As Prepared for Delivery
Thank you Alan (Wilson) – and thanks to all of you for opening your hearts, and your checkbooks to United Way. To Mark Furst and everyone with United Way, I have two big things to thank you for. First, for loaning your former national Senior Vice President, Alex Sanchez, to the O’Malley-Brown Administration. Alex is doing a great job at the helm of the Department of Labor Licensing & Regulation. Just to give you one example, last year our One Stop Employment Centers, which are overseen by DLLR, assisted 205,000 Marylanders.
The second thing I want to thank you for is all the good work that United Way does on behalf of our most vulnerable neighbors. Thanks especially for your work on the 2-1-1 bill that I signed in 2010, making 2-1-1 a permanent system. For those of you who might not be familiar with 2-1-1, it provides a link to community health and human service resources statewide, 24 hours a day, 7 days a week, in over 150 languages. It’s a critical link between our most vulnerable Marylanders and services both the United Way and the State of Maryland provide.
I’ve been asked to share a few thoughts about economic competitiveness; how we as Marylanders and as Americans, can compete to create jobs and expand opportunity in a changing global economy. We’d surely all agree that we are going through a period of profound economic change. The good news for those of us in Maryland, is that we have the assets to compete and win. In terms of job creation, economic strength, and by any objective measure, quality of life, we are in stronger position than other states. But to move forward we have to choose,… and many of these choices are not easy. In fact, most are very difficult.
To create jobs, a modern economy requires modern investments: investments by all of us, for all of us. That’s not a Democratic or a Republican idea; it’s an economic and historic truth. It was true for our parents, it was true for our grandparents, and it is a truth that has built our State and has built our country. These modern investments are not free. And nobody else is going to do this for us, except for us.
As we assess our State’s and country’s economic competitiveness, I want to talk with you today about the necessity of a balanced approach of cuts, investment, regulatory reform, and – yes – balanced revenues if we are to succeed in creating jobs and expanding opportunity.
WHERE WE STAND: MARYLAND’S ECONOMY
By any objective measure, we in Maryland are in a stronger competitive position than most states. While the nation as a whole has recovered 30% of the jobs lost during the recession, here in Maryland with your hard work we’ve recovered 45%. Together we’ve driven unemployment down to a three year low. Together we’ve driven home foreclosures down to a rate than 69% lower than the national rate. And together with law enforcement we’ve driven violent crime down to a 30 year low.
Last year the people of our State created jobs twice as fast as our neighbors in Virginia. The 30,300 jobs we created were the most since the onset of the recession. Meanwhile, Moody’s, Fitch, and Standard & Poors all certify Maryland as one of only eight states to earn a Triple A Bond Rating. The Milken Institute puts us in the Top 2 for science. The Kaufman Index ranks us in the Top 3 most likely to succeed in the new economy. The U.S. Chamber of Commerce says we’re a Top 5 State for growth. And for an unprecedented fourth year in a row, Education Week magazine says that with your record investments we’ve built America’s #1 best public school system.
None of these achievements happened by themselves. Progress is a choice, and over the last five years, the people of our State have chosen to invest in public education, new school construction, affordable college, and innovation. At the same time, we’ve balanced these investments with what will be $7.5 billion in cuts (after this year’s budget passes – knock on wood). That’s more spending cuts than ever before in our State’s history.
But with 84 cents of every dollar we invest allocated to public education, public safety, and public health; with one of the smallest state and local government workforces in the country; and with a sales tax that’s lower than 35 other states; we can’t meet our challenges with cuts alone. We have to make some difficult choices about revenues. As Marylanders, we do not believe in resting in our laurels or running in place. We believe that better is not good enough.
Maryland’s modern economy is an Innovation Economy; and in an Innovation Economy our most important assets for job creation are the talents, skills, ingenuity, and creativity of our people. Throughout our country, there is a dichotomy between the number of businesses which are unable to find workers with the requisite skills, and the number of moms and dads who continue to struggle to find work. Thirty years ago – when I graduated from high school – the United States ranked #1 in high school graduation rates among our global competitors. Today we’ve slipped to 11th,… Thirty years ago, America ranked #1 in college completion. Today we’ve slipped to #12,…
It’s not what other countries are doing to us. It’s what we’re not doing for ourselves. If we’re going to strengthen our global competitiveness, every American should be given the opportunity to acquire the skills to compete. That’s our goal in Maryland, and it’s President Obama’s goal as well.
Maryland is more competitive today, because even as we’ve cut virtually every other priority, we’ve chosen to make record investments to build America’s best public school system. In this year’s budget we’re proposing record aid for public education as well as an investment in school construction that will support 11,650 jobs tearing down temporary learning shacks and replacing them with modern classrooms.
