the maryland gubernatorial debate. >> welcome to the maryland gubernatorial debate. i'm mary jordan, editor of "washington post" live. the division of e newspaper that host forums and conferences. today our media partners are wusa channel 9, which is broadcasting this live, and wamu, 88.5, which will air it tonight at 8 p.m. we are also streaming live right now at the "washington post" post live.com and we are encouraging viewers to submit questions and some of them will be posed to the candidates over the next hour. thank you, governor martin o'malley and former governor ehrlich for coming today to answer our questions. just 19 days before voters go to the polls and decide which of you will be the governor for

the next four years. this is a matchup of two people very familiar with each other. martin o'malley, a democrat who's been governor of maryland since 2007 and bob ehrlich, republican, who was the governor from 2003 to 2007. i guess you really like this job, both of you [ laughter ] >> some would question our sanity. >> i will moderate today's debate and i'm joined on the panel by two well-known broadcast journalists, derek mcginty, anchor of wusa and greg bush, wamu 88.5's maryland reporter. our debate will last one hour and we have a live audience here at the "washington post" building and we have asked them to hold their applause until the end. the candidates have kindly agreed not to filibuster and to cut their remarks when we have asked them to move on. i thank you in advance for trying to be succinct.

we know politician and reporters and all of us will try to keep on point. so now we will start with opening statements. one minute 30 seconds. governor o'malley won the coin toss and elected to go second. so governor ehrlich. >> mary, thank you. i want to thank the sponsors of the debate, particularly the post, mary, market, thank you very much. i have brought two ladies with me today that are integral to my life, mary cane our lieutenant governor is sitting in the front row. mary, thank you for being here and my first lady, kendall ehrlich, thank you, babe for being here. we have a minute for opening statements and we will get in to the substance of this debate. i want to be governor again. i love this state and it's important, obviously because governors are quite impactful, 6.5 million people in the state of maryland. we have different definitions of progress in this state. over the past four years, we have seen a lot of job loss in the state. we have doubled unemployment,

3,000 small businesses shut. the largest tax increase in maryland i history and driven debt to historic highs. i believe we can do better. we have done better during our tenure. we can create jobs. we can lower taxes and we can retire our debt. the bottom line to today's debate is about who you trust. we have seen a lot of negative ads out there. it is a silly time. some of these ads are just over the top. and we are going to talk about those ads today and taste that's why, mary i appreciate the opportunity to have this confrontation and debate about the issues of the day and ads that have been running. who do you you trust to lead the state forward over the next four years? it is my pleasure and honor, humble, obviously to represent this state in 2003 to 2007. governor, thank you for being here today. i look forward to our debate this morning at the "washington post." >> thank you. >> governor o'malley. >> thank you so my wife and

kids for being here, as well. i want to begin by thanks the people of maryland. i want to thank you for giving me the honor of serving you during these very challenging and difficult timeses for every maryland family and every maryland business. but as a national recession comes to a close, maryland is moving forward. we are creating jobs again, and we are creating them here in maryland by retooling our economy through invasion and education and we are doing it better than most states, but we have a lot of hard work ahead of us. that's why you have an important and clear choice to make at a critical time. the choice is whether we move forward to better days, or whether we slip back. and i humbly ask for your support to move maryland forward. every decision that i have made, over the course of the last four years and moving forward, will be based on one interest and one interest only, and that is what is best for the people of maryland. i have fought every battle on your side, standing up to big banks and big mortgage

companies, for moms and dads fighting to keep their homes out of foreclosure, standing up to big utility companies for maryland consumers with fiscal discipline and decisiveness we have cut spending more than any other governor has over a four year period of time and brought people together to protect the priorities that allow us to make this transformation, a change in to a new economy. improving education, making college more affordable, investing in invasion, making tough decisions guide by science that are working to improve the health of the chesapeake bay and a vision for transportation that includes mass transit so we can grow in smarter, cleaner, greener, more sustainable ways. i love our state and i'm optimistic about the better future you and i have by moving forward now. >> great. now we will begin with a series of questions on jobs an tbe economy in general. this is, again by coins to

