Prepared text of Gov. Jon Corzine's State of the State speech

Happy New Year and thank you all for attending today's State of the State.

Reverend Clergy; Senate President Codey; Speaker Roberts; Majority Leaders Sweeney and Watson Coleman; Minority Leaders Kean and DeCroce; Chief Justice Rabner and Justices of the Supreme Court; Members of the Legislature; Members of my Cabinet; Congressmen Pallone, Payne, Rothman, Holt, and Sires; Governors Florio, DiFrancesco, and Bennett;

A special welcome to Indian Consul General Prabhu Dayal. Consul General, all of us were saddened by the recent terrorist attacks in Mumbai. We pray that all those accountable will be brought to justice and that the community of Mumbai will soon heal.

Honored guests and my fellow New Jerseyans --

Today, as we assess the state of our state, and look ahead to the challenges of 2009, I cannot help but feel an overwhelming sense of pride in the people of New Jersey.

Despite the challenges of today's national economic crisis, the people of our state are pushing forward in building better schools ...
broadening access to health care ...
making our streets safer ...
and building a more secure world.

Our state has long been blessed by its deep well of talent and by the character of its people -- people who have built, in good times and bad, a tradition of achievement and excellence.

From the founding wisdom of Stockton and Kean ... to the genius of Edison and Einstein ... to the proud voices of Robeson and Springsteen...

From the poetry of Carlos Williams and the prose of Toni Morrison ... to the leadership of President Wilson and General Odierno ...
... New Jersey and the nation have been shaped by our state's extraordinary people.

This era is no exception.

Our determination remains strong -- our drive is undiminished -- and our work ethic knows no bounds.

We are a creative, "can-do" people who, with fortitude and spirit, will work through today's challenging times.

Despite the economic tsunami that's engulfing the nation, I believe that the character and fundamentals of our state are equal to any task we face.

We generate the highest incomes in the nation. We educate our children in schools that are the envy of others. We maintain a highly respected justice system.We provide a strong safety net for the most vulnerable.

And, we have always welcomed newcomers from other shores, embracing the value of diversity and pluralism.

Yes -- New Jersey is a state committed to achievement and excellence.

Now at a time of national crisis, New Jerseyans are leading the nation in confronting our security and economic challenges.

Last week I was in Iraq, where nearly 4,000 citizen-soldiers of our National Guard, Reserves, and active duty personnel are serving.

Today, we have the largest foreign deployment of New Jersey's National Guard since World War II.

With courage, discipline, and professionalism, our men and women in uniform are making steep sacrifices so that we might be safe. We are all grateful.

Major Dwayne Kelley was one of those citizen soldiers. Last year, he went to Iraq for his third tour of duty. He left behind a wife, two daughters, a mother, a sister and a brother -- a family bursting with pride for him.

But his tours in Iraq weren't the only job in which Major Kelley put his life on the line for his fellow citizens. Major Kelley was also Trooper Kelley.

Brought up in Willingboro ... raising his family in South Orange ... Kelley served more than 20 years in the State Police, where he attained the rank of detective sergeant first class as a counterterrorism expert, fluent in Arabic.

Major Kelley ... father and husband ... sadly was one of 10 people -- 4 Americans -- killed in a roadside bomb in Sadr City on June 24, 2008. Our hearts go out to his family.

His widow, Manita, and their daughter, Mushirah, intended to join us here today, but they had to tend to a family emergency.

Words cannot express their sacrifice ... their fortitude ... or their loss. God bless them.

Whether it's the brave men and women I met in Iraq ...or the food pantry volunteers -- including Assemblywoman Coyle -- I joined several weeks ago in Bound Brook ...
... or the advocacy and faith-based groups counseling people on how to modify their mortgages and stay in their homes ...
... or small business owners struggling to meet payroll each week ...

New Jerseyans are tough, and resilient, and we are fighting back against a national economic recession exceeded in depth and duration only by the Great Depression of the 1930s.

We see that spirit in every public school, every senior center, every hospital, and in every place where people come together, day-by-day, to reaffirm a basic truth: 'We are our brother's keeper -- we are our sister's keeper.'

People also came together last November 4th, when our citizens in record numbers voted overwhelmingly to elect Barack Obama our next president.

