[ applause ] in 2016, wyoming is ranked first in Mountain Region for Work Force Development and was rated third for new business startup activity and sixthbest state for business. So despite being the most difficult budget year in my time in office,wayway stayed proactive and forwardlooking with the Capital Construction project, with the whether or not work of renovating and modernizing our state facilities like the wyoming state hospital, the wyoming Life Resource Center and the wyoming veterans home. We had Ground Breaking at the university of wyoming for the mcmurray High AltitudePerformance Center and the Engineering EducationResearch Building last fall and the Ground Breaking for the integrated test center last spring, in addition to new facility starts we opened the enzi stem facility in 2016 and the High Bay Research facility is opening soon. We have had incredible opportunities with wealth created by our many businesses and great citizens. Were grateful for so many partnerships, were grateful for the partnerships we have with eastern shoshone and Northern Arapaho tribes. We are partners and friends to each other and i look forward to continued good relations with the tribes. Sergio maldano, tribe liaison for the Northern Arapaho tribe is here today, Leslie Shakespeare of the eastern shoshone is here. Lesley has agreed to stay on until a new person has chosen. We appreciate the work of the liaisons which strengthen ties and improve communication. If all tribal members that are here and the liaisons would please stand wed like to welcome you to the state of the state. [ applause ] money from of the plrosperit we have enjoyed would be realized without our Law Enforcement and First Responders. We see nationally sometimes Law Enforcement gets painted with a broad brush and they are often vilified. In wyoming we dont do that. We continue to be extremely proud of our Law Enforcement and First Responders. Its time, wyoming, as we continually do to once again thank Law Enforcement and First Responders for the incredible work they do. [ applause ] we know firsthand and we would not have a wyoming quality of life without the men and women who serve in the guard. Our guard helps fight the global war on terrorism and assisted here at home with firefighting, Flood Control and storm damage, last year our guard performed air medical evacuation missions in afghanistan, helped fight wildfires in idaho, filled sandbags in saratoga and hudson, helped prevent a wildfire in the Bighorn Mountains from becoming a much larger wildfire. Thats just a few of the things the guard did in one year. General luke reiner, the adjutant general of wyoming is here today representing the guard. Thank you, general, we are grateful for your service and the service of all guard members. General, please stand so you may be recognized. Luke, its great to have you here and as always you look very sharp in that uniform, sir, so thank you for being here. As we celebrate our guard members we remain grateful for all military members, our veterans and those who serve our veterans. Ive asked today for two distinguished veterans to be here with us, lee alley and larry bartelbort. Both have indicated theyll be retiring in 2017. Lee is a wyoming native and graduate of the university of wyoming in 1967 he went to vietnam as an Army Lieutenant and served as a Reconnaissance Platoon leader for Infantry Battalion his list of military decorations include the distinguished service cross, the go soldiers medal, the silver star, the bronze star, two air medals, two purple hearts and the vietnamese cross of gallantry. He was nominated for our nations highest award, the medal of honor. Upon his return from vietnam the caspar star hailed lee as wyomings audie murphy. He was instrumental in helping reshape the wyoming Veterans Commission so it shapes all generations of our veterans. His leadership ensure it had commissions work is relevant. He served ten years in all. Lees book back from war, a quest of life after death has been used by countless vets and their families to better understand how they can adjust to life after serving in combat. Colonel bartelbord took the oath of an rotc cadet in 1975. His military and Government Service spanning 40 years began then. He served on active duty with the Fourth Infantry Division for five years was selected for the active guard and reserve program in 1985 and retired in 2000, he was recalled to active duty in 2000 serving as wyoming army guard chief of staff and was responsible for Airport Security augmentation for ten wyoming airports following the 9 11 attacks. He retired from the army again in 2004, became director of the wyoming Veterans Commission in 2007 and has worked tirelessly to improve benefits and Service Programs for wyoming veterans. In my budget message i discussed one benefit, the veterans tuition waiver which suffered from last years session cuts. To address the issue in the interim, i moved money to fix the program during the interim period but its just a shortterm fix. I favor a longterm commitment to those who join the guard when the promise of Tuition Assistance was in place, and i favor some form of support for new recruits. I hope youll favorably consider these matters. Me and i mean our state, are nearly 50,000 vets and those who work with the commission, including me l miss larry and lee. Our communities, our state, our country, are better places because of men like larry and lee who step up to serve in the u. S. Military and keep on serving in a civilian capacity. With their work and the outstanding work of this wyoming legislature, wyoming is recognized as one of the very best states for veterans to retire in. Larry, lee, we couldnt thank you enough for all the service you provided to the state and the country. Please stand so we can recognize both of you. Thank you. [ cheers and applause ] [ cheers and applause ] here in wyoming we are enriched by our great a. G. , tourism and