns.

It’s my goal that children start school ready to learn, and graduate from college ready and able to succeed here in Maine.

Early childhood was the heart of my economic Summit held in November. More than 200 Maine business and community leaders came together to understand the positive economic returns from early childhood investments.

I will continue to work with those Mainers to transform the Children's Cabinet Task Force on Early Childhood into a Children's Growth Council.

We can propel the powerful momentum of the Summit into our communities.

Through the power of community, we can create a legacy for our children.

Not long ago, Maine lost one of our most generous and inspiring leaders – speaking of children - Harold Alfond, the man who built Dexter Shoe.

It’s impossible to estimate Harold’s impact on Maine. He has touched so many lives and so many communities with his leadership and his philanthropy.

Harold challenged us all to do more, to build partnerships and to overcome hurdles.

Harold didn’t go to college, but he recognized early on that the days of making a good living with just a high school diploma were disappearing.

But Harold wasn’t blind to life’s hard realities. For some families, the promise of college is financially out of reach.

With the Alfond College Challenge that he established, the dream is a little closer.

The Challenge provides a $500 dollar education grant to every child born in Maine that will help them start a college savings account.

It began last week in Augusta and will expand statewide in 2009. And no, you don’t have to name your first child Harold.

Working through the Finance Authority of Maine and in cooperation with Maine’s hospitals, families in this State will have been given a head start on higher education.

In his book, Harold wrote that he hoped to retire 10 years after he passed away. He was serious and Maine will be a much better place because of it.

Harold’s son, Bill Alfond, and his wife, is in the gallery tonight. Please stand and be recognized by the Chamber.

Last year, the Legislature overwhelmingly approved Opportunity Maine, a tax credit program that will help students overcome college debt if they live and work in the State after graduation.

With these tax credits, we will keep more of our home-grown graduates here, and open the door of opportunity for the next generation of Maine entrepreneurs and leaders.

My friends, I am filled with hope. We are taking the steps necessary to grow our economy and improve the lives of the people of Maine.

We are streamlining government and cutting administration.

And we’re controlling spending.

We are investing in education and innovation so our children and families can succeed here in our state.

We are helping increase incomes by creating good jobs with good benefits.

That’s the roadmap that gets Maine where it needs to be.

This year, the Legislature will be called upon to take bold action, to protect the gains that have been made and to push forward on the reforms that will guide State government into the future.

We must ask ourselves: What do we want State government to do? What is fundamental to the health and welfare of our people?

We cannot be content with a legacy of work undone.

We owe it to our children, and we owe it to our State.

That is our task. That is our duty.

God Bless you and God Bless the State of Maine.

Thank you.

Good night.

State of the State Address Part D

January 9, 2008

State of the State Address 2008 Part E

Governor John E. Baldacci State of the State January 9, 2008

Madam President, Mr. Speaker, Madam Chief Justice, members of the Legislature, members of the Cabinet, distinguished guests and my fellow citizens:

We come together tonight as Maine stands on the verge of a new era.

The choices we make in the coming days will help to define who we are as a State, and what we hope to become.

I will not splash varnish on the hard truths before us.

Home heating oil and gasoline prices are at record highs.

Winter, just a few weeks old, has already shown its teeth.

The national economy is struggling under the weight of declining home values.

State revenues are not immune from the national condition and are falling short of expectations by $95 million dollars. We are forced to make hard decisions and set priorities.

And we remain a country at war, with men and women called to duty in far-off and dangerous lands.

Every word I have spoken is the inescapable truth. But there’s more to Maine’s story than those challenges we face.

In the five years since I first addressed you as Governor, much has changed in Maine.

Today I am proud to say that we are better prepared and more able to weather economic storms.

You, my friends, have done much of the hard work. You have not only balanced budgets, and demanded efficiencies. You’ve also come together – often in a spirit of bipartisanship -- to solve problems.

Five years ago, we faced a $1.2 billion dollar budget gap.

Our financial reserves were gone.

The State was borrowing hundreds of millions of dollars just to keep the lights on. Our credit rating was headed down.

Those days are gone – hopefully banished forever.

Today, we have rebuilt our reserves to almost $160 million dollars, and no longer take out payday loans to keep government open.

We have closed that budget gap and by the end of next year we will have invested more than $1 billion new State dollars in local education.

And we have done it all without raising the sales tax or income tax.

I want to repeat that, because it’s something the entire State should be proud of.

We have invested more than $1 billion new dollars in local education, rebuilt our reserves and stopped short-term borrowing.

Standard and Poor’s has raised our financial rating.

All without raising the sales or income tax.

That, my friends, is an accomplishment.

It has put us in a position of strength to deal with a fickle national economy.

Tonight, standing before you and with full knowledge of the challenges we face, I report that the State of this State is strong and determined to meet the future head on.

The revenue downturn we face in the two-year budget is a serious challenge that demands action.

On Dec. 18, I issued an executive order that reduced State spending by $38 million dollars for the rest of this fiscal year.

The Constitution of Maine requires the governor to ensure the State budget is balanced.

Every part of State government was called upon to make recommendations on how to reduce spending while maintaining their core missions.

I understand that these decisions touch real lives.

The cuts were not easy, but we are moving forward in a way that makes sure that we can protect our most vulnerable citizens while also meeting my Constitutional duty.

On that point, according to the Kaiser Foundation, Maine ranks first among the States in Medicaid spending for children, second in Medicaid spending for adults and fifth in Medicaid spending for the disabled.

Overall, according to Kaiser, Maine spends more per Medicaid enrollee than any other State.

So, tomorrow, when I unveil the details of my revisions to the two-year budget I can promise you this:

We will not pull the safety net out from under our most vulnerable citizens.

We will not take from our financial reserves to balance the budget.

And we will not increase taxes.

If we are to have the resources to invest in higher education, economic development and universal health care, we cannot continue to spend millions on systems built in the 1950s.

We must transform government at all levels. We must strengthen it to meet the demands of a new age. And we must prioritize our spending.

Government has an important role to play, but it cannot be all things to all people.

At the same time, beware of quick fixes and people who promise gain without change. They sell a bill of goods layered in promises that cannot be kept.

They say: You can have it all. The decisions aren’t difficult.

We all know that’s not true. The decisions ARE difficult.

We’ve made them and will continue to make them.

Since taking office in 2003, we have reduced the rolls of State government by more than 600 jobs. We have merged two major State departments, eliminating a commissioner, deputy commissioners;

And we have centralized back-office and administrative functions in all State departments. In just the first two years, that saved $11.5 million dollars.

It’s not the stuff of headlines. It’s good government, and it’s done.

Last year, the Legislature passed a truly historic reform of local education.

The new law reduces the number of school administrative units from 290 to 80.

School administrative units: That’s a mouth full. It sounds very government-like, very bureaucratic.

That’s because it is.

And that’s the problem.

Since the early 80s, the number of students in Maine has declined by almost 40,000 and is expected to decline by 20,000 more in the next five years.

During the same time, the number of school administrators has increased by 400.

For 50 years, we have done the same old thing, the same old way, and it hasn’t produced the excellence and results that we need.

It’s not sustainable and drains resources from students and teachers.

Now we are on our way to a new structure that will better serve our people. It will save taxpayers money and provide a better education for our children.

Legislation introduced this year and already approved by the Education Committee will further strengthen the new law.

Even so, the fighting around it has not stopped.

We cannot return to the dysfunction of the past.

In 1937, President Franklin Roosevelt talked about the tendency of government to fall victim to inertia and to retreat from important gains when put under pressure by powerful special interests.

“Shall we pause now and turn our back upon the road that lies ahead?,” he asked. “Shall we call this the promised land? Or, shall we continue on our way?”

As President Roosevelt knew then and the people of Maine know today, progress and growth are in front of us, not in the past.

As President Roosevelt said then, “We will carry on.”

In August, we began a conversation about the way we treat inmates in our prisons and county jails and about the financial hardships created by our current, fragmented system.

It is bad for taxpayers and bad for mentally ill and drug-addicted prisoners who do not get the care they need to break the cycle of crime.

It must change.

Tomorrow I will submit legislation to unify the state prison system with the 15 county jail administrations.

The plan has evolved from when we first began talking about it. We have listened to concerns from counties. And we have made changes to improve our plan.

I would like to say tonight that all the differences between the counties and the State have been resolved. They haven’t.

But I can say that progress has been made. Sheriffs and commissioners have come a long way from the starting point, and so have we. I believe that common ground is still possible.

And I believe a solution exists that will save taxpayer money and improve the treatment of the people in our care.

President Lincoln wrote to Congress in 1862: “The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise with the occasion. As our case is new, so we must think anew and act anew.”

You don’t have to face the deepest crisis in the history of the Republic – as Lincoln did – to understand the necessity of thinking about old problems in new ways.

We live in a complex world that requires government to carry an increasing load. Natural resource and environmental issues demand experts with broad experiences.

In a time of declining revenues and increasing financial pressures in other areas of the budget, we can’t continue funding silos that keep our experts separate and our attentions divided.

It’s been more than 30 years since we developed our approach to the stewardship of Maine’s natural resources.

In those three decades, the world has changed dramatically. There have been amazing advances in science and technology.

And Maine’s natural resource agencies haven’t been allowed to keep up. The structure hasn’t kept up pace with the changing times.

Already, we’ve brought together those agencies’ back-office staffs, accountants and IT experts. We created a single natural resource service center to do all those jobs that aren’t part of the agencies core responsibilities.

That’s done. But we need to do more.

In my budget, I will propose a process that will result in no more than two natural resources agencies, where today we have four.

We will seek efficiencies and combine programs that shouldn’t be separated by bureaucracies.

I know that I don’t have all the answers, but I do believe we can find them together.

The merger process will seek input from those willing to come to the table.

Our goal is to enhance the services provided to natural resource-based businesses; To increase outdoor recreation; And to improve natural resource management.

We need to end the duplication in administration that stands in the way.

Our efforts are not confined to a single area of government. We are looking at government at every level, and we’re looking for improvement.

Earlier this month, Maine selected a private company, Unisys Corporation, a nationally respected company, to fix a troubled part of the Department of Health and Human Services.

For almost three years, we have struggled with a Medicaid computer system that has never lived up to expectations. It’s caused countless headaches and heartaches for Maine businesses and created financial difficulties for the State.

With this work, we will move on to a better way of doing business.

I am also proposing a reorganization of the upper and middle management at Health and Human Services that will give my commissioner the flexibility she needs to run Maine’s largest department.

It will empower frontline workers, reduce from 10 to 6 the number of central offices in the agency and consolidate management at the regional level.

To be successful, you must be able to adapt. We will give them that ability.

But success also depends on innovation.

Maine has led the country on health care reform, an innovation that matters to families and businesses alike.

When the federal government passed a poorly designed Medicare drug benefit that actually hurt some senior citizens in our State, Maine stepped forward to ease the transition.

When the federal government failed to deliver on affordable health care, Maine stepped forward.

We will continue to step forward.

In my budget, we will bring together three of the largest purchasers of health care in the State for a new initiative to save taxpayer money and provide better care to consumers.

The Maine State Employees Health Commission, the University of Maine System and the Maine Education Association will join forces and put their enormous buying power to work to lower prescription drug costs.

This cooperative effort will save money for thousands of workers who need medicine, for taxpayers whose dollars contribute to the system and it will increase the amount of money available to fund health care for retired teachers.

More than 28,000 Mainers have been insured through our Dirigo Health program. We’ve extended coverage to more families and more small businesses, and we’ve done it in a way that has saved millions of dollars in health care spending.

Last year, we were close to taking the next step with Dirigo. This year, we’ll do it.

I will support Legislative efforts to provide meaningful market reform that will make coverage more affordable for individuals.

And I will work with the Legislature to find a new way to fund Dirigo that is less contentious and more sustainable.

I believe health care is a fundamental and basic right. Every man, woman and child should be able to count on receiving the care they need when they need it.

I am very pleased that the Dirigo Health Agency has contracted with a new partner, Harvard Pilgrim Health.

Harvard Pilgrim is a nonprofit health plan that is consistently ranked No. 1 by consumers nationally. The company brings new and important competition to Maine’s health care marketplace.

I’m pleased to welcome Harvard Pilgrim to Maine, and I want to recognize in the gallery the company’s CEO, Charlie Baker. We’re glad you’re here, and we look forward to working with you.

Charlie, I ask you to rise and accept the greetings of the Chamber.

When I think about what matters most to me, and to the people I meet when I travel around the State, it’s not the ins and outs of a particular policy. It’s not the details that we will wring our hands over from now until April.

What matters most is more basic. It’s family and friends.

Tonight, as I speak to you, Maine has 102 members of the National Guard deployed overseas.

Soon, more men and women will be joining them.

This month 130 members of the 126th Aviation Regiment from Bangor will go to Iraq for the second time. These men and women save lives by putting their own at risk; they fly into danger to rescue other soldiers.

Another 16-person team of National Guard Soldiers will also leave this month for Afghanistan to train that country’s military.

They deserve our appreciation; they deserve our support. Please join me in saluting their service and sacrifice by recognizing Major Brian Veneziano, the commander of the 126th.

Please rise and accept the greetings of the Chamber.

These brave men and women want the same things as you and I: A good job with benefits, a college education for their kids, and to know that their families are nearby and secure.

Family is the most important thing.

Yesterday, my wife and I celebrated our 25th anniversary. It has been an amazing journey.

You could not have a first lady more committed to Maine’s children, to education and to the State. She is a tireless advocate for literacy, and promotes Maine wherever she goes.

I’d like to ask Karen to stand and be recognized by the Chamber.

My family’s not that much different than a lot of others in Maine.

We have our family discussions, agreements and disagreements.

But I have never lost sight of what it means to work hard and still struggle to pay the bills.

I have met countless men and women who play by the rules, go to work everyday and still can’t seem to get ahead.

In 1965, President Johnson understood the great divide in our country and spoke about it.

He said: “In a land of great wealth, families must not live in hopeless poverty. In a land rich in harvest, children must not go hungry. In a land of healing miracles, neighbors must not suffer and die unattended.”

If President Johnson were speaking today and lived in Maine, I think he would have added at least one more line:

In a land of technology, science and abundant natural resources, no family should go to bed wondering if their fuel oil will last until morning, worried that they will wake up cold.

I know families and businesses are struggling with high energy costs.

I have talked to the truck drivers and small business owners who are being pushed to the brink.

And I have heard the call for help.

We will answer that call.

My administration began working on this problem when the weather was still warm and before oil topped out at $100 dollar a barrel.

Working with the United Way, Eastern Maine Funders and the Maine Community Action Agencies, the Keep Maine Warm Fund has raised more than $1 million dollars to provide emergency fuel assistance.

The effort is gaining momentum.

I am pleased to announce tonight that LL Bean will be making a contribution of $250,000 to the Keep Maine Warm Fund, joining such organizations as Irving Oil, The Libra Foundation, The Fisher Foundation, Wright Express, Maine Bank and Trust, and TD Banknorth.

I’d like to thank Leon Gorman, LL Bean’s chairman, for his company’s efforts. Please stand Leon, and accept the greetings of the Chamber.

The Fund is an example of Mainers taking care of Mainers.

I know not everyone is able, but I’d ask those of you who can to join the effort to Keep Maine Warm by making a charitable contribution to this very worthy cause.

Working closely with Maine’s Congressional Delegation, we will continue to put pressure on Washington to release funding for energy assistance.

The money’s there; and we need to put it to work.

I have signed an executive order making it easier for companies to make small fuel deliveries to families in need.

I have sought relief for truck drivers devastated by high diesel costs. During this session, I will submit legislation to help safeguard the forest products industry, which has been particularly hard hit and is so important to our rural economy.

We are doing what we can for as many people as we can. And those efforts will not cease.

For too long, our country and our state have been dependent on costly foreign oil.

Eighty percent of Maine’s homes are reliant on oil for heat.

As prices have risen, we have sent billions of dollars out of state to pay for it. Money that otherwise would have remained with the families and businesses in Maine.

We must move forward aggressively to heat our homes with resources we have or can make right here.

We have made great strides in the development of wind energy. We cannot be shy about new projects. We will rewrite the rulebook to make wind power development easier without compromising our environment.

Maine has tremendous potential for wind power. Already $2 billion worth of investments have been approved or are awaiting consideration. And an equal amount is being explored.

Just last week a new project on Stetson Mountain won approval. We can harness the tremendous power of the wind and tides to power our industries and light our homes.

And we are also working closely with Maine’s Native American Tribes to support and promote alternative energy projects.

The future rests within reach, and we must seize it.

Tonight, I am announcing a “Wood-to-Energy Initiative” to bring Maine-made sources of heat to the homes and businesses of Maine.

This partnership will bring together the public and private sectors to explore what is possible and what is practical.

I have asked Maine entrepreneur Les Otten, who is here tonight, to bring together business leaders and our Department of Conservation to lead my Administration’s efforts on a conversion initiative that will use our forests and natural resources to relieve consumption of nonrenewable oil.

As a first step in this Initiative, my Administration will pursue a transition to biofuels such as wood pellets and wood chips.

We will identify those state buildings where conversion to wood pellets, wind or other renewable sources of energy can reduce costs by 30 to 50 percent.

This not only saves money for Maine taxpayers, it generates the investment and business activity to grow Maine’s economy.

The lessons learned from these demonstration projects will be made available to every home owner and business in Maine. As part of this Initiative, we will identify and promote the financial tools to enable Maine homeowners and small businesses to move away from their reliance on costly foreign oil.

We can encourage the alternative energy industry in way that benefits Maine without disadvantaging existing businesses reliant on wood for other products.

We are already working on a collaborative effort with New Brunswick and Nova Scotia that will take stock in our natural resources and develop new technologies and new market opportunities.

We should look to our Canadian neighbors for new partnerships that can reduce the cost of electricity in Maine and help us to better understand the energy potential of our forests.

In this energy crisis, we will develop renewable sources of energy made in Maine, by Maine businesses for Maine people.

I was still a young boy when President Kennedy was elected in 1960. My father served as a delegate for him at the national convention. Kennedy’s words still hold power today.

He said: “The dynamic of democracy is the power and the purpose of the individual, and the policy of this administration is to give to the individual the opportunity to realize his or her own highest possibilities.”

It’s an ideal that helps guide us today.

Through our workforce training initiatives, investments in research and development, and Pine Tree Economic Development Zones, we want to enhance the power of the private sector to create good jobs with good benefits.

Between November 2006 and November 2007, Maine’s economy created 4,400 new jobs despite slow growth in New England and nationally.

Since 2003, Maine’s economy has created more than 24,000 new jobs.

Our incomes have grown.

And we’ve empowered our people to become entrepreneurs.

According to the Kauffman Foundation, Maine ranked in the top five in 2006 for people who, for the first time, started their own new businesses.

This is the spirit of Maine.

In November, voters approved a $55 million dollar investment that will help those entrepreneurs develop new ideas and bring them to the market.

It’s the kind of investment that turns good ideas into good jobs.

This significant infusion of resources would not have been possible without Karen Mills and my Council on Jobs and Innovation, which she led.

Karen, thank you very much for your leadership.

Our people are strong, they are resilient and they should not be underestimated.

Given the chance, they can achieve great things.

I know it, I’ve seen it. There’s evidence of it in every part of Maine.

In Brewer, Cianbro Corporation will be creating hundreds of new manufacturing jobs.

In Lincoln, Millinocket, East Millinocket and Old Town, mills threatened with extinction are alive and successful. People are back to work.

In Belfast, athenahealth, an impressive company, has created 200 new jobs with more to come.

Maine was able to beat out Massachusetts, Rhode Island, New Hampshire, Vermont and New York to attract this company.

When Maine learned that MBNA, a major employer in the State, was merging with Bank of America, there was a lot of pessimism and worry about the future.

And for good reason. There was no secret that MBNA’s workforce would be reduced and that facilities would be closed.

Now, with athenahealth and other new companies, we have successfully put people back to work in former MBNA facilities in Farmington, Portland, Presque Isle, Fort Kent, Rockland and now Belfast.

The jobs that were lost will be grown back. And hope has replaced despair for those communities.

We know we can do it.

But we must redouble our efforts to spur economic development. We cannot be lulled into a posture that sees us only able to lurch from one crisis to the next.

We must be prepared to stop trouble before it arrives at our doorstep.

I’ve asked my economic development Commissioner John Richardson and Maine State Chamber of Commerce President Dana Connors to work with the Legislature to change the way we do business for business.

We can better serve Maine’s business community with a local and regional emphasis and greater co-ordination and partnership.

We need to move our economic development efforts away from Augusta and into the communities and regions where it can do the most good.

The State’s top economic development priority should be to provide them with the support, resources and vision to help them accomplish their goals.

We all understand the Maine economy is in a time of dramatic, even historic, change.

And we all understand that our future economic success will be built upon the foundation of our people and the special qualities that define our neighborhoods, towns and our state.

People are drawn to Maine. We have what they’re looking for and what’s missing from their everyday lives.

Look at tourism, one of the bedrocks of Maine’s economy.

Last year alone, almost 42 million people visited our State.

They come for our natural beauty, our people and our vibrant historical and cultural sites.

Last year, voters showed that they understand that. They approved significant investments in conservation and in our environment. Soon, that money will be put to work.

Economic prosperity demands that we invest in our workforce, in our open landscapes, and in our historic downtowns.

Even now, we cannot become so focused on today that we sacrifice the investments that will make us stronger tomorrow.

When I visit places like Lewiston and Auburn, Biddeford and Saco and Waterville, I see the enormous potential for redevelopment. The Hathaway Creative Center in Waterville is a prime example of what is possible.

Tom Niemann is here tonight. Thank you very much.

That’s why I am supporting an historic rehabilitation tax credit. For a modest investment, we can attract millions of dollars worth of growth, which will bring new jobs, new revenues, affordable housing and new life to our cities and towns.

It’s my goal that children start school ready to learn, and graduate from college ready and able to succeed here in Maine.

Early childhood was the heart of my economic Summit held in November. More than 200 Maine business and community leaders came together to understand the positive economic returns from early childhood investments.

I will continue to work with those Mainers to transform the Children's Cabinet Task Force on Early Childhood into a Children's Growth Council.

We can propel the powerful momentum of the Summit into our communities.

Through the power of community, we can create a legacy for our children.

Not long ago, Maine lost one of our most generous and inspiring leaders – speaking of children - Harold Alfond, the man who built Dexter Shoe.

It’s impossible to estimate Harold’s impact on Maine. He has touched so many lives and so many communities with his leadership and his philanthropy.

Harold challenged us all to do more, to build partnerships and to overcome hurdles.

Harold didn’t go to college, but he recognized early on that the days of making a good living with just a high school diploma were disappearing.

But Harold wasn’t blind to life’s hard realities. For some families, the promise of college is financially out of reach.

With the Alfond College Challenge that he established, the dream is a little closer.

The Challenge provides a $500 dollar education grant to every child born in Maine that will help them start a college savings account.

It began last week in Augusta and will expand statewide in 2009. And no, you don’t have to name your first child Harold.

Working through the Finance Authority of Maine and in cooperation with Maine’s hospitals, families in this State will have been given a head start on higher education.

In his book, Harold wrote that he hoped to retire 10 years after he passed away. He was serious and Maine will be a much better place because of it.

Harold’s son, Bill Alfond, and his wife, is in the gallery tonight. Please stand and be recognized by the Chamber.

Last year, the Legislature overwhelmingly approved Opportunity Maine, a tax credit program that will help students overcome college debt if they live and work in the State after graduation.

With these tax credits, we will keep more of our home-grown graduates here, and open the door of opportunity for the next generation of Maine entrepreneurs and leaders.

My friends, I am filled with hope. We are taking the steps necessary to grow our economy and improve the lives of the people of Maine.

We are streamlining government and cutting administration.

And we’re controlling spending.

We are investing in education and innovation so our children and families can succeed here in our state.

We are helping increase incomes by creating good jobs with good benefits.

That’s the roadmap that gets Maine where it needs to be.

This year, the Legislature will be called upon to take bold action, to protect the gains that have been made and to push forward on the reforms that will guide State government into the future.

We must ask ourselves: What do we want State government to do? What is fundamental to the health and welfare of our people?

We cannot be content with a legacy of work undone.

We owe it to our children, and we owe it to our State.

That is our task. That is our duty.

God Bless you and God Bless the State of Maine.

Thank you.

Good night.

State of the State Address 2008 Part E

January 9, 2008

State of the State Address 2008 Part F

Governor John E. Baldacci State of the State January 9, 2008

Madam President, Mr. Speaker, Madam Chief Justice, members of the Legislature, members of the Cabinet, distinguished guests and my fellow citizens:

We come together tonight as Maine stands on the verge of a new era.

The choices we make in the coming days will help to define who we are as a State, and what we hope to become.

I will not splash varnish on the hard truths before us.

Home heating oil and gasoline prices are at record highs.

Winter, just a few weeks old, has already shown its teeth.

The national economy is struggling under the weight of declining home values.

State revenues are not immune from the national condition and are falling short of expectations by $95 million dollars. We are forced to make hard decisions and set priorities.

And we remain a country at war, with men and women called to duty in far-off and dangerous lands.

Every word I have spoken is the inescapable truth. But there’s more to Maine’s story than those challenges we face.

In the five years since I first addressed you as Governor, much has changed in Maine.

Today I am proud to say that we are better prepared and more able to weather economic storms.

You, my friends, have done much of the hard work. You have not only balanced budgets, and demanded efficiencies. You’ve also come together – often in a spirit of bipartisanship -- to solve problems.

Five years ago, we faced a $1.2 billion dollar budget gap.

Our financial reserves were gone.

The State was borrowing hundreds of millions of dollars just to keep the lights on. Our credit rating was headed down.

Those days are gone – hopefully banished forever.

Today, we have rebuilt our reserves to almost $160 million dollars, and no longer take out payday loans to keep government open.

We have closed that budget gap and by the end of next year we will have invested more than $1 billion new State dollars in local education.

And we have done it all without raising the sales tax or income tax.

I want to repeat that, because it’s something the entire State should be proud of.

We have invested more than $1 billion new dollars in local education, rebuilt our reserves and stopped short-term borrowing.

Standard and Poor’s has raised our financial rating.

All without raising the sales or income tax.

That, my friends, is an accomplishment.

It has put us in a position of strength to deal with a fickle national economy.

Tonight, standing before you and with full knowledge of the challenges we face, I report that the State of this State is strong and determined to meet the future head on.

The revenue downturn we face in the two-year budget is a serious challenge that demands action.

On Dec. 18, I issued an executive order that reduced State spending by $38 million dollars for the rest of this fiscal year.

The Constitution of Maine requires the governor to ensure the State budget is balanced.

Every part of State government was called upon to make recommendations on how to reduce spending while maintaining their core missions.

I understand that these decisions touch real lives.

The cuts were not easy, but we are moving forward in a way that makes sure that we can protect our most vulnerable citizens while also meeting my Constitutional duty.

On that point, according to the Kaiser Foundation, Maine ranks first among the States in Medicaid spending for children, second in Medicaid spending for adults and fifth in Medicaid spending for the disabled.

Overall, according to Kaiser, Maine spends more per Medicaid enrollee than any other State.

So, tomorrow, when I unveil the details of my revisions to the two-year budget I can promise you this:

We will not pull the safety net out from under our most vulnerable citizens.

We will not take from our financial reserves to balance the budget.

And we will not increase taxes.

If we are to have the resources to invest in higher education, economic development and universal health care, we cannot continue to spend millions on systems built in the 1950s.

We must transform government at all levels. We must strengthen it to meet the demands of a new age. And we must prioritize our spending.

Government has an important role to play, but it cannot be all things to all people.

At the same time, beware of quick fixes and people who promise gain without change. They sell a bill of goods layered in promises that cannot be kept.

They say: You can have it all. The decisions aren’t difficult.

We all know that’s not true. The decisions ARE difficult.

We’ve made them and will continue to make them.

Since taking office in 2003, we have reduced the rolls of State government by more than 600 jobs. We have merged two major State departments, eliminating a commissioner, deputy commissioners;

And we have centralized back-office and administrative functions in all State departments. In just the first two years, that saved $11.5 million dollars.

It’s not the stuff of headlines. It’s good government, and it’s done.

Last year, the Legislature passed a truly historic reform of local education.

The new law reduces the number of school administrative units from 290 to 80.

School administrative units: That’s a mouth full. It sounds very government-like, very bureaucratic.

That’s because it is.

And that’s the problem.

Since the early 80s, the number of students in Maine has declined by almost 40,000 and is expected to decline by 20,000 more in the next five years.

During the same time, the number of school administrators has increased by 400.

For 50 years, we have done the same old thing, the same old way, and it hasn’t produced the excellence and results that we need.

It’s not sustainable and drains resources from students and teachers.

Now we are on our way to a new structure that will better serve our people. It will save taxpayers money and provide a better education for our children.

Legislation introduced this year and already approved by the Education Committee will further strengthen the new law.

Even so, the fighting around it has not stopped.

We cannot return to the dysfunction of the past.

In 1937, President Franklin Roosevelt talked about the tendency of government to fall victim to inertia and to retreat from important gains when put under pressure by powerful special interests.

“Shall we pause now and turn our back upon the road that lies ahead?,” he asked. “Shall we call this the promised land? Or, shall we continue on our way?”

As President Roosevelt knew then and the people of Maine know today, progress and growth are in front of us, not in the past.

As President Roosevelt said then, “We will carry on.”

In August, we began a conversation about the way we treat inmates in our prisons and county jails and about the financial hardships created by our current, fragmented system.

It is bad for taxpayers and bad for mentally ill and drug-addicted prisoners who do not get the care they need to break the cycle of crime.

It must change.

Tomorrow I will submit legislation to unify the state prison system with the 15 county jail administrations.

The plan has evolved from when we first began talking about it. We have listened to concerns from counties. And we have made changes to improve our plan.

I would like to say tonight that all the differences between the counties and the State have been resolved. They haven’t.

But I can say that progress has been made. Sheriffs and commissioners have come a long way from the starting point, and so have we. I believe that common ground is still possible.

And I believe a solution exists that will save taxpayer money and improve the treatment of the people in our care.

President Lincoln wrote to Congress in 1862: “The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise with the occasion. As our case is new, so we must think anew and act anew.”

You don’t have to face the deepest crisis in the history of the Republic – as Lincoln did – to understand the necessity of thinking about old problems in new ways.

We live in a complex world that requires government to carry an increasing load. Natural resource and environmental issues demand experts with broad experiences.

In a time of declining revenues and increasing financial pressures in other areas of the budget, we can’t continue funding silos that keep our experts separate and our attentions divided.

It’s been more than 30 years since we developed our approach to the stewardship of Maine’s natural resources.

In those three decades, the world has changed dramatically. There have been amazing advances in science and technology.

And Maine’s natural resource agencies haven’t been allowed to keep up. The structure hasn’t kept up pace with the changing times.

Already, we’ve brought together those agencies’ back-office staffs, accountants and IT experts. We created a single natural resource service center to do all those jobs that aren’t part of the agencies core responsibilities.

That’s done. But we need to do more.

In my budget, I will propose a process that will result in no more than two natural resources agencies, where today we have four.

We will seek efficiencies and combine programs that shouldn’t be separated by bureaucracies.

I know that I don’t have all the answers, but I do believe we can find them together.

The merger process will seek input from those willing to come to the table.

Our goal is to enhance the services provided to natural resource-based businesses; To increase outdoor recreation; And to improve natural resource management.

We need to end the duplication in administration that stands in the way.

Our efforts are not confined to a single area of government. We are looking at government at every level, and we’re looking for improvement.

Earlier this month, Maine selected a private company, Unisys Corporation, a nationally respected company, to fix a troubled part of the Department of Health and Human Services.

For almost three years, we have struggled with a Medicaid computer system that has never lived up to expectations. It’s caused countless headaches and heartaches for Maine businesses and created financial difficulties for the State.

With this work, we will move on to a better way of doing business.

I am also proposing a reorganization of the upper and middle management at Health and Human Services that will give my commissioner the flexibility she needs to run Maine’s largest department.

It will empower frontline workers, reduce from 10 to 6 the number of central offices in the agency and consolidate management at the regional level.

To be successful, you must be able to adapt. We will give them that ability.

But success also depends on innovation.

Maine has led the country on health care reform, an innovation that matters to families and businesses alike.

When the federal government passed a poorly designed Medicare drug benefit that actually hurt some senior citizens in our State, Maine stepped forward to ease the transition.

When the federal government failed to deliver on affordable health care, Maine stepped forward.

We will continue to step forward.

In my budget, we will bring together three of the largest purchasers of health care in the State for a new initiative to save taxpayer money and provide better care to consumers.

The Maine State Employees Health Commission, the University of Maine System and the Maine Education Association will join forces and put their enormous buying power to work to lower prescription drug costs.

This cooperative effort will save money for thousands of workers who need medicine, for taxpayers whose dollars contribute to the system and it will increase the amount of money available to fund health care for retired teachers.

More than 28,000 Mainers have been insured through our Dirigo Health program. We’ve extended coverage to more families and more small businesses, and we’ve done it in a way that has saved millions of dollars in health care spending.

Last year, we were close to taking the next step with Dirigo. This year, we’ll do it.

I will support Legislative efforts to provide meaningful market reform that will make coverage more affordable for individuals.

And I will work with the Legislature to find a new way to fund Dirigo that is less contentious and more sustainable.

I believe health care is a fundamental and basic right. Every man, woman and child should be able to count on receiving the care they need when they need it.

I am very pleased that the Dirigo Health Agency has contracted with a new partner, Harvard Pilgrim Health.

Harvard Pilgrim is a nonprofit health plan that is consistently ranked No. 1 by consumers nationally. The company brings new and important competition to Maine’s health care marketplace.

I’m pleased to welcome Harvard Pilgrim to Maine, and I want to recognize in the gallery the company’s CEO, Charlie Baker. We’re glad you’re here, and we look forward to working with you.

