State of the State 2004

STATE OF THE STATE 2004
JANUARY 13, 2004
PIERRE, SOUTH DAKOTA
GOVERNOR M. MICHAEL ROUNDS

Thank you. Thank you. As I said last year, you're in my time zone here right now. Lieutenant Governor, Mr. Speaker, legislators, fellow public servants, and the people of South Dakota, I want to start today with just two words, THANK YOU. Thank you to the people of this great state for giving me the privilege of working for you. Thank you to the legislators and fellow public servants for giving me the honor of working with you. And, thank you, a particular thank you, to the men and the women of the Armed Forces in the United States, in Iraq, and around the world and their families here at home for the sacrifices that they make so we can enjoy the freedoms found in America today.

In the past year, South Dakota has mobilized over 2,500 National Guard and Reserve soldiers from 25 different units in 30 different communities in our state. Over, 1,800 National Guard men and women are currently deployed.

Before you today there is a beautiful gift. It's an eagle and it has been presented to the people of South Dakota by the National Guard Bureau as a way of saying thank you as the employer of over 40 different men and women that are currently serving in active duty in the theatres of operation for the United States of America. I think this beautiful eagle should be shared. So what I would ask, with the permission of the leaders in the House and the Senate, if the legislature would please keep it in your chambers during the session and share it between the two-between the House and the Senate-and then we will have a prominent location of display for this beautiful gift representing for all the people in South Dakota their participation in the protection of the freedoms that America holds so dear today. But if you would hold it here and then pass it to the Senate, then we will display it proudly for the rest of the year.

Whenever we meet together in legislative session, I hope our goals will always be to work hard and to work together to make South Dakota an even better place-first of all, for all the people that live here now, for all the future generations who will call South Dakota home, and, especially, for the people who will be coming home to live again in South Dakota after they have fought for us in far away places.

We must also never forget those who have served us in the past. This past year, we hosted the first ever Veterans Summit in South Dakota so that we could listen to the concerns of veterans and improve veterans programs. This recognition of our veterans should continue on. In particular, we want to talk about Korean War veterans this year. This last summer in Huron we began a time of celebration of commemoration with the ending of the Korean War. But this recognition of these men and women who offered to sacrifice, I think we agree that it's long overdue. What we would like to do is to recognize the 173 South Dakota soldiers who died in Korea and the over 12,000 Korean War veterans that live in South Dakota today by dedicating part of a memorial location right down here by the Flaming Fountain in which we add a statue, a statue that commemorates the many men and women who served in the Korean War. We will do that on Saturday, September 18th.

But along with recognizing those individuals who have offered their sacrifices in the past, I think also, with your permission, it's good that we look at a veterans bonus, and as I indicated in our budget message earlier, I would propose a veterans bonus this year for those veterans who have served since the last time that we offered the veterans bonus. And, furthermore, I think we'll find wholehearted support through that. I think there's something else we can do as well. We'll have young men and women that are serving right now in our National Guard that are going to be coming home again and they've missed out on something. They've missed out on, many cases, the opportunity for an education for themselves. We have a veterans program, a bonus opportunity here in which we offer 50 percent tuition waiver in our state's universities for South Dakota residents who are also members of the National Guard. What I would like to do is to expand that to any young man or woman even if they are a resident of another state but who currently serves with our South Dakota National Guard overseas, and invite them to also participate in that Tuition Reduction Program simply as a way to first of all bring attention to this opportunity, second of all as a way to say thank you, and to try in a small way to make up for the disruption in their life and the sacrifice they offer in protecting the freedoms that we hold dear today.

