Thank you, Brian – and thank you for your leadership.
I also want to recognize Executive Director Michael Sanderson and Deputy Director Virginia White. Thank you for making my first Summer MACo Conference as governor so memorable.
We come to MACo to celebrate Maryland… To soak in the beauty of our communities… To prove that business casual can actually mean flip-flops! I’ve never seen more County Executives rock shorts in my entire life. Even the ones who shouldn’t!
But if there’s one thing I’ll take away from my first Summer MACo as governor, it’s this: In every meeting – in every session, I’ve witnessed a tireless spirit of partnership. We are a state that doesn’t just welcome partnership, we need it. We thrive on it. And I’m grateful for it.
And embracing that truth has never been more vital than at this moment. Because we are entering a new season of challenge for Maryland.
Now, I know this room doesn’t need to read the news to know the challenges ahead. You are the ones closest to the people. You are the ones on the front lines of public service. And as the old adage goes: When the state catches a cold, local jurisdictions catch the flu.
So it won’t be a surprise when I tell you that we’re facing budget shortfalls.
Today, I’m going to be transparent and clear-eyed about what we’re up against. I’m going to tell you what it will take from each of us to come out stronger. And I am here to tell you that we will.
My administration has spent the last seven months looking under the hood of our state’s fiscal health, and we’ve learned some harsh truths.
Our budgets have gotten bigger over time, but our economy has not kept pace.
When I took office, our economy was nearly the same size as it was four years ago. Over the same time period, the economy of Pennsylvania grew by $22 billion.
And here's why that matters: Because our families feel it. Last year, total personal income in Maryland grew at nearly half the rate of the nation.
The average New Jerseyan saw an extra $1,700 in their bank account, while the average Marylander saw only $1,000.
So look, I’m new to politics. But I am not new to balance sheets. I’ve been an entrepreneur. I’ve run small businesses and large organizations. And I know balance sheets don’t lie.
Since at least 2017, the Department of Legislative Services has been forecasting structural budget deficits. Those projections were made under the last administration, not this one. Those are their numbers, not mine.
The trouble beneath the surface was masked by federal cash and big stock gains during COVID. Maryland and every other state in the nation has benefited from billions of dollars in federal money to get us through the COVID emergency. Record highs in the stock market brought in tax revenue to keep the budget healthy.
But we knew it wouldn’t last forever. It’s what I said before I became governor. In fact, I said it the last time I spoke before this body during Winter MACo, as governor-elect. I said it when I unveiled my first budget. I have been saying it for the last seven months.
Now, we are forced to reckon with the structural challenges facing our economy and our budgets.
Maryland has some of the best talent and assets in the world. But our economy is not reaching its full potential. As a result, our fiscal health is falling behind, and our ability to meet the full needs of our people is hampered.
Put simply: Our economic engine does not support our ambition. Of the last 20 state budgets in Maryland, 17 have needed cuts to stay balanced.
So now, we are faced with a choice. We could preserve the status quo. Our state has the assets to keep our economy alive. We can count on the eds, the meds, and the feds to maintain our fiscal footing. They are the pillars of our economic strength.
But I believe preserving the status quo is not enough – and it’s not what we were elected to do. And our peers aren’t doing that.
Look around. Our neighbors are choosing intentionality over complacency. Our neighbors are choosing growth over stasis. It’s giving them stronger economies with greater opportunity. It’s giving them greater flexibility to do big things. And we must choose to do the same.
We can be a state with a dynamic economy. We can be a state where our finances support our ambition. We can be a state that unleashes a new wave of dynamism by harnessing the great assets we already have – and getting them moving in the same direction.
Growth is a choice. Intentionality is a choice. Now is the time to view the challenges in our budget as an opportunity to reimagine our future. As our economy grows, we will have more to work with.
The good news is we aren’t starting from zero. In our first seven months, we’ve shown a commitment to working together toward big goals.
My administration partnered with you and the General Assembly to pass a first-year budget that prepares us for the work ahead.
We increased aid for local governments to more than $10 billion;
We secured significant investments for mass transit so people can get from where they live to where they work;
We delivered critical resources to local police departments across the state to help us retain and attract new talent and keep our communities safe;
We created a historic service year option for high school graduates to bring our communities together and build out our workforce;
We raised wages for our hard-working state employees and raised the minimum wage to $15 an hour – even as we launched an unprecedented assault on child poverty;
We passed bills to improve access to capital, spur clean energy, and build out new and emerging sectors of our economy – from A.I. to quantum computing.
These investments will build new avenues of growth and create new pathways to prosperity.
And we proved that we can do big things while being fiscally disciplined. Because do not forget: We did all this while keeping $2.5 billion in the Rainy Day Fund.