Charlie, I ask you to rise and accept the greetings of the Chamber.

When I think about what matters most to me, and to the people I meet when I travel around the State, it’s not the ins and outs of a particular policy. It’s not the details that we will wring our hands over from now until April.

What matters most is more basic. It’s family and friends.

Tonight, as I speak to you, Maine has 102 members of the National Guard deployed overseas.

Soon, more men and women will be joining them.

This month 130 members of the 126th Aviation Regiment from Bangor will go to Iraq for the second time. These men and women save lives by putting their own at risk; they fly into danger to rescue other soldiers.

Another 16-person team of National Guard Soldiers will also leave this month for Afghanistan to train that country’s military.

They deserve our appreciation; they deserve our support. Please join me in saluting their service and sacrifice by recognizing Major Brian Veneziano, the commander of the 126th.

Please rise and accept the greetings of the Chamber.

These brave men and women want the same things as you and I: A good job with benefits, a college education for their kids, and to know that their families are nearby and secure.

Family is the most important thing.

Yesterday, my wife and I celebrated our 25th anniversary. It has been an amazing journey.

You could not have a first lady more committed to Maine’s children, to education and to the State. She is a tireless advocate for literacy, and promotes Maine wherever she goes.

I’d like to ask Karen to stand and be recognized by the Chamber.

My family’s not that much different than a lot of others in Maine.

We have our family discussions, agreements and disagreements.

But I have never lost sight of what it means to work hard and still struggle to pay the bills.

I have met countless men and women who play by the rules, go to work everyday and still can’t seem to get ahead.

In 1965, President Johnson understood the great divide in our country and spoke about it.

He said: “In a land of great wealth, families must not live in hopeless poverty. In a land rich in harvest, children must not go hungry. In a land of healing miracles, neighbors must not suffer and die unattended.”

If President Johnson were speaking today and lived in Maine, I think he would have added at least one more line:

In a land of technology, science and abundant natural resources, no family should go to bed wondering if their fuel oil will last until morning, worried that they will wake up cold.

I know families and businesses are struggling with high energy costs.

I have talked to the truck drivers and small business owners who are being pushed to the brink.

And I have heard the call for help.

We will answer that call.

My administration began working on this problem when the weather was still warm and before oil topped out at $100 dollar a barrel.

Working with the United Way, Eastern Maine Funders and the Maine Community Action Agencies, the Keep Maine Warm Fund has raised more than $1 million dollars to provide emergency fuel assistance.

The effort is gaining momentum.

I am pleased to announce tonight that LL Bean will be making a contribution of $250,000 to the Keep Maine Warm Fund, joining such organizations as Irving Oil, The Libra Foundation, The Fisher Foundation, Wright Express, Maine Bank and Trust, and TD Banknorth.

I’d like to thank Leon Gorman, LL Bean’s chairman, for his company’s efforts. Please stand Leon, and accept the greetings of the Chamber.

The Fund is an example of Mainers taking care of Mainers.

I know not everyone is able, but I’d ask those of you who can to join the effort to Keep Maine Warm by making a charitable contribution to this very worthy cause.

Working closely with Maine’s Congressional Delegation, we will continue to put pressure on Washington to release funding for energy assistance.

The money’s there; and we need to put it to work.

I have signed an executive order making it easier for companies to make small fuel deliveries to families in need.

I have sought relief for truck drivers devastated by high diesel costs. During this session, I will submit legislation to help safeguard the forest products industry, which has been particularly hard hit and is so important to our rural economy.

We are doing what we can for as many people as we can. And those efforts will not cease.

For too long, our country and our state have been dependent on costly foreign oil.

Eighty percent of Maine’s homes are reliant on oil for heat.

As prices have risen, we have sent billions of dollars out of state to pay for it. Money that otherwise would have remained with the families and businesses in Maine.

We must move forward aggressively to heat our homes with resources we have or can make right here.

We have made great strides in the development of wind energy. We cannot be shy about new projects. We will rewrite the rulebook to make wind power development easier without compromising our environment.

Maine has tremendous potential for wind power. Already $2 billion worth of investments have been approved or are awaiting consideration. And an equal amount is being explored.

Just last week a new project on Stetson Mountain won approval. We can harness the tremendous power of the wind and tides to power our industries and light our homes.

And we are also working closely with Maine’s Native American Tribes to support and promote alternative energy projects.

The future rests within reach, and we must seize it.

Tonight, I am announcing a “Wood-to-Energy Initiative” to bring Maine-made sources of heat to the homes and businesses of Maine.

This partnership will bring together the public and private sectors to explore what is possible and what is practical.

I have asked Maine entrepreneur Les Otten, who is here tonight, to bring together business leaders and our Department of Conservation to lead my Administration’s efforts on a conversion initiative that will use our forests and natural resources to relieve consumption of nonrenewable oil.

As a first step in this Initiative, my Administration will pursue a transition to biofuels such as wood pellets and wood chips.

We will identify those state buildings where conversion to wood pellets, wind or other renewable sources of energy can reduce costs by 30 to 50 percent.

This not only saves money for Maine taxpayers, it generates the investment and business activity to grow Maine’s economy.

The lessons learned from these demonstration projects will be made available to every home owner and business in Maine. As part of this Initiative, we will identify and promote the financial tools to enable Maine homeowners and small businesses to move away from their reliance on costly foreign oil.

We can encourage the alternative energy industry in way that benefits Maine without disadvantaging existing businesses reliant on wood for other products.

We are already working on a collaborative effort with New Brunswick and Nova Scotia that will take stock in our natural resources and develop new technologies and new market opportunities.

We should look to our Canadian neighbors for new partnerships that can reduce the cost of electricity in Maine and help us to better understand the energy potential of our forests.

In this energy crisis, we will develop renewable sources of energy made in Maine, by Maine businesses for Maine people.

I was still a young boy when President Kennedy was elected in 1960. My father served as a delegate for him at the national convention. Kennedy’s words still hold power today.

He said: “The dynamic of democracy is the power and the purpose of the individual, and the policy of this administration is to give to the individual the opportunity to realize his or her own highest possibilities.”

It’s an ideal that helps guide us today.

Through our workforce training initiatives, investments in research and development, and Pine Tree Economic Development Zones, we want to enhance the power of the private sector to create good jobs with good benefits.

Between November 2006 and November 2007, Maine’s economy created 4,400 new jobs despite slow growth in New England and nationally.

Since 2003, Maine’s economy has created more than 24,000 new jobs.

Our incomes have grown.

And we’ve empowered our people to become entrepreneurs.

According to the Kauffman Foundation, Maine ranked in the top five in 2006 for people who, for the first time, started their own new businesses.

This is the spirit of Maine.

In November, voters approved a $55 million dollar investment that will help those entrepreneurs develop new ideas and bring them to the market.

It’s the kind of investment that turns good ideas into good jobs.

This significant infusion of resources would not have been possible without Karen Mills and my Council on Jobs and Innovation, which she led.

Karen, thank you very much for your leadership.

Our people are strong, they are resilient and they should not be underestimated.

Given the chance, they can achieve great things.

I know it, I’ve seen it. There’s evidence of it in every part of Maine.

In Brewer, Cianbro Corporation will be creating hundreds of new manufacturing jobs.

In Lincoln, Millinocket, East Millinocket and Old Town, mills threatened with extinction are alive and successful. People are back to work.

In Belfast, athenahealth, an impressive company, has created 200 new jobs with more to come.

Maine was able to beat out Massachusetts, Rhode Island, New Hampshire, Vermont and New York to attract this company.

When Maine learned that MBNA, a major employer in the State, was merging with Bank of America, there was a lot of pessimism and worry about the future.

And for good reason. There was no secret that MBNA’s workforce would be reduced and that facilities would be closed.

Now, with athenahealth and other new companies, we have successfully put people back to work in former MBNA facilities in Farmington, Portland, Presque Isle, Fort Kent, Rockland and now Belfast.

The jobs that were lost will be grown back. And hope has replaced despair for those communities.

We know we can do it.

But we must redouble our efforts to spur economic development. We cannot be lulled into a posture that sees us only able to lurch from one crisis to the next.

We must be prepared to stop trouble before it arrives at our doorstep.

I’ve asked my economic development Commissioner John Richardson and Maine State Chamber of Commerce President Dana Connors to work with the Legislature to change the way we do business for business.

We can better serve Maine’s business community with a local and regional emphasis and greater co-ordination and partnership.

We need to move our economic development efforts away from Augusta and into the communities and regions where it can do the most good.

The State’s top economic development priority should be to provide them with the support, resources and vision to help them accomplish their goals.

We all understand the Maine economy is in a time of dramatic, even historic, change.

And we all understand that our future economic success will be built upon the foundation of our people and the special qualities that define our neighborhoods, towns and our state.

People are drawn to Maine. We have what they’re looking for and what’s missing from their everyday lives.

Look at tourism, one of the bedrocks of Maine’s economy.

Last year alone, almost 42 million people visited our State.

They come for our natural beauty, our people and our vibrant historical and cultural sites.

Last year, voters showed that they understand that. They approved significant investments in conservation and in our environment. Soon, that money will be put to work.

Economic prosperity demands that we invest in our workforce, in our open landscapes, and in our historic downtowns.

Even now, we cannot become so focused on today that we sacrifice the investments that will make us stronger tomorrow.

When I visit places like Lewiston and Auburn, Biddeford and Saco and Waterville, I see the enormous potential for redevelopment. The Hathaway Creative Center in Waterville is a prime example of what is possible.

Tom Niemann is here tonight. Thank you very much.

That’s why I am supporting an historic rehabilitation tax credit. For a modest investment, we can attract millions of dollars worth of growth, which will bring new jobs, new revenues, affordable housing and new life to our cities and towns.

It’s my goal that children start school ready to learn, and graduate from college ready and able to succeed here in Maine.

Early childhood was the heart of my economic Summit held in November. More than 200 Maine business and community leaders came together to understand the positive economic returns from early childhood investments.

I will continue to work with those Mainers to transform the Children's Cabinet Task Force on Early Childhood into a Children's Growth Council.

We can propel the powerful momentum of the Summit into our communities.

Through the power of community, we can create a legacy for our children.

Not long ago, Maine lost one of our most generous and inspiring leaders – speaking of children - Harold Alfond, the man who built Dexter Shoe.

It’s impossible to estimate Harold’s impact on Maine. He has touched so many lives and so many communities with his leadership and his philanthropy.

Harold challenged us all to do more, to build partnerships and to overcome hurdles.

Harold didn’t go to college, but he recognized early on that the days of making a good living with just a high school diploma were disappearing.

But Harold wasn’t blind to life’s hard realities. For some families, the promise of college is financially out of reach.

With the Alfond College Challenge that he established, the dream is a little closer.

The Challenge provides a $500 dollar education grant to every child born in Maine that will help them start a college savings account.

It began last week in Augusta and will expand statewide in 2009. And no, you don’t have to name your first child Harold.

Working through the Finance Authority of Maine and in cooperation with Maine’s hospitals, families in this State will have been given a head start on higher education.

In his book, Harold wrote that he hoped to retire 10 years after he passed away. He was serious and Maine will be a much better place because of it.

Harold’s son, Bill Alfond, and his wife, is in the gallery tonight. Please stand and be recognized by the Chamber.

Last year, the Legislature overwhelmingly approved Opportunity Maine, a tax credit program that will help students overcome college debt if they live and work in the State after graduation.

With these tax credits, we will keep more of our home-grown graduates here, and open the door of opportunity for the next generation of Maine entrepreneurs and leaders.

My friends, I am filled with hope. We are taking the steps necessary to grow our economy and improve the lives of the people of Maine.

We are streamlining government and cutting administration.

And we’re controlling spending.

We are investing in education and innovation so our children and families can succeed here in our state.

We are helping increase incomes by creating good jobs with good benefits.

That’s the roadmap that gets Maine where it needs to be.

This year, the Legislature will be called upon to take bold action, to protect the gains that have been made and to push forward on the reforms that will guide State government into the future.

We must ask ourselves: What do we want State government to do? What is fundamental to the health and welfare of our people?

We cannot be content with a legacy of work undone.

We owe it to our children, and we owe it to our State.

That is our task. That is our duty.

God Bless you and God Bless the State of Maine.

Thank you.

Good night.

State of the State Address 2008 Part F

January 9, 2008

State of the State Address 2008 Part G

Governor John E. Baldacci State of the State January 9, 2008

Madam President, Mr. Speaker, Madam Chief Justice, members of the Legislature, members of the Cabinet, distinguished guests and my fellow citizens:

We come together tonight as Maine stands on the verge of a new era.

The choices we make in the coming days will help to define who we are as a State, and what we hope to become.

I will not splash varnish on the hard truths before us.

Home heating oil and gasoline prices are at record highs.

Winter, just a few weeks old, has already shown its teeth.

The national economy is struggling under the weight of declining home values.

State revenues are not immune from the national condition and are falling short of expectations by $95 million dollars. We are forced to make hard decisions and set priorities.

And we remain a country at war, with men and women called to duty in far-off and dangerous lands.

Every word I have spoken is the inescapable truth. But there’s more to Maine’s story than those challenges we face.

In the five years since I first addressed you as Governor, much has changed in Maine.

Today I am proud to say that we are better prepared and more able to weather economic storms.

You, my friends, have done much of the hard work. You have not only balanced budgets, and demanded efficiencies. You’ve also come together – often in a spirit of bipartisanship -- to solve problems.

Five years ago, we faced a $1.2 billion dollar budget gap.

Our financial reserves were gone.

The State was borrowing hundreds of millions of dollars just to keep the lights on. Our credit rating was headed down.

Those days are gone – hopefully banished forever.

Today, we have rebuilt our reserves to almost $160 million dollars, and no longer take out payday loans to keep government open.

We have closed that budget gap and by the end of next year we will have invested more than $1 billion new State dollars in local education.

And we have done it all without raising the sales tax or income tax.

I want to repeat that, because it’s something the entire State should be proud of.

We have invested more than $1 billion new dollars in local education, rebuilt our reserves and stopped short-term borrowing.

Standard and Poor’s has raised our financial rating.

All without raising the sales or income tax.

That, my friends, is an accomplishment.

It has put us in a position of strength to deal with a fickle national economy.

Tonight, standing before you and with full knowledge of the challenges we face, I report that the State of this State is strong and determined to meet the future head on.

The revenue downturn we face in the two-year budget is a serious challenge that demands action.

On Dec. 18, I issued an executive order that reduced State spending by $38 million dollars for the rest of this fiscal year.

The Constitution of Maine requires the governor to ensure the State budget is balanced.

Every part of State government was called upon to make recommendations on how to reduce spending while maintaining their core missions.

I understand that these decisions touch real lives.

The cuts were not easy, but we are moving forward in a way that makes sure that we can protect our most vulnerable citizens while also meeting my Constitutional duty.

On that point, according to the Kaiser Foundation, Maine ranks first among the States in Medicaid spending for children, second in Medicaid spending for adults and fifth in Medicaid spending for the disabled.

Overall, according to Kaiser, Maine spends more per Medicaid enrollee than any other State.

So, tomorrow, when I unveil the details of my revisions to the two-year budget I can promise you this:

We will not pull the safety net out from under our most vulnerable citizens.

We will not take from our financial reserves to balance the budget.

And we will not increase taxes.

If we are to have the resources to invest in higher education, economic development and universal health care, we cannot continue to spend millions on systems built in the 1950s.

We must transform government at all levels. We must strengthen it to meet the demands of a new age. And we must prioritize our spending.

Government has an important role to play, but it cannot be all things to all people.

At the same time, beware of quick fixes and people who promise gain without change. They sell a bill of goods layered in promises that cannot be kept.

They say: You can have it all. The decisions aren’t difficult.

We all know that’s not true. The decisions ARE difficult.

We’ve made them and will continue to make them.

Since taking office in 2003, we have reduced the rolls of State government by more than 600 jobs. We have merged two major State departments, eliminating a commissioner, deputy commissioners;

And we have centralized back-office and administrative functions in all State departments. In just the first two years, that saved $11.5 million dollars.

It’s not the stuff of headlines. It’s good government, and it’s done.

Last year, the Legislature passed a truly historic reform of local education.

The new law reduces the number of school administrative units from 290 to 80.

School administrative units: That’s a mouth full. It sounds very government-like, very bureaucratic.

That’s because it is.

And that’s the problem.

Since the early 80s, the number of students in Maine has declined by almost 40,000 and is expected to decline by 20,000 more in the next five years.

During the same time, the number of school administrators has increased by 400.

For 50 years, we have done the same old thing, the same old way, and it hasn’t produced the excellence and results that we need.

It’s not sustainable and drains resources from students and teachers.

Now we are on our way to a new structure that will better serve our people. It will save taxpayers money and provide a better education for our children.

Legislation introduced this year and already approved by the Education Committee will further strengthen the new law.

Even so, the fighting around it has not stopped.

We cannot return to the dysfunction of the past.

In 1937, President Franklin Roosevelt talked about the tendency of government to fall victim to inertia and to retreat from important gains when put under pressure by powerful special interests.

“Shall we pause now and turn our back upon the road that lies ahead?,” he asked. “Shall we call this the promised land? Or, shall we continue on our way?”

As President Roosevelt knew then and the people of Maine know today, progress and growth are in front of us, not in the past.

As President Roosevelt said then, “We will carry on.”

In August, we began a conversation about the way we treat inmates in our prisons and county jails and about the financial hardships created by our current, fragmented system.

It is bad for taxpayers and bad for mentally ill and drug-addicted prisoners who do not get the care they need to break the cycle of crime.

It must change.

Tomorrow I will submit legislation to unify the state prison system with the 15 county jail administrations.

The plan has evolved from when we first began talking about it. We have listened to concerns from counties. And we have made changes to improve our plan.

I would like to say tonight that all the differences between the counties and the State have been resolved. They haven’t.

But I can say that progress has been made. Sheriffs and commissioners have come a long way from the starting point, and so have we. I believe that common ground is still possible.

And I believe a solution exists that will save taxpayer money and improve the treatment of the people in our care.

President Lincoln wrote to Congress in 1862: “The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise with the occasion. As our case is new, so we must think anew and act anew.”

You don’t have to face the deepest crisis in the history of the Republic – as Lincoln did – to understand the necessity of thinking about old problems in new ways.

We live in a complex world that requires government to carry an increasing load. Natural resource and environmental issues demand experts with broad experiences.

In a time of declining revenues and increasing financial pressures in other areas of the budget, we can’t continue funding silos that keep our experts separate and our attentions divided.

It’s been more than 30 years since we developed our approach to the stewardship of Maine’s natural resources.

In those three decades, the world has changed dramatically. There have been amazing advances in science and technology.

And Maine’s natural resource agencies haven’t been allowed to keep up. The structure hasn’t kept up pace with the changing times.

Already, we’ve brought together those agencies’ back-office staffs, accountants and IT experts. We created a single natural resource service center to do all those jobs that aren’t part of the agencies core responsibilities.

That’s done. But we need to do more.

In my budget, I will propose a process that will result in no more than two natural resources agencies, where today we have four.

We will seek efficiencies and combine programs that shouldn’t be separated by bureaucracies.

I know that I don’t have all the answers, but I do believe we can find them together.

The merger process will seek input from those willing to come to the table.

Our goal is to enhance the services provided to natural resource-based businesses; To increase outdoor recreation; And to improve natural resource management.

We need to end the duplication in administration that stands in the way.

Our efforts are not confined to a single area of government. We are looking at government at every level, and we’re looking for improvement.

Earlier this month, Maine selected a private company, Unisys Corporation, a nationally respected company, to fix a troubled part of the Department of Health and Human Services.

For almost three years, we have struggled with a Medicaid computer system that has never lived up to expectations. It’s caused countless headaches and heartaches for Maine businesses and created financial difficulties for the State.

With this work, we will move on to a better way of doing business.

I am also proposing a reorganization of the upper and middle management at Health and Human Services that will give my commissioner the flexibility she needs to run Maine’s largest department.

It will empower frontline workers, reduce from 10 to 6 the number of central offices in the agency and consolidate management at the regional level.

To be successful, you must be able to adapt. We will give them that ability.

But success also depends on innovation.

Maine has led the country on health care reform, an innovation that matters to families and businesses alike.

When the federal government passed a poorly designed Medicare drug benefit that actually hurt some senior citizens in our State, Maine stepped forward to ease the transition.

When the federal government failed to deliver on affordable health care, Maine stepped forward.

We will continue to step forward.

In my budget, we will bring together three of the largest purchasers of health care in the State for a new initiative to save taxpayer money and provide better care to consumers.

The Maine State Employees Health Commission, the University of Maine System and the Maine Education Association will join forces and put their enormous buying power to work to lower prescription drug costs.

This cooperative effort will save money for thousands of workers who need medicine, for taxpayers whose dollars contribute to the system and it will increase the amount of money available to fund health care for retired teachers.

More than 28,000 Mainers have been insured through our Dirigo Health program. We’ve extended coverage to more families and more small businesses, and we’ve done it in a way that has saved millions of dollars in health care spending.

Last year, we were close to taking the next step with Dirigo. This year, we’ll do it.

I will support Legislative efforts to provide meaningful market reform that will make coverage more affordable for individuals.

And I will work with the Legislature to find a new way to fund Dirigo that is less contentious and more sustainable.

I believe health care is a fundamental and basic right. Every man, woman and child should be able to count on receiving the care they need when they need it.

I am very pleased that the Dirigo Health Agency has contracted with a new partner, Harvard Pilgrim Health.

Harvard Pilgrim is a nonprofit health plan that is consistently ranked No. 1 by consumers nationally. The company brings new and important competition to Maine’s health care marketplace.

I’m pleased to welcome Harvard Pilgrim to Maine, and I want to recognize in the gallery the company’s CEO, Charlie Baker. We’re glad you’re here, and we look forward to working with you.

Charlie, I ask you to rise and accept the greetings of the Chamber.

When I think about what matters most to me, and to the people I meet when I travel around the State, it’s not the ins and outs of a particular policy. It’s not the details that we will wring our hands over from now until April.

What matters most is more basic. It’s family and friends.

Tonight, as I speak to you, Maine has 102 members of the National Guard deployed overseas.

Soon, more men and women will be joining them.

This month 130 members of the 126th Aviation Regiment from Bangor will go to Iraq for the second time. These men and women save lives by putting their own at risk; they fly into danger to rescue other soldiers.

Another 16-person team of National Guard Soldiers will also leave this month for Afghanistan to train that country’s military.

They deserve our appreciation; they deserve our support. Please join me in saluting their service and sacrifice by recognizing Major Brian Veneziano, the commander of the 126th.

Please rise and accept the greetings of the Chamber.

These brave men and women want the same things as you and I: A good job with benefits, a college education for their kids, and to know that their families are nearby and secure.

Family is the most important thing.

Yesterday, my wife and I celebrated our 25th anniversary. It has been an amazing journey.

You could not have a first lady more committed to Maine’s children, to education and to the State. She is a tireless advocate for literacy, and promotes Maine wherever she goes.

I’d like to ask Karen to stand and be recognized by the Chamber.

My family’s not that much different than a lot of others in Maine.

We have our family discussions, agreements and disagreements.

But I have never lost sight of what it means to work hard and still struggle to pay the bills.

I have met countless men and women who play by the rules, go to work everyday and still can’t seem to get ahead.

In 1965, President Johnson understood the great divide in our country and spoke about it.

He said: “In a land of great wealth, families must not live in hopeless poverty. In a land rich in harvest, children must not go hungry. In a land of healing miracles, neighbors must not suffer and die unattended.”

If President Johnson were speaking today and lived in Maine, I think he would have added at least one more line:

In a land of technology, science and abundant natural resources, no family should go to bed wondering if their fuel oil will last until morning, worried that they will wake up cold.

I know families and businesses are struggling with high energy costs.

I have talked to the truck drivers and small business owners who are being pushed to the brink.

And I have heard the call for help.

We will answer that call.

My administration began working on this problem when the weather was still warm and before oil topped out at $100 dollar a barrel.

Working with the United Way, Eastern Maine Funders and the Maine Community Action Agencies, the Keep Maine Warm Fund has raised more than $1 million dollars to provide emergency fuel assistance.

The effort is gaining momentum.

I am pleased to announce tonight that LL Bean will be making a contribution of $250,000 to the Keep Maine Warm Fund, joining such organizations as Irving Oil, The Libra Foundation, The Fisher Foundation, Wright Express, Maine Bank and Trust, and TD Banknorth.

I’d like to thank Leon Gorman, LL Bean’s chairman, for his company’s efforts. Please stand Leon, and accept the greetings of the Chamber.

The Fund is an example of Mainers taking care of Mainers.

I know not everyone is able, but I’d ask those of you who can to join the effort to Keep Maine Warm by making a charitable contribution to this very worthy cause.

Working closely with Maine’s Congressional Delegation, we will continue to put pressure on Washington to release funding for energy assistance.

The money’s there; and we need to put it to work.

I have signed an executive order making it easier for companies to make small fuel deliveries to families in need.

I have sought relief for truck drivers devastated by high diesel costs. During this session, I will submit legislation to help safeguard the forest products industry, which has been particularly hard hit and is so important to our rural economy.

We are doing what we can for as many people as we can. And those efforts will not cease.

For too long, our country and our state have been dependent on costly foreign oil.

Eighty percent of Maine’s homes are reliant on oil for heat.

As prices have risen, we have sent billions of dollars out of state to pay for it. Money that otherwise would have remained with the families and businesses in Maine.

We must move forward aggressively to heat our homes with resources we have or can make right here.

We have made great strides in the development of wind energy. We cannot be shy about new projects. We will rewrite the rulebook to make wind power development easier without compromising our environment.

Maine has tremendous potential for wind power. Already $2 billion worth of investments have been approved or are awaiting consideration. And an equal amount is being explored.

Just last week a new project on Stetson Mountain won approval. We can harness the tremendous power of the wind and tides to power our industries and light our homes.

And we are also working closely with Maine’s Native American Tribes to support and promote alternative energy projects.

The future rests within reach, and we must seize it.

Tonight, I am announcing a “Wood-to-Energy Initiative” to bring Maine-made sources of heat to the homes and businesses of Maine.

This partnership will bring together the public and private sectors to explore what is possible and what is practical.

I have asked Maine entrepreneur Les Otten, who is here tonight, to bring together business leaders and our Department of Conservation to lead my Administration’s efforts on a conversion initiative that will use our forests and natural resources to relieve consumption of nonrenewable oil.

As a first step in this Initiative, my Administration will pursue a transition to biofuels such as wood pellets and wood chips.

We will identify those state buildings where conversion to wood pellets, wind or other renewable sources of energy can reduce costs by 30 to 50 percent.

This not only saves money for Maine taxpayers, it generates the investment and business activity to grow Maine’s economy.

The lessons learned from these demonstration projects will be made available to every home owner and business in Maine. As part of this Initiative, we will identify and promote the financial tools to enable Maine homeowners and small businesses to move away from their reliance on costly foreign oil.

We can encourage the alternative energy industry in way that benefits Maine without disadvantaging existing businesses reliant on wood for other products.

We are already working on a collaborative effort with New Brunswick and Nova Scotia that will take stock in our natural resources and develop new technologies and new market opportunities.

We should look to our Canadian neighbors for new partnerships that can reduce the cost of electricity in Maine and help us to better understand the energy potential of our forests.

In this energy crisis, we will develop renewable sources of energy made in Maine, by Maine businesses for Maine people.

I was still a young boy when President Kennedy was elected in 1960. My father served as a delegate for him at the national convention. Kennedy’s words still hold power today.

He said: “The dynamic of democracy is the power and the purpose of the individual, and the policy of this administration is to give to the individual the opportunity to realize his or her own highest possibilities.”

It’s an ideal that helps guide us today.

Through our workforce training initiatives, investments in research and development, and Pine Tree Economic Development Zones, we want to enhance the power of the private sector to create good jobs with good benefits.

Between November 2006 and November 2007, Maine’s economy created 4,400 new jobs despite slow growth in New England and nationally.

Since 2003, Maine’s economy has created more than 24,000 new jobs.

Our incomes have grown.

And we’ve empowered our people to become entrepreneurs.

According to the Kauffman Foundation, Maine ranked in the top five in 2006 for people who, for the first time, started their own new businesses.

This is the spirit of Maine.

In November, voters approved a $55 million dollar investment that will help those entrepreneurs develop new ideas and bring them to the market.

It’s the kind of investment that turns good ideas into good jobs.

This significant infusion of resources would not have been possible without Karen Mills and my Council on Jobs and Innovation, which she led.

Karen, thank you very much for your leadership.

Our people are strong, they are resilient and they should not be underestimated.

Given the chance, they can achieve great things.

I know it, I’ve seen it. There’s evidence of it in every part of Maine.

In Brewer, Cianbro Corporation will be creating hundreds of new manufacturing jobs.

In Lincoln, Millinocket, East Millinocket and Old Town, mills threatened with extinction are alive and successful. People are back to work.

In Belfast, athenahealth, an impressive company, has created 200 new jobs with more to come.

Maine was able to beat out Massachusetts, Rhode Island, New Hampshire, Vermont and New York to attract this company.

When Maine learned that MBNA, a major employer in the State, was merging with Bank of America, there was a lot of pessimism and worry about the future.

And for good reason. There was no secret that MBNA’s workforce would be reduced and that facilities would be closed.

Now, with athenahealth and other new companies, we have successfully put people back to work in former MBNA facilities in Farmington, Portland, Presque Isle, Fort Kent, Rockland and now Belfast.

The jobs that were lost will be grown back. And hope has replaced despair for those communities.

We know we can do it.

But we must redouble our efforts to spur economic development. We cannot be lulled into a posture that sees us only able to lurch from one crisis to the next.

We must be prepared to stop trouble before it arrives at our doorstep.

I’ve asked my economic development Commissioner John Richardson and Maine State Chamber of Commerce President Dana Connors to work with the Legislature to change the way we do business for business.

We can better serve Maine’s business community with a local and regional emphasis and greater co-ordination and partnership.

We need to move our economic development efforts away from Augusta and into the communities and regions where it can do the most good.

The State’s top economic development priority should be to provide them with the support, resources and vision to help them accomplish their goals.

We all understand the Maine economy is in a time of dramatic, even historic, change.

And we all understand that our future economic success will be built upon the foundation of our people and the special qualities that define our neighborhoods, towns and our state.

People are drawn to Maine. We have what they’re looking for and what’s missing from their everyday lives.

Look at tourism, one of the bedrocks of Maine’s economy.

Last year alone, almost 42 million people visited our State.

They come for our natural beauty, our people and our vibrant historical and cultural sites.

Last year, voters showed that they understand that. They approved significant investments in conservation and in our environment. Soon, that money will be put to work.

Economic prosperity demands that we invest in our workforce, in our open landscapes, and in our historic downtowns.

Even now, we cannot become so focused on today that we sacrifice the investments that will make us stronger tomorrow.

When I visit places like Lewiston and Auburn, Biddeford and Saco and Waterville, I see the enormous potential for redevelopment. The Hathaway Creative Center in Waterville is a prime example of what is possible.

Tom Niemann is here tonight. Thank you very much.

That’s why I am supporting an historic rehabilitation tax credit. For a modest investment, we can attract millions of dollars worth of growth, which will bring new jobs, new revenues, affordable housing and new life to our cities and towns.

It’s my goal that children start school ready to learn, and graduate from college ready and able to succeed here in Maine.

Early childhood was the heart of my economic Summit held in November. More than 200 Maine business and community leaders came together to understand the positive economic returns from early childhood investments.

I will continue to work with those Mainers to transform the Children's Cabinet Task Force on Early Childhood into a Children's Growth Council.

We can propel the powerful momentum of the Summit into our communities.

Through the power of community, we can create a legacy for our children.

Not long ago, Maine lost one of our most generous and inspiring leaders – speaking of children - Harold Alfond, the man who built Dexter Shoe.

It’s impossible to estimate Harold’s impact on Maine. He has touched so many lives and so many communities with his leadership and his philanthropy.

Harold challenged us all to do more, to build partnerships and to overcome hurdles.

Harold didn’t go to college, but he recognized early on that the days of making a good living with just a high school diploma were disappearing.

But Harold wasn’t blind to life’s hard realities. For some families, the promise of college is financially out of reach.

With the Alfond College Challenge that he established, the dream is a little closer.

The Challenge provides a $500 dollar education grant to every child born in Maine that will help them start a college savings account.

It began last week in Augusta and will expand statewide in 2009. And no, you don’t have to name your first child Harold.

Working through the Finance Authority of Maine and in cooperation with Maine’s hospitals, families in this State will have been given a head start on higher education.

In his book, Harold wrote that he hoped to retire 10 years after he passed away. He was serious and Maine will be a much better place because of it.

Harold’s son, Bill Alfond, and his wife, is in the gallery tonight. Please stand and be recognized by the Chamber.

Last year, the Legislature overwhelmingly approved Opportunity Maine, a tax credit program that will help students overcome college debt if they live and work in the State after graduation.

With these tax credits, we will keep more of our home-grown graduates here, and open the door of opportunity for the next generation of Maine entrepreneurs and leaders.

My friends, I am filled with hope. We are taking the steps necessary to grow our economy and improve the lives of the people of Maine.

We are streamlining government and cutting administration.

And we’re controlling spending.

We are investing in education and innovation so our children and families can succeed here in our state.

We are helping increase incomes by creating good jobs with good benefits.

That’s the roadmap that gets Maine where it needs to be.

This year, the Legislature will be called upon to take bold action, to protect the gains that have been made and to push forward on the reforms that will guide State government into the future.

We must ask ourselves: What do we want State government to do? What is fundamental to the health and welfare of our people?

We cannot be content with a legacy of work undone.

We owe it to our children, and we owe it to our State.

