governor dennis duguard. [ applause ] [ applause continues ] >> thank you very much. thank you, lieutenant governor. you're outstanding. thank you all for being here today. to begin, i would like to recognize two new legislators, first, doug bartell. appointed him to replace don hager. doug spent his career in law enforcement, including 12 years as due paul's chief of police. he was here last month and sworn in. let's welcome him again. doug where are you? there he is. welcome. [ applause ] second is mike dedrick. i appointed mike last month following the loss of our friend, craig teasen. mike has served three terms in the '80s and '90s. i appreciate his willingness to serve, especially on short notice. please join me in welcoming mike. [ applause ] today, i would like to look back at some of the things we've accomplished together over the past seven years, and update you on some progress. i'll also offer new proposals to consider this year. i would like to start today by talking about workforce. this is a significant long-term challenge facing our state, and i've spent a lot of time on this over the last year. if march, the national governor's association sponsored by visit, along with several other governors, to switzerland and germany to learn about their long standing work based education program. 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. 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 well-paying, fulfilling jobs here 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. it's clear that post secondary education is important in today's job market. when i graduated from college in the early '70s, post secondary 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 three-fourths of jobs were held by workers with a high school diploma or less. in 2016 georgetown university's center on education in the workforce issued a report "america's 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. and jobs for those with no post secondary training are trending down even faster. georgetown's 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 bachelor's 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 bachelor's degree or higher. the orange line shows jobs held by those with an associates degree or some college, short of a bachelor's 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 school. and then pursue some post secondary education. these are things we're already encouraging. so again, we have to ask ourselves how are we doing there in south dakota? to help us understand what's 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 ten years. why ten years? well it takes most students four years to graduate from high school. and some students graduate college or tech schools in two years, fomsome in four some in five or six. most of the rest have quit by that time. so let's 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 we'll 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 two-year program. some started a four-year 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 thus of those 100 ninth graders, less than 1/4th of them persisted to complete a post secondary education effort within ten 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. it's a problem seen across the nation. colorado has a chart like this. it's almost exactly the same is 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 a graduation 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 a good job. two summers ago, i hired a high school student to do some work at 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. that's if you graduate in four years. mind you, these days only about a fourth of the students who enter a four-year 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 $5 $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. that's a quote. you know that's a smart kid, right? he was right. it should be disconcerting. and i'm not saying psychology major can't be successful. some employers require a bachelor's degree in any field as a prerequisite to applying. and many go on to graduate school. that's what i did. but young people need to know this information, when they're making these decisions, before they make these decisions. we've taken several steps to improve this situation through an effort we're calling career launch. we're 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 co-workers and customers. and with fewer people fewer students holding jobs while in high school these days work-based 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, we're 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 to all districts. assigned personnel will help schools coordinate with employers to add learning experience opportunities, and they'll supplement a school's 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 work-based education i hope will take root in south dakota. i'm particularly excited about this. when i was in switzerland, i saw many students in high-tech 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. we're emphasizing training in these cyber fields not only because of in-demand, well-paying jobs but because it's 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 it's 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 full-ride 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. another important opportunity for high school students is the state dual credit program, now in its fourth year. you've heard me say it many times. dual cred sit 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 win, 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 i'll 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 you'll support that legislation. as i mentioned, i made workforce policy my policy initiative for the western governor's 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. that's streamlining professional licenseure. 