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"I said last year that I wished I was assuming leadership with a state whose budget was sound, but then everyone in this chamber knew that ours was not, and we begin this year with a $350 million shortfall. I said last year that I wished that I could tell you that our education system was second to none, but that too many children graduate without skills essential to success in the 21st century. But I also said that despite these challenges, if we address them properly we have a great opportunity because we could move South Carolina forward, and I am here to report to you and I am pleased and encouraged to say that we have begun that process. My dad used to say that Rome wasn't build in a day, and we have clearly many, many miles to go, but I believe that we've begun that process."

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"And so while we have worked very diligently, I think, to focus on, in essence, the culture of the way things have been done in Columbia, it by no stretch of the imagination represents all that has been done in the past year."

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"I think that a critical component to quality of life lies in not getting run over by a drunk driver on a South Carolina road. ... Last session, we passed 0.08 (percent) legislation. Its intent was to make our roads safer, and while it was a positive step to move the 0.08, law enforcement friends have told me it's tough to effectively administer that new law. It's become a fertile ground for legal challenges and, frankly, a weak spot for law enforcement in their ability to arrest a drunk on the road."

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"I want to stop for a minute, and I want to issue a challenge to every man in South Carolina. And that is to live up to the gentlemanly traditions of our ancestors. ... I'd ask every South Carolina man to work as an individual to change South Carolina's deplorable statistics on the domestic violence front."

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"Our Number One front burner issue, if you want to call it that, for us this year, tied right up there with restructuring, is doing something about the number of jobs, the quality of jobs, the pay of jobs and the economy in South Carolina. ... I think the data supports that the most significant, single tax change that we could make to improve the climate for small business generation ... is to lower the income tax."

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"We need to ask ourselves, I think, this simple question: Should we have a greater proportional tax on work and savings and investment, or, for instance, on someone's choice to buy cigarettes or buy a lottery ticket? Our income tax is effectively the highest income tax rate in the entire Southeast, and that's rough on families. It's rough on retirees. It's rough on working folks. I passionately believe that cutting the income tax would help with the job situation we have in South Carolina, and it's something that we can't delay on. It's something that we need to take action on now because the people are hurting out there."

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"If you look at our present system right now, the roughly 24,000 inmates, about 63 percent of whom don't have a high school education or equivalency. Up until now if a capable inmate, frankly, didn't get an education or wasn't interested in getting an education, there was nothing that we could do. I have instructed Jon (Ozmint) to change that policy at Corrections and to make participation in education programs mandatory for appropriate inmates. If an inmate refuses, they don't get privileges, period. Despite these budget times, I think it's worth committing $2.5 million to this program because I think it's crazy to continue to send folks out of a criminal justice system with no better educational leg to stand on and expect good things to happen."

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"I would report to you within my Cabinet, government restructuring has produced real savings and even greater accountability. I must also report to you that I've gone as far as I can go. My Cabinet represents just 16 percent of the overall size of state government, and for restructuring to continue, it'll now require legislative action. And so whether we expand on these successes and, indeed, retool South Carolina government for the 21st century or whether we stop and, in essence, let further restructuring die on the vine, is in your hands. I ask for your help."

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"I would simply say this, the structure of government matters. (DMV employee) Maurine Boyles and her peers were there for the last 10 years. They're there now. Same people in place, but because of the different structure, a decidedly different result. And people who were before spending an hour or two hours in the DMV line can instead spend that time with their family. They can spend it at work. They can spend it at play. And it just strikes me that that's what we ought to be about in government, helping people with their problems and not adding to them."

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"The changes that we propose to the constitutional officers will require constitutional change, which means that if you grant it, people in South Carolina get to vote on it, as to whether we think it's a good idea or bad idea. Giving South Carolinians the chance or the right to vote on the structure of their government doesn't mean that you as a House or Senate member agree or disagree with that particular change to that constitutional office. It does mean, though, that you believe that South Carolinians deserve the right to vote."

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Here's what others thought:

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Democratic state Education Superintendent Inez Tenenbaum: "It demoralizes our educators when the governor says negative things about education progress. The facts defy what he said in his speech about our public education system."

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Senate Minority Leader John Land, D-Manning: "He wants to compare us to North Carolina, Georgia and Florida in regard to taxes, but you look at what those states have done for education over the years, that's why they have the jobs. Jobs are going to where you have an educated people. We're not educating our people in South Carolina."

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Rep. Doug Jennings, D-Marlboro: "I thought it was big on ideas, but short on specifics, which seems to be his style. It was most noteworthy for what it failed to mention, which was any suggestion as to how we tackle some of the problems we have in this state, such as the job losses and what specifically Commerce is doing and what we can do to help Commerce with economic development."

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House Ways and Means Chairman Bobby Harrell, R-Charleston: "I was particularly pleased to hear him talk about tax restructuring, more than just the income tax. We need to take a look at the entire tax code. Several of us have proposals out there that deal with different aspects of the tax code. What I would love to see happen, and what I think he was alluding to, is bringing all of that together so that we have a general conversation about the tax structure in South Carolina so we can make the overall structure fairer for everybody."

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Senate Finance Chairman Hugh Leatherman, R-Florence: "I thought the governor laid out a wonderful road map for us insofar as restructuring government, making it more efficient, more accountable to the people of the state. He told us how to do that. He said we need to combine the agencies, we need to put more agencies in his Cabinet."

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House Speaker David Wilkins, R-Greenville: "Certainly no surprises. ... His two top priorities were jobs - expanding jobs, job creation - and restructuring. Those are things that we are working on. The House has consistently made it our business to be pro-business."

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Republican Lt. Gov. Andre Bauer: "He's continuing to think outside the box in reducing the size of state government and urging the General Assembly to find every way it can to save taxpayer dollars that are so precious right now. And I'm excited about biking across the state. ... Not only are we going to reduce the size of state government, we're going to reduce the size of people in South Carolina."

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