toss. the first question will be answered by governor o'malley. voters have been clear about one thing. they want more jobs. can each of you tell us what is something new -- what isyour best, most innovative idea for creating new jobs, again, something new, something not out there right now. governor o'malley? >> we are doing a number of things to harness this invasion in our economy and state, mary. we sit in a corridor of science, discovery, healing and learning the likes of which with with the quality of life we have exists in few other places so we have to create jobs, save jobs and we have been holding on to our job base better than most other states and are creating new jobs. this year, so far, we have had the best year so far of net new job creation we have had since 2007. >> can you talk about something we haven't seen now to get more people employed? >> yes. >> okay [ laughter ] >> and part of the reason for

this. -- the private sector is where jobs are created but there are things we have done as a state and in advance of other states we created a $5,000 tax credit for any business that hires aers and off unemployment roles and gets them back to work and pushing a new idea of invest maryland where we allow large insurance companies to forward pay their tax liabilities at a discount and invest those in to creating more venture capital in the maryland venture fund for startup businesses in our state. we have put together the largest public-private partnership of any state last ar in order to modernize the port of baltimore. so when the bigger ships can come through the panama canal they don't pass by maryland but instead maryland is a winner in global trade an a winner in the new economy. those are a number of things, along with increasing our biotech tax credit, extending the research and development tax credit and launched an

initiative called bio 20/20, which is $1.3 billion vision to increase maryland's lead in biotechnology. we have moved up in the course of the recession from fourth to second place in biotech and the jobs created at metimmune and human genome sciences and we have the same thing to do where cybersecurity is concerned. senator mikulski is part of the and we are moving forward to make sure the jobs stay here and are filled with maryland workers. >> a small business bill of rights because small business owners are hammered in the state of maryland today. you know it. we have been hammered. we have one of the most hole host tile business environments in the country wretch close to 50 with regard to our business climate. i have had 70 to 75 small business round tables around the state of maryland over the last year. thousands of small business people step forward with regard to your agencies. they are getting hammered. they are treated like a sheriff.

not as a partner. when you call a state agency, when you ask a state agency for help, you should be treated as a partner. for the folks out there, the most small business people are interested in contract making a buck, creating a business, expanding their business and creating jobs in the state of maryland. we have lost jobs in this state and 3,000 small businesses have shuttered the last three years we have the most hostile regulatory and tax environment in the country with regard to the r and d tax credit research and development, they were our initiatives. >> can you talk about what you would do as governor to create jobs. >> a small business bill of rights with regard to the impact that these agencies have on business, on business people, entrepreneurs in our state. small business should be able to get a consistent enanswer and a quick answer with feedback from the private sector today is we don't get those answers.

we don't get consistent answers. we get hostility. our unemployment trust fund is broken. the regulatory environment, which is directly the responsibility of the governor, not the legislature, it's the executive branch of government. it's very broken in our state, and that's not my opinion, that's the direct feedback from the small business community in the state. they deserve a small business bill ofrights. they deserve to have time frames put on state officials to give them consistent answers with regard to their questions about state regulation and state law. >> reporter: thank you. >> governor o'malley, i want to follow up on something that governor ehrlich said in terms of maryland ranking -- in terms of your tax friendliness to business. you are ranked 45th according to the tax foundation and virginia next door is ranked 15th for example. virginia's unemployment rate is 4.8% and yours is a half point higher. you are going to be a job's governor, shouldn't you be friendlier tobusiness in your state? >> we have friendly to business. in fact we are not for business

none of us would be able to protect our homes and have jobs. the better indicator of whether a state is good for business is whether or not as we come out of the recession we are actually creating jobs, whether we are making the investments and protecting the investments in the greatest assets that an invasion economy has, and that's our people. all of these rankings -- let me give you a couple more rankings. the u.s. chamber of commerce, mao hardly a mouthpiece for the maryland democratic party said that maryland ranks one of the top two best states in america for invasion and entrepreneurship. the kauffman foundation says that maryland ranks third on their new economy index. that is the ability to create and save jobs in to this new economy. so, if you stack up maryland's job retention over the recent years we have held on to our job base better than most other states including better than virginia. if you look at the year so far, we are creating jobs at a faster clip, faster than virginia.

