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Maryland Municipal League Fall Conference

Cambridge, Maryland

Thanks very, very much. It is a real honor to be with all of you. And I thank you for what you do for our people and our towns and in our cities and the municipalities in Maryland.

It’s great to be with you on the 75th anniversary of the Maryland Municipal League. It seems like only yesterday we were celebrating the 50th anniversary, doesn’t it?

Mike Bennett, I want to say congratulations to you. You know, Aberdeen, ladies and gentlemen, had never gone out for their own bond rating. Because of the stewardship, because of Democrats and Republicans working together, if it’s right, they do it. They went out in the bond market, even in these times, and they got a double A bond rating for important work that they had to do. (Applause.)

It’s really great to be with all of you. And I want to say to President Mike Bennett, Scott Hancock, Candace, all the members of the staff of MML, thank you for this 75-year legacy. Thank you for what you do for the people of your towns and your cities.

I’ve heard about five times now so far, just on coming in, that we heard from Dr. Smith, former mayor of Cambridge. Who will tell the story that will go down and will be repeated up until the next huge anniversary that we celebrate. He said that he was paid $600 to be mayor of Cambridge and he was worth every dollar of it. (Applause and laughter.)

It is good to be with friends. I see Mayor Sidney Katz out there from the great thriving metropolis of Gaithersburg. Mayor Victoria Jackson Stanley of Cambridge, good to be with you as always. Russ Brinsfield – soon we will be welcoming the whistling swans back to the upper marshy oak.

I know we have the biggest caucus of the Maryland Municipal League and they are the men and women of the Port Towns. (Applause.) They run as a pack. They’re the only caucus. I want to tell you, though, you’re being challenged now because I understand that the people of Berlin and also Takoma Park have gotten together at their own table out there. (Applause.)

Seems like an unlikely pair, but they seem to be getting along very well. David Carey, good to see you, my friend, and thank you for everything that you’ve done for this organization. And Carl Anderton, the biggest Ravens fan in Maryland, it is believed. Mark Frazier, you have returned to be a Mayor once again. The triumph of hope over cruel experience from the people you serve. Congratulations to you on your return.

Stewart Cumbo from Chesapeake Beach. And to all my friends – Doug Gansler, Attorney General, thank you for being here, and Ken Ullman, County Executive, who is here in his capacity as the head of MACO, thank you for being here as well.

Mike said that I came up through municipalities, and I did. And one of the nicest things that happens to me, to this day, is when I’m walking through the streets of Baltimore and citizens will come up and say, Mayor, I’m so glad you’re Governor. That happens more often than you might know. Once a mayor, always a mayor.

The other day, I found an old piece of literature from Baltimore City. I was reading a bullet on it, you know, we’re all trying to put as much as we can about how we think and what we believe in on a little card so that people can read it on its way to the trash can when you knock on the door. And one of the bullets on there was about making our city grow again. And the truth that was on that bullet from back in 1991, I guess, when I was running for City Council, was the better job that we do protecting our farmlands, woodlands and wetlands, the better that will be for growing our city and regenerating our towns and our municipalities. And that’s still true today.

So I want to thank all of you. And I know that many of you govern in towns that are in part of the beauty of our State that is rural Maryland, the Eastern Shore, Southern Maryland, Western Maryland. And I know that there’s a lot of hyperbole and fears and scare tactics out there, so I want to thank you for what you’re doing to advance the cause of Plan Maryland. I want to thank you for working with us on Plan Maryland and Fast Track. And also from that sort of septic sprawl that, unchecked, will take that investment and send it places rather than our towns and our cities.

We have some great historic towns and cities. And the challenges that we face as a State when it comes to sprawl and poorly planned roads and the pollution that ultimately affects the waters of the Chesapeake Bay – I’ll tell you what, the answers to those challenges are all found in our towns and in our cities.

These can be great years ahead if we choose to make them so. These can be years when our cities and our towns can become really dynamic and vibrant places. And so thank you for being part of this search for a better way forward and for solutions that will make a difference, not only in the here and now, but also for the people that we leave this State and our towns and our cities to.

