Thank you, Mr. President, Mr. Speaker, distinguished members of the Supreme Court, distinguished state elected officials, members of the Legislature, Consular Corps, and citizens of the great state of Washington.
Before I begin, I want to thank you for the honor and privilege of serving as governor.
Also, I would like to express my gratitude to Mary and Diane for their support. I have always believed that one of life's most challenging and thankless roles is that of the families of people in public service. Mary and Diane have long served in that role with courage and grace, and I am grateful and proud.
I congratulate Governor-elect Locke, who will be an excellent governor, and each and every one of you in this chamber, who I'm sure will endeavor to serve the state well.
To the elected officials who served so well with me, thank you. And of this excellent new team of elected officials, I have high hopes and expectations.
The voters chose you for your integrity and ability. Thank you for your willingness to serve.
To my staff and cabinet, and all state employees and educators -- you did a great job, and I thank you.
Today, our state is in excellent shape. Our economy is strong, our business climate has improved significantly, our commitments to education and the environment are intact, and our quality of life has magazine editors consistently naming Washington cities among the most livable and the best places to do business.
There are challenges ahead, yet we have good reason to be optimistic. We are on the right track.
Over the past four years, the state's economy has improved dramatically.
Independent, private studies continue to show our economy as one of the strongest in the nation. Tens of thousands more people have jobs.
Many of our state's cornerstone industries, which have for years been the backbone of our economy, are choosing to stay here, to expand and grow in Washington, rather than move elsewhere. Other world-class companies are joining them, building an even stronger, more diversified economy. And we have opened the doors of international trade to large and small businesses alike.
Over the past 4 years, our state's unemployment rate has dropped from 8.4 percent to 5.8 percent -- more than a 30% decrease. The state budget has gone from a record $1.7 billion shortfall to a healthy reserve.
And every business day, more than 100 people on public assistance enter the workforce.
For the first time since the early 1980s, state government is growing at a rate well below the state's population.
And during the coming biennium, state general fund taxes are already lower than they were four years ago.
Over the past four years, we have turned our economy around and we have greatly improved the state budget. I am proud of those accomplishments.
But I wouldn't be speaking from my heart if I didn't tell you what I am most proud of is that we have accomplished those goals without turning our backs on the needs of children, or on those for whom a stronger economy doesn't always mean more food on the table, or those who don't yet have the skills to apply for one of the new jobs.
And, we have improved our economy and our business climate without weakening our commitment to the environment.
Today, fewer families have to choose between paying rent and seeing a doctor when their children get sick, because nearly 195,000 children in low-income working families now have health care coverage.
And more than 143,000 adults who might otherwise have been shut out of the health care system altogether now receive benefits through the state's very successful Basic Health Plan.
More children are going to class ready to learn, because thousands more kids are receiving free or low-cost breakfast in school.
More young adults are able to attend college, and thousands of at-risk youth are learning valuable job skills through the Washington Service Corps.
Thousands of low-income working parents are able to keep their jobs without worrying about whether they can afford child care, because during these four years, we have eliminated the statewide waiting list for subsidized child care.
We have given businesses a reason to move here and to stay here, and we have taken steps to help more people benefit from our economy and our quality of life.
Today, all of us in this chamber, and those watching or listening elsewhere, can be very proud to live in a state where we share a commitment to improving what we can, preserving what we must, and never losing sight of the belief that Washington is a great place to live, to work, to raise a family, and to enjoy life.
Today, the state of our state is clearly very good.
The challenge, over the coming months and years, is to continue that prosperity without losing sight of the reasons why all of us live here, and to go forward without leaving behind those who have been denied the tools they need to keep up.
In the face of tighter budget constraints and even deeper cuts coming from the federal government, that task will not be simple.
Keeping our state on the right track will require continued vision and courage especially by all of you in this chamber.
One thing is certain, however: There are a few guaranteed ways of not keeping our state on track for the future.
A business is only as good as its workforce. Unless we take steps to ensure that our educational system both K-12 and higher education can keep pace with a growing demand and meet the needs of tomorrow's employers, our economy and our quality of life will pay the price.
Over the past four years, we have proven that a healthy environment is good for business. Time and again, officials of companies that locate here have told me how important it is for them to settle in a place where their employees will want to live. In the state of Washington, good environmental policy is good economic policy.
During the decade of the 1990s alone, our state's population is expected to grow by more than a million people the fastest rate of growth since the war years of the 1940s.