That is our task. That is our duty.

God Bless you and God Bless the State of Maine.

Thank you.

Good night.

State of the State Address 2008 Part G

January 9, 2008

State of the State Address 2008 Part H

Governor John E. Baldacci State of the State January 9, 2008

Madam President, Mr. Speaker, Madam Chief Justice, members of the Legislature, members of the Cabinet, distinguished guests and my fellow citizens:

We come together tonight as Maine stands on the verge of a new era.

The choices we make in the coming days will help to define who we are as a State, and what we hope to become.

I will not splash varnish on the hard truths before us.

Home heating oil and gasoline prices are at record highs.

Winter, just a few weeks old, has already shown its teeth.

The national economy is struggling under the weight of declining home values.

State revenues are not immune from the national condition and are falling short of expectations by $95 million dollars. We are forced to make hard decisions and set priorities.

And we remain a country at war, with men and women called to duty in far-off and dangerous lands.

Every word I have spoken is the inescapable truth. But there’s more to Maine’s story than those challenges we face.

In the five years since I first addressed you as Governor, much has changed in Maine.

Today I am proud to say that we are better prepared and more able to weather economic storms.

You, my friends, have done much of the hard work. You have not only balanced budgets, and demanded efficiencies. You’ve also come together – often in a spirit of bipartisanship -- to solve problems.

Five years ago, we faced a $1.2 billion dollar budget gap.

Our financial reserves were gone.

The State was borrowing hundreds of millions of dollars just to keep the lights on. Our credit rating was headed down.

Those days are gone – hopefully banished forever.

Today, we have rebuilt our reserves to almost $160 million dollars, and no longer take out payday loans to keep government open.

We have closed that budget gap and by the end of next year we will have invested more than $1 billion new State dollars in local education.

And we have done it all without raising the sales tax or income tax.

I want to repeat that, because it’s something the entire State should be proud of.

We have invested more than $1 billion new dollars in local education, rebuilt our reserves and stopped short-term borrowing.

Standard and Poor’s has raised our financial rating.

All without raising the sales or income tax.

That, my friends, is an accomplishment.

It has put us in a position of strength to deal with a fickle national economy.

Tonight, standing before you and with full knowledge of the challenges we face, I report that the State of this State is strong and determined to meet the future head on.

The revenue downturn we face in the two-year budget is a serious challenge that demands action.

On Dec. 18, I issued an executive order that reduced State spending by $38 million dollars for the rest of this fiscal year.

The Constitution of Maine requires the governor to ensure the State budget is balanced.

Every part of State government was called upon to make recommendations on how to reduce spending while maintaining their core missions.

I understand that these decisions touch real lives.

The cuts were not easy, but we are moving forward in a way that makes sure that we can protect our most vulnerable citizens while also meeting my Constitutional duty.

On that point, according to the Kaiser Foundation, Maine ranks first among the States in Medicaid spending for children, second in Medicaid spending for adults and fifth in Medicaid spending for the disabled.

Overall, according to Kaiser, Maine spends more per Medicaid enrollee than any other State.

So, tomorrow, when I unveil the details of my revisions to the two-year budget I can promise you this:

We will not pull the safety net out from under our most vulnerable citizens.

We will not take from our financial reserves to balance the budget.

And we will not increase taxes.

If we are to have the resources to invest in higher education, economic development and universal health care, we cannot continue to spend millions on systems built in the 1950s.

We must transform government at all levels. We must strengthen it to meet the demands of a new age. And we must prioritize our spending.

Government has an important role to play, but it cannot be all things to all people.

At the same time, beware of quick fixes and people who promise gain without change. They sell a bill of goods layered in promises that cannot be kept.

They say: You can have it all. The decisions aren’t difficult.

We all know that’s not true. The decisions ARE difficult.

We’ve made them and will continue to make them.

Since taking office in 2003, we have reduced the rolls of State government by more than 600 jobs. We have merged two major State departments, eliminating a commissioner, deputy commissioners;

And we have centralized back-office and administrative functions in all State departments. In just the first two years, that saved $11.5 million dollars.

It’s not the stuff of headlines. It’s good government, and it’s done.

Last year, the Legislature passed a truly historic reform of local education.

The new law reduces the number of school administrative units from 290 to 80.

School administrative units: That’s a mouth full. It sounds very government-like, very bureaucratic.

That’s because it is.

And that’s the problem.

Since the early 80s, the number of students in Maine has declined by almost 40,000 and is expected to decline by 20,000 more in the next five years.

During the same time, the number of school administrators has increased by 400.

For 50 years, we have done the same old thing, the same old way, and it hasn’t produced the excellence and results that we need.

It’s not sustainable and drains resources from students and teachers.

Now we are on our way to a new structure that will better serve our people. It will save taxpayers money and provide a better education for our children.

Legislation introduced this year and already approved by the Education Committee will further strengthen the new law.

Even so, the fighting around it has not stopped.

We cannot return to the dysfunction of the past.

In 1937, President Franklin Roosevelt talked about the tendency of government to fall victim to inertia and to retreat from important gains when put under pressure by powerful special interests.

“Shall we pause now and turn our back upon the road that lies ahead?,” he asked. “Shall we call this the promised land? Or, shall we continue on our way?”

As President Roosevelt knew then and the people of Maine know today, progress and growth are in front of us, not in the past.

As President Roosevelt said then, “We will carry on.”

In August, we began a conversation about the way we treat inmates in our prisons and county jails and about the financial hardships created by our current, fragmented system.

It is bad for taxpayers and bad for mentally ill and drug-addicted prisoners who do not get the care they need to break the cycle of crime.

It must change.

Tomorrow I will submit legislation to unify the state prison system with the 15 county jail administrations.

The plan has evolved from when we first began talking about it. We have listened to concerns from counties. And we have made changes to improve our plan.

I would like to say tonight that all the differences between the counties and the State have been resolved. They haven’t.

But I can say that progress has been made. Sheriffs and commissioners have come a long way from the starting point, and so have we. I believe that common ground is still possible.

And I believe a solution exists that will save taxpayer money and improve the treatment of the people in our care.

President Lincoln wrote to Congress in 1862: “The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise with the occasion. As our case is new, so we must think anew and act anew.”

You don’t have to face the deepest crisis in the history of the Republic – as Lincoln did – to understand the necessity of thinking about old problems in new ways.

We live in a complex world that requires government to carry an increasing load. Natural resource and environmental issues demand experts with broad experiences.

In a time of declining revenues and increasing financial pressures in other areas of the budget, we can’t continue funding silos that keep our experts separate and our attentions divided.

It’s been more than 30 years since we developed our approach to the stewardship of Maine’s natural resources.

In those three decades, the world has changed dramatically. There have been amazing advances in science and technology.

And Maine’s natural resource agencies haven’t been allowed to keep up. The structure hasn’t kept up pace with the changing times.

Already, we’ve brought together those agencies’ back-office staffs, accountants and IT experts. We created a single natural resource service center to do all those jobs that aren’t part of the agencies core responsibilities.

That’s done. But we need to do more.

In my budget, I will propose a process that will result in no more than two natural resources agencies, where today we have four.

We will seek efficiencies and combine programs that shouldn’t be separated by bureaucracies.

I know that I don’t have all the answers, but I do believe we can find them together.

The merger process will seek input from those willing to come to the table.

Our goal is to enhance the services provided to natural resource-based businesses; To increase outdoor recreation; And to improve natural resource management.

We need to end the duplication in administration that stands in the way.

Our efforts are not confined to a single area of government. We are looking at government at every level, and we’re looking for improvement.

Earlier this month, Maine selected a private company, Unisys Corporation, a nationally respected company, to fix a troubled part of the Department of Health and Human Services.

For almost three years, we have struggled with a Medicaid computer system that has never lived up to expectations. It’s caused countless headaches and heartaches for Maine businesses and created financial difficulties for the State.

With this work, we will move on to a better way of doing business.

I am also proposing a reorganization of the upper and middle management at Health and Human Services that will give my commissioner the flexibility she needs to run Maine’s largest department.

It will empower frontline workers, reduce from 10 to 6 the number of central offices in the agency and consolidate management at the regional level.

To be successful, you must be able to adapt. We will give them that ability.

But success also depends on innovation.

Maine has led the country on health care reform, an innovation that matters to families and businesses alike.

When the federal government passed a poorly designed Medicare drug benefit that actually hurt some senior citizens in our State, Maine stepped forward to ease the transition.

When the federal government failed to deliver on affordable health care, Maine stepped forward.

We will continue to step forward.

In my budget, we will bring together three of the largest purchasers of health care in the State for a new initiative to save taxpayer money and provide better care to consumers.

The Maine State Employees Health Commission, the University of Maine System and the Maine Education Association will join forces and put their enormous buying power to work to lower prescription drug costs.

This cooperative effort will save money for thousands of workers who need medicine, for taxpayers whose dollars contribute to the system and it will increase the amount of money available to fund health care for retired teachers.

More than 28,000 Mainers have been insured through our Dirigo Health program. We’ve extended coverage to more families and more small businesses, and we’ve done it in a way that has saved millions of dollars in health care spending.

Last year, we were close to taking the next step with Dirigo. This year, we’ll do it.

I will support Legislative efforts to provide meaningful market reform that will make coverage more affordable for individuals.

And I will work with the Legislature to find a new way to fund Dirigo that is less contentious and more sustainable.

I believe health care is a fundamental and basic right. Every man, woman and child should be able to count on receiving the care they need when they need it.

I am very pleased that the Dirigo Health Agency has contracted with a new partner, Harvard Pilgrim Health.

Harvard Pilgrim is a nonprofit health plan that is consistently ranked No. 1 by consumers nationally. The company brings new and important competition to Maine’s health care marketplace.

I’m pleased to welcome Harvard Pilgrim to Maine, and I want to recognize in the gallery the company’s CEO, Charlie Baker. We’re glad you’re here, and we look forward to working with you.

Charlie, I ask you to rise and accept the greetings of the Chamber.

When I think about what matters most to me, and to the people I meet when I travel around the State, it’s not the ins and outs of a particular policy. It’s not the details that we will wring our hands over from now until April.

What matters most is more basic. It’s family and friends.

Tonight, as I speak to you, Maine has 102 members of the National Guard deployed overseas.

Soon, more men and women will be joining them.

This month 130 members of the 126th Aviation Regiment from Bangor will go to Iraq for the second time. These men and women save lives by putting their own at risk; they fly into danger to rescue other soldiers.

Another 16-person team of National Guard Soldiers will also leave this month for Afghanistan to train that country’s military.

They deserve our appreciation; they deserve our support. Please join me in saluting their service and sacrifice by recognizing Major Brian Veneziano, the commander of the 126th.

Please rise and accept the greetings of the Chamber.

These brave men and women want the same things as you and I: A good job with benefits, a college education for their kids, and to know that their families are nearby and secure.

Family is the most important thing.

Yesterday, my wife and I celebrated our 25th anniversary. It has been an amazing journey.

You could not have a first lady more committed to Maine’s children, to education and to the State. She is a tireless advocate for literacy, and promotes Maine wherever she goes.

I’d like to ask Karen to stand and be recognized by the Chamber.

My family’s not that much different than a lot of others in Maine.

We have our family discussions, agreements and disagreements.

But I have never lost sight of what it means to work hard and still struggle to pay the bills.

I have met countless men and women who play by the rules, go to work everyday and still can’t seem to get ahead.

In 1965, President Johnson understood the great divide in our country and spoke about it.

He said: “In a land of great wealth, families must not live in hopeless poverty. In a land rich in harvest, children must not go hungry. In a land of healing miracles, neighbors must not suffer and die unattended.”

If President Johnson were speaking today and lived in Maine, I think he would have added at least one more line:

In a land of technology, science and abundant natural resources, no family should go to bed wondering if their fuel oil will last until morning, worried that they will wake up cold.

I know families and businesses are struggling with high energy costs.

I have talked to the truck drivers and small business owners who are being pushed to the brink.

And I have heard the call for help.

We will answer that call.

My administration began working on this problem when the weather was still warm and before oil topped out at $100 dollar a barrel.

Working with the United Way, Eastern Maine Funders and the Maine Community Action Agencies, the Keep Maine Warm Fund has raised more than $1 million dollars to provide emergency fuel assistance.

The effort is gaining momentum.

I am pleased to announce tonight that LL Bean will be making a contribution of $250,000 to the Keep Maine Warm Fund, joining such organizations as Irving Oil, The Libra Foundation, The Fisher Foundation, Wright Express, Maine Bank and Trust, and TD Banknorth.

I’d like to thank Leon Gorman, LL Bean’s chairman, for his company’s efforts. Please stand Leon, and accept the greetings of the Chamber.

The Fund is an example of Mainers taking care of Mainers.

I know not everyone is able, but I’d ask those of you who can to join the effort to Keep Maine Warm by making a charitable contribution to this very worthy cause.

Working closely with Maine’s Congressional Delegation, we will continue to put pressure on Washington to release funding for energy assistance.

The money’s there; and we need to put it to work.

I have signed an executive order making it easier for companies to make small fuel deliveries to families in need.

I have sought relief for truck drivers devastated by high diesel costs. During this session, I will submit legislation to help safeguard the forest products industry, which has been particularly hard hit and is so important to our rural economy.

We are doing what we can for as many people as we can. And those efforts will not cease.

For too long, our country and our state have been dependent on costly foreign oil.

Eighty percent of Maine’s homes are reliant on oil for heat.

As prices have risen, we have sent billions of dollars out of state to pay for it. Money that otherwise would have remained with the families and businesses in Maine.

We must move forward aggressively to heat our homes with resources we have or can make right here.

We have made great strides in the development of wind energy. We cannot be shy about new projects. We will rewrite the rulebook to make wind power development easier without compromising our environment.

Maine has tremendous potential for wind power. Already $2 billion worth of investments have been approved or are awaiting consideration. And an equal amount is being explored.

Just last week a new project on Stetson Mountain won approval. We can harness the tremendous power of the wind and tides to power our industries and light our homes.

And we are also working closely with Maine’s Native American Tribes to support and promote alternative energy projects.

The future rests within reach, and we must seize it.

Tonight, I am announcing a “Wood-to-Energy Initiative” to bring Maine-made sources of heat to the homes and businesses of Maine.

This partnership will bring together the public and private sectors to explore what is possible and what is practical.

I have asked Maine entrepreneur Les Otten, who is here tonight, to bring together business leaders and our Department of Conservation to lead my Administration’s efforts on a conversion initiative that will use our forests and natural resources to relieve consumption of nonrenewable oil.

As a first step in this Initiative, my Administration will pursue a transition to biofuels such as wood pellets and wood chips.

We will identify those state buildings where conversion to wood pellets, wind or other renewable sources of energy can reduce costs by 30 to 50 percent.

This not only saves money for Maine taxpayers, it generates the investment and business activity to grow Maine’s economy.

The lessons learned from these demonstration projects will be made available to every home owner and business in Maine. As part of this Initiative, we will identify and promote the financial tools to enable Maine homeowners and small businesses to move away from their reliance on costly foreign oil.

We can encourage the alternative energy industry in way that benefits Maine without disadvantaging existing businesses reliant on wood for other products.

We are already working on a collaborative effort with New Brunswick and Nova Scotia that will take stock in our natural resources and develop new technologies and new market opportunities.

We should look to our Canadian neighbors for new partnerships that can reduce the cost of electricity in Maine and help us to better understand the energy potential of our forests.

In this energy crisis, we will develop renewable sources of energy made in Maine, by Maine businesses for Maine people.

I was still a young boy when President Kennedy was elected in 1960. My father served as a delegate for him at the national convention. Kennedy’s words still hold power today.

He said: “The dynamic of democracy is the power and the purpose of the individual, and the policy of this administration is to give to the individual the opportunity to realize his or her own highest possibilities.”

It’s an ideal that helps guide us today.

Through our workforce training initiatives, investments in research and development, and Pine Tree Economic Development Zones, we want to enhance the power of the private sector to create good jobs with good benefits.

Between November 2006 and November 2007, Maine’s economy created 4,400 new jobs despite slow growth in New England and nationally.

Since 2003, Maine’s economy has created more than 24,000 new jobs.

Our incomes have grown.

And we’ve empowered our people to become entrepreneurs.

According to the Kauffman Foundation, Maine ranked in the top five in 2006 for people who, for the first time, started their own new businesses.

This is the spirit of Maine.

In November, voters approved a $55 million dollar investment that will help those entrepreneurs develop new ideas and bring them to the market.

It’s the kind of investment that turns good ideas into good jobs.

This significant infusion of resources would not have been possible without Karen Mills and my Council on Jobs and Innovation, which she led.

Karen, thank you very much for your leadership.

Our people are strong, they are resilient and they should not be underestimated.

Given the chance, they can achieve great things.

I know it, I’ve seen it. There’s evidence of it in every part of Maine.

In Brewer, Cianbro Corporation will be creating hundreds of new manufacturing jobs.

In Lincoln, Millinocket, East Millinocket and Old Town, mills threatened with extinction are alive and successful. People are back to work.

In Belfast, athenahealth, an impressive company, has created 200 new jobs with more to come.

Maine was able to beat out Massachusetts, Rhode Island, New Hampshire, Vermont and New York to attract this company.

When Maine learned that MBNA, a major employer in the State, was merging with Bank of America, there was a lot of pessimism and worry about the future.

And for good reason. There was no secret that MBNA’s workforce would be reduced and that facilities would be closed.

Now, with athenahealth and other new companies, we have successfully put people back to work in former MBNA facilities in Farmington, Portland, Presque Isle, Fort Kent, Rockland and now Belfast.

The jobs that were lost will be grown back. And hope has replaced despair for those communities.

We know we can do it.

But we must redouble our efforts to spur economic development. We cannot be lulled into a posture that sees us only able to lurch from one crisis to the next.

We must be prepared to stop trouble before it arrives at our doorstep.

I’ve asked my economic development Commissioner John Richardson and Maine State Chamber of Commerce President Dana Connors to work with the Legislature to change the way we do business for business.

We can better serve Maine’s business community with a local and regional emphasis and greater co-ordination and partnership.

We need to move our economic development efforts away from Augusta and into the communities and regions where it can do the most good.

The State’s top economic development priority should be to provide them with the support, resources and vision to help them accomplish their goals.

We all understand the Maine economy is in a time of dramatic, even historic, change.

And we all understand that our future economic success will be built upon the foundation of our people and the special qualities that define our neighborhoods, towns and our state.

People are drawn to Maine. We have what they’re looking for and what’s missing from their everyday lives.

Look at tourism, one of the bedrocks of Maine’s economy.

Last year alone, almost 42 million people visited our State.

They come for our natural beauty, our people and our vibrant historical and cultural sites.

Last year, voters showed that they understand that. They approved significant investments in conservation and in our environment. Soon, that money will be put to work.

Economic prosperity demands that we invest in our workforce, in our open landscapes, and in our historic downtowns.

Even now, we cannot become so focused on today that we sacrifice the investments that will make us stronger tomorrow.

When I visit places like Lewiston and Auburn, Biddeford and Saco and Waterville, I see the enormous potential for redevelopment. The Hathaway Creative Center in Waterville is a prime example of what is possible.

Tom Niemann is here tonight. Thank you very much.

That’s why I am supporting an historic rehabilitation tax credit. For a modest investment, we can attract millions of dollars worth of growth, which will bring new jobs, new revenues, affordable housing and new life to our cities and towns.

It’s my goal that children start school ready to learn, and graduate from college ready and able to succeed here in Maine.

Early childhood was the heart of my economic Summit held in November. More than 200 Maine business and community leaders came together to understand the positive economic returns from early childhood investments.

I will continue to work with those Mainers to transform the Children's Cabinet Task Force on Early Childhood into a Children's Growth Council.

We can propel the powerful momentum of the Summit into our communities.

Through the power of community, we can create a legacy for our children.

Not long ago, Maine lost one of our most generous and inspiring leaders – speaking of children - Harold Alfond, the man who built Dexter Shoe.

It’s impossible to estimate Harold’s impact on Maine. He has touched so many lives and so many communities with his leadership and his philanthropy.

Harold challenged us all to do more, to build partnerships and to overcome hurdles.

Harold didn’t go to college, but he recognized early on that the days of making a good living with just a high school diploma were disappearing.

But Harold wasn’t blind to life’s hard realities. For some families, the promise of college is financially out of reach.

With the Alfond College Challenge that he established, the dream is a little closer.

The Challenge provides a $500 dollar education grant to every child born in Maine that will help them start a college savings account.

It began last week in Augusta and will expand statewide in 2009. And no, you don’t have to name your first child Harold.

Working through the Finance Authority of Maine and in cooperation with Maine’s hospitals, families in this State will have been given a head start on higher education.

In his book, Harold wrote that he hoped to retire 10 years after he passed away. He was serious and Maine will be a much better place because of it.

Harold’s son, Bill Alfond, and his wife, is in the gallery tonight. Please stand and be recognized by the Chamber.

Last year, the Legislature overwhelmingly approved Opportunity Maine, a tax credit program that will help students overcome college debt if they live and work in the State after graduation.

With these tax credits, we will keep more of our home-grown graduates here, and open the door of opportunity for the next generation of Maine entrepreneurs and leaders.

My friends, I am filled with hope. We are taking the steps necessary to grow our economy and improve the lives of the people of Maine.

We are streamlining government and cutting administration.

And we’re controlling spending.

We are investing in education and innovation so our children and families can succeed here in our state.

We are helping increase incomes by creating good jobs with good benefits.

That’s the roadmap that gets Maine where it needs to be.

This year, the Legislature will be called upon to take bold action, to protect the gains that have been made and to push forward on the reforms that will guide State government into the future.

We must ask ourselves: What do we want State government to do? What is fundamental to the health and welfare of our people?

We cannot be content with a legacy of work undone.

We owe it to our children, and we owe it to our State.

That is our task. That is our duty.

God Bless you and God Bless the State of Maine.

Thank you.

Good night.

State of the State Address 2008 Part H

March 10, 2009

2009 State of the State Address

State of the State

Governor John Elias Baldacci

7 p.m., Tuesday, March 10, 2009

Madam President, Madam Speaker, Madam Chief Justice, members of the Legislature, members of the Cabinet, distinguished guests and my fellow citizens:

Thank you for joining me tonight as we come together to take measure of our State.

We face economic perils that will test our courage, our creativity and our resolve.

We will all be called upon to make uncomfortable decisions, to do without and to do things differently.

The headlines are filled with the terrible realities of the global recession.

Yesterday, I visited Baileyville in Washington County.

The community received rough news just last week. The Domtar pulp mill will be indefinitely shutting down in May. More than 300 people could lose their jobs.

The announcement came one day after RR Donnelley in Wells announced it would close its doors in June. More than 370 jobs will be lost. Unemployment is rising. Confidence has been shaken.

As I talk with the good men and women of Maine, I hear a similar question, punctuated with fear and uncertainty.

People ask: Governor, is the sun rising or is the sun setting? Has our time passed, will our children struggle in the years to come?

I do not know how long this recession will last, or how deep it will go.

But the sun will rise on Maine, and Maine will raise herself for the United States of America.

On Thursday when the news of the Domtar closure was released, I met with Legislators from Washington County, and we called County Commissioner Chris Gardner, who is also the director of the Port of Eastport.

It was a tough day all around.

But as we talked, Chris said something we all should take to heart. He said: “This is bad news, and we have a lot of things we must do in the coming days to prepare our community. But we also have to get started reinventing ourselves. We have opportunities.”

That is the spirit of Maine.

We are all aware of the challenges we face. But we can adapt. We can make the necessary changes.

In 1933, a newly elected Governor of Maine, Louis J. Brann, addressed the hardships of the Great Depression.

He said: “Giant forces are changing the entire social, political and governmental set-up of the world.”

“What was clear and accepted becomes complex and bewildering.”

“We find ourselves squarely up against conditions, new in government, calling for clear thinking and wise action …

“We may be forced to part with some things that we have grown to like,” Governor Brann continued.

“Like one going on a long journey, we must pack only the essentials. We will have to ‘travel light.’ Today, my friends of this Legislature, the State of Maine marches along the high road of stern necessity.”

Now, 76 years later, our predicament demands that same clear thinking and wise action as we work to ward off a global recession. And like 1933, we must make the right choices if we are to once again prosper.

In just a few short weeks, this Legislature worked with my administration to close a $140 million dollar budget gap for the current year.

State revenues dropped because the economy is dropping. To balance the books, Democrats and Republicans worked together with little regard for partisanship.

The steps we took to close the budget gap were tough, but the Appropriations Committee built a unanimous plan that won broad, bipartisan support.

We packed a light bag for the rest of this year.

Now we must move on to the budget for the next two years, and we can only afford to pack the essentials for that trip.

The Legislature has just finished public hearings on the budget I submitted in January.

My $6.1 billion dollar plan reduces State spending by about $200 million dollars. It’s the first time since at least 1974 that the State budget will actually be smaller than its predecessor.

This budget is prudent, and the reductions are necessary.

My plan protects our safety net, while calling on everyone in the State to adopt a sense of shared sacrifice.

We all must do our part to get through this difficult time.

The symptoms of today’s economic crisis are not unique to Maine, although we can surely feel them.

Our country – the entire world – is struggling under the weight of the same burdens.

But our strengths are undeniable, and we will not be deterred.

It may be dark right now, but we are not lost in the night.

We are not afraid of shadows or the empty noises that haunt children’s dreams.

The dawn of a new economic day in Maine is not here yet. But it is coming. We know the direction to look.

Because the sun rises first in Maine.

We have a plan.

There is a path to take. We know what we must do.

Just three short weeks ago the President signed an unprecedented economic recovery plan into law.

This much needed federal support will send about $900 million new dollars to Maine, to build roads, repair bridges, to help people stay well and to create jobs.

We have already started putting that money to work, and combined with our existing highway plan for this spring, summer and fall, we will put 11,000 people on the job in our State just in the area of transportation.

Thousands more jobs will be preserved at our schools, in our hospitals and as we advance toward new innovations and energy independence.

Without the hard work of Rep. Mike Michaud and Rep. Chellie Pingree, and the courage of Sen. Olympia Snowe and Sen. Susan Collins, this great opportunity for reinvestment would have been lost.

I spoke with Sen. Snowe and Sen. Collins during the most difficult hours of negotiations. They put aside empty partisanship and stood up for Maine and the nation.

With a new federal wind at our back, we have an unmatched opportunity to transform our State.

Last week, I proposed a three-year, $306 million dollar investment that will create jobs and strengthen our economy.

My plan makes critical investments in energy independence, highways and bridges.

It further develops passenger and freight rail, and invests in clean water and healthy communities.

And it will build our intellectual capacity by supporting higher education and innovation.

In addition, the plan will leverage more than $380 million dollars from other sources, putting nearly $700 million new dollars to work in Maine.

I understand that folks are nervous and that some might question the wisdom of borrowing right now, even for worthy projects.

Our State has always been conservative with bonds. We don’t borrow more than we can afford, and we don’t extend ourselves beyond good sense. We pay our bonds back in just 10 years, while most take 20 years or longer.

That makes now the time to invest.

There is no excuse for inaction.

We need to put people to work and help them gain the skills to be successful.

Maine has been a leader in putting technology to work in the classroom. We are going to revamp our laptop program and turn it into a powerful tool for the entire family.

The Department of Education and the Department of Labor will work to make sure every one of those computers has software preloaded to connect Maine families with the services available at our State’s CareerCenters.

Every night when students in seventh through 12th-grade bring those computers home, they’ll connect the whole family to new opportunities and new resources.

Just as the path forward requires us to make smart investments, it also requires that we break the bad habits of the past.

We cannot afford to back-track on important reforms that have driven government at all levels to be more efficient.

Change is always difficult, and it’s easy to understand why some find comfort in the status quo.

But business as usual doesn’t work anymore.

We must continue forward with the reform of K-12 administration. We can not allow Maine to be dragged backwards by a referendum that seeks a return to the expensive past.

The way forward – the way to protect local schools and resources for the classroom – is to stop wasting money on unnecessary bureaucracies and administrations.

We must continue to push for more effective and efficient government here in Augusta, in our counties, and at town and city halls across the State.

An excellent example is our new Board of Corrections, which is for the first time coordinating the work of 15 county jails and the state prisons.

It’s been hard work, with a few bumps along the way, but we see progress every day. I am confident the Board will make our corrections system more affordable, while providing better results for communities and our people.

And we know there are more savings to be had by keeping our eyes on efficiency.

This summer, I asked the internationally respected business consulting group, McKinsey and Company, for a data-driven evaluation of our State.

We learned that Maine can save at least $180 million more dollars over three years by improving the way we do business.

How do we do it?

We must be willing to reform now.

Whether it’s by combining State agencies, eliminating unnecessary regulations, or holding the line on taxes, we must maintain our fiscal vigilance and question the way every tax dollar is spent.

Today, Maine’s government is smaller and more effective than at any time in recent memory. Since 2002, the number of State workers has been cut by more than 700 as we have learned to do more with less. That is a stern necessity we face.

But smaller government doesn’t mean we settle for less effective government.

Let me give you an example. In Child Welfare, we have worked with families, schools and communities to reduce the number of children in foster care by one-third and to double the percentage of children placed with relatives and families.

Government gets smaller, and children are healthier and happier. Creative partnerships also give us the opportunity to stretch limited resources.

This year, Fairpoint Communications joined Maine’s business community.

Gene Johnson, the company’s president, brought with him to Maine a commitment to our State, to expand broadband statewide and to help us grow our economy. So far, the company has added more than 440 workers to its payroll in Maine.

Now the company will join with the State to form a new partnership that will help to refocus our economic development activities.

Simply put, we too often react to the crisis of the day instead of preparing and executing a comprehensive development strategy.

Our approach will help regions identify their best assets and develop plans to build upon them.

It’s economic development from the ground up, instead of the top down.

And we will combine economic development with Quality of Place. Quality of Place is shorthand for those things that we all treasure, that make Maine special, that keep us all coming home and draw visitors from around the world.

It’s our coastline, still dotted with working waterfronts. Our clean, deep lakes and fresh air. It’s our vast and healthy forests. We have artificially separated economic development from the characteristics of our State that make it so attractive in the first place.

Occasionally, we’ve allowed an unnecessary competition to grow between economic development and Quality of Place.

But they don’t compete; they must be tied together to be successful. That’s why I propose that we will continue to invest money to preserve Maine’s unique heritage by continuing the Land for Maine’s Future and Working Waterfront programs.

This will help to preserve open access to some of our most scenic areas, help farmers and fishermen stay on the job, and safeguard our forests and protect our forest products industry with a sustainable fiber supply.

Maine is a special place, and we need to protect it.

Even before health care money from the Recovery Act began to come to Maine, I worked with the Legislature to set out clear rules for how the money could be used.

First and foremost, we must balance our budget and take care of the people who need our help the most.

Second, we will meet our obligations to Maine hospitals. In 2006, I signed a commitment to the hospitals that Maine would pay down its debt. With State and Federal matching dollars, we will provide more than $370 million new dollars to Maine’s hospitals this year.

This money will save jobs and make sure that important health programs, especially in rural communities, continue.

There are 39 hospitals in Maine, employing more than 22,000 people from Fort Kent to Kittery and everywhere in between. They do a great job, and this will make them stronger.

Maine has been a national leader in providing health care coverage for our people. We have been committed to making health care more affordable and expanding access.

We have had success, and our rate of uninsured ranks among the best five states in the country.

Yet, a terrible side effect of rising unemployment is that more and more people are losing their health insurance because it was provided by their employer.

Just when folks need health care security the most, they see it slip away.

As part of his Recovery Act, the President has included provisions that make insurance more affordable for people who lose coverage when they lose their job.

Unfortunately, for too many people even the new expanded option falls short.

In the coming days, I will submit a proposal using Recovery funds that will create a voucher system for newly unemployed workers who need additional help keeping their health insurance.

The vouchers will help the newly unemployed buy private health insurance or help them enroll in a temporary, affordable health plan.

The program will be limited and last only as long as the federal program it’s meant to complement.

It’s a one-time program, using one-time money.

As Washington works on national health care reform, we will continue to blaze a trail here in Maine.

Good health takes more than an insurance card. It requires all of us to be as healthy as we can be – preventing diseases that drive up our health care costs.

Health care premiums are growing four times faster than wages. The costs are straining family and business budgets.

Chronic illness, like diabetes, asthma, heart and lung diseases, account for about 30 percent of premium costs or about $350 million dollars a year in Maine.

That’s spending on poor health that in most cases is preventable. Tonight, I am announcing Maine’s Universal Wellness program. It will help every Mainer know, understand and take action to reduce health risks and prevent disease. And it does it within existing resources.

Beginning in July, our statewide system of Healthy Maine Partnerships will offer free, confidential risk reviews and link people to local resources that can help them improve their health and prevent disease.

This is a long-term strategy that arms Mainers with the information they need to be healthier.

We also know that good health requires having enough high quality doctors and health care providers available when you need them. Doctors and nurses are the lifeblood of good health, and Maine doesn’t have enough of them.

I propose using $3.5 million dollars in one-time Recovery funds to help launch two innovative medical schools that will train the doctors we need in Maine.

Tufts University will partner with Maine Medical Center; And the University of Vermont will partner with Eastern Maine Medical Center and the University of Maine to create medical schools in our State, so doctors can finish their training right here.

We aren’t building new buildings.

Instead, we will provide needed scholarships for Maine residents to support their medical education at Maine Medical Center, Eastern Maine Medical Center or the University of New England.

Research shows that doctors tend to settle near the hospitals where they complete their training. And I know that given the chance young doctors will stay in Maine.

Finally, we will work with Maine’s medical community to change the way we provide primary health care.

Today, patients and doctors are overbooked into crazy schedules where they might get as little as 10 minutes together during an office visit. Our current system pays for sickness, not for keeping people well.

It doesn’t make any sense.