Look, I wanted to talk with you a little bit here about the investment side of life. I know that for the last several years I’ve come here, I’ve had to talk about budget deficits and shortfalls. So I want to thank Senator Ron Young for the great work that he does in bringing a municipal perspective to the Maryland General Assembly. And I also want to thank Jim Rosapepe, who is here with us tonight for his votes in the Senate. And also, Rich Colburn is here as well. Where is Rich? Alan gave me what-for for not mentioning his name last year, so I wanted to make sure I mentioned now Rich Colburn’s name three times.

C.S. Lewis once said that leadership is about living and working “in the gap between what should be and what is.”

All of you do that important work every day in your tasks, within that gap between what should be and what is. And we have to work together in that space as a State right now. I think this is a critical time for us. A lot of other states are dropping back, a lot of other states are lowering their standards, a lot of other states are saying, well, there’s not much we can do about education, you know, a recession is on.

Well, the latest scores came out today on public education and the NAEP scores, the only ones that actually compare us state to state, and guess what state had the biggest advancement in NAEP scores of any state in the union? Maryland. Exactly right. (Applause.)

Your State and my State. And it wasn’t by accident, it wasn’t by chance. It was because of the choices that we’ve made together.

And if we’re going to succeed in creating jobs and expanding opportunities, we have to make, yes, tough choices, that do the important work in that gap between what is and what should be.

And so tonight I wanted to talk with you a little bit about jobs. In fact, almost all about jobs, about job creation and about the importance of the investments that we must make together.

MARYLAND’S BUDGET

Now, this is not to hide the fact that next year, as has every year for as long as I have had the privilege to work with you and to serve the people that we serve, that we’ve had to close big operation budget deficits. No sooner had we got done with the important work of the special session, where so many of you were so very instrumental, than we had to sail the ship of State through this greatest recession our country has seen since the Great Depression. So every year we’ve had to close the gap.

Next year is going to be also a challenging year because we have in the neighborhood of about an $800 million gap that we have to close in the operating budget.

But before we bring down the 75-year celebration, let’s keep some things in perspective. We have come through – and we’re not all the way through and there’s still too many people in our State that are hurting, who want to work and can’t work, have been looking for jobs, some of them for months and months and months, some of them for more than a year. So we have urgent work to do. But, look, let’s take a perspective check. As we look at the 75 years since 1936, let’s look at the five years that we’ve been able to work together.

As a State, we have cut $6.8 billion out of our operating budget. We’ve shrunk our state government by 5,300 persons (and each of you has had to make similar decisions in all your towns and all of your municipalities). And, yet, we’re one of only eight states that still has a Triple A bond rating. Our schools, rather than slipping back, are improving their student achievements.

We’ve done record amounts of investments in school construction in Southern Maryland, on the Eastern Shore, in Western Maryland – the highest amounts we’ve ever been able to invest in education and we’ve done it in the middle of this recession.

And all of that was only possible because of the balanced approach; an approach that was very often painful, very often difficult, never popular. But we were able to do it, not only with cuts – though we certainly have all eaten our share of those. But we’ve also done it with revenues. And we’ve also done it with strategic investments in the very things that make our economy grow: this Innovation Economy that depends on the talents, the skills, the education, the creativity of our people.

I’ve got some good news for you. Now, we do anticipate revenues to exceed what we originally had forecast for Fiscal Year ‘12 and Fiscal Year ‘13. So that is an upward trend. There have been about three or four junctures in a row when Secretary Eloise Foster has been able to tell me we’re a little bit higher, this one came in 50 million more, this one came in 100 million more. And so that’s some good news.

Second piece of good news, the foreclosure crisis. You and I know that there’s no more important place in our State than a family’s home. And over the last few years that piece of the American dream has really been rocked.

But I am happy to report that because we have not given up, because we have been relentless, because we actually make our government work, because we invested in the outreach and that HOPE Network that many of you steer people to as they were trying to save their family’s home. We have now, together, and with support from the Obama Administration, have been able to drive home foreclosures down to the lowest levels that they have been in our State.

So, get this, June of 2007, they’re at the lowest rate they had ever been – June of 2007.

Final factoid of note. Over the last 12 months, our nation, every month for the last 12 months, has created more jobs that we’ve lost. Every month for 12 months in a row. The last time, as a country, that we were able to put together a string of 12 consecutive positive months of job growth was guess when? 2005. 2005.
Have we regained everything that we’ve lost? Heck, no. There’s still a lot of people hurting. And we’ve got a lot of work to do, which brings me to my next point.

