Transcripts For CSPAN2 North Dakota State Of The State 20180206

Yu Lieutenant Governor stanford. It is a pleasure serving with you, appreciate all that you are doing, and appreciate the fact you are staying so close to your kids. I cant even get through the first line. This guy is amazing as a dad, a partner, former cfo, he is exactly what the state needs it is a key part of what we have gotten done as well. [applause] governing is a team effort and there are three branches of government and we are well represented here today. We have four of the five Supreme Court justices that serve our state here today including the chief justice, longestserving justice in the history of north dakota but lets honor our judicial court, if you guys could stand to be recognized. [applause] and we have a fabulous turn out of state legislators hear from across the state, they have different from all over, these people serve all of you, not just when they are in session but all year round so if we could have all our state senators and representatives today please stand. [applause] and we are very fortunate to be able to serve along with a number of other dedicated statewide elected officials and theres a number of them here today so if we could have secretary jagr, tax commissioner ryan ross berger please stand. And the commissioner is also here so thank you. And in our state we are fortunate to have within our borders 5 tribal nations that touch our state and we have lots of things we are working to partner with, our tribal leaders. A number of them come from all over, as i would like to acknowledge all the tribal leaders here today if they could please stand. [applause] and of course for me i want to acknowledge the first lady of north dakota, catherine and joe, jesse, and tom who are not here today but are watching on a webcast somewhere, probably multitasking like your kids are but thank you for your support this last year. It has been amazing. [applause] the place i people have learned in the last year that i like to start is with gratitude. It is such an honor, our entire team, to serve all of you. It is an incredible honor to do that. What it all starts with like so many people in the state there is something about north dakota, a place where you just cant help but love north dakota for its uniqueness, its difference, everything it throws at us. It is a place that we can love and we love the people in it and we love the roles we are in because in the roles we are and we have a chance to make a difference in peoples lives every day so we are so grateful we had a chance to meet so many people across the state in the last year and the people we meet are passionate about so many things, doesnt matter, agree or disagree, party, east or west, whether it is fargo or grand forks or golden valley, across the state meeting people that care deeply about north dakota is part of what makes this place great. In the positions we are in, the things i have learned in this last year is people share, people ones to share with their leaders and they share i asked the first lady, people will share with us their most tragic losses, loss of family members due to overdose, people will share their stories, their struggles but they will also share their successes and enthusiasm about what we can do and what our potential is. In every one of these interactions we learn from the wisdom of the people in north dakota so that is just a great great part of being in this job. It is an executive job and you can actually get stuff done. We have an opportunity to go to work with our partners in government and do things and make things move forward and the other thing you have to be grateful for because the context of north dakota doesnt exist without the context of the United States and to win the ticket, so to speak of being part of the United States, we have a country where we have freedom of speech, freedom of religion and the right to bear arms and the right to assemble, these freedoms that are not, do not exist everywhere in the world but they exist here and we should make sure we remain grateful for that opportunity and the fact that we have free markets and the ability to take risk because the success we are seeing in our state, the resilience we have is not about government but the private sector, entrepreneurs and innovators, that spirit of innovation that has driven our state since the beginning and continues to drive it forward. As part of this idea that we get to make a difference in peoples lives every day, with everyone we work with, we want to bring that forward. Our administration is adopting a purpose statement and the purpose statement is simple, six words, empower people, improve lives and inspire success. This is what anybody who works in State Government gets to do every single day and that is a fantastic way to spend your time so i stand here before you today, we are going to wrap this up and the state of the state is going to be over and the next minute which it wont be but if we are going to wrap it up, in conclusion, the state of the state is one of unlimited promise and potential provided we embrace change, diversify our economy and harness the Unstoppable Force of technology, the first half of that sentence is absolutely true for our state, unlimited promise and potential. The second half represents a set of challenges we have to Work Together collectively to overcome and if we do that the top half is going to be hours. Lets look at that. A year ago, the state of the state was honored to step in and serve in this role and began a journey and that journey last year at last year at state of the state if anybody online wants to go back and watch that one, some people might like that one better than this one, we will see. The beauty of online recording, right . That state of the state a year ago we laid out some important themes, talked about the budget, property taxes, transforming education, the impact of addiction on individuals in our state, the need for improved tribal relations, building stronger communities please im grateful for the team effort throughout this last year that we have been able to tackle a number of those initiatives and the things we talked about last year thematically became the big Strategic Initiatives we are working on throughout the years that we are grateful for everybody who helped us make progress on that but before we look ahead at the Strategic Initiatives and what we are doing in 2018 lets take a quick look back at 2017 because this was the year that brought a number of challenges, some that were foreseen and some that were unforeseen and it did consume a lot of leadership time across government to deal with the crises came up and the first one a year ago, not just on the front pages here but around the world was the protests around the Dakota Access pipeline project and these protests started peaceful and prayerful, began with a powerful spiritual intent. There were incredible, historic moment that occurred at the beginning but by the time brent and i took office in december it had evolved into something much different and it is important that we respect the right for people to assemble, respect the right of free speech, we do that but we also said we have to understand the people of north dakota, we are working for every citizen, one of the first things we did as we went down and spent time listening on Standing Rock, spend time in the community of cannonball, met with ranchers in Morton County and listens. Sometimes we listens for hours and hours and theres a great lesson here for all of us in the middle of conflict, the power of being able to be present and listen and understand the energy and passion behind this historic event but from that we learned and understood Standing Rock wanted to have the protest camps closed so we worked in partnership with Standing Rock and worked across the government approach, and when the last protesters left the camp 76 days after brent and i took office, engaged with 11 different federal agencies, we had