In doing so, our voters embraced a new vision for America -- a progressive vision we share in New Jersey. In fact, it's a vision we've been working to achieve for three years --
... a vision that we must responsibly share our economic bounty ... that all of our children deserve a thorough and efficient education ... that health care is a right ... that we have a moral responsibility to be good stewards of the Earth.

Barack Obama's vision is our vision.

And now, thankfully, starting next Tuesday, New Jerseyans have a partner in Washington -- a partner who will join us in pursuing a common vision.

Change is in the air. With that change, I truly believe that as a nation and as a state, our best days lie ahead. That said ... it's impossible to ignore the deep challenges we face today.

We have been in the grips of a national recession since the fall of 2007. Our country's financial system hovers near collapse. Home values, personal savings, and the securities markets have plunged.

The national unemployment rate has soared to over 7%, with expectations of a 9% to 10% rate in the year ahead. Our citizens' economic security has been compromised.

Our people did not cause this meltdown -- its causes are beyond their control and are national ... even global ... in scope.

The cost of this colossal economic meltdown is far more than the trillions of dollars of lost value in the securities markets and economic production -- it goes well beyond any batch of statistics. The cost must be understood in the pain and anxiety of our neighbors.

Last month, I attended an anti-poverty conference here in Trenton -- a conference where I heard three life stories of people struggling just to stay afloat in these troubling times.

A single mom told us that she lost her home to foreclosure because of a predatory mortgage.
She worked for 30 years as a corrections officer -- never did she imagine she would be out on the street.

A young man described how he lost his job, then his apartment, and then his ability to put food on his table. A young woman told us how she struggled to get critical health care after she lost her job and her insurance, and was being forced toward bankruptcy.

These three people were prepared to work hard and play by the rules.They were caught up in forces well beyond their control. And when good people are at the end of their rope, they need to know that government is there to lend a helping hand.

I wish I could say the impact of the national recession is limited to a few stories ... but it's not.
- Food pantry calls are up 30% to 40%.
- 48,000 New Jerseyans received foreclosure notices in 2008, and their ranks are growing.
- The number of unemployed and uninsured is exploding.

It is in this context that we have made the economy Priority #1, Priority #2, and Priority #3.

It is in the human context that we have initiated efforts to combat hunger, to provide home heating and utility assistance, to offer legal aid, and to address the foreclosure crisis through mediation and financial assistance.

Our foreclosure prevention initiatives are a model for the nation.

Similarly, New Jersey is at the forefront of the nation's efforts to provide healthcare to our citizens. When the Bush administration tried to kick 10,000 kids out of New Jersey's Family Care program ...we said 'no!'

Instead, we expanded our program to cover every child and enrolled more working and moderate-income families.

Thank you, Senator Vitale, for your leadership on broadening access to healthcare. The Senator knows, and we know, that getting people insured saves money ... and saves lives.

Another critical element of our health system is our network of community health centers, which serve almost 350,000 uninsured or underinsured New Jerseyans.

We need these clinics today more than ever, as more people lose their insurance or struggle with their out-of-pocket expenses.

That's why we've increased our reimbursement rates and provided additional grant funding.

One network that will be receiving grant support is Community Health Care, which operates 17 facilities in Cumberland, Gloucester, and Cape May Counties.

Community will be using these funds to expand innovative prenatal care, helping women maintain healthy pregnancies while reducing infant mortality.

We are joined today by Dr. Michelle Torchia, who has made healthy pregnancies and babies her life's mission at Community. Thank you, Dr. Torchia, for all that you do.

I'm proud that the State has been able to partner with private institutions like Community Health Care even as we had to make major cuts to balance the budget.

As you recall, the fiscal 2009 budget cut spending by $600 million year-over-year, as we anticipated a gathering national recession and shrinking revenues.

By the close of the calendar year, the deepening recession had required us to cut spending by another $800 million. That's a total of $1.4 billion in cuts in this fiscal year alone.
Let me repeat -- $1.4 billion ...
... not in the rate of growth, but in absolute dollars.

It's been painful, and we've had to make many ugly choices. But together with my partners in the Legislature, we are making the hard choices.

Senator Buono and Assemblymen Greenwald have been especially diligent in taking on this challenge, and I thank them for their partnership.

