Excerpts from O'Malley and Ehrlich's first debate

Robert L. Ehrlich Jr.: It's a consequential race obviously, because when you elect an executive, executives count. Executives impact lives. They impact business cycles, they impact the ability to create jobs in a particular state. They impact taxpayers. They impact our vision and our future….Governor O'Malley has a particular view with regard to progress in our state. I have a far different view. Obviously job creation being the number one issue in this campaign.

And the fact of it is, a lot of these commercials that you're seeing attempt to litigate the past, they attempt to litigate things about me.

Martin O'Malley: I want to begin by thanking the people of our state, and I want to thank the people of our state for giving me the honor of serving you in these very challenging difficult times for every family and every business in our state. But as this national recession comes to a close, our state is moving forward. We are starting to create jobs again in Maryland and we are transforming our economy through innovation and through education and we're doing it better than most states but we have a lot of important and urgent work to do.

Every decision I've made over these last difficult years has been made with one consideration only. And that is, what is best for the people of Maryland? What is best for families as they plan to protect their own futures around their kitchen table throughout our state? I have fought every battle on your side.

Moderator: Thank you, governor. Alright, the first topic today, and both of you have touched on it already, the most numbers of viewers' questions we got were always surrounding the topic of the economy.

Ehrlich: We've gone around the state in small business round tables, and you know, the governor really has a big impact on the regulatory environment in your state. And the fact of it is we have some really broken state agencies that have been increasingly hostile to business and business creation in the state. We've seen the latest scandal in DLLR for example, our so-called business regulation agency. We have the Department of the Environment, which has been increasingly hostile to job creators in the state. We have not created one net new job in the state over the past four years, Denise. And that's a real problem….

Small business is the backbone of our economy. We talked about it, it's even a cliché.

But to the extent you're governor, and you have this direct responsibility for job creation, you really need to think about the people you put in charge, and the fact that business people need answers, they need consistency, they need a welcoming environment, they need not hostility. This election's really about how we view small business and the small business sector. Is it a source of revenue? Is it simply a source of more dollars to the state that we can tax and tax and tax and spend spend spend? Or is it a source of job creation? I believe in job creation.

Moderator: Thank you. Governor?

O'Malley: Well Denise, our country's gone through a tough recession over the course of these last three years. And I don't think there's a single family or business that's been spared this national, this global recession. But our economy is an innovation economy. And it's an innovation economy that is fueled by small business. Two-thirds out of all jobs created in our state are created by small business. But nonetheless as a state we need to take stock of our competitive strengths in this environment. I'll make no apologies for standing up when necessary to environmental polluters and for protecting our quality of life and health of the Bay. I believe there's something we can only do together, and protecting our natural resources is one of those things….

The truth of the matter is, we have actually created over 33,000 net new jobs. That's not me saying that, that's the Bureau of Labor Statistics. And we have to continue to create jobs because we have a deep hole to climb out of. This recession has cost all of us over these last three years. But for all of our anger and frustration at this recession, that anger and frustration isn't going to move us forward. What's going to move us forward are things like increasing the biotech tax credit, creating the Invest Maryland fund, which allows us to get more venture capital into businesses and the startups that are happening in Maryland.

Ehrlich: But this is really the issue of the campaign. This is what it is all about and governor, you know that. We love the federal sector. We love federal spending. We love NIH. We love Pax River. We love Fort Meade. We love Aberdeen Proving Ground. These are federal facilities. They're posts. They spend a lot of money here, as we know. But fact of it is, we have dropped in our business ratings significantly….

When I was first elected, the Baltimore Business Journal took a survey. They said, "Is Maryland a pro-business state?" We were in the 30s. When we left office, you may be able to recall, we had unemployment around 4 percent, under four, and we had doubled that business confidence. We were in the 70s. And now we are back to the 30s.

