AUGUSTA – Gov.-elect John Baldacci and ranking members of his transition team met with King administration officials Friday to discuss Maine’s precarious fiscal status.

“We’ve got challenges, no question about it,” Baldacci said after the private session in the State House Cabinet Room.

Baldacci said the outgoing administration had presented “a good description of the circumstances” for the rest of the current fiscal year, which ends June 30, and for the next biennium, which will run from mid-2003 to mid-2005.

Baldacci acknowledged that state government, which faces a brand new $44 million revenue shortfall for the current year, will be confronted by a yawning gap between spending demands and anticipated revenue for the next budget cycle.

“It’s certainly going to be close to $1 billion,” he said after the briefing.

Baldacci credited Gov. Angus King and his team for offering valuable insights into the scope of the fiscal problems. “The administration’s been very cooperative, very helpful,” he said.

State forecasters decided just Thursday to drop their revenue projections for the current fiscal year by $44 million, opening a new hole in Maine’s freshly patched state budget.

A week before, the Legislature had enacted a $229 million deficit-reduction plan to cover a previously diagnosed revenue shortfall. The forecasters on Thursday also decided to reduce revenue estimates for the next two-year budget cycle by about $120 million.

Among those attending the State House meeting from Baldacci’s transition team were leaders of his transition advisory council – co-chairs Warren Cook and Rosalyne Bernstein, and vice chair Tabitha King.

Also present were transition coordinator Larry Benoit, deputy transition coordinator Tamara Pogue, communications coordinator Lee Umphrey, transition policy coordinator Martha Freeman, and Jack Cashman, who led a group receiving a legislative staff briefing Wednesday.