held from 22 different states, four nongovernmental groups, 31 emergency jurisdictions, 110 local jurisdictions from around the state and coordinating 175 partnerships to deal with something unprecedented in our history and one of the key things we had was we were going to resolve easily and clean it up because part of the original intention, this was initially about protecting the water where the camp was situated, you see this was next to the Cannonball River before the historic snowfall started coming in december and on the righthand side of the slide, last july, we saw this before the spring melt down, and 10 Million Pounds of degree left behind in the camp including cannonball or Missouri River and that would not have happened without Great Team Effort from Indian Affairs group, friends and relatives at Standing Rock, tribal groups that helped with this cleanup, huge team effort and more dialogue to be had about the future of infrastructure, impact of industries on the environment, we can have those dialogues in a peaceful way and we can have that in a productive way but this is a celebration where we all came together and protected the environment. [applause] we knew when we took office that the protests were occurring, what we didnt know in the middle of all the record snow we were having in central and Western North dakota when we took office was less than 5 months later we would be in the middle of the historic drought but this is part of what you love about north dakota. This is the drought map from july 25th last year, the darkest areas are exceptional drought, the red is extreme, the light orange is severe. You can see virtually the entire western half of the state was in severe, extreme or exceptional drought, this led to all kinds of economic challenges for farmers and ranchers, required a response, our approach was lets get out and listen because farm programs are complex, theres federal, state, lots of different agencies involved, lots of bureaucratic programs meant to help in the context of a drought maybe not be happening so we did that. Is the whole of government we had great partnerships with the department of agriculture, the permit of Human Services, bank of north dakota, state Water Commission and north dakota state emergency services, state fire marshal, national guard, delegates from the congressional offices representing federal standpoint but we held these around Western North dakota in communities like this and listens, part of this is droughts dont make great frontpage pictures, floods and hurricanes make Great Television because you have all the water. A drought is something that just eats away economically at family operations, family ranches, and their livestock, so there is serious, serious stress not just economically but on families which when we went to these things with the whole of government, taking care of your cattle make sure youre taking care of your self because a drought like this can tear communities and families apart but listening from all of that we came up with a number of ideas, we listed 10 executive orders which helped us, by declaring the drought and fire emergencies we waived permit fees, distance requirements, established livestock water supply program, a number of things we did to provide relief, to understand when we met people at those drought things, people that would normally have 1400 bales to feed their cattle during the drought, in some cases pulling less than 40 off of the same thing, of their normal crop, 50 , 70 , people that were desperately in need we had to get the cattle, the feed, feed the cattle, one of the things we partnered with was hey lottery, 492 applicants where people applied, ranchers in north dakota applied to do that, 289,000 of these bills, with 9. 3 million miles an save and serve 126,000 livestock so with that we were able to provide assistance and that reimbursed 36 of peoples costs to do those, doesnt save the day but everything held in the midst of a crisis like this. The state Water Commission worked on coming up with 1. 3 million representing where a rancher applied for a project for water supply, these were for new projects, every green. He represents is building a resiliency because each of these projects is not temporary, they are permanent and help provide permanent Water Supplies Going Forward. When you have that much drought you end up with fires and we had an incredible year, 430 wildfires reported in Western North dakota last summer, a near record, largest of which was the magpie fire at Missouri National grassland, the federal government was involved, 5400 acres burned. There were many more fighters, the fire to the ranchers themselves get the fire put out for they announced for help but i do want to give a shout out to the north dakota forestry, state forrester, the longestserving state forrester in this country and his team and we need to share our gratitude with firefighters most of whom are volunteers, nearly all of them are volunteers who are out fighting these fires in the last year so those volunteers, farmers, ranchers, and wearing 5 other hats, those Volunteer Fire Department in the western part of the state, fabulous job this year, lets give them a hand. [applause] the drought impact not only affected livestock and people and communities, it also affected wildlife which is a big part of the hunting, fishing culture but economically, many communities depend on hunting revenue but licensed personages presage purchases were down, bird countdown 63 on pheasants so they were way down, deer hunting also, we had 54,000 deer permits issued, fabulous to live in a state that has the kinds of Natural Resources we have with outdoor activities. If you are not taking advantage of this it is another reason to live here but challenges remain, today we enter into winter and start thinking about stopping thinking about drought but we move out of the extreme and exceptional but still have areas considered severe, the western half of the state is still considered moderate. The eastern is abnormally dry and when youre driving a school bus are going to your kidss games you are happy theres not a lot of snow on the roads but we are short of moisture and could find ourselves continuing to have challenges in the next year but we are a state of extremes, and 7 years ago the historic floods. I want to say we havent forgotten about the 7 million in damage, 4700 structures that were there. The legislature stood behind, committed 78 million through the Water Commission towards Flood Control projects, congratulations to everybody for achieving the decision from the army corps of engineers because that is not an easy thing to do but Flood Control continues to be a Major Initiative of the legislature and spending so continuing to charge ahead on that. On the other end of the state which had significant flooding multiple times, great progress being made, city of fargo achieved a decision from the corps of engineers, federal authorization past the sales tax, funding for the state legislature to protect the largest flood protection project in the state but also protecting 17 of taxable sales, 30 of open jobs in the state, 14 billion of Property Value would be protected by the divergence so the record on many measures in terms of the scope and scale of that project but that came to a halt with litigation through the state of minnesota so the entire project was stopped through connecting with governor dayton in minnesota. We agreed to get a task force, governor dayton and head of the dnr came through all 6 meeting this, they were held, full day long meetings, got to spend five will days with neighboring governor and from that work issued a final report, engineers are working, we have a possibility to solve issues we were trying to solve in terms of maintaining the federal authorization, making sure we had projects though people would not have to buy flood insurance, getting more water off of minnesota north dakota taking care of downstream and upstream, other problems trying to be sold at the same time and it was like riding horseback with a bow and arrow and hit a bullseye when the targets are moving but it was through that, we have a plan coming out of this that should solve those problems and we can get back to work protecting one of the most significant economic engines in the region. The budget challenges when we took office last year, everybody knew this coming in. Legislature understood it. The prior appropriations in the previous session had been 6 billion through a lot of teamwork, we balanced the budget together, did that bringing spending down to 4. 