That’s why I propose using $500,000 dollars of Recovery funds for a pilot project designed to change the way we deliver primary care.

We will test a system with 15 medical practices that allows teams of doctors, nurses and other health care professionals to concentrate on keeping you well – not just waiting for you to get sick.

They’ll work to keep you at home and out of the hospital.

We have an opportunity to transform health care in Maine, and make it more affordable and more patient-centered.

That’s a goal we all share.

For nearly 30 years, I have been involved in public service, for the last six years as Governor. During that time, I have had the privilege to work with many dedicated people.

But I have never known a stronger advocate for Maine’s children than the First Lady.

Karen has elevated the efforts of Maine Reads, created the Festival of the Book, and has been instrumental in bringing the first-in-New-England Educare Center to Waterville, which will break ground in June and help establish best practices for early childhood teaching.

She is tireless, and an inspiration, who keeps us all grounded in what’s most important.

Karen is here tonight with our son, Jack.

Could you both stand and receive the greetings of the Chamber?

This summer, we received an unwelcome reminder of how dependent our State is on costly, imported oil.

In a short time, prices more than doubled for gasoline, diesel and heating oil.

We were on the verge of a crisis.

Truckers, fishermen and just about everyone else felt the weight of high energy costs.

We immediately began planning for an emergency. We knew then, and we know now, that if heating oil prices are $4 dollars and 50 cents a gallon, many people would struggle just to make it through Maine’s long winter.

There are many factors that have contributed to the current recession.

Poor decisions on Wall Street and in Washington; an economy dependent on easy credit; and a lack of government oversight all played a part.

But the high cost of energy is one of the biggest factors.

I’m concerned that we might forget the role high oil prices played in our current economic troubles and underestimate how quickly prices can rise again.

We’ve been through energy crunches before.

But time and time again, as prices stabilized we returned to our old habits.

Not this time.

Not again.

No more.

For too long our economy has been held hostage by imported, foreign oil.

It’s jeopardized our national security, and has left us at the mercy of markets and foreign powers over which we have little control.

In July, we took immediate action to begin fighting our oil addiction, with a new emphasis on making homes more energy efficient.

We increased funding for weatherization, cutting the energy bill for families.

We put technology to work, streaming live video to classrooms across the State, so we could expand training for homeowners and professionals so they can get the information they need to reduce energy consumption.

We put all of our energy resources within reach of a single telephone call. One call to 2-1-1 will put you in touch with a person who can help.

We distributed more than 300,000 do-it-yourself brochures that include easy-to-do tips to reduce energy consumption.

And you raised more than $1 million dollars through the Keep Maine Warm Fund to help folks make it through the heating season.

Thank you to those who gave.

Much has been accomplished, but we must do more. Prices will go back up, and we can’t sit and wait for it to happen.

We must transform our State.

We will become more energy efficient;

We will invest in clean, renewable sources of power;

We will build a better electric grid that is more reliable and capable of connecting Maine and all of the Northeast to new sources of electricity;

We will empower workers to do the high-tech green jobs that our new economy will demand.

And we will invest in a smarter transportation system that can move goods and people more cheaply and efficiently.

Our efforts start with energy conservation and weatherization, where we’ve already made a good start.

We will leverage funding from the President’s Recovery Act, and we’ll expand the reach of our efforts.

I will introduce the Maine Energy Independence Act, which will re-invent the way we manage our State energy programs, and put all of our efforts under one roof so they are more closely coordinated and integrated.

We will set aggressive goals to weatherize every home in Maine and half of all of our businesses in the next 20 years.

We know that we need to make energy upgrades as easy as possible.

With this plan, there will be one place that individuals, families and businesses can go to get help with all of their energy efficiency needs.

My approach will build upon the strengths of our current programs, but will also energize new partnerships to accomplish our goals.

Tonight I am announcing a new collaboration between the State and Maine banks and credit unions that will simplify the way people accomplish home energy improvements.

The program uses State loan guarantees to access up to $100 million dollars of private capital.

It will help thaw our frozen credit market and make it possible for homeowners to invest in energy upgrades.

In one simple process, you’ll be able to save money on your mortgage by refinancing, improve your home’s value, and cut utility bills.

And we’ll provide direct support, through our State Energy Plan, for subsidized energy audits and other incentives to help businesses make improvements.

The Recovery Act includes $32 million dollars to weatherize homes for low-income families, and we’re adding access to another $100 million for middle-class families.

We’ll multiply our current weatherization efforts by 20 times.

I’m talking about a massive infusion of new resources to fix people’s homes and improve their lives.

The dividends for Maine are huge. We’ll send fewer energy dollars out of State, we’ll reduce greenhouse gas emissions, and we’ll create thousands of jobs for Maine workers.

In addition to creating new jobs, we must ensure that Maine workers are prepared to fill them.

We will combine the efforts of the Department of Labor, Maine State Housing, the Public Utilities Commission and our universities and community colleges to create a green-collar workforce that is second to none.

This summer Maine will have its own Weatherization Corps of young workers, who will learn important life and job skills right on the job.

A joint program between the Department of Labor, Jobs for Maine Graduates, local CAP agencies and Maine Housing will train about 100 students to work on energy related projects.

These young people will have the opportunity to learn about energy efficiency and home weatherization while working to make their State a better place to live. And they’ll do it while earning a paycheck.

It’s a good program that will help young workers and help us meet our energy goals.

My energy plan also invests in the growth of Maine-based renewable energy resources.

When Maine was at the peak of its economic strength, our industries were able to harness the power of our rivers and the resources in our forests to produce cheap electricity.

Those resources drove Maine’s industrial revolution. And those same renewable resources can power a new revolution for our State.

Already, we have reduced the regulatory barriers for the development of onshore wind power, and we have an Ocean Energy Task Force working right now to do the same thing for resources that exist off our coast.

The group is developing legislation that will greatly advance renewable energy projects off the coast of Maine.

And I propose $7.5 million dollars for a Maine Marine Wind Energy Fund that will support the development of the premier offshore testing site for wind energy for the country.

This is a tremendous opportunity to become one of only three test sites in the country.

Success will make Maine a hub for the manufacturing and research industries that will drive energy production for the next generation.

We don’t have oil or natural gas reserves in Maine, but we are rich in the resources that can take their place. We have two of the largest operating wind farms in New England, and billions of dollars in proposed projects on the way.

Turbines placed off Maine’s coast have the potential to produce more than 133 gigawatts of electricity from wind alone. That’s as much electricity as 40 nuclear power plants can produce.

There’s also impressive work happening in the development of tidal power, which captures the movement of the ocean to generate electricity. Ocean Renewable Power Company is field testing tidal power turbines right now near Eastport.

And that’s just the beginning. As my Wood-to-Energy Task Force demonstrated, Maine has great energy reserves in our forests.

Whether it’s through wood pellets in homes and businesses or biomass electric generation, we have great options for diversifying our energy consumption.

SAD 58 Superintendent Quentin Clark has put this type of innovative thinking to work in his school system. Instead of relying on oil from 8,000 miles away, he is heating one school with pellets made in Franklin County, just eight miles away. He’s looking to expand the program to all the schools in his district.

And a facility in Strong will provide the pellets.

Quentin is creating opportunities by being smart about energy.

Solar, hydroelectric and the potential for pumped storage round out our impressive energy mix.

Maine sits at the center of a growing energy hub, not only for us but for all of New England.

To the north in Canada, there are vast sources of clean, cheap and renewable energy. To the south, millions of people hungry for renewable, clean, reliable energy supplies.

As anyone in real estate can tell you, the three most important assets you can have are location, location and location.

Our location puts us in a position to become a renewable energy engine for our country. We can help deliver on the promise of a new energy future – one that reduces the impact on our climate, and stabilizes and reduces the cost of electricity for Maine.

But if we want to capitalize on our advantages, we must be aggressive.

As we transition our economy from oil and utilize more electricity for our energy needs, we must strengthen and improve our electrical grid.

That means more reliable transmission and greater capacity to handle the new energy resources that are being developed.

Consider the Maine Power Reliability Project, proposed by Central Maine Power. This upgrade of our existing grid has the potential to pump $1.5 billion dollars into our State’s economy and create more than 2,000 jobs over four years.

That translates into more than $240 million dollars in new wages and salaries.

In addition, we need to connect Aroostook County’s electric grid to the rest of Maine and New England. We can’t continue with part of our State isolated from the rest.

And while we need to be able to move quickly to review new projects when they are proposed, that doesn’t mean relaxing our standards.

Every project must be judged on its details and must be right for Maine.

But we must move forward.

We also must rethink the assets we have, and put them to the most efficient use.

Right now in Maine, we have transportation corridors that run the length of our State.

We need to transform them into much more.

Today I signed a Memorandum of Understanding with Bangor Hydro to explore the potential use of the right-of-way that exists along our interstates and roads for new, underground transmission lines.

Instead of a transmission company negotiating with hundreds of individual landowners and communities, they can utilize right-of-ways that already exist. There’s less impact on the environment and less impact on people.

Transportation corridors will become commerce corridors.

The idea also has the potential to speed an exciting proposal currently under consideration.

Bangor Hydro’s Northeast Energy Link, which would run from Orrington to Boston, has the potential to inject $2 billion dollars into Maine for the construction of a new transmission line that would move eleven hundred megawatts of clean, renewable electricity.

The line would support the growth of vast wind resources and help to drive down the prices for electricity in Maine and throughout the region.

We are also investigating the potential for second energy corridor that would run between Maine and New Brunswick.

Our shared objective with New Brunswick is to increase the long-term supply of secure, reliable and clean energy to our region. The work will also include the accelerated development of renewable power and an improved grid in Maine.

These commerce corridors would house appropriate projects, generating tens of millions of dollars each year in new revenue for the State.

Those resources would be used to meet our weatherization and energy efficiency goals, to invest in top quality energy research and other State priorities, including tax relief.

And the corridors would make it quicker and easier for major projects to get started, putting people to work faster.

A third possible transmission line is being discussed at part of the plans for pump storage in Wiscasset.

Riverbank Power wants to spend about $1 billion dollar to construct an underground hydro generation facility in Wiscasset.

The facility would then be connected to Boston by a proposed $1 billion dollar underwater transmission line.

With just a small handful of projects, Maine has the potential to benefit from more than $5 billion dollars of direct, private-sector investment.

And if we meet our stated goal of developing 3,000 megawatts of wind power, Maine will see an additional $7.5 billion dollars of energy investment.

The massive size of the proposed investments – at least $12 billion dollars and growing – demonstrates Maine’s central position in the growth of renewable energy, and our great potential for energy self-sufficiency and to lower energy prices for Maine people and businesses.

At stake are thousands of jobs, new economic development, and millions of dollars of potential revenues for the State that can support our priorities.

When it comes to energy, Maine and New Brunswick have a close and necessary relationship. We have to work together, and that means making compromises for our better energy future on both sides of the border.

As we move forward with new and exciting energy partnerships, it is critical that the Canadian government support our efforts to bring new, liquefied natural gas terminals to Washington County.

LNG has an important role to play as Maine transitions from oil to renewables, and the proposed terminals in Washington County give economic hope to a region that needs new industry.

All of these projects will create thousands of good-paying, private-sector jobs in Maine just when we need them the most.

To capitalize on these new jobs and to build the industries of the 21st Century, Maine must invest in education, innovation, and research and development.

A generation ago, a high school diploma opened the door to a good job that could last a lifetime. That’s not true anymore. Success today depends on a college education.

That’s why I propose significant investments in Maine’s institutions of higher learning so they can serve more students and make energy efficient improvements that will save money that can be put toward the classroom.

That’s why I propose an advanced technology and engineering campus as part of our redevelopment plans for Brunswick Naval Air Station.

The center will bring together the University of Maine and Southern Maine Community College in a joint venture that will support the economic development of the Midcoast while also training students for the good jobs of the future.

This collaboration between the university and community college should be a model for greater cooperation between our institutions of higher learning.

We need to break down the walls that separate the systems and instead build bridges for greater efficiencies.

There’s great potential for working together and saving money. And that means more resources for students and teachers.

Tonight as we examine the State of our State, I want to take a few moments to thank the men and women of the Maine National Guard, who every day make us proud, whether it’s serving in Iraq or Afghanistan or responding to an emergency right here at home.

Right now, we have 15 members of the Guard serving in Iraq and Afghanistan, and hundreds more preparing for deployment later this month and early next year.

All of these brave men and women are close to our hearts even when they are many miles from home.

We pray for their safety, and offer our sincere gratitude for their service.

In closing, I would like to return to Governor Brann, who served our State during the worst of economic times.

He said: “Maine women and Maine men have never faltered in the crisis. The ruggedness and stern grandeur of our land are reflected in the character of our people. The future of Maine has always been safe in the hands of its sons and daughters, and never more so than today.”

Now in 2009, we have within reach the power to shape our own future, to write the next chapter in this Great State’s story.

When our grandchildren and their children look back, I want them to see in us a generation that answered the call, that transformed Maine.

Our way forward is not just about energy. Or a cleaner environment, or even the jobs we’ll create today, although all those things are important.

What I’m talking about is a new economy, one that’s built to succeed in a rapidly changing world. But it’s an economy that will rely upon those same Maine traits that have served us so well: Honesty, Integrity, Quality, Pride and Workmanship. Maine Built is Best Built.

There’s a new era of opportunity and prosperity on the horizon. We will get there together.

Thank you.

Good night.

March 10, 2009

State of the State 2009 Part I

All of these projects will create thousands of good-paying, private-sector jobs in Maine just when we need them the most.

To capitalize on these new jobs and to build the industries of the 21st Century, Maine must invest in education, innovation, and research and development.

A generation ago, a high school diploma opened the door to a good job that could last a lifetime. That’s not true anymore. Success today depends on a college education.

That’s why I propose significant investments in Maine’s institutions of higher learning so they can serve more students and make energy efficient improvements that will save money that can be put toward the classroom.

That’s why I propose an advanced technology and engineering campus as part of our redevelopment plans for Brunswick Naval Air Station.

The center will bring together the University of Maine and Southern Maine Community College in a joint venture that will support the economic development of the Midcoast while also training students for the good jobs of the future.

This collaboration between the university and community college should be a model for greater cooperation between our institutions of higher learning.

We need to break down the walls that separate the systems and instead build bridges for greater efficiencies.

There’s great potential for working together and saving money. And that means more resources for students and teachers.

Tonight as we examine the State of our State, I want to take a few moments to thank the men and women of the Maine National Guard, who every day make us proud, whether it’s serving in Iraq or Afghanistan or responding to an emergency right here at home.

Right now, we have 15 members of the Guard serving in Iraq and Afghanistan, and hundreds more preparing for deployment later this month and early next year.

All of these brave men and women are close to our hearts even when they are many miles from home.

We pray for their safety, and offer our sincere gratitude for their service.

In closing, I would like to return to Governor Brann, who served our State during the worst of economic times.

He said: “Maine women and Maine men have never faltered in the crisis. The ruggedness and stern grandeur of our land are reflected in the character of our people. The future of Maine has always been safe in the hands of its sons and daughters, and never more so than today.”

Now in 2009, we have within reach the power to shape our own future, to write the next chapter in this Great State’s story.

When our grandchildren and their children look back, I want them to see in us a generation that answered the call, that transformed Maine.

Our way forward is not just about energy. Or a cleaner environment, or even the jobs we’ll create today, although all those things are important.

What I’m talking about is a new economy, one that’s built to succeed in a rapidly changing world. But it’s an economy that will rely upon those same Maine traits that have served us so well: Honesty, Integrity, Quality, Pride and Workmanship. Maine Built is Best Built.

There’s a new era of opportunity and prosperity on the horizon. We will get there together.

Thank you.

Good night.

State of the State 2009 Part I

January 21, 2010

2010 State of the State Address

State of the State Governor John E. Baldacci 7 p.m., Thursday, January 21, 2010 FINAL – As Prepared

Madam President, Madam Speaker, Madam Chief Justice, members of the Legislature, members of the Cabinet, distinguished guests and my fellow citizens:

I can not remember a time that has presented Maine with such hard choices and such great opportunities.

It’s a bit of a contradiction – to talk about economic hardship and opportunity in the same breath.

But that is the situation we face today.

In the last 12 months, State revenues have fallen by $1.1 billion dollars. Unemployment has topped 8 percent; housing and businesses are struggling; and people are uncertain and anxious.

It’s a time of great turmoil.

But it’s also a time of incredible opportunity and revolutionary change.

A time when our State is breaking with the comfortable past to blaze a new trail.

We have come together to say enough, to put our foot down and to put an end to the circumstances that have held our people and our economy hostage.

Today, we are laying the groundwork for economic revitalization and freedom from the tyranny of foreign oil.

Are we there yet? No.

But we are on our way.

Despite the difficulties we face, the hard choices and hard work ahead, the next chapter in Maine’s history will be one of resurgence, growth and opportunity.

As I report to you tonight on the State of the State, I am not sullen or deterred by the road ahead.

Because I know beyond question or doubt that the people of this State – our greatest resource – can persevere and overcome any challenge.

And they are looking to us, the men and women gathered here in this great hall of the people, to lead.

To balance tough choices and compassion.

To reach forward to welcome a bright future, but also to make sure opportunity doesn’t leave anyone behind.

I see a Maine that is energy secure, with highly educated and successful people.

Natural resources that are protected, accessible and put to work.

A place where innovation and creativity prevail.

And cities, towns and villages draw people from around the world to a quality of life unmatched.

This is our job.

We are in the midst of unprecedented times.

Locked in a struggle between recession and recovery.

The choices we make will help to determine which way Maine goes.

About a month ago, I submitted to the Legislature my plan to close a $438 million dollar shortfall in the State budget.

It continues themes you’ve heard from me before: A leaner government, increased efficiencies and frugality.

The causes of the shortfall are well-known.

Our State and country are beset by a global recession that has destroyed jobs and wealth, and undermined consumer confidence.

My plan includes tough choices and pain.

There’s no way around that hard truth.

It will impact people and their communities.

It won’t be easy.

During public hearings on the budget, we heard people talk about their economic plight.

Many of them told compelling, personal stories about how State government touches their lives, the good work that it does, especially in the area of human services.

I am committed to maintaining life-sustaining services, but we can’t avoid reductions.

We must change the way we help people.

And we’ll continue our mission to reduce administration, so there are more dollars available for what’s really important.

If we can’t break down the walls between State agencies to save money during this crisis, how can we tell other folks they need to go without?

My budget proposal also contains new efforts to streamline government.

I’ve suggested improving cooperation between the State’s four natural resource agencies – the folks who help us manage our forests, fish, water and wild life.

They have so much in common, but are artificially broken into four pieces.

We can save money and improve results by helping them to work better together.

During the last seven years, my administration has been aggressive about cutting the size of State government.

We’ve eliminated 1,000 positions, about 8.8 percent of the State’s workforce.

State workers have taken shutdown days, lost pay raises and are now required to pay a portion of their health care.

We’ve combined State agencies and departments, school administrations, and county and State corrections.

And we are continuing our efforts to find efficiencies and to reshape government at all levels to be less expensive.

I am convinced that government at all levels can operate more efficiently, that administrative costs can be reduced through greater cooperation.

We’ve seen it work with the Board of Corrections and with regional school units, saving millions of property tax dollars.

Every dollar that we save from reduced administration means more resources for direct services – those places where the money does the most good.

It’s hard to change structures. But we must.

About 46 cents of every dollar brought into the General Fund is returned to county and municipal governments.

There is no way that the State can absorb such a sharp reduction in revenues without impacting other levels of government.

Through school administrative consolidation and our unified correction systems, we have reduced the load on local governments.

But the times demand more.

While it’s a tentative first step, I was encouraged by the election results in Brewer this fall. Voters there approved a ballot question that will begin the process of greater cooperation between their city and Bangor.

Maine has almost 500 municipalities plus 16 counties. We have a local government for every 2,500 State residents.

We cannot afford that redundancy and the duplication.

But we have also recognized that local governments need help.

With our unified corrections system, we have curbed State and local spending for jails and frozen property taxes needed for this area, helping counties to hold increases to their lowest level in many years.

The system is projected to save $189 million dollars in property taxes over the next five years.

In addition, school funding for this budget will still be $352 million dollars more than it was when I took office seven years ago, even after the proposed reductions.

And over the last five years, State aid to schools has increased faster than the cost of essential programs and services for the classrooms.

For communities willing to change, they can find a way through this recession.

Now the budget is in your hands, the Legislature.

Just last spring, we worked together to cut State spending by $500 million dollars.

At the time, it might have seemed impossible.

But leaders in the Legislature showed courage and resolve. They put aside partisanship and they trusted one another.

When the work was done, the cuts were made and we didn’t raise taxes. For some, on both sides of the aisle, it was a hard vote to cast. But it was the right thing to do.

Now, we are again faced with the necessity to cut spending.

And once again, I am confident that working with the Legislature we can find a bipartisan path forward.

There should be no illusions.

There are no easy answers.

We must balance core government functions while protecting the vulnerable and safeguarding our economy.

While we still have a long way to go, there are signs that things are beginning to turn around.

When I addressed this body last year, I spoke about my visit to Domtar in Washington County. The plant had just announced that it was indefinitely closing.

I’m happy to say that today, 300 workers are back on the job and the owners of the company are committed to finding a business model that will work.

Maine is ready to help. We want to keep those men and women working.

We shouldn’t take any action that will jeopardize recovery.

I will not support a tax increase to balance this budget.

Working families and businesses simply can’t afford it.

I don’t question the motives of those who seek a tax increase. They look around and see real problems and people struggling.

Their heart tells them they have to do something. My heart says the same thing.

But I know that the best way to help all Maine people is to promote job growth and economic recovery.

To spread opportunity and give our people a chance for prosperity.

We can’t tax our way out of our problems, but we can grow our way out.

As President Kennedy said: “A rising tide lifts all boats.”

And that’s why I have an aggressive agenda that is already creating jobs today and will continue to create jobs for years to come.

It begins with our people and our natural resources.

Right now, Maine is leading New England in wind power generation.

And every day this important sector is growing.

Producing renewable and safe electricity.

But we have only begun to tap the potential for wind.

Work going on today by Habib Dagher at the University of Maine, with private-sector partners and critical support from the federal government, is positioning our State at the forefront of a new energy revolution.

We have it within our power to develop new, cutting edge sources of energy that can help to forever reshape the world.

From start to finish, Maine has a role to play. We can develop the technology; use composites from the University of Maine to build the turbines; and lower electricity rates.

That means good jobs.

It’s also important for communities to see the benefits of new energy development.

That’s why I am supporting legislation that makes sure wind projects produce tangible benefits to host communities.

Real benefits that communities can see and feel, like lower property taxes or improved public services.

There is a burning urgency to the work we are doing. We can not wait; too much is in the balance.

What’s remarkable is that the right and left should be united on the need to free ourselves from foreign oil and all that dependency does to our people, our economy and our world.

Whether you believe in global warming or not, ending our dependency on foreign oil is a matter of national security that demands action now.

In 2008, this Legislature set a goal of producing 2 Gigawatts of wind power by 2020.

With 430 Megawatts already permitted, Maine is ahead of the schedule.

We are on the brink of a new day;

Will we allow the clock to be turned back to midnight or will we embrace the dawn?

The choice is as stark as night and day.

In the coming weeks, I will submit legislation to continue our aggressive pursuit of offshore wind energy.

The plan, which is the result of my Ocean Energy Task Force, will help to spark this new industry and confirm Maine’s leadership role.

We will set a target of producing 5 Gigawatts of electricity from offshore turbines by 2030. That sounds like a long time from now, but in the birth of a new technology it’s just a blink.

In just two years, there will be a prototype turbine in the water, producing electricity. And in five years, the amount of power produced will double.

Already, our efforts are being recognized.

The DeepCwind Consortium at the University of Maine already includes more than 35 public and private partners.

The project has earned nearly $25 million dollars in competitive grants and is in line for additional federal support.

Maine competed nationally and was one of just 12 sites in the entire country that has received this support to construct an offshore wind laboratory.

There are no sure things, but the plan has tremendous potential to create thousands of jobs in Maine and attract billions of dollars worth of investment.

Permitted and approved wind power development in Maine already represents more than $1 billion dollars of capital investment in our economy.

When it comes to energy, Maine’s potential is not limited to wind alone.

Matt Simmons (Sim-mons) of Rockland is one of the world’s leading thinkers about the oil industry and its limitations.

Matt founded the Ocean Energy Institute, which is working with some of the most prominent researchers in the world to develop a new source of energy.

Matt is working on an innovative approach that would utilize wind and tidal power to make ammonia, which could be handled and used much like propane.

Imagine, using the power of the wind and waves to create a new energy source almost literally out of thin air. Matt’s imagined it, and he’s working to make it real.

My administration is working with the Ocean Energy Institute, which is planning to build a pilot plant within the next two years.

And Maine is right in the middle of the action.

Our future doesn’t solely depend on new technologies. Maine can also look to its forests to help provide for an independent future.

Just as our woodlands powered Maine’s industrialization, they can contribute to new industries. Bio-fuels, like ethanol, and a new generation of boilers can turn wood into the energy and electricity we need for our industries and our homes.

Whether it’s our ability to produce energy ourselves from sustainable resources or our strategic location between energy-rich Canada and the needs of southern New England, Maine is in a position to benefit.

I’m talking about new jobs, lower electricity rates and cleaner air and water.

It goes beyond turbines on a ridge or bio-mass boilers at paper mills. Our new energy future can reach into every home, bringing benefits that are felt throughout our economy.

Maine is a national leader in weatherization and conservation efforts. We know that any serious effort to reduce our dependency on oil starts with conservation.

It’s where we get the biggest bang for the buck.

Two weeks ago, Maine awarded nearly $9 million dollars in grants to companies around the State committed to reducing their energy consumption, which will leverage about $81 million dollars in private investment.

Using estimates from the Department of Energy, that translates into more than 950 jobs.

But for Tex Tech Industries in Monmouth, the grants are a little more personal. The investment will pay for improvements that will save between 45 and 50 jobs that were slated to head offshore.

Those good jobs will be saved because energy improvements will help Tex Tech hold its costs in line with its competitors in the Far East.

Conservation means jobs.

And for those families at Tex Tech, it’s the difference between hope and despair.

Our efforts aren’t limited to just businesses.

We also have a new program for homeowners that can provide rebates of up to $3,000 dollars for weatherization and heating upgrades.

That’s money coming right back to families who make the investment to cut their energy bills.

It’s available to anyone, regardless of income.

The program helps families determine how to be more energy efficient and make the improvements, and the results can cut energy bills by up to half.

Government can’t solve every problem, but as the grants and rebate program show, it can give businesses and families the tools to find their own answers.

For as long as I can remember, people have talked about “Two Maines.”

I’ve always rejected that notion. We are one people, united in the things that matter most.

But there is truth to the idea that we live in different communities, each with its own strengths and challenges.

We can’t be satisfied with an economy that favors one region or one industry. We need statewide growth, building on the assets that make each part of Maine unique and strong.

That is the idea behind the Great Maine Forest Initiative.

I believe it’s the key to a successful rural economy, and can find the right balance for tourists and sportsmen, energy and industry.

A group of dedicated and diverse people have been working since last summer to develop a pilot program for this initiative.

The idea is to create large scale conservation that maintains access for traditional uses;

It protects Maine’s valuable forest resources from development;

And provides a stable source of wood, sustainably managed, for our forest products industries and our growing energy sector.

If we make wise choices, and keep our forests as forests, there are enough resources for everyone.

In the last seven years, Maine has conserved nearly 1.3 million acres of land, including completing Governor Baxter’s vision for Baxter State Park.

We’ve done it through a State trusted program, Land for Maine’s Future, with federal and private resources and, most importantly, with local support.

Environmentalists, private landowners, sportsmen and industry have bridged the gaps that in the past had kept them from working together.

This is the model the Great Maine Forest Initiative will build upon.

In February, we will present this innovative plan to the Obama Administration, where it will be considered as a national model of how conservation can be done in a new, cooperative way.

No initiative can be successful without the most important ingredient.

Our people.

If we want our economy to grow, then our people need the tools to succeed.

On February 9th, I will be holding a Jobs Summit at the Augusta Civic Center.

This is a cooperative event between the Maine Chamber of Commerce, Department of Economic and Community Development and the Department of Labor.

We’ll listen to people who are growing their businesses in this tough economy and take away the lessons they can share.

We want to put people to work today.

We’re also going to make sure that Maine businesses are aware of the tax incentive and business development programs that are available.

For example, Maine’s Pine Tree Zone program was expanded statewide last spring. The program is an important tool for companies that create new jobs or relocate here.

For 2009, Maine received 65 applications for the program, more than any other year since it was introduced and despite the recession. Of those, 27 came from York and Cumberland counties, which were just made Pine Tree Zone eligible.

These companies are creating jobs right now. And that’s good news.

Also at the summit, I want to introduce my proposed new structure for the Department of Economic and Community Development.

Our economic development efforts are going to be more locally and regionally based, growing from the ground up and not from Augusta down.

This new approach will build on local assets and will be more friendly to businesses looking for assistance.

Over the long-term, jobs creation depends upon having a quality workforce.

And that starts with a quality education.

Despite mounting financial pressures, Maine continues to demonstrate that our children are our highest priority.

Education spending accounts for half of every dollar spent by State government.

I want to do more, but a good education depends upon more than just money.

My administration has made it a focus to reduce administrative costs for education, so resources can be directed to the classroom where they matter the most. And in those districts that have reorganized, there are real savings.

We have never sacrificed quality to save money. And we won’t start now.

The voters this fall validated our approach to reducing unnecessary school district administration.

And I will not support changes that undermine the law. We must move forward, not back.

But I also recognize administrative reform can take you only so far.

We are at a crossroads in education. We must make changes.

President Obama has set aside significant incentive dollars as part of a national Race to the Top competition. For states to be eligible for the increased funding, they must answer some difficult questions.

Beginning with accountability.

Teachers and principals are responsible for their classrooms and the students in them. Student achievement must be part of how they are evaluated.

There are many factors that contribute to student performance, some of them outside the control of hardworking teachers. But we know that effective teachers get better results.

It’s time we put that common sense into policy.

I know this proposal will be controversial in some quarters. But no less an authority than Randi Weingarten, the president of the American Federation of Teachers, acknowledges that student performance must be part of teacher evaluations.

How can we, in good faith, hand out grades to students based on how they perform if we fail to do the same thing for the people teaching them?

Recognizing good teachers is an overdue reform.

Next, we need to provide schools with the flexibility to succeed.

Under my plan, schools will be encouraged to innovate.

They will be able to manage their budgets on the school-level, set their own schedules, and try creative approaches to curriculum and instruction.

For example, we could see schools try a year-round schedule with a science-based theme that runs through the curriculum.

And we must address low-performing schools and reduce dropout rates.

We can do it by empowering parents and districts, and encouraging programs like Jobs for Maine’s Graduates that we know are effective in keeping kids in school and preparing them for a career or college.

It’s not enough to have good schools if too many of our kids don’t go to them.

We will also adopt national standards for performance.

Maine already has rigorous standards, but because most states use different ones, comparisons are difficult.

By adopting core national benchmarks, we will be able to better understand the places where Maine excels and the areas where we need more work.

Look around and the world is a much different place than when I was in school.

The challenges are greater, and they require a focus on science, technology, engineering and math – or STEM for short.

Schools are partnering with businesses to create STEM-related internships, to engage students and introduce them to a world of possibilities.

Later this month, we’ll hold our STEM Summit, where Maine’s leading high-tech industries and thinkers will come together.

Companies will locate to places like Maine with a highly skilled workforce.

Attention to early childhood education is also critical for laying the foundation for success in life.

Even during these difficult times, we know that we have to invest in early childhood education.

Last year, working with the Legislature, we created New England’s first and only Educare site, a public-private partnership that will help improve early childhood education in every part of the State.

Educare wouldn’t have happened without the vision and determination of the First Lady.

She is a dedicated educator and advocate for children and families.

She is here tonight with our son, Jack. Would you both please stand and receive the greetings of the chamber?

Thank you.

Maine is blessed with an active and committed people, determined to make our State better.

We see it everyday in big ways and small, whether its donations to churches, relief efforts and spaghetti fundraisers, or big gifts to support our soldiers or our students.

And we see it from individuals like Stephen and Tabitha King or the Alfond Foundation, who continually contribute to worthy causes, and from groups like State workers, who contributed more than $340,000 to their communities through our coordinated campaign.

Tonight, I would like to recognize Richard Collins, who is here with us.

Dick and his wife, Anne, have contributed $6 million dollars to support the University of Maine, providing one of the largest gifts in the school’s history.

It’s an example of how the people of Maine support their communities and partner with government on issues that matter.

Dick grew up on a Maine potato farm and despite great success never forgot about his alma mater or his State. His contribution will help thousands of students and Maine’s flagship university.

Dick, would you please stand and receive the greetings of the assembly.

Thank you.

There’s a temptation to look around and see our challenges and feel like the terms of our economy are being dictated by others:

Financiers.

Wall Street.

Oil companies.

They’ve all certainly taken their toll.

But come June, Maine voters will have a chance to take control and make a real and lasting difference in our economy.

No, I’m not talking about the 23 – or more – people who are running so they can give this speech next year. Although that’s important too.

I’m talking about an investment package and tax cut that will appear on the ballot.

Maine has an opportunity to invest in economic development and innovation, green energy, clean drinking water, higher education and the redevelopment of Brunswick Naval Air Station.

About $69 million dollars in bonds will go to voters in June.

I understand that during a recession, voters might be reluctant to approve new borrowing.

But the truth is, we can’t afford not to make these investments.

They will put people to work, make our universities and colleges stronger, and help our critical Midcoast economy weather the storm of the air station’s closing.

This is an investment in our people and our future. It’s strategic and timely.

We must make it.

