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This is Governor John Baldacci.

While the national economy continues to be held within the grips of a global financial crisis, there are some early indications that we may be settling out.

Don’t get me wrong, our country is a long way from economic stability and getting out of this recession, but there are signs that we are starting to pull out.

Here in Maine, we have experienced budget gaps as a result of the recession that far exceeded anyone’s expectations from a year ago.

Simply put – people are not spending as much money, the State is not collecting as much in revenue, so our spending must be reduced to balance the budget.

I emphasize that spending must be reduced to balance the budget because I have pledged from the beginning that we will get through this by sharing the sacrifice – and that raising taxes to balance the budget is not an option.

We have made those reductions in spending – this biennial budget is $500 million dollars less than its predecessor - the first time this State has had a budget smaller than the previous one in the last 30 years.

While revenue forecasts indicate that we will need to continue to make reductions in spending for the immediate future, we have also made it a priority to make investments that will position Maine as a leader once the recession is over.

Despite all of the global financial hardships, Maine has continued to invest in transportation infrastructure – roads and bridges, ports and rail – to meet the needs of our economic development engine – tourism – and manufacturing, and for our citizens alike.

We continue to invest in natural resources and things that make Maine special. And we will continue to invest in our most precious natural resource, our people.

By making investments in the business climate in Maine – we are investing in opportunities for our people to succeed.

We were able to send a strong message this year that Maine IS open for business – the Business Equipment Tax has been repealed, Maine income taxes have dropped from 8.5 percent – 6.5 percent, and we have expanded the Pine Tree Economic Development Benefit program statewide.

It is one of the most aggressive economic development strategies in the country.

It forgives taxes for manufacturing businesses that either relocate or expand here in our State.

International Woodfuels, a leading wood pellet manufacturer, is building a 30,000 square foot facility to employ at least 35-50 people in Burnham, Maine.

International Woodfuels is also making a $20 million dollar investment in this project – one that is somewhat unique in nature.

They will be co-locating in Burnham with Pride Manufacturing, making both operations more efficient, more profitable through combined resources.

International Woodfuels searched throughout Northern New England to find a location – but this company saw the value of Maine people and the abundance of our natural resources; and realized that savings that could be seen through co-locating with Pride Manufacturing, and it understood the benefits of the Pine Tree Zone program.

In five years, the Pine Tree Zone program has certified 213 businesses which have reported plans to create more than 6,500 jobs, investing nearly $700 million dollars in Maine.

The jobs alone are expected to generate $203 million dollars in payroll annually.

A few weeks ago I told the story of two businesses investing in Maine just days following the statewide expansion of the program.

TD BankNorth announced plans to expand its presence and its work force in Auburn.

And in Augusta, we are preparing to welcome Bolduc Technology. The technology company solidified their plans to expand and relocate in Augusta last month, bringing 18 new high technology jobs with them to start.

And we also celebrated Hannaford’s investment in Augusta earlier this week – opening the most environmentally-advanced supermarket in the country.

Hannaford’s new LEED-certified supermarket officially opens this weekend at the site of the old Cony High School in Augusta. The company is not just making investments in a new building for its customers, but they are investing in ways to save energy, save money and to help save our environment. This is the type of investment that will pay off for generations.

Our State is in a good position. We are still facing some tough times. But we are looking forward and planning for the day when the global economy is once again stable, and the country’s work force is once again bolstered.

While it may not seem possible to see a silver lining around this financial dark cloud, it does exist. Now is the time to use our Yankee Ingenuity, our frugality, improving efficiency and restructuring the way that we do business so it makes more sense, and to help our people continue to grow and prosper.

And by working together and staying focused on our goals and opportunities down the road, our State will be getting through this recession stronger than before.

Thank you for listening and have a great weekend.

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