3 billion which is a historic shift no legislature ever had to drive through in dollar amount from a percentage basis, the work done since the Great Depression and able to strengthen government but still maintain services, 327 equivalents that does not count Higher Education and 642 fewer budget employees still working to work smarter into keep delivering services and funded what we chose to do including fully funding k12 but one of the things in our state if we dont diversify the economy we end up very dependent on things we cant control, commodity prices, ag and energy being commodity related if we take a look at what we have been through in the past we 10 years look at the price of corn and you can see there was a time when corn prices were very high, they get high and you think they will stay high forever but you see the precipitous drop they went through and they stayed low putting pressure on our ag communities and ag producers and everybody in the system and puts pressure on the state because of the revenue we produce. From energy standpoint, Energy Prices are volatile, lots of competition. Our approach in our state is all of the above, supporting oil and gas, coal, wind, oil and gas, a lot of that is going towards transportation, fuel, coal, wind, that is to power our grid and if we didnt count the coal industry we have some of the lowest electric rates in the country, the most reliable electricity because of the baseload we get provided by coal and the renewable continues to grow and grow at low variable costs, those dynamics put pressure on the economics between those two and we have to sort that out as we go forward but from a revenue standpoint to the state, we are very dependent on revenue that comes from the oil and gas industry and as you can see here we had a huge drop from june of 14 to january 2016 where we got a 70 drop in the price of oil making it difficult for any organization when you have this kind of volatility on the revenue side to figure out how to do your spending. Oil production is back up as you see on the prior page as oil prices have come up, production is starting to climb up, very likely in the next few months we will break our previous record high in terms of barrels of oil produced per day and that is absolutely positively a due to the fact this industry has figured out through technology and entrepreneurs of the ship how to get their breakeven costs down because roughly 60 a barrel, we have people investing and making money, four five years ago they needed prices at 80 or 90 to make money and when we do things that are smart like drilling more wells on a pad, having less surface impacts and providing better economics in terms of how we do this some of the challenges we have related to workforce there would be more activity going on in our state if we could fill the jobs and as we produce more oil we also produce more gas and if we produce more gas we have more gas capture which means infrastructure which means gas lines which means working at the state and federal level because federal lands or tribal lands with burdensome federal regulations to do the gas capture to keep making sure we are capturing all the gas we want to capture as we go forward but with this oil revenue being highly variable this is the challenge the legislature is facing, almost 6 billion in oil revenue in the 1315, that could drop in half in 1517, we are projected to be about the same in this thing but dealing with have the revenue that came in from this important source. The other thing that made forecasting tricky was we had a huge runup in sales tax during the time the boom was going on and if you look in both of these it doubled from 2009 through 2013 it doubled. You might say that trend will keep going but when oil activity drops in Oil Prices Drop sales tax revenues followed to a lower level and again created a great challenge for us from a forecasting standpoint and as i said earlier through great teamwork with the legislature able to reduce general Fund Appropriations from 6 billion down to 4. 3 and keep driving ahead on the important initiatives the good news and bad news of how we got that done, the good news is prior legislatures built up some really significant reserves across different funds, tax relief fund, Financial Aid which goes to schools, Budget Stabilization which is meant for budget fluctuating and Improvement Fund and the general Fund Ending Balance leaving money in your checking account, think of the last column is that so money tucked away in a bunch of places when the revenues dropped we had a period of time when revenues were less than what we were spending and we were able to keep those Government Services rolling with our savings account, reserve Fund Balances but if you can see where we are in the gray, the gray is where we are projecting and in 2019 balances will be substantially lower, in some cases they were run almost to 0 it back up again so we are working our way back out of the situation, the risk, we are not riskfree so again more work for the legislature from appropriating standpoint to make sure we are matching expenses with revenues at a time when we have lower revenue and depleted balances. One other great thing all of you if you were an age that you were voting at that time is the creation of a legacy fund and the legacy fund takes 30 of the total revenue derived from oil and Gas Production and puts it away into a fund for the future. Through 2016 that money just grew and it was created by a vote of the people put on the ballot by the legislature through bipartisan resolution and that money grew last year for the first time. The ability to access the income off of it and the orange piece down there was 200 million that came from that that we were able to use that went towards funding for . 3 million. It will grow to 2018 into 2019 as the earnings go in there but i think i will steak out my position, i dont think we should be tapping the principal and when it comes to spending interest earnings i would like us to think about how to use those dollars to transform what we are doing, not just fund basic services so we may have to use this again to get us through this time when we are just using it to Fund Government but all the young people here, there will be an opportunity to use the Legacy Fund Earnings for something that is really transformative and part of the challenge i have to everybody in the state is to keep the ideas coming about what would really be impactful because very special that north dakota has this and has this is a potential tool for the future. In spite of cutting down from 6 to 4. 3 the legislature again, very supportive and very strategic on spending money on infrastructure and these numbers are down from what we were spending during the boom when we were trying to catch up but worth noting State Government still continues to be a huge economic stimulus in terms of building new roads, water projects for the most flood or water supply and airports in particular building the new regional airport, a lot of money being spent, add this up, over 1. 3, 1. 