Also on the ballot in June will be a question opposing an income tax cut.

Last spring, we passed legislation that cuts income taxes in Maine. The Wall Street Journal editorial page called it the “Maine Miracle.”

We lowered the rate from 8.5 percent, one of the highest in the country, to 6.5 percent for people making $250,000 or less.

We did it by closing loopholes in the sales tax and by increasing the tax on meals and lodging to spread the burden onto visitors who come to Maine but who don’t pay taxes here.

Maine Revenue Service says 90 percent of Maine families will benefit and more of our tax burden will be exported to tourists.

After all, when you and your family plan a vacation, you don’t check to see how much the lodging tax is before you go.

This is a middle-class tax break that rewards work.

If you earn a paycheck, you’ll be able to keep more of your wages.

And the lower income tax burden will attract new investors to Maine, where they can create needed private-sector jobs.

In June, I urge you to vote NO on this misguided effort to raise the personal income tax again.

Working families and small businesses deserve a tax break, and Maine needs new jobs now.

In Washington, there’s a loud debate centered on health care.

The policy choices are far from clear cut, but the States are struggling, and we need relief both in terms of increased financial support and better policies so that everyone has access to affordable and high quality care.

It’s a big issue and it touches every family and business in Maine.

Reform is difficult work. We know because Maine has been a leader, enacting the first comprehensive health reform effort in the country.

While we know we need a national solution, we will continue on our path of increasing access, quality and reducing costs.

Tonight I’m announcing another part of that effort.

Each one of us can help lower health care costs by taking better care of ourselves and taking responsibility.

As a doctor once told me: We can’t show up at the emergency room and pretend we had nothing to do with getting there.

Tomorrow, a new resource will be available to help Mainers take control of their own health.

It’s not health care reform from Washington or Augusta, but better health in the hands of the individual.

By logging on to “KeepMEWell.org,” people can sign up and learn more about their health status and lower their risk for disease.

The confidential Web site will connect people to information and resources they need to be healthier and lower their health care expenses.

It will connect them to low-cost health services and community resources built through our sustained commitment to using tobacco settlement money for improved health and the Healthy Maine Partnerships that are located throughout Maine.

We need systematic improvements in health care. But we also have an obligation as individuals to take responsibility.

No matter the challenges we face as individuals or as a State, the people of Maine are always willing to help others even when money is short at home.

As we work to balance a difficult budget and to set Maine on the course for a prosperous future, I keep coming back to how lucky we really are to live in such a wonderful place.

Last week, the tiny island nation of Haiti was devastated by an earthquake.

The capital was destroyed, and it’s hard to imagine the scale of the destruction and the terrible loss of life.

A country and its people precariously cling to life.

Mainers are already answering the call.

They rushed into chaos to provide aid and comfort, and to tell the stories of life and death.

Our State stands ready to do its part to help Haiti.

Soon, 324 members of the Maine Army National Guard will deploy to Afghanistan.

Whether it’s at home during a disaster, or overseas in the fight against Al Qaida or delivering humanitarian assistance to a battered neighbor, Maine’s National Guard is ready.

Every time I meet these men and women, I am overwhelmed with pride. They are among our best, they do us proud and they keep us safe.

The Herald tonight is Lieutenant Colonel Diane Dunn.

Colonel Dunn recently returned from Afghanistan, where she led a team of 81 National Guard soldiers. She is the first woman to lead a Maine National Guard battalion in either Iraq or Afghanistan.

The unit performed its mission with professionalism and courage.

Colonel Dunn please stand and accept the appreciation of the assembly for a job well-done and for bringing our soldiers home safely.

Thank you.

Tonight, I make this promise to the people of Maine.

We will not relent.

We will drive forward regardless of the obstacles that confront us.

We will sacrifice today, and we will make strategic investments for tomorrow.

We face hurdles and hardships, but we are not afraid to make decisions, to break new ground and to build. To set the bar high. To challenge old and outdated limits.

We are called to act prudently and responsibly. But we are called to act.

This is not an easy time.

But we are not adrift. We are grounded in the Maine values of hard work and integrity, and by a spirit of determination.

We are not trying to just get by. We are making changes so that Maine can be at the forefront of recovery and a new economy.

Our State is small enough where you know everyone, but big enough to get the right things done.

We have the power, the ability, the skills, the resources and the people.

On January 4th, 1972, Sen. Edmund Muskie came home to Maine to announce that he would run for President.

That night, he said:

“There is not a single problem we do not have the resources to solve if we overcome our fears and quiet our doubts and renew our search for the common good.”

“Ultimately, of course, what is at stake is your future. I am not telling you that I can guarantee the best of all possible worlds. All I am asking is that we pledge a new beginning.”

Tonight I say to you, the future is ours to make.

God bless you. God bless Maine and God bless the United States of America.

Thank you.

May 8, 2010

University of Maine Commencement Speech

MORNING: President Kennedy, Provost Hunter, Trustee Johnson, honored guests, graduates, and family, friends and supporters:

AFTERNOON: President Kennedy, Provost Hunter, Trustee Newell, honored guests, graduates, and family, friends and supporters:

I am honored to be here to celebrate your graduation from the University of Maine.

Like you, I’m also graduating this year.

And like some of you – I bet – we will be moving back home.

Life at the University of Maine and life in Augusta really aren’t that different.

There are cliques and fraternities, rituals, pomp and circumstance, and a bureaucracy that you have to learn to navigate.

There’s lots of studying, and many difficult tests.

(PAUSE)

And the friends you make and relationships you build last a lifetime.

I have been blessed with the opportunity to serve my hometown of Bangor, my State and my country in elected office.

Throughout more than 30 years in government, I have had the pleasure to meet many wonderful and inspiring people: Presidents, poets, statesmen and world leaders, authors and actors.

People who have transformed the world, and people who have transformed their neighborhoods.

But time and again, the people I find most inspirational are the young men and women of Maine, our State’s next generation of leaders and thinkers and creators.

When I look out into this crowd, I see a bright future for Maine and the country.

And I know that we will be in good hands.

(PAUSE)

The world you will face is much different than the one that was waiting for me when I graduated from the University of Maine.

I was a non-traditional student and didn’t finish my degree until I was in my early 30s.

But I was a late bloomer when it came to the classroom.

My world had focused on the family’s restaurant, politics and the community.

But it was the University of Maine that opened my mind to a wider world, where I learned history and a broader point of view.

I will be forever grateful for the friends I made, the professors who were mentors and for the love and support of my family that made the experience possible.

(PAUSE)

As a country, we have thrived during good times. And survived the down times.

And we have learned hard lessons from the bubbles, the bailouts and the Wall Street bandits.

Old dangers of Mutual Assured Destruction have given way to dirty bombs and terrorism.

We live in a much smaller place, connected 24-hours a day, 7 days a week by smart phones, Twitter and Facebook.

But in a world of constant communication where every detail is often shared, we don’t talk to each other enough.

On a national level, heated and angry political rhetoric too often replace discussions, compromise and empathy.

Sure, people have plenty to say. But a lot fewer are willing to listen.

They shout across TV screens at one another, reciting the day’s talking points as if trying out for a play, staying true to a script that the audience doesn’t want to hear.

(PAUSE)

I say this a lot, and it’s true.

In Maine, it’s different.

There’s no question that politics can be rough and tumble, and there are real and significant differences between the political parties.

But there is also a fundamental and core value that runs deeply through Maine’s political leaders regardless of party affiliation.

They are willing to listen and work together for solutions that put the best interest of the people ahead of short-term political gain.

As Maine begins to emerge from a brutal national recession that has demanded stern action and tough choices from the President of the United States, to the Governor of Maine, to the President of the University of Maine, we have navigated our way in a spirit of honest debate and in good faith.

Given the magnitude of the challenges we have faced, Maine leaders have worked in a bipartisan way to craft innovative energy policy, health care reform, balanced budgets and make strategic investments.

We’ve reduced the size of government, while protecting our most vulnerable neighbors.

It hasn’t been easy, and there is always more to be done.

But in this age of protests and disconnection, Maine people remain closely tied to their government. They are active, involved and demand results. And they get them.

For that I am thankful.

When I first became involved in politics, my father challenged me with a question.

He asked: “What have you done for the people today?”

Now, I will pose a slightly different question to you:

“With the world of opportunities and options before you, what will you do for the people starting tomorrow?”

Most of you graduating today have only read about the 1960s and the turmoil of the decade.

The struggle for Civil Rights and the War in Vietnam divided a nation.

In 1966, Robert F. Kennedy delivered a speech at the University of Capetown in South Africa.

He took on the demons of segregation and apartheid, and called on the world to tear down the barriers of race and religion, social class and ignorance.

And he laid his challenge at the feet of students, not that different than you:

Kennedy said:

• “Our answer is the world’s hope; it is to rely on youth. The cruelties and the obstacles of this swiftly changing planet will not yield to obsolete dogmas and outworn slogans. … • “This world demands the qualities of youth; not a time of life but a state of mind, a temper of the will, a quality of imagination, a predominance of courage over timidity, of the appetite for adventure over the life of ease.”

The nightmares of segregation and apartheid have ended.

But injustice remains and each of you, as you move on to the next stage in your life, will be called upon to stand for what is right.

There is still discrimination and hate – intolerance for the things that make us different.

And the struggle for equal rights and justice – for gays and lesbians, immigrants or people of different faiths -- continue.

These battles are sometimes fought in crowds and through protest, but they are won with one person and one changed mind at a time.

With every conversation and action, you can influence your family, your friends and your community.

Through small, individual acts of kindness, strength and moral courage, the world can be changed.

I’m reminded of a story about the ants and the elephant.

You see, every day on his way to the river, this elephant would step on the top of one particular ant hill.

Every night, the ants worked to fix their home until finally they had had enough.

The next day, the elephant came walking down the trail.

The ants were waiting. They jump all over him, covering every inch of his body.

The elephant, annoyed, gave a mighty shake and all the ants flew off.

All except one.

He hung on for dear life around the elephant’s neck.

The other ants, still ready for a fight but safely on the ground, yelled up: “You’ve got him now! Choke him. Hold him.”

The moral to this story is NOT that, If you want to choke an elephant, you need bigger arms than an ant.

The real lesson here is that even small individual acts can make a difference.

That doing the right thing, making the tough choice, hanging on – even when you feel like you’re alone – matters.

That you can inspire others, you can lead the way, and you can turn the tide.

One ant won’t stop an elephant.

But one person can make the world a better place – Martin Luther King, Archimedes, Joan of Arc, Constantine.

History is marked by the names of men and women, courageous enough to make a difference.

Even small acts can send a ripple that travels around the world, changing lives.

So as you leave the University of Maine, there are challenges that will test your wits and your ethics.

The obstacles you face are daunting, and demand the utmost care and attention.

But I am optimistic.

New ideas are no longer tied to the past, to “obsolete dogmas and outworn slogans.”

And nowhere is that more true than in the area of energy.

We stand on the verge of a transformative time.

When the limits of the past are overcome, and we can shed our addiction to oil and the calamities that addiction creates.

Maine depends on oil – to heat our homes, to run our cars, to fuel our factories.

Each year, we send billions of dollars overseas to buy the energy we need.

It hurts our economy and it hurts the environment.

As the terrible events in the Gulf of Mexico remind us, our country’s over-reliance on oil puts all of us at risk.

As one of worst oil spills in history demonstrates, our thirst for oil is dangerous and has been hard to quench.

But our past doesn’t have to be the future.

We can change!

Right now, work going on here at the University of Maine is leading a new revolution in alternative energy.

Maine has tremendous natural resources.

Most folks recognize the important role that wood and hydropower have played in our history.

They have powered our rural economies for generations.

And they still do.

But there is a new opportunity on the horizon, and the University of Maine is the key.

Working cooperatively with the federal government and the leading companies in the world, the University of Maine is doing the work that will make offshore wind energy a reality.

Safe, renewable and close to home, this exciting resource will lead to new opportunities for Maine.

Thousands of new, green jobs.

Industries to build and support the turbines.

And billions of dollars of new investment.

We have it within our power to develop new, cutting edge sources of energy that can help to forever reshape the world.

From start to finish, Maine has a role to play. We can develop the technology; use composites from the University of Maine to build the turbines; and lower electricity rates.

The research going on here, under Dr. Habib Dagher, will ensure a brighter, cleaner future for Maine.

And recent graduates, like Elizabeth Viselli, are working at the Center, helping to turn the dream of a better energy future into reality.

In fact, recent UMaine grads are showing the world the value of a Maine education.

They are pioneers, researchers and entrepreneurs.

They’re people like Joan Malcolm Albee, who is a biomedical engineer.

She’s doing work that will make the dream of having a family possible for couples who thought it was out of reach.

And businessmen like Soren Hansen, who received his master’s degree and is about to defend his Ph.D. He has started his own aquaculture business.

And Jeff Ma is helping to revolutionize TV.

And Chris Frank was Maine’s 2006 Young entrepreneur of the year.

There are more – many more – UMaine graduates who are doing great things.

I can’t wait to read your names in the newspaper, maybe written by Samantha Danis, who has received a Pulitzer Center international reporting fellowship and graduates today.

It’s exciting to think about all the great things you will do.

The challenges you will overcome.

The doubts you will lay aside.

The problems you will solve.

You will graduate into a world in flux, that is uncertain and changing.

As Robert Kennedy said in 1961:

• “All of us might wish at times that we lived in a more tranquil world, but we don’t. And if our times are difficult and perplexing, so are they challenging and filled with opportunity.”

You don’t need me to tell you that the national economy remains fragile, and that jobs can be difficult to find. That the world can be hostile and that there are those who would do our country harm.

But you are strong, smart and well-prepared to find your own path.

You will dream and dare to innovate.

When you return to Orono for your 10-year reunion, the world will have changed as dramatically as it has since I graduated.

Maybe even more.

Renewable energy will power our homes, industries and cars.

Technology that I can’t even imagine today – but I bet you can – will change the way we work, drive and communicate.

Diseases that confound doctors and scientists today will be cured, giving new life and new hope to people who suffer.

We will see a new era in international relations, a new day in American politics and a fresh start to a robust economy.

And you will help to shape it all.

Years spent on the campaign trail and in public office give you a great gift – the chance to meet thousands of people, each with their own story.

It is the mill worker, the nurse, the teacher and coach. The fishermen, loggers and cops. The line worker and firemen that I remember, and that I think about when I go to work in the morning.

It’s people who work hard and play by the rules.

They raise their families, and they pray that their children will be happy and have opportunities they missed.

It was my mother and father and my brothers and sisters who pushed me, challenged me.

Today is a day to celebrate the hard work of the Class of 2010.

But there’s not a single person graduating today who made it here alone.

Parents, grandparents, aunts and uncles. Teachers and friends.

They pushed you.

They prodded you.

And they helped in a million ways.

Please, join me in saying thank you to Mom and Dad, and all the people who helped you get here today.

You did a great job. And so have your kids. (CLAP)

It has been my pleasure to speak with you today.

An honor to be invited to share such an important, happy day with so many people.

I’ll leave you with one final thought from by Stephen King, a 1970 graduate of the University of Maine.

In his book, “IT”, King wrote, I’m paraphrasing: “Stand, be brave, be true, stand for your brother, your friends: believe … believe that courage is possible … believe in yourself.”

Anything is possible and you can make it happen!

(PAUSE)

And if you find yourself hanging on for dear life with your arms around an elephant’s neck, just keep on squeezing.

You’ve got him now!

Congratulations.

And thank you very much.

January 5, 2011

Inaugural Address of Maine Governor Paul R. LePage

Mr. President, Mr. Speaker, Members of the 125th Legislature, Governor Baldacci, former Governors King, McKernan, Brennan and honored guests. Welcome.

Mainers have a long tradition of working together.

As I begin I would like to thank John Baldacci. John, Karen and his entire administration have done all we have asked to make this transition a success. Ann and I are very grateful, and we join all Mainers in thanking the Baldaccis for their service to city, state and nation.

Like every proud dad and husband, I did not need to take the oath of office to believe I have Maine’s first family. But now that it is official, let me thank Ann and my children for their love and support during the last 16 months.

First and Foremost, I am a businessman who served his community as a Mayor and now as Governor. My pledge to the Maine People is to put you before politics:

The parents trying to make a better life for their kids; The retirees trying to hold onto their homes on a fixed income;

The college graduate trying to find a good paying job; The entrepreneurs with the courage to take a chance on an idea; and

The taxpayers tired of footing the bill for a bloated establishment in Augusta.

It is time to make state government accountable. It is time to deliver value. It is time to put people first.

The word “people,” appears in the Maine Constitution 49 times. You cannot find a single mention of the words “politics,” “Republican,” “Democrat,” “Green,” or “Independent” in 37 pages of preambles, articles and sections of our State Constitution.

The framers had it right. People come before politics.

Partisan affiliations, political leanings and the obsession with winning and losing have been getting in the way of solving Maine problems. We need a new approach and it starts right here and right now!

I am willing to listen and work constructively with anyone committed to honest solutions that benefit all Maine people.

To ensure I get plenty of input, I will be hosting monthly breakfast meetings with groups of teachers, business leaders and environmental leaders. Oatmeal and solutions will be on the menu.

I will re-introduce Governor McKernan’s “Capitol for a day program” where town hall meetings are held in each of Maine’s 16 counties. We are going to get around and learn from the people of Maine.

I will host constituent service hours to meet directly with the people of Maine. Come in and share your concerns, tell me about your ideas and, if we disagree, we can look for common ground so we can move Maine forward.

While I will listen to anyone, my Administration will be focused on making Maine work for everyone. There will be no favorites, carve outs, or favors for the special interests. Good policy is public policy for everyone.

There is no greater example of serving the common good than the sacrifice of our service men and women. The peaceful transfer of power, our rights and our liberties are not free. They are earned each and every day by those who serve.

Forty-Six service members from Maine have made the ultimate sacrifice in defense of our state and our nation in the last seven years.

I am honored that some of the families of our fallen heroes are here today.

Dan and Suzanne Brochu along with their daughter Sadie are with us. They lost Private First Class Jordan Brochu in Afghanistan in August of 2009.

Starting tomorrow, Suzanne will be the receptionist in my office at the State House.

The family of Corporal Andrew Hutchins of New Portland is also with us.

Corporal Hutchins gave his life in service to Maine and the Nation last November in Afghanistan. Corporal Hutchins’ wife Heather is due to give birth to their first child, Allyssa Braelynn, in March.

All of Maine shares the sorrow of the families of our fallen heroes and we all honor their service to protect our liberties.

Please join me in a moment of silence to honor the sacrifices of our fallen heroes and to reflect on the loss their family members continue to endure so each of us can be free.

Thank You. One area where we must put politics and specials interests aside is education.

Students are the most important people in the classroom. Every decision we make and every dollar we spend must be focused on the individualized needs of our kids.

Our standards need to be high, administration must be lean and we have to make sure we find solutions that work for all students.

I believe we need to make vocational education a priority again in our schools. Training our young people in a trade while they earn their diploma is a path to a good living.

I believe we also need to create five year high schools in Maine where students can graduate with an associate’s degree that is a leg up for entering the workforce. And these credits can be transferred into our four year degree universities, reducing the time and expense of earning a college degree in Maine.

Approximately one in every three Mainers is on some form of state or local government assistance for food, shelter, income or health care.

For the truly needy and impaired, these programs are an important life line that combines with charitable programs, churches and the individual generosity of Mainers to form the safety net for a healthy society.

While we have a generous spirit in Maine, we do not have limitless resources. Our programs have to be focused on Maine residents, we must make every effort to move people from dependency to self-sufficiency and we must have a tiered system that rewards work and progress.

And we have to have a five year time limit so kids in Maine grow up in families where self-reliance and work are a way of life.

I recently met Jennifer Cloukey, a single mother of four and a full time nursing student. Like me, Jennifer has escaped domestic violence.

Jennifer works two or three jobs at any given time but also has to rely on Temporary Assistant to Needy Families and the Food Supplement Program to make ends meet for her family. Seven years ago, she built a home for herself and her kids through Habitat for Humanity.

Jennifer was determined to be a good example for her kids and other single moms. This coming May she will graduate from Nursing School.

Nearly every day someone asks Jen how she does it. She tells all that will listen that a life well lived does not happen all at once.

Today, Jennifer, all of Maine is listening and I am proud to share your story. In my administration your example will be our goal, and eventually the norms.

Please join me in recognizing Jennifer Cloukey.

Maine is the hardest place in the country to start and grow a business. Consequently, we earn just 80% of the national per capital income and we are failing to make the investments needed to grow our tax base.

Only the private sector can create the jobs and investment we need to move Maine forward. Profit is not a dirty word. In fact it is the direct and indirect solution to all of our challenges.

The search for profit is what drives investment and innovation. Without profit, no one has an incentive to create jobs or build our tax base. Profit is what will keep our young people from leaving Maine in search of better opportunities.

Profit is what makes the public sector possible. Without profit, we do not have economic activity, we do not have income and we do not have a tax base. Profit pays the bills for every sector of society.

Profit leads to more competition. And through competition “We the People” end up with more choice and greater value.

Every private or public sector job, every program, every non-profit, every state service and every advancement in society started because someone took a nickel worth of input and turned it into a dime of output. It is a trend that has to continue. Here is a four step process of how we are going to do it.

Simplicity: It needs to get a lot easier to do business in Maine. We are now conducting a state-wide Red Tape removal audit to identify the statutes, rules and bureaucratic road blocks to job creation in Maine. We can have vigorous protections for what makes Maine so great as long as the safeguards are clear, decisions are quick and we have a cooperative relationship between regulators and the private sector.

Savings: It needs to be less expensive to do business in Maine. Everything from the cost of licensing a business to health care, workers compensation and utility costs needs to go down.

Business is just math. It is the same for everyone whether you’re an international player in the paper industry or a corner deli fighting to reach the breakeven point.

The costs that we can control through public policy need to go down. Our forests, fisheries and farmland will never reach their full economic potential in Maine if it is cheaper elsewhere to operate factories that turn wood into paper, process fish into a meal and turn potatoes into chips and fries.

Skills: We need to train the next generation of workers in Maine in the industries that offer the most potential. We have one of the world’s best Science and Math magnet schools in Limestone, Maine. Motivated teachers, motivated students and affordable access make it all work.

Representative Terry Hayes, the Assistant Democratic Leader in the Maine House of Representatives is a proud magnet school mom. Her son Danny participated in a one-week summer program and applied for enrollment in the magnet school because of his interest in math and science.

Today Danny is a Dean’s list engineering student at the University of Maine who aspires to live and work in Maine as a mechanical engineer. Let’s work together to make sure Danny Hayes, and others like him, can stay close to home and prosper.

Scale: We need to provide our industries with competitive advantages in terms of costs, regulatory environment and trained labor that give Maine businesses a leg up over the global competition. We are fighting for the future of Maine and every decision we make has to be considered in these terms. That is how you achieve competitive advantage.

If we can make Maine a place where it is once again cost effective to make paper or process potatoes, we are going to have the business climate that attracts new economy jobs in information technology, biotechnology and semi-conductors as well. It is about balance. We can find balance in life, if we work together.

I ran for Governor because I know how to run a business and create jobs. In my experience you pick your team, make your decisions and you stand accountable for things that matter.

I will spend every day of the next four years working to make Maine a better place for ALL of our sons and daughters to find work, to start businesses and to stay here to start families of their own.

A Governor cannot do it alone. It is going to take hard work from everyone, but I am ready to provide the leadership and focus needed to move us forward.

I do not care about editorials, opinion polls or the next election. I have four years and a job to do.

At the end of my term I will be ready to stand accountable for the job we did at putting people first and creating prosperity for working Maine families.

Being Governor is not about me, my administration, the Legislature or Augusta bureaucrats. It is about Maine people, and I will let you be the judge.

Thank you for coming. Thank you for listening. Now let’s get to work for all Maine people.

February 10, 2011

Budget Address

FY 2012 / 2013 Biennial Budget Address Maine Governor Paul R. LePage – February 10, 2011

President Raye, Speaker Nutting, members of the 125th Legislature, and citizens of Maine, thank you for the invitation to discuss our budget submission for the 2012 / 2013 Biennium.

It takes a great deal of work to prepare a budget – especially for a newly elected Governor. I would like to begin by commending my transition budget team led by Sawin Millett and Tarren Bragdon for all their hard work. Volunteers all, they gave us great ideas and a great head start. I would also like to offer a special thanks to Ryan Low for temporarily joining our budget team.
Ryan’s professionalism and dedication to public service is an example for all.

I must also compliment the 125th Legislature for the professional and bipartisan work that went into enacting the Supplemental Budget. Representative Flood, Senator Rosen and the entire Appropriations Committee have my thanks for a job well done. I also want to thank Speaker Nutting, President Raye, Representative Cain and Senator Hobbins for their leadership. I would welcome the same result with my biennial budget.

INTRODUCTION
Our 2012 / 2013 biennial budget is a jobs bill. It sets us on a path to keeping more money in the private sector and ends the expectation that every available resource should be devoted to funding the operations of state, county and community government.

Our budget includes long term reforms that will make our state pension system and workforce more affordable. It increases aid to education and allows for transportation investments without adding to our debt burden. And this budget encourages hard work and independence through needed welfare reforms and tax cuts for Maine’s small businesses and working families.

REFORM THE BUDGET PROCESS
Our budget was written without consideration for political interests or special favors. It makes tough choices and puts people first.

But it could have been more comprehensive if we had the time to conduct oversight and make informed decisions about the performance of state programs and agencies.

Our budget is being made available on the 37th day of my term. Given the logistics of drafting and printing the document, all of the major decisions were made before I was in office a month and before most of my commissioners were confirmed.

Fifty members of the House and five Senators have no prior Legislative experience. Collectively you represent well over a third of Maine’s population and today is the 14th session day since you took office.

Every committee chair, member of leadership and presiding officer is also new to his or her post.

We should ALL be spending our first year on oversight and decision making. Every agency, program and service ought to start at zero and justify their objectives and practices. And before a budget is drafted, suggestions for improvement should be considered.

Because baseline budgeting and assumed increases are the norm, every biennial budget since 1992 but one has started with a deficit.

There is not a business, municipality, hospital or nonprofit that would willingly flirt with insolvency every budget cycle the way state government does. We need to change the process.

Representative Ayotte has sponsored legislation, An Act to Establish a New Method of Determining the State Budget, starting the fiscal biennium in the second regular session of the Legislature. The bill is cosponsored by President Raye, Representatives Cain and Curtis as well as Senators Rosen and Sherman.

Representative Ayotte’s proposal would give all of us the time we need to conduct oversight and work with the agencies to set priorities. I strongly support the bill and would sign it right now if we could pass it by a show of hands.

PUBLIC DEBT
State government has been paying many of today’s bills with tomorrow’s revenues. Our indebtedness creates job-killing demands on our private sector and has to be reformed.

One of the most pressing concerns is the $4.4 billion unfunded liability in our state pension system. Without reform, the payment for our pension liabilities totals $449 million in the first year of the upcoming biennium. That is 15% of projected General Fund Revenue. Within ten years the total annual cost to taxpayers is more than $700 million.

If you do not think our pension liabilities are a problem, check with a constituent. Tell one of Maine’s 653,000 tax filers in your district that her share of the unfunded pension liability, paid today, is $6,500. Let her know that if she wants to finance her obligation we will need $15,313 over the next 16 years.

Public sector employees have served our state and our communities. They have planned on a public pension to sustain their retirement and we cannot abandon them. But changes are needed so we can finance today’s priorities without robbing the private sector of billions of dollars of potential job creating investment.

Our budget calls for reasonable changes to the retirement system that saves $524 million over the current biennium, with most of the savings accruing to the General Fund. This budget asks retirees to forgo cost of living increases in the short term and to accept modest increases in the future. This budget also asks retirees for the same shared sacrifice we are asking of our state employees and increases the retirement age to 65 for new and recent hires.

The two year savings of over half-a-billion dollars realized by these modest changes is critical to funding today’s priorities and sustaining the pension fund going forward.

Over the longer term, these changes reduce our unfunded pension liabilities by $2.5 billion and reduce our retiree health liability by almost $1 billion.

Our changes keep almost $7 billion in Maine’s private sector economy through 2028. All things being equal, the pension reforms in this budget save every Maine tax filer $10,700 over the next 16 years.

Our proposal funds no new bonds, borrowing or deferred payments of any kind over the next two years. If a MaineCare patient goes to a hospital for critical care, we are going to pay the bill immediately.

Much of the additional savings or resources we identify over the biennium will go to repaying our remaining balances to Maine’s health care facilities.

We plan to use savings at the Department of Transportation and General Fund Dollars rather than borrowing to ensure we make critical infrastructure investments. And we have no plans to borrow in order to finance land acquisition, facility improvements or anything else. If the question is cash or credit, the answer is always the same.

Our total public debt obligation in Maine is $12.9 billion – only $500 million of which was actually approved by the voters as required by the Constitution.

We owe twice as much in debt as we expect to collect in General Fund Revenues over the next two years and our debt as a percentage of state GDP is twice the national average. Our problems will not go away over night, but sensible reforms, fiscal discipline and time will clean up the state’s balance sheet and put more money into the hands of job creators. If we were a private sector company, we would be in bankruptcy.

EDUCATION
Reforms to our pension liabilities make it possible to increase state aid to local education by $63 million over the biennium from the state aid provided in FY 2011. In 2013 we will contribute $914 million to General Purpose Aid to Education.

And it will not be enough. Education funding is never enough because too many resources are diverted before they reach the classroom. We are working on reforms that make the student the most important person in the classroom.

Our budget has no cuts for higher education. Our community colleges and universities have to remain affordable options for our high school graduates and for adults who need to upgrade their skills to remain competitive in a changing job market. We also continue to provide strong support for scholarship programs.

We need to consider additional ways to pay for the cost of higher education as well. While not included in our budget submission, I want to start the discussion about creating Maine Higher Education Savings Bonds.

A new initiative in our budget is a new collaboration between the Kennebec Valley Community College and Good Will-Hinckley to expand opportunities for kids who need a stable, alternative learning environment. The program will provide career training and prepare students for Maine’s workforce.

Not every kid has the same needs or goals. Not every student is well served by traditional schools. Our resources need to follow the student to make sure his or her unique needs are being met.

TAXES
The cost of citizenship and business ownership in Maine is too high. We tax income, property, gas, sales, and pretty much every other traceable transaction in our economy.

As Ronald Reagan said, “If it moves, we tax it. If it keeps moving, regulate it. And, if it stops moving, subsidize it.”

We assess fees on almost every interaction residents have with their government and create disincentives for success and marriage. Every so often a rumor hits the internet that the government will start taxing emails. And people fear it.

Our budget proposal cuts taxes by $203 million over the biennium. We include conformity provisions that align Maine’s income tax code to federal provisions, saving state taxpayers money and aggravation.

Our budget eliminates the marriage penalty and increases the personal exemption for all Mainers. Coupled with a higher standard deduction, our changes completely eliminate state tax liability for an additional 15,000 Mainers at our lowest income levels.

And to help create jobs in Maine, we include bonus depreciation for businesses investing in our economy’s future.

We increase the exemption for the death tax to make it easier to pass a family business to the next generation and to reduce the incentive for moving wealth out of Maine.

And we lower the tax rate on families and business success from 8.5% to 7.95%, the lowest top income tax rate in Maine since 1975.

And we need to be clear. Maine’s top tax rate is not just for the rich. For the 2011 tax year, it will take just $19,950 in taxable income to hit Maine’s top bracket for single filer and $39,950 for joint filers. 240,000 families in Maine will see a savings as a result of the tax cut we propose.

Our budget also ends indexing of the gas tax in the second year, a levy that is especially hard on working Maine families and gets passed on to virtually every Maine business.

WELFARE REFORM
Maine was built by immigrants. The energy and aspirations of our immigrant ancestors powered our mills, carved out our farmland and built our shipyards. Maine must always be a welcoming place for those who seek an opportunity to advance through hard work and self reliance.

Despite our heritage, Maine is one of just a few places in the country that offers “welfare-on-day-one,” for legal non-citizens. Our budget saves $20 million by eliminating instant eligibility for welfare benefits and sends the message that work and independence are what is expected of everyone in Maine.

Our budget also includes a true five-year time limit on welfare eligibility and incentives to help move people from dependence to self-sustaining employment. Based on ability to pay, we also ask MaineCare recipients to contribute to the cost of the state-sponsored health care coverage.

Unfortunately, we are limited in the reforms we can offer in MaineCare because of the Affordable Care Act out of Washington. Maine’s generosity is being penalized by the federal government.

There are additional savings to be had in MaineCare but federal mandates force us to look elsewhere.

Our welfare reform also includes mandatory drug testing of program participants convicted of drug offenses. If we are serious about helping people move to independence and work, we must address the barriers caused by addiction. Otherwise, we are spinning our wheels and squandering state resources.

STATE WORK FORCE
Some say, state government is too big to fail, but does not deliver enough value to taxpayers. Big changes are needed, but we are going to be smart about it.

My budget has no mass layoff, no furlough days, no across the board cuts and no gimmicks.

There will be continued shared sacrifices for members of our state workforce. But people who work for Maine can expect to earn more next year than they do today.

We start the process of making state government more affordable by maintaining a real hiring freeze. Truly essential positions will be filled, but we will ask every agency to look for efficiencies first.

Our budget also includes a retirement incentive for state workers. Age-eligible employees who leave the work force before the end of this calendar year will receive a small cash payment and enter the retirement system before cost saving adjustments are made to the program.

My message to state employees is clear. If you start each work day thinking about serving the public, there is a place for you in state government regardless of age. If you come to work to fill in time until you are age-eligible for retirement, we have built in incentives for you to expedite the process.

CONCLUSION
We have offered a budget free of gimmicks and politics. We have made hard choices that put Maine people first, values work and investment, and makes needed reforms to our state workforce, pension and welfare systems.

