Lieutenant Governor Carney, President Pro Tem Sharp, Speaker Spence, members of the 141st General Assembly, members of the Delaware judiciary, members of my Cabinet, distinguished guests, my family and my fellow Delawareans, thank you for joining me.

As I stand before you today, our world has shifted. The events of the past year have touched us deeply. We are more conscious of our place in the world and in the connections between all people. Our world and our state have been transformed, but, in contrast, we as people have not been.

Times may change, but our values and priorities do not. What was important to us as individuals and as a state before is still important now. In the face of terror and challenge, we have found strength.

We have found the strength to do the right thing and make the right choices based on our values and our priorities. So long as we do not compromise the principles that have made our state and our nation great, we will weather all storms, large and small. We will keep our state safe and strong.

Year of successes

I took office a year ago carrying the expectation from Delawareans that I would work to improve our schools, strengthen and make safe our families, foster economic development, protect our environment and make Delaware more livable, and run their state government responsibly and well.

With the help of the General Assembly, dedicated state employees and thousands of citizens, I believe we have made significant strides in each of these areas.

With contributions from and the assent of the General Assembly, most of my first-year priorities came to fruition. As a result of our work, Delawareans now have the right to a speedy resolution of disputes between their doctors and HMO's, and won't have to pay out of their pocket if they reasonably go out of the care network.

Delawareans will now know inside of 24 hours when there is an environmental accident in their community and know that we have strengthened penalties for those who pollute our environment.

As a result of our work, we have taken the first step toward curbing sprawl in our state by asking cities and towns to plan for growth, to grow only where they plan and by continuing to preserve farmland and open space.

With the creation of the Department of Technology and Information, the implementation of technology will be more efficient and we'll be able to hire the highly-skilled people we need.

In the area of e-government, we have listened to the needs and desires of real people and put state government on the web in a way that is most useful to them.

We have put children first by improving foster care and child safety, and protected our services to abused and neglected children from the difficult budget cuts that we were forced to make.

The Department of Transportation has been transformed into a citizen-responsive agency that is adjusting transportation projects to fit community priorities, not the other way around.

Finally, as a result of the General Assembly's investment in my top priority, Delaware's children now have reading resource teachers in 50 public elementary schools to help them learn to read and after-school programs to help them keep up. One of those reading resource teachers is here today.

Sylvia Stevens works with 36 second- and third-graders at Fairview Elementary School here in Dover. Sylvia strives to find a way to get through to each child and help each student not just learn to read, but comprehend what he or she has read. In one project, students read a book about bald eagles and then wrote letters to the governor about the importance of protecting them. I want to say thank you to Sylvia and to all of the reading teachers like her across the state.

These are the effects of an agenda that put more money into education than health and social services for the first time in state history, of an agenda that included the Patient's Bill of Rights, Environmental Right-To-Know, and Livable Delaware. I thank the members of the legislature once again for your commitment to the people of Delaware.

Further, the Minner-Carney Administration faced challenges not of our own making, but ones that we have addressed and will continue to address.

In July, a deadly accident at the Motiva refinery in Delaware City shed light on a possible pattern of neglect of equipment at the facility. As a result, we are finalizing an unprecedented contract that will force Motiva to inspect, maintain and repair equipment on a regular basis or face stiff penalties well before an incident occurs.

We took on the challenge of fixing the 800-megahertz radio system that serves our state's public safety responders, expediting needed repairs. As a result, problems that have plagued that system should be fixed this spring, months earlier than if we had not acted as we did.

After years of delays and cost overruns, we successfully implemented PHRST, a new payroll and human resources software system for state government.

After listening to the comments of almost 400 Delaware State Police troopers, we are making changes in the agency that will make it a fairer organization for every single trooper, regardless of gender or race. I have great respect for each of them, past and present, and know that they deserve the same rights that they protect every day.

Finally, we have dealt repeatedly but successfully with the effects of an economic slowdown.

September 11

Of course, the greatest challenge that came without warning was the terrorist attack on our country September 11 and its aftermath. The targets may have been in New York and Washington, but the effects were spread far wider than that.

