Washington Board of Trade
Let me thank all of you. You have really led the way in so many very, very positive ways. It is hard to protect our quality of life unless you do so in a truly metropolitan way.
You know, as you fly over the country on a night flight and you look down, you see the lights emanating from our cities. You don’t see the state borders or colors of the landscape change from one state to another, but you do see the metropolitans. And the particular challenge that we’ve always had – those of us who are familiar with the Washington area – is seeing beyond those borders, making sure we’re working together.
In 2 different states we have 3 different jurisdictions. We have a city that’s almost as much a state as it is a city, and it’s often very, very hard to have that common vision to create that alignment so that we can move forward together and make progress. That’s what your organization has always tried to do, I think anyway. Whether it’s the importance of our intellectual infrastructure – that is strengthening higher education throughout the whole region, building a stronger workforce… to meet the demand of a very diverse economy, or improving physical infrastructure, like transportation.
From your very beginnings in “City Beautiful,” you’ve understood the importance to preserve physical infrastructure – the beauty – of this region and I want to thank you for continuing that legacy.
And I understand that with your conference coming up October 30, we’re going to be focusing in on sustainability, which is something that our administration is doing well. That notion that crosses a multitude of departments – that we need to measure the costs of what we do over the lifetime of those investments, rather than just the upfront bricks and mortar. By reducing energy consumption in this very scary de-regulated world, we can start empowering our people to take control of their own future and their own destiny.
I think we really have a tremendous opportunity. We have the former Mayor and now Governor Kaine, former Mayor now Governor yours truly, and also have the Mayor Adrian Fenty of the District of Columbia. Right now, I think that we have the executive alignment, if you will, to really drive this Chesapeake Crescent World Economy. Not only with sustainability but also on transportation… not only to invest in the skills of our people but to promote our preeminence as we compete on a world stage in this new faster moving global economy. And I’m looking forward to working with you.
So I wanted to touch on a couple of things that I know are near and dear to you in the time I have left. And then we’ll open it up to questions…
I’ve touched a little bit about the importance of intellectual infrastructure. With us today is a new member of the Board of Regents Jim Shea, who’s one of the best friends I have – a great leader in the City of Baltimore – and now is going to lead on the Board of Regents…
And I wanted to focus today on that physical infrastructure – transportation investment, highways, roads, bridges, mass transit, subway system, hopefully greater investments in the future in rail. All of those things that connect the tremendous intellectual power and creative energy of our state and of our region.
We face tremendous challenges and these challenges have not been made any easier by the fact that – if you read the Post today, one of my favorite periodicals – we have a $1.5 billion structural deficit in our state budget whose operating budget is approximately $15 billion…
How did we get there? In the broad sense, the short story is that we invested in an additional $1.3 billion in public education. Now, we can see these results coming back with test scores rising. The gaps between our poorest kids and our wealthiest kids are closing. And everybody’s return on that investment is really their improvement. Unfortunately, at the same time that we locked in that formula, which meant in our budget this year that we invested an additional $580 million in all of the area school boards so that they could retain quality teachers, retain quality leadership.
At the same time that we locked that formula in four years ago, we also enacted – on the eve of an election – an income tax cut of a billion dollars that nobody was particularly clamoring for. The difference between a $1.3 billion investment and a $1 billion tax cut leaves you with $2.3. The combination of economic growth and also taxation by fees, which is a policy product of the last four years, narrowed it to the $1.5 hole we currently have.
We had a good session this year, and while we have not yet come to terms, we have reestablished that tone of civility, mutual respect and honesty… And hopefully, in the course of the months and weeks ahead, we’ll be able to create a much more high-minded dialogue about the choices that we face as a people. We are trying to break up that gridlock that had taken over in Annapolis and we’re trying to square our shoulders to the challenges ahead. Together we are advancing a statewide vision and we intend to continue to advance a statewide vision for transportation that is based on balance.
It is not solely focused on roads. It is not solely focused on rail. It is not solely focused on transit. It is not solely focused on growth and sustainability. But the balance that incorporates all of those things with an economic development strategy as well.
To help us, we have been able to recruit some really top notch people in this administration. A couple of them are here today. John Porcari, our Secretary of Transportation, who wore his purple tie for the Purple Line today. John, thank you for coming back here and serving…
Also, David Edgerly is here, our Secretary of Economic Development. David who served as the Secretary of Economic Development for Allegany County and also Montgomery County and, in terms of the economic spectrum, that covers about everything in our state… We’re delighted that both of these gentlemen would come back to state government. When I get frustrated that we aren’t able to find that common ground, among all the various representatives of the state, I do take some solace in the fact that we have a really good cabinet…
We have committed, as you know, and we are going to pursue with all deliberate speed the Intercounty Connector. We all know what’s at stake. We have been studying it for 50 years, and right now we have an over burdened local road system that simply cannot absorb the rate of growth. We are not going to roll back that rate of growth and every year of delay is costing us another $100 million in missed opportunities and in efficiencies.
