The people of south dakota listening and viewing this, please welcome the honorable governor dennis daugaard. [applause] applause continues ] [ applause] governor daugaard thank you. Thank you, very much. Thank you, Lieutenant Governor. Youre outstanding. Thank you all for being here today. To begin, i would like to recognize two new legislators, first, doug bartel. I appointed doug to replace don hager. Doug spent his career in Law Enforcement, including 12 years as due pauls chief of police. He was sworn in last month. Lets welcome him again. , where are you . There he is. Welcome. [applause] second is mike diedrich. I appointed mike last month following the loss of our friend, craig teasen. Mike has served three terms in the 1980s and 1990s. I appreciate his willingness to serve, especially on short notice. Please join me in welcoming mike diedrich. [applause] today, i would like to look back at some of the things weve accomplished together over the past seven years, and update you on some progress. Ill also offer new proposals to consider this year. I would like to start today by talking about workforce. This is a significant longterm challenge facing our state, and ive personally spent a lot of time on this over the last year. In march, the National Governors association sponsored by visit, along with several other governors, to switzerland and germany to learn about their long standing work based education programs. In june, i met at the white house with President Trump, ivanka trump, the u. S. Secretaries of labor, commerce, and education, and several of my fellow governors. There the president signed an executive order to encourage development of apprenticeship programs. For chair ofosen the western governors association. I chaired as the policy focus for my oneyear term. We held workforce summits in sioux falls, denver, oklahoma, and seattle. Next summer, south dakota will host our annual meeting in rapid city. Through all of this, i have seen two interrelated problems in south dakota. From the perspective of businesses and employers, our state does not have enough workers in many skilled fields. This is a barrier to economic growth. We have companies that do not expand or that turn away business because they cannot hire enough skilled workers to do the work. Almost any Business Owner will identify workforce as a significant concern, but we must also see this from the perspective of our young people. We want them to receive an education that allows them to find wellpaying, fulfilling jobs here in south dakota. We in south dakota. We have an excellent Education System in our state, but we must help all of our young people achieve this goal. So how are we doing . First, the national perspective. Its clear that post secondary education is important in todays job market. When i graduated from college in the early 1970s, Postsecondary Education was not especially common. A few years ago, a Harvard University study entitled pathways to prosperity looked back to 1973, about that time. At that time, nearly threefourths of jobs were held by workers with a High School Diploma or less. In 2016, Georgetown Universitys Center on education in the workforce issued a report, americas divided recovery, which found only 34 of jobs are now filled with employees with a High School Diploma or less. And this trend toward workers with more than a High School Diploma began in the early 2000s, and has recently accelerated. Jobs for those with no post secondary training are trending down even faster. Georgetowns report showed that in the six years after the recession ended, the economy added 11. 6 million jobs. 11. 5 million of them, or 99 , have gone to workers with at least some post secondary education. Those with a High School Diploma or less gained only 80,000 jobs, less than 1 of those jobs. Looking at it another way, this graph from Georgetown University shows first the loss of jobs during the recession, and then the recovery of jobs. The shaded area on the left shows the recession, from december of 2007 to january of 2010. The blue line shows jobs held by those with a bachelors degree or more. The numbers show, as you can see, slight gains and losses during the recession, and then when it ended, 8. 4 million new jobs were added for those with a bachelors degree or higher. The or higher. The orange line shows jobs held by those with an Associates Degree or some college, short of a bachelors degree. You can see about 2 million of these jobs were lost during the recession. This is the orange line. Lost during the recession, but regained afterward, plus 1. 1 million more. The green line shows jobs held by those with a High School Diploma or less. About 6 million jobs were lost during the recession. And those with a High School Diploma or less have regained only 80,000 of them. So given this, we wanted our kids to graduate from high and then pursue some post secondary education. These are things were already encouraging, so, again, we have to ask ourselves how are we doing there in south dakota . To south dakota . To help us understand whats been happening, last spring i asked our department of education to look at ninth graders who enrolled in high school in 2006, ten years ago, to see how they faired over the next 10 years. Why 10 years . Well, it takes most students four years to graduate from high school, and some Students Graduate College or tech schools in four, some in five or most of the rest six. Have quit by that time. So lets look at ten years. Our best data is for students in public schools. We have 10,513 ninth graders Enter High School in south dakota in the fall of 2006. To make the numbers easier to follow, well talk about 100 of