4 billion being spent on infrastructure by State Government so we continue to invest in ourselves and in the future. I want to spend a couple minutes on property taxes because this is such an important story and one that is not well understood so it is important to understand the work the state legislature has been doing on this. Prior to 2009 it was about an equal split between what the state provided towards local School Districts and what local property taxes paid for for that and some small amount of money that came from the feds but when the oil boom happened and oil money was coming in, one thing the state decided to do is take on a bigger share of paint for local k12 funding and that is where those lines separate the orange line had skyward and the local line staying flat. In dollar amounts today in 2017 local School Districts through property taxes are contributing almost just under 100 million less than they were in that 2010 timeframe. The state on the other hand is paying almost 570 million more than we were in that timeframe so this is gone from a 1 1 ratio to almost more than a 21 ratio approaching a 3when in terms of what the state pays versus local so if you hear someone at the state or state legislature talking about permanent Property Tax Relief this is the slide. The state permanently taking on a higher proportion of k12 spending through state Revenue Sources lowered the burden on local taxpayers and so if you put it in a percentage basis, the local, 45 , now the local is paying about half of that in terms of the k12 on a per student basis. What does this mean . There has been a lot of discussion about one element here ending the 12 by down, very little discussion about the blue bar. I want to be sure we are doing since we have all the students your we can do a little math together. The additional care12 relief that is coming through increases in student funding on formulas shown from the state in the next biennium is estimated to be 150 million coming from the state, the state has taken on the transfer of payments for county social services equaling 161 so the county is another group taxing through property taxes to pay for that but the state did end the 12 by down, something i talked about last year which is it was unsustainable, the state needed an offramp for property taxes because property taxes are driven by local decisions, not state decisions and it was unsustainable going into the future as a percentage of something that somebody else decided and in the worst cases at subsidized local spending that might not have been affordable by local jurisdictions so very slightly Legislature Getting out of that. Put of those things together in the system, theres more debt relief going so i know if you are from a city like minos and your property taxes of gone up you are looking at this chart going what the heck. I would say individual results may vary. Because if your valuation has gone up, if youre city leaders, local school board, the county, the Park District decided to offer more services, if any of those increase their mills, that could have an impact on your taxes but it varies, it will vary by individual property and by individual city, but understand from a state standpoint the state is doing more than ever with k12 and social services to help keep property taxes down so if you have a concern about property taxes a simple piece of advice, talk to your county commission and talk to your city elected officials because it is the group that is making decisions and get back to how we design our communities which we talk about in mainstreet. Federal partnerships, it has been an incredible year, not something brent and i expected, we thought we would have so much access, so much interaction with federal decisionmakers who can make decisions and in many cases a president ial vision to a small rural state like north dakota will occur in the last month of the last day of their second term. We have a new sitting president , and only eight months into his term, decides to do a major policy, this is the kickoff of the tax reform for the nation, happened in north dakota, that was one of many partnerships but at the cabinet level, whether it is the secretary of the interior, secretary chow who was in fargo for the focus event, secretary perdue who was very helpful in working with the commissioner and i on drought relief, epa director pruitt who has taken the lead in rolling back the waters of the usa which was determined to every farmer in north dakota at the cabinet level interaction lots of things happening that are probusiness, proenergy, proagriculture, pronorth dakota and in talking to i have had a chance to meet 40 other governors from both parties, doesnt matter which party they are and they say they never had more access to cabinet people, had more access to cabinet leaders in the last months than in the past eight years, cabinet leaders are the ones who make it happen for state like us so i would say focus that signal, lots of other stuff goes on in dc that is noise and that gets the headlines, the signal is we have cabinet leaders helping make our state better every day. Up north we have this border with canada we dont even talk about, 310 miles long, 18 border crossings, canada is our number one trading partner and in ag and in energy it has been quite a year on that front, we had a chance this last summer to meet Prime Minister Justin Trudeau and i give a shout out, my daughter jesse, today is her 22nd birthday so happy birthday, jesse. [applause] lower left, canadian ambassador david mc not, had a chance to meet them three times, outgoing premiere of rat wall, the premier of saskatchewan and brian and his wife esther, premier and his wife of manitoba. You can tell from that picture they were both collegiate basketball players. Brian is also a fast pitch softball player who has been to 20 tournaments in fargo so he really knows fargo. I was joking with him, we forget in winnipeg there were 675,000 People Living in winnipeg and we only have 750,000 in the whole state of north dakota and he goes what are the things youre working on . We have 13,000 jobs open, im working on getting 13,000 people to move south from winnipeg to fill these jobs but we had some great partners up there. We do touch not only trade but water. You get it right here with the river, you understand how important relationships are and we want to keep working with the red river basin it crosses the border. Lots of things we can build, partnerships with canada for a Better Future for north dakota. Those federal partnerships also lead to the military. We are honored a month after the president ial visit to have the secretary of the air force and Vice President of the United States visit, not only critical to our local economy at a time when we still have global tensions and Global Nuclear tensions which are an unthinkable thing that i thought i could quit thinking about from the 60s in 70s when we were kids doing the drills, when you were kids in school but we would like to think we could get past that but in the meantime it is very important for our country and all freedom loving people everywhere that we have a strong deterrent when we have rogue nations threatening Nuclear Activity and we have the only base in the nation that has a dual Nuclear Mission both in missile wing and an air wing and that was the reason the air force and the Vice President were here so we also have security a database provided by north Dakota National guard and a unique partnership that doesnt exist elsewhere so we do have a number of folks here that are representing the important work that is going on and i would like to make a few introductions. We have our north Dakota National guard adjutant general here, colonel sloan, Vice Commander of the fifth bomb wing from my not air force base joined by colonel benjamin spencer, Wing Commander of the grand Forks Air Force base, chief ryan thomas is here and perhaps others but if i can ask all those officers to stand and if we could have all of the active Duty Service Men and women today also stands, lets give our military leaders [applause] [applause] if you guys can stay standing, if you could stay standing can we have all the veterans in the room, anybody who served at any time in your life, all the veterans if you could please stand. [applause] i want to give a special shout out to our tribal