(reverent orchestral music) - [Announcer] The governor's State of the State address.

Production support was provided by the Greater Montana Foundation, encouraging communication on issues, trends, and values of importance to Montanans.

- Good evening, and welcome to our continuing political coverage.

I'm John Twiggs.

We'd also like to welcome our listeners on Montana Public Radio and Yellowstone Public Radio joining us for the governor's State of the State address.

Let's get you to the State Capitol, inside the House chambers, where a joint session of the legislature is convening.

They just completed the presentation of the colors and the national anthem, the ornate chamber with the Charlie Russell artwork providing that backdrop there.

In just a few minutes, Governor Gianforte will be formally invited into the chamber to deliver his first State of the State address.

It's all part of tonight's coverage that includes the governor's speech in its entirety.

That will be followed by the Democrats' response, to be delivered by House Minority Whip Laurie Bishop from Livingston.

Montana PBS's Jackie Coffin will also have an interview with the House majority leader, Sue Vinton, about the rest of the upcoming session.

But let's bring in our analyst for this evening from the University of Montana School of Journalism, Lee Banville; Lee, great to see you, and what are you expecting from Governor Gianforte tonight?

- So, I think we'll be looking for a few things.

Obviously, he'll be bringing the messages that he ran on, which tended to be pro-business, pro-economic development.

But also, it'll be interesting to see, this is his first opportunity to lay out his priorities of what he wants to see, not only outta the next couple of months of the Legislature, but actually the next couple years of what Montana's up to.

- This is always a big night of pomp and circumstance and a bit of political theater.

I think we all associate it- - A bit?

(laughing) - Yeah, okay, that might be a bit of an understatement there, like the State of the Union.

- Right.

- But tonight, with the part of it going on with the pandemic, it seems it's even fraught with more symbolism.

- Right, I think we're gonna see a lot of, does he wear a mask into the chamber?

How do we deal with things like social distancing?

But also, how is he received by a legislature that is overwhelmingly Republican?

So, for the first time in, what, 16 years, we're seeing a state government run by a single party, but it's a single party somewhat divided on simple things like masking.

And so, some of this will be symbolic.

A lotta this, though, will be substantive policy talk.

- We're just a few minutes away from Governor Gianforte coming in.

They're completing some of the preliminary activities that they have in the chamber, but we're still awaiting the governor to come in and deliver that address.

And any specific details you're thinking of that the governor will pull out?

- So, I think one of the things will be how do we manage this moment where we're still in the midst of the pandemic and yet we see increasing numbers of vaccinations, but we're still dealing with huge economic fallout for what's been happening in the state for the last year.

I mean, just think about it.

A year ago, Steve Bullock is there focusing on early education and his priorities at the time.

And now, we're looking at a situation where, this pandemic has sort of changed the whole dynamic of what Montana state politics is gonna look like.

- [John] And I believe we're ready now for the governor to enter the chamber.

And the governor coming in now; of course, receiving a very warm welcome.

As you mentioned, the vast majority of elected officials there are his Republican colleagues.

So, they've been waiting a long time, the Montana Republican Party, for this.

You have to go back to 2003 for Governor Judy Martz delivering remarks since they've had that.

Governor Gianforte wearing his mask into the chamber, similar to what he's done to press conferences leading up to this where he'd come into the room with that and then take it off when he would address the media.

He is working both sides of the aisle, as they like to say, as- - Shaking hands.

Embracing both sides of the political divide a bit as he makes his way up to the podium where he'll speak.

- [John] That's right; he will deliver a copy of the speech to the Senate President and also the Speaker of the House, as, again, the applause continuing there.

Tradition would have it that the Senate President, that's Mark Blasdel from Kalispell, would introduce the governor to the chamber for that speech.

Let's listen in.

- Ladies and gentlemen, I have the high honor and great privilege now to present to you and the people of Montana the governor of the state of Montana, the Honorable Greg Gianforte.

(audience cheering) - Thank you.

Thank you.

Lieutenant Governor Juras, President Blasdel, Speaker Galt, members of the 67th Legislature, my fellow statewide officials, tribal leaders, honored members of the judiciary, and members of the cabinet, my wife, Susan, our kids, and our grandson, and finally, my fellow Montanans, serving you is the highest honor and privilege of my life.

You have entrusted me to lead the Montana comeback, and I am humbled.

From our seniors to our hopeful kids, from our main-street business owners to our hardworking farmers and ranchers, from our men and women in uniform to our veterans who have answered the call.

I had the opportunity to welcome home members of the Montana National Guard this week.

On short notice, they were activated, flew to Washington, DC, and fulfilled their mission to ensure a peaceful transfer of power.

And now, thankfully, they're back home.

(audience applauding) Only weeks before in the same US Capitol, it had been under siege by a violent mob intent on destroying our democratic institutions.

It's a day we won't forget.

It revealed just how fragile our republic can be.

It also reaffirmed, though, how resilient we are as a nation.

Hours after storming the Capitol, the House and Senate came back into session and finished their work, certifying the next president of the United States.

(audience applauding) That resiliency is also what defines us as Montanans.

This last year has brought real serious challenges.

But through it, we've seen the resiliency of Montanans.

The first case of COVID was reported in Montana on March 11th.

Almost 11 months later, Montana has seen 93,000 cases and, sadly, more than 1,200 Montanans have lost their lives.

In the four months after the first case, more than 150,000 Montanans filed for unemployment.

And since that time, an untold number of businesses have had to close, some for good.

Men and women who took an idea and invested their savings and energy and lives saw what they built disappear, the victims of pandemic-induced restrictions and mandated closures.

And despite all of these stark challenges and dark days, Montanans remain resilient.

We found our heroes in the doctors and nurses on the frontlines, like Dr. Paul Johnson, a husband and a father in Great Falls.

He works at Benefis.

And for 13 weeks, Dr. Johnson treated COVID-19 patients and lived out of his camper.

He did that and went to that great length so he could keep his family safe and keep the virus outta their home.

We found our heroes in our first responders, like firefighters, law enforcement officers, and other first responders in Butte.

Despite the pandemic straining their resources, they still showed up to host a parade for the Montana Special Olympics.

