O'Malley talks economic challenges at Towson

Maryland faces economic uncertainty, Gov. Martin O'Malley said Wednesday, but the state's innovations in green technology, health and cybersecurity leave it well-positioned to remain ahead of its peers.

"Very few other states in the country have the edges we have now in innovation," O'Malley told more than 100 students and faculty members at Towson University in his first major address since winning re-election last week. "It's the thing that will allow us to be leaders."

Earlier in the day, analysts projected a $1.6 billion hole in the state budget, up from the $1.2 billion anticipated earlier in the fall. O'Malley repeated that he would not propose new taxes in the budget he is preparing for the fiscal year that begins next July.

"We will balance this with cuts," he said, and added: "The next two years will probably be every bit as hard as the last two."

O'Malley's speech echoed his remarks from the last weeks of his re-election campaign. He did not unveil any major policy initiatives, spoke of investing in education and said Maryland has endured the recession better than most states.

Asked if he would return to the tuition freezes of his first term, O'Malley hinted that he would instead strive to keep annual increases modest. He said he expects another 3 percent bump next year. If he can keep the annual increases at that level, he said, universities in Maryland will grow more affordable in comparison to those in other states.

He acknowledged that this would be "cold comfort" given the lower cost of higher education in other countries.

"Education and economic development go together like eggs and breakfast," he said. He pledged to continue investing in schools and universities.

Asked when university professors might expect salary increases and fewer furlough days, O'Malley said, "I don't know. … I hope that maybe in the upcoming year, we'll be able to ratchet back furloughs a little bit."

O'Malley, who rolled up his sleeves and bounded around a small stage in Towson's student union, spoke for about 20 minutes and then took questions for almost 40 minutes. He seemed to relish showing off the state's websites with their interactive maps and charts.

"I've been campaigning for too long," he said, beaming at a big-screen projection of his BayState site. "I missed this terribly. I could do this all night."