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This is Governor John Baldacci.

On Wednesday, I ordered State government to immediately cut spending by $80 million dollars.

The Maine Constitution demands that the State finish the fiscal year with a balanced budget. It’s the law. The reductions I have ordered have helped to meet that requirement.

Our country remains in the grip of a difficult economic downturn.

Unemployment is on the rise, companies are being forced to retrench and consumer spending is down.

While Maine has faired better than many of our neighbors – largely due to the economic and fiscal policies of the last six years – we are not immune from the trauma that is affecting the world economy.

We know that State revenues will not meet the projections we used to craft this year’s budget.

To meet the challenges of this reality, we must move to reduce spending immediately.

Under State law, the Governor has the authority to reduce spending on programs through what’s called a curtailment order.

The order is temporary and serves to reduce spending until a supplemental budget can be passed by the Legislature.

As we worked on the details of the curtailment, I moved forward carefully to limit the direct impacts on people who need help the most – the vulnerable populations of children, people with disabilities, the elderly, and also watching out for public health and safety.

After six years of constrained State spending, there are no easy choices.

In December, I will present to the Legislature a supplemental budget that will contain many of the cuts in the curtailment, but also include other initiatives to reduce spending to meet the current revenue downturn.

And in January, I will present a two-year budget for 2010 and ‘11.

We are making some very difficult choices and we have to prepare for the uncertainty of the future, but at the same time to put us in a better financial position for recovery.

The cuts we have implemented will reduce State spending in human services, in K-12 education and other vital areas of government.

The proposed reductions were evaluated based on a number of factors, including the effects on public health and safety, the extent that the impact could be minimized and whether the proposal, insofar as practical, followed the intent of the Legislature. I am going to continue the hiring and travel freezes currently in place.

I will continue to look for administrative efficiencies and restructuring of government at all levels.

And despite the hardships our country faces, I want you to know that Maine remains a very attractive place to live, work and do business.

And speaking of doing business, even in this downturn we are seeing businesses moving into Maine and expanding here.

Whether it was Boston Financial in Rockland or NotifyMD in Winthrop, TD Banknorth with over 2,500 employees in Maine and T-Mobile now up to 800 in Oakland. Companies all up and down the State of Maine are realizing that Maine has economic incentives and a highly productive, capable workforce to compete and win anywhere.

So we are going to fight for every job and we are going to try to grow new ones. Especially in renewable energy and wind energy and transmission. And we are going to even work in the most difficult times that we face with an eye toward the future and toward recovery as a nation and as a State.

So as we work on the budget for 2010 and 2011, we know that there are more difficult decisions are ahead. All indications are the current recession will continue at least through part of next year – and maybe even longer.

But, you know, we’re Mainers. And you know we are going to work together, especially during difficult times. And we are going to overcome those challenges. And we are going to work together – I am sure of it.

Have a very good day. Thank you.

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