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 one's house wired by an unlicensed electrician. but we must be sure that licensing isn't 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 member's state and practice for 18 months enough time to earn a license in that state if one chooses to do so. this year i'll 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. i'm pleased with the progress to date. in the first year arm teacher pay 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. teacher's salaries increased 24%. in i heard from many superspen dentsdent s -- superintendents that this has improved the ability to retain and recruit teachers. and we have improved the situation greatly. i'm 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 brinldges. it raised the gas tax by six cents a gallon and increased the license plate fees. i'm happy to report that the new money is being put to good use. the state has awarded 298 construction contracts amounting to $750 million. these projects have encompassed work on 6,078 miles of state highway,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 connect the east side of tsunami falls to interstate 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. 37 more bridge projects should be under construction in 2018. no one likes tax increases, but it's less expensive to maintain a good road than build a bad one. the bridges and highways we fail to repair today will have to be rebuilt tomorrow. at many times the cost. the best time to plant a tree was 50 years ago. the second best time is today. on our farm when i was a boy, we always had a big garden and we ordered plants and seeds by mail. with every order, gaurnthey would always enclose a bonus item. one year it was a bare root seed ling only about a foot long. my dad and i planted that seed ling and now, 50 years later, it's strong and tall. here's a picture of that tree today. before us comes so many issues. deferred payment nance, highways criminal justice teacher pay. that can't be solved in one year but a start must be made. we can kick the can down the road but the problem would only worsen. so we must do whatuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuu;(uuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuáp>/d them to prepay debt. very proud that we kept our funds fully funded. of just a handful in the trustees have led the nation their innovative reforms to the pension plan sound practices have south dakota a aaa credit the highest possible. should all be proud of this. should also be proud of the we've done to preserve and south dakota's outdoors natural resources. created a state park a not only for its beauty but for its and cultural significance to native state buildings are more efficient and our governor's houses use energy. new buffer strip program has to increase natural gases water quality. in the black hills, we a new visitors center and other facilities. the interstates, we're welcome centers of the borders to welcome more south dakota. a return to the analogy of trees, on the capital alone, we've planted than 500 trees. in state parks more. our state parks, our crown is custer state park. want to talk for a moment about the recent fire. the morning of monday 11 a fire broke out over the next two days dry warm temperatures high winds drove the 4,000 acres, making it third largest black hills on record. were very fortunate to have own season type two incident based in the black hills to the response. not have responded as without our type team. and volunteer from across the and region responded to aid. ranchers and customer state park staff all high winds caused the fire jump containment lines, firefighters, law enforcement and staff went door to door to families evacuate as the pressed at their heels. than 340 firefighters that night or in the days to protect primary structures. to all efforts -- thanks the efforts of all involved, lives were lost no one was and no homes or primary were lost. 175 houses in the area were and the farmers, and local residents all a home to which they could return fire can sometimes be healthy it clears unwanted and in many areas, what happens. buffalo herd and were largely did lose fencing. of the winter pastures and stands of timber. new fencing is being built. we're buying some hey. hs working on a salvage sale to capture some from the burn. state park reopened just days after the fire started. could have been much much if not for the hard work heroic effort of our firefighters. south dakota at its best. from all across the pulling together in a of need. help me thank them [ applause ] last summer you met in session to address a issue in south legislative solutions have elusive. situation came to a head march when the supreme said it was "up to the to decide how these to be beneficially in the public interest." heard that message, went to and the open waters passed is already working. more than 99% of all of water with managed are open for small, red sliver on the chart is not just a win for those enjoy fishing and boating. owners of these waters have by keeping all of waters open. has created a new dialogue sportsmen and land which has been positive all. the special session, the bill included a to sunset the law this the legislature could consider whether it wa working. believe that if the law is and i'm introducing a for your consideration to the sunset date by three to june of 2021. will give the new system time to work before we opportunities for improvement. open waters compromise is of many instances in which a effort has solved the what the people of south expect of us. want problems solved. want elected officials to ethical and accessible and want opportunities to their government. my time in office taken these expectations to to try to make efforts in areas. revamped, open the public can access financial information and the same financial metrics i see every week. launched