ANNAPOLIS, JAN. 14 -- Maryland Gov. William Donald Schaefer clipped a microphone to his short red tie, armed himself with goofy glasses and charts filled with slogans, and laid out a mission today for the 1988 General Assembly.

Schaefer transformed what is usually a staid ceremony -- the State of the State address -- into a colorful, personal, 50-minute talk that was devoid of formality. The governor staked out his positions in simple terms: Is he pro-business? "Yes, sir!" Does the state get all it should for the $1.6 billion it spends on education? "I have some reservations." Is he ready to share power with the legislature? Yes and no.

The speech was mostly style, but there was some substance. Social issues will be on stage, with new initiatives for mental health services, juvenile services and day care. "This is the year" for improving higher education, Schaefer said, with changes in its structure and more money. He wants to build a boarding school for talented math and science students. He wants $20 million to woo businesses to Maryland and keep those already here.

Legislators also will be asked to tackle the politically difficult issue of making Circuit Court judges appointed rather than elected. And the major capital works project for the year is a proposed $290 million light rail system connecting Anne Arundel and Baltimore counties with downtown Baltimore.

Schaefer offered a peacemaking gesture, telling lawmakers that he would blink before the first potential legislative confrontation of 1988 reached the eyeball-to-eyeball stage. The governor said he would heed the advice of Lt. Gov. Melvin A. Steinberg and drop his opposition to a bill he vetoed last year that would give lawmakers a larger role in state spending decisions. The legislature is expected to override Schaefer's veto next week, and the governor said he wouldn't fight it.

" 'I don't want you fighting with the legislature,' " Schaefer quoted Steinberg, who is responsible for shepherding the administration's proposals through the legislature. Get off it, Steinberg said. "So, reluctantly, I did," Schaefer said.

But while optimistic lawmakers said Schaefer seemed to be more conciliatory and comfortable with their roles, the man who likes to be compared to the iron-fisted Chicago mayor Richard J. Daley warned lawmakers not to think he is giving away his clout.

"You should not give up an ounce of the authority you have and give it to me," Schaefer said. "On the other side, you ought to allow me to do my job. Don't take from me the things that I can do.

"I'm a different type of governor. I don't sit and watch the world go by. I'll be bumping heads with you on who does what."

Schaefer quickly dispensed with the pomp that usually surrounds such events. He donned a pair of gag eyeglasses that House Speaker R. Clayton Mitchell Jr. (D-Kent) handed him -- last year, Schaefer thought he had forgotten to bring his reading glasses -- and wore them long enough for photographers to record. He unveiled slogans: "This is the moment -- for Maryland momentum."

And he joked that because Virginia Gov. Gerald L. Baliles' State of the Commonwealth address Wednesday ran for an hour and 10 minutes, his would be 10 minutes longer. "I'm not going to let Virginia get ahead of us in any way," he said.

Schaefer also gave lawmakers a piece of advice: "You've got to be a little daring. You've got to take a little risk."

Most legislators seemed pleased with the tenor of Schaefer's remarks, although they added that it would be impossible to judge all of his initiatives and proposals until he presents the budget next week.

"I thought the tone was lovely; it was definitely more conciliatory," said Sen. Barbara A. Hoffman (D-Baltimore). "He realizes he has to work with the legislature."

"You can't help but like this guy," said House Republican Leader Ellen R. Sauerbrey of Baltimore County. "He's a super salesman."

But he didn't please everyone. Del. R. Terry Connelly (D-Baltimore) said he thought a State of the State address should be more formal. And Schaefer's lecture and use of visual aids made Del. Patricia R. Sher (D-Montgomery) feel as if she were in a classroom -- for very young students.

"To use speeches like he's talking to first graders is the most insulting thing I've ever heard," said Sher, who is furious with Schaefer because he reneged on a campaign promise to increase the availability of state-funded abortions for poor women.

