Thank you.  

Speaker Johnson, Democratic Leader Byrum, Majority Leader Sikkema, Democratic Leader Emerson and the members of the state Senate and House; Chief Justice Corrigan and the members of the judiciary, Attorney General Cox, Secretary of State Land, President Straus and the members of the Board of Education, colleagues and friends:

Good evening.

It has been said that “only challenge produces the opportunity for greatness.”*  So, Michigan, we are challenged, and this is our time for greatness.

In the face of challenge, I relish Michigan’s chances for greatness because I am convinced of the tremendous power of the Michigan spirit.  Some might wonder whether there can be a single unifying “Michigan spirit” – when we’ve got Spartans and Wolverines, Detroiters and Grand Rapidians and Yoopers, Muslims and Jews and Sikhs and Catholics and Protestants, with hunters and hikers, factory workers and philosophers, Ford and GM and Chrysler, Hayworth and Steelcase and Herman Miller, and John Engler and me.

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In the face of such brilliant diversity, this is our common spirit: Michigan is driven by hard work and innovation that builds wider and stronger bonds of community.

We Michiganians came here to work and we are unafraid of working hard.  People don’t move here to gamble, lie on the beach, play the stock market, compete ruthlessly or live the easy life.  Our Michigan spirit mirrors our classic American one:  This is a place of traditions, a wholesome place to raise a family, a place where hard work and good work done well is admired and rewarded. 

And Michigan doesn’t just work hard, we work smart.  We innovate.  We explode with creativity.  The Michigan spirit of innovation has spurred thousands of dreams into reality.  Teenagers belting out catchy harmonies in West Grand Boulevard basements created the soundtrack of our nation.  Kids who sketched Corvettes and T-Birds in school notebooks are today engineering the hybrid vehicles of this century. 

But nowhere does our spirit soar higher than when hard work is united with innovation – to build stronger bonds of community. 

Fifty years ago, Michigan took an incredible stand when it triumphed in a challenge of extraordinary political, economic, architectural and physical dimensions.  In 1953, the state issued nearly $100 million in bonds so work could begin on a bridge – the Mighty Mac – that would join the two peninsulas of our one state.  Today, most of us cannot imagine a Michigan without it.  Fifty years ago, almost no one could imagine a Michigan with it.

The Bridge literally arose from citizen vision that extended far beyond what politicians and bureaucrats thought achievable.  It was built with a magnificent mix of bold design, artistry, courage and sheer ironworker skill.  There is no greater symbol of our belief in One Michigan, and no greater testament to the strength of our Michigan spirit.

Today, our spirit is being tested in new ways.  We boldly wrestle with a competitive and often heartless beast called the global economy.   Our country is endangered by terrorists.  Our elders are struggling to maintain the dignity they earned after a lifetime of hard work and contribution.  Too many children are roughed up instead of built up for this rough world.  And Michigan’s spectacular natural environment itself is under assault. 

These dangers outline the challenge of our time, and call anew for the greatness of our Michigan spirit. 

And in the face of these dangers, I believe the spirit of selflessness, of community in our state has never been stronger.   Our citizen engagement is undeniable.  Unemployment is up, but that didn’t stop nearly 85 percent of our fellow citizens from giving to a charity in the last year.  The stock market has been battered for over two years, yet during that time, Michiganians created some 200 new charitable foundations – finding new ways to solve old problems.  And more than a third of our fellow citizens found time to volunteer last year, building webs of community and striking a spark of hope for those in shadowy corners. 

Today my fellow citizens, I submit to you that while the state of our budget is weak, the state of our Michigan spirit is strong.   And we will accomplish great things through this challenge.  The Michigan spirit will propel us forward, and we will progress toward the goals that matter most to Michigan’s people.  We will educate our children and we will protect the well-being of our families, despite the budget crisis.

Together, we will have to work hard.  We will have to innovate, and we will have to act as one community – especially right here in this building.  I applaud the Republican leadership of Senator Sikkema and Speaker Johnson for their willingness to work with this Democrat and Michigan’s Democrats, to move beyond partisanship, faction, friction and ego to achieve common ground.  We were elected as Democrats and Republicans, but we serve as Michiganians and Americans.

