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RALEIGH (AP) - Facing what she calls North Carolina's greatest challenges since the Great Depression, new Gov. Beverly Perdue told lawmakers Monday night they would have to make "hard, painful decisions" with state spending but remain committed to public education.

"We all must have high expectations for ourselves and for North Carolina's futures," Perdue said in her first State of the State address to a joint session of the General Assembly. "We all must exhibit extraordinary leadership and courage and determination, and make the tough, but right decisions.

Already closing a projected $2.2 billion shortfall this fiscal year and preparing for an initial spending gap of $3.6 billion next year, Perdue said she would release a two-year spending plan next week that is the result of difficult choices.

"We will reduce and cut state government programs and services that many, including me, know have been effective but which, in these times, we simply cannot afford," she said in a 30-minute address.

Neither did she mention directly the option of raising taxes - some legislators have suggested raising alcohol and cigarette taxes, and others to tighten corporate tax reporting to generate new funds. But she suggested she was open to change.

"Starting today, it is no longer business as usual for North Carolina's budget. I want all our citizens to know it is a new day," Perdue said. "Everything is on the table. We don't have time for talk-show political posturing or petty partisan games. Not on my watch."

Perdue, who took office Jan. 10, continued to boost her profile as both a responsive and reform-minded governor. She tried to connect with her television audience by talking about how she had visited an unemployment office recently and talked with the jobless. The state's 8.7 percent jobless rate is the highest since the early 1980s.

"Families all around the state are anxious. Many have lost their jobs. Many have lost their homes," Perdue said. "These people are North Carolina. They are America. And as elected officials, it is our moral responsibility to work together and help our citizens restart their lives."

She also mentioned her efforts to change how the Department of Transportation approves road projects and creating methods for the public to access information online about how federal stimulus funds are spent and state contracts and grants.

"We will be open, ethical, and put the public's interest first," Perdue told lawmakers, adding that they must do their part "to stand up to the sweet seductions of special interests, the temptations of politically popular pork barrel spending, and end the practice of backroom dealing."

Perdue a former legislator and lieutenant governor since 2001, has heard many State of the State addresses, but none like this one given the economy and history. She was elected the first female governor in November, a feat she mentioned in her speech.

Unlike previous gubernatorial addresses, Perdue focused less on seeking significant programs and budget items, except that she vowed to increase per-pupil spending in the public schools. She called on school testing reform, reducing the dropout rate and getting the business community involved in training workers.

The governor did say she wanted to expand a college-affordability program started by predecessor Gov. Mike Easley that would help children fifth grade with the pledge of a debt-free college education.

Among those attending Perdue's speech was Donna Dent, one of the flight attendants aboard US Airways Flight 1549, which splashed down in the Hudson River in New York. All 155 passengers onboard the aircraft survived.