O'Malley seeks venture capital fund, wind farms in State of the State speech

By John Wagner , Ann E. Marimow and Aaron C. Davis
Friday, February 4, 2011

Maryland Gov. Martin O'Malley urged lawmakers Thursday to back a $100 million venture capital initiative, spur investment in offshore wind farms and ban the installation of septic systems in major new housing developments.

O'Malley (D) used his fifth State of the State speech to pitch several priorities, some of which have already drawn skeptical questions from lawmakers in both parties and could test his political muscle after a convincing reelection in November.

In a 28-minute address to a joint session of the General Assembly, the governor also acknowledged unpopular budget choices ahead but asked for a continued focus on education, job creation and the environment.

"The state of our state is stronger today than two years ago. It is stronger than it was even a year ago. But better isn't good enough," O'Malley said in a speech that was interrupted by applause a dozen times. "There is more we can do, and for the sake of our children's future, there is more we must do."

Absent from the annual address - O'Malley's shortest since taking office in 2007 - was any mention of several issues expected to generate intense debate during the 90-day session. O'Malley said nothing about a bill to legalize same-sex marriage, for example, nor did he acknowledge efforts to raise the state's gas tax to fund transportation projects.

Instead, he spoke of preparing Maryland for "the new economy" and pushed a relatively narrow set of priorities, including the venture capital fund, which he said could be the difference between the next "world-changing company beginning in Maryland or watching it happen in Massachusetts."

Lawmakers said the proposal mirrors efforts in Tennessee, Ohio and about a dozen other states, where the results and levels of financial return have been mixed in recent years.

O'Malley's plan, in part, calls for making insurance companies eligible for state-issued tax credits if they invest dollars in Maryland's 14-year-old Venture Fund and venture capital firms based in the state.

Government involvement is needed, he said, "because seed and early stage money. . . have all but dried up in the national recession." Maryland's share of all U.S. venture capital investment has shrunk slightly during the recession, but about $357 million in deals were closed in the state last year.

Del. Sheila E. Hixson (D-Montgomery), chairman of the powerful House Ways and Means committee, said she would sponsor the bill but had concerns that would need to be hashed out with the administration and with industry leaders in coming months.

"I have to see a bigger picture than this. That's an awful lot of money we're investing, and is the return going to happen?" Hixson said.

Del. Brian J. Feldman (D), chairman of the Montgomery County delegation in the House of Delegates, said the legislation is "a very good thing" for his county, particularly emerging businesses in the Interstate 270 corridor.

CONTINUED     1           >

© 2011 The Washington Post Company