Together, we have inherited one of the most severe budget crises this state has ever known. 

This year the total state budget is $285 million short.   I have already asked my department directors to cut their budgets by at least 4 percent and I am asking the Legislature to pass an Executive Order that will carve $158 million from the General Fund budget right now to bring us into balance.

Unfortunately, the current school budget crafted last year and based on last year’s assumptions has now also come up short.  Michigan law requires that our school budget be balanced…and with good reason.  Two weeks ago, the law forced a $127 million cut in school aid.  A cut to education is a cut to the heart – to this heart.  It was painful, even if mandated by law.

The General Fund budget problem we inherit for the budget year ahead is $1.7 billion.  Just how much is $1.7 billion?  Let me give it to you straight.  We could close every prison in the state and still not have enough to close the gap.  Or, we could close every Secretary of State’s office, shut down the Michigan State Police, lock up every State Park, cut out the entire Legislature, shut down the Attorney General’s Office, and shut down the Departments of Agriculture, Military and Veterans Affairs, Environmental Quality, and Natural Resources . . .  and still not close the gap.   In other words, some twenty percent of the services we now provide through the General Fund budget we cannot afford. 

It will not be easy, but in March I will present a balanced budget.  The fiscal year 2004 budget will ensure that our government lives within its means, but it will have to cut deep to do so.  We will work to protect what matters most, but every department, every agency, every local government and every citizen will feel the scale of this problem.  You are all invited to be part of the solution. 

How did we get here?  Quite simply, we cut taxes but not spending, and we continue to spend more than we take in.  That must stop. You can use your MasterCard to pay your Visa bill, and even transfer that balance to your Discover card, but eventually the bill will come due.   Today is Michigan’s due date and we, the Michigan family, must make tough choices to pay the bill and balance the budget.  Though I did not create this problem, I will see that we fix it.

How will we do it?  By doing what every Michigan family does when times are tough.  We will work harder, cut waste and tighten our belts.  We will save every dollar, and we will invest in the things that really matter.    We have already started.   In my first month on the job, I directed the Department of Management and Budget to review every state contract for cost overruns and potential cost savings.  I will direct the Administrative Board – which signs-off on state purchases – to hold up contracts that represent a major expense.  And I have asked my Department Directors to cut every contract with an outside vendor by at least 7 percent. 

I am cutting the fleet of state vehicles by 1,000 cars, calling in cell phones and credit cards, stopping subscriptions, color copying and pay stub mailings.  I have directed each state agency to use up every pad of paper, and sheet of stationery in existence, even if my predecessor’s name is on them.  I don’t need them to say “Granholm.”  I need them to say that we’re giving the taxpayers a frugal government.

In these first five weeks on the job, I have focused my attention on the budget, but I have not been consumed by it.  Already we have done great work for the people of Michigan.    

We are giving our citizens a diverse government.  I have appointed a cabinet that reflects the true face and the vast mind of Michigan.  It is white, black, Asian and Hispanic.  It is female and male, fresh-faced and veteran.  It draws from city and suburb and farm, east and west, north, south and central.  We have recruited the best, whether Democrats, Republicans or Independents.  And although I’m certain they are all well fed, I know they hunger for change.

Diversity gives birth to great creativity.  An honored workforce brings forth dedication.  Michigan state employees are Michigan’s unsung heroes – men and women who quietly toil to keep the wheels of government turning in good times and bad.  Often, the people who know best how to meet a challenge are those who face it on the frontline.  We do not see our state employees as the part of the problem, but they are at the heart of the solution.  We will aggressively seek their intelligence and input.  And they have my deep thanks for giving more in these times of scarcity.

