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Good morning. This is Governor John Baldacci.

On Friday, I released my plans for closing a $438 million dollar budget gap created by declining revenues.

As we approach the holiday season, the details of our country’s economic plight are front and center.

And the impact goes beyond the numbers and the bar graphs we’ve all been accustomed to.

Unemployment and economic uncertainty are taking an increasing toll on our economy and on our families.

It has devastated people looking for work, and hangs like a dark cloud over people who are working.

This national recession has been the longest and most severe since the Great Depression, and we all feel it.

Since just last year, Maine’s revenues have been re-forecast down by $1.1 billion dollars.

As I worked on developing a plan to close the gap, I considered a list of priorities that would help guide my decision making.

My plan would work to lessen the impact as much as possible on education, public safety and health, and our most vulnerable citizens.

Given that education and health and human services account for about 80 percent of the General Fund budget, there are no ways around those areas to avoid serious reductions.

But I sought to reduce the impacts and give communities greater flexibility to reduce their costs and to focus their resources on the classroom where they do the most good.

I wish I could say we have eliminated all the hardships in this budget, but we’ve not.

There are difficult cuts, and we’ll have to continue our efforts to make government leaner and more efficient.

I also wanted to avoid including things in the budget that could unnecessarily hurt job creation or hamper economic recovery.

My plan does not increase taxes, fees or fines. I do not believe that working families and businesses can afford a greater burden.

I’ve always said that a good job is the best social service program, and the family is the best social service agency.

I have tried to find a path forward through these challenging times that protects both.

Earlier this year, Maine passed a $5.8 billion dollar two-year budget.

It was the first time in at least 35 years that a two-year State budget was smaller than its predecessor.

With the revisions I am submitting today, that budget will fall to $5.5 billion dollars.

To put that in perspective, seven years ago my first budget was about $5.4 billion dollars.

During that same time, we have increased funding for education by hundreds of millions of dollars – even though we have seen student enrollment drop by about 21,000.

We have restrained the rest of State government.

With all of my proposed revisions, education spending now accounts for more than half of the General Fund dollars.

Health and Humans Services is about 28.6 percent.

And the rest of State government is 20.9 percent.

Our priority remains our State’s children, our neighbors who need help, public health and safety.

But we have no choice. We must reduce State spending further.

My budget revisions include cuts across all agencies and departments in State government.

It reduces municipal revenue sharing, makes changes in provider rates, and adds three additional government shutdown days – taking the total to one per month.

The budget revisions contain a roadmap forward to achieve efficiencies through greater cooperation and consolidation of natural resource agencies.

It realigns the Department of Economic and Community Development and streamlines the delivery of Child Development Services in the Department of Education.

It reduces the number of bureaus within the Department of Agriculture from four to three.

The plan seeks new efficiencies in regional service delivery in the Department of Transportation.

And it includes an internal consolidation within DHHS to better utilize medical staff within the mental health program.

So while my budget contains many difficult cuts in spending, I have also used several one-time tools to reduce the impact of closing this $438 million budget gap.

In addition, I have proposed significant ongoing budget reductions that will begin saving money now and save even more in the future.

We are close to the bone. These one-time tools are a better alternative than additional, painful cuts.

My budget proposal includes those hard choices and requires shared sacrifice.

It’s a road we have been down before.

But we have never lost sight of our core values.

And we won’t lose sight of them now.

And when our economy begins to escape the shackles of this recession, we will be better positioned for recovery.

We will have a leaner, more efficient government built upon a foundation of fiscal responsibility.

The days and weeks ahead will be difficult.

But I know that if we are able to put aside partisanship, as we have been able to do in the past, and focus on the job at hand, we will be able to do the work we were elected to do.

Thank you and have a nice weekend.

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