Thank you all for your kindness and thank you for welcoming me here to be with you.
And thank you also for the work that you do in partnership with David Edgerley.
David is here with us today as our secretary of the event. He has served as Secretary in Allegheny County of their economic development, and then for many years, as the economic development person for Montgomery County.
So David does have an understanding, I think, of the breadth of our State and he also has a pretty keen understanding of the tremendous strength that we have in what I like to call our creative economy — technology and all its related components; whether it’s life sciences, whether it’s bio-tech, and everything in between.
So thank you for the work that you’ve been doing with David as well.
Robert, thank you for your introduction and for the strong commitment you’ve made to the development of our State.
I also want to thank Ed Rudner, Julie Coons, and many others for pulling this together and advancing the important conversations that we need to have about our shared challenges and our shared opportunities.
I was talking to Secretary Edgerley a little earlier today and I said “we are blessed with an abundance of assets, but what we haven’t done very well yet is to articulate the strategy.”
There are other States who are great at putting out the glossy brochure and zeroing in on their strategy and even aligning what aspects of their State Government they can to try and build up their technology sector and their life science sector.
We almost have the inverse problem. We have a lot of great assets and what we haven’t done, I don’t think, as well as we could and as well as we should, is really align so many of the things that we do at State Government — yes, and also in County Governments, they can coordinate and cooperate. They’re not unnatural acts between non-consenting adults. Especially when it’s about protecting the tremendous assets we have here to grow, by leaps and bounds.
In a relatively short time, Maryland has fast become one of our nation’s leaders in technology and life sciences — even taking those strengths overseas in some instances and partnering with other universities and Governments and businesses.
It would not have been possible without the leadership from the Tech Council. You have spent years investing your time and your talents in giving Maryland that reputation because of your good work. And we need to continue to search for answers and forge better partnerships.
I really hope that in the time that I have to serve you that we can make the State of Maryland a much stronger partner, and also a much more articulate and global partner in talking about what’s going on here in our State. Why? So we can win an award or maybe be on the right panel at the National Governor’s Association?
No. It’s because we want to be able to create and attract that most important asset of all, which is those highly skilled workers who, because they’re so motivated, so creative, so innovative and so highly skilled, can go and live any place they like because they’re very much sought after.
And in order to attract them here I find that a lot of times their spouses are equally as creative and talented and innovative. And they want to live in a place where they know that there will be more opportunities. That when they’re done doing one particular phase of their life or start at one company, that there’s opportunities to go to another one. I mean, that’s the way our world works.
In my brief time before you tonight I want to talk about Maryland’s future and our ability to grow. And our ability, quite frankly, I think to come out of this national downturn much more quickly than other States because of you. Because of all of you. And because of the work that you do in technology and technology-related fields like science’s emerging homeland security, not to mention space and aero-space and everything else that goes into making us so proud to proclaim that we are a strong State.
40 days ago we were facing the prospect of not only the national economy getting a lot of shaking, but also a huge crushing structural deficit coming to roost at the same time. That was nothing that anyone in State Government had planned, that was the hand that we were dealt.
And I thought I would have to stand in front of you and many other places in our State and say things like, I’m sorry, we cannot do the Bio-Tech Investment Tax Credit; we cannot do the Nano-Bio — I know it’s only $2.4 million, but we can’t do it; and we can’t do the Research and Development Tax Credits; we can’t do the stem cell funding anymore.
Nor can we build the ICC as quickly as we’d like to, to get your workers to and from their business, nor can we advance the red line, the green line in Baltimore, nor can we invest in either the West side or the East Baltimore Development Bio-Tech parks, nor can we invest in a purple line, nor can we stabilize health care costs, which are still killing us, because of the huge number of uninsured we have in our State.
And the reason we would not have been able to do any of those things was because we could not muster the very, very difficult and fragile and important consensus that we needed to put together in order to protect our priorities, to protect the things that make us an attractive State.
The good news and bad news is I don’t have to give that speech, but I do have to acknowledge that I know you’re not happy about the service tax on computer services in our State. I know that as you look at that you think to yourself, why do we want to tax something that’s growing?
And I know that you also are aware of the fact that it’s been hard to implement in some States. No doubt some are concerned that maybe if you’re doing business with the Federal Government that the Federal Government won’t want to choose you because you have to charge them a Maryland tax.
Well, we need to get through some of those myths and I want to work together with you. I do not blame you at all for wanting to push for its repeal. You are certainly full stakeholders in this great corporation known as the State of Maryland. And you have every right to comment and make those arguments here in this regular session.