the boards and portal one-stop site for meeting notices, and information difficult or to find. website sd .net has availability of live for public meetings. administrative rules website citizens follow the rule process. body has done a number of to advance transparency accountability in state year you took up many to codify the concept measure 22. servants from west river east river, on the right and the left came together to these bills. total of nine replacement were passed. laws officials agency heads are prohibited accepting expensive gifts lobbyists. whistleblower provisions been created. and officials who state service may not for two years. funds may not be used personal expenses. new accountability board has established to receive complaints initiate and refer i appointed four judges to this board. two government is about more accessibility and transparency,though. hsalso about efficiency. you can go online to renew driver's license, amy for a look up the status of an or parolee. the restaurant health scores. your take home pay to states. state conditions buy hunting fishing hi sense, and to communicate with the of south dakota. offer maps to help the public land for hunting, locate facilities pin point and gas wells. lake levels. bodies eligible buffer strip and more and more can be done know however, that online has made it more for our state to sales and taxes. state has been at the of the national to solve this problem. continue to hope that will address this but in the meantime years ago, this body passed bill 106 to require sellers without a presence in south to collect and remit tax. then over 100 companies, amazon have come forward voluntarily. retailers, though our ability to these taxes. we knew they would. that case is working quickly the judicial process. month, this month we expect hear whether or not the u.s. will take up our national governor's the tax foundation national retail federation american farm bureau have all joined dakota and 35 other in urging the united states supreme court t can't know how they may rule we can be proud that south has been a leader in this national issue tax uniformity. hope for the sake of south businesses the problem resolved. you continue to -- our address online sales, encouraging more for our state. me tell you about a few of many good things happening july we broke ground on neutrino facility. experiment will fire a of neutrinos from a lab chicago to huge detectors the sanford underground hopes to unravel one of the mysteries of the universe oscillation of neutrinos. but you knew that. psychology majors do experiment will require a million investment that have an impact of nearly $1 also continues to a destination for millions of year since 2011 forrism set new records for volume spending. 2011 our visitor volume grown from an estimated 12.5 visitors to 13.9 with a corresponding of $450 million in visitor also very excited about dakota's emerging biotech piebiotherapeutics broke ground. well known for world's first platform technology to polyclonal antibodies. human antibodies are aimed prevention and treatment of ailments hike cancer auto disorders and infection facility will be the first its kind designed for cattle and will them to expand its capabilities,herd and team for of life-saving technologies.2017 was a great year of economic development governor's office of development helped deals that total over million in investment and expected to create more 1400 new jobs in south i'm pleased to share that cooperatives, a leader in the american dairy industry producer of dairy products pursuing plans to expand norton cheese plant an a multiyear site search review. $250 million expansion will increase daily processing to eventually triple the capacity of requiring 125 new and employees. fully operational, the will have just over $1 in estimated annual to the region and state. project it will support more 90,000 additional dairy may, we also broke ground a major new ag processing in aberdeen. new state of the art soybean facility highlights emphasis on adding value by them within our investment will create 50 jobs and have a substantial economic understand the scale facility will eventually the equivalent of 20% of state's entire soybean crop. will extend beyond and benefit farmers by up a new market and the price for their are just two of many 2017 stories. many more. sioux falls, we supported brothers a 100-year-old south dakota manufactu it a new $40 million supported the construction of 20,000 square foot processing in elk point to add 22 jobs. secured a commitment from genetics to build a million commercial turkey creating 79 new jobs. facility will hatch over turkeys each week. great news for other in south dakota and will see another $40 million investment and another 8 new from the associated laying promoted our advanced sector which uses technology jointly by the school of mines the army research lab. is renovating a vacant to house its new and office space. plan to create 60 new by the end of this have been many other expansions including northeast south dakota. all natural foods, b-9 applied engineering, pep, great plains arrow trailers. seeing success because allows businesses prosper. a low tax burden no income tax, no income tax or personal tax, and we have low and reasonable diligent about red tape.fact since 2011 i proposed you have approved the over 4,600 of obsolete or laws and rules, for more than 515,000 unnecessary laws and rules accounting for more than 515,000 words and will propose more of those bills this year. one area where regulation continues to stifle economic development is micro brewing. current south dakota law e0caps micro breweries at 5,000 barrels per year. compare that to montana's cap of 60,000 wyoming 50,000 north dakota 25,000. again, south dakota 5,000. in addition south dakota does not allow an in-state micro brewery to sell its