Still, most lawmakers agreed with Del. Paul Weisengoff (D-Baltimore) that Schaefer's mood and message were "upbeat."

Schaefer praised what he described as his hard-working staff, who he said "don't know what hours are." He praised legislators for their "brains" and told them how much they had accomplished in 1987. He even praised a couple of reporters, including an investigative reporter "who has never written anything good about me."

Schaefer said the biggest accomplishment of his first year in office was not that he achieved legislative successes, but that he visited each part of the state frequently. He said he believed he had fostered a sense of "unity" in a state that is diverse and disparate. And he said the most important role of state government "is to support local government."

The governor's priorities are clear, but their rank is not. Schaefer says all of his proposals are important, and legislators say that makes it difficult to negotiate.

One priority is the state's colleges and universities. "This is the year for higher education," Schaefer said. "What we want to do is make Maryland's colleges and universities the best in the world. It's very simple -- the best in the world."

Schaefer downplayed the disagreements he and Steinberg have had on how to restructure the system and said their plan -- which includes $50 million in new funds -- will accomplish the goal. The plan would consolidate the state's public colleges and universities, except Morgan State and St. Mary's College, under a single board of regents. It would also create a new, stronger commission to oversee all facets of higher education in Maryland.

Most legislators were reserving judgment until they see the bill.

Schaefer also lobbied for his proposal to build a boarding school, probably in Greenbelt, for talented math and science students. The school would eventually serve 600 students and cost an estimated $20 million, and it has come under fire from some who believe the money would be better spent improving education around the state.

The governor said that wouldn't happen. "If we don't pass {the proposal}, that money is not going back into education," Schaefer said. "I just want to make that perfectly clear."

Schaefer said he will propose major maintenance work at some of the state's neglected buildings such as prisons and mental hospitals. But the single largest capital works project is the light rail system -- essentially a modern version of the trolley -- that would link Anne Arundel and Baltimore counties to the planned stadium complex in downtown Baltimore.

Schaefer asked legislators not to oppose the project just because only one area of the state benefits from it. But Washington area legislators say the governor's plan is quickly becoming an issue among their constituents, and they want a commitment for at least a study of a similar system in their region of the state.

Social services also will be a priority, Schaefer said. He will seek $8 million in new mental health programs, he said, especially for people who have been deinstitutionalized. He said he is also concerned about providing day care; he wants to make it easier to open day care centers and wants to provide an increase in the state's subsidy for the care of poor children.

The legislature will be asked to approve the first year of an 11-year, $331 million program to demolish antiquated prisons and build new ones. The program also would include job training and counseling. Schaefer also wants to increase the pay for the State Police, whose wages he said rank near the bottom nationally.

"Here's a tough one for you," Schaefer said as he asked lawmakers to approve a controversial proposal that would discontinue contested elections for Circuit Court judges and make the positions appointive. The plan has been blocked for years by a coalition of Republican, rural and black lawmakers who fear their choices would be kept from the bench.

For economic development, Schaefer wants a $20 million fund he could use to lure businesses to Maryland and keep those already here. Legislators have said they will not establish the fund unless they have prior approval over how it is spent.

The battle over what House Appropriations Committee Chairman Charles J. (Buzz) Ryan (D-Prince George's) called the "space" between executive and legislative powers -- especially as it relates to spending money -- is expected to continue throughout the session.

So lawmakers said they were especially pleased that Schaefer was dropping his efforts to fight the override vote. "There are a lot of us who feel very strongly about that bill," said Del. Nancy K. Kopp (D-Montgomery).

Schaefer's speech received more laughter than applause, but lawmakers did come through at least once. That was in the midst of a pep talk about how much the legislature already has accomplished.

"We're going to do even more of a remarkable job in the next seven years," he said, alluding to what would be a second term. Schaefer acknowledged the smattering of applause. "Thank you, Democrats," he said.

Staff writers Susan Schmidt and Amy Goldstein contributed to this report.