Last year, I had the privilege and the responsibility of first of all discussing with you an Inaugural Address and then also in the State of the State address several different ideas that I thought it important that we pursue. I want to thank you for the cooperation that we had in the last legislative session, and during the special session, and during the rest of this year. We had proposed 23 separate bills or initiatives as part of our plan. You agreed with me and passed 21 of those 23. I want to thank you for that. But in addition to that, you also had many good ideas and of the hundreds of proposals that you offered, the vast majority of them we were able to work through and to allow it to become law, making improvements in the way that our state government does business, and making improvements for the people that live within this state. Last year, in the Inaugural and also in the State of the State, I listed some of the basic concepts in which we all believe. During this session, I hope we can continue to rely on those basic concepts of good government. We protect those who cannot protect themselves-the very young and the very old. We protect society from those who would harm us, and we provide a quality education for our children because they are our future. And, while we are doing these basic goals, these basic tenents, we always must be vigilant to protect the rights and the freedoms of the individuals who have elected us to govern them.

Last year, as I stood before you, I said that together we will balance our budget, that we will improve the operations of state government, that we will create more economic development, that we will fund quality education, that we will implement a prescription drug program, and, we will develop a mutually beneficial relationship with our Native American tribes and people.

Today, I am proud to stand before you because, working together, we've moved forward on all these issues. We've been successful, and it's only the beginning. Together, we can do even better in the future. One way that we build a better world is by helping each other. Your work last year is proof that we can be successful.

I'm very concerned about the proposal to repeal the entire sales tax on food. Our programs that you supported in the past are in jeopardy if the sales tax is repealed. It's a $42 million loss every single year.

In other places around the country, they've looked at the sales tax, they've looked at what it does. Let me give you some information on what happens. Forty-five states have a sales tax today. Eighteen of those states tax-they include the sales tax on food. Twenty-seven do not have a sales tax on food. Forty-three states have a personal income tax. Forty-six states have a corporate income tax. South Dakota has neither. Of those 27 states that do not have a sales tax on food, 23 of them, or 85 percent, have a personal income tax, and 24, or 89 percent, have a corporate income tax. I know that when we talk about sales tax and policy, many times we do our best not to include a discussion about income tax. But I believe this spawns an income tax debate. And it has proved to be one of the primary alternatives in states that do not continue to have a broad-based sales tax approach. I believe an alternative is the sales tax relief for the working poor that we outlined earlier in our budget address. I'll work with you. I believe very strong that until such time as there are other alternatives that are acceptable, we have to remain strong in supporting a very healthy sales tax base within South Dakota in order to continue those programs that are critical for the very poor, for the injured, and for our young children.

Last year, you approved the Senior Prescription Discount Card that was a proposal that we had made to you. The card did not provide savings to everyone because some people already had a better program, but many, many card-holders have realized significant savings since it began. In the last 6 months, over 105,000 claims were paid. The savings to the card users was over $825,000, and that's an average of 17.7 percent below the pharmacies usual and customary prices. Over 35,000 people are currently using the discount cards. This was truly an excellent program. It filled a gap that I think the program designed to fill until such time as Congress would respond and do a national plan. Congress has finally taken action. Thank you, first of all, for working with us to create a state-sponsored plan. And I also have to say thank you to the pharmacists from across the state who cooperated with us in this effort. We told them to begin with that this would be short-term and that as soon as Congress responded, we would begin to phase this proposal out. Because of the recent passage of the Medicare Prescription Drug, Improvement and Modernization Act by Congress, the Governor's Prescription Drug Card, with your permission, will be phased out as soon as the new Medicare cards are available. Until Congress acted, we did the right thing for South Dakotans. I want to thank you once again for working with us to create that plan. But I also want you to know that we need to discuss pharmacy benefits management. There are two possibilities. We have benefit managers that negotiate as a middle man between consumers and between the pharmaceutical companies themselves. But today when they do that as part of their negotiating agreements, they will receive rebates back from the pharmaceutical companies based upon the volume and the types of pharmaceuticals that they are able to market. I believe that it's appropriate as one possible alternative that we should make those types of transactions transparent so that individuals within South Dakota can see where the opportunities are for the pharmacy benefit managers to make additional profits and where there are incentives to move individuals from one type of a prescription to another. Or as an alternative to that, I believe it would be appropriate for this legislature to pursue the concept of allowing the creation of our own public pharmacy benefits authority in which we could go out and negotiate directly with the pharmaceutical companies to provide the best possible contractual arrangements for our state employees, for those involved in larger groups, and if possible the individual plans that would have an interest in working with us. I don't know which is right, I do know that we should pursue both options, take careful, a very careful, look at both, and decide whether or not one or the other would work for the people of South Dakota in continuing to reduce the cost of pharmaceuticals to individuals who live here in South Dakota.