leaders because once everybody should know, in our country, the group that volunteers and it lists and served at a higher percentage than any group in the country is american indians, native americans right there. It is also an incredibly special honor today we have private first class lynn haas here with us. This gentleman served in world war ii and served with distinction, he won the medals for bravery, bronze star, purple heart and just last year the country of france awarded lynn cause the highest military honors that they have, the night of the legions honor, he is here from my not, 96 years old, world war ii vet. [applause] thanks for being here, greatest generation right there. One of the other important parts of this is the opportunity to interact with the third branch of government, the judicial branch. We have a system across the state represented by the colors of district courts, those are elected by the people, if those positions become vacant the governor has the honor and duty to make those appointments and i was pleased last year to have the opportunity to appoint six new judges from a pool of highly qualified candidates that are one of the things you learn for each of these positions i interviewed three candidates, 18 people who served with dedication, one of the things you learn is you cannot do this job in north dakota unless you are face to face every single day with addiction absolutely, these people are experts because 70 of our people in the criminal system have got an addiction. When we are trying to solve problems this is a group that can be a big part of that. And extreme honor when a vacancy occurred with justice carol, we have the opportunity and honor to appoint one of the district judges, judge jensen, not only brings great judicial worse but a mindset about reinventing government to make sure we can get more done with less, not only fair with justice and the processes we built and a great addition to the court, thank you, great to be part of your investiture, thanks for serving the state. [applause] 2017 was an incredible first year, i had a chance to share gratitude for the help across all that. It was a huge team effort but in addition to the worker was laid, the foundation laid, crises that were managed, trying to drive forward. As we look ahead, challenge of the bound, the world is changing but if we are going to achieve unlimited promise and potential it requires we embrace change, diversify the economy and harness Unstoppable Forces of technology. While i am on this slide, i see the slide, i see more face championships in the future too. [applause] what are the Unstoppable Forces of technology. This is an hour long keynote in 30 seconds. Ubiquitous sensors, pervasive mobility, a supercomputer in your pocket if you have a smart phone, you wrap that up with a magic software, throw in Machine Learning and artificial intelligence, computers actually learning and getting smarter through software to run so you dont need people to make the software better, the machines can keep making it better and more intelligent, throw those things together and what happens is it changes every job in every company in every industry. Represented on the left the energy industry, without a change in technology, we would not have an oil industry in north dakota at the prices, people wouldnt be drilling if they hadnt made the technological advances, technological advances driven by the things in the prior page allows an industry with free Market Forces to continue to move forward. Agriculture, the free market force in north dakota, 31, in 1900, 31 worked in production of agriculture, today it is a tiny fraction of that and we produce more and better food than we ever produced ever before because of the productivity, American Farmers are great, north Dakota Farmers and ranchers are the best in the world and they are adopting technology at a rapid rate. What do we have on the righthand side . Healthcare and education. When we didnt break it out in the budgets earlier, 70 of what we spend across our budget goes to health, Human Services, k12 or higher red, 70 so if you are in this job, like the ceo job, along with University President s and other, those healthcare and education are not immune from the forces here, they got a little more insulation because of federal involvement and traditions but digital disruption comes in waves, it is coming sooner than we think. For us to be successful as a state we have to figure out a way to embrace the Digital Transformation and you cant embrace change with having the culture set and that is part of why the purpose we talked about earlier in terms of empowering people and improving lives and inspiring success as state employees of which there are over 16,000 state employees, we have to all agree on a common purpose and drive forward to do that and be openminded about how we are going to get that done and there are five areas driving out of our administration across the cabinets the we are focused on and these are the five Strategic Initiatives, reinventing government, be behavioral help, transforming education in the mainstream initiative and when we say crosscutting, not Just One Agency working on each of these, we might have a dozen agencies working on one of these crosscutting initiatives. Lets start with reinventing government. A year ago at the state of the state, we embarked on a mission to reinvent. The statement was if anybody wants to defend their institution probably not going to have time for that meeting. If you want to talk about reinventing your approach and process and systems, we will meet until midnight, we have a lot of fantastic north dakotas that want to do their best and reinvent how they do stuff, we have a lot of meetings until midnight with people, great ideas on how to do that starting with our own cabinet. We challenged the cabinet to think about how to drive change, be in a relentless pursuit of the exceptional and put together a group of leaders, a mix of veterans with new, eight new cabinet members, nine veterans, a balance, Institutional Knowledge and fresh perspectives but this team meets multiple times a month, driving through on the crosscutting initiatives and we have a great Leadership Team helping drive the core government agencies. One of the things that is important during the cultural transformation is to understand the people that are on the front lines. The socalled drivers, school teachers, people that are doing counseling work on the front lines, we put out a survey, coming back with their feedback, this is a word cloud that represents the feedback we got, this is one of the tools that we want to employ regularly to make sure we understand and listen as we are trying to drive transformation. We are pulling together the extended cabinet leadership because we have the cabinet leaders which are the agencies that they have their direct reports over the First Time Ever we had an extended cabinet Leadership Meeting where we pulled everybody together and working to get everybody on the same page to drive these costcutting initiatives and the transformation, this is a new way of thinking how to do a better job for all of you in terms of delivering Government Services. One of the ways we interact with citizens is through technology and as we approach technology in the past, we have been doing it in the silos of the agencies and everybody is like lets create a website but we end up with 160 websites in north dakota, none of them interconnect with each other, you try to buy a park pass and fishing license, two different times and when you come back it doesnt know who you are, you were on the other website. If any of you have done any shopping online and let me guess the percentage on this room is very high in rural north dakota, 100 of hands go up, shopped online, when you go online, when you come back the second time they remember you and remember all the things you look at when you were there and here are the things you looked at but didnt buy. Across all cabinet agencies and said what are the kinds of things that youre tasked with. Are you working on growing the systems or trance transforming government, turns out 91 of the resources we have is just keep ing the lights on, running the systems, not just 160 plus websites but we have over 8020 business applications. We have mainframes that we are trying to run. We have to figure out a way to Harvest Resources from the run to transform and we have to do this across State Government if we are going to be able to do that. In in the private sector, if you think of transform r d, most Software Companies 15 to 20 r d and we are running at zero and we have to keep a way to keep in vesting in the future to make sure we are going to Service Citizens better and keep costs down. Cybersecurity is another huge risk for us in the state and thats what i have to say. We have to find out the right systems, approaches, processes, funding to make sure that we address this. We are averaging 7. 