We made the choice to keep money in reserve even as we launched new programs to support our people, our communities, and our economy, and I thank the General Assembly for their partnership.
Now, we have to apply the same discipline of last year’s budget to this year’s budget – but we can’t rely on the federal government or historic market performance. Hope cannot be the key ingredient of growth.
Three principles must guide our work to build a responsible budget that meets this moment. First: We must take a balanced approach.
Fiscal responsibility has been a north star of our administration from day one. We made use of the money we had. We kept money in reserve. But we need to ramp up restraint as we approach the new year. This will be a season of discipline, and our choices must reflect that.
Second: We must be data-driven.
That starts with my extraordinary cabinet. We recruited a diverse team of experts from every sector and industry. I rely on facts, and so do they. They know how to solve big problems, and they believe in getting out in communities and working closely with you, and many of them are in the audience!
I also ordered the creation of a new Maryland Economic Council to ensure we don’t just move with speed, but also move with strategy – tracking big trends and learning from our competitors to come out on top.
And I will soon appoint a new Chief Performance Officer to monitor our progress and ensure efficiency across government. And they will be working closely with you to track progress at the local level.
Third: We need to prioritize spending in a way that strengthens our assets and grows our economy in the long-term.
All of you know that I am deeply optimistic about the future of our state. But that optimism is not based on blind faith – it’s based on hard facts. We are home to some of the greatest institutions of science, health care, research, education, and commerce in the world. There's no reason why Maryland should be ranked 47th in the nation for economic momentum. We’re better than that!
I want Maryland to be the headquarters of the 21st century –
With an economy on the leading edge of innovation;
With businesses ready to dominate;
With a labor force ready to drive growth.
We can seize this moment.
The national economy is changing. And do you know who knows that? Our competitors!
Twenty years ago, who thought Kentucky could be the capital of electric vehicle battery production? But they knew electric vehicles were the future, and they bet on it.
Twenty years ago, who thought Massachusetts could expand their economy by focusing on Biotech? But they knew the industry would boom, and they bet on it.
Maryland already has the assets to command industries of the present and the future. Now, we just need the strategy and discipline to unlock that potential.
These are the principles of our approach and the pillars of our success: We will be prudent. We will be data-driven. And we will prioritize spending in a way that strengthens the economic engine of our state.
Discipline will be the thing that moves us forward.
The discipline to be collaborative;
The discipline to be innovative;
The discipline to choose the hard thing over the easy thing.
It’s the discipline of your president, Calvin Ball, who has been prioritizing broadband in Howard County, because he knows to leave no one behind, we need to get everyone online.
It’s the discipline of Lenny Pfeffer, who is making sure that volunteer firefighters in Dorchester get the support they need – and that’s going to bolster recruitment.
It’s the discipline of Danielle Hornberger, who is watching out for the brave men and women who stand guard over our communities – because she knows that incentivizing people to serve doesn’t just make us safer, it also drives growth.
It’s the discipline of Paul Edwards and Dave Caporale, who sat down with me and members of my team to talk about how we can work across party lines to bolster the Mountain Maryland economy by focusing on infrastructure projects that create jobs.
It will take discipline from all of us.
It will take the discipline of the small business owner, who chooses to stay in Maryland, even if other states are calling – because they see the potential that we do.
It will take the discipline of the student, who makes the choice to earn a degree or a certificate in a field that’s just starting to emerge, instead of a more traditional path – because they see the potential that we do.
It will take the discipline of every theater and every business; Every farmer and every CEO; Every faith leader and every clerk; Every mom and every dad and every guardian and every village elder.
And yes, it’s going to take the discipline of elected officials at the state and local levels, who commit to a spirit of partnership, even as we face some tough decisions ahead.
And yes! It will take the discipline of the governor – Where as I want to say “yes” … you are going to hear some “no”s.
The time for discipline is now. The time for responsible and intentional governing is now.
And I have full confidence that if we choose to step up, if we act with ingenuity and focus – as we are doing – we will prove ourselves worthy of the moment we find ourselves in and the future we seek.
Let’s embark on this journey to not just pave over the cracks, but to actually fix the foundation of what’s broken – and let’s do it together.
And when we succeed, the people of Virginia and New Jersey and Pennsylvania and Delaware will look at what we did, and they will envy our strength.
They’ll talk about how we met this moment as Marylanders, when our budgets were strained and our economy was sluggish – and we endured.
They’ll talk about how we met this moment as Marylanders, when technology was changing and the economy was evolving – and we seized it.
They’ll talk about how we met this moment as Marylanders, when our competitors bet against us – and we prospered.
This is Maryland’s time. And our greatness will be won here, in this moment, together, in partnership.
Thank you, God bless you, and let's leave no one behind.