I look forward to your review of my proposals and working together to enact and implement a spending and reform plan that moves Maine forward. Thank You.

March 2, 2011

L.R. 2067 (Governor's Biennial Budget) Testimony

Testimony of Maine Governor Paul LePage Joint Standing Committee on Appropriations March 2, 2011

Chairman Rosen and Members of the Joint Standing Committee on Appropriations and Financial Affairs, I want to thank you for the hard and thoughtful work you are putting into our budget submission. We have high responsibilities to the people of Maine and I respect the approach this panel takes to its work.

52,529. That is the number of state workers or teachers who are either in our retirement system or are within ten years of obtaining retirement age. These are long-serving state employees and teachers who are counting on Maine’s pension system to sustain their golden years. Many will receive no social security and very few have the work years left to make other arrangements for their future.

We have both a Constitutional and Moral Obligation to save our defined benefit pension system for our retirees. We also live in a state with finite resources and there is no amount of obligation, wishing or avoidance that will change this hard economic fact.

Without reform, we would need to appropriate $926 Million over the biennium to meet our normal and unfunded liability pension obligations. That is 15% of our projected General Fund Revenues and crowds out needed spending on education, our social safety net, health care, public safety, and places ever-increasing demands on Maine’s taxpayers who labor under one of the highest tax burden in the country.

The problem today is severe. Ignored, the problem grows to the point where our biennial pension expenses will exceed $1.5 billion by the end of the decade, consuming approximate one-in-every-four dollars in General Fund Revenue. If we let the problem get to this point, Maine’s defined pension benefit program will cease to exist and our promises to retirees will go unmet.

Let me say it again. If we do not act, people in this room will be forced to make funding decision so dire that our current state retirement system will have to be cast aside.

There are many factors to blame for our pension shortfall. Poor market performance, higher life expectancies, unreasonable expectations, and growth in government Maine’s taxpayers simply cannot afford.

Our budget proposal takes on our $4.3 billion pension system shortfall and puts us on a sustainable path toward fully funding our retirement obligations. Only then, when the money to pay for our promises is in the bank, we will have truly and honestly kept our promises to Maine’s retired public servants.

Our fix is not easy. But it is honest and it is essential if we want to keep our commitments.

We ask for sacrifice from retirees in the form of COLA freezes and caps.

We ask for sacrifices from current state workers and teachers in the form of higher contributions and later retirement ages.

And we ask for continued sacrifices from taxpayers who for the next seventeen years will have to dig even deeper to pay for the un-kept promises and assumptions of the past.

I appreciate your consideration of our budget submission and my comments today. I welcome your questions.

January 24, 2012

State of the State

Governor LePage 2012 State of the State Address

President Raye, Speaker Nutting, Chief Justice Saufley, members of the 125th Legislature, distinguished guests, and my fellow citizens.

I am here tonight to update the Legislature on the condition of our great state. However, before I begin, I want to recognize and thank a few people.

First and foremost, I want to thank my wife Ann, and family who have been so supportive, I appreciate all you have done and continue to do.

Master Sergeant Chad E. Smith, the Military Herald this evening, thank you for your courageous service to our great state and nation.

I would also like to recognize and thank Major Mark Stevens. Next month Major Stevens will be leading his soldiers to Kuwait in support of Operation Enduring Freedom, for their 3rd deployment in the Middle East in support of this great country.

Not only is Major Mark Stevens the commander of the unit, but he is also the marketing manager of a business in Southern Maine. Major Stevens is a true citizen soldier. Major, thank you for your service, we wish you and your unit God speed.

RECOGNIZING OUR ACCOMPLISHMENTS

I am pleased to report that in the last year, we have taken a right turn on the road to economic recovery.

In a bipartisan effort we passed the largest tax cut in state history for hardworking, Maine taxpayers. Not only did we cut the top rate for individuals; we are supporting working low income Maine people by ensuring seventy thousand Maine families will no longer pay state income tax, until they earn higher incomes. That is a real helping hand to put them on the road to self-sufficiency and prosperity.

Some claim our tax cuts are tax cuts for the rich. In Maine the top income tax rate kicks in at an income of under $20,000 dollars per person.

Let me tell you this, no matter what anybody says - $20,000 dollars is not rich.

Two thirds of Maine’s hardworking taxpayers will receive tax relief next year. Maine families will have more money for heating oil, for groceries, and gas for their vehicle. This was not an easy task. I thank the Legislature for their efforts in focusing on making our state a more prosperous home for all Mainers, and for helping us put Maine people before politics.

Just one year ago my administration faced a $4.1 billion dollar shortfall in the pension system. Together, we eliminated over $1.7 billion dollars of pension debt on the books, 45% of the existing pension shortfall, while protecting retirees’ future pensions through sensible reforms. You can’t pay a pension with an I.O.U.

In other areas, Maine state government has a new attitude. With the leadership of Senator Garrett Mason, Maine became the 41st state in the union to adopt charter school legislation.

In addition to passing charter school legislation, my last budget increased general purpose aid to K-12 education by $63 million.

As promised throughout my campaign, a 5-year cap was placed on welfare benefits.

Workers’ compensation insurance premiums are down 7%. Unemployment is also down, and lower than the national average.

Maine’s Department of Transportation under the superb leadership of Commissioner David Bernhardt saved more than $100 million dollars, without sacrificing our infrastructure improvements.

Red tape was reduced. We are not here to tell Maine job creators what they can’t do; we are here to help them find out what they can do.

Providing superior customer service to all Mainers is the first job of state government. We are changing the culture of state agencies from “NO” to “CAN DO.” Together, these things add up to one reality: Maine is Open for Business.

And the word is getting out.

During 2011, we heard from dozens of businesses who have pledged investments in Maine totaling $100 million dollars, with plans to create over 1,000 new, good paying jobs. In this last year, we have not only reopened businesses, but have brought back American jobs from overseas. The restarting of Great Northern Paper in Millinocket shows how persistence and working hard to reduce red tape and regulation can pay off. What was a recently shuttered business, is now a blossoming employer again.

Another example is Carbonite in Lewiston. Carbonite recently relocated its customer service operations from India to Lewiston. According to Carbonite CEO, David Friend, our efforts to accelerate the regulatory process in Maine were a primary reason they were able to bring 150 jobs to the Lewiston / Auburn area.

Even as we mark some success, we continue to face ongoing fiscal challenges.

PUTTING OUR FISCAL HOUSE IN ORDER

When I took office on January 5, 2011, I found that two distinct fiscal issues clearly threatened our state’s future financial stability – first was the pension fund liability, which we addressed, second was unsustainable welfare spending.

My administration did not create this problem and did not invent it. Many of you did not create this problem, nor did you invent it. This problem does exist! Regardless of who is responsible, we must fix it.

I want to thank Commissioner Mayhew for her leadership and grace dealing with this difficult challenge. Today, we must confront the $221 million dollar budget shortfall within the Department of Health and Human Services that is fueled by overly generous welfare programs that we cannot afford.

Over the last decade, Maine’s welfare program has grown by over a billion dollars. We have encouraged people to rely on the taxpayers, rather than rely on themselves. Year after year, state government has used one-time federal funding, accounting gimmicks, misuse of funds and not paying hospitals to feed this beast.

We are now forced to make tough, but necessary decisions. Many of these tough choices were proposed last spring. Here we are again, and if we kick the can this time, I guarantee we’ll be back next year because the problem keeps on growing.

This is not political rhetoric. We must stop promising people a free lunch when those working in Maine are earning below the national average. It is unfair to promise people they can get things for free when the resulting bills are not being paid.

Now, we, as elected officials, must decide how to protect the most vulnerable among us. My administration has made a commitment to save Maine’s safety net.

But saving it means we must restructure our welfare programs and reduce total spending. We also must begin to reestablish core priorities for our welfare program. If we don’t, the system will fail everyone.

My plan stabilizes the safety net for Maine’s most vulnerable and preserves benefits for over 285,000 Mainers.

As a state, we must move closer to the national average in terms of our welfare programs. My plan protects benefits for over 285,000 Maine people – a number that would still have Maine 15% above, but closer to, the national average. As you all know, I have a unique understanding of what it means to need help.

We cannot be all things to all people. Maine’s welfare program as it stands today will run out of money in early April, and all services will be lost. The clock is ticking and we must act quickly.

I encourage the Legislature to act now to move this supplemental budget forward to save our system.

THE FUTURE

If you look to our neighbors in New Hampshire, you will find that the annual median household income is $60,734. In Massachusetts, it is $64,057. Here in Maine, our annual median household income is $45,708 – 18% below the national average.

It is sad. Really sad. This is one of the single greatest issues that affects families in Maine, and we should be ashamed that our state is in this position. So I ask all of you, where is the outrage? Why should many Mainers live in poverty while our neighbors who live on the other side of lines drawn on a map earn a far better income and lead much more prosperous lives?

My friends in the Legislature, it’s time to be outraged. It’s time to create a climate for the private sector in Maine where our job creators can succeed – where Maine people can prosper.

The high cost of doing business in Maine is the common theme from Kittery to Fort Kent, from Fryeburg to Belfast. Therefore my legislative agenda will focus on the concerns I have heard from job creators. We need more than jobs. We need careers to pull our state out of poverty. We need good paying careers that will offer benefits, job security and job satisfaction.

We must focus on lowering the cost of energy, creating an educational system that can help us compete globally, and boost efforts to strengthen the local economy in each community in Maine.

I am convinced that reforms in these 3 areas will bring more jobs to Maine and provide the career paths that are missing today for so many Mainers.

ENERGY

One of the largest inhibitors, if not the biggest obstacle to job creation is Maine’s high energy costs. We must address the issue of the high price of electricity and energy costs in total, if we want economic prosperity. For example, Tambrands in Lewiston/Auburn competes for capital against 3 other US plants to grow. Energy costs in the other 3 plants range from 4.2 to 5.6 cents kwH while in Maine it is almost 8 Cents per KwH.

Another example is the Advance Pierre/Barber Foods facility in Portland. They compete with plants in Oklahoma where energy costs are 7.5 cents per KwH, while Maine they are 12.5 cents or 67% higher.

Electricity prices in Maine are the12th highest in the country and 42% above the national average. As a result, Mainers pay approximately $400 million dollars more than the national average for electricity. Think about that – $400 million dollars that could be used elsewhere in our economy.

Maine no longer competes just in New England; it must compete nationally and globally.

However, there are some who think government should mandate what types of energy Mainers must buy – regardless of how expensive it is.

I DO NOT support Augusta being in the business of increasing costs on Maine ratepayers to pad the pockets of special interest groups.

I believe it is morally and ethically wrong to take more money from those who can least afford it to line the pockets of those that are politically connected here in Augusta.

I have met and spoken with companies ranging from natural gas providers, oil dealers, electric utilities, and biomass suppliers to gather input regarding how to lower Maine’s overall energy prices.

My energy policy will focus on all forms of energy, and give Mainers the freedom to choose whether or not they buy from renewable sources.

For example, hydropower is a green energy. Let’s remove the 100 MW restriction on renewable hydropower.

I support letting the free-market decide what energy sources are sustainable for Maine people.

Energy conservation is an important goal. However, we must make sure our government programs that use taxpayer dollars for energy efficiency, are responsible and cost-effective. Look back 15 years ago -- did every household have a laptop, a cell phone, an iPad or an iPod? We have to recognize that with technology comes the reality that we will consume more and more energy in the future.

We need to empower Maine people to take control of their energy fate.

EDUCATION

Businesses have repeatedly told us that they have jobs available, but lack a qualified workforce to fill them.
I have met with students, teachers, principals and education experts. I learned too many of our students drop out of high school, and too many that complete high school are not ready for college or a career.

We must reform our educational system today or we’ll fall even further behind.

This summer, Commissioner Steve Bowen and I studied educational systems from around the world.

For much of the 20th century, the United States led the world in quality of education, driving economic prosperity. Sadly, our country no longer leads, but struggles to follow.

Most international assessments of student performance, place the United States at best as average. Average is not leadership. Average will not get us prosperity.

Average means: we are as close to the bottom as we are to the top.

Maine can and must lead the nation.

Improving education in Maine starts with one simple step: putting our students first. That is not a slogan. It is not a cliché. We all must ask ourselves “What is best for the student?”

Not special interests, not unions, not superintendents, not school boards - students must come first.

Teacher effectiveness is critical to student learning.

We will soon introduce a series of reforms related to Maine’s teacher effectiveness policies. Maine must have the best teachers educating our children.

Children’s educational needs should be determined by their families – not by their street address.

Last year, this Legislature did a great thing by passing charter school legislation. That is a start!

As we put students first, we must recognize that some students learn best working with their hands.

My hobby is woodworking. Woodworking requires a strong working knowledge of geometry. Some kids aren’t going to pick up geometry in a textbook, but will in the context of trades such as woodworking, welding, or machining.

We must ensure that every student has access to a wider array of educational opportunities.

Therefore, I want to increase access to, and improve upon, Maine’s Career and Technical Education System. Students should have the ability to choose to study trades, and develop skills before joining the workforce.

As we consider education reform, I ask you to keep one question in mind: what is best for the student?

THE ECONOMY

I spent my career as a businessman, turning around private sector companies.

I have said it many times – As Governor, I cannot directly create private sector jobs. However, together we can develop policies that will encourage businesses to expand and create opportunities here in Maine.

If Maine is to be truly “open for business”, we must work to further reduce the high cost of doing business. Last week, the Wall Street Journal reported that in 2009, Maine had the 9th highest tax burden in the country. New Hampshire was the 6th lowest. Even TAXachusetts was lower than Maine.

Last year we passed the largest tax cut in state history. But that is not enough. I will return to the Legislature with further proposals to reduce Maine’s tax burden. We will focus on keeping our retirees here at home, spending money with our small businesses, investing in our state, and mentoring our children and grandchildren.
We must break the cycle where retired Mainers live in Florida for 6 months and 1 day to avoid our high taxes. It’s one thing to go south for some beach weather in January and February; it’s entirely different when you have to escape the tax man.

As Governor, I am determined to make state government accountable. We need to work with our job creators – not against them. Red tape or procrastination, or just foot dragging is no longer acceptable.

However, encouraging businesses to expand takes a partnership with local communities and the state. Therefore, my administration is developing a Certified Business Friendly Community Program. This is a way for the state and communities to partner to reduce red tape and promote job creation.

The goal is simple: we want our local communities to partner with businesses. Let’s identify those communities that exhibit a pro-job creator attitude and go the extra mile in creating jobs and wealth.

These communities will be recognized by the State as communities that are “Open for Business.” I believe, Maine is the most beautiful state in the nation. It is important that we do not lose sight of our roots as we work to improve our economy.

The choice between our environment and our business climate is not “either or.” It should always be “both.”

Through much of our history, fishing, farming, and forestry have been Maine’s economic engine. Maine can be prosperous, and still be a great vacationland. We are committed to reviving these industries to get Maine working again.

I call on the Legislature to support our plan to create the Department of Agriculture, Conservation and Forestry. With renewed strength and collaboration, this Department will be a good steward of our natural resource based economy for future generations.

DOMESTIC VIOLENCE

The last issue I want to address this evening is one that is very personal to me. I am sad to say that my childhood memories are ravaged with domestic violence. Those memories are not pleasant; but I share my past to help end domestic abuse today.

Every year, nearly half of Maine’s homicides are related to domestic violence. In 2011, 23 people were murdered, 11 involving domestic violence.

These are real lives – mothers, fathers, sisters, brothers, uncles and aunts, and yes - even children. We all feel the horrific effects of domestic violence.

This tragic loss of life is unacceptable. I have ZERO tolerance for domestic abuse, of any kind.

More than 80% of domestic violence assaults are committed by men. It is time men stand up, speak up, and stamp out domestic violence. As men – we must stand together as one and say no to domestic violence.

Tonight, I am proud to acknowledge a domestic violence awareness advocate who has a personal connection to the affects of this brutal abuse.

After the murder of his 2 year old grandson, Arthur Jette became involved with the Maine Chapter of Parents of Murdered Children.

Art and I believe that it is time we shift domestic violence from being a women’s issue, to a men’s issue. It will take a much tougher justice system to stop this violence. I have teamed up with the Chief Justice, the Attorney General, and Commissioner Morris, district attorneys, victims and the Maine Coalition to End Domestic Violence in an effort to strengthen Maine’s domestic violence related laws.

Our system must focus on protecting women and children. There is more to justice than winning and losing a court case.

We must close loopholes in our current bail system. It is important that the law ensures the most dangerous offenders are put in front of a judge before bail is set. Ending domestic violence is not a partisan issue. I’d like to thank House Minority Leader Emily Cain who has expressed an interest in sponsoring this bill.

The Conclusion

Ladies and gentlemen … make no mistake, Maine is at a crossroads, and the road to economic recovery is a challenging one.

In order to succeed, we must put politics and gridlock aside.

It is time to roll up our sleeves, get to work and fight for the Maine people.

Thank you for this opportunity to share my thoughts and vision with you tonight. God Bless Maine and God Bless America.

Now let’s get to work.

December 10, 2012

State House Wreath Laying Ceremony

On Monday, Governor Paul R. LePage joined members of the Maine Funeral Directors Association (MFDA) and their families and friends to help kick off the 2012 Wreaths Across America (WAA) campaign. The WAA State House Ceremony included a Wreath Laying Ceremony in the Hall of Flags at noon. The annual event helps to promote a week-long celebration of America’s veterans and their service to country.

The Governor's remarks can be found in the attachment below.

State House Wreath Laying Ceremony Remarks

December 11, 2012

Governor Celebrates Hanukkah

Governor Paul R. LePage commemorated Hanukkah in Maine with a celebration and menorah lighting today at the State House. The lighting took place on the second floor of the State House in the Hall of Flags outside the Office of the Governor.

The Governor joined the Honorable Rabbi Moshe Wilansky, who runs the Chabad House for Maine, and other members of Maine’s Jewish community, including Senate President Justin Alfond.

Menorah Lighting Ceremony Remarks

February 5, 2013

Governor LePage's 2013 State of the State Address As Prepared

"Chief Justice Saufley, President Alfond, Speaker Eves, members of the 126th Legislature, distinguished guests, and my fellow citizens.

Tonight, I am here to update you, the people of Maine, about the condition of our great state.

First, I must recognize and thank a few individuals. To my wife Ann, Ann please stand, I would not be here tonight without you. You have made Maine proud as our First Lady, especially through your support of our armed services and their families.

To my family and friends, I appreciate all you have done, your unwavering support, and all you continue to do throughout my life’s journey.

Staff Sergeant Justin Middleton, the military herald this evening, thank you for your courageous service to our state and nation.

Members of our military and veterans that are here tonight, please stand.

We salute you and extend our sincerest appreciation to each and every one of you for your service in keeping a safe and free people.

In the balcony, you’ll notice an empty chair next to our uniformed service members.

This chair represents every Mainer who is serving overseas, in harm’s way, so we can be here tonight and exercise our freedom to assemble and our freedom to speak.

I ask that we all take a moment to remember, recognize and thank our men and women in uniform.

Recently, Ann and I had the opportunity to go down to Arlington National Cemetery during the Wreaths Across America trip.

As I walked through rows and rows of tombstones, marking the final resting place of our fallen American heroes, I remembered one simple truth: These individuals paid the ultimate sacrifice to ensure future generations had the opportunity to pursue their piece of the American Dream. It is a dream we cherish and the freedom that marks our lives is so rare for the rest of the world.

The American experience represents a unique moment in time. We must not abandon it!

If each and every one of our elected officials visited Arlington, they might realize the political battles we wage are meaningless in comparison to the blood that’s been shed to protect our American Dream.

We all recognize that the political climate in Washington D.C. is toxic. With no solutions in sight, the Federal debt grows at such a pace that many of us question how the American Dream will ultimately survive for our children and grandchildren to experience.

We owe it to each and every one of our fallen heroes, as elected officials, to come together and develop solutions to our challenges. We must commit to make our state a better place to live and raise our families.

There is no more important thing in most of our lives than our families.

Maine families are struggling. With a median household income of just under $48,000, Maine families survive on far less money than those in other states.

Maine families struggle to heat their homes, fill their cars with gasoline, put food on the table, and pay for health insurance.

Government has not strengthened Maine families with more income, opportunity, or reducing the cost of living.

Instead government has taken more and more of our family’s hard working income away to serve some people’s political and/or financial self interests.

The path forward offers two choices. We continue to accept the status quo or we can make the tough decisions to create a better Maine for everyone.

We can only do this if we work together. Every Mainer deserves the opportunity to pursue the American Dream.

Recognizing our Accomplishments

Last session, we took steps to improve our economy. We provided Mainers the LARGEST TAX CUT in history in a bipartisan effort.

Despite rhetoric to the contrary: 70,000 working Maine families no longer pay state income tax.

Two thirds of all taxpayers are receiving tax relief, easing the burden on middle class Maine families.

The average Maine family is receiving a $300 tax decrease. A 28% reduction in their state income tax.

We also reduced taxes for Maine’s job creators. A critical step to attracting investment in Maine.

Unfortunately, there are those who would like to undo these modest reforms– despite having voted for them.

Now is not the time to rollback these monumental reforms.
High taxes come at a high cost: the erosion of our state’s economic competitiveness.

President John F. Kennedy had it right: “An economy constrained by high tax rates will never produce enough revenue to balance the budget, just as it will never create enough jobs or enough profits.”

Tax cuts were not the only accomplishment of the last session.

Together, we eliminated $1.7 billion, 41% of the existing shortfall in Maine’s pension system, without cutting retiree benefits.

Maine families now have more choices when purchasing health insurance. Over 17% of Maine’s small businesses received a decrease in their rates last year.

With LD 1, we reduced red tape, and improved our permitting process for businesses.

Maine hospitals are now paid in real time for the services they provide.

Principled job creators know that my administration wants to help, and my door is always open.

You want to create a job; I want to be there to help.
However, let me be clear, I am not interested in helping those who increase the cost of living on Maine people for personal financial gain.

We passed legislation to strengthen vocational education. This will ensure that Maine students who work with their hands have more opportunities to learn valuable skills and gain good paying careers.

We passed legislation to hold teachers and principals more accountable through performance evaluations.

Unemployment is down in Maine, lower than the national average.

We are focusing our efforts on branding the State of Maine, recognizing that Maine made products embody quality and value.

Government is becoming more transparent. We exposed the wasteful use of Mainers tax dollars at agencies such as the Maine Turnpike Authority and Maine State Housing Authority. We not only exposed it – we cleaned it up. We have more to do!

I am pleased to announce that in the coming days we will launch a new website that will enable Mainer’s to see how their precious tax dollars are spent.

We placed renewed interest in our natural resource economy. Farming, fishing and forestry continue to be top priorities for moving Maine forward.

My administration also launched a “Business Friendly Communities” initiative. The program works with our towns and cities to make them “Open for Business.” Eighteen Maine communities are now designated as business-friendly.

These reforms are a small step in making Maine a better place to live and raise our families. There is so much work left to do. Once again, Forbes ranks Maine dead last in the nation when it comes to being business friendly.

We can disagree with Forbes analysis; however, America’s job creators listen to them. Denial or sticking our heads in the sand will not change the reality.

We must put ideologies aside and get to work to make Maine a competitive and prosperous state.

Maine’s Economic Future

I have spoken with a lot of Maine families and businesses in the past three years.

They desperately want more opportunities, better paying jobs, and a lower cost of living.

I spent most of my career in business creating jobs for hard working Mainers. I know what it takes to expand and create jobs. Maine’s cost of doing business is simply too high.

For example, Alabama, South Carolina, Indiana, and Texas are attracting huge investments by companies, providing higher paying jobs for their residents, without exorbitant taxpayer subsidies.

Why shouldn’t Maine people benefit from the same economic opportunity?

Remember one simple truth: “Capital investment goes where it is welcomed – and stays where it is appreciated.”

Improving our economy requires taking bold action.

We must pay our bills, lower our energy costs, reform education, and make government more efficient and affordable for our economy to grow.

Paying Our Bills

When I became Maine’s Governor, hundreds of millions of dollars in unpaid bills to Maine’s hospitals were stacked on my desk. My predecessor left no plan to pay them, just IOU’s.

During the last session we paid back $248 million in debt owed to our hospitals.

Tonight, there is a plan on your desk, sponsored by Senator Pat Flood, to pay the outstanding balance of $484 million owed to Maine hospitals.

Hardworking Maine families face two choices, pay their bills or face the debt collector. It is embarrassing that state government is not held to the same standard as every Maine household.

In Lewiston, Central Maine Medical Center is owed over $50 million dollars. The result of the states IOU?

Lewiston residents are denied the opportunity to fill critical positions, capital improvements are delayed, and local vendors go unpaid.

These IOU’s are damaging the very communities each and every one of you represents.

We cannot expect to have a prosperous economy when we owe hundreds of millions of dollars to hospitals that employ Maine people.

My proposal ensures that Maine hospitals get paid. It will improve Maine’s fiscal health, allowing me to release authorized bonds, injecting more than $700 million into Maine’s economy.

For the sake of Maine families, and our economy, I plead with you to act on this proposal quickly. Maine needs to pay its bills!

Balancing Our Budget

Hardworking Maine families sit at their kitchen table every month to balance their checkbook, and pay their bills.

Federal, state, and local government must do the same.

Our nation faces a national debt of over $16 trillion dollars.

With the Affordable Care Act, Mainers will face huge tax increases, and regulations that will have a negative impact Maine’s own healthcare reforms.

Gridlock has paralyzed Washington D.C., and the American people are paying a heavy price.

We cannot continue to mortgage the future of our children and grandchildren because politicians won’t do their jobs. The policies of Washington D.C. will result in smaller paychecks for Maine families.

In fact, the average Maine family is handing Washington an additional $1,000 dollars this year.

Now is simply not the time to burden Maine families with higher taxes.

I have put forward a balanced budget proposal. I want to hear other ideas for structural changes that will lead to a more efficient and effective delivery of government services.

Energy

Maine’s energy costs are TOO HIGH – and its killing economic opportunity.

Maine families pay more than 24% above the national average for electricity. Our businesses pay 14% more.

Even more discouraging is a law that forced the recent decision by the Public Utilities Commission in favor of Statoil’s off shore wind proposal.

This move compels Maine families and businesses to subsidize a global entity to the tune of nearly $200 million dollars.

Maine can ill afford any more of these job killing decisions that only increase electricity prices for Maine families and businesses, which just continues a policy of crony capitalism.

We need more elected officials to stand up for the ratepayer, for the taxpayer, and for the folks who are paying the bills.

Imagine the burden lifted for Maine families if we promoted policies that saved 24% of their electricity costs.

For those who believe that Mainers should pay more for energy to serve a greater global goal or continue to pad the pockets of those politically connected, I fail to understand your reasoning.

Long term prosperity for the sake of a buck today is not the path to a winning formula.

Just think if every Maine business could invest the additional 14%, to create jobs and pay their employees higher salaries.

For example, Bar Harbor Foods is located in Whiting in Washington County. The company manufactures seafood products.

Mike Cote, CEO and Founder states that the high cost of Maine’s energy erodes the operating margins of the business, resulting in reduced profits.

Reduction in profits slows his ability to re-invest for growth and hire more people in Washington County. In a county that struggles with widespread poverty, this is disheartening.

Maine is competing nationally and internationally and we simply must do better, and we can do better.

It only takes courage, to take bold action.

The average Maine family spends more than $3,000 dollars per year to fill their oil tank. With access to natural gas, this same family could save an average of $800 dollars per year.

My predecessor fast tracked permitting for wind projects; I am going to do the same for all natural gas infrastructure and Maine businesses.

And we should continue to not pick favorites when it comes to energy, and I welcome every energy source that is cost effective for hard working, struggling Maine families.

State government has mandated what types of energy Mainers must buy – regardless of the cost. That is wrong.

Maine has played favorites when it comes to energy – ensuring that well dressed lobbyists and special interest groups pocket the profits, at the expense of Maine families.

Last session, I proposed removing the 100 MW restrictions on renewable hydropower. Expanding access to low cost hydropower makes economic sense.

This session, I am back before the Legislature with the same proposal because Maine needs and deserves lower energy costs.

I encourage this body to advocate for the Maine people, and not bend to the special interests.

Education

I am passionate about education. This passion is not an attack on public schools. I speak passionately because education is what saved my life and I cannot accept any child not being given the same opportunity I had.

As a homeless child on the streets of Lewiston, it never occurred to me that one day I could be a successful businessman, a Mayor or even Governor.

Finding my next meal and a warm spot to sleep was my goal. However, through all that hardship I knew that education was the key for me, if I was ever going to climb out of poverty, escape a life in prison, or life on the streets.

I needed the structure and discipline of a parochial school education provided.

This option allowed me to succeed, despite coming from a background of poverty.

I want every child in Maine to have the same opportunity I did, to pursue a quality education. Last session, we passed charter school legislation. A topic that has been highly politicized, by administrators and big union bosses, despite the fact that Maine was the 40th state to adopt charter schools.

States like Massachusetts, Rhode Island, Minnesota – hardly “red” states -- have been successfully running charter schools for decades.

In fact, charter schools are part of the mainstream in the rest of the country.

Let me tell you why charter schools are so important to Maine.

Alex West is a student who is currently attending the Maine Academy of Natural Sciences, formerly known as Goodwill-Hinckley. Alex, please stand.

Alex is from Hartland. He struggled in a traditional classroom setting, and was at risk of dropping out.

He chose to attend the Maine Academy of Natural Sciences, and has gone on to take classes at KVCC. This charter school provided Alex with a bright future.

School choice should not be just for the wealthy elite. Rather as Horace Mann stated in 1846 – “Education is the great equalizer.”

Education is what brought Abraham Lincoln from splitting rails to leading our country though its greatest crises. School choice benefits each and every Maine student who deserves the best education this state can provide.

Giving students options is more than charter schools. It’s the Maine Math and Science School in Limestone.

It’s the 10 town academies that have a track record of great success. It’s the Bridge Year program in Hermon, where high school students can earn both a high school diploma and an associate’s degree in 5 years.

All students and parents deserve options, especially those who are economically disadvantaged.

Therefore, I am proposing legislation to give more educational options to all kids. We must fund schools that best fit the student’s needs.

In the case of students like Alex, we will even fund residential costs to attend a school like Maine Academy of Natural Sciences.

All Maine students deserve an equal chance of success whether you live in Cape Elizabeth or Fort Kent. This is how we break the cycle of generational poverty for Maine’s children.

Despite committed teachers, dedicated parents and concerned citizens – too many public schools are not getting the job done. Not only do we need more options for students, we need to improve outcomes in all public schools.

We have schools in Maine where only 23% of students are at grade level in reading and math upon graduation.

On average, only 32% of Maine 4th graders are proficient readers. By the eighth grade, that number only climbs to 39%.

Almost 20% of students drop out before graduation. Those of us in this room have the responsibility to fix this travesty.

Far too many graduates are unprepared for higher education. 50% of incoming community college students require remediation.

Far too many graduates are unprepared for the workforce. Employers are concerned that high school graduates do not have the basic math and reading skills necessary to succeed in the modern workplace.

We spend more than twice the national average on administrative overhead in our schools. In fact, on a per-pupil basis, Maine has the highest district administration costs in the nation.

This money should be going into the classroom, not funding more bureaucrats with questionable impact on our children’s education.

Public school administrators are in denial, and have taken a position that simply cannot be defended on the facts. As a whole, Maine is not achieving academic growth at a competitive rate. This is unacceptable. But the good news is, we can reverse it.

Here is how we fix the problem.

First, we offer students options that work for them. Second, we hold our schools accountable. We tell students, parents, and communities if their schools are failing or thriving. We help those that are falling behind and replicate those that are working well.

Tonight I am directing Commissioner Bowen to develop a ranking system for Maine schools. Each school will be graded A-B-C-D or F.

Students, parents, and communities will understand if their schools are good, average or failing.

Then, we help schools that are failing and reward schools as they improve.

The third way we fix this problem is to adopt best practices. I plan to hold a Governor’s Conference on Education this March.

We are bringing national experts to Maine to demonstrate what other states are doing to improve education.

We cannot stand still, we cannot wallow in the status quo and let the rest of the country and world pass us by. Instead, we must embrace the fact that we need to change and work together to solve this problem.

If you believe the status quo is working, you are the problem – not the solution.

If you have an open mind and if you are willing to put our kids first -- I invite you to join me in this effort.

I’ll make this promise – I don’t care what party you belong too, if you are willing to put our kids first, to put aside issues like turf and money, we will get the job done.
Domestic Violence

Last session, we put politics aside and worked together to address domestic violence in Maine.

We amended Maine’s bail code, ensuring that judges determine the bail for domestic violence offenses.

We required abusers to pay into the Victim’s Compensation Fund. This provides financial resources to the victims and families of domestic abuse.

A number of other bills dealing with stalking and risk assessment were passed, and executive orders signed.

I want to thank Representative Ken Fredette and Senator Emily Cain for their leadership on this issue, and also for agreeing to sponsor a Governor’s Bill supporting our Batterers’ Intervention Programs.

Ending domestic violence requires abusers to change – batterers’ intervention is an important step in that direction.

As a youth, domestic violence hit close to home for me. I was not a spouse, I was a child.

It is important that we broaden the discussion about these heinous crimes.

Domestic violence is a crime that affects families. Family violence is domestic violence, and we need to focus on protecting all women and children.

Dealing with protection from abuse orders and firearms continues to be an issue with no simple solution.
Protection from abuse orders require people to surrender their firearms until further notice.

However, the enforcement for this is deficient.

Often police cannot do more than simply ask whether the person has surrendered their firearms.

That is why I am signing an Executive Order tomorrow creating a task force to address this problem.

Curbing domestic violence is an issue I take seriously and I value your help in this effort.

Conclusion

Maine families need help, and they are fed up with the partisan political rhetoric.