For every three jobs that the private sector has created since June of 2009, the official end to the recession, for every three jobs the private sector has created, the public sector has eliminated one. So if it feels like we’re taking three steps up and one step back, that’s because we’re taking three steps up and one step back. And that public sector is still contracting. Because as the home housing values have declined and all of those sorts of things happened, then they settle in your property base, then they settle in your budget, then you have to have a sit-down and some teary conversations with all the people who look to you to provide the leadership and ultimately make the tough decisions.

So the truth remains. You know, we’re having to talk as Democrats and Republicans here and one of my friends said, “Yeah, but these folks next to me are Republicans, I’m trying to convert them.” I said, “Well, they’re actually – they sound to me like they’re Lincoln Republicans. I don’t think they need converted. Our country needs the Party of Lincoln.”

We all need to be fiscally responsible and acknowledge something that really isn’t a Democratic opinion or a Republican opinion, it’s an economic and American fact. It’s an historic truth that in order for a modern economy to create jobs, we have to make modern investments in our own times. We have to believe enough in our country’s future, we have to believe as much as our parents did, as our grandparents did.

You know, multiple choice quiz here. What is the motto of our nation? Is it (A) Eat Cake and Lose Weight; (B) Pay Less and Live Better; or (C) In God We Trust? Answer, (C) In God We Trust that one person can make a difference, each of us must try, and that there is no more important freedom that we exercise than the freedom to be responsible in our own time, to make this country and our State and our children’s future better than it other would have been, were it not for our work and our sweat, our belief in our own investments.

RE-CAPITALIZING MARYLAND’S FUTURE

We have been, in my opinion anyway, under-capitalizing the great idea of America. And Maryland has not been immune from that sort of national diversion from a history that really understood that this is a tremendous job-generating engine, the United States of America, if we keep pace with the investments we must make, especially in basic things that only we will invest in.

China is not going to come over here and help us build the Dover bridge. India is not going to build the overpass for 301-304. Only we can do this. And we have the ability to do it. The question is, do we have the will to do it?

Together with tough choices, even as we’ve cut spending, we’ve made some real progress in a number of areas. I mentioned education. We’re the only state also to go four years in a row without an increase in college tuition. In a recession we’ve actually been able, nonetheless, to increase our investments in Program Open Space and protect 240% more open space than we otherwise would.

With the Obama Administration’s help, we’re going to complete rural broadband with $115 million investment.

As leaders of our cities and towns, you understand better than any other elected officials how important these investments in infrastructure are. You also understand that because you can see that if we don’t make these investments now, we end up paying in so many other ways. We pay in lost productivity. We pay by sitting in traffic on some sections of 495 which look more like a parking lot than they do like a highway. We pay in the damage to our environment, we pay in an immobilized workforce. We pay in the damage done to our environment, we pay in climate change. We pay in so many other ways.

And you know better than most that bridges are not like trees, they don’t grow stronger with age. No, they crumble. And that’s why they need to be repaired before moms and dads die on their way to work when they collapse into rivers. This happened in Minneapolis.

I’d like to tell you that if we just had people in government that thought more creatively and engaged in more public/private partnerships, that we will be able to build a $90 million bridge for $10 million, but it doesn’t work that way. There’s no way to do it. And I sense – and I hope you’re starting to sense, too – that people are kind of wising up to the fact that we’re all in this together. And you know what, no generation gets a free pass.

The fact of the matter is, it now costs more, get this, to paint the Bay Bridge than it did to build that first span. It costs more to paint it than it did to build that first span. It now costs twice as much to paint and clean the Hatem Bridge as it originally cost to construct it.

And so I wanted to share with you five truths that we have to recognize if we’re going to generate the public consensus from all the people we serve, because at the end of the day we run their government in trust. We all work for the people and we reflect how far the people allow us to go.

So the five hard truths as I see then are these, especially when it comes to making investments we need to make in transportation funding.

Number one: even assuming we are able to solve that operating gap, which is a big assumption; but assuming we were able to do that and assuming we’re able to do the restorations to the diversions we made to the Transportation Trust Fund in recent years, including HUR, which I’m going to come back to in a second. Even assuming all of that, the level of investment and the pace of investment that we’re making is not sufficient for what Maryland needs in order to keep people safe, in order to keep our competitive edge, let alone create jobs. Especially when they’re so critically needed now.