In the special session last year, you also worked with us to help create the Risk Pool to help South Dakotans who lose their health insurance through no fault of their own. In the past 5 months, almost 400 people have signed up for the Risk Pool coverage. Again, working together, we stepped up, took the challenge, and responded. And I'm pleased to report to you today that that Risk Pool is working and it is working the way that you intended it to work.

Also during the last year, the people in our departments and agencies have helped thousands and thousands of South Dakotans in many different ways. I'd like to give you just a few examples of the type of work that these people in these departments are providing.

In the Department of Human Services, we helped 982 people start the transition from injury back to work. We had the highest employment rate in the nation for people who are blind or visually impaired. With a lot of help from retailers, South Dakota became one of only nine states that reduced our underage tobacco sales to below 8 percent.

In the Department of Social Services, while many states are cutting their Children Health Insurance Programs (CHIPs), South Dakota continues to serve more and more children every year. We've gone from helping 32,000 children in 1998 to helping over 60,000 today. Our office of Child Support Enforcement collected record-high $72.2 million for the children of South Dakota.

In the Department of Health, to combat the flu, the Health Department directed a special outreach to the vulnerable 6 months to 23 months age group. They were vaccinated as well as their siblings and parents. The Health Department also managed the West Nile Virus surveillance and response in South Dakota, including testing, case investigation, provider and public education, and aerial spraying. To reduce the illnesses and deaths next summer, the Health Department is securing $700,000 in funding to help communities buy mosquito control equipment and chemicals. The department will also be working with the cities and counties this winter and spring so that larviciding and adulticiding can be done at the right times and done effectively.

In South Dakota, water development is very important. I want to report to you that progress is being made on the Lewis and Clark and the Perkins County water projects. During the summer, our congressional delegation was working hard on funding for this year. I'm very happy that President Bush stepped forward and not only funded what we wanted for this year, but also proactively supported a total of 3 years of funding for these two projects. The President made an unprecedented

3-year commitment to the two projects. So, instead of cuts, President Bush is giving us the money we need for at least the next 3 years. Ladies and gentlemen, that shows that he cares about South Dakota and rural America.

During the last year, you've continued to show your support for agriculture in this state. The result has been good. We've had over $200 million worth of ethanol plants come on line in just the past year. That's a substantial capital investment in our ag economy that will provide higher corn prices for our farmers for many, many years. You also passed a special Wind Energy bill that caused the creation of a $42 million investment on a wind farm near Highmore. That one wind farm has twenty-seven 1.5 megawatt generators. FPL, the owner, is paying landowners and paying property taxes to support the county and the school district. It's a win-win situation for everyone.

Furthermore, during this same year, the Value-Added Subfund loaned more money this past year than ever before. Over $1 million is being used right now for feasibility and marketing studies for various projects. The Dakota Prime initiative is essentially a "seal of approval." It's a plan that producers can use to increase the quality of their beef and thereby make it more marketable and profitable. The name is generic. The concept is what we're trying to move forward. The state, in this concept, would act as the verification or certification agency. The ultimate goal behind the concept of Dakota Prime is to create the idea in the minds of millions of consumers that South Dakota beef is the best there is and we can prove it. That's the way we will get a higher value for every single unit produced within our state. The Department of Agriculture is working with four marketing groups on this initiative. They have plans to put forth proposals for a voluntary approach with producers who want to be able to prove just how good their livestock really are.