We found our heroes in our educators like Kristi Borge, a fourth-generation Montanan who teaches 11 students in a one-room schoolhouse in Polaris.

When the pandemic disrupted regular instruction, Kristi had summer school outside just to keep her students on track.

(audience applauding) We found our heroes in truckers who kept our supply chains moving and grocery store clerks who kept the shelves full, like Myron Aeschbacher, a Montanan who's been trucking for 30 years.

With truck stops, rest areas, and restaurants closed along his route, Myron had to do without some basic necessities, all while keeping our supply chains moving.

We found our heroes in small-business owners and others who helped support our response to the pandemic.

Like Steel Toe Distillery in Potomac, which partnered with veterans nonprofit organizations to make hand sanitizer.

Like Dayspring Restoration, whose employees washed and disinfected first-responder vehicles for free.

Like Billings Clinic, which provided free childcare to essential health care workers.

We found our heroes next door, in our friends and neighbors.

The people who checked on seniors to make sure they were okay when the state was under a lockdown.

The people who sewed masks for health care providers and emergency responders when PPE was in short supply.

In Montana, neighbors help neighbors.

It's what we do.

And it's what we've done during this difficult year.

Our Montana resiliency has shown bright, and it's an example to other states.

And while we are resilient, the pandemic remains the biggest challenge we face today.

Addressing it is my top priority as your governor.

And we've begun improving how we confront this pandemic.

On my second day in office, we changed the state's vaccine distribution plan to protect the most vulnerable.

These changes are saving lives.

Our focus is on ensuring that those most at risk get vaccinated: seniors 70 and older, our families, friends, and neighbors with severe underlying medical conditions like cancer and heart disease.

They're on the frontline now and they're getting their vaccinations.

As of today, Montanans have received more than 92,000 doses, and nearly 22,000 Montanans are fully vaccinated.

At the end of the week, nearly all of our long-term care facilities and nursing homes will have had at least one vaccination clinic and the second one is scheduled.

And while we are quickly deploying the doses we receive to communities throughout Montana, our supplies from the federal government aren't keeping up with our demand.

Each week, we ask for as many doses as the federal government can get to us.

And we have proven in Montana that we can get the vaccine quickly into the arms of our most vulnerable.

We just need more vaccines.

That is why today I asked President Biden to do everything in his power to ramp up production and send more vaccines to Montana.

We need them.

(audience applauding) And while we face a public health crisis, we also face an economic crisis.

Too many Montanans lost their jobs and found themselves without a paycheck through no fault of their own.

Too many small-business owners closed their doors for good.

Too many farmers and ranchers struggled with uncertainty.

Too many students were left to learn in front of a computer instead of a classroom.

We are righting the course and improving our response.

We consulted with public health officials, health care providers, and business leaders.

And nine days after I was sworn in, we lifted the arbitrary restrictions on limited hours of operation and capacity for restaurants and other small businesses.

(audience applauding) Instead, we're relying on business owners to follow industry best practices and public health guidance, rather than relying on the long reach and heavy hand of government.

As we continue to move forward, we need to protect businesses, nonprofit organizations, places of worship, and health care providers from lawsuits, provided they make a good faith effort to protect their staff and customers.

I appreciate the urgency with which the Legislature has acted to pass Steve Fitzpatrick's bipartisan bill that will do just that.

(audience applauding) I look forward to getting SB 65 to my desk so we can take that critical step towards getting Montana safely open for business, moving towards incentives and personal responsibility and away from impractical government mandates.

(audience applauding) I look forward to, and I know many of you do as well, to the day when we can take off our masks, throw them in the trash, and go about our lives in a safe manner.

(audience cheering) In the meantime, I'll continue wearing one, and I encourage you to do so as well.

(audience cheering) Finally, as hard as 2020 was for Montana workers and business owners who were just trying to get by, the last thing we all needed was for the government to get in the way.

But that's exactly what happened in the fall.

The state government, under the previous administration, sued five businesses, all in Flathead County, alleging they did not adequately enforce the mask mandate.

The first judge to hear the case ruled against the state, saying it didn't have enough evidence and that the businesses made reasonable efforts.

A pandemic with severe economic fallout is bad enough.

We don't need government piling on as well.

(audience cheering) That's why, tonight, I'm announcing I've directed our staff to seek dismissal of the litigation against these businesses.

Enough is enough.

(audience cheering) As we continue making progress to address the economic fallout from the pandemic, we are guided by three clear principles.

First, we must get our economy going again.

Second, we must get Montana open for business.

And third, we must get Montanans back to work in good-paying jobs.

(audience applauding) As we lead the Montana comeback, we can't just talk about these things.

We must do them.

Businesses and the jobs they create are fleeing high-tax, high-regulation states, and moving to states where the business climate is friendlier, with lower taxes and less red tape.

Unfortunately, Montana is not competitive today.

Montana taxpayers with at least $18,500 in income, of taxable income, pay our top tax income rate.

More than half of Montana taxpayers pay that top rate of 6.9%.

Look across our competitors in the Rocky Mountain West.

Of the eight states in our region, Montana ranks seventh, near the bottom.

We used to have the highest income tax rate in the country at 11% before we cut it to 6.9% 18 years ago.

That made us competitive then, but no longer.

Since then, Idaho has cut their rate to ours.

And Utah, Arizona, and New Mexico cut their rates at least two points below Montana.

That's a stark difference, and it's one of the reasons why we're losing out on opportunities and good jobs.

Our high rate drives away too many businesses that wanna locate in Montana.

The effects of that are very real: Montana loses out on good-paying jobs and the tax revenue that comes with it.

And when we lose out on opportunities and good-paying jobs here, our kids and grandkids leave Montana to pursue them: better jobs for better pay.

To get our economy going again, to get Montana open for business, to get Montanans back to work in good-paying jobs, we must make Montana competitive.

(audience applauding) We must lower our top personal income rate, and that's what I've proposed in my budget.

Not only will the majority of Montana income taxpayers see relief, but also Montana will become more competitive.

I thank Senator Hertz and Representative Knudsen for working on the Personal Income Tax Relief Act.