product directly to a retailer. montana, wyoming inned ndnorth dakota iowa all allow that. south dakota's alcohol laws were written over 80 years ago after prohibition ended and they have been amended many times. the statutes in this area are a mess and in many cases they just don't make sense. i'll be supporting several bills this session to streamline and modernize these statutes so they make sense for a 21st century economy. one of the most important steps we've taken in economic development over the past seven years has been the creation of the building south dakota program. i spoke to you last month in the budget address about my proposal to strengthen this program and i know many of you want building south dakota to have a reliable ongoing revenue stream so these grant programs can be sustained. my proposal is an improvement over the current system which relies on volatile revenue sources and which is too complicated. as i explained last month, my budget proposal takes the approximately $3 million per year in contractor excise tax that's currently diverted to building issed sundaysouth dakota and directs that money back to the general fund. i'm proposing that we allocate $3 million in general funds into the funds that make up building south dakota. the housing development authority would commit another $1.5 million for the next five years, adding $400,000 annually from the private activity bond fund as well. this would bring a total of $4.9 million in ongoing funds to be spent in turn in the general appropriations bill for building south dakota programs. this proposal would eliminate the 5% stream of dollars that's currently allocated to the ready fund and would reallocate the dollars instead to the four remaining funds -- the housing opportunity fund the local infrastructure fund the workforce education fund and the economic development partnership fund. if we make these changes, these four funds will exist in the general appropriations act each year rather than relying on a complicated side statute. this will make it easier for legislatures to weigh the relative benefits of each fund and allocate future revenue increases as our needs change. governor george s. mickelson is remembered for his efforts to bridge gaps between native americans and nonnatives. governor mickelson called on south dakotaens of all races to focus on areas of agreement which led to successes in tribal tourism, health care and small business development. during my time in office i've tried to follow governor mickelson's example and i'd visit reservations to meet with tribeal officials every year. the department of tribal relations has facilitated partnerships among state agencies and the nine tribes. we now have tax collection agreements with 8 tribes and gaming contracts with 8 tribes. in 2016 and 2017 the department of game fish and parks signed cooperative memorandas of understanding with the sioux tribe and others to improve communication and management of wildlife and lands. the department of environment and natural resources has dedicated millions of dollars for the operation and maintenance of tribal drinking water systems. in corrections we've implemented a tribal parole program that's been very successful and leaders are working on a proposal to start a similar program for the sioux tribe. i value the intergovernmental relationship the state has with the tribes and the native americans who call south dakota home and i hope we can continue to progress in these areas. one issue that's important to all south dakotaens including our tribes is infant mortality. when i was first elected, i was shocked to learn how many infants were not reaching their first birthday. south dakota's infant mortality rate was higher than the rates in surrounding states. i asked my wife linda to work with a group of doctors, nurses tribal health care workers, social workers and department of health officials to understand the causes of this problem. in their research they found that deciding against early elective deliveries, abstaining from tobacco, learning safe sleep practices and receiving prenatal care are critical to an infant's well-being. if you know linda, you know she's someone who gets things done. once the task force identified the problems she began to work towards solutions. she joined the former first lady of north dakota betsy daland checking this off the list linda moved on to something tougher, tobacco use. she worked with the department of health to redouble efforts to reach more pregnant moms with resources like the 24/7 quit line and the new data looks promising. since 2011 we've seen smoking during pregnancy decline by 19.5%. linda has also traveled the state to promote safe sleep practices. thanks to her, even i know the abcs of safe sleep. infants need to be alone, on their backs in a crib. she's gained donations for cribs for kids, a program that provides safe sleep kits to families in need. more than 9,000 parents and care givers have received these cribs. after seven years of linda's work on this issue, i'm happy to report the latest data shows more south dakota babies are celebrating their first birthday with only about 4.8 deaths per 1,000 live births our lowest rate ever for infant deaths. please help thank linda. [ applause ] thanks for helping me out there. it's been nearly one year since donald trump became our 45th president and the new administration is giving states more flexibility in administering federal programs. one recent example is in medicaid. the trump administration recently indicated that for the first time it's willing to consider work requirements for medicaid enrollees who are nonelderly able bodied adults. i've asked our state department of social services to pursue a waiver so our state can require people who receive medicaid to work if initial. in many other states medicaid coverage has been expanded to add many