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Good morning. This is Governor John Baldacci.

This week the Legislature’s Appropriations Committee finished the public hearings on my proposal to close a $438 million dollar gap in the State’s current budget.

Hundreds of Mainers traveled from across the State to Augusta to have their voices heard.

Many of them told compelling, personal stories about how State government touches their lives, the good work that it does.

Especially in the area of human services, we heard how the State helps people to live independently, to rebuild their lives after tragedy, to survive hardship and disease.

I’ll continue to do everything we can to maintain life-sustaining services.

We also heard from towns and cities that said they could withstand no funding reductions.

From school district administrators.

And from folks who oppose the consolidation of the State’s natural resources agencies.

In a perfect world, no need would go unmet and no worthy program unfunded.

But we do not live in a perfect world.

We’re all trying to come out of this global recession.

And I have a constitutional and statutory obligation to balance the State budget.

That means making tough choices.

Maine – likely virtually every other State – has been hurt by the worst recession since the Great Depression.

In the last 12 months, projected revenues for the State have declined by $1.1 billion dollars.

There is simply no way for the State to absorb that loss without impacting people and their communities.

Almost 46 cents out of every dollar that comes to the State’s General Fund is returned to municipal and county governments.

During the last seven years, my administration has been aggressive about cutting the size of State government.

We’ve eliminated 1,000 positions, about 8.8 percent of the State’s workforce.

State workers have taken shutdown days, lost pay raises and are now required to pay a portion of their health care.

We’ve combined State agencies and departments, school administrations, and county and State prisons.

And we are continuing our efforts to find efficiencies and to reshape government at all levels to be less expensive.

You know folks, it’s been studied and studied, from the Productivity Task Force, the Brookings Report, the McKinsey Report.

We know what needs to be done. We just need to do it and do it now.

I am convinced that government at all levels can operate more efficiently, that administrative costs can be reduced through greater cooperation.

And I am equally confident that service providers can do their very important work with less administration, better cooperation and greater efficiency.

We’ve seen it work with the Board of Corrections and with School Administrative Districts.

Every dollar that we save from reduced administration means more resources for direct services – those places where the money does the most good.

I have proposed one-time tools to help reduce the impact of revenue declines on education, health care, public safety and job creation.

What I haven’t done – and I don’t support – is raising taxes.

Economists are telling us that the recession is slowly ending, but that job creation will lag.

Even though Maine’s unemployment rate is better than the national average, we must be cautious about any action that could hurt recovery.

Working Maine families and businesses can’t afford higher sales or income taxes.

We have to balance protecting core government functions and the need to safeguard our economy.

It’s no easy task, but it is the job we have before us.

The Legislature’s committees are working hard to make improvements to the proposal I submitted to balance the current State budget.

There are long days and long nights ahead, and I am committed to working with the Legislature to find a bipartisan answer.

We’ll have to change our ways, be innovative and creative, and do things differently.

But we will get there.

Thank you and have a good weekend.

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