Governor McCrory Delivers 2013 State of State Address
About five weeks ago, when I was being sworn in as governor, and they called me “Your Excellency,” both my wife and I looked behind us to see who they were talking about.
What an honor this is to be here tonight in this beautiful chamber.
Mr. Speaker, Lieutenant Governor, Mr. President Pro Tem, Governor Martin, who I think is in the audience. Please give a round of applause for Governor Martin. He’s been a mentor, and a friend, and a next door neighbor.
Members of the court, members of the General Assembly, and I also must recognize eight very, very hard working people during the last six weeks, and even before that. People who are making tremendous sacrifice working for state government along with many of you, and that is my Cabinet.
I'd like all eight members of my Cabinet and my other members of my staff to please stand up, you’re doing an outstanding job, and I’m proud to have you be a part of our team. Thank you very much. Aldona, this is the earliest I’ve seen you out of your office.
I also want to give a special “hello” to former Governor Jim Holshouser. He's back home, he had to deal with an immediate issue that came up, I just wanted to let you know he’s healthy, he’s strong. We had a great conversation today and the Governor Holshouser thanks for all your wisdom and your service to this state. I really appreciate it.
Also, more than anything else, I welcome the fellow citizens of North Carolina.
You know, I first came to Raleigh in 1967, as a fifth grader from Jamestown Elementary School to tour this magnificent chamber. It seemed just like yesterday.
My goal as governor is to ensure that the fifth graders we’re seeing today and yesterday and we’ll see tomorrow, that are taking that same tour that I took 46 years ago, will also get the same great opportunities to live, work, play, and raise a family in the greatest state in the United States of America, and that state is North Carolina.
But to make that happen, we cannot accept the status quo. We cannot live off of a brand that needs updating and major revamping to not only compete with our neighbors, but to compete with the rest of the world.
Tonight, you will hear a sobering assessment of our state, but also some recommended actions that will get our economy and state moving again. I already know that during my short tenure here, I’ve already stepped on some toes on both the left and the right. I am not doing it to cause pain, but to get us to stand up and recognize that we must solve our serious problems now to prevent pain for future generations. That’s why we’re here tonight.
But one thing I’ve learned, I learned during my fourteen years as a mayor, when you try to appease everyone, you satisfy no one. What motivates me every morning, when I’m so privileged to get up here in Raleigh as your governor, is the opportunity to be part of long term solutions.
We must be here not only to represent the next generation, but also the hardworking men and women, who everyday have to get up in the morning and take responsibility for their families.
The manufacturing worker completing shift work that every day demands to improve quality and productivity, knowing that if it is not achieved, the plant may move or shut down due to competition not only in the United States, but throughout the world. That’s pressure.
The emergency room doctors, and nurses, and even our sheriff deputies throughout North Carolina who are sadly taking care of mental health patients and those fighting addiction in emergency rooms and county jails.
The farmer who is constantly trying to save their crops from an approaching hurricane or tornado or storm.
The hardworking teacher who cannot get funds for needed technology to help students learn.
And the sixty or more people, along with me, took time off of their jobs to wait in line for over an hour and a half to get their driver’s license renewed.
We are here to represent these people and all of the people of North Carolina, especially those people right now that are looking for work. That is our goal right now to represent all of these people.
We obviously have a lot of work to do together, but my team and I chose to look at these challenges, to look at these challenges as opportunities. These are opportunities for every one of us.
Therefore, our administration is going to focus all of their time on three key functions: our economy, our education, and the efficiency of our services.
Our economy, our education, and the efficiency of our services.
Let’s start with efficiency. First, we are reviewing the budget numbers as we speak. And right now it looks like next year’s budget provides no new money or new revenue. So like families across North Carolina, we must live within our budget. We must refocus our priorities and become more efficient in how we spend our limited dollars.
Now in my first five weeks I’ve had to work on things I did not anticipate, but that’s the part of leadership and many of you are working on these same issues. This is because those people in Washington required us to make some tough decisions on two massive programs affecting all of North Carolina.
These Washington policies were passed with little understanding or discussion of the short term and long-term impact on our state services and on our state taxpayers.
I will not outsource these tough decisions. I was elected to do what in right for the people of North Carolina.
Now after extensive reviews in this brief time that we were given, I have concluded that our government, like working families throughout our state, must first pay off its debt. Pay off its credit card, which in this state’s case, is $2.5 billion.
Therefore, tomorrow, I will sign house bill 4 to protect our small businesses from continued over taxation. This will insure our citizens’ unemployment safety net is secure and financially sound for future generations. This is the reason I’m signing this bill.
