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Good morning. This is Governor John Baldacci.

In the coming weeks, I’ll be presenting to the Legislature my plans for bringing Maine’s two-year budget into balance.

The truth of our country’s economic condition is well-known. Unemployment levels are high, over 10 percent nationally and 8 percent here in Maine.

Businesses are moving with caution and aren’t investing as much.

Consumers are worried about their jobs and their health care and aren’t spending as much either.

So incomes are down. Investments are fragile and people are nervous.

All in all, it translates into an economy that has been slow to regain its footing.

This national recession has been the longest, most severe since the Great Depression, and we feel it at home, at work and in government.

Despite a conservative and data-driven approach to revenue projections, the unprecedented nature of the recession has led economists to consistently downgrade projections for economic growth.

In just the last year, Maine’s revenues have been re-forecast down by $1.1 billion dollars. Most recently, projections for the rest of 2010 and 2011 were reduced by more than $380 million dollars.

It can feel like Maine is all alone.

But the truth is, at least 34 states at last count are in the same situation.

Their Legislatures passed budgets for 2010 and 2011 that now must be cut.

It is a challenging time.

We are called upon to balance the budget at the same time the recession is placing increased demands upon government to take care of people and families in need.

While funding for the State’s Medicaid program has been held almost flat and well-below the national average for growth, the program is serving an additional 20,000 people.

Other programs, like food assistance and unemployment, have grown and more and more people have fallen on hard times.

In the spring, Maine passed a two-year budget that was $500 million dollars less than its predecessor. It’s the first time in at least 35 years that that’s happened.

And on Dec. 18, I will present my plan to close a shortfall of $383 million dollars more.

As a preview, we will not increase taxes. I don’t think working Mainers can afford a heavier burden.

You can expect more cuts across State government.

I will propose new ways to streamline government, and make structural changes that will reduce the cost of government going forward.

And I will also use one-time tools to help reduce the impact of the revenue decline on education, health care, public safety and job creation.

We face a necessity to reduce state spending, but government still has a responsibility to protect its people.

• When you call the police, they come.

• When you need medical care, you can get it.

• When you go to work, you get paid.

• And when things fall a part, there are supports that will help you lift yourself back up.

You can talk about government in a lot of ways, but essentially it is how we, as a people, deliver upon the promises we have made to one another.

Regardless of political party, we all want a good education for our kids, to help our neighbors who are struggling and to expand economic opportunity.

Those are the basics, the essentials. We have to protect them.

And we can do it by making tough choices today that leave us in a better position for recovery.

Already, much has been done.

Government today has more than 1,000 fewer employees than it did when I took office.

We have consolidated school administrative districts, and reduced the redundancy between the state prison and 15 different county jail administrations.

We have merged state agencies and departments, and made our information technology and financial systems more efficient.

And we’ve made major investments in K-12 education while holding the rest of government spending almost static.

My first budget as governor was $5.35 billion dollars. Seven years later, the budget for 2010-2011 will be close to the same, even though we have increased aid to education by more than $500 million dollars with 19,000 fewer students.

We have continued to be fiscally responsible.

And we’ve have never lost sight of our core values.

And we won’t lose sight of them now.

My proposal to balance the budget will include hard choices and will require shared sacrifice.

And we will have to change the way we do business and continue on the path to a smaller, more efficient government.

But we will maintain the essentials. And we will support job growth.

By working together, we can make sure our economy will start to grow again.

Thank you and have a nice weekend.

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