Gov. John Baldacci today signed an executive order that curtails state spending by $63 million -- effective immediately. With seven months left in the current fiscal year, the state budget is already a little more than $90 million dollars in the red, and state economists predict that figure could increase by another $300 million dollars before the end of the two-year budget cycle. Baldacci promises to address those revenues losses next month with a plan that he insists will not include any tax increases.

Facing continued tax revenue losses in a stubborn recession, Gov. John Baldacci decided to immediately cut state spending, rather than wait for the legislative session that will begin in January. "Today, I took action to cut state spending to help ensure our budget remains balanced as required under Maine law and the constitution. I ordered a curtailment of roughly $63 million."

Uunder the order, the state university system took a $6 million hit and the Maine Community College System saw its budget slashed by a little more than $1.5 million dollars. But more than half of the cuts will have to be absorbed by health and human services programs and local education funding.

School districts will have $38 million dollars less than they planned on for the current school year, and the cut could grow in the coming months. The governor says the state continues to try and meet a 2003 voter mandate requiring the state pay for 55 percent of local education costs. He says in the past seven years, education funding has grown to almost a billion dollars.

"Up from $709 million dollars in my first biennial budget in 2003 and four," Baldacci says. "And there are 19,000 fewer students today than there were back then. Without those increases, the general fund spending today would be about at the same level or a little bit less than it was seven years ago."

"We're concerned about the reduction to education, we understand the difficulty that's going to cause at home," says Sen. Jonathan Courtney, a Republican from Springvale who serves as assistant minority leader. He says that while the state budget is creating hard choices for lawmakers and educators, he does believe that both sides are working together to make the best choices for Maine's students.

"For many members in our caucus, it's a hope that we will give the superintendents the tools to create savings locally," Courtney says. "Because they know their districts, they know how to save money, probably better than people in the Department of Education."

Meanwhile, as the governor was detailing his curtailment plans to reporters, members of the state Revenue Forecasting Committee were working just down the hall to predict exactly how far state revenues will drop over the next 20 months. A month ago, Baldacci was facing a $200 million shortfall. That has now grown to $400 million.

Baldacci believes the economic uncertainties have made the forecasting committee's job difficult. "You can't get guidance out of a corporation for next week, let alone next month or next year. So I can understand why the Consensus Forecasting Commission's going to have a challenging time. But I think what I understand from their forecasting is that they had the trend lines right, but they came at it from a higher place than what really took place -- the economy was a lot worse than what everybody thought."

"This is tough, forecasting is a really tough thing to do," says Jerome Gerard, Chairman of the State Revenue Forecasting Committee. Gerard says that despite the moving revenue targets, he stands by the economic modeling of state economists like Michael Allen, who are trying to prepare an economic blueprint for the governor and state budget writers.

"My sense is that Mike's approach is very reasonable, he's seasoned, he's been through enough forecasts, that this is what he thinks is the right approach," Gerard says.

Next month, Baldacci says he will unveil a supplemental budget aimed at saving $400 million over the next 20 months. Lawmakers will consider the new budget in January.