additional adults. in south dakota medicaid covers only children pregnant women, people with disabilities and very low income parents. work requirements may only apply to a subset of that last category. very low income able bodied parents who aren't already working or caring for a child under one. that's approximately 4500 individuals. i proposed to pilot the new requirement in mini ha ha where there's the greatest availability of employment and training resources. we'll use the same services that we already require for those on unemployment to help participants find jobs. for those families whose income goes up we'll provide interim resources such as child care assistance and premium assistance to support families as they transition off medicaid. as we wait for approval of the federal waiver we'll begin a voluntary program for participants in july. work is an important part of personal fulfillment. there's a sense of pride that comes with having a job to do and being able to provide for your family. by making this adjustment to our medicaid program we can continue to help those who need it the most and start to connect those who can work with jobs that give them that sense of self-worth and accomplishment. another issue that requires hard work over a long period of time is drug abuse. last october president trump declared the opioid epidemic a public health emergency. according to the white house, in our country drug overdose deaths now outnumber fatal crashes and gun-related deaths combined. with 175 americans dying each day. fortunately south dakota's prescription drug overdose death rate remains relatively low. we rank second lowest in the nation. that's good. still, every one of these deaths is a tragedy and the overprescription of opioids is something we have seen in our state. in 2015 for instance the number of opioids prescribed in south dakota would have been enough to medicate every south dakota adult around the clock for 19 straight days. some solutions require a top down approach. last year you passed legislation that requires pharmacies to enter pain killer prescriptions into a state-wide database within 24 hours. that legislation also requires participation by prescribers of controlled substances in the prescription drug monitoring program. in 2015 and 2016 we put new laws in place to increase access to naloxone which is used to treat opioid overdose. as of the end of december the state has purchased and provided 807 doses of naloxone to first responders. there is no legislative fix, however, that will completely lyly solve this problem. we can't mandate away addiction and we need health care providers, private organizations, law enforcement communities and individuals to all play a role. it's been promising to see south dakota's health care systems provide additional guidance to their providers on when to prescribe these drugs, and it's having an impact. the state medical association is doing its part as well by developing resources for physicians to recognize and treat opioid addiction and prescribe opioids appropriately. they'll be holding in-person and web-based educational sessions starting this month. the board of pharmacy partnering with local pharmacies is establishing permanent sites throughout the state where anyone can dispose of certain expired, unused and unwanted prescription drugs. the services is free and anonymous with no questions asked. in 2016 we established the south dakota advisory council on opioid abuse. its strategic plan supports developing medication-assisted treatment capacity. this approach uses medications in combination with behavioral therapies to provide a holistic approach to treatment. this year the advisory council will be working to raise public awareness about the risks of recreational opioid use through a media campaign and school-based opioid prevention activities. we also continue to wrestle with the methamphetamine problem in our state. the department of social services has funded more than 245 presentations at communities and schools with thousands of people hearing their message, and the attorney general's office has also undertaken an education campaign. additionally this month prevention resource centers will complete a meth prevention tool kit for communities. for the most part we're seeing less meth manufactured in home-grown laboratories. it's more often manufactured on a larger scale and trafficked into the midwest. the drug task force made up of dci agents and highway patrol officers has been hard at work over the last year to stop meth from coming into our state, and we need to continue to do more to choke off these distribution channels. for those who are severely addicted the department of social services is working to expand and increase access to treatment, ensuring treatment is evidence based and that providers are equipped and trained to provide intensive treatment models. we've recently seen some hopeful results in substance abuse treatment. in 2017 over69% of individuals entering treatment for substance abuse completed successfully compared to the national average of only 44%. employment rates at discharge were 9% higher in south dakota than the national average as well. this meth epidemic has had a profound impact on our criminal justice system. it's been five years since the passage of the public safety improvement act. juvenile reform legislation followed two years later. the impetus for both was the belief that we could do better. for adults south dakota had a higher imprisonment rate than any other state in our region. per capita we are locking up 75% more men than north dakota and four times as many women as in minnesota. 