3 per month on the state of north dakota, that maybe a shocking large number but thats the world we live in. Some of it is state sponsored or some doing it for profit or someone trying to harness a bunch of computers to mind bit coips, a variety of bitcoins, we have vital information, we have an opportunity duty to protect citizen information and we have to invest and make sure we are doing that. A couple of fun things that are happening in terms of Digital Transformation coming from dot on the righthand side there, they are testing kiosks, they have them in three locations in bismarck, both on the campus but over at the mall. 18,000 Motor Vehicle tabs have been redone by people walking up to the kiosks, thats a fun thing versus waiting in line, get a number and go through that theres about 2,000 people that have renewed drivers licenses online. Thats a cool thing. We dont have to go get a number and sit. Last year there was a loft oh of angsth, one of the things that the dot is test driving right now, theres tractors on there, you can download an app and track the snowplow in your area, where are they coming, when was the last time they were by here but if the pilot works we will roll out all the snowplows. Thats a unique thing we can do as a state. As part of innovation and rein venting government, one of the things we launched last week in conjunction with the department of health and dot, Highway Patrol and we we want to have collaboration with counties , with cities, with the tribes, we want vision zero, zero fatalities on our highway and zero excuses, hey, is that doable, thats probably not doable, i dont think thats doable, wont be doable in my lifetime, the question is you want to ask, what is the right number for your family, how many people should die of auto accident, is there any number other than zero for your friends , cousins, for the kids you teach, the number has to be zero and if any state can do it, it could be us, we might have a week or two weeks we go without it, we will celebrate that. We might have counties that might go a whole year without it we can get to this number and we can get there before any other state, what does it take, Government Plus technology because 91 of the accidents are human error, hey, by the way, we will have Autonomous Vehicles which will help drive the number down. Its also going to take us to be aspirational about about keep ing at this multiyear ongoing but also the personal responsibility of the wear your seat belt, if you have a friend, dont let them drive if they they are impaired. If you have kids, let them take a pledge dont text while driv ing. Thats the new sign, vision zero , get on board, find out how your community can partner with it and in the dot youll learn more about it. Behavioral health and addiction. Addiction can happen to anyone, anywhere any time, this is tear ing apart the social fabric of our communities around the country and from the state level we have to do everything we can to try to reverse that trend and it is its staggering the numbers nationally. We will have more overdoes death s in 2017 than auto deaths and gun deaths combined. The worst year in the history of all of saying hey, war on drugs which started in 1980s, worst ever in terms of overdoes deaths and its driven by more powerful and fatal drugs a lot of them relate today related to fen t a we need to start with the understanding that addiction is a disease and you cant you cant treat a lifetime chronic disease with 28 treatments anybody that you can treat diabetes with 28 days of insulin you cant incarcerate who have a health issue and expect them to get better if they are not getting treatment while incarcerated and as leon burch says, we have 98 of the people in north dakota get back out of incarceration, we need to be make better neighbors and not better prisoners and we need to make better members, theres a tie in workforce that we can be tapping, we are are making progress, Opioid Awareness efforts, weve actually reduced about 11,000 fewer prescriptions in 201716, a statewide task force that was looking at that, some of that involved changing in software, some people dispensing it and things that we will be keep chipping away but staggeringly high, 60 thoses for every women and child, 60 doses for every man, women and child. I dont think we need that much pain medication as a state. So we need to think about how do we use it appropriately and how do we make sure we manage the supply and manage the challenges of the disease of addiction. One of the things that we did bring attention to new approaches on reinventing recovery was an event, the first lady helped drive this event and it was fabulous turnout, fabulous speakers, speakers from all over the country that were there and at the end of the day, it was interesting, people got done, we loved the speakers, they were amazing, five of the people that spoke today in the conference were felons. The women the woman from la, the lawyer who works in hollywood, felon. We have to understand that we we are we have to get rid of the stigma associated with this and start looking at the root problem and so we are in the first lady has been doing amazing work prior to this, part of the ideas and speakers that came from this event came from her five visits to five other states on her own dime, own time , new hampshire, vermont, massachusetts, california, arizona, new jersey, with chris christie, anyway, bringing ideas and bringing speakers back to help and Great Team Work from pam and her team in Human Services, Great Team Work effort driving this thing. One of the things that happened at that event is we said lets give out narcan, the nasal spray that can reverse an overdoes. Some people said, its north dakota, a, we dont have a problem, b, why are we giving out something thats going to support addicts, thats the kind of language and thinking that we have to get rid of. This is a lifesaving tool for people who have a disease, 326 kids were distributed after we gave training on stage, five day s later there was a there were parents that came, parents came and listened the whole day, they left with narcan, they were there because they had adult son , early 20s, they were concerned about his addiction, five days later they come home, hes unresponsive in the bathroom floor, the dad applies the narcan, saves his life, sav ed his life. [applause] and the legislature and the judicial branch, they are on this, they are on this and making great progress, passed the bill last year, one of the most significant pieces of legislation, this moves 7 million out of corrections up street to start working on collusions, keep people out of incarceration, get them into treatment, the brand name for that effort coming out of Human Services is free through recovery and the this is to try for us to support up to 600 people with Services Previously not available in north dakota. And if we can provide 600 people with services and keep them out of incarceration, it cost all of you, it cost taxpayers, 41,000 a year to incarcerate someone, a fraction