Governor Jennifer Granholm cautioned the state against an all-too-familiar return to “partisan nonsense” during Tuesday’s State of the State address, arguing that “the leadership challenge that we face could not be more clear.”

Citing a world “changing at a rate that was unimaginable a decade ago,” Granholm outlined a new budget for 2008 that will emphasize job creation and retention; affordable health care; strengthening education; and promoting community safety. Although the governor was quick to recognize the slowing economy (she mentioned the politically-sensitive “r” word early in her remarks), the tone of her address was decidedly optimistic and assertive.

“No state has borne the brunt of that change more than Michigan,” said Granholm of a shifting economy that has left the state’s manufacturing industry devastated. “We need a bold course of action…to diversify our economy,” she said. “That hope is not a Democratic hope, it’s not a Republican hope.”

“It’s a Michigan hope,” said Granholm to a mostly - if at times warily - enthusiastic audience of state senators, representatives, judges and invited guests. Asking the divided legislature to set aside the bitter partisanship of 2007, the governor implored the assembled lawmakers to join her in “an era of unprecedented cooperation for historic progress.”

“Will you join me?” Granholm asked, as the audience rose to its feet.

“Even though we’ll certainly have disagreement this election year,” the governor said, “we agree that we must push progress for Michigan.” Truly, agreement and progress emerged as the central themes of the remarks, which criticized the federal government repeatedly for what the governor depicted as its failed policies on education, energy, health care and insurance.

Under the governor’s proposed budget, Granholm announced, the government would work to create and secure new jobs by offering a Michigan Job Creation Tax Credit - a “stimulus” for Michigan businesses involved in any one of the nation’s top 50 “hottest” industries. Further, the governor said, the proposed Michigan Invests Funds would give high-growth companies “the investment capital they need to invest in Michigan.”

“A strong economy also demands a stable state budget,” the governor stated, noting with perceptible frustration that “last year…was anything but pretty.” The governor drew loud applause for her explicit promise of “No new fees, and no new taxes,” and added that her budget would include $200 million in additional cuts and reforms. Granholm praised and thanked Michigan’s state employees for their willingness to compromise and sacrifice in renegotiating a 3-year contract, a recently completed move that the governor said will save the government $170 million.

Continuing in the vein of economic stimulus, Granholm announced that, under her forthcoming plan, the government would initiate the creation of approximately 28,000 jobs for infrastructure improvements and new civil construction. The governor noted that there is “blockbuster potential for Michigan” in alternative energy, alluding to Canadian hockey legend Wayne Gretzky by saying “the puck is going to alternative energy.”

“We will win these jobs for Michigan,” said the governor excitedly, who was caught in an awkward and potentially embarrassing moment when the remarks failed to draw a response from the audience. “Are you on it?” she asked the silent chamber. “Oh, come on!”

Citing “our wind, our water, our woods…and a skilled workforce,” the governor said that “to compete, you need to capitalize on your advantages. And for us,” she said, “it’s our geography, and our history…and if we do it right, Michigan can be the alternative energy capital of North America.” She called on requiring 10 percent of statewide energy production to come from renewable sources by 2015, a target that would increase to 25 percent by 2025. The governor further called on the legislature to “eliminate the gas tax for ethanol and bio-diesel at the gas station.”

Central to the governor’s vision, Granholm said, is expanding and strengthening K-12 education and providing incentives to Michigan colleges and universities to increase retention and graduation rates. As outlined in the speech, the governor will ask the legislature to raise the statewide high school dropout age from 16 to 18, and support a 21st-century Schools Fund “to build smaller schools” with increased “rigor and relevance.”

Addressing safety, the governor announced a plan to hire an additional 100 state troopers, noting that homicides in Flint have dropped by 46 percent following the initiation of a cooperative effort between local and state law enforcement authorities. Granholm also expressed hope that the legislature would authorize the demolition of as many as 1,500 “crime havens” and “blighted buildings” that would serve to both fight crime and encourage redevelopment.

“Safety and economic development in our communities go hand in hand,” she said. “The strength of Michigan’s cities is critical to the strength of Michigan as a whole.”

Decrying the inability of the federal government to enact comprehensive health care reform, Granholm stated defiantly that “when a new president takes office next year - whoever that president may be - we will be the first in line to get affordable health care for everyone.” The governor applauded recent statistics that show that “Michigan now has the highest rate of health insured children in our nation,” but urged the legislature to continue to fight, saying somewhat redundantly that “when everyone has access to affordable health care, health care will become more affordable for everyone.”

Although markedly optimistic, Governor Granholm nonetheless made clear the difficulties on the road ahead. “Let’s be frank,” she said. “We didn’t get into this overnight, and we’re not getting out of it overnight. We need to roll up our sleeves. Let us tune out the partisan bickering…through this economic hurricane.”

“This is not a time for partisan nonsense,” Granholm said. “This is a time for one thing. This is a fight for Michigan’s future. Period.”

“I’m ready,” the governor said. “And I believe in my heart that you’re ready, too.”

Click here for a complete transcript of the State of the State Address.