Just as we've taken action to discipline spending and shore up New Jersey's safety net for our most vulnerable ... we've also built a foundation for future economic recovery.

We began by offering small and mid-size businesses $3,000 for each new job created over the next year.

Additionally, wherever I go, small business owners tell me that they're having trouble getting loans. That's why we're encouraging new lending through innovative credit facilities and placing deposits with New Jersey's community-oriented banks.

Most importantly, we are creating jobs by accelerating public investments in roads, bridges, school construction, and the new mass transit tunnel under the Hudson.

In the next year alone, we're committing $4.7 billion in high-return investments ... saving or creating as many as 42,000 New Jersey jobs.

We all know that infrastructure matters. We saw the high cost of failure in Minneapolis and New Orleans. These investments not only create jobs today -- they will provide returns for all New Jerseyans tomorrow.

Just talk to the students I visited at the Oliver Street School in Newark. Their building is overcrowded and crumbling -- classes in English as a Second Language are held in the hallway -- special education classes are crammed into a windowless coat closet. Oliver Street School was built in 1869. Ulysses S. Grant was president that year.

Can we really expect our children to learn and to grow to their fullest potential when their classrooms are in a closet?

That's why I fought to authorize $3.9 billion in new school construction funds --money that can be leveraged into $5.4 billion in investments across the state.

My hat goes off to Senator Rice and Assemblyman Coutinho, who stood with me to do right by New Jersey's school children.

Through all of these initiatives, we're planting the seeds for future prosperity.

We are positioning as many people and businesses as possible to survive the national recession ... and then thrive once the inevitable recovery begins.

We've structurally reformed our oft-criticized corporate tax code ...reforms that will encourage investment, and research & development ... reforms that will allow businesses to recoup operating losses and competitively align our rates with those of surrounding states.

These actions are especially beneficial to our core biotech, pharma, high-tech and alternative-energy sectors.

We've taken steps to expedite regulatory review and offer permit relief in this time of recession.
It is through this comprehensive approach that we expect to maintain a lower unemployment rate than the rest of the nation.

Today, New Jersey's unemployment stands at 6.1% -- nationally, the rate is 7.2%. Make no mistake --as long as one New Jerseyan is unemployed, we have work to do.

While we are reducing corporate taxes, we have also expanded the Senior Freeze on property taxes to include 70,000 additional senior households.

And, we have continued to expand the Earned Income Tax Credit ... making work pay.

Let me repeat -- getting our state through this national economic crisis is my Number One, Number Two, and Number Three priority.

Current economic circumstances dictate that we take steps which in normal times I would not.

It is regrettable that over a period of at least 15 years, when the sun was shining and the economy was strong, New Jersey failed to put its financial house in order ... particularly our public pension system.

It's only because of today's financial crisis that I've recommended giving local governments the option of deferring a percentage of their employee pension payments.

To be sure, I have demonstrated a commitment to the solvency of our pension system.

Over the past three years, we've contributed more money to that system than previous administrations have in the preceding 15 years combined.

Our plan doesn't require towns to put off pension payments -- it simply gives them a tool to work through this financial emergency.

Some may not need to exercise their option. But others will have to either seek cap waivers, leading to significant property tax hikes, or impose unacceptable cuts in public safety and other vital services.

Yes, the economy and its harsh impact on our people remain our most significant challenges.
That said, we have not turned our back on long-term strategic goals like reforming and restructuring our state finances ... improving government ethics ...enhancing public safety and education ...and protecting the state's most vulnerable citizens.

Even as we've cut the budget by $1.4 billion, we've continued to reshape and reduce the size of government.

Today, there are nearly 4,000 fewer employees on the state payroll than when I took office and 3,000 fewer at our independent authorities.

That's 7,000 people! By comparison, nearly half of our municipalities have fewer residents than our personnel reductions.

We've also scrubbed line-by-line state government for inefficiencies and implemented departmental consolidations ... We ended Christmas tree spending ... We improved the timing and transparency of the budget process ... We approved a constitutional amendment to give voters a greater voice on state borrowing ... These ideas have been on the table for nearly two decades. We made them happen.

Additionally, starting with the upcoming year's budget, I have through Executive Order required that recurring expenditures be matched with recurring revenues.