81% of new commitment admissions to prison were for nonviolent crimes. among juveniles, issouth dakota had the highest incarceration rate in the country, nearly three times the national average. at the same time our juvenile violent crime arrest rate was approximately one-third of the national average. again, we are locking up primarily nonviolent juvenile offenders. in the years since those reforms, we've seen progress in dealing with nonviolent offenders. our drug and tiedui courts have expanded capacity and we're seeing more probations completed successfully. still, we can yet improve. it's important we always turn a critical eye toward past policies anding be willing to be smarter today than we were yesterday. when we first passed the adult criminal justice reforms in 2013 no one foresaw the influx of meth that has occurred in south dakota and in other midwestern states. last year in response to the meth epidemic we passed legislation endorsed by the law enforcement and state's attorneys that requires jail time for those who use drugs while on probation or parole, mandatory. we also ex expandpanded the availability of 24/7 hope for drug offenders. we passed legislation to give schools and law enforcement more tools to use in response to tu ansy. we should always strive to improve. we also need to recognize there have been huge positive changes as a result of the reforms. functional family therapy which offers treatment for the entire family to address juvenile issues is available at every community in south dakota and we're seeing positive results from this treatment. today 346 families have successfully completed this therapy and 88% of these families have reported a positive change. in the adult system capacity and specialty courts like drug and dui courts has nearly quadrupled since the passage of the reforms. south dakota's substance abuse treatment and criminal thinking completers have a lower recidivism rate. overall 23% of individuals released from prison return in 12 months. i'll say that again, 23% of individuals released from prison return within 12 months. but that rate is only 10% for those who complete this cognitive substance abuse treatment and only 5% for those who complete moral recognition therapy. juvenile justice reforms were unacted in 2015. at that time as i mentioned, south dakota had the highest rate of commitment in the nation. i know we all hear concerns from law enforcement and school leaders concerning the juvenile reforms. that's why we made some of the changes we did last year. when someone tells you the reforms aren't working, we need to understand exactly what is the problem and what policy change might address it. a broad brush is insufficient. the statutory purpose of the juvenile justice system is rehabilitation and we must never lose that focus. i spent 20 years working at children's home society which operates institutions for children who have suffered abuse and neglect. often these children have behavioral problems. at children's home our priority was to do whatever we could to return children to their families or if that was not possible to a foster or adoptive family. i know juvenile offenders can be difficult but we need to remain focused on what is best for them. locking up children because they're difficult to deal with is not acceptable. putting a child in an institution away from the community is incredibly disruptive to the life of a child. we must reserve institutions for children who pose a risk of harm to others. our system has always allowed for that and the juvenile reforms did not change that. in fact juvenile commitments to state-run facilities have been falling in almost every state in the nation over the past 18 years. nationwide placements fell from 40,678 in 1997 to 13,970 in 2013. in south dakota they fell from 315 to 102 before the 2015 passage of juvenile reforms. now, remember that those reforms passed in 2015 most of them became effective january 1 of 2016. if you add the prior year 2015 our placements had fallen farther still to only 48. a juvenile who commits a violent crime can be committed to the department of corrections, and a judge can also commit a child who's found to pose a serious risk of harm to others. beyond those cases, we must continue to build our capacity to treat children in their communities, near their homes, families and schools whenever possible. for most children this offers the greatest chance of true rehabilitation. before i close today, i'd like to say a word about the south dakota national guard. in 2017 401 soldiers and airmen with the south dakota national guard served overseas. soldiers with the 153rd engineered battalion returned home in september after serving a ten-month deployment to the middle east. today, right now, 109 of our soldiers and 96 of our airmen are abroad serving in the middle east romania and other parts of europe. last year we had 11 state active duty missions including wildfire response security support for the presidential inauguration assistance to puerto rico following hurricane maria, and the air space control alert mission which serves to protect the country from any type of emergency including acts of terrorism. i'm proud of the south dakota national guard. it continuously distinguishes itself. for example, south dakota leads the nation in unit readiness. the national guard bureau the national level of the national guard, annually designates superior units based upon personnel strength training completion and inspection marks. last year only 35 army national guard units in the nation were named superior. 