of that to get treatment and they can be with their family, with their kids working, generating taxes, it is so war on drugs is tough on taxpayers, thats what it is. We need to come up with solution s that solve the problem and work for taxpayers, so any way, we need more investment in this Going Forward but, you know, Great Team Effort, first training yesterday morning, the first lady was there, pam, about 25 of more people showed up they are going to work on that, fantastic. At the federal level, first lad ies have been very busy, shoutout from President Trump and shes met with the white house drugs richard, commission er, and continues to build these relationship at the National Level and do that and i just want to say to the first lady, your courage to put yourself out there on this thing is amazing and its making a difference, so thank you. [applause] coming up next recovery is one of the elements we want to focus on prevention, we want to focus on Early Intervention and we want to focus on treatment and recovery, the four elements when we are approaching this holistically, we had the day focused on recovery, now in the spring a day of prevention. Registered, recovery reinvented. Com, i challenge people to get there particularly if youre if youre clean and sobber and have friends, school friends, other classmates that arent, think about getting out of school and coming to this thing, ask your ask your principal, superintendentant, why arent we sending a bus to this thing, this is an everybody issue. Tribal engagement. One of the top priorities. We at inauguration had tribal luncheon, we met with all the tribal leaders, we had everybody come in, we have gone out and had meetings with tribes, where are we . We have a long way to go, trust was very, very low last year and probably for good reasons but but digging in on this thing because its so important to the future of our state, you know, what we have here is a history that goes back before we were state, long before north dakota was here in started in 1899, we have tribal nation that is were here with a complex mix of this tragic history and inter action with the feds and broken promises and treaty debates that all happened before we got here, force assimilation, it is a tragic history. One of the challenges we have is not enough people in north dakota understand that history and the challenge that im going to put out to all of you is to try to better understand the history. We need people that really work to understand where weve been so that you could also understand what is the inspirational resolve solve of our tribal nations to try to work on behalf of people to create better situations and we have a federal system that is, i think, incredibly, the federal system is incredibly dysfunction al and it is led to multigenerational poverty and challenges and we have to whether its addiction or k12, whether its higher ed, all initiatives that we are working on also apply here, its just in this case we are working nation to nation relationships and so we have to approach it a little bit different and so we have to figure out a way to Work Together to try to resolve that and im grateful for the partnerships we built with the leaders that are here, they have been incredible hosts when katherine and i have been there and we want to continue to keep those dialogues going on this year to work on the big issues that are fazing us. The some of those areas relate to taxes we created for the First Time Ever, tribal taxation, committee that was formed by the legislature, we have the leaders from both parties, tax commissioner, Lieutenant Governor, myself, its a Historic Group of leaders thats put together on one group to really put the leadership working on on tribal relation s from the legislature and executive branch working together and we are hoping that that can lead to legislation that can help solve some of the challenge that is we are facing, but we need to listen more and we have to understand and those if you get out and spend time listening, understand, yes, we are separate nations, we are all north dakotans. We all have kids and we all want the same thing, bright future, congratulations on your new responsibilities but thank you for hosting and inviting katherine and i after the ad diction submit summit last number up in Turtle Mountain an shoutout to all the leaders, monica from mha has been great working with katherine on a number of things she received recognition that the recovery re invented but thank you chairman fox, thanks for your leadership on the tribal taxation efforts but we have a great crew of folks here, thank you all for being here and we look forward to continuing to work with you. Education, this is a biggie, we are teaching in many cases same way we taught them 120 years ago we think that we have a monopoly as State Government in dliffing private education for the most part because theres about 109,000 students in k12, 900,000 kids that are home schooled or 109,000, we have and the state delivered education is essentially monopoly market share and our own effort to try to adopt the technology and the approaches and the processes to help transform this. This picture was taken here at school, go vikings, they had all Elementary Schools in coding, teaching how to code, private partnerships involved, microsoft , 4h ambassadors, in credible day with incredible energy, with kids learning all kinds of things. Again, legislature deeply involved. Senate bill, innovation bill, bottoms up innovation. Not top down washington, d. C. Decide, bismarck decides, this is each individual School District can adopt plan and they can decide locally what the best way to try to drive education. Hands on experience in education and to understand how to make that happen we have created k12 task force. We have been holding our meet ings. This was out in home of the troopers and had a chance to interact with students there as part of that tasker force thing. We are going to oaks next week. We will continue to get out into the schools and understand what people are doing to help drive initiatives forward. Last year we had great conference on education, in bismarck 600 people attended. This year we are just now announce announcing its two days long. Northern cast colony which observed arthur, if you heard of that tun town. [laughter] anyway, you guys know the history. The knights merged with the hornets and the eagles merged with the eagles and now the jaguars. [laughter] basically everybody i played now goes for the same school is sort of how i think about it. All arch rivals except for the squirrels are not part of this group. Anyway, this is a great event, my challenge to all of you is to get out there and to do that and i think we may have northern president Susie Carlson here, wave your hand, yes, no, there she is, thank you for host ing us susie, we look forward to seeing you at northern cast. Thank you. [applause] higher ed Governance Task force. Again, we have a governance system in highered thats been around since 1939. We have decided its time to take a look at that. We are going to work through 2018, we may or may not depend ing on the work of task force have legislation to be introduced to the legislature or to the people a year from now but weve got this awesome task force, the task force that had over 230 applicants getting down to 150 was hard getting down to 100 was really difficult, getting down to 50 was im possible and from the 50 we had to pick 15 but we have a fantastic task force the chief justice, one of the ones that are serving on this as well but weve had our first meeting and weve got traction going in terms of taking a look at how we want to take a look at this thing. The goal here, of course, is to make sure, again, we do lots of listening and part of that listening is that we are going the Governors Office will do tours. Starting this afternoon. Yeah, lets go. Here we go. [applause] we want to listen to the needs of students, faculty, community, we want to make sure that we get an