We're ending our dependency on gimmicks and one-shots. Meaningful reforms are in place. We are truly doing more with less.

This past year, we also made progress on ethics reform, although not enough to my liking.

As you know, I've taken steps through executive orders to close loopholes in the state pay-to-play ban ... including by extending that ban to state redevelopment contracts.

We created the office of Comptroller to audit the use of public money.

I put a former prosecutor, Matt Boxer, to work systematically searching for breakdowns in financial controls and government efficiencies.

Now I am asking you, the Legislature, to end pay-to-play, wheeling, and no-bid contracts at all levels of government ...to lower the limit on campaign contributions to county committees... and to make the state ethics committee a public- member only body.

These initiatives come in addition to steps taken by the previous Legislature to end dual-office holding, among other measures.

I want to acknowledge the contributions of Senate President Codey who, as governor, helped enact one of the strongest state pay-to-play bans in the nation ... and the efforts of Speaker Roberts, who overhauled the Legislature's ethics commission and has been a champion of publicly-financed campaigns.

With continuing ethical and legal breakdowns by some, and with pay-to-play headlines unfolding in Alaska, Illinois, and other states, we must act to restore the public trust.

People deserve a government they can trust. People have a right to know that when a decision is made, when a contract is awarded, when a law is passed, the officials in charge had only one thing in mind: the public good.

Let's complete our agenda on ethics because it's the right thing to do. In addition to my fiscal and ethics reform agendas, no issue has been closer to my heart than education.

Our schools, from pre-K through college, rank among the very best in the nation.

This month, Education Week rated us as one of the top five systems for overall performance in the nation and number two in providing a chance for our graduates to succeed in life.

Test scores across the state reinforce their conclusion. Results count. We already lead the country in graduation rates and in access to quality pre-school.

While there are clear exceptions, New Jersey schools give most of our children an exceptional opportunity to build a bright future.

The new school funding formula for which we now are seeking court approval will only strengthen our commitment to success.

That formula recognizes that 50 percent of disadvantaged students live beyond the borders of Abbott districts.

The formula fulfills the state's obligation to provide a thorough and efficient education to all children, wherever they live.

In fact, even though we cut the overall state budget by $1.4 billion, we've held firm in increasing total spending on education by nearly $500 million.

Beyond our financial commitment, we're also working to upgrade standards, curricula, and graduation requirements in all of our schools.

We've been collaborating with Colin and Alma Powell's effort to substantially lower dropout rates. Again, obviously, results matter, but outcomes are best measured in more than just statistics.

We educate our young people one student at a time. We are joined today by one of New Jersey's bright hopes for the future.

Kamaris Loor came to New Jersey from Ecuador in 1995 and is on track to graduate this spring from Union City High School with a 4.2 grade point average -- I didn't even know you could get a 4.2 GPA.

Kamaris is a county champion in the 100 meter butterfly -- she did cancer research at the Susan Lehman Cancer Research Center -- and next year, Kamaris will attend Brown University to begin a joint undergraduate and medical degree program.

She is clearly on a track of success. But ... behind every student's success is an exceptional teacher.

Nadia Makar is the science chairperson at Kamaris' high school, where she has been a career educator for 35 years. Nadia is a prime example of the excellence you'll find among teachers in New Jersey's classrooms.

Kamaris isn't alone. In fourth, eighth, and eleventh grades -- and in both language arts and math -- test score improvements in Union City are beating the state average. I'd like to ask Kamaris and Nadia to stand and be recognized -- not only for what they've achieved, but in recognition of all the great schools across New Jersey.

Beyond pre-K through 12,I need not tell you about the excellence of our county and state colleges and public universities.

They continue to provide an affordable path for our young people from all walks of life to access the American promise.

To that end, even in difficult times like the last three years, we've expanded financial aid for New Jersey's low- and moderate-income college students.

Now ... let me turn to another focus for success.

We've taken great strides in making New Jersey a safer place to live.

In 2007, we achieved a 7% statewide reduction in violent crime and an 11% reduction in murder. In the first three quarters of 2008, we have achieved another 7% reduction in violent crime, and an additional 6% decrease in murders.

Eighteen months ago, I launched a statewide anti-crime plan in cooperation with local authorities to bring safety to our streets and neighborhoods.