When dairy promotion is talked about in South Dakota, we see nothing except opportunity. Even though many dairy farmers are retiring and other states are having real difficulties in increasing the number of dairy farmers that will operate in their states, South Dakota is seeing opportunity. Because of new plants coming on line within our state and increased demand for the product, today, we have a need in the very near future for more than 65,000 more dairy cows in this state alone. It's an opportunity we cannot afford to pass up. And yet at the same time, while we talk about dairy and we talk about the opportunities for our ag producers, and adding more value to their product, whether it be through ethanol or whether it be through wind farms in local agricultural areas, or in the concepts behind the promotion of Dakota Prime, we still have hanging over our heads BSE-that disease which is prevalent, or has been prevalent, in Europe, and that disease which has shown up in Canada in some of their livestock, which have been transported into certain areas of the United States. I understand the importance of country of origin labeling, and while we have to continue to pursue at the national level the concepts of country of origin labeling as soon as possible, this opportunity for South Dakota to continue to identify its beef is as good if not better than beef anyplace else in the world provide us with marketing opportunities that we should pursue. We start by being able to identify the livestock which is bred here, born here, which is backgrounded here, which is fed here, and which eventually will be processed here so that we can go back to the consumers in the United States of America and show them the entire story behind the livestock, which is being produced right here in our state. Once again, this is an opportunity to add value to this fine, high quality product that we produce right now today.

In doing so, one of the possible routes that we have to explore in our Department of Ag is taking a lead, along with several other states in the Upper Midwest, the possibility of identifying our livestock. Our Department of Ag is taking the lead in an optional program that would allow livestock identification where our producers want to participate. They're working with eight other state agriculture departments and their state veterinarians, the U.S. Department of Agriculture, and the U.S. Animal Identification Plan. The purpose is to track the animal from birth. This is something that must be explored further and with other states and in cooperation with the federal government. This will be an excellent tool to isolate and prevent the spread of disease, and it will allow producers to really understand the history of any livestock he or she wants to buy to bring in or to show exactly the history of the livestock that are produced on their own property.

In the last year, you have also supported local and statewide efforts to improve economic development. During this year, we have also changed the rules of the REDI Fund to provide more money to regional revolving loan funds. $3 million has been distributed to the six regional loan funds. The Economic Development Finance Authority also became a better vehicle for economic development. In 2003, the number of loans from this fund doubled, and we can now provide up to $5 million in bonds for large capital-intensive projects. But I think it is important that we go farther. I will be recommending that you pass a new law this year that would allow us to use a very limited amount of REDI Fund dollars for high opportunity ventures. This would allow qualified venture capital companies to invest REDI Fund dollars in projects and businesses that have the potential for high return which will contribute to South Dakota's economy by providing more capital and for creating more high quality jobs. Time and time again, we are asked to provide equity funding for small businesses or new ventures, and there is no program in the state that provides this today. This will be a vehicle to use REDI dollars on those projects. The goal is to provide additional equity funding to small businesses in South Dakota that may not yet qualify for conventional financing, but have a need for facilities, equipment, or operating money to get their concepts and ideas off the ground.

As many of you know, we have been working very hard to secure the donation of the Homestake mine so that it could become the premier underground research laboratory in the world. Yesterday, I signed the agreement in principle with the Homestake Mining Company that provides for the conditions and timelines for the transfer of the mine to a Science and Technology Authority.

To answer your questions and give you any information you want, we are sponsoring a special meeting for legislators and the public next Tuesday, that's January 20th. We're going to do it at 1p.m. at the Rigg's High School, just 3 blocks away from here in their fine arts location. At this meeting, there will be an explanation of the new emphasis on research and intellectual property development that we are proposing for our public universities. In my budget proposal, I've asked for more money for university research and also for the commercialization of that research to create more and higher paying jobs in South Dakota. With your approval, we will create a research and commercialization office to boost research at our universities. It will be opened before the next school year. We will also develop a new policy for intellectual property so that our faculty will have more incentives to do job-creating research. We will also help take those new ideas from the drawing board to the marketplace. Initially, this will involve at least 10 faculty and 20 graduate students.

Also at this meeting next Tuesday, there will be a panel of scientists to discuss the benefits of establishing the Homestake Underground Lab. And, I will propose legislation to accelerate the process of making the Homestake Underground Laboratory a reality.

