Text of Pawlenty's final State of the State

Here's the text of Gov. Tim Pawlenty's speech.

Here's the governor's news release:

ST PAUL -- In his final State of the State Address, Governor Tim Pawlenty said state government needs to listen to job creators about what needs to be done to grow good, private sector jobs in Minnesota. The Governor also implored legislators to reduce government spending, cut taxes on job providers, and reform the state's budget process.

"The most important question before us is this: how do we best grow good, private sector jobs in Minnesota?" Governor Pawlenty said in the speech. "The people who can best answer that question aren't in this room. They're not in Congress. They're not in the White House. They're not in bureaucracies. In fact, they're usually not in government or politics at all. The people who best know how to create jobs, are the people who have actually done it."

Governor Pawlenty said job providers are sending a clear message to government: "Get out of our way. Leave us alone. Make it easier, not harder."

The Governor outlined a six-part package of tax cuts and incentives, called the "Jobs Creation Bill," to spur entrepreneurship and job growth. The package includes:
•20 percent reduction in the corporate tax rate
•20 percent exclusion from taxation for small businesses
•"Angel Investment Tax Credit" to provide incentives for investment in early-stage companies
•Supercharged Research and Development Tax Credit
•Capital gains exemption for qualifying investments
•Incentives for companies to invest in Minnesota small businesses

In addition, Governor Pawlenty called on the legislature to extend the benefits of the state's JOBZ tax-free development zones, which are scheduled to expire in 2015, and create a new CARZ initiative to provide similar tax incentives at the Ford plant in St. Paul, which is set to close in the next couple years.

"We should spend only what we have, not what we hope to have," Governor Pawlenty said. "That's a common sense approach understood at every kitchen table in Minnesota."

Governor Pawlenty asked the legislature to enact the unallotments he made in July 2009 in order to bring certainty and stability to the state budget. The Governor's recommendations for dealing with the existing $1.2 billion deficit will be released on Monday.

Governor Pawlenty outlined several other initiatives in his speech, including:

•Holding the line on government spending at all levels – Governor Pawlenty called on the legislature to make the current property tax caps, which expire after next year, permanent.

•Increasing education accountability – Governor Pawlenty called on the legislature to pass his plan to give mayors the mayors of Minneapolis and St. Paul accountability and full control of their local school districts. Short of that, he directed the Department of Education to use existing authority to create an Office of Turnaround Schools that will have the ability to implement new leadership and hiring practices at failing schools.

•Reforming teacher tenure – Governor Pawlenty called for teacher tenure to be renewed every five years and based on evaluations linked to student performance.

•Providing additional choice and affordability in health care – Governor Pawlenty asked the legislature to pass his plan to allow Minnesotans to purchase health insurance across state lines. He also called for reforming state government-subsidized health programs to require that they include incentives to reduce costs and improve quality.

•Enhancing public safety – Governor Pawlenty asked the legislature to pass his "If You Don't Breathe, You Don't Leave" plan to crack down on drunk drivers and his proposal to more than double sentences for sex offenders.

•Streamlining Minnesota's permitting process – Under the Pawlenty Administration, the wait time for water permits has already been cut in half. On Monday, the Governor directed state agencies to further improve permitting.

•Improving the democratic process – Governor Pawlenty said the legislature should ensure members of the military can vote on-time and establish a fair redistricting process.