We addressed the issue comprehensively through prevention, re-entry and enforcement initiatives. Gangs were stealing young lives and leaving people in fear of letting their children play on our streets.

So ... we marshaled resources across state departments and local law enforcement agencies to focus on reducing gang, gun, and drug activity.

The results are showing up on the streets of Newark, Asbury Park, Vineland, and communities throughout the state.

I want to thank Assembly Majority Leader Watson Coleman for her leadership on this issue, and Mayor Booker for his hard work and cooperation.

Just as we are addressing crime, we have been tackling highway and pedestrian safety, and we've realized exceptional results.

One of our most important safety measures is increased awareness of seatbelt use. As you can imagine, I have a personal stake in this issue.

I'm blessed to be here today, and if one more person decides to buckle up because of my poor example, then something good will have come from my mistake.

Through enforcement and education -- particularly for teenage drivers -- and with previously higher gas prices ... highway deaths dropped by 127 lives year over year -- that's a drop of nearly 18%. Highway deaths are down to a level not seen in the past 25 years.

Fewer drunk drivers on our roads, stricter licensing requirements on young drivers, and enforcement of seat belt laws have resulted in fewer accidents and fatalities. Safer roads and better drivers should result in lower auto insurance rates and overall economic costs.

On another public safety front, the protection of our most vulnerable children remains one of our highest moral responsibilities.

Over the past three years, our newly created Department of Children and Families took a sometimes broken, understaffed, and flawed system and made it a ray of hope for at-risk kids.

The department found permanent homes for 4,200 children, drastically reducing the backlog and caseloads. And the department recruited over 5,200 new foster and adoptive families -- a net gain of more than 1,800 safe, stable, and loving homes for foster children.

We rebuilt a broken system and are on track to becoming one of the very best. These efforts are driven by dedicated public employees -- people like James Williams.

As a senior case worker at the Division of Youth and Family Services, James stands up every day for New Jersey's most vulnerable children.

So on behalf of all his colleagues, I'd like to invite James to stand up and accept the thanks of a grateful state for moving us from a position of weakness to a position of success in protecting our children.

These highlighted achievements and work in no way describe the entirety of our agenda and activities.

Keep in mind:
* We enacted a family leave insurance program -- the second in the nation.
* We strengthened our worker's compensation system.
* We continued reform of our public pension system.
* We appointed record numbers of women and minorities to the bench.
* We created the office of supplier diversity.
* We built and dedicated a long-overdue World War II memorial.
* We reformed the Charity Care funding formula to better protect health care for our most vulnerable, especially in our urban areas.
* We created an inter-agency Council on the Prevention of Homelessness.
* We finalized the Highlands Master Plan.
* We built and participated in a regional auction system for carbon credits.
* And ... we have delivered a nationally recognized Energy Master Plan as well as a Greenhouse Gas Reduction Plan.

No one has been more instrumental in shepherding environmental initiatives than my former DEP commissioner, Lisa Jackson.

I had hoped to introduce Lisa today, but tomorrow, I'm proud to say she is appearing before the United States Senate for her confirmation hearing as EPA Administrator.

As you know, Lisa is the only state commissioner to be nominated by President-elect Obama for his Cabinet -- and I know you'll join me in wishing her great success.

Now, as we look toward fiscal year 2010, it's probable that the national recession will continue to take a toll on our revenues, and in March, I will undoubtedly propose additional, painful cuts.

Even with these harsh realities, we must continue to do everything we can to limit the impact of budget cuts on the state's most vulnerable citizens, our children's education, and public safety.

Some of our work outside of the budget will be complex and controversial.

A case in point -- today, I am sending formal instruction to the Local Finance Board to firmly enforce the 4% tax levy cap. Last year, we saw 80% of reporting municipalities come in over the cap. In fact, 30% came in with increases of 10% or more.

We need to reverse that trend, and that's why it's important that we enact the pension deferral bill to give towns the tools they need.

I will also ask Commissioner Doria to request, for both the Legislature and myself, concrete recommendations on cost saving from shared services and consolidations to be submitted from the Consolidation Commission by March 31st.