Here's the sequence of events that should happen to make the Homestake Underground Laboratory a reality. During this session, I will be asking you to create the Science and Technology Authority. The authority is needed to both accept the donation of the mine and to operate the infrastructure of the mine. Think of the mine as a building. The authority will take care of the building so that the scientific tenents can concentrate on doing their experiments in the laboratory found inside the building. During this session, I will also ask you for indemnification and immunity for funding and funding to accelerate the entire mine conversion process. The indemnification and the immunity are part of the agreement in principle, and the full text of the agreement in principle, our authority legislation, the indemnity legislation, and the immunity legislation will all be available if not today by tomorrow at the latest, along with a copy of all of the properties that are proposed to be transferred free of charge from the donor to the authority. This will give you an opportunity to review it, to take your time and put together the questions that you may have, and then with that as a background to attend this meeting next Tuesday and to listen to what the scientists suggest as the reason why you should move forward on this major development opportunity.

We will need to put this together in a fairly rapid fashion because these scientists are excited. They see opportunities. They also recognize that the National Science Foundation has to act on our plan in order to get the funding so that it can become a reality. To expedite the conversion and to make the project more enticing to the National Science Foundation so that it makes the underground laboratory one of its top priorities, I am asking for $10 million in a one-time appropriation. We will also need $3.5 million for a one-time payment to buy 10 years of insurance and to operate the authority for its first year in operation. Please remember that we already have $10 million from the federal government for protecting the integrity of the mine. That money will be used for removing the water and preparing the mine for creation of the laboratory.

If you approve these requests this session, we will work with the scientists to complete the design of the underground facilities, and we will join with the scientists in presenting the design to the National Science Foundation for approval. If the National Science Foundation approves, we will then secure funding from them, Barrick and Homestake will transfer the mine to the authority, bonds will be issued by the authority for the conversion, and then the conversion will begin. When the conversion is done, we will open the new Homestake Underground Laboratory for scientific use.

You may have noticed that this project has had two or three different names over the course of the events in the last 3 years. We are now calling it the Homestake Underground Laboratory for two very important reasons. Number one, we want to recognize this facility and the value of it by the Homestake Mining Company and its parent company, the Barrick Gold Corporation. But, just as importantly, by using the name Homestake, we hope to honor the memories of all the generations of miners who have worked in that mine for so many years. It has played such a huge part in South Dakota's history.

I had the opportunity to attend a meeting of scientists in Los Angeles a little over a month ago. I went down there to convince them that the Homestake project was alive and well. My intent was to share with them information about Homestake and about our desire to see it become a national laboratory and to talk about our excitement and our strong belief in the future of this plan. But I got a whole lot more than I delivered. Because what I found among the scientific community was an infectious, a very infectious, desire to move forward in the area of research and the opportunities that it offers to the state of South Dakota and to our children and to the Upper Midwest. When it comes to the type of development that we dream about, but we very seldom have the opportunity to actually promote, I found scientists talking about such things as proton decay and they talked with one another in such as fashion that it was very clear that, although I didn't know what they were talking about, they most certainly did, and they convinced me, they convinced me, that the opportunities that we have in making this a reality-the upside-is so much greater than the risk that we have in one-time investments that we cannot let this get away. This is a once in a lifetime opportunity. We've taken the first step. This is only the first step. We have to be able to show our enthusiasm and our support and our understanding as to the importance of research for research sake and development because we understand that in this new economy if our children are to have the kinds of jobs and opportunities that we want them to, that this type of a facility is one of the finest, one of the finest, advantages that we can give them as a gift for generations to come that we can't let it go. So I am here to make that extra special plea, if you have questions, if you have any doubts at all, don't sit quietly by, raise them, allow the scientists to come here to explain to you, catch the enthusiasm, enjoy the infection that they offer that can do nothing except help our state for generations to come. And so with that, I will do anything I can to answer the questions that you have. I'll work with you, but when we get done at the end of this legislative session, we have to provide every opportunity for our children to take advantage of the research and development possibilities that a facility like this can offer.