I have reached out to engage our citizens with their government.   Citizens are providing input through a Medicaid summit on how to repair our broken Medicaid system.  Citizens are providing input in Flint through a community summit on how to repair a bruised city.  And tomorrow morning, I will officially open to the citizens a Governor’s Constituent Services division on the ground floor of the Governor’s office.  Every month, I will hold office hours so citizens can come and share your ideas directly with me.  Later this February, I will go on the road to tell it to you straight and to ask citizens for their input on balancing our busted budget.

But let me be very clear, my fundamental message tonight is that we will cut the size of government, and we will move to greatness.  The challenge we face is not unique.  Whether your business is a titan in the global market or a sub shop in the local mall, you struggle with the double demand; cut costs and improve your products and services.  State government is no different. 

We are fortunate that our business community is answering the call to serve:  American Axle, Arvin Meritor, Butzel Long, Delphi, Strategic Staffing Solutions and Visteon have all committed to loan top executives to our state departments to serve full-time as a team of Bureaucracy Busters.  They will help us streamline, root out waste and find creative ways to do the people’s work.   I thank them for their citizen patriotism.

But enough about cutting.  I’ll present a budget message to you in March.  Let us turn tonight to what together we can accomplish in spite of the budget.

First, we must grow our economy.  Last year, Michigan lost 59,000 jobs and we rank in the bottom quarter of all states in terms of personal income growth.  Though no state can completely escape the effects of a national economic downturn, Michigan can’t afford to wait for federal policy or a national trend to lift our boat.  We must do that job ourselves.

To this end, I have committed my Administration to create a Technology Tri-Corridor.  We will position Michigan to lead the world in the development of the technology-based industries likely to dominate the world economy in this new century. 

The Corridor will focus new technology business recruitment and development in three critical areas:  the life sciences, the automotive industry and the emerging homeland security sector. 

Already, our Life Sciences Corridor has nurtured the development of cutting edge bio-technology firms and made our state a leader in this important new field.   The same emphasis can help us build on our automotive heritage, and grow businesses that keep our citizens, state and country safe.

Last week the President committed the federal government to the development of fuel cell powered cars within a generation.  As your Governor, I make my own commitment – not only will we build those cars in Michigan, our Automotive Technology Corridor will help develop the fuel cell technology those cars will run on.

Wayne Gretzky once offered this advice: “Skate to where the puck is going, not to where the puck is.”  My colleagues, the puck is going toward the goal of homeland security, the third sector in the Tri-Corridor.  And Michigan needs to get there quickly – literally to “capitalize” by growing businesses in an area of emerging and critical need.  Three economic strengths, three technology corridors. 

We will use Michigan’s financial power as leverage to bring investment capital to the Tri-Corridor.   Today some 240 private investment funds do business with the State of Michigan.  Our State Treasurer, Jay Rising, is now telling those fund managers that they’ll get more of our business if they make sound investments in our Technology Tri-Corridor.

Make no mistake, no one will out-work me, out-run me or out-hustle me when it comes to keeping or bringing good jobs to this state. 

And I won’t do it alone.  In the coming weeks I will ask some of our state’s leading business people, labor leaders and economists to serve on my Council of Economic Advisors.  The mission of this Council will be crystal clear:  find ways to ensure that Michigan leads the nation in private investment and job growth.  I am pleased that Lansing’s results-driven mayor, David Hollister, has joined us to head a consolidated, streamlined state Department of Labor and Economic Growth.  Our goal – replicate his success at revitalizing Lansing in the other urban centers across our state.  And we want to create cool cities, hip places to live and work.

Perhaps the single most important key to economic development is the one that opens the doors to learning in the minds of our young ones today.  In the knowledge economy, business and education are linked; you cannot succeed at the former if you do not excel at the latter.  I assure you, educational excellence will be my number one priority.

We will begin with Project Great Start – a broad movement to increase learning in the critical years from birth to age five – because education must begin at birth. 

Scientific research on the brain is clear:  By the time a child arrives for kindergarten, 85 percent of the brain is developed.  If the brain is purposefully stimulated and nurtured before a child is old enough to tie his or her shoes, that child’s lifelong capacity to learn will be forever enhanced.  And, unfortunately, if it is not, an opportunity is lost forever.