But I also pledge to you that I want to work with you to work out the administration of this and mitigate whatever possible downsides there might be and include the administration and the collection of this particular piece, as it’s projected to generate approximately $200 million. Some would say that that will not do that much.
But nonetheless, that was part of a really tough consensus package. And I’ve got to tell you, there wasn’t one piece of it that was very popular. There was not one piece that was popular.
And totally glossed over in all of this exercise was approximately $1.2 billion that we cut, even while trying to protect our priorities of public education, higher education, public safety and our quality of life. 80 percent of your State tax dollar goes to three things; public education, in one way, shape or form, including our colleges and our community colleges, public safety, and health care. I mean, that’s 80 percent of what our State does.
So I want to work with you in the future. I know you’re not happy about it, I don’t blame you for not being happy about it. And in the triumph of hope over cruel experience I even more deeply appreciate you not rescinding your invitation for me to be with you tonight. (Laughter)
Let’s talk a little bit about the future, shall we? We have a tremendous State and it is one of those States that people like Richard Florida looks at — the gentleman who wrote, The Rise of the Creative Class and, also, The Flight of the Creative Class — because of our diversity, because of our collection of tremendous institutions, public and private, of discovery of technology, of scientific innovation. We are a very, very creative State.
And in this new sort of asymmetrical warfare that our country is going to be dealing with for the next 100 years and the confluence of Federal assets across the board of that defense, from Fort Dietrich to Aberdeen, NIH and others, we are well poised as America squares her shoulders to the challenge ahead of us. Not to mention the other natural challenges of the threat of pandemic flu and the like.
We are very, very well positioned and we are very well poised to really roar ahead. It’s sad to say and I don’t know the reason, but historically Maryland has always experienced her greatest periods of growth and economic progress during wartime. And this is a 100 year war of a different type that’s going to require investments in technology and innovation and life sciences.
This promises to be an unprecedented time, when we might not only advance our country’s defense here at home, but we might also discover the weapons of mass salvation — in the words of Dr. Jeffrey Sachs — to cure epidemics, pandemics, diseases far away from here that really do secure our role as a moral leader of this world.
Maryland ranks fourth in the nation for investments in science and technology. If we look at science related employment levels, which incorporates our world class Federal facilities, there is no place like Maryland on earth.
In trying to do a better job of attracting inward investment here, I’ve met with some of the ambassadors from China.
Also the Irish sent their delegation here — they were very, very focused in a very concerted way on technology and are now the largest exporter of software in the world. Well, they’ve determined the next big thing is life sciences and bio-tech and health sciences and the technology associated with that.
And I know we have a diverse crew here, I’m going to try to keep it broad-based. But the point being, that Maryland is the gateway to all of that, because they don’t see another State with that concentration of skills and talents and great institutions.
We are the country’s second largest recipient of Federal research and development grants — $12 billion a year. We are home to one of the largest clusters of bio-tech companies in the country. We have leading institutions of higher learning, accounting for one of the most highly skilled workforces in the nation, but it’s not as skilled as it needs to be.
And we have enormous strength today, but only because of the foresight that leaders like you have had to develop a potential here. And I thank you for doing that in Maryland.
Our challenge now — and the responsibility we share and also the opportunity we share — is to put forward an agenda that’s broad, inclusive and that also aligns our efforts and which protects our priorities, which builds on our strengths and puts forward that technology agenda so that we can hold our heads high, advertise to the world that this is an epicenter in the United States of America.
This is an economy that can compete with other world economies, especially as increasingly we look at the assets we have not only in Maryland, but in this whole creative crescent that is this Chesapeake Region; the District of Columbia, and Virginia as well.
And I look forward to working with you as we do some of the spade-work and ground-work to create that larger economy, which we’re unconsciously a part of. Talented people don’t stop at the Potomac River or the District of Columbia, notwithstanding the transportation constrictions that we all suffer from.
But tonight I want to share with you some tangible steps that we are taking to strengthen our technology community and the agenda that we’re moving forward in these challenging times.
You might imagine how difficult it would be in your own business, as it has been for people like Secretary Edgerley, to look at their budgets and know that if we were not able to pull off the difficult things that so far we have been able to pull off to restore fiscal responsibility, that he would have to do his mission with about 40 to 50 percent less of a budget.