Here in Delaware, people responded with compassion and generosity. By 5 p.m. September 11th, a long column of ambulances from Delaware fire companies had set off for New York.

In the days and weeks afterwards, Delawareans provided aid and comfort to strangers as well as to the families of those here in Delaware who were lost. Among the efforts was one led by Lt. Gov. Carney, which raised $40,000 for the families of public sector employees in New York and Washington.

Delawareans especially responded in support of Dover Air Force Base, which faced the tough task of identifying those who were lost at the Pentagon. The commander of 436th Airlift Wing at Dover, Col. Scott Wuesthoff, is here and I'd like to take the opportunity to thank him not only for the base's activities in helping American families recover their loved ones, but for the role he and the base have played since September 11th in making our state more safe and secure.

A more direct impact on Delawareans came with the fear of the spread of anthrax. Delaware's state troopers, police officers and fire companies responded to over a thousand reports of suspicious white powder.

DNREC's Air and Waste Management Division were involved in the investigation of 362 of those calls and the Division of Public Health at DHSS responded or performed tests in 175. Please join me in thanking them all for their dedication and performance under pressure.

Further praise goes to the Delaware Emergency Management Agency and the Delaware National Guard. DEMA was the coordinating agency through this crisis and we know now that DEMA's years of preparation made Delaware better prepared to respond than many other states.

The Delaware National Guard, has responded admirably and, today has over 100 personnel deployed around the world in support of our nation's war on terrorism. I ask Adjutant General Frank Vavala to thank his troops on behalf of us all.

Finally, I'd like to thank all our state employees who kept state government running smoothly. They are represented here today by the leaders of AFSCME, DSTA, FOP, DCOA and DSEA.

On September 11th, our world changed and our state must change as well. State government has a heightened sense of responsibility for protecting our citizens against previously unimagined perils. Over the last several months, we have worked across federal, state and local government levels, with other states, with every police, fire and emergency response unit, and with many private sector companies in Delaware to step up security in our state. Much of this has gone on behind the scenes, but I assure you it has happened.

There is more to be done. That's why I have hired a new homeland security adviser, Philip Cabaud, to continue working to insure that we are even more ready to prevent an attack on our people or property, and even better prepared should one occur.

I am also asking the General Assembly to pass a number of pieces of legislation along these lines.

Our world changed on September 11th and our state must change as well. The spirit and effort I have seen from Delawareans over the last several months assures me that we will do so successfully.

Budget of opportunity

One of my main tasks today is to address the financial picture of our state and the fiscal condition of our state government. In this area, there is no question: the state of our state is strong. In some ways, it has never been better. Let me tell you why.

A year ago, I said that times when the state was flush with revenue were over - at least for a while - and that we should heed the warning signs and make the tough decisions necessary to maintain our financial health. Well, we have done so.

Over the last year, we cut a total of $107 million out of the Fiscal Year 2001 and 2002 operating budgets. Some of the cuts were taken to make way for our priorities - like reading teachers, after-school programs, e-government initiatives and last year's pay raise for state employees. Some were taken to make way for unavoidable costs and emergency pressures - such as increased Medicaid costs and staffing the Delaware Psychiatric Center. Finally, some were taken to adjust our budget to the reduced revenue projections.

These were tough decisions to make, but good ones as well. As I have said before, after several years of flush times - times when it was easy to add to the budget and there was no real need to subtract - I believe this has given us the opportunity to better manage our state government.

We have found ways to work more efficiently, to trim some fat, and we have done so without affecting the quality of our services to the people of Delaware.

Next week, I will present my budget for Fiscal Year 2003. Compared to the budget increases that ranged from 5.4 to 11.5 percent over the last nine years, my proposed operating budget will contain an increase of just over 2 percent, and it will include further belt-tightening measures across state agencies.

The reductions we have had to make in compiling the FY03 budget have been made to accommodate continued increases in health care costs and Medicaid as well as unavoidable new expenses in state government, such as the opening of the new courthouse in Wilmington.