35 in the nation. two were from iowa 10 from virginia. the other 23 were all from south dakota. [ applause ] because of their service and the sacrifices of all who have served in the military we can meet here today to chart the course of our state's future and so it's fitting that we've added a reminder of that service to our capitol building. last summer we moved our state's hall of honor which commemorates south dakota's medal of honor recipients recipients. we moved it to the capitol's first floor, formerly in the soldiers and sailors building, it was not as visible and accessible to those with limited mobility. one of these mornings when you arrive early i hope you'll pause to each the incredible stories of each of these men who represent the very best our state has to offer. finally now, i'd like to say a few words about our state's farmers and ranchers. it's been another tough year. after seeing a lack of moisture in the spring, we declared a state-wide emergency in june and activated the state drought task force. the drought persisted throughout the summer and in august 97% of the state was abnormally dry with more than half in severe or extreme drought. drought conditions exacerbated the impact of low prices over the last few years. 27 looks to be near low in terms of farm income. our economists are hopeful this year if production levels increase but improvement will depend upon the weather of course and in part on federal trait policies. even though we don't know what this year will bring, there's still reason to be hopeful. during the good times our farmers and ranchers invested in themselves. farmers adopted new technologies and updated their equipment. our ranchers invested in new equipment, fencing and corrals, along with better genetics. those investments have positioned them to seize opportunities when times are good again. we continue to see success under the county's site analysis program that helps counties identify sites conducive to ag development. 54 have had their analysis completed and the remaining three are currently under way. in august we broke ground on upgrades to the animal disease research and diagnostic lab which were approved last session. this lab produces critical research and diagnostic support to protect our livestock industry from disease outbreaks. the expansion ensures the lab can address the needs of producers when they need it the most. agriculture is the foundation of our state's economy and it always will be because of the generations of resilient individuals who gave their all working the land combining until dark getting up before dawn to milk and feeding livestock in subzero temperatures. these hardy leaders grew the industry to what it is today and they will bring us through the next year and the years to come. even when times are tough, we have many reasons to be hopeful. we have it good in south dakota. there's no better place to live work or raise a family. no better place. south dakota's a state where people can succeed. if you show up and work hard you can make a good life for yourself here. this is why site selection called south dakota the number one state for achieving the american dream. we have high quality of life and abundance of outdoor recreation safe communities, good roads, good schools. we have one of the best safe drinking water records in the nation and a stellar clean air record. every south dakotaen can be proud of this state and the many things we have accomplished together over the past seven years, balancing the budget honestly every year securing triple a status raising teacher pay, investing in our roads, bridges and railroads. but our work is never done. every challenge is an opportunity to improve, and we must always seek to leave the state a little better than we found it. this is my 22nd legislative session and my final state of the state address as governor. linda and our three children laura, sarah and chris are here. i'm grateful for their support through all these sessions and through all the elections to earn the privilege. i love you. i'm grateful to my sister joyce and her husband george for driving from minneapolis for this. linda's sister mary and her whole family who have helped me. budgets and policies and bills and operations are certainly important to me but nothing in comparison to their importance to me. thank you for being here. [ applause ] my first legislative session was in 1997. i've enjoyed the six years i served in the senate and the eight years as lieutenant governor and starting my 8th year as governor i've met great people just great people. i feel good about the part i played. we dealt with some tough issues together. i tried to do what i thought was right. you've been great to work with. the first state of the state i attended was in 1997 when bill jenko was governor. i was listening to him give this speech. if you knew bill you know he did not have much respect for show boats or attention seekers. he didn't have a lot of patience at all sometimes. but i still remember and i look back and found something he said in the 1997 address. he said this the public doesn't care about all these dramatic moments where people take these great stands that will be forgotten in eight minutes after it's been on the evening news. they don't mean anything. they literally don't mean anything. i'll tell you what means something. ten years from now when you look back on your tenure and i look back on mine did you make a difference? is south dakota truly in an important way better than it was when you found it? because if you're not a contributor, you're a destroyer. let's all be contributors. let's be builders. let's start the debate. let's start the dialogue. let's start the challenges. let's fight the good fights and when you all go home let's be able to look everybody in the eye and tell them that the things that we put in place, the problems that we solved the things that we funded and the policy thazies that we created will be the things that make south dakota a better place next year than it was today. i look forward to working hard with you over this session and over this my last year to make south dakota a better place than it is today. thank you so much. [ applause ] tonight, a look at the global energy outlook. then the johns hopkins university hosts a forum on transparency at the food and drug administration. later remarks from russian foreign minister sergei lavrov.