But inputs are just part of the story. Because our students will someday be competing for jobs against workers from Europe, Africa, Asia and South America, we’re benchmarking their achievement against students from Europe, Africa, Asia, and South America. And we’re adopting new curricula so that they will be better prepared to compete and win. And because America’s students are falling behind our global competitors in science, technology engineering and math, we’ve made it a statewide priority to reinvigorate education in these so-called STEM disciplines. Our goal is to increase the number of STEM college graduates 40% by 2015. So far, we’re more than half way there at 22%, and we continue to forge ahead.
Concurrently, for those of our students who will be entering the workforce sooner rather than later, we’re ramping up Career and Technology Education. And we’ve made four year college more affordable for more families, freezing in-state tuition for four years in a row, and investing to continue keeping tuition costs down.
Like our progress in skills and education, our State’s Innovation Economy is not merely the product of chance or geography, it is also the product of the important choices and investments we make together in initiatives like InvestMaryland, the Biotech Tax Credit, the Research & Development Tax Credit, the healing power of stem cell research, the CyberMaryland initiative and rural broadband.
If we are going to truly strengthen our global competitiveness we cannot allow ourselves to be content merely are being #1 in research per capita. Our goal is to be #1 in transferring that research and technology out of the lab and into the economy for job creation. Today we’re at #37, so we have some work to do together. And we’re asking the General Assembly for help this session, on a proposal that’s aimed at transferring 40 technologies out of the lab and into the market to create jobs.
To maximize our competitiveness, we will also have to take action to rebuild our state’s infrastructure. Marylanders have the longest average daily commute in America. Longer than New York. Longer than New Jersey. Longer than Illinois. Longer than California, the Baltimore Metro area has the nation’s 6th worst traffic. Greater Washington, has the worst traffic in America.
You don’t need to be a traffic engineer to see that we have not kept pace with the transportation needs of our growing population. And every day we are paying a huge price for this under-investment. We pay in the amount of hours we waste in traffic jams. We pay in terms of lost productivity at work. We pay in the amount of fuel we waste idling in bumper to bumper back-ups on the beltway. We pay in terms of the time we lose sitting in traffic when we should be at home with our families.
With a growing population and aging infrastructure, we might soon pay an even steeper price, bridges are not like trees; they do not grow stronger and broader with age. And yet today – with gasoline at $3.59 per gallon – our primary source of revenue for transportation is the same flat 23 cents it was during Governor Schaefer’s second term, when gas was $1.08 per gallon. Twenty years later, our road network has expanded with a growing population, a growing economy and sprawling land consumption. Gasoline now costs $3.59; but the primary revenue supporting our transportation infrastructure is the same flat 23 cents a gallon.
Meanwhile, all of our bridges have grown older as their structural lives approach their end. Our roads are more jammed with traffic than ever. It costs more to paint the Bay Bridge today than it did to build the first span. As the Sun editorialized, “If Maryland continues to embrace a 1992 tax rate, it will have to settle for crumbling 1992-era infrastructure.”
Through the years – as you know – there have been many recommendations on funding options, but no one has wanted to ask people to do more. Yesterday, we introduced legislation to repeal the current sales tax exemption on a gallon of gasoline; phasing it out by two percent a year (over the next three years), with a “braking mechanism” to protect consumers in the event that the price of gas spikes. In addition, it will enhance so called “lock-box” protections in the law to better safeguard these new investments in the Trust Fund. An enhanced investment on this scale would allow us to support 7,500 new jobs building needed roads, bridges, and public transit throughout our State. Now look, I know that every family is still feeling the hurt of this recession. I know this is a very, very difficult ask. But nobody else is going to do this for us, except for us.
To wrap up, these choices we have before us in Maryland similar to the choices we have to make as a country. The difference is that we in Maryland have chosen to move forward with a balanced approach of record cuts, modern investment and balanced revenues. At the national level, for the last decade we’ve been severely under-capitalizing the idea of America. We have been under-investing in that common platform of job creation and opportunity expansion called the United States. No one else is going make these national economic investments in education, innovation, and infrastructure for us.
There are some challenges so large that we can only hope to tackle them together. Educating our children, creating jobs, spurring innovation in how we feed, fuel, and heal our people, expanding opportunity in this fast-changing new economy, improving public safety, making college more affordable, rebuilding a 21st century transportation and cyber infrastructure, eradicating child poverty,… these things won’t happen by themselves. Progress is a choice. Strengthening and growing our middle class is a choice. We can be the victims of circumstance or we can build a better future. We can have our fear or we can have a better future — but we can’t have both.