The challenge to completely shift our thinking to seize this incredible opportunity is immense.  Let the immensity of this shift not deter us, but stir us to concerted action.  Project Great Start will link people and institutions all across our state with a common strategy – and uncommon imagination – to achieve a common purpose.   

Project Great Start will make a huge difference in the lives of our children if we do two things and do them well.

First, we must focus on educating new parents – before their baby is born, in the maternity ward, at check-ups and later at home.  No one wants to be a bad parent, but not everyone understands what it takes to be a good one, particularly when it comes to stimulating and nurturing the supple minds of young children.  

Second, we need to read to children.   Educators insist that if we read to every child under the age of five for just one half-hour every day, the change would be revolutionary,  the educational achievement in our schools would skyrocket.  That simple half-hour act repeated over these five preschool years amounts to a full year of school, and it doesn’t cost one cent. 

Already, many of our Intermediate School Districts are deeply involved in these early childhood education activities and they’re making great strides.  As I submit my budget, I will ask all 57 of these county-wide and multi-county districts to re-define their mission:  to recognize that education begins at age zero; to find ways to educate parents; and to make sure our young children are read to for a half-hour each day.

At the same time, I will ask each and every state department that impacts the lives of our children  to come together to form the Children’s Action Network so that we can coordinate departmental policies to support our parental education and child reading goals.

As we engage the full weight of the Executive Branch in this effort, I applaud the leadership of the legislative Children’s Caucus and know that their work will encompass early education.

Finally, I will ask Michigan’s foundation community, which has already supported important work on this issue in our state, to do even more.    We are grateful to our foundations for the support they have given the Ready to Succeed Partnership, the organization that has spearheaded the creation of early childhood learning coalitions across our state.  And I know their commitment to this issue remains strong. 

Our children need a Great Start.  Then they need great teachers at every stop on their journey to educational achievement.  

Michigan’s educators unlock the mysteries of multiplication tables, Shakespeare, photosynthesis and penmanship.  In addition to our families, they are the ones who breathe into us the values of hard work, innovation, grit and community.  It happens every day.  At Roosevelt Elementary, in Room 1.  At Central Middle and Renaissance High.  Teachers model curiosity, integrity and responsibility. Our teachers and principals create pride of place – teach our children they belong in this class, this school, this city, this Michigan, this America. 

Please join with me in recognizing Susan Gutierrez, here with us tonight.  Mrs. Gutierrez is a teacher at Forest Hills Central Middle School near Grand Rapids and she is Michigan’s Teacher of the Year.  We thank you and all the phenomenal teachers who are giving their professional lives in service to molding young minds.

It is both my profound gratitude to the great teachers in my life, and my absolute certainty that good teaching is the key to our economic wellbeing, that steels this conviction in me:  We must give teachers the best tools available in the world to teach better than they imagined they could.

Today, I am announcing the creation of the Governor’s Education Technology Fund – the GET Fund – a public-private partnership between the State of Michigan, Intel and others to provide educators with on-line professional development opportunities through the Michigan Virtual University and school districts.  Thanks to the GET fund, hard-working teachers will be able to access best practices and continually expand their knowledge.

While we in Michigan are blessed with an education community second to none, we cannot rely on our educators alone to prepare our children – our state – for the future. Every one of us must find a way to reach out, too.

I’m proud that this year, my husband Dan Mulhern will renew the Mentor Michigan initiative that I introduced as Attorney General three years ago.  He will spearhead a statewide effort to recruit thousands of citizens to be role models for children who badly need a caring adult.  Research proves mentoring reduces youth crime.  And we will not stop until every child in Michigan can answer the question – which too many children cannot answer today – “who really and truly takes a special interest in you and believes in you?”

Our youngest adults hold the greatest hope, and we will tap their energy, also.  We will team high schools with early childhood centers to supply volunteers to read to children for a half an hour a day.  It’s already being done in districts like Traverse City and it’s coming soon in places like Kent and Wayne Counties.