(audience applauding) But let's be clear, and I wanna set the record straight tonight: We don't pay for it by cutting services.

We pay for most of it by modernizing our corporate tax structure to reward businesses that create Montana jobs and make investments in Montana.

Reducing the top rate is just a start.

To make Montana more competitive, we must bring our income tax rates in line with other states in our region, but we must do it prudently.

That's why I urge the Legislature to send to my desk a bill that continues to reduce our uncompetitive income tax rate as our economy grows and we find efficiencies across the state.

Our budget also creates an entrepreneur magnet, which encourages companies to establish their headquarters in Montana and create jobs here.

I thank President Blasdel and Representative Beard for their efforts to introduce the Entrepreneur Magnet Act.

(audience applauding) We must reform our tax system so our main-street businesses can thrive and create jobs.

Under the current system, Montana small-business owners have to invest countless hours as they try to comply with our business equipment tax.

They have to value their property, file paperwork, and pay the tax.

This is a burdensome process that takes a lot of time.

To reduce the burden on our small businesses, my budget calls for reforming the business equipment tax by exempting business equipment valued up to $200,000, boosting the exemption by 100%.

The- (audience applauding) The BIG Jobs Act, or Business Investment Grows Jobs Act, eliminates the business equipment tax burden for 4,000 Montana small businesses.

(audience applauding) I appreciate the efforts of Representative Kassmier and Senator Hoven to get that bill to our colleagues here in the Legislature.

Thank you.

(audience applauding) The increased exemption also encourages our small-business owners, farmers, and ranchers to invest in their businesses.

When they make those investments, they support Montana businesses they buy from: retailers and manufacturers whose sales grow and who, in turn, create more jobs.

I ask the Legislature to pass and send me the BIG Jobs Act.

Together, we can ease the burden on small-business owners, encourage them to make investments, and to help them and Montana thrive.

(audience applauding) To make Montana more competitive, we also must get a better handle on our regulatory scheme.

Burdensome, unnecessary red tape ties up small businesses, farms, and ranches.

These regulations cost time and money.

And ultimately, Montana consumers bear the burden with higher prices on goods and services, and the biggest burden falls on low- and middle-income families who are just trying to make ends meet.

It's time to cut back this thicket of red tape, and it's one of my top priorities.

That's why, on my second day in office, I signed an executive order to establish the Red Tape Relief Task Force, which Lieutenant Governor Juras will lead.

I have charged the task force to complete a comprehensive, top-to-bottom review of regulations in every single agency across state government.

They are to leave no stone unturned as they identify excessive, outdated, and unnecessary regulations.

(audience applauding) Our budget builds a stronger Montana workforce by prioritizing trades education.

Many jobs require specialized skills, and we should ensure Montanans have access to the training and education they need to acquire and refine those skills.

That's why my budget establishes the Montana Trades Education Credit, or M-TEC.

Our budget provides for as many as 1,000 scholarships per year by offering small businesses a 50% credit for their employees to learn a trade.

Together, employers and employees can decide on training that's best for the business and the employee.

Representative Jones and Senator Salomon, thank you for leading the effort on M-TEC to strengthen our workforce, ensuring that Montana workers are well-equipped to succeed.

(audience applauding) Taken together, these measures will make Montana more competitive, but it doesn't matter if no one knows about it.

That's why we need to effectively promote a more competitive Montana to job creators.

That's one reason I asked Scott Osterman to lead the Department of Commerce.

A native of north central Montana, Scott has broad experience, including as a senior executive in Fortune 500 companies.

He knows how to grow businesses.

I gave Scott this charge: Use your business experience to grow Montana's economy, create high-paying jobs, and bring Montanans back home.

(audience applauding) I will join Scott to promote a more competitive Montana and emphasize what really makes Montana a special place.

First, the Montana work ethic is second to none.

Montanans are hardworking and they know the value and virtue of work.

Second, our quality of life is second to none.

Our public lands make this one of the best places to live, work, and raise a family.

These are two of the reasons Susan and I decided to move to Montana, to put down roots, raise our family here, and start our business here.

Our decision to move wasn't random.

We didn't throw a dart at a map.

I knew from my first trip to Montana nearly 45 years ago that I wanted to make Montana home.

That's when Tim Frable introduced me to Montana.

His deep love of this state was infectious.

He had trained at Malmstrom Air Force Base and flew missions in a P-51 over Japan during World War Two.

Tim was my junior high school science teacher, and he loved Montana so much that every year, he brought two van loads of ninth-graders to Montana.

(audience laughing) I came here in 1976 in one of those vans, and we hiked into the backcountry up to Black Canyon Lake, and Grasshopper Glacier, and onto the Absaroka Lake Plateau, and I was in love.

I tell this story because Tim was a dedicated educator who shaped my life.

There are many educators like Tim Frable in Montana and throughout our country.

They make lasting impacts in the lives of our students, not only imparting their knowledge but also sharing their experience, wisdom, and passions.

They make us better.

And we should do everything we can to ensure any teacher who wants to start her career in Montana can.

But Montana ranks at the bottom nationally in starting teacher pay.

Wyoming's starting teacher pay is 45% higher than Montana.

After receiving a teaching degree, a Montana student shouldn't have to choose between earning more in Wyoming or teaching in Montana with the worst salary in the country.

That's what happened to a couple of teachers who used to live in central Montana.

A husband and wife, they both taught in the same high school.

They were early in their teaching careers.

They were just starting a family.

They soon realized that they couldn't raise a family and make ends meet on one salary, so they moved to Wyoming where they could.

We must do better for our starting teachers.

(audience applauding) That's why my budget provides $2.5 million in incentives to schools to improve starting teacher pay.

I encourage the Legislature to pass the TEACH Act, or Tomorrow's Educators are Coming Home Act, which Representative Jones is sponsoring.

By increasing their pay, let's make it easier for our starting teachers to choose to stay in Montana or come back home.

Let's make our communities stronger and our classrooms better with excellent starting teachers in them.

Let's make their pay more competitive.

(audience applauding) Our kids will thank us for it.

(continued applauding) There are young educators out there like Tim Frable who wanna teach our kids.

