Lieutenant Governor Taylor, Speaker Coleman, Members of the General Assembly, Justices of the Supreme Court, Judges of the Court of Appeals, members of the Consular Corps, other honored guests-andAssembly - and especially my wonderful wife Mary, without whose love and support I would not be here today.

My fellow Georgians, tonight I am honored to come before you to report on the state of our great state.

We gather at a moment of dramatic changes in Georgia. Changes in how we work, in how we live, and in how we are governed.

Tonight is the first time any of us-myself included-has heard a Republican Governor give a State of the State address.

And this General Assembly is a different body than the one I left just over a year ago. Today we are truly a two-party state, with shared representation in the legislature and shared responsibility for governing.

The mandate I heard on November 5th was that Democrats and Republicans must now work together for the benefit of Georgia.

These political changes may be upsetting to some, exciting to others, but they merely reflect bigger changes in our state as a whole.

Within the lifetime of many Georgians, we were a poor state in a region hobbled by poverty. Today we have-despite the recent recession-one of the leading economies in the most dynamic region of the country.

Our population has more than doubled since 1960, and it has grown increasingly diverse. Those of us born in Georgia have welcomed millions of new neighbors over the years.

These new Georgians have come to get an education, to find jobs and to start businesses. They've come to raise families and to retire. They've come because anyone who looks can plainly see what a blessing it is to live in Georgia.

We are truly blessed. You can see that however you travel across Georgia, but I think you get a special perspective when you fly.

One of my great joys in life is being a pilot. There is a great sense of freedom in soaring through the sky. You get a different perspective up there. Seeing things that aren't so apparent from the ground.

There is also great responsibility that goes with piloting a plane-concern for proper maintenance and safe operation, the comfort of your passengers, and being prepared for any emergency.

In preparing my remarks for tonight, I thought about this new flight our state is taking together, all 8.5 million of us. It is a flight of opportunity that brings with it much responsibility for deciding our state's future.

We've got a new pilot in the cockpit...a new crew in the cabin.

We've got a craft that has always been dependable. But it does need a tune-up.

And we're short on fuel right now, so we've got to fly smart, efficiently and effectively to reach our destination.

The weather is uncertain. The skies are still full of dark economic clouds. We'll have a bumpy ride for a while.

But Georgians, let me be clear-we will chart our course carefully, prayerfully. We will keep a steady hand on the stick.

And we will soar to new heights of accomplishment in Georgia.

A growing population has brought many changes to our state. But whether they were born in New York or New Delhi, people choose to become Georgians because of those things about our state that will never change.

Like our core values of faith, family and freedom. The way we stick together when times are tough and look out for each other when danger threatens.

The greatness of Georgia is, and will always be, in our people. In our optimism, our patriotism, our enterprise, our compassion for one another.

Sustained by those qualities, the Georgia family can overcome any challenge we face. Georgia is strongest where it counts the most-in the collective character and spirit of our people.

And that is what will lift us up, whatever storms we meet.

Flying is in many ways an exercise in trust. And so is governing.

Throughout my campaign last year, I told the citizens of Georgia that if they'd give me the opportunity to pilot our state I'd make them proud.

I promised to work every day to restore public trust in government and to make state government more responsive to the public voice.

Why is trust so important to me...and to Georgians?

The answer is simple-trust is the cornerstone of our society.

From individuals -- to a family -- to a nation, no order can be maintained, and no progress can be sustained without trust.

But trust is especially at the heart of our society-a free society.

You don't have to trust a dictator, you just have to obey him. But a free republic is different. It is built on trust.

Trust in our fellow citizens. Trust in the integrity of our elections. Trust in the leaders we choose.

Trust that our laws will be justly made and fairly applied. Trust that the government will respect our rights and protect our liberty.

Trust is woven throughout the entire social and political fabric of America ... and of Georgia.

Every time that trust is violated ... especially by the government ... we lose a little of our freedom and a little of our faith. Not our faith in God, but our faith in ourselves and our public institutions.

There are a couple more things to keep in mind about trust­­...Trust has to be earned. And trust is a two-way street.

For the people to trust their government, the government must trust in the people. That shouldn't be so hard.

After all, every power of government comes from the people themselves.

If each one of us in government will keep that simple principle in mind-where our power comes from and for whose benefit we hold it-then trusting the people is automatic.

We are stewards of that public trust and we will be held accountable for our stewardship. That is my guiding principle as Governor.

