EXCERPTS FROM GOV. JOHNSON'S STATE OF THE STATE ADDRESS

INCOME TAXES

All you have to do is talk to anyone who is considering moving to New
Mexico and you will quickly learn how many decide not to locate in our
state because of our punitive tax structure. How many of your friends and
neighbors have moved away from New Mexico because of high taxes? How many
of your new neighbors who have moved here are shocked at our high tax
structure? Taxes on food, clothing, services and an 8.2 percent income tax?

This session, let's put all of our efforts towards an income tax cut.
Nationally New Mexico is 47th in per capita income. The only way I know to
change that is to encourage New Mexico companies to remain in New Mexico
instead of leaving for a more tax friendly state as so many have done in
the past. We need a more realistic tax structure in order to attract new
and better paying jobs to our state. This session, let's put all of our
efforts behind reducing our personal income tax.

We need to reduce and cap personal income tax at 7.7 percent. Right now New
Mexico has the highest income tax rate in the region. It's time to give our
citizens a break -- time to let them keep more of what they earn. Let's
implement tax relief that benefits every single New Mexican.

Personal income taxes in our state are among the highest in the nation. Is
it a shock that many individuals leave New Mexico and others, looking for a
state to locate in, simply don't give us serious consideration? It's time
to give everyone in New Mexico a pay raise! Cut income taxes now!

EDUCATION

Here's the way I see it: New Mexico has been at the bottom of the nation's
educational rankings for a long time. But we don't seem to want to change
the way things are being done.

Usually, we hear that we need more money. But we've been hearing that for
as long as I can remember. And in the past, including last year's
educational budget, we have consistently appropriated more money. But this
has not resulted in the kinds of improvements we need.

I'm sure you're all familiar with the old saying that the definition of
insanity is continuing to do things the way you've always done them but
expecting a different result. That's what I think has been going on in
education for decades. So, it's time to make some changes.

DRUG POLICY

We need to reform our drug policies. The goal should be to help those
addicted to drugs to find a better way. The answer is not imprisonment and
legal attack.

The answer lies in sentencing reform, treatment, harm reduction and
education. We need policies that reflect what we know about drug addiction
rather than policies that seek to punish instead of help.

We need a humanitarian approach. The days of the "Drug War" waged against
our people should come to an end. Adopt our eight drug reform bills and I
guarantee that prison rates will drop; violent crime will decrease;
property crime will decrease; overdose deaths will decrease; AIDS and
Hepatitis C will decrease; and more of those needing treatment for drug
abuse will receive treatment. In a nutshell, New Mexico has a chance to
lead the nation in drug policy reform that will reduce the overall harmful
effects of drugs.

COOPERATION

I ran for this office seven years ago because I believed there were
important things that needed to be done in our state. We had been laboring
under attitudes that were not going to bring us successfully into the 21st
century. Some have argued that we were, in reality, stuck in the 19th century.

No matter how far behind you may think we were, one thing is certain: We
had a lot of catching up to do. We were at the wrong end of almost every
imaginable statistic. I wish I could say all of that's changed but it
hasn't. We're still at the statistical wrong end of things when compared to
other states.

But as you all know, when you're so far behind that you're almost not in
the race, you can't expect to jump ahead just because you want to. So,
these last six years have been a time of laying the groundwork of preparing
to move forward.

I believe that time has come. I believe it is a time for a new beginning.

ECONOMIC GROWTH

Wealth is created when people produce more than they consume, and poverty
is created when people consume more than they produce. Some areas of our
state have been consuming more than they produce for a long time now.

By opening up the state to across-the-board economic development we are
making it possible for more and more communities to begin to produce more
than they consume. Thus, in a very real way, wealth can be generated.

WATER

We need to take serious steps to protect the state's water rights from
infringement by other entities. Today, as never before, the state must be
proactive in protecting its water. As I speak before you today, storage of
water in our reservoirs is substantially diminished due to drought and use
of water for endangered species. Reservoirs that were depleted last year
may not be refilled for many years. Endangered Species Act litigation may
cause substantial water supply problems and legal crisis situations on both
the Rio Grande and the Pecos River in 2001.

New Mexicans are faced with the risk that the federal government will take
from our limited water supplies. We must defend our water, requiring that
the federal efforts to comply with the Endangered Species Act are in
accordance with state law and are based on purchase of water rather than
its being taken without compensation. Nor should our ability to deliver
water across state boundaries, as required by interstate compacts, be
diminished.