them, as representing the cohort. Of the 100 ninth graders, 23 did not graduate. Leaving 77 high school graduates. Of those 77 graduates, about 2 3 of them, 52, entered some kind of post secondary education. Some began a twoyear program. Some started a fouryear program. Less than half of them completed their program in south dakota by 2016. So six years after they began, less than half had completed. So had completed. So of those 100 ninth graders, less than 1 4th of them persisted to complete a post secondary education effort within 10 years. Now, some of the others have found or will find success through directly entering the workforce and achieving there, or joining the military or through transferring and graduating from an out of state institution, or some other means. But many of these will not find the success we want them to find. Now, this situation is not unique to south dakota. Its a problem seen across the nation. Colorado has a chart like this. Its almost exactly the same is as ours. California has a similar chart. The good news is south dakota is getting better. Our High School Graduation rate is improving, and at the post secondary level, the state universities are very focused on improving retention rates through graduation. Our best Technical Schools have rate over 70 . So we are improving. Still, we have a long way to go. Too many students still do not complete their post secondary efforts. Among young people who do pursue additional education after high school, many are unaware of which educational pathways lead to skills or credentials which are in demand and qualify a person for good job. Two summers ago, i hired a High School Student to do some work had our farm. He was a good student, hardworking and respectful, with good grades. I asked about his plans after graduation. He said he was going to enroll in a private university to major in psychology. Tuition, room, and board at this school amounts to about 90,000 for four years. Thats if you graduate in four years. Mind you, these days, only about a fourth of the students who enter a fouryear Degree Program graduate in four years. Later, i asked this young man to lunch, and provided him with new York Federal Reserve data showing poor job prospects for psychology majors. With those few jobs paying 25,000 or less. I showed him the number of psychology majors is huge, with much competition for the few jobs available. He was very surprised. He had no idea. He said, this is disconcerting. Thats a quote. [applause] [laughter] daugaard you know, thats a smart kid, right . He was right. It should be disconcerting. And im not saying psychology major cant be successful. Some employers require a bachelors degree in any field as a prerequisite to applying and many go on to graduate school. Thats what i did, but young people need to know this information, when theyre making these decisions, before they make these decisions. Weve taken several steps to improve this situation through an effort were calling career launch. Were encouraging high schools to expand the availability of work based experiences, such as job shadowing or apprenticeships. The best way to learn about careers is to experience them. In addition, these work experiences help our young people learn how to arrive on time, how to dress appropriately for the job, how to interact with coworkers and customers. And with fewer people, fewer Students Holding jobs while in high school these days, workbased education experience is maybe the best way or even the only way to learn these foundational skills that every employer expects of every employee. Let me give you an example. In yankton, Many High School seniors plan their schedule to their classes are compressed into half a day, either morning or afternoon. During the other half of the day, the students work at a paid internship with an employer in town. The student receives high school credit, paid at least 11 an hour, gains exposure to a career field, and learns those foundational skills i just mentioned. This month, were piloting career launch with four school districts. Sioux falls, rapid city, yankton and brookings, so we can learn from them and help them move forward, as well. We hope to expand this effort in the future too all districts. Assigned personnel will help schools coordinate with employers to add learning experience, opportunities, and theyll supplement a schools career counseling services, so that young people receive more information about career fields and education pathways. Last month, i joined an announcement in sioux falls of a Partnership Among dakota state university, southeast Technical Institute, the Sioux Falls School district, and the department of labor and regulation. High School Juniors and seniors will take dual credit courses in cyber security, network services, or software development. These dual credit course also count towards their High School Diploma. The courses will also count as stackable credentials towards college credit. Students can earn a certificate from southeast tech, stop there, or go on to an Associates Degree. Stop there, or go on to a bachelors degree at dakota state university. Students will also have the opportunity to work in the local business, using their course training. The department of labor will be working with dakota state and southeast tech to create an apprenticeship in these technology fields. This is an example of the type of workbased education i hope will take root in south dakota. Im particularly excited about this. When i was in switzerland, i saw many students in hightech apprenticeships. We need to change the notion that apprenticeships are confined to the construction trade, such as