That is why on day one, I issued a strong executive order setting forth high standards of ethical conduct for my administration, with strict rules on conflicts of interest, gifts, and lobbying.

That is why I will submit legislation tomorrow to the General Assembly that will permanently extend these high ethical standards to all of state government ...reform candidate disclosure requirements ... and strengthen our State Ethics Commission.

And that is why on behalf of Georgians, I urge the House and Senate to pass these ethics reform bills during this session.swiftly and decisively.

We will continue changing the culture of state government to be truly principle-centered...people-focused ...customer-friendly ...and dedicated to earning the people's trust every day.

The most fundamental way the people express their trust is in the voting booth.

The citizens of Georgia are entitled to elect representatives who truly reflect their communities' values and speak for their communities' interests.

But our current legislative map frustrates that fundamental right. It distorts the shape and composition of legislative districts to get a predetermined partisan outcome.

We must align our districts with democratic principles, not partisan politics. I would like to set forth some guiding principles for the redrawing of our legislative maps-

These principles are clear and simple.

First -- the law of the land must be obeyed.

Second -- counties, precincts, and communities of interest should remain intact.

And why should partisan political data even be part of the process? Elections should be about the future, not the past.

With that in mind, I have asked Attorney General Baker to withdraw the state's appeal before the U.S. Supreme Court. The challenges of redistricting should be addressed at home, by Georgians, in Georgia's legislature.

Working with my floor leaders, we will be introducing legislation highlighting the principles I have just outlined.

Lieutenant Governor Taylor, Speaker Coleman, Senator Johnson and every member of the General Assembly, I am asking-and Georgians are expecting-this legislation to pass.

But it goes beyond this one issue. Georgians expect bills important to them to be openly and fully debated and voted upon in the light of day, not quietly and cowardly buried in the tombs we call committees.

The will of a powerful few should never be substituted for the will of the people.

I have been listening to Georgians for over a year and I didn't need a poll to tell me that over two-thirds of Georgians want an opportunity to vote on the symbol that represents our state.

Rather than the shouts of distrust that divide us, let us tear down the walls that separate us.

The debate over what symbol will represent us has divided our state and continues to divide our state.

As I have said many times during the last year, to begin a new day in Georgia we must have a healing process.

That process begins with giving the people a say-a voice-a vote on the symbol that represents them.

We owe it to the people to choose that symbol through an open and democratic process.

I'm willing to trust the people of Georgia to make the best decision for Georgia, and I trust you are too.

Let us decide ... and let us move forward.

Georgians know our greatest challenges are ahead and we've still got those dark clouds to face.

Economic recovery and job creation are fundamental to the continued success of our state.

Georgia is experiencing, along with the entire nation, the effects of a recession.

We have gone from leading the nation in job creation to leading the nation in job loss. Some of our major industries were hardest hit-such as aviation, hospitality, construction and information technology.

We don't know yet how much our state economy will recover this year. We do know it won't be as much as we'd like.

The headwinds we've battled have slowed our economy and our people are feeling the pain.

The effect on our state government has been a record two straight years of declining state revenues and budget shortfalls. That hasn't happened since the Great Depression. No modern governor has ever faced such a budget crisis.

The word crisis has an ominous tone. But in Chinese the word for crisis is written with two symbols-the first stands for danger, but the second stands for opportunity.

Let us focus on the latter.

As we are well aware, we're short $620 million in the current fiscal year alone.

When I submitted my budget, I said I would work with the House and Senate as partners to come up with a final plan that meets the human needs of our state while doing everything we could to hold the line on taxes. I committed to you that we would keep working to find monies to offset taxes.

So, I am proud to report to you that, working together, we have identified an additional $285 million that will allow us to fully fund the homestead exemption property tax cut without taking away from education, health care or other critical needs.

But let me be clear- from this day forward we will fund this homestead exemption program in straightforward manner that pays for it out of General Budget funds each year as it should be.

We can never again be so irresponsible in leading the public to expect that ongoing programs - especially tax cuts -- be funded based on surpluses. Continuing programs must be funded in the General Budget.

And I assure you, we're going to keep looking for more savings and more cuts in this budget. Last week I met with all of our department and agency heads asking them to continue looking for ways to cut spending.

Today I sent them a letter challenging them to come back to me with those ideas.

President Ronald Reagan once said balancing the budget is like protecting your virtue-you just have to learn to say no.

This process has only started and I look forward to working with the House and Senate to produce a budget we can all be proud of.