The Blue Ribbon Commission recommends that we need to make an additional investment of more than $800 million a year in order to do what needs to be done, to strengthen our economy and to keep Maryland strong and safe. So that’s truth number one.

Truth number two: a traditional flat tax on gasoline, by itself, can actually become a declining source of revenue over time, especially as we try to transition away from fossil fuels and as we’re pushing people and passing tax credits for electric cars and vehicles that frankly, run not so much on gasoline. So what worked well for us for 40, 50, 60, 70 years ago won’t work as well in an era when we’re pushing people to drive cars that get much better gas mileage.

Truth number three: for decades, both the Greater Baltimore and the Greater Washington regions have been under-served, as far as their public transit needs and potential goes. There are whole areas of Baltimore City that would fill up with people if we had better transportation there. And the same is true inside the beltway in the Washington suburbs. That’s why we’re advancing the Purple Line and the Red Line. Neither of these projects is free.

Number four: the fourth truth is that our State Transportation Authority was actually under-leveraged, meaning they could have done a lot more. That’s no longer true. Because for the first time in our State’s history it was decided five years ago that we would undertake, out of the Transportation Authority, two major projects at the same time; one was the ICC and the other one is that big widening north of Baltimore, up through White Marsh and the like.

And that has put a tremendous strain, and frankly, over-leveraged the Transportation Authority, with the result being the tolls – I think you’ve seen that your constituents are talking to many of you about – in order to pay the debt service and the bond service on that over-leveraging.

And the fifth truth is this: our transportation plan goes over a six-year period of time. The recession knocked $2 billion out of that $10 billion plan. The Obama Administration, because of the Recovery and Reinvestment Act, restored $600 million of it. So you do the math. That’s still $1.4 billion that left us because of the recession.

So, look, I am going to be doing my very, very best, but I’m one person in this operation. I do have the honor to serve all of the people of our State, but I need your help.

We have to have a conversation that returns us to the better traditions, not only of our country, but the better traditions of our State. Whether we pay for our infrastructure or whether we pay in all those other ways is really up to us. It’s a product of the choices that we make together.

And these are the realities that we face. And we have to make cuts in order to close our budget deficit, but we also have to invest in order to create jobs, in order to make our State stronger, in order to be able to look our kids and our neighbors in the eye and say, you know what, we’re all in this together and we are keeping faith with you.

And let me talk a little bit on Highway User Revenues. Last year, because of your good work, we were able to restore about $10 million. I cannot imagine a scenario under which we’re able to get a significant increase in Transportation Trust Fund revenues from some combination – whether it’s what the Blue Ribbon Commission suggests on the gas or other combinations, under which we will not be able to restore a great deal of those Highway User Revenues. I hated to cut those. They were the last can of peas in Mother Hubbard’s cupboard. I hated to go to those.

CONCLUSION

So I need your help. And I do believe that people are wising up to the fact that you get what you pay for. There are no free rides. And I have been to so many line of duty funerals over the last five years in small little towns and municipalities throughout our State, where a lot of families are giving up a hell of a lot more than another $1.50 on the Bay Bridge, you know. What kind of country did they die for? What kind of country do we want our kids to have? What kind of State do we want our kids to have?

I’ll leave you with this final story. I have a dear friend, his name is Bill Shore. And he told me this story of his little boy, Nate, who is kind of one of these wise old souls contained in a six-year-old little boy’s body. And he was down at the beach and he went up to some kids that were making this very elaborate sand castle, right in that sweet spot on the beach, you know, just up from right around where the peak of high tide is, where the tide comes in. They were using the squirt guns and they had the forms and they had the drizzle pine trees and everything else.

And the little boy went up to the other kids there, with his hands on his hips, he said, “Hmm, you know, I’ve seen lots of people build these things and they’re never here in the morning.”

You and I aren’t building sand castles. We are serving people in historic towns and historic cities and in a great State, that center State, that middle State, that State around which other states rally, especially in times of adversity.

The most important leadership is leadership by example and that’s the leadership our country needs to see from all of us. That’s the leadership that our country needs to see from Maryland. More importantly, it’s the leadership that our children need to see from us, especially right now.

Thank you all so much for what you do. Thanks a lot. (Applause.)