electricians or plumbers or carpenters. Apprenticeships can offer a pathway for training in many career fields. Were emphasizing training in these cyber fields, not only because of indemand, wellpaying jobs, but because its a strength of dakota state university. Dakota state announced last summer a generous 30 million gift from denny stanford, and this gift to the college of computer and sign herbcyber sciences will keep dakota state a leader, where its been designated by the department of homeland security. New programs, scholarships and a new Research Facility are all being added. Of course, the gift to the college is not the first time that Denny Sanford has made a major donation to advance workforce development. In 2014, he donated 25 million to launch the 50 million fill the dakota scholarship fund. Now in its third year, approximately 300 students annually receive fullride school har scholarships. They enroll in a program and promise to work in south dakota after graduation. In south dakota, enrollment is up 2 and in build dakota programs, up nearly 10 . The first graduated last fall and today, 208 recipients are working in south dakota in a high need field. Another important opportunity for High School Students is the state dual credit program, now in its fourth year. Youve heard me say it many times. Is a win, win, win. Students win, because these are the cheapest College Credits they will ever buy, and they get a head start. High schools also win, because they can expand their course offerings at no cost to the school district. Universities and tech schools when, as well. Although we do ask them to discount their tuition rate, this program attracts more south dakota students to our institutions, retains more freshman after the first year, and helps graduate students on time. Last year, 2,224 High School Students took at least one dual credit course from a university. Another 934 took a Technical Institute course. The pass rate is excellent, over 90 , and the cost savings are substantial. Last year, these students saved an estimated 5. 3 million, compared to the tuition rate they would otherwise pay. This year, ill propose to update the statute and clarify the manners which the students, the institutions and the state share the cost of this program, and i hope youll support that legislation. As i mentioned, i made workforce policy my policy initiative for the western governors association, and i invited u. S. Secretary of labor to participate in our first summit in sioux falls. When he was here, he asked me as wga chair to promote another issue that is a priority of the Trump Administration thats streamlining professional licensure. Licenses can make it difficult for professionals to move, because each state has its own requirements. Clearly, professional licensing plays an Important Role in protecting the public. No one wants to be operated on by an unlicensed doctor or have ones house wired by an unlicensed electrician, but we must be sure that licensing isnt used to keep qualified workers out of the market. I reached out to several governors and all expressed an interest in a reciprocity compact for professional licensing. If already licensed in one state, a professional can move to another members state and practice for 18 months, enough time to earn a license in that state if one chooses to do so. This year, ill ask that you pass a statute to create this compact and create reciprocity with any other state that also enacts it. A number of Western State also establish this compact which can spread to other states, as well. I would like now to speak about education. Two years ago, we enacted the recommendations of the bipartisan Blue Ribbon Task force to increase teacher pay and Reform School funding. Im pleased with the progress to date. Payhe first year, teacher in south dakota increased 8. 8 . We saw sizable salary increases across the state. In small districts and large. In fact, some of the largest percentage actually it happened in small districts. Teachers salaries increased 24 . I heard from many superintendents that this has improved the ability to retain and recruit teachers. We have improved the situation greatly. Im also pleased with the progress we made in transportation. Three years ago, this body passed a comprehensive, highly funded bill, which generates 85 million in new annual revenue for roads and bridges, and it tax by sixtax gas cents a gallon and increased the license plate fees. Im happy to report that the new money is being put to good use. The state has awarded 298 Construction Contracts amounting to these projects have 750 million. Encompassed work on 6,078 miles state highways, bridges. Many of these projects could not have occurred without this new revenue. One example of a project is the highway 100 project that will content connect the east side of tsunami falls to interstate 90 90. This continuation of a sioux falls corridor will improv commercial mobility and sustain suspected growth over the next 20 years. This is the largest highway contract in state history, and the completed highway will be owned and maintained by the city. Bridges can also be expensive for local governments to maintain, which is why we included a provision in the bill. The first project to replace the driving surface on a bridge in Davidson County was completed last fall. Projects should be under construction in 2018. No one likes tax increases, but its less expensive to maintain a good road then build a bad one. The print bridges and highways we fail to repair today will have to be rebuilt tomorrow. At many times, the the best time to plant a tree was 50 years ago. The second best time is today. On our farm, when i was a b