Governor Hughes, it's great to join you here, To President Bennett, Scott Hancock, and the staff of MML: thanks for keeping alive the 75 year legacy of MML, fighting to move Maryland forward.
C.S. Lewis said that leadership is about living and working in "the gap between what should be and what is."
The great thing about MML, is that as Maryland's mayors and municipal officials, with every job you create, with every road you repair, with every drug dealer you take off the street, with every school you improve, you work to close these gaps. There is no Democratic or Republican way to pick up the trash or reduce crime. There's no way for a Mayor to hide whether you're doing the job or not. You see this gap between what should be and what is, and you work to close it.
We must work together in this same space as a State, if we are to succeed in creating jobs and expanding opportunity. Because for all the progress we're making, there are still gaps we must fill; deficits we have to close.
We are counting on your leadership as we use initiatives like Plan Maryland and Fast Track to target state dollars to those areas in your communities where they can do the most good for job creation, for our environment, and for the future we will leave to the next generation.
Last session we were able to restore some of the HUR dollars to you. Not enough. But some. The Blue Ribbon Commission's proposals call for our State to revisit the ways we invest in infrastructure and deferred maintenance at all levels, including -- and especially -- at the municipal level. If we're willing to make some tough choices on the revenue side, we'll be able to do significantly better than $10 million for HUR. But if we're not, the math won't be there. It all comes back to the choices we make, together.
In all the many difficult decisions that we have to make as a people, job creation has to be our number one priority, always.
Last month, we created 10,000 new private sector jobs at a faster rate than all but two other states. In fact, our rate of private sector job creation was more than five times the national average. And yet, we lost 3,200 public sector jobs. That's 3,200 moms and dads in Maryland out of work. 3,200 jobs that we could not afford to lose, because every job's important. You and I know that public sector job losses can kill this fragile jobs recovery just as surely as private sector job losses can kill this jobs recovery. We have to move forward together. That's what you and I have understood these last five years.
With far too many of our neighbors still out of work, the urgent work of greater job creation remains. And the most important job we create is the next job.
Tonight, I want to talk with you about jobs, and about the two deficits we must close in order to reach our potential for greater job creation: our budget deficit,
and our investment deficit.
CLOSING MARYLAND'S BUDGET DEFICIT
In the past five years, you and I have cut more state spending than ever before in our State's history -- $6.8 billion. We have shrunk the size of our state government by 5,300 positions. And we have protected our Triple A Bond Rating -- making us one of only 8 states to earn this seal of fiscal responsibility from all three rating agencies.
With a balanced approach of cuts, investment, and revenues, we've guided Maryland through these past five difficult years in a stronger position than most states.
I wish I could tell you that the choices we have to make this year will be easier, but they won't. While we do anticipate revenues to exceed what had been originally been forecast for FY12 and FY13, our projected budget shortfall for 2013 could be as high as a billion dollars -- even with one of the nation's smallest and leanest state and local government bureaucracies.
Once again, we must find a fiscally responsible way forward -- not just for its own sake, but so that we can afford to invest in a better future for the next generation.
CLOSING MARYLAND'S INVESTMENT DEFICIT
To create jobs, a modern economy requires modern investments. That isn't a Democratic or Republican idea, it's an American idea; an historic and economic truth that we have proved out time and again as a people.
Five years ago, we inherited more than a $1.7 billion structural deficit, we inherited an investment deficit. Even in easier economic times, we allowed ourselves to undercapitalize our State. With undercapitalized schools, our kids were sent to learn in temporary learning shacks. With an undercapitalized state university system, families were hit with a 40% increase in tuition bills. With an undercapitalized commitment to protecting our land, water, and air, we protected less open space, and did less to protect our Bay. With an undercapitalized cyber infrastructure, too many small businesses and schools in Maryland were put at a competitive disadvantage with no access to 21st century broadband. And with an undercapitalized transportation system, our entire economic engine was put at a competitive disadvantage.
Together, with tough choices -- even as we've cut spending -- we've made real progress in closing many of these investment deficits. With record investments we've built what Education Week magazine says for the third year in a row are America's #1 best public schools. With a four year tuition freeze, we've made college more affordable for more of our families. With a commitment to Program Open Space, we've brought the number of protected acres to 34,289, an increase of 240%. And with help from Obama Administration we are building out a truly statewide broadband network.
Now, to move our State forward and create jobs, we have to close our investment deficit in Maryland's transportation infrastructure. And in this national economic climate it won't be easy.
As the leaders of our cities and towns, you support investing in our infrastructure, because you can see that if we neglect close our investment deficits, 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 that look a lot more like parking lot than they look like a highway. We pay in an underemployed workforce. We pay in an immobilized workforce. We pay in damage to our environment, we pay in the health of our Bay, we pay with climate change. We pay with the diminished ability to attract those very highly skilled individuals that our Innovation Economy requires, who can live anyplace in our country or in the world.
I would really like to stand here tonight and tell you that somehow we can somehow eat cake and lose weight. I'd also like to tell you that bridges are like trees and if we leave them alone long enough they'll grow taller and stronger, but that's not true. I'd also 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.
The fact of the matter is, it cost us more to paint the Bay Bridge than it cost us to build it. It now costs twice as much to paint and clean the Hatem as it originally cost to construct it.
To create jobs and move Maryland forward, we need to acknowledge 5 hard truths:
The Blue Ribbon Commission on Transportation Funding concluded that we need to make an additional investment of more than $800 million more a year. But the fact of the matter is that the current pace of our investments is not sufficient to meet those needs.
A traditional flat tax on gasoline, by itself, actually becomes a declining revenue source, when the new generation of cars and trucks that are being designed are built to use less and less gasoline. What worked well for us for the last 40, 50, 70 years isn't going to work in an era when we're pushing electric drive cars, hybrid cars or vehicles that are powered by other fuels. The ways in which we commute to and from work are changing. More Marylanders are telecommuting, and fewer are purchasing cars.
For decades, both the Greater Baltimore and Greater Washington regions have been underserved as far as our public transit needs go -- that's why we're advancing the Purple Line and the Red Line. Neither of these projects is free.
Five years ago, our State's Transportation was actually under-leveraged. No more. For the first time in our State's history, five years ago, we decided together, to embark not only on one major project, but on two. And we decided to do them at the same time: the ICC and also the Section 100 widening of I-95 through Baltimore County. That has put a tremendous strain on the Transportation Authority.
Our transportation plan goes over a six year period of time as many of you may know. This recession, knocked $2 billion out of that $10.5 billion plan. The Recovery and Reinvestment Act that President Obama rightly advanced, restored 600 million. But at the end of the day, we're still $1.4 billion less than we had anticipated.
These are the realities that we face. We have to make cuts to close our budget deficit. But to create jobs, we must also close our investment deficit -- and therefore we have to be open to new revenues.
Whether we pay for our infrastructure or whether we pay in so many other ways is up to us.