The bond bill I will present is tight as well, with no cash being added for the first time in years. Of the $153 million in non-transportation projects, more than two-thirds will go to school construction and renovation.

What our proposed budget does not contain is many worthy items that, for now, will have to wait. Among them is funding for reading resource teachers for the half of public elementary schools that don't already have them, as well as a pay raise for state employees.

We have left some worthy items out in order to adhere to the principles of fiscal responsibility that have kept Delaware sound for the last two decades. As proposed, our budget stays within the 98 percent spending limit. It does not tap into the Rainy Day Fund. It does not include layoffs and it does not include a tax increase.

We should not alter a steady and successful course. In contrast to other states, while revenue growth has slowed in Delaware, we will still take in more this year than last year. And, as I said, we propose an FY03 budget that grows a little bit, but remains in balance.

Times have been tight, but we will remain in sound shape so long as we stick to the fiscal principles that got us here. Among those is that we should not build one-time money into our operating budget - which means staying within the 98 percent limit and not dipping into the Rainy Day Fund.

The current economic situation is a challenge, but it is also an opportunity. The tough times will not last - some say they can already see the light at the end of the tunnel. When we reach that light, I want Delaware to be in better shape than when it entered the tunnel. We are on the road to making that happen, and I ask the General Assembly to stand firm with me so that it can happen.

Should revenues rebound between now and June 30, I ask the General Assembly to commit that the first addition to the FY03 budget be a pay raise for the state employees who work so hard for us each and every day.

Times may change, but our values and priorities don't. Our priority right now should be to make responsible decisions so that we are poised for the next era of prosperity.

Economic development

The prosperous eras that have come before have been due to the vision of our state's leaders - not just of state government, but leaders of business and of labor. From manufacturing to chemicals to incorporations to banking, we have benefited from the ability to identify the successes of the future and lay the groundwork to make them happen here.

Two days after taking office, I created a Strategic Economic Council made up of some of the state's top business minds, to provide me with advice about attracting new jobs to Delaware and keeping the good ones we have. The Council is scheduled to deliver its first report to me early this year.

I am very pleased by the preview I have received, like the recommendation to create a special technology court to attract high-tech companies to Delaware. But I am especially pleased by its focus on biotechnology.

Many of you have heard me talk about the Delaware Biotechnology Institute, the state's premier biotechnology research facility. Having a research facility of this stature serves as a magnet to attract biotechnology and life science companies to Delaware. I'd like to introduce to you the director of the Delaware Biotechnology Institute, the state's leading biotechnology expert, Dr. David Weir.

We are currently working with several potential life science companies that may soon choose Delaware. We have had some success already with the arrival of the Fraunhofer Institute at our biotechnology park in Newark.

That's why I have asked our Economic Development Office to make biotechnology a prime focus of the state's Strategic Fund investments. And I will ask that the Strategic Economic Council continue to provide valuable advice in the years ahead as we strengthen and diversify Delaware's economy.

In the meantime, we already have much to be proud of in the area of economic development. Delaware is seeing the results of our successful efforts to bring AstraZeneca's headquarters to our state. The new buildings are going up in Fairfax and the company has begun to hire several hundred more employees to fill those new buildings.

Over the past two weeks I have had the opportunity to announce new jobs in Kent and Sussex counties. The Wal-Mart distribution center in Smyrna will bring as many as 1,000 new jobs to Kent County in the next several years. And a new vegetable processing plant in Bridgeville begins to fulfill my pledge to treat agriculture like the leading industry that it is in our state.

Delaware's economy is showing signs of progress and we can see many exciting prospects for the future. I look forward to continuing to bring quality jobs and opportunities to Delawareans.

Legislative priorities

One source of pride for me over the past year has been the wonderful working relationship I have maintained with the members of the General Assembly, so let me again welcome you all back to Dover.

From January to June last year, it seemed I couldn't pick up the paper without reading one of you saying something nice about me and the way things were going. Then you left town and all the articles seemed to be about the slogan or the fence…I just I missed you all so much! I'm so glad you're back!

But the real reason I look forward to this legislative session is the issues I want to address and the opportunity to address them with you.