Ultimately, our budget is about Montana priorities.

It's about increasing opportunities here at home and bringing the American dream into greater reach for all Montanans.

We should ensure every Montanan has an opportunity to realize it; earning a decent living, raising a family, contributing to our communities, retiring comfortably, and owning a home.

One of our current taxes, however, jeopardizes part of the American dream for some of our lower-income Montanans.

Every two years, and always on schedule, reappraisals drive up our property taxes.

These rising taxes threaten the American dream, particularly for lower-income Montanans, people who have invested their lives in their homes, raised their families there, and have retired with a fixed income.

Ever-rising property tax bills shouldn't force someone to have to make a difficult decision: pay the tax or sell their home.

Pay the tax or put food on the table.

Pay the tax or get their prescription drugs.

That's why I proposed the Keep Your Home Tax Relief Act in my budget.

Keep Your Home provides $3 million per year over the next biennium to mitigate the impact of reappraisals on lower-income Montanans, including our seniors and disabled vets.

I appreciate the work of Senator Hoven, Representative Beard, and Representative Hopkins to get this critical bill introduced.

Thank you.

(audience applauding) Part of the foundation of the American dream is safe communities where we live and work, and where our kids go to school.

But our state faces a grave threat to our safety: drug use, particularly meth.

The Department of Health and Human Services estimates about 64,000 Montanans have a substance abuse disorder.

Addiction is tearing apart families and ravaging our communities.

Few Montanans are untouched by this epidemic.

There are devastating consequences of this crisis.

Our treatment facilities are filling up, some unable to take new patients.

Our corrections institutions are filling up with people who, after losing a battle with addiction, resort to increasingly violent crimes.

Our first responders and frontline medical workers at hospitals not only confront it with overdoses but also they see it in the innocents; the spouses, the children, the loved ones who are victims of meth-induced violence.

Our schools see young people drop out as addiction overtakes them.

Addiction leaves them falling farther and farther behind in their education and further off the path to a better life.

Most tragically, the crisis of meth in Montana is dissolving families and endangering our kids.

Meth use has transformed homes from places of love and care to ones of mistreatment and abandonment.

Addicted parents neglect their children, leaving too many of our Montana kids fending for themselves.

Kids go hungry, face constant food insecurity.

Some fear their parents will become violent.

Last year, two parents in Great Falls allegedly smoked meth in front of their four young children.

Meth and drug paraphernalia were easily accessible to the kids.

They were only six, three, two, and one years old.

The two-year-old was covered with bruises, and a CT scan showed he had a skull fracture.

Children who survive this abuse and neglect often end up in foster care, a system severely strained by meth.

Montana has the second-highest number of kids in foster care per capita in the entire country.

44% of all children in our foster care system are there because of parental meth use.

The crisis is heartbreaking, and it has to stop.

There is no silver bullet, but there are steps we can take to confront it.

My budget begins to take some of those steps.

It will make investments.

So let me be clear: Tax revenues from the sale of recreational marijuana should go to confronting the epidemic of addiction in Montana.

(audience applauding) That's why my budget devotes the marijuana tax revenue and part of the tobacco tax settlement to the HEART Fund, or Healing and Ending Addiction through Recovery and Treatment Fund.

The HEART Fund will provide for a full continuum of substance prevention and treatment programs for our communities.

That full continuum of programs is critical.

Under our current system, there are gaps in coverage that reduce effectiveness.

In some communities, there are no coordinated prevention programs.

In other communities, there's gaps in meth treatment.

In some communities, there's a lack of local recovery support for someone leaving treatment who wants to stay clean, sober, and healthy.

We must close these glaring gaps, and the HEART Fund will do that.

With $7 million in new funds and a federal match, our budget makes a historic investment.

An additional $23.5 million per year will provide substance abuse prevention and treatment programs for our communities.

And let me emphasize- (audience applauding) Yeah, thank you.

Let me emphasize, this is not bigger government.

It's a community grant program to help non-profits and NGOs do the work on the ground in our communities.

This makes our taxpayer dollars go much further.

And it's where our focus lies, that's in our communities.

With guidance and resources from the state to improve their response to addiction, our communities will lead this effort, because they know what their local community needs.

Successful prevention and treatment programs help people who have hit rock bottom regain their health, rebuild their lives, and become vibrant, productive members of our communities.

In addition to making a historic investment in prevention and treatment programs in our communities, we must prioritize and invest in treatment courts.

Treatment courts work.

They reduce recidivism.

They reduce drug use.

They increase public safety.

And they are much more cost effective than incarceration.

Three years after completing treatment court, 70% of graduates are still clean and holding a job.

But just don't take my word for it.

Ask Judge Mary Jane Knisely in Yellowstone County, who started a treatment court there in 2010.

Judge Knisely swore me into office a few weeks ago.

I asked her to do it because of her experience and outstanding record.

Her treatment court model is one we should implement throughout our state.

For all those reasons, our budget provides funding for five drug treatment courts.

(audience applauding) And while we should focus on treatment for nonviolent offenders, we must maintain the rule of law.

Montana has the highest violent crime rate in the northwest.

And we saw an eight percent increase in violent crime last year alone, even as our nation saw a decline.

Ladies and gentlemen, we are a nation of laws.

That's why I support Representative Holmlund's bill to ban sanctuary cities in Montana.

(audience applauding) And the hands of justice must be swift.

That's why our budget provides for two new district judges in both Gallatin and Flathead Counties, and it's why our budget adds 14 new parole and probation officers, since our officers are overwhelmed because of prior cuts and growing crime.

And while we face an epidemic of drugs and increasing crime, we must also address the crisis of missing and murdered indigenous persons.

(audience applauding) In Montana, Native Americans make up about 7% of our population, but they account for 26% of missing persons.

Between 2017 and 2019, nearly 80% of those reported missing were teenagers less than 18 years of age.

Native American women face a murder rate 10 times higher than the national average, and 84% experience some form of violence in their lifetime.

Time is of the essence.

We must act urgently to curb this tragic trend.

It's critical that we bring all the voices to the table, and that all the voices are heard.