understanding of where we are and then understand how can we create a governance system that allows our Higher Education to be tine amic dynamic and we have to figure out how to we get our Education System to match that. Main street, empowering local leaders to help attract 21st century workforce and compete in the global economy. Thats what its about. Theres three pillars, the workforce component, you have a healthy vibrant community and small piece you have infrastructure which sports supports the other two. Thats fantastic. We have that many jobs open. The problem is we have that many jobs open because if these were filled this would be like adding jamestown to north dakota. We have been out talking with folks around the state and two things come through to the top we have done 13 visits to different communities, workforce , workforce, workforce, workforce and health care is probably the highest one within that because we have a shortage of nurses and shortage of providers across the state and then the other piece which is a big take away is youth engage ment and one of my challenges to all of you, we have communities that are graduating all kinds of high school kids, graduating all kinds of college kids and their population is flat, do the math your population is flat, youre graduating high school kids, that means for every person that comes somebody else is leaving. We need tone gauge our youth and understand what it is that they want. We cant build communities that we want because we need to build the communities that they want. This is my challenge to everybody is deeper youth engage ment. Main street summit coming up february 12th and 13th bismarck center. Reserve your space now at main street. Com or mainstreet nd. Com. Great local speakers, everybody thats coming into this thing will be inspirational. My challenge to you right now i think grand forks has anyone more registered than anyone. [laughter] come on. [applause] so on the strategic initiative, there they with, crosscutting, working across, making progress, theres opportunities for you to participate in all of these. Theres ways, and theres a challenge behind all of these as well and so look forward to your participation when we close out here looking at the road ahead, this is a this is a road in the valley, not far from where i grew up and if you grew up in this part of the country, that road is fine if it hasnt rained for a week or two. If that road is rained, man, you are not getting down the road, you get stuck in that thing so fast. This is a little bit, the road a head is not some paveed, it requires judgments effort, some thought, it requires us to think about it and weve always in the past been able to think of ourselves as a state that know how to Sergey Lavrov veer and endure and now we have to add to that that we are the state that knows how to innovate and now know how to learn and we pride in putting up with the coldest weather, blizzards, thats built into our character but thats what we do. We have to understand that, part of what created, whether its the bobcats, that was innovation , that was leadership, these companies were created here by people that had their feet on the soil, they were tied to the land, they had all of that great capability of perseverance and endurance but that helped them become innovat ors and entrepreneurs and making new ideas, to do that you have to have a growth mind set and in growth mind set you welcome feedback, you are willing to accept new things and know how to listen to people. The fixed mind set i already decided, i know what i need to know. You cant tell me what i need to know because i know what i need to know because i heard it from somebody else or watched it on tv. I cant learn anymore. Im fixed in my thinking. If we have these two things colliding, we wont reach full potential, we have to be able to listen to each other and be able to learn, as i said last year, i know i learned something very powerful in december of 2015 when i met a homeless addict on the street in an ali in downtown , i learned something from that individual, i have been learned every day i have been in the job from all the people that have come up and shared stories with me, we need a whole state of people to get up in the morning, what am i going to learn today, to do that , to be a continuous learner , you have to have the courage that some of the things that you hold true may actually not be true. You have to be willing of let go perceptions. You have to have humility to understand that you can learn from anyone, you have to have the curiosity to keep driving forward with set of questions that help you come up with answer that works for everybody. I tell you, gratitude, theres a bucket sitting next to you called the gratitude bucket and you can reach into that bucket and you can share it every day, every day with everybody you run into and when you get up the next morning its actually fill ed up again. But some people dont know the bucket is sitting next to them because its too easy to get in the world where everybody is a complaint when we have so much to be grateful for in terms of what we have as a state, as families, as a country, the re sources that we have, we have a lot to be grateful for and so this is something, my challenge to all of you today, i was trying to think, we have 750,000 people in the state of north dakota, how do we get the gratitude engine, its a force multiplier, how do we get the things rolling, if 750,000 people, i understand if youre between the age between 1 and 3, maybe that doesnt apply, so we will take those out of the pop ulation, but your parents can write two notes. If you went out and said im going to write a note of gratitude, a handwritten note, im going to write a handwritten note to somebody who made a difference in my life, a coach, a teacher, a parent, an uncle, aunt, a friend, because you all know who those people are, you are probably thinking of them right now, if you had time to send them a note, thats a force multiplier, if we did that as a state once, we would make a difference. If we that a week we would be the most amiaing place to live in the world. We have this thing thats free, it doesnt require judicial, executive authority, personal responsibility power to the people, bottoms up, take the time, write a note of gratitude to somebody who made a difference in their life, you will make them feel amazing and do a check in on yourself and see how you feel, see how good you feel after youve done that for me. Just try it. Thats my closing challenge. We are in a state of unlimited potential and promise, one way we get there is a state and best price life has to offer is chance to work hard and worth doing, Teddy Roosevelt said that , he built character here in north dakota, we have a chance, we have won the price, we have an an inspire every single day we get up, thats one of the reasons why brent and katherine love this job. Lets go make it happen. Thank you. [applause] here is a look at live coverage for tuesday, the house at 9 00 a. M. Eastern, they will work on house labeling bill and morgan legislation, thats live on cspan. The senate is in 10 00 a. M. Eastern, more nominations are expected to come to the floor this week along with a shortterm government funding bill, no votes are scheduled. Live Senate Coverage on cspan2, on cspan3, defense secretary james mattis will take questions from members of the House Armed Services committee, thats live 9 30 a. M. Eastern. Sunday on cspans q a, New York Times photographer enjoys talk ing about president. Despite his constant, you know, comments about fake news and the media and so forth, i really i really feel he enjoy s us having us around because helps drive the message, helps drive the news of the day which he can do every day and does every day, hes constantly driving the message and therefore having us around really allows him to do that. Q a sunday at 8 00 eastern on cspan. Next ira shapiro, he joined a panel in the brookings institution, this is 90 minutes