In the coming months, I will ask all of our school districts to volunteer to make 40 hours of community service a requirement for graduation from their high schools.   We want to raise young people who embrace service to others as a way of life.   

We must also insist that high schoolers stay in school.  I urge you in the Legislature to adopt legislation that will send a clear message to our students:  “if you don’t show up in school, you shouldn’t bother showing up at the Secretary of State’s office either,” because we won’t issue driver’s licenses to chronic truants.  Driving is a privilege, not a right.  The responsibility of driving a car should be linked to the responsibility of attending school.

Finally, we need to take a new approach to using academic achievement scholarships to encourage students to reach higher levels of performance in school.   Scholarships shouldn’t just reward those who manage to succeed in our education system today; they should encourage far greater numbers of students to succeed tomorrow.

I have created a Great Lakes, Great Hopes scholarship fund that will guarantee scholarships to middle school students who commit to graduate from high school and go on to college or another post high school education experience.  

We’ll fund these scholarships with private donations today, and with joint public-private support when our fiscal situation improves.  One way or another, we’ll make sure that the doors of educational opportunity swing wide for those with limitless dreams, but limited means.   

Just as stronger schools are critical to our strategy to build Michigan’s economy, so too are our efforts to create a healthier Michigan.   Not only do we need a healthy workforce, but our state’s businesses can’t soar if they are weighed down by runaway health care costs.

There are several things we will do today to make Michigan healthier tomorrow.

For the first time in this state’s history, we will be led by a State Surgeon General, Dr. Kimberlydawn Wisdom, who is here with us tonight and who will focus on rebuilding our state’s public health agenda.  She will focus on preventing: lead poisoning, teen pregnancy, obesity, teen smoking, HIV/AIDS and more.

Second, we will take concrete action to bring down the high cost of prescription drugs in this state. 

On behalf of our seniors, we have submitted – just this afternoon – a waiver request to the federal government asking for additional federal funds to expand EPIC, our Elder Prescription Insurance Coverage program.  The waiver will allow us to more than double the number of low-income Michigan seniors who can rely on EPIC for comprehensive prescription coverage.

I have also instructed the State’s Director of Community Health, Janet Olszewski, to begin negotiations with other states to form a multi-state compact for prescription drugs.  By leveraging the compact’s immense buying power, we expect to cut tens of millions of dollars from our Medicaid drug costs this year.

We will not wait for Washington to act.  We will get it done, now.

Likewise, the time has come to protect the spectacular environment that beats with the heart of the Michigan spirit.

In my Administration, the environment will not be an afterthought; it will be a priority.

First, we will no longer allow Michigan to be North America’s dumping ground.

Federal law doesn’t allow us to ban this trade in Canadian and out-of-state trash, but we do have the right to insist that trash dumped in our landfills meets our standards.   I am asking this legislature to act now to pass legislation that will allow us to refuse to accept solid waste loaded with batteries, bottles, cans and toxic substances that jeopardize our health and safety.  Our state cannot – and will not – be the nation’s trash can.

Second, I stand before you tonight to assure you that I will exercise my authority under federal law to veto any proposed export or transfer of Great Lakes water outside of our Great Lakes Basin.   Our water is our defining natural resource – and it should never be for sale.   I applaud Senator Sikkema for his leadership on protecting our ground water, and with him I will push for a Michigan water protection statute to prevent the diversion of all of our waters.  

Third, we will lead in promoting regional cooperation.   As citizens we are not confined to the county, city or township lines drawn on a map – our thinking should not be either.  We must think regionally about managing our watersheds, about our public transportation systems, about sharing common assets and services among units of government. 

And this year, we must finally address the issue of land use.  We must develop a cooperative, commonsense approach to how we use our land so we can protect our forests and farms, prevent the sprawl that chokes our suburban communities and threatens our water quality, and bring new life to our cities and older suburbs. 

