Governor Rick Perry delivered his State of the State address to a joint session of the Texas Senate and House of Representatives, outlining what he considers to be the top issues facing the government during the 79th session. Perry began by enumerating the gains he says the state has made since the last session of the legislature. Perry pointed out Texas' economic gains in the last two years, capturing nine of the twenty-four largest new capital investments in the nation, among them a $3 billion dollar Texas Instruments semi-conductor facility. Job growth, said Perry, has also been robust, as the state has added 162,000 jobs over the last 15 months. Perry also praised education gains in Texas, saying that Texas is the first state to make college-prep curriculum the high-school standard, and also the first to require personalized graduation plans for at-risk students.

Perry made education and education finance reform the main thrust of his address. "We have a once-in-a-generation opportunity to make sure children of every background are given a chance in life", said Perry. The governor also promoted fiscal responsibility in education reforms. "How much money we spend on education is important, but not nearly as important as how the money is spent," said Perry. Perry said he believes in order to improve education, the state must first improve low-performing schools. To accomplish this, the governor wants to offer $7,500 incentives to teachers who choose to teach at struggling schools. He also wants to form "turn around teams" to go into low-performing schools and provide management support and mentoring to teachers. Perry advocated increasing the number of charter schools in the state, by following the model of successful charter schools while shutting down under-performing ones.

Perry also wants to change the state's property tax system, by lowering the rate at which appraisals can increase from ten percent to three. He advocated a broad based, fair, and equal business tax in order to cover lost revenue. Perry pledged to accomplish all of the state's goals without increasing the total tax burden.

Citing the investments in other states in the cutting-edge biotechnology science, the governor wants Texas to lead the way in the field with a $300 million Emerging Technology Fund. "Where will the better, faster computer architecture be designed, the gene therapies that will rescue people from terminal and chronic diseases, the cleaner technologies that will clean the air our children breathe," asked Perry, "I want them developed in Texas labs by Texas minds to the benefit of the Texas economy."

Perry pointed out the need to restore cuts made in the state's Children's Health Insurance Program (CHIP), saying that better economic times means the legislature can re-evaluate the program's benefits. While state health insurance is important, said Perry, "We must not lose sight of the long-term goal to move more Texans from subsidized insurance to private insurance." While Texas is 18th in the nation in children covered by Medicaid, the state is 46th in the number covered by employer-sponsored insurance. To shift to a greater share of Texans under private insurance, Perry wants to use new approaches, like health savings accounts. Perry also advocated reforms to the state's adult and child protective services.

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