Let me go on, during the last year we talked about the need to reach out to South Dakota's American Indians-you responded, you offered us tools and opportunities. You passed a new law to allow for nursing facilities to be constructed on American Indian reservations. The Cheyenne River Sioux Tribe has been very active in the planning and development of their Elder Village Nursing Home project. Land has been identified and plotted. An architect has been selected. Policies and procedures and staff development plans are underway. Construction could start as early as this spring or summer. The Hagen-Harvey Memorial Scholarships, as of January 15 in just two short days, the board for those scholarships will meet to select seven individuals who will each receive a $1,000 scholarship their first year, $1,000 scholarship for the second year, a $1,500 scholarship for the third year, and a $2,500 scholarship their fourth year for a total of $6,000 over 4 years set up so that Native American children have the opportunity and something to shoot for when it comes to scholarships available to them to pursue higher education in our state.

During the past year, we have signed four tax agreements with different tribes. We have signed comprehensive tax agreements involving more than one tax with the Cheyenne River Sioux Tribe, the Standing Rock Sioux Tribe, and the Rosebud Sioux Tribe, and we have also signed a motor fuel tax agreement with the Oglala Sioux Tribe. The Department of Revenue will be submitting a legislative proposal to allow the state to enter into tax compacts with tribes that include the wholesale tax on tobacco products.

We have also changed prison policies in the Department of Corrections. We created a tribal contact person at each prison so that the tribes and Native American people can deal directly with one person at each institution. Each tribe has also created one person in the tribe to deal directly with prison issues. We have also implemented funeral furloughs once again to the reservations. We are holding quarterly spiritual conferences at both Jameson Annex and the penitentiary in Sioux Falls. We have extended the time for pow wows. We are also allowing Pipe Keepers to contact tribal representatives via the staff telephones. We are offering two new Native American classes in prison: a Lakota Language Class, and the P.I.P.E.S. Class, which is also known at the Red Road Approach to Alcoholism. We are actively working with tribes to identify Native American families to participate in the Department of Corrections' Foster Care program.
In the Game, Fish and Parks Department, we continue to work with the tribes and the Corps of Engineers to make sure religious and cultural sites along the Missouri River are treated properly. George Mickelson was governor when I first became a state senator, and I remember his second inaugural address when he talked about the need for reconciliation. We need to build on this legacy of reconciliation through cooperation, communication, and mutual respect.

Last year, you continued the South Dakota tradition of increasing state aid to local schools. The parents and teachers of South Dakota encouraged, motivated, and helped our students continue to work hard to learn what they need to become successful. In the National Assessment of Educational Progress tests in grades 4 and 8, our students did very well. In grade 4, we were the 6th highest in the nation in both reading and mathematics. In grade 8, our students were the 4th highest in math and the 3rd highest in reading. In a separate test, 98 percent of our districts met or exceeded the standards in reading and math, and 96 percent of all our schools met or exceeded those math and reading standards. Those test scores are a tribute to our students, their teachers, their parents, and to you, our legislators for placing an emphasis on educating our children.

To offer local school districts the flexibility they want, I will be introducing a bill to delete the fund balance penalties on school district general funds. I hope that local school district leaders will remember that the legislature provides additional state aid to local schools every year so that local education can be improved and students can receive more opportunities. If this bill passes, I hope it will allow schools to operate responsibly in both preparing for the future and also in giving their students the best opportunities available today.

During the past year, your state employees have also done an excellent job. Our team of state employees has worked hard to reduce costs and to become more efficient. In our budget, you will see $3.7 million in savings. Our Child Support Enforcement office was ranked number one in the nation. For the 10th year in a row, the South Dakota Food Stamp office achieved the highest case payment accuracy in the nation. The Cultural Heritage Center was selected as the best state history museum along the Lewis and Clark Trail. And, at Christmas time just a few weeks ago, we asked our state employees to remember our deployed troops and their families back here at home. We asked for donations to help those families stay in contact with the troops overseas. We hoped that we could raise $5,000. As of today, with over 60 different state agencies, organizations, and private donors all contributing, that includes all departments and bureaus, including from offices all over the state, every university, every constitutional office, the Unified Judicial System, county employees, Republican women groups, churches, 4-H clubs, the South Dakota State Employee Organization, a federal surplus property office, hospitals and clinics, private donors, and the Homestake Laboratory Project office, these folks, public servants, didn't make $5,000. As of today, they have contributed $35,851. That money is being used by our National Guard to provide cell phones, satellite phones, digital cameras, along with the disks, so that these young men and women can stay in touch with their families and so these families can stay in touch with their loved ones overseas.

