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Good morning. This is Governor John Baldacci.

As we clean up from the severe thunderstorms that blew through Maine this week, it’s encouraging to know that at least the economic forecast has gotten a little brighter.

On Friday, Kestrel Aircraft Company announced that it would locate a new high-tech manufacturing facility in Brunswick, Maine.

The new company will hire between 50 and 70 engineers to begin design work on a cutting-edge passenger plane.

The company intends to build a new, advanced composite passenger aircraft – called the Kestrel JP 10 – here in Maine.

Once the design and development work is complete, Kestrel will begin production at the facility, adding another 250 highly skilled jobs.

The company’s decision speaks to the quality of Maine’s workforce, our improving business climate and our commitment to support new technologies.

Kestral Aircraft Company will complement the already strong composite technology cluster in the Mid-Coast and the development of the Maine Advanced Technology and Engineering Center, which will be located at Brunswick Landing.

The Advanced Technology Center, which is a partnership between the University of Maine and Southern Maine Community College, received significant funding this year when voters approved $4.75 million dollars that was for the program.

Mainers understand the importance of investing in innovation and the industries of the future.

Kestrel’s decision to come to Maine demonstrates the success that can occur when government at all levels works cooperatively with the private sector on economic development.

The redevelopment of Brunswick Naval Air Station has been a top priority of my administration, a priority that is also shared by the Maine Legislature and the people of the State.

We will continue to work to help Brunswick Landing realize its full potential.

We have come a long way since the summer of 2005.

The federal government made a mistake when they closed the Brunswick Naval Air Station.

Since that day, we have worked together tirelessly to turn that mistake into opportunity.

We are making progress.

Maine’s financial position is also improving.

While it’s too early to talk about the national economy in terms of recovery, Maine did end last fiscal year with a surplus of more than $70 million dollars.

That surplus puts Maine in a better position to address the challenges facing our State.

And while there are signs that the economy is improving, recovery remains fragile and we must remain vigilant.

The surplus is good news, but we have to understand the context.

Even with the improved circumstances, we finished this year more than $55 million dollars below the 2009 level, and revenues were about the same as they were in 2005, five years ago.

The surplus is the result of improving corporate profits and a recent improvement in the sales tax.

But they are also a result of a disciplined and frugal approach to government spending.

And I remain committed to rebuilding Maine’s financial reserves so the State can weather future hardships without raising taxes.

We have controlled spending and focused on finding efficiencies.

And we have fulfilled our commitment to the most vulnerable in our State.

But it hasn’t been easy, and there have been many, many tough choices.

We’ve done it by working together.

But our work is not done.

Without Congressional action to extend support for Medicaid, Maine faces a potential budget gap of an additional $100 million dollars.

So if Congress does not act, in October I will be forced to issue an executive order to immediately cut spending.

My administration right now is identifying areas within State government where spending can be reduced.

Every department and agency has received a target for those reductions.

In the coming weeks, we will thoroughly examine the alternatives and put forward a plan to assure that Maine’s budget remains balanced.

Already, I’ve heard from some folks saying that we should use the surplus to restore earlier cuts in the State budget.

Unfortunately, that’s not possible.

The lingering effects of the global recession continue, and we have to understand that government must continue to do more with less.

It’s a hard message.

But it’s the truth.

Kestrel’s decision to locate in Maine and our State’s improving revenues point to the opportunities that exist.

And remind us that better days are ahead.

But our task now is to remain responsible and ensure that our economy has every opportunity to begin to grow again.

And if we stay focused, we will get there. The best social service program is a good-paying job with benefits, and the best social service department is the family. We need to work to continue to strengthen both.

Thank you and have a nice weekend.

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