so we are in a strong region. what we are not in competition with is the past. we are in competition to win the future, and there's going to be states that win and states that lose in this competition. and the ones that win will be those that protect their investments in the skills of their people, in making college more affordable rather than jacking it up 40% as my predecessor did. they will be the states that understand that invasion is what will create jobs for the future and if our people are going to fill those jobs we have to be improving education and creating more affordable college opportunities. >> derek, let me -- >> excuse me -- >> this question is for governor ehrlich. if you return to annapolis you propose repealing the sales tax increase that governor o'malley approved. that would mean a drop in revenue of hundreds of millions of dollars in the state. give some specifics of how you will fill in that drop? >> let me take both questions together because they are relevant. our business environment has gotten hammered. those numbers that you suggest

are true are true. we are a fly over state for corporate headquarters. virginia chamber of commerce made fun of us when we passed the tech tax that you signed in to law. we have had millionaires taxes, we have had wal-mart taxes, the fourth higher personal income tax rate in the country. we have become a tax hell for business folks and virginia is taking advantage of it. the maryland chamber of commerce yesterday, you may have seen the news this morning, governor, that we are now out of four in the mid- atlantic rion fwith regard to any variety of business criteria. business people -- can we move on? >> sales tax is relevant to this. you pass the most aggressive tax that a governor could, a sales tax. it hurts poor people, working people disproportionately. passed the largest tax increase in history. first of all, matt as a predicate i believe we will have more people consume in maryland so we don't have the tax loss that a static analysis would have you believe.

i believe fain dynamic analysis when he passed the millionaire's tax they scored it at $106 million to be brought to the state. we lost $257 million. we lost 33% of our qualifying families and montgomery county particularly was hammered. class warfare is not good economics. it costs us job and business reputation and costs what we should be about. this state should be leading the country. with have the smartest people per capita, phds per capita, college graduates. a sales tax hurts retail maryland and border maryland. >> again, the question is, if it is dropped, from 6% to 5%, we are going to lose a lot of money. what do you do to make up the short fall. >> i don't believe we will lose that much money because people will consume more. let's get to the budget. i suspect we will get in the budget here, as well. it has come time for real. governors around the country are talking real with regard to the budget. it is time for pension reform and we know it.

although we have been kicking the can down the alley for years. at any particular time there is one to 4,000 empty funded job positions in maryland. we need an innovative governor as we did under the man dell commission and i believe you recall saying very positive things about the man dell commission and recommendation. >> thank you. we will move on. >> another question. >> we care about our tax and tort and regulatory environment. they are the constituent elements of what makes your state pro business or antibusiness. >> thank you. so we will go on now to a question from the on-line audience. we have gotten hundreds of questions and several of them asked both of you if you have any plans for youth programs or youth jobs. >> governor o'malley first? >> yes. and i believe the answer to the last question asked repeatedly is he has no idea how he would make up the 700, 800 million [ laughter ] we have done a number of things thanks to

president obama's courageous leadership in preventing our country from sliding in to the second great depression and i think all of us can agree we have lost a lot of jobs in our country. and we need to continue to work hard. but president obama helped us getting more summer jobs happening in our state and we have also created something called the civic conservation core in our state where we serve 600, 700 young people and get them doing important works in our parks and our state parks, repairing trails and streams and doing things of that nature. we work with all of our individual offices of employment development in order to get young people to work. we also are improving bour career and technical education offerings that we have in our high schools because in this new economy, where you have to earn in order to learn and learning is a life-long process, we want to make sure when our children come out of high school they have not only the ability to go on to college in terms of their levels, their

scholastic levels but we want them to have the ability to get a job. and so those are a couple of things we have go done on youth -- we have done on youth jobs. >> i guess your idea of getting the budget corrected is to ask the federal government for more dollars which has been the mo in annapolis over the past four years and by the way, the spigot is stopping november 2nd. that's the message for the american people and the people of maryland, as well. with regard to jobs, it is all about jobs. jobs is the issue in this campaign. whether you are young or old. we want young people to stay in maryland. so, that jobs environment that we discussed earlier is a key for young, middle age people, they need retrained because their business may have closed 0 the economy changed. i would ask respectfully every listener today, everyone watching on of the compare the jobs under our administration to the o'malley administration. under 4% unemployment, one of the best and fastest job

