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Governor John E. Baldacci Radio Address Focus on the Economy Saturday, August 8, 2009

This is Governor John Baldacci.

We are beginning to see some signs nationally that the recession that has mired our country for too long is beginning to ebb.

But the hard truth is that we still have a long way to go before recovery is certain.

Last week, the Federal Reserve released a report that shows the U.S. economy has begun to stabilize. That’s the good news.

The report also said the economy continued to be weak going into the summer, retail sales being sluggish and the labor market remaining soft.

The housing market is improving, although not out of the woods yet, we are seeing anecdotal evidence that things should start to get better later this year.

Unfortunately, our country and our State remain in the shadows of a global economic decline.

As the Associated Press reported this week, tax revenues for the federal government are on pace to drop by 15 to 18 percent this year. That’s the biggest decline since the Great Depression.

States are facing the same bitter trend. As the needs of our people are growing, we don’t have the resources to do all that we would like.

Just one month into the new fiscal year, at least 33 states are expecting deficits for the year.

Unemployment and continued contraction among even successful businesses continue to cut the revenues every state relies upon to provide critical government services.

Maine, like so many other states, faces the same pressures.

Since the Legislature passed the current two-year budget with great bipartisan cooperation and discipline, revenues have continued to decline.

Already, the Appropriations Committee in the Legislature is working with my administration on ways to further reduce State spending.

The trend, however, is clear and troubling. We must look deeper and make more difficult choices to balance our budget while maintaining the core services and safety net that Mainers demand.

While our situation is serious, I will not raise taxes to balance the budget.

Instead, we will take a disciplined and programmatic approach to further reducing state spending.

Already, the two-year state budget is $500 million less than its predecessor. Out of necessity, the budget will get smaller.

Working with the Governor’s Council on Competitiveness and the Economy and the Appropriations Committee, my administration will develop recommendations on how to best close the emerging gap between revenues and projected spending.

Building on the work that we’ve already done, including the research of the Brookings Institution and McKinsey and Company, we will find additional cost savings through efficiency, implementation of best practices and restructuring.

We will maintain our critical safety net so hardworking people do not fall through the cracks during this economic downturn.

And we will make smart investments – in innovation, education and people – to strengthen and grow our economic future.

We will protect our natural resources.

And we will continue to make government more effective and efficient.

We have grown accustomed in Maine to making tough decisions and doing it without the partisan fighting that has plagued too many other states.

And as we continue this difficult work, it won’t be easy. But we need to maintain that same approach. But we must.

We must continue to change, to adapt and to improve. We can’t go back to old, inefficient ways.

If we are bold in our ideas and committed to putting the good of Maine ahead of individual political ambition or party politics, we can and will be successful.

The current recession will end.

And when recovery comes to Maine, Maine will be leaner, more efficient, more competitive and ready for a new period of growth and prosperity.

Thank you, and have a great weekend.

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