In the last year, I've participated in more than 30 different National Guard mobilization and demobilization ceremonies. I thought at first it would be something that would become routine. It became anything but that. During that time period as we shook hands with young men and women leaving their families, there was never a time in which it became any easier to shake hands, and to wish them good luck, or to wish them Godspeed, or to offer a blessing for them, but time and time again I learned something.

Before I go on, let me just share with you one thing that I learned in just a couple of encounters. At one location, after a ceremony in front of perhaps 3,000 people in Redfield, South Dakota, the place was so full they were literally opening the windows, people were standing in the halls, the doors were open, and people were standing in the doorways wishing these young men and women of the 142nd the best of luck. And it was last spring the first time they were deployed. And I shook hands with each of these young men, most of them were young, but as I shook hands with them, I wished them good luck and I looked at their name and then moved to the next one in line. One of the first guys in line was not a young fellow, not much hair, and a little gray. I noticed his name. And the guy right behind him, a younger fellow, same last name. I looked at him and I said, is that your dad ahead of you? And he said, "No sir, that's my uncle. My dad's behind me." What it told me was this duty, this sense of duty, is passed down in this state, in these communities, in the heartland of America, from generation to generation, and that they're part of us. They're part of the fabric of every single community within this state.

And then to follow up on that, I remember a mobilization in Sioux Falls, and I remember how I had told these young men and women how proud we were of what they were doing, and that they were the best, and that they represented the best in South Dakota. And afterwards after shaking hands with those family members and taking pictures with some of them, one of the commanding officer's that was there, his daughter, kind of stood off to the side a little bit and I won't forget her because she was about 11 years old, long, dark hair, and after the ceremony she came up to me. She stood by me a little bit and then she said, "I really liked your speech." I said well thank you very much. And she said, "But I think I know how I could make it better." I thought for a minute, and I said, well tell me, how would you make it better? And she said, "Remember my dad and his team, you said that they were the best." And, I said yes, I did. I said that they were the best because, don't worry, they are the best. They've been well trained, and your dad's a good leader, and they've got good leaders, and they're going to be okay and they're going to come back, and they really are the best. She looked at me and she said, "I know. But I think when you talk about my dad and his team, you should say they're the best of the best." She's right. She's absolutely right. And so when we talk about the opportunities for development within our state and we talk about the reasons why we come here, those reasons include providing our commitment to these young men and women who are offering the sacrifice and to their families who are offering the sacrifices of being away from them for more than a year at a time, and for the best of the best we owe them our best efforts at making this place even better.

Sometimes when we do it we make decisions, we make a decision as to whether we will stand and do battle, whether we work on principle, or whether we find ways to cooperate. In September we had one of those choices to make. I made the decision that I would find a way to cooperate with other governors up and down the river in working out the issues of the Missouri River. I invited them to a summit to be held at Dakota Dunes, the newest community in South Dakota. I invited the governors, I invited tribal representatives and stakeholders from up and down the Missouri River to come in and to discuss the issues that we had. That plan that we proposed, we called it the Summit Plan, became the basis from which technical advisors from up and down the Missouri River made modifications and eventually proposed what we call the Nebraska Plan, a modification of the summit proposal, which the Corps of Engineers has worked on. The vast majority of that plan has been supported by the U.S. Fish and Wildlife Service through their recently released Biological Opinion. This is good news for our recreational industry up and down the river and the residents who rely on the river for drinking water and crop irrigation. Because we are cooperating and speaking with one voice, the Corps of Engineers is working with us instead of against us, and we look forward to having lakes in South Dakota that have more water in them than in the years that they would have before during the times in which we found ourselves time and time again in litigation with the Corps of Engineers. We're moving in the right direction.