That growth will put tremendous pressure on our roads, our land, our watersheds, and our environment.
The state's Growth Management Act is one of the best ways to ensure that we think about how and where we want to grow before it is too late and before unplanned development destroys even more of the natural drainage systems that are so vital to flood control efforts.
I am of course referring to Initiative 601. It is important state policy, and I know the Legislature will honor its intent. But Initiative 601 was not carved in stone and brought down from the mountain. Across-the-board spending limits that do not account for growing needs will create across-the-board problems long into the future -- problems that can be avoided with minor amendments that stay consistent with the voters' intent.
The strength of our state lies in the contributions of every single person who lives here. We must stay committed to equal opportunity, equal rights, and respect for diversity. To those who would bring hate and intolerance of any person, belief, lifestyle or circumstance into our state, I say "hands off."
Today, nearly a quarter of the nation's children live in poverty. We're doing a little bit better in our state, but even our statistic of one-in-six is far too high. Building America's future on a foundation of one quarter of our kids growing up in poverty is just plain dangerous. We simply must, as a society, make our children a higher priority.
Adjusting to the upcoming federal cutbacks and new state responsibilities is one of our greatest challenges. The worst of all possible solutions is for the state to act oblivious to those changes, make even deeper cuts, pass responsibility onto others and force people into the streets.
Here in our state, the new federal welfare law, along with other cost-cutting measures approved by Congress, is expected to reduce federal dollars by $619 million over the next biennium.
Those cutbacks will affect everything from food stamps and food banks to housing assistance and environmental protection programs.
In our state, more than 200,000 low-income families will face cutbacks in food stamps and other food subsidy programs.
That includes about 38,000 legal immigrants many of them working parents with children who will be dropped from the Food Stamp Program entirely. And about 11,000 legal immigrants who are blind, elderly or disabled will lose eligibility for the federal Supplemental Security Income program, which provides about $470 a month to low-income people who can't work.
Our state's legal immigrants are people who have always played by the rules.
In addition, nearly 1,000 non-immigrant children with severe behavioral disorders will lose disability benefits they had received through the federal SSI program. Most are in foster homes.
We have both the financial resources and the moral obligation to ensure that low-income children, families, and senior citizens affected by federal cutbacks are not left out in the cold.
In my budget proposal, I have asked the Legislature to replace some of the deepest federal cuts with $220 million to help our neediest neighbors. That commitment might require a minor adjustment in Initiative 601, and that you forego some of your additional desired tax cuts.
Most of the problems we count on government to deal with would be solved if everyone had a living-wage job. Today especially, the fallout from families that are torn apart by poverty, or those who have simply lost hope, affects everyone.
And today, all of us must come to terms with a new reality: that helping people enter the workforce is in everyone's best interest, and punitive proposals that pass judgment on a person's inability to find a job have never put anyone to work.
I have been fortunate. I grew up in a healthy environment, with two parents who loved my sisters and me, and loved each other. There were no drugs, there was no abuse, there was no violence.
Most of the kids I went to school with came from the same background. In fact, most of the people in my generation grew up with those values and advantages. When we were old enough, nearly all of us got jobs and became productive members of society. That is what our parents had done; and that is the path they helped create for us.
The cards were never stacked against us, as they are for so many people today.
Today, thousands of children grow up in an environment where there is physical violence, mental abuse, or neglect; an environment where, at best, only one parent plays a role in a child's life; where handguns are a tragic ticket to respect on the streets; where peer pressure is unlike anything any of us have ever known.
When some of these kids become young adults, their troubled lives are in the hands of many who still believe that what worked when they were young tighter boot straps, their parents' expectations, a little help from mom and dad ought to be enough for anyone.
They believe that telling someone to "get a job" is enough to help them overcome a lack of job skills, a history of abuse, a lifetime of disadvantages. It's just not that simple. Like it or not, the world has changed.
We all share the goal of getting able-bodied people into the workforce. In our state, we have programs in place that are doing exactly that in record numbers.
Our success is proof that the vast majority of people on welfare want to work, and if they are given the right tools, they will not only join the workforce, they will stay in the workforce.
Choosing to believe otherwise to justify politically popular rhetoric is self-defeating fantasy, and it simply will not work.
And unless we continue to take steps that address today's reality rather than yesterday's expectations; unless we base our policy decisions on something more substantial and more compassionate than an attitude of, "I did it, why can't they," a huge number of people will fail in our society. And that will mean we will fail.