creation records in the country. a very positive business reputation. when i was elected governor, the question to the business community was is maryland pro business, does maryland create jobs? the answer was in the low 30s. when i left the governorship it was in the 70s. it is now returned to the 30s because of the issues that we have talked about already in the debate. for young people to stay in the state we need to create a positive environment, a culture of entrepreneurship -- thank you, governor. we are going to close out the section with one question and move to another section. >> governor ehrlich, i have to ask you you have been criticizing governor o'malley over and over again saying he is going to raise taxes, but in a time when our economy is crazy, nobody can predict what is going to happen. does i make sense to issue a blanket statement say nothing matter what happens if i have to furlough american workers for ten weeks fai'm not going t raise taxes. >> $32 billion budget we do not raise taxes. you do not hammer taxpayers.

you do not hammer small business people. you do not hammer entrepreneurs in one of the worst recessions in our country's history. national unemployment rate 9.5, maryland doubled over the last year. we have lost 3,000 small businesses. it's the last time you want to talk about even raising taxes. people are feeling the hurt. middle class, working class poor people have been really hit by the sales tax. by the increases in fees throughout our university! , increased 35% over the last four years them last thing the american taxpayer wants to hear today is about taxes. >> is that a no. >> that's a no. that's a blanket no and i'm the only candidate giving a blanket no. >> can i respond briefly. >> very briefly. >> the former governor's credibility on this issue is nonexistent. he made the same pledges eight year ago when you got in you raised property tax and college tuitions by 40%. you raised 30 tolls and fees. you imposed a new tax called

the flush tax. i don't recall you ever sending away one federal dollar that came to maryland at that time. and further more more, during your four years, we actually lost our share of the nation's jobs was actually declining. during these tough years our share of the nation's jobs have been rising and you bare always talking down maryland. i don't think that is good for business. i don't think that's good for job creation. under your leadership you slip below the national average. >> thank you, governor. >> that's the stuff that's been on tv that drives people down, that depresses people that makes people cynical about politics and politicians. >> but those are things you did when you were chief executive of the state. >> you raised the property tax, bob. >> you know, governor. >> you raised 30 different tolls and fees. you have the biggest increase in state spending of any governor. >> okay. >> i think we have. >> let senator ehrlich respond here. >> i think we have focused on the problem. the governor doesn't understand

the fundamentals of state government. the state, it appears. >> please hold your applause and all comments. the governor doesn't set the tax rate. fees and not taxes have nothing to do with the general fund and by the way the largest fee is the chesapeake restoration act so i would ask you to tell the people of maryland how you claim to be an environmentalist and you run around to press conferences and claim credit for septic upgrades, sewer treatment plant upgrades and crops band where do you think those dollars come from the same fees you are campaigning against. with regard to college tuition, let's talk about i. it is the subject of a lot of misreporting. 30 second attack ads on tv. the cost of tuition at a university system schools has gone up dramatically the last four years, not tuition,

associated fees. like to talk about fees 35%. 16,000 to 22,000. >> thank you, both. we're going to move on to a section -- many of the viewers live in the washington area. they live in montgomery county, prince georges county, two of the largest jurisdictions that maryland has in our area. so i want to ask each of you to tell us one thing that you would do as governor over the next four years that would specifically benefit montgomery county, and then separate one thing that would specifically benefit prince georges county residents. governor o'malley, please begin. >> only one, huh? >> only one. just something you prompt to do that would really help montgomery county residents and something that will help prince georges county. >> i can't talk about protecting record investments and public education and record investments. >> reporter: that's right. you can't. >> you can if you want. >> if i have to choose only

one, and i can't pick those things for making college more affordable, i would say moving forward with a better balance and manassas moving forward with the purple line which will benefit both montgomery county and prince georges and prince georges county specifically is finding and forging the partnership that allows us to create a world-class hospital at prince georges county hospital for the future. >> reporter: great. thank you. please hold the applause until the end. governor ehrlich. >> i want to build the purple line in the way i can look you in the eye and say we can plan it. we can fund it. we can build it. and people will use it and that's obviously rapid bus and that was our planned alternative during our b administration. governor o'malley can talk about light rail all day long. red line to baltimore, pumple line in dc. can't fund it. can't tell you how he would fund it. it has been around for decades. like the itc you weren'tent too