of course minstrels. We know for the state to be strong we need a Great University. A Great University starts with great leadership and we have a great leader in laurie nichols, uws 26th president. She started in may, 2016. She came at a challenging time, its hard enough to be a University President , let alone during a time of budget cuts, its great to have her at the helm. We are proud of the new facili y facilities at the university of wisconsin which will strengthen them as a leader of education, technology. Were proud of the athletic achievements at uw. Speaking of which, how about that Cowboy Football Team . [ cheers and applause ] they gave us great memories and we appreciate that and we thank you for your leadership at a critical time and thank you for being here today. Please stand so we may recognize you and the university of wyoming. [ applause ] we are keeping in the Competitive Edge and thats a wise thing to do at all times, especially during a time of constrained revenue. N 2016, we pressed on with efforts to promote and diversify our economy. Ill give a few examples. We are now and shall always be a proud ag state. Ag puts food on the table. Ag provides great open spaces. We have great wildlife in wyoming. We have Great Respect for the second amendment. And when you combine these assets together its no surprise hunting, firearms and shooting sports are part of wyomings history and heritage. We want to keep these traditions and pass them on to future generation and share our enjoyment of sporting life with others. With this in mind i announce a new initiative for public shooting ranges and shooting competitions including the first annual mag pool governors match. I charge state parks with convening an Outdoor Recreation task force. The task force held its first meeting in december and will provide recommendations to me this year on how to further expand the growing outdoor industry. Thanks to tungsten, mcginley orthopedics, 2016 was a year of expansion for manufacturing. The wyoming firearms industry, an important component of manufacturing, continues to grow. Our worldclass companies manufacture handguns, precision rifles, silencers, optics, sights and other firearms accessories. Take mag pool, recently selected by the United States marines as the exclusive supplier of magazines for combat use. Isnt that incredible news for a wyoming company to supply our u. S. Marines . [ applause ] while there were doubters about recruitment of firearm companies, i think we can continue to build on robust firearms industry in wyoming. You are aware of my focus on the technology sector. With a unified network, annual broad band and technology summits, recruiting efforts like cool climate, energy availability, technology continues to emerge as a viable economic sector. I believe it can be our fourthlargest sector and we must continue to build upon it. Last spring with more than three quarters of the initiatives, the original Energy Strategy complete, we updated a strategy to include 11 new initiatives, morngs those, were working to make changes in the endangered species act. It was passed in 1973. Since 1973 all the species listed, a little over just 1 , have ever been delisted, it needs help. As chairman of the western governors association, my initiative was to get western states on board to change and improve the endangered species act. As you can be aware, all western states dont have the same politics as wyoming. But we worked together with outdoor groups, with environmental groups, we put together a proposal and im pleased to say in june last year, western governors voted unanimously for improvements to the endangered species act. Well take it through the National Governors association and to congress, its time to make improvements to the endangered species act. [ applause ]. We continue with the Energy Strategy with review of reclamation rules, carbon innovation and appreciate the legislatures support of Energy Strategy which has helped with implementation we not only want to be the energy state in terms of production, we want to be the energy state in terms of innovation and we can be, the car Bob Initiative looks at building an industry around co 2. This means investing in advanced Energy Technologies and innovation. The test center under construction at the dry forks station in gillette is part of thisser. The relationship we fostered has put together a 10 million prize for the team that can figure out how to capture the co2 and use it to make a useful product. This has not only brought attention in wyoming to how to help further coal but around the country. The governor of montana is asking his legislature to help participate in this. We have companies coming to wyoming to learn what they can do to participate in it. Its very exciting. Its very important to have that innovation here in wisconsin. An Industrial Park project for valueadded energy products, that is the use beyond extraction is part of the carbon initiative. In 2014 this body appropriated 15 million for the itc and provided seed money to begin an energyrelated Industrial Park project. Projects like these not only help wyomings numberone industry, minerals, especially coal, they foster diversification. The itc is well on its way and we need to pursue the Industrial Park project this year i hope you will consider a bill that provides for thorough implementation of the initiatives in the Energy Strategy. We are proud wyoming is the energy state and we are the energy state. In 2016 as part of that we continue to imflaemt which goes with energy which is water. The state water strategy was issues two years ago. The water strategy contains 10 initiatives. One is the 10 in 10 project which seeks to build 10 new reservoirs in 10 years. I know its ambition but im pleased to say the omnibus water bill youll consider this session has four of these 10 in 10 projects. The Big Sandy Reservoir in sweetwater counties, the middle piney