I ask the Legislature to send to my desk a bill to extend the Missing and Murdered Indigenous Persons Task Force.

(audience applauding) And I wanna thank Representative Sharon Stewart Peregoy of Crow Agency and Senator Jason Small of Busby for their efforts on this legislation.

(audience applauding) Thank you.

And since we're talking about saving lives, we must protect the lives of the most vulnerable: unborn children.

(audience applauding) I firmly believe life is precious and it must be protected.

I urge the Legislature to send me the Montana Pain Capable Unborn Protection Act, which protects unborn babies by prohibiting abortion when they can feel pain.

(audience applauding) I also urge the legislature to send me the Born-Alive Infant Protection Act, which requires doctors to perform life-saving care on a baby who's born as a result of a botched abortion.

(audience applauding) These are necessary, compassionate measures where we should all be able to find common ground, and I will sign both of them into law.

(audience applauding) As we work to lead the Montana comeback, we must keep hardworking families at the front of our minds.

Every day, they decide how to live within their means.

State government should live within its means too, providing essential services and letting Montanans keep more of what they earn.

Just because a state brings in more revenue doesn't mean we should spend it.

I made a commitment to change how Helena does business, and our budget does that.

Our budget is fiscally conservative.

It's balanced.

It's sound.

It holds the line on new general fund spending, increasing an average of less than 1% per year.

Our budget decreases general fund spending by (audio missing) the previous administration's proposed budget.

Our budget preserves the rainy day fund by eliminating $25 million of borrowed funds that the prior administration had proposed.

Our budget has a strong ending fund balance of over $300 million, $50 million more than the budget from the prior administration.

Our budget does all these things without cuts to essential services.

(audience applauding) But it's not just about dollars and cents.

It's about service.

What kind of customer experience is state government providing to Montanans?

In the last three week, I've started visiting our state agencies.

It's been a great opportunity for meet some of the folks who serve our state.

These visits have reaffirmed to me that we have many hardworking state employees who do their best for Montana every day.

For too long, though, they just haven't been led well.

After one visit to an agency, an employee, who's worked there almost three decades, told me I'm the first governor he's ever seen in his building, the first and only one.

He works across the street, (audience chuckling) but he's never seen the state's chief executive in the agency's building.

I was shocked to learn about his experience, just as shocked as he was to see me.

(audience laughing) If this is how business is done in Helena, it's time for us to change the way Helena does business.

(audience cheering) From decades in the private sector, I firmly believe that leaders set the tone and culture of an organization.

Tonight, I make these commitments to you as your chief executive.

I will be available, accessible, and accountable.

I will provide our state agencies with a clear mission, we will measure our progress, and we will celebrate our shared successes together.

I will emphasize providing exceptional customer experience to all Montanans.

After all, you pay our salaries.

We work for you.

(audience applauding) I expect our cabinet officials and agency heads to make the same commitments, and I'm proud of the outstanding team we've assembled.

We looked for change agents with the best qualifications and leadership experience needed to change the way Helena does business and lead Montana's comeback, and we got 'em.

The members of our cabinet come with diverse backgrounds and experiences.

All, however, are united in our shared commitment to make our state agencies more responsive to the people and more responsible with taxpayer dollars.

That is the charge I've given them, and I am confident they will get the job done.

I have charged Mike Foster at the Department of Agriculture to find ways to add value to our ag products here in Montana to preserve our brand through the supply chain.

That way, our ag producers can capture more of the value they create.

I've charged Hank Worsech at FWP to build stronger, better bridges with sportsmen, landowners, and outfitters.

I've charged Amanda Kaster at DNRC to bring more federal lands into active forest management so we can prevent catastrophic wildfires, have healthier forests, improve wildlife habitat, and bring back some of our good-paying Montana timber jobs.

(audience applauding) Our agenda is ambitious, but we owe it to you to be bold and to lead Montana comeback.

Like you, I want our kids to enjoy a better life.

Like you, I wanna leave our state better than I found it.

And while we have our differences on policy, that ideal, that we should leave Montana better than we found it, is what motivates everyone who serves here.

That's why our agenda is ambitious.

Because four years from now, I see a place where more Montanans are realizing the American dream, working hard, earning a good living, and raising a family.

I see a place where our kids and grandkids stay in Montana because this is where the best opportunities are.

I see a place where our communities are safer and thriving.

I see a place where we have come through on the other side of this global pandemic stronger.

If there's anything this year has taught us, it's that Montanans can handle anything.

We met the test.

Ladies and gentlemen, the state of our state is strong.

But it's more than strong.

The state of our state is resilient.

We are ready for our Montana comeback.

Like Montanans at home tonight, we will go forth from here, ready to face what tomorrow brings.

We will overcome whatever confronts us together, because that's what we do in Montana.

We help each other.

And because we are resilient.

Thank you.

God bless you.

God bless America.

And God bless this great state of Montana.

(audience cheering) - I'm John Twiggs with Montana PBS.

You've been listening to Governor Greg Gianforte deliver his first State of the State address.

He spoke at length about the Montana comeback.

As he spoke for a little more than 45 minutes, he spoke of resiliency.

As he said, the state of our state is resilient.

He talked about the recovery from this pandemic as being his top priority.

He spoke of cutting the thicket of red tape, adjusting tax rates, increasing teachers' pay, and Governor Gianforte spoke at length about the state's drug addition, drug addiction issues, rather, and confronting them in a variety of ways.

He said he wanted a fiscally conservative budget, but without cuts to services, essential services, indeed.

Let's bring in our analyst for this evening, and that's from the University of Montana School of Journalism, Lee Banville.

And Lee, your initial thoughts in hearing the speech from Governor Gianforte.

- So, it's an interesting of messages that resonate with his party, right, the Republican Party, where he is riding high on a Legislature controlled in both houses by the Republicans and then the Republican in the governor's mansion, and so there were certainly messages about reducing taxes, ending mandates related to COVID, and more controversial issues like sanctuary cities and abortion.

But there was also a lotta stuff that actually may resonate with a lotta Democrats as well, including services for teachers, the drug addiction work that you just talked about.