They want a lower cost of living and opportunities for bigger paychecks.

I have put my proposals forward, and I am open to hearing others. In order to succeed, we must put politics and gridlock aside and take bold action.

The time for talk has ended; it is now time for action. Thank you for this opportunity to share my thoughts and vision with you tonight.

God Bless Maine and God Bless America. Now, let’s get to work."

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February 4, 2014

2014 State of the State Address

Chief Justice Saufley, members of the 126th Legislature, distinguished guests, and my fellow citizens:

Tonight, I am here to update you, the people of Maine, about the condition of our great state.

First, I must recognize a few individuals. To my lovely wife Ann and children—please stand—I would not be here tonight without you. Ann, you have made Maine proud as our First Lady.

Staff Sergeant Douglas Connolly, the military herald this evening, thank you for your courageous service to our state and nation.

As we thank our men and women in uniform, we are reminded of those who are not with us. Bill Knight greeted thousands of troops returning from Iraq and Afghanistan at Bangor International Airport.

A World War II veteran, Bill was part of the Greatest Generation. He died on Christmas Day at age 91. He made greeting the troops his life’s most important duty.

Another veteran who is not here tonight is someone many in this chamber know and respect. Michael Cianchette, who was my chief legal counsel, is now deployed to Afghanistan.

Mike is truly one of Maine’s best and brightest, and we send him our best wishes for a safe return home. Mike’s lovely wife, Michelle, is here with us tonight. Michelle, please stand.

Our administration is working hard so young Mainers like Mike and Michelle can continue to live and work in our state. We want our young families to enjoy a growing economy that allows them to prosper and succeed.

Mainers are a breed apart. Many of us value our individuality. We work hard. We take care of each other.

I love my state. I am proud to call myself a Mainer. I want every Mainer to succeed and prosper. But Maine is at a crossroads. We have huge challenges.

Higher taxes and bloated government have not improved our lives. Higher energy costs have not attracted major investments to Maine. More welfare has not led to prosperity. It has not broken the cycle of generational poverty.

We cannot return to the same failed policies of the past 40 years. We are better than that. We must be bold. We must have the courage to make the tough decisions.

We can do better. We will do better.

JOBS/ECONOMY

We must keep our young people in Maine. Recently, I asked some Bowdoin College students, “What can we do to keep you here?” One of them was Grégoire Faucher from Madawaska. He is eager to hear what the future of Maine holds for him. Comment ça va, Gregoire? Ca me fait plasir de vous avoir ici ce soir.

Unfortunately, Gregoire hears more about job prospects in Boston or New York or even New Hampshire than right here in Maine. He wants to stay in Maine. But he may have to leave to find higher-paying jobs and better opportunities.

Greg and his classmates are the kind of young people we need to grow our state’s economy. We must create a business climate that encourages investment that will employ Maine people.

Recruiting job creators to come to Maine is not easy. The global competition is fierce. Investment capital goes where it is welcomed and stays where it is appreciated.

As Winston Churchill said: “Some people regard private enterprise as a predatory tiger to be shot. Others look on it as a cow they can milk. Not enough people see it as a healthy horse, pulling a sturdy wagon.”

Since we took office, we have made Maine more competitive. Maine’s unemployment rate has fallen to 6.2%. It’s the lowest since 2008. Almost 13,000 new private-sector jobs have been created since we took office.

• We reduced bureaucratic red tape.
• We cut the automatic increase to the gas tax.
• We eliminated almost $2 billion in pension debt.
• We right-sized government.
• We found efficiencies within state agencies.

My proudest achievement: paying $750 million in welfare debt to Maine’s hospitals. It sent the message that, in Maine, we pay our bills.

Because of our efforts, good-paying jobs are being created all over the state.

• In Portland, the Eimskip shipping service.
• In Wilton, Barclaycards.
• In Brunswick, Tempus Jets.
• In Nashville Plantation, Irving Forest Products.

More jobs have been added at such world-class companies as:

• Maine Wood Concepts in New Vineyard.
• Molnlycke Health Care in Wiscasset.
• Hinckley Yachts in Trenton.

We are a state of entrepreneurial “doers.” There are 40,000 small businesses in Maine. Our state has roughly 130,000 microbusinesses. They employ 170,000 people. They drive our economy. If they could each add one more job, that would transform our economy.

Nicole Snow of Sebec is a very successful micro-entrepreneur. She created Darn Good Yarn, and she does all of her business online. Nicole is growing her company into a million-dollar business—thanks to the internet. Nicole, please stand.

Having spent my career in business, I know what grows an economy. But there is a major push by many in this chamber to maintain the status quo.

Liberal politicians are taking us down a dangerous path—a path that is unsustainable. They want a massive expansion of Maine’s welfare state. Expanded welfare does not break the cycle of generational poverty. It breaks the budget.

In 1935 during the height of the Great Depression, FDR—the father of the New Deal—warned against welfare dependency. He said: “To dole out relief in this way is to administer a narcotic, a subtle destroyer of the human spirit … The federal government must and shall quit this business of relief.”

Big, expensive welfare programs riddled with fraud and abuse threaten our future. Too many Mainers are dependent on government handouts.

Government dependency has not—and never will—create prosperity.

MEDICAID EXPANSION

Maine expanded welfare over a decade ago. Now MaineCare alone is consuming 25 percent of our General Fund dollars. The result?

We are taking money away from:

• Mental health services
• Nursing homes
• Job training
• Education
• Roads
• Law enforcement
• Natural resources

Maine’s welfare expansion resulted in 750 million dollars of hospital debt. We just paid it off. Some want to repeat that mistake.

Look at the facts. Welfare expansion will cost Mainers at least $800 million over the next decade. It will cost Maine taxpayers over $150 million in the next three years. Maine’s current welfare system is failing:

• Our children
• Our elderly
• Our disabled
• Our mentally ill

Thousands of our most vulnerable citizens are on waitlists for services. They need your compassion.

Michael Levasseur of Carmel has autism and needs care 24/7. Michael is here tonight with his parents, Cynthia and Paul. Cynthia had to quit her job to care for her son, and they had to downsize their house to make ends meet.

With services, Michael could get a job coach, assisted-living accommodations and participate in a day program. Maine lawmakers must address these waiting lists. Michael deserves your compassion.

We must set priorities on who will get services with our limited resources. Money may grow on trees in Washington, D.C., but we cannot count on promises of federal windfalls to pay for our services.

Let’s be clear. Maine will not get 100 percent federal funding for welfare expansion. Maine already expanded. That means the federal government would give us less money than other states that are expanding now.

Adding another hundred thousand people to our broken welfare system is insanity. It is unaffordable. It is fiscally irresponsible. Expanding welfare is a bad deal for working Mainers who have to foot the bill.

Liberals believe that giving free health care to able-bodied adults, while leaving our most vulnerable in the cold, is compassionate. I disagree.

We must show compassion for all Maine people. We must protect our hard-working families from the higher insurance premiums and higher taxes that will result from further expansion. Do not focus on the next election. You must focus on the next generation.

WELFARE REFORM

We owe the next generation a society that provides them with prosperity and opportunity, not welfare and entitlements.

I will not tolerate the abuse of welfare benefits. Maine’s limited resources must be reserved for the truly needy. Maine EBT cards provide cash for Temporary Assistance for Needy Families. This cash is supposed to purchase household items for needy children.

Every dollar that goes to buy cigarettes, alcohol or lottery tickets is a dollar taken away from a needy child, family or others who need services.

My proposal will prohibit TANF funds from being used for alcohol, tobacco, gambling and other adult entertainment. We will limit the use of Maine EBT cards to Maine—not Hawaii, not Florida.

If you want to ask the taxpayers for money, you should make a good-faith effort to get a job first. We will require those seeking welfare, if able, to look for a job before applying for TANF benefits.

Maine taxpayers are being punished because our welfare program far exceeds the federal guidelines. Maine has been so lenient with its work exemptions, the federal government has fined us millions of dollars in penalties. We must eliminate exemptions that excuse TANF recipients from work.

There is no excuse for able-bodied adults to spend a lifetime on welfare at the expense of hard-working, struggling Mainers. That is not what I call compassion. As John F. Kennedy said in 1961: “Ask not what your country can do for you, ask what you can do for your country.” These are words that still ring true today.

EDUCATION

I know generational poverty. But I escaped generational poverty, and lived the American Dream. Some caring Maine families took me in from the streets of Lewiston and gave me the guidance I needed to succeed.

I have said it many times. Education saved my life. Throwing money at poverty will not end poverty. Education and mentoring will end poverty.

Our bridge year programs are providing educational opportunities for Maine students. The Business Academy in Biddeford recently presented 33 students with a total of 126 college credits. We saved these students thousands of dollars in college tuition.

In Fort Kent, 17 students have completed their freshman year at college upon graduating high school.

This spring, students in Hermon will graduate high school with diplomas and technical proficiencies and trade licenses. Many lawmakers, the union and school superintendents have opposed our reforms at every step. But I vow to always put our students and our teachers first.

INFRASTRUCTURE

To strengthen Maine’s economy, we must invest our resources to improve infrastructure, reduce taxes and lower energy costs for homeowners and businesses. Industry needs infrastructure to move goods and services at the speed of business.

Over the next three years, MaineDOT will invest over $2 billion in infrastructure improvements.

We will repair or replace 54 bridges and reconstruct hundreds of miles of state roads. We will improve our ports, rail, airports and transit infrastructure. The plan supports over 25,000 jobs in highway and bridge projects. Thousands more jobs will be supported by the plan’s investments in ports, rail, ferries and buses. That’s putting Maine to work.

ENERGY

But we still face barriers that make Maine less competitive. Heating and electricity costs remain a major obstacle.

Our homeowners spend well over $3,000 a year to heat their homes. That’s nearly double the national average. Maine families know that this winter has been more challenging than most.

Distribution of natural gas expanded this year in Southern and Central Maine. Mainers are saving more than a thousand dollars a year by converting to natural gas.

More funding is now available to help Mainers convert to more affordable heating systems. These systems include wood pellets, advanced oil systems, natural gas systems, energy efficiency improvements, heat pumps – anything that will cut costs for Maine homes.

High electricity costs make it very difficult to attract business. My administration is working to expand pipeline capacity from Pennsylvania to take full advantage of the natural gas supplies in that state.

Also, our neighbors in Quebec have the best clean-energy resources on the planet. My Administration is fighting for access to this cost-effective and clean source of electricity along with the rest of New England.

Many lawmakers have chosen to support powerful special interest groups over the needs of Maine’s ratepayers. Let’s be clear. I do not favor one form of energy over another. I am on the side of those who want to lower the costs for working Maine families. Whose side are you on?

“OPEN FOR BUSINESS ZONES”

Tonight I am proposing a bold new idea to attract companies that will invest more than $50 million and create more than 1,500 jobs.

My proposal will offer valuable incentives for companies that choose to locate in certain areas. They are called “Open for Business Zones.”

“Open for Business Zones” will offer discounted electricity rates; employment tax benefits; and provide access to capital.

Companies in these zones will get assistance to help recruit and train workers.

Employees in these zones will not be forced to join labor unions. They will not be forced to pay dues or fees to labor unions. This will allow Maine to compete with right-to-work states.

Companies in these zones must show preference to Maine workers, companies and bidders.

Our proposal combines the kinds of incentives that other states have used successfully to attract major investment. We must be able to compete with them. We must be bold.

We must show young people like Gregoire that we are serious about providing good-paying jobs and opportunities for him and his classmates.

TAX REFORM

States with the highest economic growth often have the lowest overall tax burdens.

We are working hard to combat Maine’s reputation as a high-tax state. We passed the largest tax cut in Maine’s history. Two-thirds of Maine taxpayers will get income-tax relief. Liberals call it a “tax break for the rich.” But 70,000 low-income Mainers will no longer pay income tax.

We cut taxes for the working poor. This is compassion. We put money in people’s pockets. We told the business community we are serious about tax reform. I am proud of the progress we made. But we need to do more.

Our tax system is out of date. It is not competitive with other states. So let’s ask Mainers in a statewide referendum if they want to lower taxes.

We must lower our income tax rates and eliminate the estate tax to bring Maine’s tax system into the 21st century. This would make Maine more attractive for people to work and raise their families here. It would encourage retirees to stay in Maine.

This will protect our working-class families from bearing an unfair tax burden.

My proposal also includes a limit on the growth of state spending. This will provide much-needed relief to Maine’s taxpayers.

Let’s stop arguing about tax reform. Let’s ask the people who really matter. Let’s ask Maine’s hardworking taxpayers. We will ask Mainers a simple question at a statewide referendum. We will ask if they want to lower taxes by at least $100 million and reduce state spending by at least $100 million.

We think Mainers want tax relief. Let’s give them the option to decide.

ADRRESSING MAINE’S DRUG PROBLEM

Finally, we must confront a troubling epidemic. It is tearing at the social fabric of our communities. While some are spending all their time trying to expand welfare, we are losing the war on drugs.

927 drug-addicted babies were born last year in Maine. That’s more than 7 percent of all births.

Each baby addicted to drugs creates a lifelong challenge for our health care system, schools and social services. The average cost for drug-addicted births in 2009 was $53,000. Welfare programs covered nearly 80 percent of those increased charges.

More important than cost are the effects to these innocent children. I am deeply concerned about the suffering and long-term consequences these newborns are subject to. It is unacceptable to me that a baby should be born affected by drugs.

We must show them our compassion.

There were 163 drug-induced deaths in Maine in 2012. The use of heroin is increasing. Four times as many people died from a heroin overdose in 2012 than in 2011.

Over 20 percent of the homicides in 2012 were related to illegal drugs. We must address the problem of drug addiction and drug trafficking. We must act now.

We need to fully fund the Maine Drug Enforcement Agency. Our police chiefs tell us local law enforcement officials need more resources to fight the drug problem in our state. Auburn Police Chief Phil Crowell is the president of the Maine Chiefs of Police Association. He is here tonight to show that the chiefs fully support our administration’s war on Maine’s drug problem. I am pleased the county sheriffs also enthusiastically support our initiative.

As Henry Ford said: “Coming together is a beginning; keeping together is progress; working together is success.” The judicial, executive and legislative branches joined forces in an effort to eradicate domestic violence from our state. We need to come together once again to combat Maine’s drug problem.

My proposal adds four new special drug prosecutors and four new judges to sit in enhanced drug courts in Presque Isle, Bangor, Lewiston and Portland.

Since local agencies do not have the manpower or resources they need to fight Maine’s drug problem, we will add 14 MDEA agent positions.

We must hunt down dealers and get them off the streets. We must protect our citizens from drug-related crimes and violence. We must save our babies from lifelong suffering.

CONCLUSION

In closing, I welcome common-sense solutions from anyone who wants to put Maine on the right path. Success doesn’t happen by doing nothing.

Bring me bold solutions. Put your politics aside. Fight for the future of Maine’s children. We must show them the path to succeed.

God Bless Maine and God Bless America. Now, let’s get to work.

*Speech as prepared

January 7, 2015

2015 Inaugural Address of Governor Paul R. LePage

Mr. President, Mr. Speaker, Members of the 127th Legislature and honored guests. Welcome.

First, I must thank Ann and my children for their love and support during the last four years and particularly through the recent campaign, which was very negative. I’m so proud of their strength and resilience through it all.

I’m especially proud of Ann, who has dedicated so much to the veterans of our state over the past four years.

However, I hope she doesn’t jump out of any more planes! Je dois aussi remercier mon collègue Franco Américans pour leur soutien. Je suis un enfant des rues du petit Canada, je n’ai jamais imaginé qu’un jour, je deviendrais votre gouverneur.

Mais à vous prendre en charge, nous l’avons fait.

J’ai jamais oublier où je venais, et je n’oublierai jamais votre soutien indéfectible. Merci beaucoup mais aimee.

Well, folks, we’re back. The national experts and the media said we wouldn’t be here today. They forgot to ask those who matter most: the Maine people.

Pundits and pollsters don’t determine why a person should be Governor. The people do.

For four years, we have been taking our message directly to the people of Maine. We let our actions speak for themselves.

That’s what the people want: action. They are so tired of politicians preaching to the people and not listening to the people. They promise one thing, then do another.

That’s not who we are.

We said we were going to pay the hospitals, and we did. We paid hospitals $750 million in welfare debt.

We said we were going to lower taxes, and we did. We passed the largest tax cut in Maine’s history.

We said we were going to help private businesses create jobs, and we did. State government is no longer an adversary against business, but a partner with the private sector.

We made Maine “Open for Business.”

Private-sector companies have created more than 20,000 jobs. And there are almost 7,000 jobs at the CareerCenter that still need to be filled.

If you want a job, you can get it. But our work is far from complete!

WELFARE REFORM Most importantly, we said we were going to reform welfare, and we are.

So far, we have cut the welfare rolls in half. We stopped the growth of Medicaid.

We went after fraud and abuse. We put photos on EBT cards. We put more money toward nursing homes.

We are using the savings from our welfare reforms to take care of our elderly, disabled and mentally ill.

We are transitioning people off welfare and into productive jobs. The Departments of Education, Health and Human Services, Labor and Veterans Services have teamed up to create an innovative program called “Welfare to Work.”

More than 1,200 Mainers who were on welfare are now working full-time.

No more welfare handouts.

We will give them skills, training and jobs. We want them to know prosperity, not poverty.

We are making progress in reforming our welfare system. But we are just getting started.

MAKING MAINE COMPETTIVE The people of Maine told us they want us to keep reforming government. They want better jobs.

They want welfare reform. They want lower energy costs. They want lower taxes.

They want good roads and bridges, and they want a smaller, more affordable government.

Mainers work hard. They have common sense. They know what it means to pay the bills. They want their piece of the American Dream.

We won’t rest until every man, woman and child in Maine gets their chance to achieve prosperity, not poverty.

Mainers deserve career jobs with higher pay and good benefits. We must attract new business to Maine and help our existing companies to grow and expand.

We don’t have to reinvent the wheel. Other states are growing and expanding. We can do what they are doing. We can make Maine competitive.

TAX REFORM States with the fastest growth have the lowest tax burdens and the lowest energy costs. That’s not a coincidence.

We need good-paying jobs that encourage young people and families to stay in Maine. To create these jobs, Maine must be competitive with other states.

Companies want to come to low-tax states, and so do young families. Once they get here, we must keep them here. We want families, retirees and wealthy residents to stay in Maine.

We lose them to other states because we tax them too much. When we lower the income tax burden—and we will—we put money back in your pocket. You earned it, you should keep it.

My long-term vision is a Maine without any income tax. We will start by getting rid of the estate tax and income tax on pensions.

Small Maine companies cannot afford to transfer the business to the family because the estate taxes are so high. Small, family-owned businesses are the backbone of our economy.

We must keep our small businesses alive and well. We must keep our families in Maine.

We must also keep our retirees in Maine. Too many Maine retirees have moved to other states to avoid our high taxes. Let’s work together to keep them here. More importantly, let’s work together to keep their assets here as well.

ENERGY COSTS Business owners from all over the state tell me the same thing: energy costs are too high.

If you think your household electric bill is high, just imagine how much it costs to build a destroyer at BIW or make paper at a mill in Hinckley.

Lower energy costs are absolutely critical to attracting major employers, manufacturers and high-tech industries. We’re off to a good start.

We brought natural gas infrastructure to Maine. But we need an adequate supply of natural gas.

Massachusetts now has a governor who wants to work with us. We are already talking with him about increasing natural gas supply to our region.

We need it here as soon as possible so we can help all Mainers.

We need a Public Utilities Commission that concentrates on affordable energy for all Mainers, not just rich, subsidized investors and environmentalists.

I am open to any form of energy that lowers the cost of electricity. But we can’t wait 15 or 20 years. We need affordable energy, and we need it now.

We must lift the 100 megawatt cap on all energy sources. We must lower the costs of heating our homes and our businesses. Our rebates and loan programs are driving down heating costs.

But we need to allow open competition.

Nearly 10,000 heat pumps have been installed in Maine. That saves on heating costs and improves energy efficiency. It puts money back in your pockets.

Businesses want lower energy costs, and homeowners need lower heating costs.

Let’s give the people what they want.

REDUCING THE SIZE OF GOVERNMENT The people of Maine want an affordable, innovative and flexible government. The size and cost of state government should support—not burden—hard-working families.

We have started to right-size government, but there is still more to do. It is time to eliminate obsolete regulations and poor customer service.

You, the Maine people, are the customers, and state employees are your public servants.

We must have a cost-effective and efficient government that is responsive to the needs of our citizens and our businesses.

A government that is too big and too expensive takes resources away from Mainers and discourages job creation.

We need to be bold. We need to think outside of Maine’s traditional model of government.

Mainers are tired of paying for a government that doesn’t deliver quality services or competitive schools.

We have made progress on the state level. We have taken the politics out of improving infrastructure. Projects are now prioritized by professionals, not politicians.

Infrastructure projects that speed economic development or help businesses get goods to market are the highest priority. Projects based on political promises get left by the roadside.

It’s time to do this at all levels of government. Yes, we must work together, but we must work smarter.

Efforts to consolidate jails in Maine have failed. The attempt to consolidate our schools has failed.

School budgets are rising every year. Maine has twice the number of administrators as the national average. But student enrollment continues to drop—and so does their competitiveness in the fast-growing technical world.

School administrators take home six-digit salaries, while our teachers dig into their own pockets to buy classroom supplies. That’s just simply wrong.

Our education system is upside down. It has two winners and two losers. Administrators and union bosses are the winners. The two big losers are teachers and our students.

We must get our education budgets under control. We must put the money where it belongs: in the classroom. If we really want achieve the state’s mandate to pay 55 percent of local school costs, we could initiate a statewide teachers’ contract.

We must also get our local budgets under control. Total spending on local government has increased by half-a-billion dollars over the past five years, during the worst recession since the Great Depression.

This kind of spending is unacceptable. Mainers cannot afford it. Municipalities blame cuts at the state level, but they ignore that they are duplicating services. This has to stop.

Cities, towns and counties must work together to provide key services. Local control is great, but no one wants to pay for it. We will never be competitive until we learn to share services by working together.

It can be done. In Washington County, 18 municipalities have created a shared EMS system. This regional service has saved hundreds of thousands of dollars a year.

In Waldo County, several communities have contracted with the City of Belfast to provide fire protection.

State government should reward these efforts. The state should be helping these communities to reduce cost without decreasing services. If we want to improve services and reduce costs, we must have the courage to work together and do it right.

KEEPING MAINERS SAFE Mainers deserve to be kept safe. We will focus on fighting drug crimes. Unlike the 126th Legislature, the 127th must prevent young Mainers from getting addicted. We must make sure no more babies are born addicted to drugs. We must focus on the drug epidemic.

We will continue to raise awareness and campaign against domestic violence.

Whether it comes from national sports stars or the streets of Maine, there is no excuse for domestic violence.

Men must step up and speak out against this heinous crime that traumatizes women, children and families.

When it comes to keeping Mainers safe, we can’t move fast enough.

To the Maine people, we say this: we listened to you, and we hear your concerns.

We just hope the legislature is also listening to you. The election sent us all a clear message: Mainers want action.

We must work together. My door is always open to anyone—anyone—who brings innovative solutions that will help move Maine forward.

But be warned. I am not here to play political games. We are here to work—to work hard for the people of Maine. We are here to bring prosperity, not poverty.

Actions speak louder than words. Let’s get to work.

Thank you.

February 3, 2015

2015 State of the State Address

The following is text as prepared of Governor Paul R. LePage's 2015 State of the State Address

Chief Justice Saufley, President Thibodeau, Speaker Eves, members of the 127th Legislature, distinguished guests, and fellow Mainers.

Tonight, I am here to update you, the people of Maine, about the condition of our great state.

First, I must recognize my wife, Ann. I would not be here tonight without you.

You have made Maine proud as our First Lady, especially through your support of our armed services and their families.

To my family and friends, I appreciate all you have done—and all you continue to do—to support me.

Staff Sergeant Sarah Cayia, the military herald this evening, thank you for your courageous service to our state and nation.

I ask that we all take a moment to remember, recognize and thank our men and women in uniform.

I would like to make a very important announcement. I am the only Republican that will not be running for President – yet.

I became Governor for one simple reason. I want prosperity—not poverty—for all Maine people.

Doing “business as usual” hurts our ability to be competitive. It favors poverty and prevents prosperity.

Mainers, it’s time to innovate. We need an efficient, effective and affordable government. But change is hard. It’s much easier to protect the status quo.

Studies sit on shelves, collecting dust. Politicians talk about tax reform every year. Nothing meaningful gets done.

We must make hard decisions today so we can have prosperity tomorrow for our future generations.

I made hard decisions all my life—the necessary decisions to help companies grow and expand.

I was a mayor. I understand the needs versus the wants for municipalities.

As Governor, I’ve listened to Mainers. They want to succeed and prosper.

My budget takes bold action. It is the first step—a big leap forward. Friends, I can’t do it alone. I need your help. We must do it together.

The Maine people want results, not rhetoric. They want action!

TAX REFORM

Washington, D.C. is broken. Our future depends now more than ever on the states. They are the 50 laboratories of democracy.

Our country has the highest income taxes in the world. This makes our nation uncompetitive.

Maine is currently not competitive nationally or globally. Our tax system is antiquated. We must modernize it.

My fellow Mainers, you work hard for your paycheck. The government takes your earnings, and you have no control over how it is spent.

You earned it. You should keep it!

An income tax cut puts money back in your pocket. It is a pay raise for all working Mainers.

With consumption taxes, you make the choice. You decide where you spend your money. And let me be clear: this plan does not tax funerals. It does not tax car repairs. It does not tax groceries or other necessities.

My plan makes sure more taxes are paid by tourists — not by Mainers. Approximately 650,000 Maine tax returns pay the income tax.

On the other hand, 29 million tourists a year pay sales taxes on almost every purchase they make.

Our refundable sales tax credit helps lower- and middle-income Mainers get their money back.

This plan is different from past plans. It is not a tax shift. It is a tax cut for all Mainers.

My vision is a Maine with no income tax. But I’m no magician. It takes time.

When I took office, Maine’s top income tax rate was 8.5 percent—one of the highest in the nation.

We reduced the rate to 7.95 percent—a baby step. This plan cuts it to 5.75 percent—a 40 percent decrease in the income tax since I took office. That’s one big step.

A young married couple, both teachers with one child, claiming a standard deduction, would get a $1,500 pay raise.

That’s a mortgage payment. That’s few tanks of heating oil. It’s several car payments or back-to-school clothes for the kids. It’s real money. It makes a real difference.

Other tax reform plans were “revenue neutral.” They were created by politicians to serve special interests. My one special interest is the Maine people.

My plan cuts spending. It gives money back to you: the Maine people.

This plan reduces the tax burden on Maine families and small businesses by $300 million. That’s a real pay raise for the Maine people!

If Maine is to prosper, we must have courage.

There are 9 states with no income tax. 19 other states are working to reduce or eliminate the income tax. Maine is leading the nation with our bold plan. We’re the first out of the chute.

Let’s show the nation—and the world—that Maine is serious about job creation. The Tax Foundation says this plan would propel Maine’s ranking from 33 to 23. That’s not a jump, that’s a leap.

But 23 is not good enough. Let’s aim for the top 10.

Maine’s corporate tax is a job killer. My plan cuts it. We also eliminate the Alternative Minimum Tax.

We will catapult Maine from 45th to 17th place in corporate tax rankings. And trust me, that’s a big deal for job creators.

Our past rankings said: “Stay away from Maine.” My plan says: “Come to Maine. We want your jobs!”

REVENUE SHARING

Local officials care about municipal budgets. They take money from Mainers to grow the town office.

I care about the people who live in the town. I want to give Mainers their hard-earned money back. Someone must lobby for the Maine taxpayer.

The Maine Municipal Association is supposed to represent cities and towns. MMA is not a taxpayer-friendly organization. Its mission is to protect local officials—not local taxpayers.

Your local officials pay dues to MMA with your tax dollars. MMA uses those dues to fight for bigger and more expensive local government.

They should be called the Middle Man Association. They pit local taxpayers against local officials. They fight against any kind of tax reductions.

In Waterville, the city manager worries about a one-million-dollar loss in revenue sharing. Neighboring Winslow gets $500,000 in revenue sharing.

But residents of Waterville and Winslow are paying 17-million-dollars in income taxes.

I ask them: Would you trade 1.5-million-dollars to keep 17-million-dollars in your pockets? I’ll take that deal any day.

A number of property tax relief programs have passed – and all failed. It’s time for state government to worry about state taxes. Local government should focus on local taxes.

Programs to lower property taxes should benefit homeowners—not government offices. My plan expands the Property Tax Fairness Credit. That helps low- and middle-income homeowners.

We double the Homestead Exemption for our senior citizens. They worked all of their lives for their homes. Let’s make sure they can stay in them.

We help local government identify other sources of revenue. We give them the telecommunications excise tax.

We allow local government to collect tax revenue from large non-profits. They provide valuable services.

However, they do use public services—just like everyone else. They must help ease the burden on all Maine people.

For our state to prosper, everyone has to pitch in. Working-class Mainers cannot do it alone.

RETIREES, VETERANS AND ELDERLY

My budget is not a Band-Aid to get us through the next budget cycle.

It drives prosperity for decades to come. It looks past the next election and focuses on future generations.

We need to attract more young people and families. We need to keep our retirees here.

My plan reduces the tax burden on our families, our veterans and our retirees.

Family businesses are the backbone of our economy. We must keep them alive and well.

We will eliminate the estate tax. Only 19 other states impose this “death tax.” It punishes family businesses in Maine.

We end the tax on military pensions. Let’s attract military retirees to Maine. We want these highly trained men and women to live and work here.

Too many Mainers move to Florida or elsewhere for 6 months and a day. That’s why we cut taxes on all other retirement pensions.

This keeps our retirees in Maine. Even better, it keeps their assets here.

BUDGET PRIORITIES

My budget also ensures our most vulnerable get the care that they need and deserve.

We have reformed Maine’s Medicaid program. We now prioritize our elderly, the disabled and those with intellectual disabilities.

My budget increases funding for nursing homes. I will continue to fight to keep our nursing homes open.

Maine needs common-sense welfare reforms. We are drug testing TANF recipients. Welfare dollars should not support a drug habit.

We are putting photos on EBT cards. We are sending the message that we do not support welfare fraud.

We are making sure our limited welfare dollars go to Mainers in need, not illegal aliens.

We are getting people off welfare. Our administration has helped more than 1,200 Mainers who were on welfare find full-time careers. Our welfare-to-work program is moving Mainers from poverty to prosperity.

Throwing money at poverty does not help people prosper — it never did and never will.

Instead, we are investing our time to teach needy Mainers how to succeed. We are giving them the skills and self-esteem they need to lead productive and satisfying lives.

My budget also addresses the drug epidemic facing Maine. We fund more agents in the Maine Drug Enforcement Agency. We add more prosecutors and judges.

More Mainers are dying from drug overdoses than traffic deaths. Too many babies are being born addicted to drugs. This has to stop.

We must save our children and families from the poison being sold on our streets.

We cannot allow vicious, out-of-state drug traffickers to use Maine as their marketplace. My plan will hunt down these criminals and hold them accountable.

ENERGY

High energy costs drive away business and raise rates for Mainers. We must lower electricity rates and home heating costs.

Maine’s renewable energy policies are broken – they are expensive and ineffective.

Look at the mills in Millinocket and Bucksport – look at the curtailment in other paper mills.

We have affordable natural gas right in our backyard and hydropower just over the border in Canada and right here in Maine. Let’s use it!

We will seek to lift the 100 megawatt cap on all forms of renewable energy. I favor any kind of energy that lowers prices for Mainers now—not 20 years from now.

We need more affordable and efficient hydropower and access to more natural gas—not just high-priced, special-interest energy.

We should follow other states and return money from the regional cap-and-trade program to our businesses that are struggling with high energy costs. This will return millions of dollars to Maine rate payers.

We must help Mainers invest in more affordable heating options.

Once again, we will request to use $5 million from the increased timber harvest to do this.

For four years, we fought for more affordable heating options for Mainers. Legislators and special interests stopped us cold.

This hurts Maine. This hurts Maine people. We must expose it for what it is.

No Mainer should be cold during the winter. Let’s help them invest in heat pumps, install wood stoves or upgrade to highly efficient oil burners.

Furthermore, if we do nothing, our forest resources will be destroyed by invasive insects, as happened in the 1970s and ’80s.

We are on the verge of another budworm epidemic on our forest in the next few years. We can shorten its devastation.

DOMESTIC VIOLENCE

The First Lady’s personal mission has been to serve our veterans and military families. My mission is the fight against domestic violence.

If you have not lived through this heinous crime, you cannot imagine how destructive it is or the unseen scars it leaves on its victims.

There were 21 homicides in Maine in 2014. That’s down from 25 in 2013.

But 14 of these homicides were related to domestic violence. Even worse, 8 of those murders were children under 13.

Domestic violence is killing our children and our families. This is unconscionable. We must speak out to eradicate this heinous crime.

CONCLUSION

I want prosperity, not poverty, for all Mainers—even my adversaries.

My vision is an economy that allows all Maine families to thrive and succeed.

Every Mainer deserves the chance to achieve their American Dream.

My budget is just the start. I cannot do it alone. I need your help.

We must make sure the income tax keeps going down every year until it is gone.

I ask for a constitutional amendment that will direct all growth in revenue to go toward eliminating the income tax—once and for all.

We’re not doing all this work just to let career politicians reverse it after I’m gone.

I want prosperity for all Mainers. We must work together to make it happen. We must take bold action now. The time for talk is over. Let’s get to work.

February 7, 2017

State of the State 2017

Members of the 128th Legislature, distinguished guests, and my fellow citizens:

Let me begin by first recognizing a few individuals. To my lovely wife Ann and my children—please stand—I would not be here tonight without you. Ann, you have made Maine proud as our First Lady.