Why is that? Because he’s outside of the public safety, the health care, and the education formula of things. He’s in that other 18 percent, which always gets whacked with the biggest cuts at the end to absorb a $2 billion cut on a $14 billion base.
So we want to take advantage of the growing influx of science and technology programs, the workforce that will enhance Maryland’s position as one of the most research and development intensive locations in the U.S.
We’ve seen some evidence of that already. Morgan Stanley, located 900 new jobs here – very technology dependent. T. Rowe Price, with the 1,400 additional new jobs that they announced. Legg Mason, their expansion and relocation.
I know we think of them as a financial services industry, but there are many, many people in New York that are increasingly wanting to put their technology and their back-up centers here in Maryland. Off on a different power grid and some place on I-95 or the Amtrak lines, so that people can get in for meetings when they need to.
We’re making key investments in education now to grow Maryland’s workforce 20 years from today. We want to reinvigorate and recreate a Pre-kindergarten to 20 Council in our State. We have tremendous strengths, but it’s a shame that we have silos; “I’m a K to 12 person, I only do K to 12,” “I’m a community college person, I do community college.”
We have made investments in K to 12 education and school construction and renovation. It’s a huge priority, because the people who we attract to our workforce really want to live here. High on their list is whether we can continue to maintain the high quality of public schools that we have in our State, recently ranked the third best in the nation.
We’ve held the line for the third year in a row on college tuition – we saw it go up in our State by 40 percent – so we’ve held the line on college tuition.
I’ve mentioned the P-20 Council. That council will be charged with the higher education system to produce the science, technology, engineering and math skills demanded by the global economy.
Brit Kirwan has identified a program at the University of Texas in Austin that is very successful in attracting teachers into our system. They can help us produce the talents that all of you need.
Together, we’re also going to be doing a much better job of harnessing the potential of our adults. There are many people, returning veterans and others, that come back to Maryland and are a tremendous strength.
We also want to create a more coherent vision for Maryland’s life sciences community. As you know, we appointed the first life sciences advisory board in September whose mission is to create a comprehensive strategic plan to grow Maryland’s bio-science industry, creating workforce and field research in our academic centers.
I asked Tom Watkins of Human Genome Sciences to lead the board and craft that whole vision. And, Tom, thank you for your service. It is my great hope that come this summer – maybe even at the front end of the summer, rather than the back end of the summer – that instead of meeting and talking about what we need to do, we’ll actually have a strategic plan, and can start aligning these efforts and creating that more coherent vision.
Number five, Maryland has a very strong position in the aerospace and defense industry to meet our nation’s needs. Last year ATK, a leader in satellites, rocket propulsion and space robotics, moved its mission systems group headquarters to Baltimore.
This year ATK purchased Canada’s McDonnell Detweiler and is establishing their new combined systems headquarters in Baltimore as well. Today our university system is partnered with companies like ATK, who invest in Maryland students to create a new, stronger workforce.
Number six, we are significantly increasing Maryland’s financial investment programs for businesses in order to make investments that actually bring us returns in high growth areas like technology. We are growing Maryland’s largest business loan and grant financing program by $40 million this year alone. That is not part of the bread and butter, David Edgerley’s shop of that critical investment fund.
We are completing the Rural Broadband Initiative, we’re helping Maryland’s small and minority businesses take advantage of BRAC opportunities, where Anthony Brown has been doing a tremendous job. We asked the Lieutenant Governor, he probably told you last year, to head the BRAC Task Force. And not only do we now have a plan, we’re actually making some substantial progress towards making that plan real with investments in transportation and other initiatives, like workforce and higher education related to BRAC. Huge opportunities.
Sometimes when I have occasion to sit down with Governors from other States, I won’t mention any names, but there are States where the Governors wake up every single day and look at the newspaper, and they see the tens of thousands of jobs that their State is shedding and losing – whether they’re going offshore or whether they’re going to other States. And that’s their problem, every day they’re scratching and clawing.
And think about our psychology as Marylanders, we wake up in the morning and we see thousands of jobs coming from BRAC. And large portions of our public said, “oh my goodness, we’ll never handle it, the roads will be crowded on the weekends, what a horrible thing.”
I served the people of Baltimore, a city that is suffering through the greatest job loss and greatest population loss of any of America’s cities in the 30 years prior to 1999. And in the course of the last year I’ve had occasion to serve a State where people want to live and where the Federal Government is making investments and locating jobs that will not go oversees to Asia or India.
