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Governor O'Malley: Alright. Look, I want to thank you all for being here today.
I want to thank Jay Davis from MML. We are also joined by Lillian Lowery and a number of
a number of Secretaries, Cabinet Members -- one and all.
and uh...
Seated at the table to my right
is our Lt. Governor, Anthony Brown who has done
an outstanding job in the
six years, going on seven years, of this administration.
He is joined by Matt Gallagher
uh... who is our Chief of Staff.
And in the center - a woman who needs no introduction
T. Eloise Foster.
the "T" stands for "Tough Choices"!
So it's my great honor to be able to present to you the uh...
to give you a little forecast and preview, in a nutshell, of the budget
that we will be submitting
to the Maryland General Assembly.
And uh... by way of a
visual -- this is the budget. that we'll be... submitting to the Maryland General Assembly.
And you'll have plenty of time to read through it. I thought I would click through
a few slides to kind of lay it out to you.
And um...
so that's what i'm going to do right now.
How you doing with that recorder? Was that music?
That's alright.
Okay, so we'll just get right into this. I just want to thank Brit Kirwan from
the University of Maryland system for being here as well.
uh...
This will be a
the budget that we are are submitting
uh... is which number, Eloise? That you and I have put together together? 0:01:56.660,0:01:58:660 Eloise Foster: This is coming up to your seventh budget. 0:01:58:660,0:02:00.659 Gov. O'Malley: This is our seventh budget that we will submit to you.
These have been uh...
challenging years to say the least uh... biggest economic downturn since the
Great Depression. And yet, the people of our State
have continued to move forward. And they expect, just as every family was doing more with less,
they expect their State Government to do more with less.
And uh... in a great number of instances that's what we have been able to do
Maintaining, every year, our AAA bond rating and submitting
uh... our budget uh... below spending affordability guidelines --
every single year.
Not just the years when it was easy --
but, especially in the years when it was tough.
So, this budget is a 'jobs budget' and I say that it's a jobs budget
because - do I have the clicker? Or do you do the clicker? I can do the clicker. This is my clicker? Okay.
uh... This is the jobs budget
in the capital investments alone
this budget will support
43,000 jobs throughout our state.
And those jobs will be in uh... school construction and other capital
projects. So this is the capital budget investments
and also the uh...
you know the transportation plan investments so
uh... school construction 8,199 jobs.
The rental housing works initiative which many of you were there when we kicked off the
other day around the corner here in Annapolis
that supports 1,900 jobs.
Investments we make through the Bay restoration funds 437 jobs.
The transportation capital budget over 16,000 jobs.
the other capital investments are uh... another 16,000.
So this is a jobs budget.
If there's one thing that this economic downturn has reminded all of us of
It is the truth that there is no progress without a job.
So everything about this budget we examine through the lens of:
What will this mean
for accelerating Maryland's jobs recovery
and getting more of our people back to work?
So far
we have recovered 76% of the jobs we lost
in the recession.
The national average is about 52% of the jobs that we
lost in the recession. So we still have a ways to go. But, right now we rank
9th among the 50 States.
And in terms of the rate the pace of which we are recovering our jobs.
So we still have a lot of work to do - still far too many moms and dads
looking for work
in the State of Maryland so, that's why
our focus is jobs.
uh... This is how your State general fund dollars
are spent. This is the psychedelic dollar slide which you've seen in the past.
So 47% of everything we do now goes to education.
47% of what we invest for the general fund goes to education
and that includes the higher education. So K-12 and higher education
is 47¢ of every $1.
25¢ of every $1 is health
an 11¢ is public safety
17¢ is everything else.
So, Department of Agriculture, Department of Environment,
Department of Natural Resources,
uh... Department of Labor, Licensing and Regulation
uh... all of those - everything else
is the other 17¢.
Stated another way
83¢ of every general fund $1 goes to education, public education,
public health, or public safety.
uh...
We uh...
This budget will have record funding once again and full funding for public education.
