AUGUSTA – While Maine faces a two-year budget shortfall of around $1 billion, exemptions, exclusions and other tax breaks adding up to about twice as much remain on the books.

Income, sales and excise tax exemptions total $2.2 billion, according to an Associated Press analysis of hundreds of breaks ranging from prescription drugs and prosthetic devices to funeral services.

There is a variety of exemptions: grocery staples, tips to employees, boats and snowmobiles purchased by nonresidents, and camp rentals to list a few.

Income tax deductions for charitable contributions alone add up to $25 million, and sales tax exemptions on labor service fees translate into nearly $23 million not collected by the state.

Pressure has mounted in Maine’s State House for major tax reform as the state faces its worst financial crisis in more than a decade.

“Our tax policy is getting to the point where we’re trying to help everybody,” said state Sen. Stephen Stanley, co-chairman of the Joint Committee on Taxation.

But Stanley and others agree that filling Maine’s gaping budget hole will be much more complicated than repealing blocks of exemptions. Some of the tax breaks carry political consequences. Some are tied to federal tax laws. Some at best are theoretical.

Maine Revenue Services financial analyst Jerry Stanhope wonders, for example, how much sales tax revenues would be derived from private “casual sales” between two individuals or at garage sales.

“I think there will be a reluctance to raise revenue from things people have to have, so I think, for example, the food exemption is very unlikely to be removed,” said Christopher St. John of the Maine Center for Economic Policy, a nonprofit research group that lobbies on behalf of low-income people.

Stanley said Maine’s pages of exemptions need to be re-evaluated with a focus on how they can benefit the state most.

“I believe we have to take a look at everything,” said Stanley, D-Medway.

For the state’s current fiscal year, which ends June 30, all of the sales tax exemptions and exclusions add up to $1.5 billion, more than enough to cover the pending shortfall in General Fund revenues for the two-year budget cycle starting July 1. Income tax exemptions and other breaks add up to more than $660 million.

The totals as computed by The Associated Press include some items whose uncollected taxes are only estimated in broad ranges by the state. The state is required by its Constitution to balance its budget.

Amid the $1 billion state budget crisis, Mainers are demanding relief from local property taxes, and one consequence could be to increase reliance on broad-based taxes. Newly elected Gov. John Baldacci has said he’s committed to not raising taxes.

Lawmakers have submitted scores of bills to revamp the tax structure, and Stanley and others say exemptions are certain to be scrutinized as never before.

The Maine Municipal Association is calling for a thorough review of the tax code, but not simply as a way to plug the yawning budget hole. The MMA, which is pushing a property tax relief referendum, says Maine needs a more stable state tax code to smooth out cyclical shortfalls.

“We need predictability,” said MMA lobbyist Geoffrey Herman.

Rep. Bernard McGowan, D-Pittsfield, said Maine’s “extremely narrow” sales tax base leaves many exemptions ripe for removal.

McGowan, a Taxation Committee member, is pushing for reforms to generate more state revenues to ease property taxes. He pointed to a survey taken about a year ago that indicates many Mainers would not mind paying new taxes on things like haircuts and bowling to help put the tax base on more sound footing.

One of the areas that deserves a close look is exclusions, or items that are not taxed unless they are specifically listed as taxable, said Herman. Exclusions could generate new revenues as the service sector grows.

Also warranting scrutiny are tax breaks for specific industries that draw the attention of similar industries, which in turn request the same favorable treatment, said Herman. “Exemptions tend to breed exemptions,” he added.

The Maine Center for Economic Policy points to another problem with Maine’s tax code that was flagged in a report by a national think tank a decade ago: The cost of its exemptions rises faster than revenues collected as the economic base shifts from manufacturing to service.

St. John and others also point out that Maine’s tax laws could do a better job “exporting the tax burden” by collecting more taxes from tourists on things like meals, lodging and ski lift tickets.

Many exemptions are unlikely to be changed, said St. John. The Legislature has been reluctant to undo state income tax exemptions and deductions that mimic federal law so it can keep the two tax codes consistent, St. John noted.

Lawmakers would likely be more open to erasing tax exemptions for discretionary purchases, such as movies, golf fees and boat moorings, he said.

The Associated Press analysis of more than 200 tax exemptions shows increases in uncollected totals in almost all categories between 2000 and 2003. Some of the largest increases are for relatively small programs, such as the credit for rehabilitation of historic properties, which jumped 762 percent to $250,000.

But the worth of the exemptions has grown steadily for the big-ticket items, as well. Exemptions of pension contributions and earnings have increased 13 percent since 2000.

Deductions of property tax on owner-occupied homes have risen 21 percent to $20 million, and mortgage interest deductions on owner-occupied homes are up 13 percent to nearly $37 million. The exemption on groceries has gone up 11 percent to $117 million.

“Maybe we could look at groceries” as a new source of sales taxes, said Jonathan Rubin, associate professor at the Margaret Chase Smith Center for Public Policy at the University of Maine. Rubin said that if groceries were taxed, low-income people should still be protected.

Whatever decisions the Legislature makes to reform taxes, there will be winners and losers, warned Robert Tannenwald, assistant vice president and economist at the Federal Reserve Bank of Boston.

“It is possible,” Tannenwald added, “that the cure is worse than the disease.”