In the final minutes of the debate (frankly, the structure so hamstrung the candidates that the term "debate" really doesn't apply), Governor Palin observed:

And we are to be that shining city on a hill, as President Reagan so beautifully said, that we are a beacon of hope and that we are unapologetic here.

The phrase and sentiment evoked is beautiful and it's obvious why the Governor would invoke President Reagan.  However, although President Reagan did utter the phrase in his farewell address, he cited the John Winthrop when he did so.  Here's the more complete quote:

And that's about all I have to say tonight. Except for one thng. The past few days when I've been at that window upstairs, I've thought a bit of the "shining city upon a hill." The phrase comes from John Winthrop, who wrote it to describe the America he imagined. What he imagined was important because he was an early Pilgrim, an early freedom man. He journeyed here on what today we'd call a little wooden boat; and like the other Pilgrims, he was looking for a home that would be free.

http://www.reaganlibrary.com/reagan/speeches/farewell.asp