We have #1 public schools in America
five years in a row never happened before. It's happened now
because of the hard work of a lot of people and because of the investments
of the people of our state.
We have cut the achievement gap by 25%.
We have a record numbers of our children actually entering kindergarten ready to learn
That's -
We've moved that from about 60% to 83%.
We have record high
uh... standardized test scores and we still can do better.
#1 in percentage of our kids that can take and pass AP exams and that's for the 4th year in a row --
and we have the highest graduation rate in history.
No state has done a better job than our state in
holding down
what is the, has been, the rising cost, in some cases the hyperinflation, of college education.
And so uh...
it's the hard work the good the economy inefficiency
things have been going on in the university system. But also, the fact
that as a people, even in tough times, we invested in making college more affordable for our kids.
other states have
treated their university system as if it were a toll road
that only those using it have to pay the toll --
the tuition to get through.
We understand in our state
that the more person learns a more a person earns
and the better that is for all of our sakes,
for our economic future, and for the expansion of opportunity.
So among the fifty states
no state has held uh... the line
on rising college tuition better than our state.
2% for Maryland.
Our neighboring competitors - Pennsylvania it's been a 14% increase
over that same time period.
Virginia 29. And you can see the rest of the graph.
We moved from the 6th most expensive university system
to we're around 26th or something.
And we have even before the Affordable Care Act we uh... made the tough decisions necessary
in order to provide better health care for our more vulnerable families...
including a lot of kids.
So that no child in Maryland ever has to die because they can't have a toothache treated.
So uh... that's 367,000 people but now have health care that did not have it before.
uh... We have driven violent crime down it's not a weather event.
uh... It's not a barometric
pressure sort of thing. We have driven
violent crime down
to its lowest levels in some 30 years. In fact, we've exceeded our
20% reduction goal and have driven violent crime nearly 25% down since 2006.
There are probably 32 other slides like this I could show you
of good things we're doing to improve the health of the Chesapeake Bay.
This budget will have record funding for the uh...
Bay Trust Fund.
And one of the areas
uh... of graphs that are moving in the right direction -
this is just one - but this is the cover crops.
We now have,
in these difficult years nonetheless,
gone from about 200,000 acres in cover crops in our
state to over 600,000 in cover crops.
Just kind of recapping a little bit the history here --
one of the untold stories uh... is the progress that
the members of the Maryland General Assembly, the representatives of the people, have made
in attacking the structural deficit that has uh... plagued us
these many years. And I just wanted to recap kind of the drivers of how
we got to the situation even in a AAA State.
Where we -- a AAA bond rated State --
where we found ourselves having to confront the structural deficit.
There were a few main drivers of this.
Some on the revenue side, some on the spending side. On the revenue side in 1997
for reasons I'll leave others to debate
uh... we cut revenues by $1 billion.
And on its heels
we also increased our investment and locked-in
a $1.5 billion increase.
I say "we"
collectively,
I mean uh…
"we" the people.
Through our representants' institutions.
In 1997
reduced revenues by $1 billion,
increased expenditures by $1.5 billion
for Thornton.
Then we came on four years
of insufficient action
to address
this bad math.
And that led to
a structural deficit
as soon as Anthony Brown and I took office in 2007
that we needed to attack - and did
in that special Session.
No sooner had we got done with that and we were hit by the great recession.
uh... which totally wiped out anybody's, everyone's revenue forecasts
as people lost jobs,
people lost homes, and the revenues declined.
So we attacked that uh... structural deficit
from that early bad math. There was $1.7 billion when we took office
and uh... together we actually forged the precious consensus necessary,
even through our disagreements, even as democrats and republicans,
we found a way to restore a more balanced approach. And that balanced
approach involved record cuts
to reduce the deficit but, also to protect our priorities.
So in addition to the record cuts we also made responsible decisions to restore
much of the general fund revenues that had been cut
by that earlier decision.
uh... So that we can protect priorities liked job creation and like education.