These are not easy decisions. But I know one thing: borrowing from Washington with no idea or plan on how to pay for it ends with this administration right now. We aren’t going to do it any longer. We are not going to borrow money from Washington with no idea on how to pay it back.
A recent audit showed that the past administration overspent on Medicaid by 1.4 billion dollars over past three years. Georgia is able to deliver Medicaid services at a cost of 4,000 dollars per patient, while North Carolina’s delivery is over 6,000 dollars per patient. We must fix this and strengthen our existing Medicaid system prior to putting at risk further tax dollars in a broken system.
But I must ask all of you to please give my team the time and the flexibility to first stop the bleeding. Please, please, minimize the reports that you’re requiring for administration. This is just last week. Please minimize report. I know you have a lot of work to do and a lot of review, but please let my administration fix the problem and stop the bleeding now.
We also need your help, and I will be requesting your help through legislation, to streamline the process at which the Office of Administrative Hearings were delays- delay after delay – are adding millions of dollars to our cost as we speak today. We must change legislation which allows us to break through this very costly appeals process.
Then we can all work together, with hospitals, with doctors, with insurance companies, with patients on reforming this broken system. This is our number one priority that has been put on our lap and we have to fix it together, and we will fix it together.
In other areas of inefficiency, and frankly basic neglect of state operations during the past decade, my administration is taking immediate action. Our administration is moving IT equipment from over 30 identified, in the last five weeks, unsafe locations to ensure that the safety of our employees is protected and also the integrity of our IT systems. We’ve already had one fire. We don’t want to have another. My budget will provide substantial funding to fix and repair state properties and our broken IT systems in North Carolina government.
We will be requesting legislation to expand efforts to implement electronic tracking – tracking systems for state vehicles - an area where we currently don’t have any accountability. In addition, we are "right-sizing" vehicles where possible to reduce cost and fuel use, saving hundreds of thousands of dollars each year.
We are also requesting legislation to address state personnel and productivity issues. This is a very serious issue for our Cabinet and other people in the Council of State who have communicated this issue to me.
We want to reward our talented state employees, but seat warmers must be a thing of the past.
But I want to also say, we have to continue to attract, retain, reward and appreciate our state talent that works so hard for all of us in state government. Let’s also give them a round of applause.
Now let me say, tell you a few other things we’re trying to fix regarding short term and long-term operations. We recently found out we inherit a system that has been double billing on the Triangle Expressway. Our administration has already fixed this issue. Customer counts have been refunded, and each one of those customers have been called and given a personal apology. Now that’s the cultured state government that we must have… a culture of customer service.
I’d like to thank our Secretary of Transportation for his role model leadership and delivery in this excellent customer service in a very short period of time, but Tony I’ve charged you with several other projects. First and foremost, fix DMV.
And while you’re at it, Mr. Secretary, can you please fix the lights on the highways throughout North Carolina. And with all respect, can you start with I-85 and I-77 interchange in Charlotte, my hometown? We would appreciate that. Malcolm Graham I know appreciates that.
You know, most people don’t think of criminal justice, addiction and mental health issues priorities as we work to streamline government. But as a mayor, I’ve seen first-hand the collateral damage to our families, our communities and taxpayers if we continue to sweep these issues under the rug.
Recently, the our First Lady and I visited the Durham Rescue Mission. We were moved by the stories of addiction and its impact on families. After meeting many people at the mission – and my wife has been there twice – Ann has said it best, and I’m quoting her: “So many of us could sit back and say, ‘Why don’t these people get out of it? Why don’t they quit doing drugs? Why don’t they leave this battered situation?’.” And she concluded by saying the following, “These women and men have more courage than I can fathom in this entire state.”
I want to introduce my wife Ann and these two heroes of ours from the Durham Rescue Mission, who have successfully, who have successfully turned their lives around in fighting their addiction – while fighting their own addiction battle, and also preserving their family. Please welcome our first lady, Ann McCrory, and our special guests, Mike and Rebecca Allred. May God bless you, and thank you for your hard work.
Ann, your ovation was bigger than mine, and I just want to make a point of that. I am so proud of Mike and Rebecca.
Their story can be repeated in every of the 100 counties in North Carolina, and we have to do everything that we can to help this terrible addiction issue throughout North Carolina. For the sake of North Carolina families, I ask you to please send legislation, which will re-establish our drug treatment courts, and also increase penalties for those who set up meth labs in our communities. I will sign both of those pieces of legislation immediately.
