In his annual State of the City Address last night, Mayor Thomas Menino tried to emphasize Boston’s many ongoing projects despite its financial crisis, before a crowd including Governor Mitt Romney and Lieutenant Governor Kerry Healey.

Menino reflected on many issues concerning the city of Boston, but drew everything back to a common theme, the economically challenging times facing Boston and the entire country.

‘[The recession is the] biggest challenge in the last decade,’ Menino said. ‘The national recession is crushing tax revenue.’

Even with the current financial crisis facing the state, however, ‘we continue to make progress,’ Menino said.

Menino highlighted two significant development projects that illustrate that type of progress. These developments, in Dudley Square and the Longwood Medical area, are hoped to provide the city with hundreds of new jobs and revitalize those neighborhoods, he said.

Another landmark improvement for the city is the scheduled opening of three new schools, the first built in Boston in 35 years.

‘[Building new schools] gives flexibility to improve schools across the city,’ said Menino.

Another area of progress noted by Menino is that, contrary to national trends, violent crime has decreased to its lowest levels in three decades. The homicide rate is down 22 percent from last year.

This trend will be hard to maintain, however, as Menino acknowledges, ‘we need to do more with less.’

Faced with the realities of having to make cuts in various programs throughout the city and state, Mayor Menino was recently forced to cancel the incoming class of 60 new police recruits.

To help keep the streets safe in Boston, Menino and Police Commissioner Paul Evans have worked out a program to bring a number of police officers that had previously been relegated to administrative duties onto the streets.

Menino looked to the future with a cautious optimism, likening the city to the U.S.S. Constitution.

‘This old ship has weathered a lot worse storms,’ he said.

He said he hopes that a more tolerant and increasingly diverse city will lead the way.

‘There is a new spirit at work here; the old divisions are not as daunting,’ said Menino. ‘This new spirit will lead us through the slowdown.’

Menino went on to urge the federal government to put a greater effort into restoring the financial health of the country, and criticized Washington for not following through with the money it promised to many cities, including Boston.

‘Congress has been missing in action when it comes to restoring financial health,’ said Menino, ‘[We] can’t have domestic security without economic security.’

Menino added that times are different now than they were 10 years ago when he entered office, and the city has to make necessary adjustments to the current state of the city.

‘Those who insist on business as usual will soon be out of business,’ he said. ‘We will not be reckless with public money,’

Menino also contended that the outdated revenue system was one of the largest problems facing the city, with 53 percent of the city’s land left untaxed.

‘This is a world class city in a horse and buggy revenue house,’ Menino said.

Amidst solemn news of the financial challenge looming for the city, Menino proudly acknowledged the benefits it will receive when Boston becomes ‘center stage’ for the 2004 Democratic National Convention. The convention will bring in about $150 million in revenue, according to the Boston Globe.

In keeping with ‘the new spirit’ Menino addressed, he publicly extended an invitation to the state’s most well-known Republican.

‘Governor Romney, you are invited too,’ he said.