The state has grown "stronger" in the past year, Gov. Martin O'Malley told lawmakers Thursday — and he credited advances in public education and a focus on innovation with helping to spur economic recovery.
In his fifth State of the State address, the Democratic governor echoed themes he sounded during last fall's re-election campaign and in his inaugural address last month.
"The state of our state is stronger than it was two years ago, stronger than it was even a year ago," O'Malley said. "But better isn't good enough."
He urged lawmakers to protect the Chesapeake Bay with a ban on new septic systems in large housing developments and to hold utility companies accountable for repeated and prolonged power outages.
The state faces a budget deficit of as much as $1.6 billion, but O'Malley said the economy is showing signs of improvement, pointing to a decrease in home foreclosures, better job creation than at any time since the recession began and the forging of public-private partnerships such as at the port of Baltimore.
He lauded the state's public schools for high rankings nationally and gains on test scores.
"Innovation is key," he said. "And the foundation of innovation is education."
O'Malley praised President Barack Obama, calling his efforts on health care and economic stimulus "courageous" and borrowing a phrase from his State of the Union address: "Win the Future."
The governor also quoted Abraham Lincoln and Bill Clinton, and told the story of a Prince George's County woman who found a job after being unemployed for 13 months.
Republicans said O'Malley's speech was out of sync with his policy choices.
"The governor always gives a great outline of things, but now the reality sets in," said Senate Minority Whip E.J. Pipkin. If O'Malley truly wants to solve the state's structural deficit, the Eastern Shore Republican said, he should be looking for additional education savings and more dramatic pension reforms.
The governor's address to a crowd of lawmakers and state dignitaries drew sparse applause, save for one area: Holding utility companies accountable for restoring power quickly after outages. The audience cheered repeatedly as O'Malley announced legislation that would set reliability standards for customers — a popular proposal after recent winter storms left tens of thousands of customers in the dark.
"Moms and dads deserve better than to sit for days in freezing homes because the power hasn't been restored," he said. "Family-owned businesses should not be forced to lose productivity and income because big utilities have failed them."
O'Malley highlighted policies from his first term, including improving communications among emergency responders, building a broadband network, freezing college tuition for several years and investing in K-12 public education.
But there is one area, O'Malley said, in which the state has "totally failed." While Maryland has pursued policies to limit storm water runoff and other pollution into the Chesapeake Bay, he said, it continues to allow the "proliferation" of septic systems — which "by their very design are intended to leak sewage into our bay and water tables."
The state began requiring less-polluting but more costly septic systems for all new homes built close to the bay and its tributaries in 2009. Legislation to extend that requirement statewide, which has failed in the past, is expected again this year. But O'Malley said he'd like to ban further installation of septic systems in "major" housing developments.
Pipkin and other Republicans are concerned that O'Malley's proposal could be burdensome on rural counties.
In the Republican response to O'Malley's address, House Minority Whip Jeannie Haddaway-Riccio said Republicans agree with O'Malley's call to slow government spending and improve the economy.
"With that in mind, we expected a budget that was lean, that curbed spending and that addressed our structural deficit," the Eastern Shore Republican said in a speech taped Thursday morning, before O'Malley's address. Haddaway-Riccio said O'Malley's spending plan, which he proposed last month, "does not go far enough."
Anne Arundel County Executive John R. Leopold, a Republican, approved of the aspirations the governor laid out in his address.
"I think his goals are laudable," Leopold said. But Leopold does not believe the state has the resources to accomplish the programs, and singled out O'Malley's proposal on septic systems as an example of an idea with a price tag that is too high.
Leopold also wants to see more spending reductions.
"I think we need to make cuts to some of these programs that are sacrosanct," he said. His idea: reduce money for education administration.
Other county executives in attendance said they were worried about the education cuts O'Malley is proposing. By keeping state aid for K-12 education flat this year, the state would reduce by about $94 million the spending amounts required by state education formulas.
That would mean a $15 million reduction in school aid to Baltimore and a $21 million reduction for Prince George's County next fiscal year, compared with this year.
Baltimore Mayor Stephanie Rawlings-Blake said she is "concerned" about proposed education funding cuts.
"I'm not an alarmist," she said. "But I understand the potential dangers in that kind of cut to the school system."
Prince George's County Executive Rushern L. Baker III said he understands that the state is facing "lean times."
Still, he said, his county is being asked to take "a big hit" in the governor's budget. "We are looking at ways to make up some of that."
Baltimore Sun reporter Annie Linskey contributed to this article.