I will also direct the COAH board to allow for maximum flexibility and ample time for collaborative review of all the 240-plus affordable housing plans submitted by the 80% of the required municipalities who did the right thing and filed plans by December 31st.

Finally, recognizing the economic realities and pressures of the current economic environment, I am calling today for a one-year moratorium on the 2.5% developer's COAH fee while additionally exempting projects that were in the pipeline before the fee was instituted.

I look forward to working with Speaker Roberts, and Senators Codey and Lesniak, who all support this initiative.

A second area of vital importance and concern is open space preservation, which has always been one of New Jersey's priorities ... and which should be addressed before June 30th.

It is my preferred approach that we put in place a long-term funding solution.

That said ... we need, at a minimum, an interim bonding question for November's ballot to extend the financing the voters approved in 2007.

Between the budget, ethics, and job creation for the economy, I will need bipartisan cooperation to address the people's agenda.

My door is always open to anyone who is seriously interested in putting good ideas ... intellectually honest ideas ... on the table.

One good idea I like ... is the posting of our state expenditures on the Internet as suggested by a number of Republican legislators.

I think this is a credible way to increase accountability and transparency in our budget process, and so I have directed the Comptroller to review how to undertake this initiative.

In closing, three years ago, I came to Trenton to make our state a better place for all our people...to move an agenda on fiscal responsibility ... on ethics ... on early childhood education ... on the environment... and on health care.

We've made important strides ...There surely is more work to do ... and I'm committed to finishing the job. We don't choose the circumstances in which we govern.

Let me repeat ...my first priority -- my second priority --and my third priority -- is to get our state through these challenging economic times.

Our job is to help our citizens cope with this crisis, and lay a foundation for a strong recovery.

Great crises, through necessity, make us think clearly and practically about the most important responsibilities of government.

Necessity forces us to choose our most important objectives. Necessity focuses us on our most vital legacies. In 2008, my second and third grandchildren were born.

When I look at those two boys -- and when I think of the young men they'll one day become -- when I think about the world we're creating for all of our children and grandchildren -- I'm certain that the work we're doing is important.

We must strive for universal pre-school, so that all of our children have a chance to succeed in a competitive world.

We must do our part to fight climate change by investing in energy conservation, alternative power, and mass transit ...We must flat-out build the new mass transit tunnel between New Jersey and New York -- doubling the number of passenger trains that cross the Hudson each day.

We must work with county executives, freeholders, mayors, and school boards to make New Jersey more affordable by holding the line on local property taxes.

In the coming year, we must build on our commitment to healthy children and healthy parents ...I entered public life because I believe that government matters, that government can play a constructive role in people's lives. I'm sure you feel the same.

Almost 35 years ago, I chose to live in New Jersey because of its great strengths.

I raised my children here, and through good times and bad, I have always been able to count on my community to stand together.

Today ... we must stand together. In ordinary times, ours is a tough job ... but these are no ordinary times.

Given the magnitude of the national economic crisis, the challenges we face are unprecedented and daunting.

I've never run from a challenge, and I'm not running from this one.

Everywhere I go, people ask me two questions: How long will this recession last? Have we seen the worst of it?

I wish the answers were easy. They're not.

The national recession undoubtedly will intensify in the next few months and will likely last beyond 2009. New Jersey is faring better than other states by most standards.

But when one worker loses his job -- when one family loses its home -- when one child goes without health care -- our work is incomplete.

Hubert Humphrey once offered that society's character is measured by how it treats those in the dawn of life --its children ... how it treats those in the twilight of life -- its seniors ... and how it treats those in the shadows of life --those with special needs, the sick, and the forgotten.

New Jerseyans have a strong character, because New Jerseyans believe in our common good.

That's why I have confidence that if we pursue the common good -- together -- we will get through these difficult times and emerge even stronger.

Let me say this to the people of New Jersey: I may not always say what's popular, but you can be sure that what I say comes from the heart.

I know that government can be a force for good in people's lives.

Members of the Legislature, we may not always agree ... but we must, always ... share ... a common commitment to making the world a better place for this generation, and the beyond.

It's fitting that on this 200th anniversary of Abraham Lincoln's birth, we conclude with his hope:

"With firmness in the right as God gives us to see the right ... let us strive on to finish the work we are in."

Thank you and may God bless New Jersey and America!