I have also instructed my head of Public Safety – because this issue of drugs and alcohol are just penetrating our families and our communities – I have instructed my Head of Public Safety to ensure that all state law enforcement officials will fight a coordinated effort against the cartel drug rings that are currently in North Carolina as we speak.*
We cannot ignore them, we must identify them, and we must get them out of this state now. The sheriffs will tell you this. We need to let people know about this issue.
I also want to collaborate with our educational leaders to ensure that our schools and universities have a strategy to change the culture – to change the culture that I’ve seen first-hand – of binge drinking and so called recreational drug use. There must be enforcement in our schools and universities of their own policies and enforcement of our laws. And in addition, we must offer help to these students who are doing harm to themselves and to their families.
This is not a laughing matter; this is not something that they are going through a time of their life. They’re causing serious harm to themselves and their families, and we must offer help, both through enforcement and through counseling. That must start now or we will continue to have terrible mental health issues for generations to come.
Speaking of education, this is an area which I have passion for; I had my teaching degree at Catawba College, and it’s another major focus we are moving forward on because North Carolina is known around the country as a leader in education and innovation in the classroom. But we cannot rest on our past reputation or our laurels. We must continue to reform our education system to stay ahead of the competition not just in the United States but throughout the world.
Last year, I’m sad to report that 14,000 kids dropped out of North Carolina schools. 14,000 kids dropped out of our schools. 30% of our children weren’t able to read at grade level. 65% of our high school graduates that enter community college need remedial math or reading.
We can all agree on the importance of improving education because our competitive future depends on it. But tonight, we must begin to change the debate on education. Instead of focusing the debate only on the budget, we must now demand results.
We must ensure that our schools are preparing our students for success by effectively teaching them both the knowledge – both the knowledge and the skills – that will help them lead productive lives and also find jobs. The disconnect that I’ve seen right now between employers unable to find qualified talent, even with the high unemployment rate, and the citizens unable to get jobs must be resolved through education.
Senator, I know you are working on this, and I appreciate it. Market based needs must be an important factor in education funding, curriculum, and results. That’s why my administration is seeking to expand strategic partnerships between the education community and the business community. My budget will promote this philosophy in pre-K, K-12, community colleges and our university system.
I have strongly advocated for two pathways for success in our high schools, vocational and higher college education. I firmly believe in this. There are two pathways to success: both a college track and a path through vocational training. Students like to have choices. Our employers need these choices. They are both equally important to empower our students, to achieve their post-graduation high school goals.
That’s why today we had a wonderful event in Asheboro at Randolph community college, in front of over four hundred people. And I was proud to sign into law my first bill as governor, your first bill in this legislature, Senate Bill 14. This major bipartisan bill will help our employers find qualified candidates for jobs, it directs high schools and community colleges to share resources. It also makes it easier for experts in a private sector to get certified for teaching. Congratulations to all of you, almost every one of you, bipartisan, Democrat, Republican, everyone almost voted for this bill. You deserve applause. North Carolina needs this education reform, and you started it, and it was signed today. Congratulations.
But we can and must do more to break down what I consider to be the four silos of education: pre-K, K-12, community colleges and our great universities. It’s been too long since the education cabinet has met. You may have not even known there was an education cabinet. But I will reinstate and lead these meetings to develop a joint strategic plan and process to share resources, to share teachers, to share technology that puts both students and hardworking taxpayers first.
As governor, I will also lead a collaborative effort to help our universities come together as the competition for federal dollars is getting so tough. We need to come together as universities to maximize research funding.
In our Morrisville city schools, the superintendent recently issued laptops for students in grades 4-12. Three years ago, the graduation rate was below 80%. In the last three years, the rate shot up to 90%. Education is no longer about spending money on bricks and mortar. The power to improve education and deliver real results is at our fingertips. Right now, you watch any four-year-old child learning, they’re learning on technology, and they’re learning quicker than any of us in this room ever learned.
To increase our children’s access to technology, I’m advocating that we ensure that the education lottery money actually be used for education. Now that’s a novel thought that all you’ve been hearing across North Carolina. But we can change some legislation to make that happen.
I’m recommending that we pursue legislation to reallocate a portion of money away from the bloated and frankly annoying advertising and the large administration cost of the Lottery Commission, and we will use that money to directly help our students with technology.
I also think we need to work together to give schools more flexibility to spend lottery funds on digital and virtual learning, which school districts, according to our laws, are not allowed to do right now.
