Gov. Neil Abercrombie said Monday that Hawaii has weathered the most difficult choices needed to balance the budget, urging lawmakers to leave the drama of the past few years behind and consider targeted investments to improve the state’s economic future.

The governor, in his State of the State address, said the two-year budget must reflect fiscal discipline because of uncertainties in the U.S. and European economies and a projected decline in state revenue growth that could produce deficits in the last years of a six-year financial plan. But he said the state has an obligation to look beyond immediate needs and develop a vision for infrastructure, technology, early childhood education and alternative energy.

Abercrombie said that "by working together and through shared sacrifice, we have started to turn the corner. This past year has not been easy, but we have accomplished our purpose."

His largest immediate investment is $300 million worth of bond-financed state construction projects that are ready to break ground and could help spur job growth. The state Senate has proposed $500 million in new construction, and the governor said initial discussions with House and Senate leaders indicate a commitment to an aggressive outlay.

Abercrombie described a potential $200 million settlement with the state Office of Hawaiian Affairs over former crown lands — which includes the transfer of waterfront land at Kakaako — as a deal that could bring closure to a long-standing rift with Hawaiians.

"We’re going to stop talking about what needs to be done and give Native Hawaiians the opportunity to do something for and with themselves now," he said.

The governor said legislation to support an undersea cable to link wind and other power between the islands is critical to stabilize energy prices and equalize electricity rates.

He called a mixed-use development in Kakaako that would include the state’s tallest condominium tower a central project to promote urban density and discourage sprawl.

With his hands tied by concerns over revenue growth, the governor recommended a series of smaller investments and policy changes that could provide the groundwork for more substantial spending once the economy rebounds.

Abercrombie urged modest new spending to improve broadband access, information technology, watershed protection, early childhood education and health, and long-term care for seniors. He said he would ask lawmakers to shift telecommunications oversight from the Public Utilities Commission to the state Department of Commerce and Consumer Affairs, so it is regulated under one agency, and give the PUC authority over electricity reliability standards, which could allow independent power producers greater access to the electrical grid.

Citing the success of Hawaii-based movies such as "The Descendants," he urged lawmakers to make film and television tax credits permanent.

Abercrombie saved most of his rhetorical emphasis, however, for ideas that might not be fully financed or fleshed out until later.

The governor said every public school student should have a laptop.

He said he would change the criminal justice system so more felons who pose little risk to public safety can leave prison on supervised release.

Knowing a soda tax would not likely advance in an election year, he proposed a task force that would develop a strategy to reduce obesity rates, which could lead to a soda tax in the future. He said the link between sugar-sweetened drinks and health is undeniable.

"This is a fiscal issue. This is a money issue," he said. "But it is fundamentally and primarily a public health issue that is not going to go away and is only going to accelerate and be exacerbated in the time to come."

Abercrombie said he would soon unveil an alternative energy and food security project in Hawaii County that could be a model for sustainability. He said lawmakers had been debating ideas to reduce dependency on imported oil since he first served in the Legislature in the 1970s.

"I would be totally remiss if I’m talking about how we spend our money, if we didn’t ask ourselves, Why do we continue to send billions of dollars a year outside the islands to meet our energy needs?" he said. "If there’s one thing we export from Hawaii, it’s dollars. It’s our major export — for oil, for food, for prisons. We’ve got to keep these dollars here in Hawaii."

State Rep. Denny Coffman (D, Keauhou-Honokohau), chairman of the House Energy and Environmental Protection Committee, said he hopes the governor will push forward with the development of geothermal resources in Hawaii County, and perhaps Maui, with the long-term goal of providing energy to other islands. He said he and other lawmakers would ideally like to replace fossil fuel-driven plants with alternative energy, but he has doubts about whether there is truly a commitment to change.

"That’s where I see what I call this ‘little dance,’" he said of interaction with Hawaiian Electric Co. and others in the energy industry. "The HECO companies aren’t bad people. It’s just not in their best interest to want to shut down their own facilities."

Republicans were relieved that Abercrombie did not mention any new tax increases, but several wondered whether the state could afford all of the initiatives the governor outlined.

"I’ll feel more relieved when the closing day is here and we know that we did not raise taxes," said state Rep. Cynthia Thielen (R, Kailua-Kaneohe). "Then I’ll believe we’ve done our job."

House Minority Leader Gene Ward (R, Kalama Valley-Hawaii Kai) said Abercrombie would be judged on whether he could deliver.

"Remember, this governor is a Picasso. He can paint with words, pictures that are excellent," he said. "But to deliver them, to put it in a frame, to put it on the wall without cracking anything, without breaking any of the glass — that’s really the part where we’re in it, because we’re down at the legislative policy level and we need to know details."

While Abercrombie’s tone was more optimistic and upbeat than his first State of the State last year, when he warned of an economic collapse, there were some emotional and stern passages.

The governor opened by asking for a moment of silence for two Honolulu police officers — Garret Davis and Eric Fontes — killed in the past six months after being struck on the roadways.

He repeated a declaration on Friday that the state will proceed with education reforms in a $75 million federal Race to the Top grant, including a teacher evaluation system that measures student growth, even if teachers continue to resist a new contract.

The governor ended by mentioning a note that was given to him by Rep. Karen Awana (D, Kalaeloa-Nanakuli) during a difficult time in his rocky first year in office. He said he still carries it around. "A’ohe Hana Nui ke Alu ‘Ia,’" the note says. "No task is too big when done together by all."

Hawaii News Now video: Education, economy, energy highlight gov’s annual address