We will fail because most people who are driven into the workforce without job skills end up in minimum wage jobs -- if they can find jobs at all -- and minimum-wage jobs do not pay enough for single-parent families to make it on their own.
A single parent with two small children who works full time, earning minimum wage, pays about 72 percent of his or her salary in child care expenses, and takes home about $74 a week.
That adds up to $300 a month, out of which a working parent must pay the rent, put food on the table, pay utility bills and transportation costs and just plain hope that no one gets sick.
We will fail because forcing people into minimum-wage jobs or onto the street will do nothing to solve the many problems that have kept them from self sufficiency -- the lack of job skills needed to earn a living wage, an inability to afford basic medical care, the need for quality, affordable child care.
And we will fail because a growing gap between those who have much and those who have little will continue to tear at the fabric of our society until the only thing that unites our communities is a sense of fear, anger, resentment, and hate. We are better than that.
Those who call our state home are some of the most generous and giving people in the world. We help each other when we can. During the holidays we hear more stories of people who are having a rough time, and our instinct is to help make things right.
During the recent winter storms, I heard dozens of examples of people looking out for each other; clearing tree branches out of neighbor's driveways, delivering groceries to people who couldn't leave their homes, pulling cars out of piles of snow.
I heard about workers staying on the job past midnight to help drivers who needed tire chains, and I met utility crews who were working around the clock day after day.
There are countless other examples. But whether we give blankets to the homeless or help push cars out of snowbanks, when someone needs help, most of us are eager to lend a hand.
Yet despite our generosity, the greatest problem facing America today is the growing number of people in our society who are truly in need.
Whether they are workers who have been downsized out of a job; people who have never had the skills needed to keep up; or those whose circumstances have just taken a turn for the worse, thousands of people in our state wake up every single day facing challenges every bit as difficult as a winter storm.
Their stories are compelling. Over the past year, I've met dozens of people in our state who have left public assistance and entered the workforce. Almost to a person, they have told me -- sometimes with tears in their eyes -- about how desperately they wanted to get off welfare, just to have a measure of self respect, and how grateful they were to finally be earning a living.
I learned of a single mother who just wanted to earn enough money to afford to live in a house or apartment -- so her children could go to school without having to lie about the place they call home.
And I met a man who had grown up on public assistance, who told me that as a child, the greatest wealth his family ever knew was the day the food stamps arrived.
For him, as for so many others, the difference between continuing that cycle of desperation and becoming self-sufficient was the chance to learn, the tools to advance, the opportunity to succeed, and a job.
I am certain the people of our state will step forward to help those who are in real trouble, if given the chance. Today, more than ever before, it is absolutely critical that we not turn back from the progress we have made, and that we commit ourselves to ensuring that all people have an opportunity to work and to share in our prosperity.
We live in the wealthiest country on earth. We pay lower taxes than nearly any other industrialized nation -- only Turkey and Australia pay less. In Washington state, we are now enjoying one of the nation's strongest economies and greatest qualities of life.
Over the past four years, we have made significant strides in making government more efficient. We can do more, certainly. No government -- including ours -- should ever be beyond reproach. Few exist that could not be improved upon.
But we're kidding ourselves if we choose to believe that in today's world, government is not important to a good economy and a higher quality of life. In a democracy, government is not the enemy; it is what we, the people choose to make of it.
In our state, we have worked hard to create a balanced approach to government that recognizes the need for tax and regulatory policies that help businesses prosper without compromising our environment, our health and safety, or our children's future; a balanced approach that recognizes that today's prosperity carries with it a responsibility to invest in our future, support education and workforce training, build a transportation network that helps get people to work and products to market, and preserve our quality of life.
A strong economy gives us both the capability and the responsibility to do more than widen the gap between those who have much and those who have little. It allows us the flexibility to decide what we value as a society, and the freedom to invest in policies and practices that help close that gap.
We are, today, at a crossroads.
One path divides us, denies the common good, and closes the door of prosperity to all but a few. The other path unites us, seeks the common good, and opens the door of opportunity to everyone.
Our decision to follow the path of least resistance and political expediency, or the path of right decisions and political courage, will determine our future and that of our children and grandchildren.
Let it be our quest to seek the greater good; to choose justice over inequity, possibility over privilege, hope over despair.
Let us take the road less traveled, if that is where fairness lies.
And let us end our days with promises kept:
That we fought for hard-working people,
That we were good stewards of the earth,
That we stood against discrimination,
That we gave all people a chance to work and to prosper,
And most important, that we took care of