There’s a pot of money right now that can only be used on certain things. Why not let all of our hundred districts use that money on technology and virtual learning? This is the future. Why don’t we be ahead of the curve as opposed to being behind the curve? This begins right now.
Now, third and most important, our number one focus is on the economy and jobs because there are a lot of people hurting out there right now. You know it, I see it, and it’s tough. We've got to do everything we can to help people want to work and get work. And today, North Carolina’s unemployment rate continues to be the fifth highest unemployment rate in the country.
This is our North Carolina. My number one priority as your governor is to make sure that we are doing everything possible to make North Carolina an engine for job creation. North Carolina’s economic brand has not been updated – and we've looked – since the 1980s. Governor Martin, thank you, but it’s time we update your plan.
Simply put, our competition in other states caught up to us, and many times, we have to admit, beating us. We are going to develop a long-term strategic plan, Madame Secretary, that updates our brand and puts us on a path to success. And the first part of that plan is to fix and modernize our tax system in North Carolina. We’ve got to do it.
I know many of you have been working on this for fifty, sixty years. It was even in Governor Martin’s speech, I think. But the fact of the matter is our current system is out of date. It was written in the nineteen thirties. It no longer applies to the modern economy. We must have an economic and tax policy in North Carolina that is simple, that is competitive, that is modern and that is pro-growth.
This policy must reward our people and businesses that build things, produce things, grow things and innovate things. We cannot live off of the services free alone or government jobs. We have got to help the people who build things and make things and produce things and innovate things. And our tax policy need to be updated to help those industries.
My friend, Joel Ford, even stood up, I am proud of you Joel, thank you. We will work together – we will work together on this plan, which should meet the following criteria:
Lower rates on personal income and businesses to be more competitive at least with our next door neighbors.
Close loopholes for special interest to make our system more fair and transparent.
It must be revenue neutral. We must implement this plan systematically and strategically to make sure that we don’t put at risk business confidence where crucial revenue need to our citizens.
But tax reform is just one tool we have to build our economy; we have many other tools to make our economy start igniting again. During the past decade, we have sat on the sidelines for far too long on energy exportation, at a time when our country needs to be more energy independent, at a time when the gas prices right now are going up almost every day, and at a time when our people need jobs. Sadly, we are in a catch-up mode with other regions in our country, and those states that went first have the lowest unemployment rates in the country.
This administration will move closely working with all of you, to get North Carolina in the energy business and the process of energy exploration in a safe and environmentally sound way.
Last week, I proudly joined the governors – one minute they are my competitors, and the next minute they are my partners – but I joined the governors of South Carolina and Virginia to request federal authority to begin offshore exploration in North Carolina.
Just think what we need, what we could do with these future revenues. Future revenues can help create jobs; they can provide new revenue for roads or needed infrastructure or to repair of bridges; it can help replenish our beaches, which our travel and tourism industries currently needs desperately at this point in time, dredge our ports, which we need right now for travel and trade; and to help fund our education system. This is one pocket of revenue that we have got to explore and find out are we capable of moving now and beating our competition, which has also been sitting on the sideline for far too long.
We also can afford to overlook and take for granted the valuable economic resources that we’ve had in our state for a long time, and that’s our military. To grow our private sector economy, we must use our military assets as a major recruitment tool. Think of the talent that is coming home right now, especially as our heroic men and women return home from Iraq and Afghanistan. Think of the leadership talents, the technical talents, the skills that they have to help fill that gap between commerce and the people needing the jobs. We will use them as a recruitment tool to help them and their families when they return home.
I want to thank our men and women in uniform that have honored our country with their presence, and their service. They deserve it.
For these heroes, we are finalizing a plan that focuses on first, the retention of the bases and our troops here in North Carolina; Growing our military supplier base; three, retaining our highly skilled; and four, growing the defense manufacturing sector. We have incredible opportunity to follow through on those four objectives.
And speaking of the military, I’ve always said I’m kind of and Eisenhower Republican. I believe that government’s main roles is to provide the infrastructure for job creation and economic growth. This is one of the great things that Dwight Eisenhower did as president. He worked to connect the urban with the rural and the East with the West. We need to keep focused on continuing that type of visionary thinking right here in North Carolina using our infrastructure.
That’s why we will soon kick off the development, of a strategic, long-term plan for four areas of infrastructure that are crucial for the next generation and for job growth to continue, and to protect our environment. Those four areas are: transportation, water, energy and communications. We need to present to the people of North Carolina, and the people who want to invest in North Carolina, our vision for the transportations plans, our water plans, the energy plans and communication plans. This will send a strong signal to the private sector, that we will be partners with them in their continued economic expansion in North Carolina. It is crucial that we begin the process now. We’ve waited far too long. Let’s do it now, and present the next generation with a plan for economic growth and prosperity through infrastructure.