So I am pleased to join with Senators Sikkema and Emerson, and Speaker Johnson and Leader Byrum to establish a bipartisan Commission on Land Use to ensure that Michigan grows in a way that preserves the character of the state we call home.  The Commission will be headed by two men from different parties but with a shared love of Michigan and a commitment to its future: Governor William Milliken and Attorney General Frank Kelley.

Every day the morning news reminds us of what security really means. It means making sure that our families feel safe in their homes and that our homes are safe here in our homeland of Michigan.

Security and safety is the most basic duty of government, one that I take very seriously.

That is why I have directed Lt. Colonel Sturdivant, the Director of the Michigan State Police, to coordinate with county and local law enforcement to aggressively go after violent criminals who violate their parole to get them off the streets. Violent criminals deserve to be in jail – no ifs, ands, or buts.

One of the most important steps we can take is to expand the use of drug courts.

Drug treatment courts offer a way to break the cycle of drugs and crime.   They allow non–violent drug users to serve their sentences not in expensive prisons, but in lower cost facilities that help them tackle their addiction and rejoin society as sober and productive individuals.   By some estimates, we could save more than $10,000 per person, per year every time we use this alternative approach.

Finally, especially today, no discussion of security is complete without addressing the war on terrorism. With our active and long border and the amount of commerce and number of people who pass through our state, Michigan is on the frontline of the battle to ensure the security of our American homeland.

I will create the position of Advisor for Homeland Security within the Department of Military and Veterans Affairs to more directly link our security efforts here in Michigan with the country’s defense preparations in Washington. We will be ready to answer the nation’s call to service at a moment’s notice. 

The Michigan State Police Emergency Management Division, Office of Public Health Preparedness and the National Guard’s 51^st Civil Support Team have already been preparing for a chemical and biological emergency.  In the next ninety days, they will jointly conduct a training exercise to test our capabilities to respond to a bioterror event.

Right now, the 1460^th unit of the Michigan National Guard has left Michigan for likely deployment overseas.  These men and women are not full-time soldiers – they are factory workers and store owners; teachers and nurses; mothers and fathers, sons and daughters. They are citizens willing to give their time – and God-forbid, their lives, to serve our country.

Sgt. Rohnalda Hollon from Beaverton shipped out last week with the 1460^th.  While she serves to protect our families, her husband Timothy will stay home to raise and protect their own.  Tim, their 10-year old daughter Whitney, and their 7-month old twins, John and Timothy, are with us tonight. 

Tim, you and Rohnalda are both heroes.  We salute you and our entire military family for your commitment to our country.

In the shadow of these soaring gifts, the sacrifices of our service men and women and the service to country they represent – we too, are challenged to greatness. 

Will we give to our children – all of them – their birthright of educational opportunity?  Will we protect the soil that we pray our soldiers will soon kneel to kiss?  Will we protect the health of our parents and children, the safety of our own cities and villages?  We have challenges, but with the full breath of the Michigan spirit, we will one day sing of a new greatness born in these times.

As we face the great challenges that lie ahead, I call on the people of Michigan not to be bystanders. Do not look at children struggling to read and say, “Those aren’t my kids.”  Do not see seniors struggling to pay for their prescription drugs and say, “Those aren’t my parents.” Do not drive by neighborhoods suffering from blight and crime and say, “That’s not my problem.”

The fact is, they are all problems we share – and we will either tackle them together or suffer the collective consequences.

While patriots pack their bags to serve in the name of Democracy overseas, let us give life to the Michigan spirit here at home.   We can win our wars.  Life’s most satisfying victories are those that seemed impossible, yet gave way in the end to grit and hard work.  Life’s most dazzling victories dawn when imagination finds a way they said couldn’t be found.  And the sweetest of all victories arise when those thought to be adversaries together lead to a higher ground. 

Our call is not unlike that given to the leaders of our troops abroad:  the most cherished homecomings occur when we protect those most at risk in times of dark and storm.  My friends, I say to you in closing:  “We cannot wait for the storm to blow over; we must learn to work in the rain.”[1] 

And that, my friends, is the Michigan spirit.  Thank you and good night.