I mean, there's a lot in there that actually you may find a fair amount of consensus around that we haven't actually been seeing in Helena these first few weeks of the session.

- Well, we want to remind everybody who's with us that we're also going to have the Democrats' response to Governor Gianforte's speech that just took place at the State Capitol.

House Minority Whip Laurie Bishop from Livingston is going to be delivering that from the Old Supreme Court Chamber at the Capitol, so please stay with us.

We're going to have the Democrats' response.

But in the meantime, we continue to talk about what took place within the speech.

And let's dig into some of the economics of it first, because we do have a clip from the speech for those of you that are just joining us.

The governor talked about that comeback, the importance of the economic comeback from the pandemic, and he outlined three steps that he said are key.

- As we continue making progress to address the economic fallout from the pandemic, we are guided by three clear principles.

First, we must get our economy going again.

Second, we must get Montana open for business.

And third, we must get Montanans back to work in good-paying jobs.

(audience applauding) - Now, from that point, Lee, he went on to talk about taxes and the tax rate and particularly in relation to our neighbors in the region, and that was interesting because that's obviously been a contentious point.

- Sure, and when he campaigned and certainly when he rolled out his initial budget, there was a lot in there that was focused on taxes.

There are specific taxes aimed at growing business, including some capital gains cuts and some business investment cuts.

But what he focused on tonight was personal income tax rates.

And it is true he's proposed dropping it from 6.9% to 6.75%, which would drop taxes a little bit for everybody.

The more you earn, the more you get a tax cut.

But I think what's important to remember is all of these states he's pointing to that are around us, Idaho, Arizona, New Mexico, Utah, all of them have sales taxes, right?

So, they have a more diversified tax base, so they can reduce income tax rates 'cause they're gonna be getting money from sales taxes.

And we in Montana pretty much have income tax and property taxes, and that's why he also made sure to talk about help for people when it came to property taxes.

But what he's really focused on, in this speech anyway, was the need to drop that income tax rate.

He said that was what was central to making us competitive, although businesses in these other states he's talking about have both income tax and sales taxes that they have to deal with.

- Did you expect maybe even a little bit more in the speech from that?

I mean, he really has campaigned, once before for governor, when he ran for House, he's a businessman, not a politician.

"I'm a businessman."

And did you expect to hear even more in terms of, I guess, that line in terms of opening up for small businesses, just trying to create a better climate?

- Yeah, I was surprised that wasn't more discussion of actual business, right?

There was much more focus on personal income.

So, it was about all of the taxes all of us pay, as opposed to the sort of investments that might be made that might get a small business to expand the number of workers.

A lotta these businesses have been very dependent on sort of help from the federal government during this time to sort of stay open with the Paycheck Protection Act.

And so, there wasn't a lotta talk about that.

I think, instead, he sort of focused on the things that the state itself can do, which really is, frankly, not as much as what the federal government can do when it's throwing around $1.9 billion or fill in the blank with these very lar- $1.9 trillion, let me get the number right.

- Yeah, even bigger.

- (laughing) I know.

That's a lot more.

And so, I think what he's doing is sort of more strategically targeting a couple messages that he hopes the Legislature will jump on in the next couple months.

- Well, you referenced it earlier in the overall theme of the speech that there were definitely some bipartisan moments.

We recognize these speeches as one half of the chamber sitting on their hands, the other half standing and applauding.

We did have a bipartisan moment, didn't really have a whole lot to do with policy.

In fact, it had to do with masks.

- I look forward to, and I know many of you do as well, to the day when we can take off our masks, throw them in the trash, and go about our lives in a safe manner.

(audience cheering) In the meantime, I'll continue wearing one, and I encourage you to do so as well.

(audience cheering) - So, a rare feat there to be able to get both sides onboard there from Governor Gianforte.

We're now ready for the Democrats' response.

We're gonna take you to the Old Supreme Court Chamber at the Capitol.

House Minority Whip Laurie Bishop from Livingston standing by, and now let's hear from her.

- Bishop, and I'm a state representative from Livingston, Montana.

A few minutes ago, Governor Gianforte, for the first time since taking office, shared his vision for our state, a vision that is limited to massive giveaways for Montana's wealthiest and gives quiet approval for an unprecedented barrage of attacks on the freedoms of Montana's women and children.

Democrats have a better plan that aims to meet the challenges of our time by creating jobs and opportunity for Montanans.

Rather than prioritizing out-of-state interests, Democrats are investing in the people who live here, who have roots here, raise their families here, and care deeply about making this state a better place, and I'm honored to be sharing our plan with you tonight.

This has indeed been a hard year for Montanans, as this pandemic changed our world in ways that we couldn't have imagined.

As COVID silently spread through our country and our state, every single family was touched by loss in one way or another: loss of income, loss of health, loss of mobility, and, in too many cases, loss of friends, neighbors, or family.

In the face of it all, Montanans have endured, uplifted by the strength, determination, and optimism that define the people of this state.

And as vaccinations get out to communities in all 56 counties, there's more reason for hope than folks have had for a long time.

But there remains work to do, and a lot of it.

Local economies across our state have struggled to weather this economic downturn.

Montanans who were struggling to get by before the pandemic have endured impossible circumstances since its onset.

It's our job to create economic recovery that will help our communities rebuild stronger than ever and bring jobs and opportunities to all Montanans in every corner of this state.

A month into this legislative session, Democrats have remained laser-focused on that mission.

Our colleagues across the aisle cannot say the same.

After a long campaign season talking about jobs, Montana Republicans have let our economic recovery fall by the wayside.

Instead, they have focused their energies on attacking the freedoms of Montana's women and children.

The people of this state demand leadership.

They expect us to rise to the challenge of our time and deliver lasting progress.

They expect us to deliver opportunity.

But apparently, Republicans have lost sight of the problems their constituents elected them to solve.

Democrats have not.

We have led the way this session, advancing meaningful policy that helps Montanans who need it.

After Republicans moved to cut $1 billion from our healthcare system, we didn't just oppose it.

We responded with a comprehensive healthcare package that lowers costs and creates jobs.