The ICC is going to be a very important part of the balance of transportation in this region. We are going to be managing demand – what does that mean? It means we’re going to be reducing the tolls during those off peak hours. We will be improving bus services. We’re going to be doing everything we can to recruit and retain businesses in this region. And we are going to unlock some of that gridlock that has become such a huge impediment. I’m sure you experience it when trying to recruit employees to the regions. It’s become one of the biggest detractors that we have. It could mean over $7 billion worth of savings over the next 20 years and over 14,000 new jobs with tremendous potential in Montgomery and Prince George’s Counties…
I know there are those who want to delay the ICC – some preferably for another 50 years of study. There are others who want to stop it all together. But fifty years is long enough, and it has to give way to action. If we’re going to be ready for tomorrow, the ICC has to be part of the solution. That’s why we started, this year, with the first $480 million contract to begin construction. We’re investing $370 million to minimize any environmental impact. And last month, Secretary Porcari and his team went to New York City to brief the rating agencies on the project, earning a Triple-A rating from Standard and Poor’s.
On the legal front, our federal partners are facing a couple of lawsuits filed against them over how the ICC study was conducted. And we have asked Attorney General Gansler to file a motion to intervene so that we can hopefully push forward to a resolution that allows the ICC to continue. I also wanted to mention that a key member of our legal team is someone many of you are very familiar with: Gus Baumann of Beveridge & Diamond, who is a former Chairman of the Maryland-National Capital Park and Planning Commission. Gus has been invaluable on both the legal and environmental fronts – and I know that together, Maryland can keep moving the ICC forward.
Let me talk a little bit about the Metro. As we advance a balanced vision for transportation, we also have the support our fundamentally important Metro system. While other jurisdictions have had to figure out how they would deal with the dedicated funding issue, Maryland already has the mechanism in place – in the Transportation Trust Fund – and the commitment to make it happen, without reinventing the wheel. That is a responsibility that we have always met, and we will continue to meet.
In the budget we submitted this year, the rate of growth – even with those investments in public education – was 2.1%, compared with 12 % in the last fiscal year. As part of that budget, we did not divert money from Open Space nor did we take Transportation Trust Fund dollars and put them in the general fund. As one state though we can only do so much. Hopefully one day soon… maybe with a shift in Washington, we will get our national government to return to the much more traditional role it has played in making investments in our security, in our infrastructure, in our transportation system. We do not want to be the first generation of Americans that leaves our country to our children in a weaker condition than we inherited it from our parents.
I’m a very strong supporter of the Davis Bill, which would in part expand the Metro board to include federal representation. If we work together, the $1.5 billion in federal funds each year, along with the local match, would pay for: 275 new buses, tunnel repairs, station improvements; and 340 new rail cars – making full use of system capacity. When it was built in… the 70’s and 80’s, our Metro system was one of the best in the world, and we have a responsibility to make sure we continue to make it one of the best in the world. That won’t happen by itself. We have to make the investments necessary to make it so and to ensure the Metro remains the transit workforce of the Washington region.
We have a whole lot of work ahead of us, in promoting a statewide vision for transportation. If it is to truly be statewide, then it’s going to have to include not just one or two projects – it’s going to have to include hundreds of projects, large and small. The growth that’s coming to Maryland because of our tremendous institutions – like NIH, Aberdeen Proving Ground, and many, many others – require that we make timely investments. It’s going to be difficult. We cannot pit ourselves one against another. We cannot fall into that tempting scarcity mindset that, “this far we’re going and no farther.” We have to dream of a new tomorrow and more importantly, we have to challenge one another to invest in that new tomorrow.
We need Transit Orient, we need demand management. We need the Purple Line…We have a $40 billion – that’s with a “b” – in unmet transportation needs. We need to advance a balanced, statewide vision that connects our local economies together. It’s not going to be easy – nothing worth doing ever is.
In order to make steady progress, we need to realize between $400 to $600 million per year on top of what we’re already investing. That’s a big price tag. It’s especially difficult in the current climate and with the other challenges we have, but that’s the task we volunteered for. And that’s why we have to close the deficit in a way that’s fiscally responsible; that provides a long-term solution to our problem; and unlike some of the policies from the recent past, is fair to middle class and working families.
We can trim excess here and there. Yes we always have to look for room to cut, and we already have. On July 11, we are going to submit $200 million in cuts from various state agencies and departments. But if we go around solving this deficit only with cuts, I think we miss a huge opportunity. More importantly, I think that if we solve this with a cuts-only solution, we are going to erode our very quality of life that all of you care so very much about. That is the reason why we are the powerhouse metro economy, and state and regional economy. Quite frankly, I did not put myself and my family through the meat grinder of public service in order to reside over decline…
I know that when people of Maryland are given the opportunity to choose progress or decline, we always choose progress provided that the sacrifices are shared, that we are fair about it and that we are one Maryland as we move forward.
So I need your help in this. I really, really do. There has been a wild swing of the pendulum that would make our government as weak as possible, as quickly as possible, as if somehow that would move us all forward and advance the common good. I think we’re coming through those times… but I need your help. As people who have to meet your bottom line everyday – who understand that you will not long have a successful business if you’re not retaining quality people, if you’re not investing in your own infrastructure and innovation – you know we need to make business successful along with our quality of life.
And I need your help in backing up your delegates and senators because they’re going to be under a heck of a lot of pressure. The simple communication of sticking with cuts only is very effective and very wrong. Like most simple answers, it is also wrong and will not keep faith in what people have done for us in the past. More importantly, it will not keep faith with the children of Maryland who are going inherit this place from us.
Thank you all for your time.