he wants to start his own business. he thinks he can do a negotiated better contract, manage his workers better. if he doesn't feel the community supports him taking that risk, if he thinks there is too much red tape, if she feels there is not enough space for her entrepreneurial activities, then they won't do it. over the last several years we have seen that. the number of startups have gone down significantly. you can tie it to a number of things. how supportive we are of entrepreneurs. the media is constantly bombarding people with this negative impression of how this is broken, or that is broken. or this person is a soundrel. we go through these campaigns where the level of negative advertising is beyond what anyone could have imagined 20 years ago. people don't believe anymore. that is having a direct effect on our entrepreneurship. colorado is growing. we have tons of startups. we do believe. we have a funny way of infrastructure. we move rapidly and the planning that has gone on is not going to be sufficient. even if we had it we are too far behind. it is good policy to have. traffic jams, congestion, we are one of work on this together. it is better than having empty streets. i think that sense of confidence is that this is going to be the key for the overall country. people forget governor clinton before he was president talked about the economy stupid. our recession started in 1984. i got laid off in 1996. he was running for president in 1992. that recovery had some dips. these recoveries are difficult processes. part of that is getting accelerated have people believe , to get confidence. >> i agree. the media plays an important part in terms of ensuring people understand the facts and what is going on. one of the reasons that people have not been feeling it is because their wages haven't moved. you have an environment where unemployment numbers look what they are getting better but the average guy or gal has not seen a change in their salaries. >> absolutely. we just open shake shack. >> hugely successful deal. >> the wait staff, the price of the menu goes up. they have gone up 250% in the last 25 years. wages have gone up a fraction. i think that pressure, you see that in every industry. >> that is true. >> the segue from that is why is that? there are two big reasons. businesses have more choices than they have ever before about where to locate and where to expand, and where to hire. >> and who to hire. >> and who to hire. we have to come to grips with the fact that we are not entitled to a job tomorrow just because the employer was in our state yesterday. this is not just a battle amongst us as governors. the battle is with employers around the globe. that is number one. number two, there are profound implications. we carry these computers in our pockets. the positive aspects of that increases productivity, more wealth and opportunity. i'm sure we all have employers in our states who are producing twice as much as they produced 10 years ago employing half as many people. this revolution has big implications for the nature of what is the role of people in producing things. i think particularly given the fact that there are more choices than ever before, we need to understand what it is that they care most about when they are making that decision about where to invest and hire. then we have to act on it. to me, the biggest take away of all this is what everyone has talked about. it has to do with workforce and skills. the $28 billion overseas, i think it is not just about tax policy. even if the tax policy was equal they are going to have lots of great choices about where they can get a great workforce. we need to make sure every single day we are getting better because we know other countries are investing heavily in that. >> you make a great point. this issue is only going to get worse. right now as we sit here they are doing prostate cancer surgery robotically. they are doing health care checks of our bodies. we have sensors all over the place. machines talking to machines. that will mean fewer jobs. is everybody ready for that? obviously not. we don't have the skill sets. >> at the same time these technologies will create new jobs, the kind of jobs we never thought about before. >> absolutely. >> biggest economic choice you are facing? >> the honest answer is the one we don't know. who would have envisioned a down turn the likes of the great recession a few years before it took place i would say there are challenges that we currently know that we are ignoring. climate change, although we did talk about massachusetts or boston issue with snow, climate change is a gigantic challenge. my states on the eastern seaboard, maybe not in my lifetime but i hope and the like them of my children, i hope they get to the point where they will be as challenged by that as by seawater rising and the implications of greater disparity and whether. i think that is a gigantic problem. transportation infrastructure presents a global disadvantage. i think we have to address that. we go back to how we going to fund how we address that. income disparity and what we do or don't do about that, the story about the chef not making as much as the wait staff, there is also a cultural, educational and racial disparity on who works on what side of the house. we have institutionalized to some extent those disparities me -- and we have to worry about it. demographics. we are getting older. there are -- everybody has gotten older. it is not because you have a better skill set. on the demographic side. i think these are serious issues. political infrastructures, the person who used a way of political battles was the worst -- the person who could unify. now the person that can win more often than not than ever before is the person that can best divide. that is a problem. >> governor? >> kentucky has been very fortunate in coming out of this recession and a strong way fairly quickly. our unemployment rate has gone from 10.7 to 5.7. it continues to fall. our economy is really picking up . none of us are where we want to be yet. >> to what do you attribute that success? >> every ceo i have talked to. they love incentives. they love infrastructure. they love the things that we give them. the thing that they want more than anything, their number one priority is a productive workforce just like everybody else. i think we ought to spend a moment talking about what the definition of a productive workforce is. obviously it is a trained workforce. we have problems like so many that we have programs like so many where we develop the skills needed for the jobs of the 21st century. a productive workforce, every smart ceo will tell you, is a healthy work force. they are not on the job all the time, they are not productive. we have made great strides in kentucky of getting our workforce healthy. it has to be a drug-free workforce. all of us have that issue in our state. we have it. we are having to attack that problem. all of these things that we do in one way, you can see the relationship. it goes to developing that productive workforce that is going to give you the job attractiveness to bring those folks into your state because you have that workforce that will do the job they need. >> governor? >> our challenges are the opportunities. in arkansas we have great entrepreneurs. we have great producers. you think of the global marketplace, that is our challenge. making sure the global marketplace is open to our industries. you look at walmart. they have expanded beyond the united states in the global marketplace, tysons food, in terms of the and poultry production, exports all over the world. rice production. we are a small state of great entrepreneurs that has to have a global marketplace to make sure we create the jobs. i think that is the opportunity we face. i have listened to the comets around the room whether it is workforce education, job skills, infrastructure. from a state perspective i would like to see the federal government give more flexibility to the states to address those problems. i think that we can do a better job. i think that we can manage it. i think it has been proven that while the federal government has done a great job of collecting revenues, they have not been very good at providing the solutions to the states and we have done better. i would like to see that flexibility. >> does everyone agree with that statement? [laughter] this is going to be a topic you discuss with the president tomorrow. >> i hope to absolutely do that. i think there is a growing recognition in washington that there is a willingness to give more flexibility. i don't blame this simply on the federal government. things have changed. we have been very dependent. we have enjoyed have the federal largess returned to the state. times have changed for the federal budget. with the states being greater innovators. with mobile society that we have more competition. i think it is time to read figure that balance in federalism. that debate goes on. we can certainly push it and grab hold of the rains. >> let me push back a little bit. the last thing you said is actually a little bit at all its with what you first said. you want to strike the right balance. i can go along with the argument that maybe it is time to reset that balance. let's not forget there is a balance there. we have a national economy everyone takes advantage of whether you are pennsylvania or arkansas. the manufacturers, the distributors, they take it manage of not just a global economy with the fact that we have one of the biggest and richest domestic markets in the world. that takes federal regulation and some federal cooperation. we can't lose sight of the idea that states can do everything. >> i agree totally. immigration, we need to have the federal government engaged in that, and trade policy. the federal government needs to do trade policies. but whenever it comes to our job creation, when it comes to our infrastructure, we have been dependent upon the federal highway dollars. let's read figure that. there are a ways to do things differently. i don't think it is inconsistency. i think we are in agreement with that. we need to make sure that there is a clarity in the difference and responsibilities. >> governor? >> north dakota, our gdp growth over the last 10 years has been 10. 