Mr. Chief Justice, honorable members of the Supreme Court, Lt. Governor Michels, legislators, constitutional officers, family, friends, and fellow South Dakotans:

I am honored to stand before you today as your Governor -- to stand here, in this beautiful rotunda, and to think about the significant responsibility that you have entrusted to me. I am grateful to so many, especially my wife, Linda, for your support and your belief in me.

It's not an easy time to be Governor or any elected official. These are challenging times for our state and our nation. We've endured two years of recession and a slow and halting recovery we face now. The obligations of our state have increased at the very time that our revenues have fallen. The federal government is placing more burdens
upon us. And we continue to support our troops overseas, even as we face natural disasters and emergencies at home.

But even though times are difficult, I am optimistic about our future, because I know that in South Dakota we have always done what it takes to overcome adversity and to emerge into greater prosperity. Just as our forbearers overcame great challenges, we will overcome ours by embracing the values they embraced.

Self-reliance -- we take care of ourselves, even as we help our neighbors. Persistence and determination -- we work hard. And frugality -- we don't spend money we don't have. I'd like to say a few words about these values today.

The first of these values is Self-reliance. South Dakotans believe in self-reliance.

The pioneers who settled this state over a century ago, as well as the natives who preceded them, understood the idea of self-reliance. In fact, they knew no other way. Those who came to Dakota sought freedom and a fresh start. They understood though that freedom requires responsibility, because they could only survive by taking care of themselves.

Self-reliance is the essential complement of individual liberty. The word independence literally means: not dependent. I worry that so many in our nation have forgotten this core principle. When a crisis occurs, we ask what the government is going to do to solve it. When a foolish risk goes bad, we look to the government to control our losses.
We have a great and growing sense of entitlement -- that solely because we exist, we have the assumed right to be given certain things.

One hundred years ago, Theodore Roosevelt warned of the fallacy of this sense of entitlement in his famous speech "Man in the Arena". Roosevelt had left the presidency the prior March, and had embarked on a yearlong safari of Africa, he explored the Congo and followed the Nile to Khartoum.

Following the safari, Roosevelt traveled to Europe for a grand tour of the continent. He was greeted in Vienna, Rome, and Berlin with a hero's welcome. Arriving in Paris, Roosevelt was invited to the Sorbonne, which is the historical home of the University of Paris. Roosevelt was billed as the "greatest voice in the New World," and was asked to address the leading minds of France. He used the occasion to discuss the experiences of the American and French Republics, and to caution that our shared "social experiment" of republicanism requires that citizens work hard and care for themselves.

He said:

If a man stumbles, it is a good thing to help him to his feet. Every one of us needs a helping hand now and then. But if a man lies down, it is a waste of time to try and carry him; and it is a very bad thing for every one if we make men feel that the same reward will come to those who shirk our work and those who do it.

President Roosevelt's words from another continent and another century ring true today. In South Dakota, we help our neighbor who stumbles. The many who earn their way come to the aid of the few who need a helping hand. But we must never carry the man who lies down. If we reward with entitlements those who shirk their responsibility to work, we will quickly find that the many will ask to be carried, and there will be too few left to carry the burden. South Dakotans must be self-reliant.

As a second key value, South Dakotans believe in hard work and persistence. It is simply a part of our culture. When we promote South Dakota as a good place to do business, we promote the work ethic of our people -- and those who do business in South Dakota and elsewhere will attest to the fact that South Dakotans know how to
work.

In 1927, President Calvin Coolidge and his wife, Grace, took a vacation in the Black Hills. They enjoyed it so much that they stayed 3 months, and made the State Game Lodge in Custer, their summer White House. If you visit the State Game Lodge today, you will still find the Coolidge room there. I mention Calvin Coolidge because of something he once said -- something in which I believe strongly. In fact, I've carried his quote with me for over 20 years. He said this:

Nothing in the world can take the place of Persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is
almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent.

Now, I would never diminish the importance of education or knowledge, and neither was President Coolidge. But the essential element to success is persistence and determination. An education is meaningless without hard work to apply it.

The third value I want to talk about is frugality. Along with self-reliance and persistent hard work, South Dakotans still understand the importance of frugality. We don't spend money we don't have.

Last summer, Linda and I attended the Days of '76 rodeo in Deadwood. There were riders from all over the country -- from Colorado, Utah, Wyoming, and of course, South Dakota, many other states. Occasionally when an out-of-state rider was about to perform, the announcer would ask the audience -- "the next rider is from Utah, is
there anyone from Utah here?" And of course, there would be a smattering of cheers and applause. Later on in the program, another rider would be about to perform and the announcer would say -- "well, the next rider is from Texas. Is there anyone here from Texas?" And again, there would be a smattering of applause. Later he asked -- "If
anyone was at the rodeo from California?" And, again there was a bit of applause and the announcer quickly replied -- "Welcome to South Dakota, a state that pays its bills."