Allison Salsbury of Bar Harbor is here tonight with her daughter, Kathy. She is an elderly widow, and she knows about the hardships Mainers are facing.

To Technical Sergeant Christopher Ludden, the military herald this evening, thank you for your courageous service to our state and nation.

Ann and I are so grateful to all of our military and their families for their service.

I’m here tonight to speak to the Maine people about the future of our state. Our economy and our way of life are under attack.

Older Mainers who have worked their entire lives are losing their homes because of tax or utility bills—and many local governments condone it. Sadly, Maine Municipal Association defends it.

The taxes Mainers have paid all their lives fund the organization that throws them on the street. It has to stop. We must protect our elderly!

We must also protect younger Mainers. Our families are losing good-paying jobs. It’s all because of a faulty ideology.

Maine was once renowned for its rugged individualism. Liberals are now trying to transform our state into a socialist utopia.

Utopia is an ideology—no amount of taxpayers’ money can make it a reality.

We have made great strides in shrinking state government, but liberals continue to provide all things to all people free. “Free” is very expensive to someone.

As Franklin D. Roosevelt said during his Annual Message to Congress in 1935:

“The lessons of history, confirmed by the evidence immediately before me, show conclusively that continued dependence upon relief induces a spiritual and moral disintegration fundamentally destructive to the national fiber.

“To dole out relief in this way is to administer a narcotic, a subtle destroyer of the human spirit. It is inimical to the dictates of sound policy. It is in violation of the traditions of America.”

It was true in 1935, and it is true in 2017. Liberals have not learned from history. They have just changed tactics. They are doing an end run around the Legislature by highjacking the citizens’ referendum process.

They say they are helping low-income Mainers by raising the minimum wage and taxing the so-called “rich.” But they are harming our economy. We are losing doctors, dentists, psychiatrists and other professionals we so badly need. They are harming small family businesses. They are harming low-income workers. Even worse, they are harming our elderly.

Successful people are not the problem; they are the solution. They create jobs.

They pay the most in sales, excise, income and property taxes. They already pay two-thirds of the tax burden in Maine.

Taxing them out of Maine does not help our economy—it harms it.

It is harmful to lay off employees. It is harmful to put your local restaurant out of business. It is harmful to drive our elderly deeper into poverty.

Liberals from Southern Maine never go to Calais or Machias or Rumford or Fort Kent. But I do. I see the elderly living in poverty.

I see how Maine families are struggling. Our industries are laying off hard-working Mainers or leaving the state.

Madison Paper, Verso in Bucksport, Verso in Jay, Lincoln Pulp and Paper, Millinocket and East Millinocket and Old Town—just to name a few.

We need to help our families, not harm them. My budget has a theme: Do No Harm. I am asking you to join me—Do No Harm! Our citizens voted to raise the minimum wage. They also voted to “tax the rich.” I get it. But they did not read the legislation behind the ballot questions. They didn’t know it would destroy our fragile economy.

We reduced the unfunded pension liability. We improved our credit rating. We paid the hospitals!

We built the Budget Stabilization Fund from nearly zero to $123 million. It could have been $300 million, if we had the will to be just a bit more fiscally responsible.

We reduced the structural gap from $1.2 billion to $165 million. For the first time since 2005, we had positive cash flow at the end of the fiscal year.

We have lowered the income tax from 8.5 percent to 7.15 percent. During this period, revenues started to increase. Wow, imagine that—signs of prosperity.

Under my administration, Maine has been moving forward. To paraphrase Ronald Reagan: Free enterprise has done more to reduce poverty than all the government programs dreamed up by liberals.

Liberals are making the Legislature irrelevant and going straight to referendum. We need to reform our referendum process.

TAX REFORM Rich, out-of-state unions and progressive groups are moving us backwards. They spent millions to hit us with the second-highest income tax in the country.

California’s highest tax rate kicks in at $1 million of income. Maine’s starts at $200,000 household income. California is a wealthy state.

It is 18th on the Family Prosperity Index—Maine is 44th. We cannot afford this tax.

We must help Maine families achieve prosperity—not shatter their American Dreams with high taxation, high energy costs and an underperforming education system.

Eliminating the income tax is the biggest pay raise Mainers could get—but there is no political will to promote prosperity in Augusta.

My budget counteracts the damage from the 10.15 percent income tax. It is designed to do no harm.

By 2020, Maine’s income tax will be set at 5.75 percent for all Maine families. We must keep lowering the income tax until it is gone!

My budget lowers corporate taxes, broadens the sales tax and eliminates the death tax. The non-partisan Tax Foundation called my tax plan “a recipe for a more competitive state.”

It cuts taxes, welcomes professionals and allows families businesses to thrive. It does no harm!

MINIMUM WAGE As written, the law to raise the minimum wage will wreak havoc. Mainers did not read the 32 pages of legal jargon behind the ballot question.

If the question asked Mainers to slash the pay for their favorite server, they would have said no.

If it asked them to increase the cost of everything their grandparents buy, they would have said no.

Let’s be clear: I am not opposed to a higher minimum wage. But I would rather talk about career wages. Liberals always aim low—they want to raise the starter wage.

I don’t want to create more 9-dollar-an-hour jobs. I want to create 29-dollar-an-hour jobs.

The minimum wage law will be devastating to the restaurant industry. Menu prices will increase dramatically to cover the new labor costs.

It will eliminate the tip credit for employers, which will end tipping as we know it.

Restaurant servers who now make $20 to $30 an hour will get $12 an hour with much lower tips—if any. This promotes poverty—not prosperity.

This law will prevent teens and low-skilled workers from getting jobs. Employers will not pay $12 an hour for a kid with no work experience or someone with no skills.

Higher prices will push the elderly deeper into poverty. 358,000 Mainers on fixed incomes won’t get a raise. They cannot afford higher prices.

The minimum wage will go up $4 an hour, but the average increase in Social Security is just $4 a month.

Indexing is even worse. It means the minimum wage will go automatically every year—even in a recession.

We got rid of indexing for the gasoline tax because the tax kept going up, even after gas hit $4 a gallon during the Great Recession.

We already have an employee shortage across the state. Most places already pay more than a minimum wage. It was never supposed to be a living wage.

It is used as a starter wage and for those who cannot work at 100 percent capacity.

Make no mistake, this is not about economics. It is about a socialist ideology—the same kind that has failed in Greece, Venezuela and other countries.

Liberals only care about ideology. They don’t care about raising prices on your grandparents. They don’t care if your teen can’t find work or mentally disabled people lose their jobs.

They don’t care if they slash the pay for a single mother working as a waitress from $20 to $12.

ELDERLY This budget protects the people liberals consider expendable. They have forgotten the elderly.

They have forgotten the disabled and those with intellectual disabilities. It seems that whenever the Governor proposes to help the elderly or the mentally and physically disabled, it gets killed in committee.

That’s why the Maine people and the American people say government is not working. I don’t care who gets credit for helping them. We just need to get it done for the Maine people.

Patrick and Janet Caskin of Litchfield wrote to me to say their daughter Katie is still on a waitlist for intensive home support. She has an intellectual disability. She has been on the Section 21 waitlist for five years.

Two years ago, my budget paid for the entire Section 21 waitlist. If the Legislature funded my initiative, Katie would be getting full-time care today.

But liberals have forgotten Mainers like Katie. She is not a priority for them.

Liberals only funded one-third of the waitlist. They spent the rest of the money on welfare for able-bodied, non-citizen asylum seekers.

They don’t care about our elderly or the physically and mentally disabled. I do. When it comes to our most vulnerable citizens, I will do no harm!

We have realigned the welfare system and the Medicaid program to prioritize the elderly and those with all forms of disabilities.

As Ronald Reagan said: “We should measure welfare’s success by how many people leave welfare, not how many are added.” Able-bodied Mainers between 19 and 50 need to get off welfare. Get off the couch and get a job!

Our limited resources are helping our most vulnerable. In our budget, elderly and disabled Mainers make up more than 40 percent of MaineCare—an increase of 35 percent since 2011.

In Fiscal Year 2019, the elderly and disabled will make up 45 percent of MaineCare.

My budget includes more than $30 million to help with increased costs for Medicare Part B and Part D. We also need to eliminate the income tax on retired pensioners. We provide tax relief to low-income and elderly homeowners with the Property Tax Fairness Credit.

This should help elderly Mainers like Juliet Nyholt of Solon, who has been struggling to pay her taxes. In 1986, her taxes were $300—now they are over $2,000. This is wrong.

No Mainer should be taxed out of their home—especially when environmental groups are taking hundreds of millions of dollars’ worth of land value off the tax rolls.

Communities and the Maine Municipal Association may do things right—they follow the law regarding tax liens and foreclosures. But they should do the right thing—help our elderly stay in their homes.

It is unethical and immoral to take away a senior citizen’s home. They lose all the equity they built up during their lives. They end up on the street.

Richard Sukeforth, an elderly veteran, and his wife, Leonette, lost their home in Albion after the town seized it for back taxes. They were thrown out with no place to go. He is here with his daughter, Yvette.

I’m pleased to announce Adria Horn of our Bureau of Veterans Services jumped into action and discovered he was eligible for VA benefits.

Mr. Sukeforth is now getting almost $1,200 a month. This is how we should treat our elderly!

OPIOID CRISIS We are also addressing the opioid crisis that is ravaging our state.

We have been urging the Legislature to take action for years, but many have been dragging their feet.

They held up our efforts to hire more MDEA agents for two years—God only knows how much heroin poured into our state during that time.

Back then, heroin was killing 5 Mainers a week. Now it’s over 7.

MDEA seized 8 pounds of heroin in January—that’s almost 50,000 deadly doses of heroin mixed with fentanyl. It was the largest seizure of heroin in the state’s history. It saved thousands of lives. Law enforcement works.

But liberals don’t care about law enforcement efforts to stop out-of-state drug dealers from selling their poison to Mainers.

They simply want to throw money at treatment programs. They don’t identify which programs the money should go to—they just want the headlines to say they are doing something. We are doing something. Strong financial management at DHHS has allowed us to budget an extra $2.4 million in funding for opioid-addiction treatment for the uninsured.

This money will fund 359 openings for therapy and medication-assisted treatment for uninsured Mainers afflicted by the heroin and the opioids—immediately.

Seven Mainers a week are being killed by deadly opiates. Three babies a day are born afflicted by or addicted to drugs. This drug epidemic is killing our young people.

EDUCATION REFORMS Liberals haven’t just forgotten our elderly. They have forgotten our children, too.

Out-of-state teachers’ unions spent millions on a referendum to tax the so-called “rich.”

We do not need more money for education—we need more accountability in education.

Only 59 cents of every dollar spent on education in Maine makes it into the classroom. The national average is 64 cents. Our children deserve more!

This attempt to “tax the rich” will drive successful people out of Maine. Only 10 percent of taxpayers pay two-thirds of the tax burden in Maine. By chasing them out of the state, liberals will generate less money for education—not more.

We are seeking accountability and efficiency in education funding. Instead of spending money on a top-heavy administrative structure, we direct it where it is needed most: our students and our underpaid teachers.

This budget enables communities to form regional education systems to reduce administrative costs.

More importantly, this budget sets the stage for a statewide teacher contract. This contract will increase the base pay for teacher salaries and increase access to quality teachers throughout Maine.

Good teachers in rural Maine are lured away by wealthy communities that pay more.

This needs to stop. Teachers in rural Maine should get the same pay as teachers in wealthy towns. All Maine children deserve good teachers!

We also need to stop double-dipping, and we need to pay effective teachers what they are worth. Gimmicks like double-dipping will come to haunt our education system. We need to replace the unsustainable age imbalance and let young teachers enter our school system.

We are also reducing the cost of higher education. We have increased funding to the University of Maine System, the Maine Community College System and Maine Maritime Academy to help control tuition cost.

We want to make it easier for young people to stay in Maine. I will once again propose funding for zero-interest loans for all higher ed students who decide to live and work in Maine.

Business owners who help pay off student loans should be able to write it off quickly—not over 20 years.

ENERGY
Young people need good jobs. Businesses need all the help they can get to stay competitive and create good jobs.

The PUC’s decision on net energy billing is the latest example. It raises rates on elderly and poor Mainers to subsidize solar panels for affluent people.

This rate hike was pushed by environmentalists, special interests, the public advocate and some Legislative leaders. Rather than protect Maine ratepayers, the PUC caved to special interests.

I have no problem if wealthy people with solar panels are paid for the excess electricity they generate. However, they should not be paid for the transmission and distribution of the excess power.

The PUC ruled Mainers will pay for the excess generation, as well as the transmission and distribution of the excess power. But Emera and CMP will also charge the ratepayers to transmit and distribute this excess electricity.

Ratepayers are being charged twice so people who put solar panels on their roof can recoup their money faster. Our elderly, our poor and our most vulnerable Mainers should not be subsidizing people who can afford to install expensive solar panels.

The wealthy solar industry will line its pockets on the backs of hardworking Mainers—not to mention our poor and most vulnerable who can least afford it.

We should be able to agree on a sensible energy policy. We should provide the most affordable energy that does the least harm to the environment.

I ask the Legislature three questions:

  1. Should we lower energy costs?

  2. Should we lower carbon dioxide levels in the most cost-effective manner?

  3. Should we reduce our demand for oil?

If we agree the answer to all three is “yes,” then we can become a state that supports job creators and protects the environment.

But liberals continue to support their favorite—and very expensive—forms of renewal energy. They have no political desire to reduce rates for Mainers.

Our energy costs have gone from 12th highest in the nation to 11thhighest. We are going backwards.

Liberals continue to deny the harm they are doing to our job creators and our economy. Put very simply, higher rates leave less money for higher wages.

CONCLUSION We are trying to attract small businesses and successful young professionals. We need creative innovators with an entrepreneurial spirit.

We must keep our families here and attract new families from other states and countries. We must give our young people a reason to stay in Maine.

We have worked hard to reduce spending and limit the growth of government. It has not been easy.

When writing about American Presidents, Andy Jones said: “Whenever government in general is smaller, the people have more say over their own lives, and the nation becomes more prosperous.”

We are trying to make Maine more prosperous. It takes courage. We were elected to make tough decisions for the hard-working taxpayers and the forgotten Mainers—not just lobbyists and special interests.

We are here to make sure our progress is not rolled back by poorly thought-out referendums. We are here do no harm. Over the next two years, I hope we can work together to set Maine on the path to future prosperity.

I ask you, the members of the 128th Legislature, to join me in protecting our economy, our families, our small businesses and, most importantly, our elderly.

Despite the challenges facing us, I ask you to move Maine forward—not backward. I ask you to do no harm.

Now, let’s get to work!

February 13, 2018

Governor LePage's 2018 State of the State Address

(As prepared for delivery on February 13, 2018. Official remarks differ from prepared text. To view a video of Governor LePage's 2018 State of the State speech, visit the link below and scroll down on the right-hand calendar to "6:50:31 PM - STATE OF THE STATE" http://mainelegislature.org/Audio/#house_chamber?event=73953 )

Chief Justice Saufley, members of the 128th Legislature, distinguished guests, and my fellow citizens:

I want to briefly remember Paul Mitchell of Waterville, brother of Senator Mitchell, who passed away this weekend. He was a dedicated public servant and a good friend.

As I begin the last State of the State Address of my time as Governor of this great state, let me first thank my wife Ann—please stand— for her service to the people of Maine these past seven years. I would not be here tonight without you. Ann, you have made Maine proud as our First Lady—and our family is proud of you. In case I forget, happy Valentine’s Day tomorrow.

I also thank our children. I appreciate my family’s willingness to share my time with the duties of being Governor.

To Staff Sergeant Ronald Fowler of the Air Force’s 243rd Engineer Installation Squadron, the military herald this evening, thank you for your selfless service to our state and nation. We congratulate you on being our state’s 2018 Outstanding Airman of the Year.

Ann and I are grateful to all our military and their families for their service.

I would also like to recognize two members of my staff, Angela Kooistra our sergeant of security and Holly Lusk my chief of staff.

I’m here tonight to speak to you about the future of our state. We have made progress—but there is much more we could have done and more that we can do to move our state forward.

In his last State of the Union, President Ronald Reagan said: “If anyone expects just a proud recitation of the accomplishments of my administration, I say let's leave that to history; we're not finished yet. So, my message to you tonight is put on your work shoes; we're still on the job.”

Now is not the time to slow down. I will continue working until the last minute of my last day.

I came into office saying I will put people before politics, and I have tried to do that. Politics as usual puts our most vulnerable Mainers at risk. As most of you know, I’m no fan of the status quo.

Today, special interests continue to highjack our ballot box and politicians continue to kowtow to wealthy lobbyists and welfare activists. The Legislature has forgotten about the Mainers who need our help the most.

Our elderly, our intellectually and physically disabled and even our youth are being left out of the process. I vow to spend my final year as Governor fighting for those Mainers who don’t have a voice in Augusta.

For years I have listened to liberals talk about compassion. Subsidizing solar panels for wealthy homeowners at the expense of our needy is not compassionate. Raising taxes on hard-working families to expand welfare entitlements for able-bodied people is not compassionate. Catering to the activists in the halls of the State House instead of the struggling family businesses on Main Street is not compassionate.

I know what it’s like to need help. That’s why I meet one-on-one with constituents on Saturday mornings. That’s why I get involved in cases that affect our elderly and our most vulnerable. They need our help. It’s our job to help them. We are, after all, public servants.

REDUCING PROPERTY TAXES

For the past seven years as Governor, my priority has been to make all Mainers prosper.

Too many Maine families are facing skyrocketing property taxes that strain household budgets. Our elderly on fixed incomes are particularly vulnerable to these increases. You simply cannot tax your way to prosperity. As Chief Justice John Marshall wrote, “The power to tax is the power to destroy.”

School budgets are often blamed for property-tax increases. The real culprit is the tremendous amount of land and property value we’ve allowed to be taken off the tax rolls, leaving homeowners to pick up the tab. These landowners must contribute to our tax base.

It’s time for all land and real estate owners to take the burden off homeowners and pay taxes or a fee in lieu of taxes. The federal government does! Maine property-tax payers need a break.

We proposed allowing municipalities to collect property taxes or fees from large non-profit entities, and we’ve tried to require land trusts to contribute to the tax rolls. We have been met with staunch resistance from Democrats.

We must think outside the box. Tough problems call for tough decisions and solutions. I don’t walk away from tough decisions. I’ve proven that on occasion.

We established an online registry for all non-profits to report conservation-land ownership.

The result of all property-tax exemptions reported within municipalities exceeds $18 billion. Think about that—$18 billion.

The loss of that tax revenue has shifted over $330 million in property taxes onto the backs of local homeowners.

My office is distributing to each legislator the total value of property taken off the tax rolls for each town, along with the estimated increase in taxes paid annually by property owners.

Over 4 million acres have been conserved by the federal and state governments, as well as non-profit organizations, such as land trusts. Nearly 20 percent of our state is conserved from development. This is an area larger than the size of Connecticut.

In 1993, about 35,800 acres of land was owned by land trusts. That number has increased by an astonishing 1,270 percent. Land trusts now control more than half-a-million acres with an estimated value of over $400 million.

Ask your local officials how much land in your community has been taken off the tax rolls. Ask them how much in tax revenue it would be contributing today to help reduce your property taxes.

The desire to preserve land without benefit to the taxpayers or their input is out of control. We must restore balance.

We must ensure that all property owners are required to contribute to the local tax base. Everyone must pay their fair share. It’s common sense.

Richard and Leonette Sukeforth are the elderly couple who were evicted from their home due to their inability to pay their property taxes on their fixed income. Due to health reasons, Mr. and Mrs. Sukeforth were unable to attend tonight.

In 2015, the town of Albion foreclosed the Sukeforths’ home and sold it for $6,500. A compassionate neighbor offered to pay the taxes, but the town officials refused to accept the money. The new owner evicted them and demolished their home.

I learned of Sukeforths’ situation after the foreclosure had occurred—it was too late to help them. I submitted a Governor’s bill to protect the elderly from tax lien foreclosures going forward.

We must fight to protect our parents and grandparents whose fixed income cannot keep up with rising property taxes.

This common-sense solution will require municipalities to be a bit more compassionate to our elders. I thank Representative Espling for sponsoring this bill, and I urge both chambers to pass it. This is the right thing to do for our senior citizens.

TAX CONFORMITY

My tax cuts have resulted in tangible savings for Maine families. A family of four earning $90,000 pays 29 percent less than they did under the prior law. A family of four earning $35,000 no longer pays the $298 tax bill they did under the prior law. Despite what my colleagues to my left say, these are not tax breaks for the rich. These cuts are meaningful savings for hard-working families.

The new federal Tax Cut and Jobs Act will provide more savings for families and businesses. The federal tax cut will result in an estimated economic benefit of approximately $1 billion in 2019. More than $500 million of that will be in direct income tax cuts for Mainers. Our small businesses will receive tax cuts of an additional $200 million.

Whenever Congress changes the federal tax code, Maine must decide whether to conform our tax code to the federal changes. Doing so is better for the taxpayer because it simplifies tax filing.

It is also better for the state because the IRS takes the lead on income-tax compliance, and we do not have to fund duplicate services, like additional auditors, in Maine.

For that reason, I will be proposing legislation to conform to the new federal law. However, since strict conformity would result in a tax increase to Mainers, my bill will include a proposal that offsets any tax increase. Let me make this perfectly clear: I will not support any conformity measure that results in a net increase in income taxes.

In fact, I will not support ANY increase in taxes for either tax conformity or to pay for Medicaid expansion.

MEDICAID EXPANSION

Maine’s previous experiment with Medicaid expansion plunged our state into financial disarray. However, make no mistake: Medicaid expansion is the law, and I will execute the law. But funding it is the Legislature’s constitutional duty, as it is the Legislature’s job to appropriate the funds.

Appropriate the money, so we can implement the law. The time is now—not after the next election.

I have laid out four basic principles to guide your decision on how to pay for Medicaid expansion. I will not jeopardize the state’s long-term fiscal health. We must avoid the budget disasters of the past.

We must fund Medicaid expansion in a way that is sustainable and ongoing. Therefore, my principles are as follows:

  1. No tax increases on Maine families or businesses.
  2. No use of the Budget Stabilization Fund (which we call the “Rainy Day Fund”).
  3. No use of other one-time funding mechanisms—known as budget gimmicks.
  4. Full funding for vulnerable Mainers who are still waiting for services, and no reduction of services or funding for our nursing homes or people with disabilities.

It would be fiscally irresponsible for the Legislature to demand we implement Medicaid expansion without adequate funding. It is simply not too much to ask the Legislature to prioritize our truly needy over those looking for a taxpayer-funded handout.

DHHS cannot hire and train the additional 105 staff needed to run the expanded Medicaid program without money. We cannot pay the state’s share of the new enrollees’ medical bills without funding.

Democrats, hospitals, advocacy groups and wealthy out-of-state special interests who campaigned for this referendum claim that adding 80,000 people to a taxpayer-funded entitlement program will save money. I take you at your word. Show me the money and put your plan in writing. Show the Maine people how you will pay for Medicaid expansion.

I ask Theresa Daigle and Josiah Godfrey to please stand up. These are the people you should be thinking about. Theresa has shared with me the hardships she and her son have experienced while awaiting services for his physical and intellectual challenges. Josiah has autism, an intellectual disability, and bipolar disorder. He qualifies for services, but he is stuck on your waitlist.

Because his mother will need to care for him, it will be impossible for her to continue working. She has been told that she may need to leave Josiah at St. Mary’s and refuse to pick him up—thus making him homeless—in order to qualify for Section 21 services. THIS IS WRONG!

I ask that the Legislature fully fund these programs so people like the Daigles can get the help they desperately need and qualify for. I have proposed to fully fund them, but Legislators chose to use the money for other programs, like giving welfare to illegal immigrants. That is simply wrong. Maine people need to come first.

Do the right thing for Josiah and his worried mother. Fund the Section 21 and 29 programs.

KEEPING YOUNG PEOPLE IN MAINE

Now, many legislators tell me that they don’t pass bad bills. Let me give the Maine people tonight an example of a horrible bill.

I vetoed a bill that would prohibit 18-year-old adults from buying cigarettes, but the Legislature overturned it. This law denies rights and responsibilities to 18-year-old adults who want to purchase a legal product.

This is not about cigarettes—no one should ever start smoking. This is about protecting our personal choices from an ever-expanding nanny state.

Our laws must recognize one age when adulthood begins. You, the Legislature, must pick that age. I don’t care what the age is, whether it is 18 or 21. It can’t be both.

Legislators have no problem letting 18-year-olds vote for them in elections or die in wars. Let’s think about that a moment—legislators think 18-year-olds are not adult enough to decide whether they should purchase cigarettes. But they think 18-year-olds are adult enough to vote on complex referendums like the legalization of marijuana, the elimination of the tip credit, and a 3 percent tax surcharge that would devastate our economy.

Young adults should be treated like adults. If 18-year-olds can fight for our country, pay taxes, get married and divorced and make personal medical decisions—and even younger teens can use birth control and smoke “medical” marijuana—then let’s make adulthood start at 18. If they can do all that, they should be able to decide if they want to buy legal products.

The last I knew this was still a free country. That includes the freedom to make personal choices—free from government interference.

Frankly, drinking is no different, the federal government uses the threat of defunding road construction if 18 year olds are allowed to drink, so let’s make adulthood 21.

INVESTING IN OUR ECONOMY

We are the oldest state in the nation. We must attract young people to Maine. Our current position requires us to get serious about growing our state. Please join me in this effort.

I will put forth bills this session to support investment in Maine and the development of our workforce. We have spent seven years fixing Maine’s balance sheet. Now is the time to make investments in our economy and for the Maine people.

Our bond sales have not focused on commercialization. I support a commercialization bond. Maine has always supported research-and-development bonds, hoping it would create jobs. Although R&D is critical, it is not enough to bring an innovative idea to market.

Developing a patent that sits on a shelf is not a good return on investment for our taxpayers. We must focus on commercialization.

Our innovators create a vast array of products in many industries: bio-tech; high-tech; forest products; manufacturing; aquaculture; agriculture. We must invest in commercialization as we do in research.

Let’s get our products to market. Let’s offer excellent careers at high wages for our people. Let’s attract newcomers to our state.

If our state is to survive and prosper, we need to grow our workforce and keep our economy growing. Record numbers of baby boomers are entering retirement. Employers need to replace these skilled workers. For our economy to continue to grow, we must attract and retain young people.

Not only will these young people work in our industries, but they will also buy homes, pay taxes, invigorate our communities and, yes, have children.

We can invest in our young people by relieving some of the burden of student debt for those who want to stay in Maine or choose to relocate here and start their professional careers.

High student-loan payments prevent our young people from buying a house or a car or spending their money at local businesses. Many take higher-paying jobs out of state to survive. They simply cannot afford to live in Maine.

We cannot continue to sit by while our employers have vacant positions that young people could fill. I will be submitting legislation again to create and fund initiatives that make these strategic investments.

My initiative—the Maine Student Loan Debt Relief Program—calls for a $50 million bond to fund zero-interest student loans to keep Maine kids in school attending Maine colleges and universities.

It also calls for a new, low-interest refinancing program to encourage graduates from outside Maine to work in our great state.

In addition, I am asking the Legislature to simplify and increase the Opportunity Maine tax credit so employers can attract and retain the young workforce we need. The return on these investments will pay enormous dividends by encouraging young people to come here and help to reverse our declining population.

Good-paying jobs attract workers. To attract manufacturing jobs, more than half the states—28—have passed Right to Work legislation.

Kentucky became a Right to Work state in 2017. It has already proven to be a major catalyst for growth. Kentucky shattered its annual economic investment record in 2017, reaching $9.2 billion—nearly doubling its previous record of $5.1 billion.

Mainers are missing out on these opportunities. I urge you to have a serious debate on Right to Work.

FISCAL RESPONSIBILITY

Despite our challenges, we have made state government more efficient and more accountable. We lowered the tax burden on hard-working Mainers. We cut the pension-fund deficit by nearly half. We paid off the hospital debt. We reformed welfare.

People say they want government to run like a business—until it does. Now we must make sure our progress is not hijacked by big-money, out-of-state liberals who continue to use our broken referendum process as a means of implementing their social-engineering agenda.

The will of the people is the constitution of our state—a representative republic. But if we want to govern through referendum, we do not need a Legislature. However, as we have seen, governing through referendum has been very destructive to many true democracies.

It took a shutdown of state government to prevent the most damaging of the 2016 referenda from taking effect.

I will fight just as hard this year to make sure we keep moving forward. There is nothing wrong with Maine people realizing a bit of prosperity.

I am pleased to report that the state of our financial house is good. In fact, it is in better shape than any time in the past 40 years. Our economy is strong. Unemployment is at 3 percent—down from 8 percent in 2011, and lower than the national and New England averages.

And the number that some call the “real” unemployment rate, which includes people working part-time or those no longer even looking for work, has fallen to Maine’s lowest-level ever.

The number of jobs in our private sector is at an all-time high. Unfortunately, our problem is we have more deaths than births. That is why we must continue to be fiscally responsible. We must enact policies to attract young people, not chase them away.

Our good fiscal health is the result of making tough decisions and taking bold action—like using the liquor bond to pay off our hospital debt.

We have had a positive General Fund cash position for the past three fiscal years. We project this fiscal year’s General Fund ending cash will remain positive. But we cannot pat ourselves on the back and say we have done enough. The job is not done.

Before I took office, Augusta used the Budget Stabilization Fund as their own personal slush fund. It damaged our credit rating and put the state at risk during financial emergencies. We’ve built this rainy-day fund to over $200 million—an amount greater than the average of the funds of all New England states.

We promised to bring fiscal sanity to Augusta, and we did it.

The credit rating agencies have improved our credit rating. It is less expensive now for us to borrow money to improve our roads and bridges and to fund other essential capital projects.

We should strive to become a Triple-A-rated credit risk. Increasing the fund to $300 million would help us achieve this goal. We must keep moving forward.

We have right-sized the state’s workforce, making it more efficient and more accountable. Former administrations balanced the budget on the backs of our state workers. I promised not to do that—and I didn’t. We eliminated the furlough days; we restored merit pay increases; and we provided cost-of living increases, which will total 6 percent this biennium.

We told the state employees that if they like their union, they can keep their union. But we also told them that if they didn’t want to join the union, they didn’t have to, and we let them keep their wages instead of paying fees to subsidize a political agenda. And many have!

WE MUST CONTINUE OUR PROGRESS

We need legislators who will pass laws that make sense and help Maine families—not politicians looking for feel-good headlines.

We have made great progress implementing reforms that have brought greater prosperity and created jobs. Just today, the North Carolina-based company LignaTerra announced it will build a new, cross-laminated timber facility at the former Great Northern Paper site in Millinocket.

We’ve been working with the company the last few months, and we are pleased that it will invest $28 million and eventually create 120 new, good-paying jobs. Welcome to Maine, LignaTerra! Your investment is welcomed and appreciated.

My administration has eliminated red tape, created charter schools, cut taxes, improved our infrastructure, created new trade relationships, and reformed health insurance to lower costs—to name just a few reforms. Reforming government is hard work, but it is the right thing to do for our people.

I thank Representative Ken Fredette, Representative Ellie Espling, Representative Jeff Timberlake, Representative Heather Sirocki, Representative John Martin, and Representative Craig Hickman, as well as Senator Rob Whittemore, Senator Lisa Kiem, Senator Eric Brakey, and Senator Troy Jackson for working with me.

This is an election year, and this year’s vote will be especially important. Mainers get the government they vote for. So I urge the Maine people to think carefully before going to the polls.

Think long and hard who you will send to the Legislature and to the Blaine House.

You will be voting to either protect Maine’s fiscal health or to let politicians run it back into the ground.

You will be voting on whether to keep our taxes low and to maintain the right size of government or to let special interests and public-sector unions raise taxes and bloat government for their socialist agenda.

You will be voting on whether to respect our young adults or exploit our youth and chase them out of the state. You will vote on whether to keep growing our economy or to stifle it.

You will also be voting to continue our significant progress on welfare reform. Our policies now protect our most vulnerable while encouraging those on welfare to look for work, if they are able. We are offering people a hand up, not a hand out.

You will be voting on whether to continue these common-sense welfare reforms or whether to return to the days of out-of-control welfare entitlements that almost bankrupted the state.

In my Inaugural address, I made a pledge to the Maine People, “to put you before politics: The parents trying to make a better life for their kids; The retirees trying to hold onto their homes on a fixed income;
The college graduate trying to find a good paying job;
The entrepreneurs with the courage to take a chance on an idea; and
The taxpayers tired of footing the bill for a bloated establishment in Augusta.

It is time to make state government accountable. It is time to deliver value. It is time to put Mainers first.”

Those were the promises I made, and those are the promises I have kept. I promise to continue to fight for you until 11:59 a.m. on Inauguration Day.

To all the hard-working Maine taxpayers out there, it has been the biggest privilege of my life to work on your behalf as your Governor.

As a homeless kid living on the streets of Lewiston, I never imagined I would one day make it to the Blaine House. You are in my thoughts and prayers every minute of every day. Your prosperity is paramount for Maine’s success.

I fought for you every day, and it has not been easy. But I would not have had it any other way. Thank you for letting me serve you and our great state.

I leave you with this quote President Reagan attributed to Abraham Lincoln:

“You cannot help the poor by destroying the rich. You cannot strengthen the weak by weakening the strong. You cannot bring about prosperity by discouraging thrift. You cannot lift the wage earner up by pulling the wage payer down. You cannot further the brotherhood of man by inciting class hatred. You cannot build character and courage by taking away people's initiative and independence. You cannot help people permanently by doing for them, what they could and should do for themselves.”

God Bless the great State of Maine and God Bless America!

We still have much to do—let’s get to work.