4% more than three times the national average. >> is that because of energy? >> about three or four points of that 10% has been attributable to the energy sector. the rest is other industries agricultural, technology manufacturing. our greatest challenge is managing the rapid growth of our state. one of the fastest growing economies in the world. if it were not for north dakota, gary herbert would have achieved his goal of being the fastest growing economy in the country. we just keep chasing it and working hard to do the things that everybody has talked about. and the national media does call me and ask me why is north dakota so different from the rest of the nation over the last 10 years, and i think it is not that complicated. we have low taxes. we have a reasonable regulatory climate. we have a terrific workforce. we have a state government that we think is the most accessible government in the country. companies come to our state for that reason. you see deere and caterpillar building, microsoft is expanding. there is economic activity that is a long ways away from the oil fields. it is working well for us but at that pace, 10.4%, we have to go to stay on top of that. and keep everything going forward. inhighways getting built. buildings getting built. law enforcement expanding. all the social services you have to bring to bear. all that has to keep up. that is without a doubt our biggest challenge. >> what has been the impact of the seller and the price of oil? >> so far we are almost surprised at how little we are noticing it. in northwestern north dakota, it is one of the most productive in the world. we think our costs producing a barrel of oil is in some counties as low as 30 hours a barrel. the drilling pace is not dropped off that much. plus the fact that we had a shortage of workforce going in. we are finding that if anybody has been laid off, they have had no problem whatsoever finding another job. >> my biggest challenge is probably the governor will not agree to a border realignment. [laughter] we permit faster and lower taxes on our oil and gas than most in north dakota. in addition to that, i like to look at it more of post economic challenges as real opportunities. at the state government level, the opportunities, i need to maintain fiscal discipline. a reporter at j.p. morgan say we are the most fiscal stay in the -- state in the country. that allows us to do things to give folks looking forward that much more excitement. it allows us the ability to -- it may not be sexy, but reduce interest rates that we provide local governments on wastewater and sewer water. saving $40 million for ratepayers across the state. we need to continue to build on a business friendly environment. like many others said, at the end of the day the private sector does this. we have the private sector to identify the opportunities and obstacles for growth. we have either repealed or streamlined 714 regulations that rather unnecessary, unwarranted, stand in the way of further economic development. we are asking them to say help build the business plan for the future. that is where we get into these issues of we do have a skills gap. we had to do things like fund early childhood education because we know the difference that will make long-term. the investments all throughout if business is at the table saying where can we grow, and what are the opportunities to look long-term because in government with political cycles it doesn't always look long-term, but partnering with them in looking forward it is just going to create that many more economic opportunities for the state. >> governor walker. >> the good news in alaska, we are closest to the market. we are close. the bad news is we can't get access to our resources. the basin has 475. we will drill 63 wells. we just can't get access to our resources. we have the highest cost of energy. >> the federal land. >> it is limiting our ability to get there. they have drilled 19,000 wells. we have drilled about 6000 wells. we just can't get access to our resources. we have the highest cost of energy. diesel fuel is the equivalent of $30. we are paying two dollars down here. we have the coldest temperature days. we don't have cold snaps. we have cold seasons. so it is very frustrating that we have trillions of dollars of value in the ground and when we became a state we would be returned to live off the resources. that was the mandate. we have held at our end of the deal. the administration has not. our biggest challenge is getting access to our resources for our economy and our own people so people can afford to live in the villages some of the highest i've heard is 15 people live in one house. that is ridiculous based on the energy. we inject more energy into the ground than they consume in gas in california, and washington combined. it is all about distribution. we have plenty of resources. we just have to be able to get to our resources. >> governor. >> thank you. sitting here listening to the discussion, i feel lost. we are experiencing a very difficult time in our economy. the only that we have been associated with united states for the last 120 years, we haven't really developed any economy that would coast into some direction. are you are discussing which way to go as far as direction of our economy. here we are struggling to find if we do have an economy or not. we lived under the mercy and survived under the mercy of the federal government. we don't really have a strong economy. we do have a couple of galleries which rely solely on the availability of fish and the fishing industries. it is getting tough. it is getting to be a national issue with the chinese and other foreign countries who are trying to take advantage of the fishing industry. we are the victim of such impact on our economy. what we have been discussing this morning, as insular territories and commonwealth, we need to come together to find some ground within the relationship between the federal government and the territories of the commonwealth. we