In South Dakota, we do pay our bills. In fact, South Dakotans average the best credit score in the nation. In our own homes, we understand we cannot spend and borrow our way to prosperity.

Our state budget is one of the healthiest in the nations because our leaders have not forgotten these principles. In the coming weeks, I will bring forth a budget that meets the needs of our people within the realities of our resources. That proposal will be the topic of discussion and debate, and I welcome that. I'm sure there will be good ideas for improvement.

But let me say today that, while the details may change, we must not and we cannot accept a budget that strays from our core principles. We cannot spend more than we take in. Our reserve funds are to be used for emergencies, not to perpetuate over-spending. We must avoid the temptation to allow federal strings to control our decisions. And to the extent that cuts must be made, everyone -- everyone -- must
take a part and share in the sacrifice. Just as every family cuts back when times are tough, so, too, must we make tough choices and cut back this year.

Although these choices will be difficult, they also offer us opportunity to improve. I call on every constitutional officer, every legislator, and every governmental official to join me in making government better. We must ask ourselves what core functions we expect of our government, and find ways to redesign and refocus the delivery of these services. Every department, every office, and every program can be made more efficient, more responsive, and less bureaucratic. I commit to lead this effort and to reinvent our government to work in the modern age.

These are difficult times in our nation. Some of our sister states, and some cities within them, face the very real possibility of default because of their mountains of debt and deficits. They have yet to learn that you cannot spend your way out of a recession. Their broken systems perpetuate the unsustainable patterns of spending and borrowing that have brought them to the brink of ruin. They have promised their citizens something for nothing, and created a society where everyone wants to be carried and no one wants to pull their weight.

I believe that South Dakota, our little state on the prairie, has an opportunity to show our sister states and our even national government that there is a better way. We in South Dakota can be that shining city on the hill. Our values work. Our system works. Our state still works.

We don't spend money we don't have. We save during the years of plenty to provide during years of naught. We let our taxpayers keep more of their hard-earned dollars -- more than any other state, in fact. And we remember the role of government is to protect and serve, not to regulate and control.

It is not preordained; however, that South Dakota will always be strong, or prosperous, or free. It is the obligation of every generation to secure these blessings for the generation to come. If we ever fail -- if we allow our state to be ensnared in a pattern of entitlement and debt -- it will be because we forgot those core values that have served us for so long. It is too easy to allow the expediencies of the present to distract us from the values that will carry us in the future. It is too easy to make an exception, just this once, rather than face the tough choices.

But, I pledge to you, as your governor, I will never lose sight of those values. They keep our state strong, and through our strength we demonstrate to our nation the pathway forward.

I know others will urge that we defer our problems rather than face them. That might be the easy way, and it might be the politically expedient way. But I did not run for governor so that I could get reelected. I did not run for governor to be popular. I ran for governor because I believe so strongly in the people of our state and in the values we hold. We will make the tough choices -- the right choices -- to put our state on a strong foundation for the future. I promise you that.

I spent some time over the holidays thinking about my family. One hundred years ago, exactly -- in 1911 -- my grandparents from Denmark, Martin and Margaret Daugaard, came to South Dakota and bought a farm between Garretson and Dell Rapids. Three years later, my father, Raymond, was born in that farmhouse. And a little bit later, my uncle, Howard, who is here today.

Dad was a young man during the Depression, and he learned early on that one can attain much through hard work. When he and my grandfather wanted a basement under their little farmhouse, which didn't have one, they dug one out with hand shovels and buckets and built the foundation from the inside.

As Bob mentioned, my parents were both deaf. They were born deaf, but they did not allow that to deter them or to define them. They worked hard on our farm for years, and once we were old enough, my sisters and I worked hard too -- didn't we. When Dad had financial troubles and had to sell the livestock and equipment, he was the same age I am right now. He didn't use his deafness as an excuse. He had stumbled, but he didn't ask to be carried. He and my mother drove fifty miles, every day, to work as janitors in the dorms at Augustana. It was work that some people would not accept. But my parents taught me that all work -- all work -- has dignity.

Most people wouldn't call my father a particularly successful man. He died with very little. But he worked hard, he took care of himself, and he paid his bills. He was self-reliant, persistent, and frugal. He was successful to me, and I stand before you today because of the lessons I learned from that experience. South Dakota is a special place because there are many, many people who set that same example in their own lives, every day, all across South Dakota.

That's why I love South Dakota, and that's why I know our best days are still ahead of us. Like the pioneers, we will come together in adversity and emerge into even greater prosperity. We will be self-reliant. We will work hard and persevere. We will be frugal.

As my last words today, I want to say it is the great honor of my life to lead our state during this time. I am tremendously thankful for this wonderful privilege, and I promise I will never stop listening, never stop learning, and never stop working for you. Thank you so much.

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