After the governor proposed a $30-million giveaway to Montana's wealthiest that only puts $14 in the pockets of middle-class Montanans, we didn't just send a press release.

We advanced a tax package focused on giving Montana's working and middle class a real break.

We invite Republicans in the Legislature and in the governor's office to come back to reality, get to work on the issues that matter to Montanans.

In the meantime, we are happy to lead the way and build a better Montana, and we're just getting started.

Every day, Democratic legislators show up to create economic opportunity for every Montanan.

We're investing in critical infrastructure and education while looking for ways to promote access to our public lands and expand the rights of our workforce.

On infrastructure, this year has been a stark reminder that the consequences of the digital divide are immense.

Rural broadband is critical infrastructure, and it is as necessary to growing our economy as roads and bridges.

Investing in broadband creates jobs.

It allows small businesses to compete and grow, and increases equity in education for students in every corner of our state.

Democrats know that access to broadband is a game-changer for rural places and tribal communities.

While other parts of the country are seeing huge strides in technology, too many communities across Montana still cannot reliably access the internet.

We can make Montana a broadband leader and lift up communities that have been increasingly left behind in our expanding digital world.

And as we invest in our infrastructure to create jobs in communities across the state, we must also do more to invest in our future workforce by guaranteeing that every child has access to a quality public education.

Our public schools provide safe spaces for children to learn while their parents work.

They're also a source of jobs, and often they serve as the social hub for many of our most rural communities.

While we're excited to partner with lawmakers across the aisle to invest in our schools, students, and teachers, Democrats will continue to stand up for Montana public schools against attempts to divert critical funds and privatize education.

But building a strong workforce goes beyond investing in our public schools.

We have to make sure that the workers of today and tomorrow can continue to rely on the wages, protections, and benefits that have been hard-won by our brothers and sisters in the labor movement.

To do that, Democrats are standing tall against attacks on workers, their wages, and Montana's middle class.

The right to organize led to the creation of good-paying jobs, and it remains essential to sustaining a thriving middle class.

We've already seen an unprecedented flood of attacks on workers' rights this session, and no doubt we will see more.

Democrats will hold the line and defend every Montanan's right to organize and demand the compensation and protections that are due to them.

And we will continue to fight for better wages, working conditions, and quality of life.

Every Montanan has the right to earn a living, and we know that thousands of Montanans earn their living thanks to the state's incredible public lands.

But instead of protecting this essential economic driver, some Republicans in this building are undermining successful programs that have helped the state and private landowners to work together on land conservation.

Montana Democrats are fighting to defend our pristine public lands and maintain the $7-billion outdoor recreation economy that they support.

Our public lands are not for sale, and they never will be.

(audience applauding) As Democrats continue to lead with solutions like these, we'll also continue to stand our ground to defend the freedom of Montanans and all the progress that we've made over the years, because we have come a long way.

In the last several sessions, Democrats have worked across the aisle to create jobs, expand opportunity across the state.

Working together, we've secured health coverage for tens of thousands of Montanans and created thousands of jobs in the process.

We've invested in critical infrastructure projects that grow local economies in underserved parts of the state.

And we've kept public education accessible and affordable, preparing young Montanans to be the job creators of tomorrow.

Democrats have strived to build a government that creates opportunity for all Montanans, that puts money in the pockets of people who need it, that helps families put food on the table and invest in their children's future.

Over this last year, Montanans have stepped up and supported each other.

They've shopped and ordered takeout from local businesses and restaurants.

They've delivered groceries and home-cooked meals to neighbors.

They've made masks for nurses and first responders.

Montanans stand up for each other.

That is who we are.

And that's what my husband and I have taught our own kids, and that's the kind of society that our elected officials should be working to build.

Democrats are fighting to help Montanans who fall on hard times and give them an opportunity to recover.

Democrats are working to invest in our middle class and advance policies that make it bigger.

Democrats are organizing to protect workers from exploitation by wealthy out-of-state corporations, ensure everyone is paid a fair wage.

Democrats are striving to create the conditions that help small Montana-grown businesses expand and thrive.

Democrats are committed to advancing and defending opportunity for all who reach for it.

That is what we believe.

That is what we're fighting for relentlessly every day, in this legislative session and way beyond.

We welcome the chance to work with anybody who shares these values in the common pursuit of a future for this state where every Montanan can thrive.

Thank you.

(audience applauding) - We've been listening to the Democrats' response to the governor's State of the State address.

That was House Minority Whip Laurie Bishop from Livingston who was delivering those remarks.

She spoke for about 10 minutes, trying to draw out some of the differences between the Republicans and the Democrats.

And Lee, as we examine that, a lotta the differences she was references, of course, really skewed more towards what the Legislature has been doing as opposed to what Governor Gianforte was putting out as an agenda in the speech, because she obviously talked about what the first four weeks have been like and there's been a lot of social, cultural issues that they've been going after with the abortion regulation and transgender policies and not so much anything fiscally.

And was that what you were hearing?

- Yeah; I mean, it's funny, we ended this clip right before we went to her with that moment of sort of unity about we're kinda tired of masks, but we gotta stick through this, and there was a sort of awkward moment where they seemed to all be on the same page.

But they have not really been on the same page for the first four weeks of the session, where Republicans have really had this built-up pile of legislation that they have introduced in previous sessions that either was vetoed by the Democratic governor or died because it was gonna get vetoed by the Democratic governor, and they have really been ramming through issues likes guns, limits on abortion, potential limits on or sort of things that might affect public unions, free speech on campuses, things that really are kind of red meat issues for conservatives that really have split the Legislature.

And so, you kind of heard that division in her address.

And it's funny 'cause it was a little less in what the governor was saying, but it's still, there is enormous differences between these two parties.

- Yeah; I mean, they were going on about excited to partner across the aisle, that got mentioned several times.

Obviously, they don't really have much choice in that.

But I think it was just the idea of, what can you say at this point when it's 67-33 and 31-19?

- Well, and it's also- I mean, if you think about, the Democrats, for the last several sessions, were able to reach off and peel off some Republican support along with the governor to get Medicaid expanded, to have at least a starter early education program pilot, to do a lotta things that they felt like they could hammer out across the aisle, although it wasn't with the whole Republican caucus, but parts of it.

