Lieutenant Governor Cherry, Speaker Dillon, Majority Leader Bishop, members of my Cabinet, fellow citizens, my beloved family: good evening.

There are many familiar faces in the chamber this evening, but there are also more than 40 representatives joining us for the first time. Congratulations to you and your new leaders -  Minority Leader Prusi and Minority Leader Elsenheimer.

We welcome a new member to our state's highest court - Justice Diane Hathaway. And let us also recognize State Board of Education President Kathleen Strauss who has now become that body's longest serving president.

Before I begin this evening, we must take a moment to reflect on the service of the sons and daughters of Michigan who defend freedom far from our shores, and the service of the first responders who give their all to protect our safety here at home.  Sgt. Brooke Murphy is here, just returned last week from duty in Iraq. She represents all of the men and women who are serving on our behalf. We stand with her in awe of their commitment, and we offer a moment of silence for those who have made the ultimate sacrifice.

As we gather this evening to take stock of our state, I will not sugarcoat the severity of the crisis we face. This past year has been brutal. Like few others in our history. The nation's financial system teetered on the brink of collapse. Our auto companies fought for their very existence.  And as the bottom fell out of the national economy, the job situation in Michigan has gone from bad to worse.

Families across our state can only wonder and worry what new threat tomorrow will bring. Breadwinners worry they'll find a pink slip in this week's pay envelope or empty packing boxes on their desk on Friday morning. Any honest assessment of our state's economy has to recognize that things are likely to get worse before they get better. But if there is one thing I want you, the citizens of Michigan, to know this evening, it is this: Things will get better.

Michigan will weather this economic storm because our people are resourceful and resilient and because our battle plan is focused on the three things that matter most:

• fighting for more good paying jobs in Michigan;
  
• educating and training our people to fill those jobs;
  
• And protecting our families during the worst economic conditions in more than a quarter of a century.

The days when our government could be all things to all people are behind us. This is no time for special interests or pet projects. It's a time that demands relentless focus and discipline.

Good-paying jobs. Education and training. Protecting our people.

After years of seeing our economy battered like no other state by the combination of global market forces hammering the auto industry and trade policies sucking jobs overseas, fortunately, Michigan now has a friend in the White House who shares our agenda.  I say this based on pragmatism, not partisanship. President Obama's priorities are nearly identical to ours. He, too, is focused on jobs for middle America and new, renewable energy jobs. He, too, is focused on education. He too is focused on protecting people. He's proposed a sweeping economic recovery plan for the nation.

Please review the nation's economic statistics over the last 8 years and compare Michigan's record with that of the Nation.  But I suppose.. In all fairness, you aren't entirely at fault for the last several years, but your ideological bedfellows in the congress are.  Those statistics reveal the relationship between who is controlling congress, and the failure of the economy.

However..  The support for "union think," that place where the leaders of the enemies of business have cowed the membership into an all or nothing mentality have indeed found their desired result..  Nothing.  Trade policies be damned if it still is not worth setting up shop here in Michigan.  It is your policies, Jennifer Granholm, that drive business from our shores.  It is the unrelenting punishment that is inflicted by labor rules which limit the choice of the OWNERS of business.  Choices that are made on the basis of profit.  IF they cannot compete from the platform of Michigan, why would they build here?

Obama's priorities are identical to yours..  I believe it says much.

As the details of that plan take shape, we know one thing for certain. We, in Michigan, will use that recovery plan to accelerate our own. We are not starting from scratch. We have already made renewable energy a key focus of our economic development strategy. We're already transforming education and training.

And we've already made tough choices in our budget. So, while Michigan's budget situation is difficult, it pales in comparison to many states' now drowning in red ink. While other states will use this federal recovery funding simply to survive, Michigan will use it to move further and faster into a better future.

When that stimulus package is signed by the president, I'll come back to you with the specifics for Michigan. But let there be no confusion about this: If anyone thinks we should use the stimulus package to create a bigger government in Michigan, they should think again. I have a veto pen and I will use it.

The president's economic recovery plan is a one-time opportunity, not a permanent funding stream. One-time money will not weaken our long-term resolve to keep our fiscal house in order. We must reform our government to meet the needs of our new economic realities long after the stimulus funds are gone.

That is why I have asked Lt. Governor Cherry to lead a comprehensive effort to dramatically change the shape and size of state government--reducing the number of our departments from 18 to 8, reforming our civil service system, creating public/private partnerships, and infusing technology everywhere - because we won't settle for 9 to 5 government in a 24/7 world.

I'm asking our team to continually provide better service at less cost to taxpayers. That starts at the top. Today, the Lt. Governor and I have directed the State Officers Compensation Commission to reduce the salaries of all state elected officials in Michigan by 10 percent. With families across Michigan struggling to make ends meet, we must tighten our belts as well. I thank you in advance for doing your part.

We then wind up with.. well.. people like you, who don't understand what it means to be in business.

Instead.. Lets start with an Across the board 5% for EVERYONE who works for the state.  The ONLY reason you go for the elected officials, is because you think it will be popular, and if you hit the employees, you would get resistance from your union masters.

While many of the reforms in the structure of state government will require detailed legislation or even changes to our constitution, others will be contained in the budget I propose to you next week.

A recent national survey showed that since 2001, Michigan has done more to restrain general fund spending than any state in the country. Already, I've cut more than any governor in Michigan history. And the budget I present to you next week will cut even deeper.

I will recommend eliminating virtually all earmarks. While some fund helpful services, we simply can't afford them any more.
I will recommend eliminating funding for both state fairs, because while they are a wonderful tradition, the state fairs are not an essential purpose of government. I'm grateful that others are stepping forward to continue this tradition.
I will recommend eliminating the Department of History, Arts and Libraries and finding other means to support these important functions.
I will recommend returning enforcement of wetlands protections to the federal government where more staff exists to effectively safeguard our natural resources.
I will recommend additional reforms to our justice system that bring down the cost of corrections, while continuing to reinvest in more law enforcement on the street. Over the last six years, we have reduced corrections spending by $460 million, closing nine prison facilities in the process.
We'll close three more in the coming months.

Soon, I also will recommend long-term reforms to achieve affordable but stable funding for maintenance and repairs to our roads, bridges and transit systems.

There was more to your speech..  there will be more to follow up.