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Good morning. This is Governor John Baldacci.

Last week, we saw another positive sign that Maine’s economy is beginning to improve.

Our state’s independent revenue forecasters have seen enough improvement in the economy to slightly upgrade our financial outlook for the next year and a half.

They were cautious and conservative, and the improvement is modest – at best.

We know that our economy remains fragile and that recovery is far from certain.

In December, when I released details of my plans to close a $438 million dollar budget gap, I laid out my priorities.

We must protect and encourage economic recovery, and take no action that would jeopardize growth.

We must safeguard our core values and safety net, so the most vulnerable in our society receive the care they need.

And we must make structural changes so that our state is better prepared for economic recovery, and so that the size of government better matches available resources.

From the beginning, I have placed a high priority on finding a bipartisan and cooperative path through these troubled economic times.

With the news we received last week about improving revenues and with some other tools that are now available, I will submit revisions to my plans for closing the budget gap.

It’s critical that Maine not raise taxes or increase the burden on families and businesses. And I remain committed to this.

But I also understand that the cuts I proposed are difficult.

I have said from the beginning that if given the opportunity, we would work to mitigate the worst of the cuts in Human Services.

My revisions will look first to strengthen our support in those areas that provide 24-hour, seven-day-a-week care: Nursing homes and assisted living facilities.

I will also look to restore support for mental health and crisis management.

If possible, we will also look to ease the cuts to education in K through 12 and our colleges and universities.

But even with the changes I will recommend, there will be many difficult choices in this budget.

There simply are not enough resources today – and won’t be enough in future years – to continue the status quo.

We must continue to change and adapt.

I spent part of last week in Washington meeting with the President and members of his administration.

I am convinced that we have a partner in the federal government who understands the plight of the states and the steps necessary to get our economy moving.

Despite growth in the fourth quarter and a slight improvement in the financial picture, we know that unemployment is still too high.

And the stories go beyond the numbers and statistics.

I visited with workers in Prospect Harbor. They learned that the last sardine packing facility in the country will be closing.

128 workers will lose their jobs through no fault of their own.

The reasons are complicated, and have to do with declining herring numbers in Maine’s coastal waters and federal regulations.

But what the workers know is that their jobs are ending.

My administration is committed to redeveloping that facility and finding a new owner who can put these folks back to work.

And in the meantime, we will do what we can do to provide support for the workers and their families who have lost their jobs.

It’s understandable that during this Great Recession that consumer confidence and the general mood would be dark.

But surveys tell us that people are anxious and that even those people with jobs are reluctant to spend and invest.

But when I talk to people in Maine, I’m struck by the fact that most of them remain optimistic even in the face of hardships.

They are concerned – even worried – about their jobs, their health care, and the direction of the country.

But they are not overwhelmed or overly pessimistic.

As we have before, Maine and the country will overcome the recession.

As the Legislature and I work to finish the budget, I will do everything I can to promote growth and prosperity, to help the middle class, and to prepare our economy for the future.

We’ll make the tough choices today that will translate into opportunities tomorrow.

Thank you and have a good weekend.

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