Gov. Butch Otter highlights five priorities in the State of the State address and budget he's releasing at 1 p.m.: education, economic development, refilling reserve accounts; more pay for state employees; and tax relief.

-- Public education. Otter proposes a 2.6 percent increase of $31.7 million, which would fully fund the Students Come First initiative including its technology and pay-for-performance elements. Higher education gets a 8.1 percent increase of $16.9 million to colleges and universities; and a 19 percent increase of $4.4 million to community colleges.

-- Economic development: $5 million would create IGEM — Idaho Global Entrepreneurial Mission — which will increase research initiatives with universities and private industry partnerships.

-- Replenishing Idaho reserve accounts: The state has spent $384 million in reserve funds since 2009, leaving a balance of $30 to $40 million. Some $60 million would be used to start refilling these funds: $26 million to the budget stabilization fund; $29 million to the public education stabilization fund; and $5 million to the higher education stabilization fund.

-- State employees: $41 million would go to all agencies, including public schools, for one-time, merit-based bonuses. Half of that bonus money will be released if the state hits its July 2012 revenue goals; the other half will be released if the state hits its January 2013 revenue goals.

-- Tax relief: Otter wants to reinstate the grocery tax credit, which would be about $10 more per filer this year. He also wants to work with lawmakers to provide $45 million in tax relief. Otter said he would leave the details of the tax relief up to legislators.

Otter is delivering his State of State address to legislators at 1 p.m. in the Capitol.

Watch for more details through the day at IdahoStatesman.com.