Now let me tell you one of North Carolina’s greatest strengths, and that’s our export potential. I’ve always firmly believed that one of the best ways to grow a business is to increase that business, and wanting people to have that product and export it to other countries. When I go overseas on trade missions as your governor, my number one priority will be expanding the exports of products which say, “Made in North Carolina”.
Mr. Commissioner, the export of North Carolina products, especially our incredible agricultural products, is crucial in the rebuilding of our economy. To help achieve this goal, under the leadership of the agricultural commissioner, the transportation and commerce secretaries, we gained approval, and I’d like to thank the Council of State, to bring needed refrigeration to our Wilmington port, for our cold food chain exports. This will be one step forward that we must have to increase exports. Thank you Mr. Commissioner.
But we also must look at our entire commerce strategy. In the area of business recruitment and needed investment expansion, we are going to be recalibrating our incentive program. This will ensure that we are using our resources based upon measurable results, to attract, expand and retain jobs in North Carolina. We will be undergoing a total review of our Commerce Department, to ensure that we are flexible and we are adapting to our ever-changing competition and economic conditions.
Almost every day since I have been your governor, I have been personally meeting, along with other members of my administration, with potential employers who want to expand or relocate to North Carolina. And I’m telling you we’re getting a lot of people who are interested. We are already successful in improving our customer service working through bureaucratic regulatory roadblocks that stifle economic recruitment efforts. This is especially true in the Department of Environmental and Natural Resources. John, thank you very much for your hard work and DENR, we appreciate it. We’re bring a customer service attitude to DENR.
I’d like to than the employees of that department too.
We are also developing partnerships with community colleges and universities to help meet specific workforce needs for our businesses. And let me tell you this. The heads of our universities, the heads of our community colleges are also an important parts of our recruitment team. I have told Tom Ross and every university president, and every community college president, we want them with us on our recruitment trips, because they will be an important part of our selling of North Carolina.
Our biggest challenge, our biggest challenge as I travel the state right now, is right now, not just developing jobs in a growing urban area – sometimes it’s much easier to sell the Triangle area or the Charlotte area or the Triad area. But right now I think our biggest challenge is to develop a strategy for the small towns in North Carolina that have been hit so hard by this recession. And that’s exactly what we plan to do. We’ve got to work with the small towns of North Carolina.
There are too many people hurting in those towns.
And let me tell you this right now. I did it as mayor, and I’ll do it again as governor. No one will out work this governor, or this team or any of you in our effort to grow, recruit and retain North Carolina jobs. We will be on the road and we’re going to sell our great resources that we have. This is my job, this is your job. We’ve got a great product.
Already, I anticipate good news in the near future because of the groundwork we’ve already laid down in only the first five weeks. We have been meeting and meeting and meeting with potential customers who are interested in North Carolina.
Now, to do this, however, I’m not going to be deterred by those who want to keep the status quo. The way we’ve always been doing things in North Carolina. We’ve got to change, we’ve got to adapt and we’ve got to be visionary for the future. We’re going to stay focused despite what some of the critics say. We’re going to stay focused of fixing the economy, transforming education and improving government efficiency.
I’ll say it one more time: fixing the economy, transforming education, and improving government efficiency.
None of this can be about politics, power, legacy, turf, or who gets the credit. Who cares? This is about the people of North Carolina. This is why we’re here. This is why each one of you are taking time away from your families every day to work right here in our State Capital. To have this privilege. It’s about the people of North Carolina. It’s not about power or turf, or legacy. It’s about solving problems and developing long-term solutions.
We cannot achieve these goals alone inside the bubble of government. There’s no way. We’ve got to get out of here occasionally. Our approach must be outward. Starting tomorrow, I, and I ask all of you, to bring this message to our citizens and main streets across our beautiful state.
Achieving these goals during our term in office will not be easy; it’s going to be tough. But we have to fulfill and exceed North Carolina’s potential. Let’s unleash, let’s unleash our unlimited resources and opportunity North Carolina has to offer.
We will do it, we must do it, and God bless all of you and the great state of North Carolina. And now let’s get back to work. Thank you very much.
*(Omitted: We will also support legislation to bring a new DNA lab to the west, because people are waiting for too long for requests to be processed.)