- Associated Press - Wednesday, January 19, 2011

ANNAPOLIS, Md. | Maryland must focus on the job-creating potential of the state’s economy with innovations in life sciences, biotechnology, aerospace and cybersecurity to thrive in “a period of profound economic change,” Democratic Gov. Martin O'Malley said Wednesday in his second inaugural address.

Mr. O’Malley, who will submit his budget proposal addressing a $1.6 billion shortfall on Friday, focused on economic matters during an 11-minute speech outside the Maryland State House.

“We have a long way to go,” Mr. O'Malley said, at a scaled-back ceremony reflecting what organizers said was the state’s difficult budget straits.

The governor acknowledged the economic difficulties of his first term when the national recession dragged down state revenues, but he also emphasized that Maryland still managed to make record investments in K-12 education and hold a tuition freeze for four years at public colleges and universities.

Mr. O'Malley has been bracing the state for a hard budget year, one he plans to address with spending reductions instead of new revenue proposals. Maryland also is contending with a long-running problem of more than $18 billion in unfunded pension liabilities over 25 years. The state also has unfunded health care liabilities that are estimated to be about $15 billion.

That’s on top of other tough problems, including projected budget deficits in future years, as well.

“As we look ahead, we know that these next four years will not be easy,” Mr. O'Malley said. “Unemployment and foreclosures remain unacceptably high, wages remain stagnant and our national recovery has only just begun.”

Still, the governor said no other state is in as good a position to rebound from the recession.

“From the schools, laboratories and companies of Maryland are emerging the discoveries, technologies and jobs that will remake our world and transform better opportunities and a better world for our kids,” Mr. O'Malley said.

The governor’s environmental agenda includes continuing to clean up the Chesapeake Bay, advancing renewable energy and tapping into emerging technology such as offshore wind and electric cars.

“All of these pursuits are important and essential to the future,” Mr. O'Malley said. “Each creates new jobs and new opportunities, and progress on one requires progress on all.”

Because of the need for austerity, a parade in Annapolis was canceled. Evening festivities at the Fifth Regiment Armory in Baltimore were designed to be less formal than four years ago. People who attend have been encouraged to bring a canned food item in recognition of the challenges many Maryland families are facing from the tough economy.

Sen. Barbara A. Mikulski, Maryland Democrat, made reference to the less-formal nature of this year’s inauguration when she introduced Mr. O'Malley before his speech.

“Dear friends, inaugurations are usually about pomp and circumstance, but given where our country and our state is, this inauguration is less about pomp and more about our circumstances,” Ms. Mikulski said.

Mr. O’Malley, who turned 48 on Tuesday, and his wife, Judge Catherine Curran O’Malley, hosted a receiving line at the governor’s house after the inauguration.

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