ANNAPOLIS — The pomp and circumstance are officially over.
Gov. Martin O’Malley, 48, was sworn in Wednesday on the steps of the Capitol in front of a crowd of several hundred, including Maryland’s political and business elite. He kicked off his second term with a cautiously optimistic inauguration speech about Maryland recovering from the recession, while also touching on a wide range of accomplishments since taking office in 2007.
O’Malley — a rising star in the Democratic Party coming off a resounding victory over a former Republican governor — begins his second and final term in the midst of a careful balancing act: He’ll need to address a series of pressing issues facing Marylanders while keeping an eye toward bigger political aspirations.
The challenges facing the state during his second term are plenty.
Over the next four years, O’Malley and his administration will tackle issues ranging from projected budget deficits to implementing health care reform, to name just two.
“As we look ahead, we know these next four years will not be easy,” O’Malley said, in his roughly 11 minute inaugural address. “Unemployment and foreclosures remain unacceptably high, wages remain stagnant, and our national recovery has only just begun. We have a long way to go.”
Political experts say O’Malley will need to walk a tight rope during his second term. Issues that are likely to come up — including tax increases and same-sex marriage — could complicate future political aspirations, said Todd Eberly, acting director of the Center for the Study of Democracy at St. Mary’s College.
“He’s got to figure out how much he wants to split hairs over the next four years,” Eberly said.
For now, O’Malley’s top priority is job creation.
Some 220,000 Marylanders are out of work, according to November data from the U.S. Bureau of Labor Statistics. O’Malley called the figure “unacceptably high” and said “harnessing the full job-creating potential of Maryland” through its bio-tech, life-sciences, aerospace and cyber security sectors will be key for the state to succeed in a post-recession economy.
The state’s budget shortfalls will also take center stage.
Lawmakers are currently facing a $1.6 billion deficit for fiscal 2011, and legislative analysts are forecasting shortfalls of $1.5 billion in fiscal 2012 and more than $2 billion in 2013.
O’Malley has used a heavy dose of federal stimulus funds the last two years to balance the state’s budget. That won’t work moving forward, as the stimulus money has been tapped dry.
Sen. Allan Kittleman, who stepped down as the GOP minority leader earlier this week, said O’Malley has used federal funds to “dig a hole” for the state.
“We have a spending problem, not a revenue problem,” said Kittleman, R-Howard. “We need some serious discussion about reducing government spending to make up for that.”
Under O’Malley, an estimated 4,200 state positions have been eliminated since 2007 as a way to trim spending. O’Malley also has furloughed state workers three years in a row — something he has said he hopes to avoid this budget cycle.
Overall, the budget shortfalls, tax increases and cuts to state employees and services have not risen to the “draconian levels of other states,” Eberly said.
“And voters responded to that,” Eberly said of O’Malley’s double digit November victory over former Republican Gov. Bob Ehrlich. “He has a pretty resounding endorsement from the people of Maryland.”
During O’Malley’s first term he signed into law what is considered the largest tax increase in Maryland history and the nation’s first state-wide living wage bill. He also froze tuition at the state’s university system over the last four years and helped push through slots as a way to raise revenue.
Making college more affordable has been one of the hallmarks of O’Malley’s administration. He touched on the topic Wednesday and drew applause from the crowd.
“The tuition freeze did a wonder for a lot of people,” said Latia Stanley, a 22-year-old senior at Frostburg State University who attended Wednesday’s ceremony. “It gave me an incentive to stay in the state.”
Raising tuition will likely be one of the ways to balance the budget in the future, said Delegate Jon Cardin, D-Baltimore County.
“It’s time to look at that as one of the ways to fix the budget,” he said. “That doesn’t mean he (O’Malley) won’t keep tuition increases to a minimum.”
O’Malley’s political legacy is rooted in his time as a get-tough-on-crime Baltimore mayor who paid close attention to crime stats. He was elected governor in 2006 by selling voters on the idea that the state had gone adrift under Ehrlich.
Since then, O’Malley’s political stock has continued to soar. His recent appointment as chairman of the Democratic Governors Association has only bolstered talk about O’Malley running for a higher political office.
O’Malley’s political ambitions are no secret around the Capitol, said Delegate Michael McDermott, R-Worcester.
“The governor is a man that has aspirations,” he said. “We’ll see what the future holds for him.”
For now, O’Malley appears focused on the task at hand. On Wednesday, he touted reductions in crime statewide, and pointed to a blue crab population at its highest levels since 1997. He also applauded Maryland businesses for creating jobs during the recession.
During O’Malley’s speech, about 50 members of the American Federation of State, County and Municipal Employees demonstrated against proposed pension and health care benefit cuts for union workers as part of an overhaul of the state’s pension system. They carried green O’Malley campaign signs with his name blacked out by the words “pensions” and “health care.”
Although Kimberly Grandy thought O’Malley’s speech was “very good,” he didn’t address one key topic, she said.
“He didn’t mention state employees, pensions, retirements, furloughs,” said Grandy, who works in the budget and finance unit of the Department of Juvenile Services in Baltimore.
Capital News Service’s Maggie Clark and Holly Nunn contributed to this story.