proud of when you were mayor and now suddenly you blessed it. ehrlich icc maybe the appropriate name for the road. >> you have jump odd them purple line talking able the importance of the line in montgomery and prince georges counties and you have different plans for it. yours is rapid bus and yours is light rail. why is your plan the more viable of the two? >> this is an interesting philosophical difference between u.s. and i understand why governor o'malley may support light rail. the fact is, however, if you look at what happened the last few years, what is happening in dc today, we have mass transit broken in maryland. we have marc broken and we have metro and metro matters an we funded metro matters and the "washington post" gave you a hard time about your stance on metro matters in the past. and i can look you in the eye and say we can build it, we can fund it and people willbuse it. with regard to scarce resources

in time we should fix what is broken first and then build what we can on time so people aren't cynical about waiting 60 years for the intercounty connector. people will use rapid bus. it will be popular. not everyone in this community is for the light brail alternative. we hava receive solve call difference on this issue. >> talk about light rail and why you think it is a better option. >> this has been the subject of a lot of engineering study and the subject of a lot of harings and the preferences from prince georges county, county executive ike leggett was for the purple line to be light light rail and the reason is this, while it is more expensive to build up front, it is less expensive to operate over the long term and it has a bigger economic and job creating impact that is beyond just building of the line itself, which is why the greater washington board of trade has supported the purple line and why they supported our campaign, as well. so the purple line, doing it as

a bus rapid transit is a metaphor for the former ehrlich administration. it's more expensive and less effective. so that's why we are in favor of the light rail. the way we build this is we have already put $90 million in to the six-year capital plan for the planning and engineering and design up front. the federal government will need to decide which of these lines go forward or if both go forward. the purple and red line in baltimore. what remains to be filled in is whether the not federal government will partner with us on a 50/50 basis or 80/20 basis and we will have to do a number of things to get it financed, including tax incremental financing and looking a public- private partnerships like the one we pulled off in the port of baltimore but we still have the capacity to do meaningful and important things for our region. >> derek, you did not get an

answer to your question. only thing that gets you there is massive tax increase or major infusion of dollars in transportation costs which you have not talked about. >> derek has a new question. >> we are talking about billions of dollars. >> let's talk about something you mentioned and that is the pension issue. >> yes. >> reporter: since 2002, maryland has never fully funded the pension of government workers and now you are 35 billion there's behind. and i don't see a plan from either one of you to how you are going to fix this over the next few years when budgets are as tight as they are. how are you going to come up with money to make sure they get their pension and health care. >> it is time for honesty with regard to the care issue. with regard to people you are not hired yet and not invested in the system, the time is here. for people we haven't hide yet. with people who have vested in system, present employeest employees you are not going to

touch them. that's a legal vested right they have and illegal and immoral to touch that but the era of must come to the public sector must if it does not those people who are vested who have made lifetime decisions with regard to their income over their senior years are not going to receive those dollars. secondly with regard to teachers retyrement. president mill ertalked about sharing the burden with the locals. which is may major issue. everyone is scared to talk about it. we are not. >> where are you going to get the $35 billion. >> teacher retirement is a part of what you are talking about. by the way when i left we were in the 90s vested. now in the 60s. that's not his fault but that's

market and the downturn but the fact is you have to begin the discussion with regard to sharing with the subdivisions in annapolis. i think they are ready for it. do it fairly, incrementally, balanced and not overnight. >> governor o'malley. >> where do begin? this is a complex and difficult challenge and we have appointed a commission in statute to come up with recommendations and they are working right now. the difficulty here, derek, of course, is -- there are many of them, but we need to do the responsible thing and we need to do it in a responsible way. ideology will not solve this problem. >> governor, night cut you off but governor ehrlich stepped out and said defined benefit plans for government workers in maryland should come to an end. do you support the idea for balancing this? >> no, i don't. i think what we have to do is wait for the commission to put a menu of options and it will be a