O'Malley Optimistic in Face of $2 Billion Deficit

Maryland governor delivers State of the State address

ANNAPOLIS, Md. -- Gov. Martin O'Malley emphasized his belief that Maryland is better positioned than most states to break loose from the grips of a recession, sounding an optimistic tone in his State of the State speech Thursday.

"The road is steep, but our legs are strong," O'Malley said in the face of a $2 billion deficit for a budget he has described as one of the leanest submitted in years.

The Democrat, also described President Barack Obama's economic stimulus plan as a crucial source of aid. The governor repeated a common refrain about the economic recovery plan Congress is considering: That the lean budget he has submitted that includes laying off 700 state employees "will be a better budget by the time it's up for final consideration in April."

But some lawmakers, including Republican Sen. Richard Colburn of Dorchester, wonder whether O'Malley may be too focused on help from Washington.

O'Malley has included an assumed $350 million in federal aid for the fiscal year 2010 budget, and he deferred about $56 million in planned cuts Wednesday for the current fiscal year, hoping help from Congress will mean the reductions to education won't be needed.

"These problems will come back to haunt us," Colburn said. "We need to tighten our budget now -- smaller budget, lower taxes -- and work through these tough problems, because I don't think any economist can tell you when we're going to come out of this recession."

O'Malley noted Maryland is one of only seven states with a Triple A bond rating, a sign of fiscal confidence from financial rating agencies. He also said tough decisions made during the 2007 special session, which included $1.4 billion in tax increases, has put Maryland on better financial footing than most other states.

But the governor tempered his optimism by speaking about the need for state budget belt-tightening, after previous rounds of spending reductions have left the state with nothing but hard choices.

"In Maryland, we are in a better position than other states to climb out of this national recession, but until that day comes, every family in our state is forced to do more with less, and so too must we," O'Malley said.

Sen. Anthony Muse, D-Prince George's County, said he believed O'Malley "did his best job to remind us we're pulling together as a nation and as a state."

"We're depending a lot on the president -- in a sense that's scary," Muse said. "We're depending on the unknown, but we have confidence he can make it work."

The governor said he receives letters every day from residents who tell him the challenges of paying for college, rising electricity bills and keeping their homes.

He read a letter from an Allegany County woman who wrote that her landlord told her she'd be asked to move if her electricity is turned off. She asked the governor "what can you do to prevent my son and I from becoming homeless due to electricity?"

O'Malley said there are residents like her in every part of the state: "The resilient hard-working Marylanders that have worked hard all their lives, they've played by the rules, only to have the rug pulled out from under them."

O'Malley asked lawmakers to help provide $132 million in energy assistance for more than 125,000 residents who are struggling to pay their heating bills and to extend health care coverage to more families.

"Our great challenge for this session is to redouble our efforts, doing all that we can to stand up for Maryland families and power through the other side of this recession ahead of every other state," O'Malley told the General Assembly in a speech lasting nearly 30 minutes.

O'Malley urged the General Assembly to make people eligible for unemployment benefits when they are relying on part-time jobs to feed their families.

He also cited economic reasons in calling on lawmakers bring a bill seeking to repeal the death penalty to a full vote in the House and Senate. The bill has stalled in a Senate committee for two years. A study of capital punishment by a state commission concluded it is significantly more expensive to bring capital cases through the legal system than to seek life in prison.

"We could have even more resources to accomplish all of these important lifesaving goals if you would follow me in abolishing an outdated, expensive, and utterly ineffective death penalty in the state of Maryland," said O'Malley, who also mentioned there were 66 fewer homicides in Maryland but not a single execution in the state last year.

Associated Press writer Kathleen Miller contributed to this report.

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