In the same way that we reached out during this last year to schools and towns with Capital For a Day and meeting with schools during the evening to talk about their future, to talk about what it takes to have a school grow rather than to die, and to listen to what their concerns were, we also found that by working from the grassroots up, we could develop and build a group of people who cared deeply about economic development within South Dakota. To that end, we held eight regional summits and one statewide summit where more than 900 South Dakotans volunteered their ideas for economic development and tourism promotion. They created the vision and goals for the next 7 years, and now we're working on the roadmaps to achieve that vision and those goals.

The 2010 Initiative was created by those 900 men and women who took time out to roll up their sleeves and to think about South Dakota and to think about what we want. Here's what they told us. They wanted the South Dakota that was economically strong; technologically advanced; culturally rich; attractive to visitors from around the world; and enticing to scientists, researchers, business leaders and young professionals as an excellent place to live, to work, and to raise a family. To make that happen, they created five goals:

Goal One-Double visitor spending from $600 million to $1.2 billion annually.

Goal Two-Increase gross state product by $10 billion from $24 billion to $34 billion by the year 2010.

Goal Three-Become a recognized leader in research and technology development.

Goal Four-Brand and develop South Dakota's quality of life as the best in America.

Goal Five-Uphold our commitment to the 2010 Initiative as a work in progress.

Because you see, unless we do more than simply dream about it, nothing happens. The objectives have to be specific and obtainable. The plans, the action plans, have to be things that we know we can do and we have to hold ourselves accountable and we have to upgrade the plan, recognize our successes and build on them, and change where we find failure, and move in different directions. Because of that, goal number five, to make it a work in progress, means that we are making the department, this is the Department of Tourism and State Development, those department directors responsible for on-going work and the development of the plan. We are funding the first 3 years with cost savings and with existing resources within state government. We will be encouraging, and I mean seriously encouraging, reviews of our progress by outside groups and outside committees. We will also do a formal internal review every single year and provide the public and the media regular updates on our progress.

The 2010 Initiative is ambitious, but I want you to know that there will be no new taxes needed to achieve it.

Our efforts are already paying off. We're already receiving dividends from these investments. I issued a $1 million marketing challenge for the shoulder season in tourism. That challenge increased promotions. Tourism and gaming revenue were both increasing this fall. And, because of our shoulder season bump up and our recovering economy, state sales tax collections were trending higher than expected. In the budget speech, we forecasted a 5.8 percent sales tax increase for fiscal year 2004. But, in the first 6 months, the increase has actually been 7.5 percent. Of course, we'll have better figures for you by the end of the legislative session with two additional months on which to make good estimates for the coming year. The bottom line, it's working.

The 2010 Initiative will be difficult, but let's stop for just a moment. Let's remember a couple of our old friends that sometimes can give us some pretty good advice. Their names are Gutzon Borglum and Korczak Ziolkowski-South Dakota's mountain carvers. You know, we live in a state where there are some giant visions. We live in a state where people aren't afraid to start carving on a mountain-not just a part of it, but the whole thing. But how do they start? They've given us some advice. See, they started out with a vision. They were motivated and propelled by their visions. Sometimes when you're propelled that strongly, the success of the vision shows through because it lasts sometimes longer than you do. But they were propelled and motivated by their visions, but they started out, as Korczak said, "One step at a time, climbing a ladder one step at a time, and then building and taking away from that artwork, one chunk of rock at a time". And, at first, you don't see the progress. But if the vision is strong enough, and your goals are steady, and you believe, pretty soon you bring other people with you. And you see, we've got something in common here, because they had support as well, and that's the same with us. You wouldn't be here unless you believed in a vision. You wouldn't be here if you didn't believe in taking it one step at a time at making a difference. We're a lot like them. And, so, here first of all we've got each other to work with. We do have the ability, we have the skills, and we have the common vision to work together. We proved it last year, and ladies and gentlemen, we can prove it again this year.

Thank you for the opportunity to speak with you today. I look forward to working with you during this legislative session. Thank you.