feel we have been left out many times, especially in our location, where it is 18,000 miles from washington. we are the furthest of american soil in your been there since the beginning. we feel like many times we have been left out, and the only time we can feel the impact of the american dollar is when there and national disaster or something happens to our territory. otherwise we feel lonely down there. we have been discussing the prospect of insular territories and commonwealth to come together and ask our organization to find a place for the insular territories and commonwealth in international associations. we also need to see that the federal government delivers more attention to us. i can say it without reservations, so seeing with the united states of america, we feel like we're headed nowhere. the closest people to us are the chinese who come around in our shores with change in pockets trying to set up some business with our local people. they have restricted us from fishing in our waters. they have restricted us from other areas. we are victims of all this federal mandate and regulation. we cannot even protect our shorelines. you need to call the army corps to get a permit. we can't even deal with something unless the federal government knows that we do not have the resources to accommodate the lives of our people. we have been americanized by the the americans, they convinced discussed america is the best nation in the world. we agree. >> himvery important. -- very important. >> after so many years we feel like we have been left out. for the first time, the assistant secretary of the interior visited our shores. for the first time, somebody visited [inaudible] and i tip my headat for paying attention and witness firsthand how the american people down there live and survive in that part of the world. >> very important. >> i-8 to take all of the -- i hate to take all of the time to voice my opinion. >> thank you. >> thank you and good afternoon. first, the greatest challenge of the economy of the virgin islands is to convince my colleagues here in the national governors association that their winter meetings of the association should take place in the virgin islands. [laughter] [applause] 78 degrees. we are hopeful that the next 2 winters i don't have to get off of my sailboat to come into the snow. >> that should've been obvious. >> much of the conversation i was privy to today, we understand a lot. we also have that challenge of aligning our workforce development, our education, our universities with the changes in the economy for preparing our workforce for the new jobs. i think we are on the same model of going through schools graduating through high school getting to a degree and getting out the world, and being competitive and productive. the changes in the economy happen so rapidly and the infusion of technology in much of what we are doing in the economy, we have to shift that model to prepare our people to be able to take this on. most know that the main source of the economy is tourism. we have great opportunities and technology. we have to shift for that. that is going to require a great investment in the infrastructure, to be a competitive location for business globally, and be able to cycle back our workforce to leave and come to the u.s. mainland for the opportunity to come back into the virgin islands and work and raise their families, and be productive. we find ourselves, we produce for many of your cities and states, many people work there. like the governor said, one of the biggest challenges to the territory is federal bureaucracy. and a lot of rules and regulations made in washington and the other states or the federal offices are located. there is not an understanding how fragile the territory economies are. when they make these rules and regulations they are just destructive to our fragile economy. we lose jobs by the hundreds or thousands because of them. we don't have reasonable rapid response on the federal government to deal with these issues. we have to go through the congress and a lot of bureaucracy. at the end of it, that segment in the trade is no longer relevant for us. we are going to be looking to the nga and are calling to assist us in getting that point across. we understand where we are at on the scale. in the winter meeting, u.s. virgin islands. it is a lot warmer and more fun. thank you. >> you make great points. the attitude is not the way to go when you know your state best and better than anyone in washington. a final word from you. >> this is a great chance. i appreciate it. puerto rico has great challenges. we have been dealing -- we have a huge deficit of 24%. in 18 months we reduce that to zero. it is between zero and 2%. unemployment rate lasts 16. 5%. it is now 13.7%. it is on the way down. the crime rate was the highest in our history, now the lowest in the last 22 years. we are moving the lines. the on the positive line. we are breaking records. it is only 7% of our economy. our main part of the economic is -- [inaudible] and, for the first time since 2008, for the first time since 2006, the department of labor statistics states that our private sector is growing in the public sector is shrinking. without firing people. 16,000 [indiscernible] that is why we are able to budget. right now we are focused on a new tax structure. we are moving puerto rico to a value tax.

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