They're in a very different scenario this time, where they really don't have a natural partner outside of their own sort of core constituents.

- Well, let's get more reaction from the State Capitol, as Montana PBS's Jackie Coffin has been covering the State Legislature for us throughout the month of January, and she's got an interview with Republican leadership.

Jackie.

- Thanks, John, I'm joined tonight by House Majority Leader Sue Vinton.

She is a Republican representing the Billings area.

House Majority Leader, thank you so much for joining us this evening, and I wanna ask you just right off the bat what your reaction is to Governor Gianforte's State of the State speech.

- Thank you.

It was certainly invigorating, it was exciting, it was uplifting, and I think it was very well-received by everyone in the chamber tonight.

- And as the party holding the majority this session, did you feel like Republican legislative priorities were addressed by his speech?

Did he cover all the topics you guys are looking at this session?

And did you think anything was missing?

- You know, I think he just hit on everything.

As a Republican caucus, we share in the governor's desire to get our economy going again, to provide tax relief to our citizens, to get our businesses up and running, to focus on education and specifically career and technical education.

He also, as you know, addressed the drug epidemic, missing and murdered Indigenous women.

And finally, something that you know is very important to all of us is being pro-life.

And with this being Pro-Life Week here at the Capitol, he came out strong in support of pro-life legislation.

- And this is your third legislative session, and it certainly is an unusual one.

How do you think it's going so far?

And what's kinda the weight of COVID-19 on this session?

- Sure; well, yes.

Just like everyone else across the state, COVID has touched the legislative session and the members here in the Legislature.

It's slowed things down because we are being extremely careful and cautious in how we approach the way we do business.

As you know, doing things via Zoom is a little unwieldy for those of us that aren't familiar with it.

And we've worked really hard to keep staff safe, to keep legislators safe, and to keep the public safe.

But at the same time, we need to provide access for the public to be able to come to the Legislature.

And by coming to the Legislature, that may be via Zoom or via email or by telephone.

So, we've provided different ways for the public to interact with legislators this session.

- And do you think, now that we are just kinda rounding out our third week of session, or fourth week of session, that that's going pretty smoothly, that we're finding a groove of bringing in the public remotely and participating in meetings remotely and in-person?

- You know, we are.

There's glitches from time to time, and that's just going to happen with technology.

But I think everyone from legislators to staff to the public to lobbyists have been very gracious and very understanding, because we've all had to live with this for 11 months now, so we all know that this isn't business as usual.

I mean, we're trying as hard as we can to get our work done in a timely fashion, but we understand that we have some different challenges this time, for sure.

- All right, and are there any moments from the State of the State address tonight that really stuck out to you or that you thought were really impactful moments?

- Sure.

I really appreciated the way that Governor Gianforte highlighted individuals throughout the state and how they were impacted by COVID and how they struggled, but he also emphasized neighbors helping neighbors.

And I think that really is the spirit of Montana and that's what we do here, and he mentioned that in a couple different places in his address tonight.

And I think he really understands the true spirit of Montanans, and it just makes him very relatable as a governor.

- All right, thank you so much for joining us tonight, House Majority Leader Sue Vinton, and I'll send it back to John in the studio.

- [Sue] Thank you.

- Jackie, thank you.

We appreciate Jackie and Representative Vinton offering those thoughts after tonight's speech.

It was a big night overall.

And so, Lee, we've watched and listened to a lot of these now through the years, and it seemed like tonight, at least from a political tone standpoint, didn't seem quite as harsh maybe as we've had in years past, which is interesting because nationally, you feel like the climate is that way.

But what was your take on it, particularly as you compare maybe, say, the governor versus the Legislature?

- Right; I mean, a couple moments that stand out for that was when the governor talked about the peaceful transfer of power and the attack on the Capitol as an attack on democratic institutions.

These were things where you could kind of see sort of the governor sort of rising above the sort of partisan fray a bit.

And so, you did have a- I mean, the Republicans could've just come in here and said, "We've got everything.

"We can do whatever we want now."

And instead, the governor has come forward with a series of proposals that I think you're gonna see draw a significant amount of Democratic support probably when they pass, things like drug treatment programs and raising base pay for public school teachers.

And so, there may be some rays of light out here in Montana, but there are also, as you mentioned, I mean, the Legislature so far has been very divided, where they've really gone for some issues that are very divisive.

And so, it'll be interesting to see as the governor brings these more potentially bipartisan efforts to the floor or through the committees, will they remain that sort of bitter partisan sort of divide or will they start to sort of coalesce around these things and really start to see more sort of people coming together and proposing legislation that they can actually enact without it being a straight party-line vote in the committee and a straight party-line vote each time in the House and the Senate.

- We've seen a lot of that now- - We have seen a lot, yeah.

- In almost the first four- There's been a lot of 67-33.

- Lot.

But these proposals feel different and are more fiscally based, more- Certainly, you'll see fights over tax cuts.

You'll see fights.

There will be fights.

But I think some of these pieces of legislation and some of these proposals from the governor are not gonna be the source of the division that we've seen thus far in Helena.

- Right, and then, of course, we'll always see what ends up in court, because we'll undoubtedly see some of that as a byproduct of this.

- I hope the Montana Supreme Court is resting up, 'cause there's probably gonna be a lot of these things that end up in court and may end up at the Supreme Court to decide, what are the abortion regulations that can kick in?

Can weapons can be concealed and brought on campus or into different places?

A lotta that's gonna end up being hashed out in the courts.

- Well, it is a lot to watch for.

It has been quite an evening considering, during the pandemic, it's just amazing that the even took place in and of itself.

But quite an evening, and a lot to look forward to in the remainder of this 67th legislative session.

That's gonna put a wrap on our coverage tonight.

We wanna thank everyone for joining us.

From all of us here at Montana PBS, Montana Public Radio, and Yellowstone Public Radio, thanks again for joining us, and goodnight.

(reverent orchestral music) - [Announcer] The governor's State of the State address.

Production support was provided by the Greater Montana Foundation, encouraging communication on issues, trends, and values of importance to Montanans.