ANNAPOLIS, MD—Citing mounting debt and a decline in tourism dollars, the state of Maryland will shut down for good on August 31, Maryland Gov. Robert L. Ehrlich Jr. told reporters Monday.

A Baltimore-area interstate.

"I would like to sincerely thank everyone who has ever lived in or visited the great state of Maryland," Ehrlich said at a press conference held on the steps of a boarded-up Capitol Building. "You are the people who have made this such a wonderful place. Maryland will live on in the fond memories of each of you, even as we liquidate the state's assets."

Ratified as the seventh state in 1788, Maryland has been a favorite haunt for a devoted group of fans. In addition to being the home of the Annapolis U.S. Naval Academy, Maryland is the birthplace of such notable Americans as surveyor Benjamin Banneker, singer Billie Holiday, baseball legend Babe Ruth, and former Supreme Court Justice Thurgood Marshall.

In spite of its rich history, Maryland has struggled with mounting debt since the '90s, as tourism and tax revenues failed to keep pace with rising expenses. The state has for years fought what many insiders considered a losing battle.

"We had a good run, but we just can't do it anymore," Ehrlich said. "The bad economy, increased spending on homeland security, and an increasing Medicaid bill were the final nails in Maryland's coffin. We are simply losing too much money to keep the borders open."

Ehrlich promised that Maryland would not shut down operations until the last day of August, giving longtime fans of the Old Line State an opportunity to visit.

"We wanted to give people a chance to say goodbye," Ehrlich said. "Since the rumors of a state shutdown began, I have received thousands of letters and small donations from people all over the country. This means so much—more than you can ever know—but despite all the love and devotion, I'm afraid it's just not going to happen."

Ehrlich told the crowd that he did everything he could to keep Maryland open, but in the end no effort proved successful.

"I made across-the-board budget cuts, restructured all of our social services, effected hiring freezes, and emptied out the state's rainy-day fund," Ehrlich said. "The last decade has just been exhausting. As much as I love Maryland, I can't say that I'm going to miss the 18-hour days trying to keep this state afloat."

Ehrlich said he received offers to buy out Maryland, but the bids were rejected.

"We had a deal with New Mexico that could have saved us, but it fell through," Ehrlich said. "The things [New Mexico Gov.] Bill Richardson wanted to change when he took over went against everything Maryland is all about. Rather than severely compromise our state, we decided instead to pass."

On Sept. 1, the government of Maryland will disband and all state employees will be laid off, a situation Ehrlich calls "extremely regrettable."

"Many of these workers have been in Maryland all their lives," Ehrlich said. "These folks are like family to me. In fact, some actually are family. The people are why we held on to statehood as long as we did."

Although current residents of Maryland will be allowed to stay in the state until they can arrange to relocate, they must do so without government services. Experts predict the state will become a vast vacant lot within five years.

In order to offset some of the debt accrued over the last few decades, Maryland is selling its assets, announcing that "everything must go" before the state closes. The most sought-after items to be auctioned off include the original first draft of "The Star-Spangled Banner," written by Maryland native Francis Scott Key.

The rights to Maryland's state flag, bird, and motto are also being sold to the highest bidder.

"Secret [brand antiperspirant] has put in a substantial bid for our motto, Fatti maschii, parole femine, which means 'Manly Deeds, Womanly Words,'" Ehrlich said. "I also think that Nevada might buy the rights to our state sport, jousting. When we sell the rights to our state song, 'Maryland, My Maryland,' that's when it's going to hit me that it's finally over."

For many longtime fans of Maryland, the closing strikes a deep emotional chord.

"It's just a shame," said Gene Tupper, a resident of Maryland since 1955. "I don't think anyone will really understand what it was like to visit the historic Antietam National Battlefield or walk along beautiful Chesapeake Bay back in the prime years. I guess all great things have to end sometime."

Many fans of the state said they hope someone purchases and revitalizes Maryland before it falls into disrepair.

"I don't want what happened to Oregon to happen here," said Jane Renski, a Maryland resident. "We drove by the place a few years ago and it was totally abandoned— really eerie. The whole state was infested with raccoons."