Then 'dot dot dot'
the recession hit us
and no state was immune
from the recession.
Not even our state.
And this is what it did to the revenue
uh... estimates that had been made.
So a total of $13 billion between
fiscal year '08 and fiscal year '13
fell out because so many of our citizens lost jobs,
lost homes --
spending declined therefore revenue declined.
And uh...
our response to this was to cut and to cut and to cut
again...
In addition to the things we did up through
this special session in uh... April '08 $441[million] in cuts,
June '08, at the Board of Public Works here,
another $75 million,
October '08 $348 million,
March '09 $94 million in cuts,
April '09 $1.2 billion in cuts, almost $1.3 billion in cuts,
July, back here again,
another $300 billion in cuts,
August, one month later,
uh... another uh...
$494 million,
in November '09 another $232 million. In '11
$927 million in cuts
FY12 uh... $1 billion in cuts,
uh... one billion in cuts, FY13 $1.4 billion in cuts,
and this budget that we submit today will have another $325 million in cuts.
If you add up those individual actions represented in yellow, on the bottom here,
that's what this red cumulative cuts is.
So far, in the life of the O'Malley-Brown Administration,
$8.3 billion in cumulative cuts.
We've also made government smaller.
We have the fewest number
uh... for executive branch employees per capita, in our state, since 1973.
I mean our state continues to grow. We continue to grow in population
and uh...
uh... the budget grows.
Just like the population - student enrollment grows.
But the number of executive branch employees
is now fewer than at any time since 1973.
We've cut, by the way, 5,600
executive branch employees
over the life of this administration.
This is a graph that shows spending growth
going back to - where's my laser? -
I just 'lasered' Marvin Mandel.
uh... So this is the annual spending growth
over the life of every administration.
Under Governor Mandel 13.4% annual growth general fund spending growth.
Under Governor Hughes 8.5[%].
Under Governor Schaefer 5.7[%].
Under Governor Glendening 5.8[%].
under uh... the former Governor 7.5[%]. O'Malley-Brown 2%.
So, 2%.
Here's some of the takeaways from this budget. This budget uh... we have made
another $325 million in spending cuts.
Total spending cuts since 2007 now reached uh... $8.3 billion.
We have increased the rainy day fund this year to 6%. Why?
Because even though we've been able to apply a balanced approach here in Maryland,
our national politics is still struggling
uh... with restoring that balanced approach in our nation's capital.
and uh...
on acknowledgment of that
we are increasing the rainy day fund by a percentage.
Cash reserves will total $1.1 billion
so that's um...
and uh... the reasons for doing that is to safeguard against
the 'hari-kari' congress
down the street and what they might
do to our economy because of ideology.
We are reducing the structural deficit by another $318 million
which puts us on the verge - finally closing the structural deficits.
Deficits driven by our own bad decisions
and locking in increase investments while at the same time, you know -
reducing revenues but also the effects of the recession. So we are, we will uh...
We are 91% of the structural gap of -
you know, we are 91% of the way there. We're on the verge to closing
the structural deficit and will in uh... we hope the uh... short term future ahead.
And once again, for the 7th time in a row, we've submitted a budget that's actually below
the spending affordability guidelines.
So in conclusion - this is a jobs budget. There are 43,000 jobs supported
just by the capital investments that we're making
in this budget. That's before you even get to Thornton.
And the teaching jobs that are supported by that.
We'll also be increasing uh...
the police aid formula Mayor Davis will be increasing the police aid investment
that we make for public safety this year.
This jobs budget uh... makes the largest investment
we've ever made in public education
uh... which along with affordable college - more affordable college -
is the most important long-term economic investment we make
in expanding opportunity.
This is a jobs budget that makes responsible choices
to protect our AAA bond rating
which also improves investor confidence in Maryland.
so uh...
That's who we are in and what we do in a state where we believe in the balanced approach to progress
and where we understand that there is no progress
without fiscal responsibility.
and um... be glad to answer any questions.