Either way you tack your sail I suppose there’s problems, but I’d much rather have the problems of growth and expanding opportunities than contracting opportunity and population loss.
We are going to be able to continue to fund Maryland’s innovative tax credits and financial incentive programs, such as they are, for life sciences and technology. The Bio-Tech Investment Tax Credit, $6 million which leverages $12 million for Maryland companies; the Nano-BioTech Fund, which we dedicated another $2.4 million to and that’s set the other day through University of Maryland College Park; The research and development tax credits, which I believe are $6 million as well; TEDCO stem cell funding of $23 million. Is there anybody here that’s on the TEDCO board, working with TEDCO? Good. Get that money out, will you.
UNIDENTIFIED SPEAKER: We are.
GOVERNOR O’MALLEY: Okay. Is it going to good things?
UNIDENTIFIED SPEAKER: You bet.
GOVERNOR O’MALLEY: All right. I want a full report in the hallway after.
Number eight, we’re also going to work State-wide to fund investment and intervention in transportation and transit oriented development, in line with smart growth initiatives. Well, why is that important? Is that tech related? Yes, it’s tech related. Is that related to bio-technology and the whole gamut? I believe it is. Because if you look at the quality of life that we have in Maryland, transportation is really the thing that is the foundation that allows talented people to thrive and get to and from work without having to sit in four hours of traffic. It’s a very, very important part of the quality of life that people factor into their decisions as to where to locate or relocate or even to go for a job interview.
People have to see us making progress. And we have the ability to – hugging the I-95 corridor and Amtrak – we do have some infrastructure here that we need to expand upon. We’re going to be investing in greater MARC service. We are also going to be able to take the next steps on the purple line, as well as to continue the ICC. And also, we’re going to be asking the legislation to create BRAC Smart Growth Zones to attract and retain businesses and families within the BRAC footprint.
And, we’re going to be supporting and pushing rebuilding technology, new construction technologies, and a lot of other things having to do with energy and energy efficiency, which I believe can be another part of the diverse technology-related economy that we have here, that we as Marylanders are much more accustomed to leading rather than following when our country needs us. And certainly there’s no State that needs to do it more urgently than ours when you look at energy costs and congestion in the transmission lines.
So in talking to our own businesses, you quickly figure out that businesses come and grow in Maryland for five primary reasons, I think. Its workforce, its location, it’s the transportation network, it’s our quality of life, and it’s the cost of doing business.
Maryland has tremendous strengths in all of those categories, our disagreement on the computer services tax notwithstanding. As we put together the budget that we delivered to the general assembly, in order to protect all of those priorities, one of the key things that we looked at from the Administration’s standpoint was what will this do to our competitive status with the other States around us?
Now, I can’t say that when we adjusted the corporate income tax that Virginia’s still isn’t lower. Virginia’s is lower. It was lower when we started.
But we did try to look at where Pennsylvania was, where Delaware was, where the District of Columbia was as we defend our quality of life. And that’s the greatest strengths we have and those are our competitive strengths for the future.
I really wish that I didn’t have that to confront such a colossal shortfall and deficit when I came to office. Man, I would have loved to have had three years under my belt or four years and then not talk about it. (Laughter)
And then get re-elected and say, “Oh, golly day, you know what, we’ve been spending a lot faster than the revenues have been rising and all of a sudden now this has come to roost.” I didn’t have that luxury. Unfortunately, in the work that we’re going to do today, we didn’t have that luxury. And the people of our State didn’t have the luxury.
My friend Ed Rendell in Pennsylvania gave me some great advice when I was first elected mayor. He had been Mayor of Philadelphia and he was pretty good at it, and now he’s Governor of Pennsylvania and leading the State.
He said, “I’m going to give you some advice. I’m not going to give you any other advice unless you ask for it, but this is my advice.” He said, “Make every decision as if you’re not running for re-election. And what you will find over the course of time, even when people sometimes very vehemently disagree with you on some of the decisions you make – and they will disagree and that’s their right – over time, not only will people recognize that you’re trying to make decisions regardless of your temporary political popularity, but you’ll also find that you’re batting average goes up. And at the end of the day, the only reward that any of us who choose to go into public service have is that we did our very best for the people that we serve while we were in here”
And that’s what I’ve tried to do and that’s what I’m going to continue to do. And I consider myself very blessed and very lucky that I’m able to serve with such creative, talented and courageous people in our State.
Thank you for what you do to make us great. We’re going to be even greater in the future. Thanks. (Applause).