Moderator: Well, jobs are important, but first, governor, there was another thing you mentioned in there which I think is very important. A lot of people have written in. Someone named Sean said he wants to know whether you will forget jobs. Let's talk about his wallet. He wants to know whether you will pledge not to raise taxes or significant fees in the coming years .

O'Malley: I'll tell you what I will pledge. I have never done that sort of irresponsible blanket pledge. But I will pledge not to raise property taxes like you raised property taxes, governor, when you were governor in easier times. I will pledge not to jack up college tuition by 40 percent. I will pledge not to increase by 300 percent the annual filing fees for every small businesses incorporated by Maryland. And I will pledge not to pretend that fees are not taxes.

Denise, in the toughest of times, we have cut state spending more than any governor in Maryland history. In fact, state spending is three percent less now that it was four years ago. When the former governor was governor in easier times, he actually increased spending, state spending, by 33 percent. More than Glendening ever did in a four year period of time. More than Schaefer in a four year period of time….

Ehrlich: I really get to respond here. This is important. The ads have been running. I didn't even bring up the fact that property tax went down. You're right. Thank you for reminding me of that. Fact of it is, governors do not set tuitions and everybody listening, it may be a news item for some folks. Governors do not set tuition. The Board of Regents sets tuition. Obviously, and with regard to state property tax, the same thing.

Moderator: Let's go to something that affects many, many families in this state and that is public education. We have had a lot of viewers' questions on this issue. Marie in Baltimore asks what will you do to improve public education in low performing schools?

O'Malley: We were very fortunate because of the investments we protected, record investments in public education, even as I have had to cut our state budget by $5.6 billion in state spending, we have, nonetheless, and, thanks in part to presidential leadership, been able to provide record funding for our schools and they have been recognized by experts around the country as the best or among the best certainly in the nation.

But, there's still too many schools that are underperforming. So that's why we joined forces. We were one of only 10 states to win the Race to the Top grants. And, part of that involves a much more robust and effective approach to turning around underperforming schools.

Ehrlich: We will always have pretty good schools because we are a pretty wealthy state. We supported Thornton. I campaigned on it. Thornton being a major boost in public education, despite the fact that the legislature did not give me a funding source, which was the slots bill, as you know. We funded it to the tune of $1.4 billion….

We need to focus innovative approaches to education, where we are hurting, where the kids are being denied their Constitutional rights. The fact that you are born poor should not be a predictor of the quality of public education you receive. That's why we funded Thornton, when the legislature stopped my funding source. So, we can go residential charter. Next , by the way, I want to quadruple. We have one in city of Baltimore. This allows kids to not only learn but learn in a safe environment. We can bring some mentor programs into all Title One schools in Baltimore City

We generally have pretty good schools and we always will. We need to focus on where the kids are being denied their rights. That episode in 2006, although it's passed, is really relevant today because those kids were denied their Constitutional rights. Your color, your ethnicity, your background, your race, what you look like should not be a predictor of the quality of public education you receive.

O'Malley: The residential charter school, of which the former governor referenced, the SEED school was the charter school that I recruited to Baltimore. I was there at groundbreaking and have been there every step of the way and it's a good thing. But that incident, so described by you in 2006, governor, that was not about protecting a monopoly. That was about protecting the progress of kids, especially in the city of Baltimore, where 10 years ago, not one grade scored majority proficient in reading or math. Today, one through eight are scoring majority proficient in reading and math.

Ehrlich: This is really emotional, guv. When you have schools that are graduating or not graduating 85 percent of their kids and you have kids achieving 6 and 8 and 12 percent pass rates, those kids of color are being denied their Constitutional rights. That's intolerable and unacceptable in the state of Maryland, the United States of America in 2010, 2006, whatever.

O'Malley: Why don't you ever mention the places where kids are making progress? You always talk, Bob, in very coded language about kids who aren't succeeding. Frankly, I will put our progress up in the city of Baltimore and our rate of improvement up against any kids in any major city in America .

Ehrlich: I will always talk about the kids who are being denied their Constitutional rights.

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