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This is Governor John Baldacci.

Earlier this week the Legislature’s Appropriations Committee met to continue its work on the State’s two-year budget.

Just a few short weeks ago, Maine enacted a budget that addressed falling State revenues caused by the global recession. Working in an overwhelmingly bipartisan way, we passed a budget for the first time in 30 years that reduced State spending by $500 million dollars.

But our work continues.

The budget plan we passed included homework for the Legislature’s Appropriations Committee. Those members and the Executive are charged with finding additional structural savings worth $30 million dollars to make sure that State government is right-sized for our times.

This task will be difficult.

Unfortunately, the economic morass engulfing our country has continued to erode State revenue.

It is a near certainty that the Appropriations Committee will be required to find additional savings well beyond $30 million dollars we had anticipated.

From the earliest days of the recession, I have approached the State budget from a perspective of shared sacrifice – we are all in it together.

This budget touches every person in Maine, and each one of us has been called upon to do our part, to make tough decisions and to constrain spending to match the resources.

I do not believe that we can raise taxes to bring our budget into balance.

So as we move forward, what you will see is people working together to make the best of some very difficult times.

I have also asked my Council on Competitiveness and the Economy to help develop ideas that the administration will put forward as part of the process with the Appropriations Committee.

The Council was created in November 2007 and has since worked with McKinsey and Company – a management consulting firm that advises leading companies on issues of strategy, organization, technology, and operations.

I will look to the Council, which is made up of some of Maine’s leading businesspeople, to provide me with the insights and advice on how to best make long-term, structural changes in the State spending.

For Maine to find the best path through this economic downturn, we will need to draw on the collective wisdom and expertise of all of our people.

The Appropriations Committee and the Legislature worked together in a bipartisan fashion during the last session to move forward with many difficult decisions.

Where other States have been mired in gridlock and turmoil, Maine has found a way to work together and move forward.

So at the same time, we are going to continue to make investments in things that will prepare Maine for the future.

This State requires a good economic policy in order to prosper once we pull out of this global financial crisis.

That’s why it is important to expand aggressive Pine Tree Economic Development Zones Statewide – a decision that has already resulted in the expansion of TD BankNorth’s operation in Lewiston and Auburn and a new high-tech business moving into Augusta.

That’s why we need to make critical investments in our roads and bridges, our higher education systems and features that make Maine special – our natural resources and quality of place.

And that’s why we reformed our tax code and lowered our income tax rates, a move that the Wall Street Journal hailed by saying, “No state has improved its economic attractiveness more than Maine has this year.”

And that’s why it is important for us to continue to invest in energy independence. Maine has an opportunity not only to help this country kick its addiction to foreign oil, but to create jobs for our citizens in the process.

Maine is in a unique position to capitalize on natural, renewable sources of energy. The Legislature agrees, that’s why in an overwhelmingly bipartisan fashion they made the investments necessary in renewable energy now.

So we need to see that same sort of cooperation going forward.

Yes, we are going to have our differences, but we must find common ground that will allow our people the opportunity to succeed.

Given the chance, Maine people can compete with anyone, anywhere and they have proven it time and time again. It’s our job to make sure those opportunities exist.

And while the economic indicators are mixed, at best, we have seen some positive signs.

Businesses are expanding;

Construction workers are on the job thanks to the Recovery Act;

Domtar in Washington County restarted its pulp making operation last month with a focus on the future of the facility;

And traffic on the Maine Turnpike over the 4th of July; Fourth of July weekend was up 6 percent over last year, even in bad weather.

Despite the steady rain we have seen recently, the clouds will inevitably clear and sunshine will return again.

In the meantime, it is up to all of us to work together and reset the foundation of Maine for the future that lies ahead.

Thank you for listening and have a great weekend.

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