We know the dark clouds are here, but let's talk about how we can break through them to blue skies again.

How do we get our economy moving forward again in the near term-and how do we strengthen our economy to build greater prosperity and greater opportunity for Georgians in the future.

We've been fortunate over the last twenty years to have a fast-growing economy.

We've worked hard to attract new businesses to Georgia.

With competitive advantages in the cost of labor and land, we've been pretty successful at bringing factories, distribution centers, and even entire companies to Georgia.

Much of our economic growth has also been spurred by the sheer population growth I mentioned earlier.

But, as we've seen, when the flow of new residents slows down, it sends a shock through our economy.

The growth we've enjoyed until now has been good for Georgia, but it is no longer enough to simply put out the welcome mat.

Companies may save on labor and land by relocating here-but they can save even more by going to Mexico or China or Southeast Asia. And that is what some are doing.

Georgia's economy, along with the national and world economy, is changing.

Knowledge is the new economic fuel, not physical labor. It is the essential ingredient for success in this information age.

Providing all our citizens with the knowledge, skills and training they need to compete in the information economy is the best economic development plan we can have.

Education and workforce training will prepare our people for the jobs.

We can also build a position of leadership in medicine and the biological sciences. Georgia is home to the CDC and the American Cancer Society, two name just two resources we can leverage far better than we have in the past.

Logistics is another area of strength we can develop. We are home to the world's busiest airport and multiple Interstate highways cross our state. We have excellent ports and a well developed railroad system-and we're home to UPS, one of the most advanced logistics companies in the world.

In agriculture, our oldest industry, we are developing new capacity for value-added processing. When we process Georgia farm products in Georgia, it creates jobs, adds to local economies, and strengthens our farm communities.

These are just a few examples. We have the capacity to make Georgia a national, even a world leader, in several fields. And that is what we must commit ourselves to being when we compete-the leader.

We will continue to welcome outside companies relocating to Georgia.

However, to achieve real leadership we have to grow our own companies and develop our own industries, based on our own innovations.

I see our state developing homegrown industries with global reach.

We need to ensure that the world knows that the "Open for Business" sign is out in Georgia.

Whether in communications, medical sciences, logistics or agricultural technology, let's raise our aim-not just to be a player, but a winner.

I want the world to beat a path to Georgia's door. I want companies from around the world bidding to license the best innovations and latest technological breakthroughs from Georgia universities, companies and research centers.

A symbol of that vision is our effort to recruit the Secretariat of the Free Trade Area of the Americas to Georgia, to help position our state as the gateway to trade and commerce for the entire Western hemisphere.

To make that happen, I'm undertaking a comprehensive review of our tax policies and our state regulations with an eye toward reforming them to encourage, not frustrate, entrepreneurship in our state.

Georgia's reputation should be of a place where the government gets out of the way and lets the natural genius of our people create, build and grow our state.

Maintaining a high quality of life is essential to that vision.

To attract and keep the innovators and knowledge workers we need -- we must nurture and improve the conditions that make Georgia a great place to live, work and raise families.

When I fly over our state looking down on beautiful green mountaintops, sandy golden beaches and gently flowing rivers it is easy to see why we must so jealously guard our natural resources.

They are our crown jewels. We have been truly blessed with God's beauty and our natural environment is one our most valuable resources. I am committed to being a faithful steward of those resources.

That includes stewardship of our state's water.

Water is another of valuable and under-appreciated resources. Ihave promised you I would do my absolute best to bring an end to a 13-year negotiation between Georgia, Florida and Alabama on water allocation.

I have invited the Governors of Florida and Alabama to sit down with me face-to-face, leader-to-leader in a spirit of cooperation and resolve so that we can come to closure on these issues.

Yes, we have an obligation to protect our natural resources.

But we have an even higher obligation to protect an even more precious resource-our children.

Tonight I have invited a number of Georgians to sit with the First Lady in the gallery. They include educators, law enforcement, and family members of our brave men and women in uniform who are deployed overseas right now defending America's freedom.

But there is one chair that remains empty. That chair represents the invisible children of Georgia. The more than 14,000 children in foster homes and state custody.

I've said it before and I'll keep saying it: Mary and I believe we have a moral obligation to ensure that these children are not just cases in a file.

These children are members of Georgia's family.

They have faces, hopes and dreams, like all of our children.

It is our responsibility to nurture them, protect them, and prepare them for the future. Children in state custody, like all of our children, deserve a quality education.