reservoir, the Alkali Creek Reservoir in bighorn county. Water projects like these are funded separately from Government Operations, education and School Construction and maintenance fends generally come from water account 3 which has the funding available together these projects would add over 31, 000 acre feet of storage of our most precious natural resource, that is water. Water is key to economic development,ag production and more and it must remain a priority. In 2016 the executive branch, we continue to streamline our rules and tighten our belts. For example we put uniform rules in place for Public Record requests. This is in addition to my question two years ago to have all agencies reduce their rules by 30 . We have fewer rules, we are spending less and were down positions from fiscal year 20 , twaech, my first year in office. We have bucked the trend of so many governments that only grow. While being careful with the budget is critical, we can never forget we are more than counters of dollars. We are here for the citizens of wyoming. To be sure, we must remain aware of our inmate population, our disabled population, the health care we are providing or not providing to the citizens of wyoming and always we think of our families and the next generation, our children. In september, i sponsored the governors symposium on Suicide Prevention in casper. Its important to talk about suicide and ways to reduce suicide. People are hurting need help and we need to look to for ways how we can better provide it. This will now become an annual symposium. . November i announced Endow Initiative. This is a longterm planning effort for economic diversification. The acronym stands for economically needed diversification options for wyoming. I seek 2. 5 million for this initiative in my supplemental Budget Proposal. Ill continue to work for economic diversification, building on our successes during my last two years in office however as a state we need a plan that goes beyond one governors time in office. Question need a 20year plan. And we do not diversify to displace energy, tourism and ag, we diversify to increase our Economic Opportunities in those areas as well to expand our economic base over r over all. As we diversify our industries, we must look at howe we tax our industries. Diversification and a broadbased fair tax structure are required to stabilize our economy we need to not only stabilize and grow our revenue but equally important to that is we need to diversify to benefit our young people. We need to provide more options for our young people to give them as many reasons as possible to say yes to staying in wyoming as we can. As we look at our population, we know in any given time period we lose about 60 of the age group between 18 and 25. Our future will never be as bright as it can be if we dont do all we can to keep young people home home in wyoming. [applause] the energy bust and the revenue fallout from it reminds us why the Endow Initiative is imperative. I want to thank president bibout and speaker harshman for their leadership on moving endow forward. In december we got great news. The National ParkService Completed the purchase of the 640 acre Antelope Flats parcel of state trust land located within grand teton National Park for 46 million. 23 million came from the federal government and 23 million came from over 5,000 private donations to the grand teton National Park foundation. I thank all the donors who made this happen, the legislature for its support and of course we remember the latest senator craig thomas who got the ball rolling on this. [ applause ] not only is this good news for the park, its good news for Education Funding at a time when we need it. The money had been deposited in a Common School trust fund to support wyoming schools. The parcel was generate nothing revenue for wyoming. We were getting zero dollars from that parcel. Income generated in the Common School trust fund account varies but its expected these funds will generate more than a Million Dollars annually for our schools. The funds are also available for the board of land commissioners to acquire land assets held by the federal government if we choose to do so. The state of wyoming currently owns one remaining 640 acre parcel in the park, the kelly parcel. Its valued at 46 million. We are making money on that parcel. That 46 million asset is bringing us in 2,000 a year. The legislative authorization for the direct sale of the kelly parcel expired december 31, 2016 moving forward, the board of land commissioners has authority to exchange the parcel or sell it at auction to the highest bidder. Additional authorization from the legislature will be required for a direct sale to the National Park service and this is something i ask you to consider. Bottom line is even during these tough times we accomplished a lot in 2016. Wyoming remains strong heading into this new year. Thats a big achievement. Were keeping our state strong during a difficult period. Theres a lot of credit to go around. Certainly the legislature, university of wyoming, our Amazing Community colleges, our state agencies and our communities, schools and businesses. As ive said before, wyoming peoples wyoming people are wyomings greatest asset. The individuals i rised today are examples of people all around wyoming who contribute to our state strength and we thank all of them. Now i turn the budget. In june, 2016 i asked agencies to implement 2r50 million in cuts from the 17, 18 budget. This was in response to a shortfall in the spring. These were difficult but necessary cuts. My supplemental Budget Proposal carries these cuts forward, making them permanent. With my cuts and the legislatures cuts last session, the legislative branch operating budget, which was 2. 9 billion in 2010, is now a little over 2. 5 billion. Its down, not up. This reflects conservative disciplined budgeting, the type of budgeting wyoming is known for and proud of. State government has shrunk. It has not grown. The Legislature Last session voted for 67. 