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Good morning. This is Governor John Baldacci.

The Legislature returns to Augusta this week, and there’s much work to be done in just a few short months.

My top priority for the Legislative session remains the State budget and the economy.

Through the budget process, which includes extensive review and deliberation by the Legislature, we establish our priorities as a State.

I have put forward my proposal for bringing the State budget into balance, while protecting education, public health and safety, and the economy.

I’ve used a combination of spending cuts, reorganizations to make government more efficient, and one-time tools to close a budget gap of $438 million dollars.

We have made many tough decisions, and this budget will create hardships. We’ll all be called upon to make sacrifices.

But it also protects the people who need our help the most, maintains core government functions and does it without raising taxes, fees or fines.

I know that there are some people who believe higher taxes are the answer to our current budget dilemma. I don’t question their motives or their commitment to our State.

But I believe they are wrong.

Working families are struggling under the same global recession that has caused State revenues to fall far short of predictions.

High unemployment and the fear of job loss add to the stress that families already feel.

Uncertainty about the economy leaves many businesses reluctant to invest and to create new jobs.

New taxes will only add to that uncertainty for businesses and create more stress for working families.

I think that’s the wrong policy and the wrong message.

Maine needs policies that encourage work and investment, which is why I supported tax reform last year.

That law, which will be on the ballot in June, lowers the State’s income tax rates, while making the system more favorable for working men and women.

It also exports about $50 million dollars of Maine’s tax burden onto tourists, which means real relief for people who live and work here.

While some folks are advocating that we raise taxes, others are saying that my budget proposal doesn’t include enough cuts.

My budget proposal strikes a careful balance between cuts in support for critical government programs, the demand for more efficiency and the use of one-time measures to achieve savings.

I am convinced that we can streamline government more and make it more efficient.

I am proposing additional restructuring within the Natural Resources agencies, Economic and Community Development, the Department of Education, transportation, and health and human services that will save money and improve service delivery.

I know it will work because we’ve done it before with school district administration reform and our new unified corrections system.

We are saving property taxpayers millions of dollars by eliminating duplication and unnecessary administration in corrections.

No one will accuse this administration of being shy about making touch decisions.

In the last seven years, we have reduced the size of State government by 1,000 positions.

We have held spending flat, while at the same time increasing support for education by $352 million.

And we have kept taxes in check.

For our efforts, the Tax Foundation says Maine’s business climate has improved and the Wall Street Journal has touted the Maine Miracle.

But I also know that there are limits to what we can achieve in efficiencies and spending reductions between now and June 30th, which is the end of the fiscal year.

Maine’s Constitution requires a balanced budget and the clock is working against us for this year.

While I have proposed significant ongoing savings in my budget proposal, we are also using one-time tools for short-term savings.

Again, it’s about finding the right balance.

My proposal is the starting point. Now, the Legislature will have its opportunity to examine my ideas and suggest their own.

At the end of the process, it’s my hope that we find a strong, bipartisan solution.

As I look around Maine and the country, I see signs that the economy is beginning to awake.

But nothing is certain, and we must do the hard work now that will position Maine for recovery when it comes.

That is the task we have before us.

Thank you and have a good weekend and a Happy New Year.

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