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This is Governor John Baldacci.

If you want to get people going in Maine, one topic often stands out above the rest – and that’s taxes.

Maine has had a reputation as a high-tax state for a number of years, but the truth of the matter is a bit more complicated – and not nearly as bad as it has been made out to be.

I want to thank The Tax Foundation, a national think tank that promotes conservative tax policies. They have usually ranked Maine very high.

But this year they have modified the way that they measure state and local tax burden. And in their annual rankings of per capita state and local tax burden this year, they show a marked improvement in Maine in our national ranking when compared to other states.

Under the new formula, in 2005 according to The Tax Foundation, Maine ranked as the state with the fifth-highest per capita tax burden.

In 2008, Maine has improved to 15th.

Further, Maine’s per capita state and local tax rate is measured at 10 percent, while the average nationally is about 9.7 percent.

I’m gratified to see Maine’s relative position among the States improving in this important area because this is a calling card for business growth and development which provides job opportunities of good paying jobs and benefits for our citizens. This is very important in terms of being able to promote expansion of our job market and having economic development be a centerpiece of our Pine Tree Zone initiatives, of our caps on government spending, on our streamlining of administrations and school administrative districts and county jails.

All of that tough, hard work that many people have been doing in many areas is beginning to show progress and pay dividends.

The policies we have put into place have made a difference. Difficult choices necessary to restrain growth in spending have paid a dividend.

And we have held the line on broad-based taxes, we have driven government at every level to be more efficient and placed limitations on how quickly spending can grow and we need to do more.

But at the same time, we have got to be cautious about reading too much into group’s rankings, pro or con. They all have an agenda. They use the rankings as a way to advocate for the policies they support.

The Tax Foundation, to their credit, has been very open in discussing its methods it uses to determine the rankings, and was working on ways to improve them.

Until this year, as an example, they counted taxes paid by non-Maine residents as part of OUR tax burden.

So in other words, people who had homes here who lived in Massachusetts were counted against Maine’s tax burden, but those folks weren’t part of our population or our state’s income figures.

The mismatch artificially inflated Maine’s tax burden.

So The Tax Foundation made changes in the way it gauges the tax burden, including how it accounts for sales taxes paid by travelers.

The revised system can help repair the incorrect perception that Maine is the highest taxed state in the country.

In today’s political world, numbers can often become flexible, and conventional wisdom can replace the facts in the way that we are perceived.

Maine has work to do on lowering our tax burden. Let me repeat that – Maine has work to do on lowering our tax burden. But we have made progress.

That’s why we have fought to consolidate the administrations of schools and their School Administrative Districts from 152 to 80.

That’s why we have reduced the administrations of county jails.

And that’s why we have placed limits on spending by government at all levels.

And for the first time in recent State history, we are going to be spending less money in State government this fiscal year than we did last year.

So Maine is much closer to the national average and the middle of the pack on taxation than we were given credit for.

And rankings show that Maine has made progress, and that we are moving in the right direction.

These are the facts. These are the scorecards. And this is the information that Maine people need.

Hopefully, the new numbers will also change the tone of the debate.

Maine is on a steady course to grow our economy and improve our tax burden. And I will make sure that that work continues.

Thank you very much.

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