7 million in cuts. Which i know you found difficult to make. I made three and a half times that amount of cuts in june which, too, was very difficult. The belt tightening begun in 2013 has continued and i make only five general Fund Requests of you this session. 5 million for local governments. We have to continue to support our local governments. 2. 5 million for endow which i have speaken about. 500,000 for the Science Initiative. 475 for the strategic Enrollment Program and 160,000 for tribal liaisons. These are onetime items although the Endow Initiative is envisioned for 20 years and i hope it will continue to be funded beyond this budget cycle. My general Fund Supplemental budget requests total just is over 8. 6 million and the funds are available, for new legislators to put in the perspective, supplemental budgets in recent history have exceeded 300 million. My budget message explains the importance of these requests but today, for example, ill talk about one of them, the uw Science Initiative. As i mentioned earlier, we have been investing at stem at the university of wyoming. These efforts are critical, we need to continue to invest in the Science Initiative, thus the supplemental request. Because we value education and this legislature values education so strongly every year ive highlighted the great talent we have with our teachers by recognizing the teacher of the year. This year were recognizing ryan fuhrman, wyomings 2017 teacher of the year. He grew up in casper. He was inspired by his latin teacher to become a teacher, he graduated from black Hills University in spear fish magna cum laude and received a masters degree out east. Hes taught science at sheridan junior high since 2012. In addition to teaching science hes a vex robotic instructor, a camp systematic counselor and organizer, science kids board member and assistant basketball coach. Continued commit, to the Science Initiative at uw will help premare more science teachers like ryan. Ryan, were very proud of you, please stand so we may recognize your extraordinary work as a teacher. [ applause ] we know as we consider the difficult work ahead on education that we not only have Great Teachers and great School Districts we also in wyoming have great, great students. Logan general sjensen is a univ from grieable,wayway. Logan is double majoring in physics and astronomy at the university of wyoming. I do not know that was possible. Im not even sure its legal. This is abamazing thing. He has taken advantage of almost all wyoming offers as an undergraduate. As a freshman he went faculty to uws infrared telescope learning to operate a major scientific facility and acquiring the skills to analyze digital images. As a sophomore he led a study at the atmosphere stability at the observatory site. Hell participate in next summers total Solar Eclipse research and outreach. For those of you not familiar, wyoming will be the place for the total eclipse. This is if youre not aware a big deal and i have here in my notes in your own words from the diane, make sure you know who how valuable this is to tourism. Its a big deal. August 21. He also serves as counselor to junior high youth at the Exxonmobil Bernard Harris summer science camp at uw. Hes done as a junior what many ph. D. Students would long to do. Hes a beneficiary of uws Science Initiative. We want to encourage more students like logan to take advantage of the uw Science Initiative. Logan, please stand, congratulations on the extraordinary work you have already done. [ cheers and applause ] in this supplemental budget year i requested contingent funding 2061 million for title 25 services, 19. 2 million to address a fire at the wyoming state penitentiary if necessary and 104. 2 million for the Budget Reserve account. This contingent funding would from the lsra. I requested the legislature authorize bonding to cover Capital Construction costs for the wyoming state penitentiary. I know some of you are not in fall river of that but let me say this. Whether you want to do bonding or take it as savings, i wont go away by not addressing funding. I believe the prison should stay in rollins, not just by the constitution but by what it means to that community, i also believe we need to be prepared to, whether it is a fix or rebuild, we need to have that addressed this session, including where the funding would come from. My Budget Proposal is bare bones in balance. We have nearly 1. 6 billion sitting in the Rainy Day Fund, it appears without a diversion ive asked for from all of you the Rainy Day Fund will grow this session. Thats a hard message for the people of wyoming as weve made in excess of 300 million cuts since last session and we would continue to grow the Rainy Day Fund and goes gone the question what is the Rainy Day Fund and what will we use it for. So i have asked for some of that money to be diverted for my budget and to not grow the Rainy Day Fund during a time it is raining. I think of and i know many of you think about the General Fund Budget as a separate budget from education and i think thats an appropriate way to look at it. The education budget is different. The School Foundation program can fund k12 School Operations through this year but not beyond. Beginning with the 20 budget, the shortfall in the School Foundation account is projected to be 1. 5 billion over the next six years. School facilities and maintenance funding must also be addressed because its not included in that 1. 