That's why we have devoted 55% of our state budget to education, and that commitment shows.

I've already mentioned our strong university system. We also have a solid vocational training system. In both of those areas, of course, we can and will make needed improvements.

But the foundation of our education system is K-12. And that foundation does have some cracks we need to mend. We have strong bookends in place, bracketing the K-12 system.

Two solid pillars of our commitment to education are two of the nation's most innovative education programs: The Pre-kindergarten program and the HOPE scholarship.

This program not only makes a college education affordable for every dedicated student, it has helped us keep more of our brightest young people in Georgia-and I've already spoken to how important that is for our state's future.

I will protect these programs. I have already proposed that in the future Georgia Lottery funds be reserved for these two programs alone. These are two great Georgia success stories that lay the foundation for many successes to come.

But despite these strengths, Georgia's education system is not what it should be.

The National Assessment of Education Progress is the nation's education report card. It shows Georgia is behind the national average on reading, writing, math, and science.

For each of those subjects more than 50% of Georgia children are below the proficient level.

Georgia also has one of the lowest high school graduation rates in the nation.

And, to our shame, we rank 50th in SAT scores.

We can sum up our report card in two words: "Needs improvement."

To improve our educational performance, I will work in the areas of accountability, cooperation, and respect.

We have a good start on accountability, with a system setting high standards and high expectations for our schools.

But we need to build on and improve the Georgia system. In consultation with parents, teachers, and local educators, we'll do just that.

We also must align our system President Bush's No Child Left Behind legislation that says all Georgia children, regardless of race, color, creed or income, will be held to the same high standards of performance.

We've set high goals. To reach them, everyone involved in the education process must work together.

To improve the level of cooperation, we're going to put the Department of Education back together.

We'll place the Office of Accountability back in the Department, but reporting to the State Board of Education, similar to a corporate audit function.

We'll also work to reconstitute other educational functions back into the Department of Education so that local school officials no longer have to thumb through the Yellow Pages to know who to call for the answers they need.

I, along with our Board of Education, will work in concert with Superintendent Cox so that Georgia's education team is operating from the same lesson plan.

This spirit of cooperation extends especially to our teachers and local educators. I am personally committed to including them in our policy-making process.

For example, I will invite teachers into my office for "Coffee & Conversation" events where we can talk and I can get real world input and advice straight from the classrooms.

We will also organize an education policy steering committee composed of local educators from throughout the state to give me periodic feedback.

I want the teachers of this state to know that I respect your hard work and your commitment. You are vitally important to the education process and I will do everything in my power to help you do your jobs better.

That includes greater control over your classroom -- the power to remove disruptive students who aren't ready to learn -- so you can focus your efforts on teaching those students who are.

This June I will convene a statewide education summit specifically devoted to hearing directly from you how we can improve the working environment of classroom teachers.

And I want to emphasize that 57% of Georgia are getting 3% or more salary increases because I have insisted that we fund all step increases. Along with the 10% salary supplements for our National Board Certified teachers, these teachers are the only state employees getting a raise this year.

While 57% of our teachers have earned pay raises this year, we simply can't afford to give an across the board cost-of-living increase for everyone right now. It is less than we want to do for our teachers. But when our budget situation improves, we will give our teachers a raise.

The state of our state is still good ... but it can be better.

We can restore the people's trust and confidence in their government...and the government's respect for the people we serve.

We can meet the challenges of a changing economy, build on Georgia's strengths, and propel our state to the forefront.

We can preserve our state's natural beauty and improve the quality of life for our citizens.

And we can maintain our commitment to education and prepare our citizens to succeed in the global economy.

Those are our responsibilities as we pilot Georgia into the future.

It won't be easy.

But remaining on the ground is not an option.

The tower has cleared us for take-off and it is time to buckle up and go.

Those dark clouds may threaten, but they won't stop us.

And when we break through into the sunlight again...

We'll look, from the ocean to the far horizon, and see below us, sparkling like a jewel beneath the clean blue sky, the new Georgia that we've made.

Bustling with enterprise and opportunity. Rich with new ideas and new faces. Ringing with children's laughter. Bright with promise fulfilled.

Safe, educated, healthy and growing stronger every day.

That is what awaits us. That's our destination.

And we'll reach it together.

It is time for Georgia to take wing and fly higher and farther than we've ever flown before.

Thank you. God bless you-and God bless Georgia.