In her third State of the State address this morning, Lingle also resurrected her call for a food and medical tax credit to help families earning less than $40,000 a year and she called for lawmakers to eliminate the practice of reducing welfare benefits for parents who work.

"I want to use some of the revenues generated by our recent prosperity to pay for a modest yet important $63 million tax cut over the next two years for individuals and families with low to moderate incomes," the governor said.

The governor has failed to push through an increase in the standard deduction during her first two years in office. Lingle said increasing the standard deduction over the next three years to one-half of the federal standard deduction will mean 27,000 people will no longer need to file state tax returns, and 78,000 more will see their taxes reduced.

The governor delivered the speech this morning, just having returned from a snowy Washington, D.C., where she attended the second inauguration of President Bush. She returned to Hawai'i late Friday, and attributed her hoarseness to "that Washington, D.C." weather.

Lingle touched on a number of other issues, including constructing more affordable housing, expanding early childhood education and charter schools, increasing funding and autonomy for the University of Hawai'i, promoting economic development and addressing long-term insurance.

Looking at the Democratic in the Legislature with whom she has fought with during her first two years, the Republican Lingle called affordable housing "the issue that brought us together." She called for tax credits of up to $4,000 for each of the first 2,500 affordable units constructed by the end of 2007, streamlining a government review process she described as "cumbersome" and doubling the amount of conveyance tax revenues that are transferred to the Rental Housing Trust Fund.