5 billion. I ask now as ive asked before that we work tolt to discuss solutions that include the public, teachers, School Boards and parents in this discussion. We recognize that one week to submit comments to this body regarding the subcommittees december 28 very thoughtful Education Funding white paper is not enough i believe just short of 600 comments in about a week were provided. We have to make tough decision this is session but to solve the issue completely we need to have a broader public discussion. Many Public Comments we received in one week underscore the need for the publics participation on this issue. Starting the discussion, i point out the wonderful report of the superintendent, we were rated seventh best in the country, the other six are on the east coast, we dont even know where the east coast is in wyoming. We are proud of that and we want to continue to be strong in education. I point out wyoming should be proud of how it supported education, by any measure wyoming has placed the highest value on education. To illustrate this point between executive, judicial and legislative branches, the general Fund Standard government operating budget has decreased since 2007. Today the Government Operations standard budget is about 200 million less per bienyam than the total block grant to School Districts. 200 million less. Simply stated, the standard budget for all Government Operations is less than were spending on k12 education. This doesnt even include major maintenance. Doesnt include school cap con construction. In 2016, we cut the executive branch operating by 317 million and totalled the cuts to the executive branch to 11 when you combine legislative cuts during the a 2016 session. In contrast, the School Operation budget has been growing. It was 1. 3 billion annually in 2011 when i took office. Its nearly 1. 5 billion now, six years later. While student enrollment has increased 12 since 05, 06, Foundation Funding has increased over 91 . And now we see a projected shortfall of 1. 5 billion over the next six years. This is a big problem. Its a fiscal crisis. Its a big problem that require very big very difficult choices. As i did last year, i again ask we have a tark force or speaker harshmans committee to be formed with full participation of wyoming stake holders to address School Funding because a year has gone by and things have got gotten better. We cannot wait another year to act. At a minimum we should be planning for reductions, but there is a broader discussion we should continue to have about funding and revenue and its my hope that participation with all of you and the public that we can at least by the start of next session have a plan that addresses both cuts and funding. I do want to mention a nonbudget measure from last session, the program authorized by legislation by senator coor and speaker harshman. This program, which is an ammon mouse tip line, is making a difference in preventing suicide and improving school safety. I know youll be considering numerous bills. Ill follow them as they move through the legislative process, but i can tell you at the start a few things that im interested in. I support in concept the sales tax collection from remote sellers, establishment of a legislative framework for endow. Improving ignition interlock laws and providing a mechanism to continue the energy and water strategies, in what has sure been a challenging Financial Market were getting poor investment returns. Theres no other way to look at it. Its a challenge in this final market but were not doing well compared to other states and yet the state of wyoming pays in excess of 71 million a year in Management Fees and consulting fees, this has to change. It has to change now more than ever when we are budget constrained. The treasurer has worked hard to make solutions for the legislature, id ask you to consider them because the treasurer, like me, rises we want better returns and we want to spend less money getting the returns. Until we can get a broter more comprehensive tax structure i ask you to consider the manufacturing Tax Exemption which is sun setting. Its important for the businesses that are here. Its important for some of the businesses we are trying to recruit now we are looking to the change of administration in d. C. In the coming weeks and we hope that will provide an opportunity for wyoming to become stronger. Im heartened about the prospect of fewer federal regulations and progrowth economic policies. Im hopeful the new administration will see the benefits of what states like wyoming have done in responsibly developing our resources. Im hopeful that more authority will be given to the states with respect to Natural Resources in other areas and as we face difficult budget times, we know that we are in fact better suited to address the problem than we have been in the past. Im confident this group, the legislature, is the group to deal with these difficult issues. But as always it really isnt just about the numbers and the dollars or a single issue. We cannot lose the forest in the trees. This session, as every session, we remain obligated to do what is best not for ourselves, our Political Parties but for the citizens of wonderful wyoming. What a privilege we have to have that as our duty. It its a privilege to serve the citizens of wyoming without regard to political party, without regard to any single issue but how do we do better for the citizens of wyoming . I thank the legislature as i always do. We were successful in this state for a number of reasons but a prime reason is we have a it is seine legislature too you men and women who leave your homes and families and businesses to come here, this is an extraordinary thing, it keeps wyoming strong. But as always we take time today to say we know were blessed to live in this state, we say to the citizens of wyoming we will continue to work hard for you. We say may god continue to bless wyoming, the United States and all her people. Thank you very much. [ applause ] today federal managers discuss their ideas for improving effectiveness and efficiency of the federal work force. Were live with the Senate Homeland security and Governmental Affairs subcommittee at 10 00 a. M. Eastern on cspan 3. Next, cspan talks to a freshman member of the 115th congress, representative david kustoff, republican of tennessee