I am announcing a package of bills that will increase our readiness to deal with potential terrorism, and I hope the General Assembly will take them up and pass them quickly.

Our emergency health powers legislation will ensure that our state is prepared to deal with a terrorist attack involving biological or chemical weapons. Our terroristic threatening bill will outlaw threats using false biological or chemical weapons, and will guarantee that all false threats that burden law enforcement are treated more seriously.

We have introduced legislation to ensure that evidence properly gathered by police is admissible in court. We have introduced legislation to tighten the licensing procedures at the Department of Motor Vehicles. And we have introduced legislation to protect the incomes of our courageous state employees who have been called up to serve their country, and to help us temporarily fill their vacant positions with skilled retirees.

All of these bills are important to our anti-terrorism efforts. I thank all of you who have agreed to work with us on these bills, and I ask that you pass them as soon as possible.

Also on my agenda for this year is the next phase of Livable Delaware. The cornerstone this year is Transfer of Development Rights, a tool that will preserve farmland while channeling growth to existing areas - all with private dollars, not state funds.

Currently, there are more than 100 TDR programs operating across the country - including our neighboring states. Montgomery County, Maryland, has preserved 40,000 acres of farmland this way.

Here's how it works: A farm's development rights are sold to a developer, and the farmer keeps farming. Those rights are transferred into a receiving area, along with a bonus allowing some level of increased density.

That scares people. But those areas can be attractive places to live: Neighborhoods where you can walk to school, the soccer field or the bus stop. Well-designed communities with ample open space and a convenient mix of uses. Efficient communities that focus our state investments.

I would like to see effective TDR programs in all three counties. Why? Because of farmers like Gary Warren, who is here today. He grows 135 acres of hay near Middletown. Gary just wants to keep farming, but the pressure to sell is tremendous as the farms around him turn into subdivisions as land values approach $20,000 an acre.

For the sake of Gary Warren and farmers throughout our state, I ask the legislature to thoughtfully consider TDR and other Livable Delaware legislation we will propose this year.

In addition to the enactment of TDRs, I also want to keep conserving farmland through the purchase of development rights by the state. That's why my FY03 bond bill will include $5 million for farmland preservation.

Also on the Livable Delaware agenda this year: To implement legislation the General Assembly passed last year, the Livable Delaware Advisory Committee, chaired by Lt. Gov. Carney, is developing first-in-the-nation statewide impact fees that will capture new growth's fair share of capital spending in areas outside the state's growth zones.

These fees are designed to channel growth away from those areas where the state and counties have planned little or no investment in roads, sewers, schools and other infrastructure.

I ask the General Assembly to consider a series of measures that will make our roads safer by cracking down on drunk driving. I ask that you reduce the legal blood alcohol level to .08, that you increase penalties for repeat DUI offenders and that you ban open containers of alcohol from the passenger compartment of cars. These actions will not only save lives, but will preserve millions of dollars in federal funding that we cannot afford to lose.

Together last year, we created a commission to investigate Delaware's high cancer rates. That commission will be delivering its report in just a few weeks. I expect that the commission will encourage us to keep up our efforts to control the use of tobacco. To that end, I hope that the legislature will send me an indoor-smoking bill this year.

Finally, I ask the General Assembly to work with me to regulate above-ground storage tanks, like the one that collapsed at Motiva refinery in Delaware City and the one at Conectiv that leaked into the Indian River, to help ensure nothing like that happens again.

Anti-terrorism, Livable Delaware, cancer and safety on the roads and in industry - these are among my priorities for this year's legislative session and I look forward to working with the General Assembly on them.

Conclusion

As I stand here before you, our world has shifted. Attacks on our country, an economy that is stagnant, sprawl in our state and safety on our roads - they are tests of differing magnitude but they are all challenges we face. They are challenges that come with the changing times. But we must meet them with the resolve and determination that built our state and our nation.

Times may change, but our values and priorities do not. In all matters, let us stand firm. Let us make the tough decisions that we know are the right ones. We have experienced prosperity because of the tough decisions made by those who came before us. We have the same responsibility to those who come after us.

Thank you.