A first look at the governor’s budget for 2006-07 suggests it is strong evidence for Maine to continue its tax-and-spending reforms that will shift the state away from being forced to count on lottery sales, savings on the unfunded liability in its retirement account and new fees to make its budget balance. The governor seems to have done a responsible job with what he had to work with; Maine should want him to work with better.

The governor’s charge was to close a $740 million gap between revenues and projected spending. The Baldacci administration, with a refreshing minimum of complaint, had filled a $1 billion gap two years ago and has accomplished a similar feat this time. But, like last time, it relies on new fees and fines in a dozen areas to fill a small portion while borrowing from the future to fill a considerably larger one.

The borrowing comes from the state lottery – the budget proposes to raise $250 million over the next biennium through selling up to $40 million annually of the lottery proceeds for the next 10 years. The budget contemplates the possibility of trustees of the Maine State Retirement Account being interested in the purchase of this investment. Fair to say, this idea will require more explanation before legislators (or baffled journalists) can claim to understand it.

Nevertheless, this is not an ideal way to fund the state but it is what Maine will have for as long as its spending patterns conflict with its desire for tax cuts. The governor, prudently, is not slashing department budgets to meet the demand for lowered property taxes and he certainly isn’t raising a broad-based tax. With federal funding drying up, his Hobson’s choice is largely what he presented Friday: a budget piecemealed into balance.

The Legislature has both time and incentive to take this budget, respect its intent to provide services and avoid new taxes, and find more effective ways to meet its goals. The costs for Maine’s K-12 schools rank eighth highest in the nation. That’s worth looking into. Its corrections-system costs are rising even as it fails to fully meet its obligation to the mentally ill. Its long-term investments in research and development are small and uninspiring yet badly needed.

The budget’s most notable provision concerned the other news story in the State House yesterday – a plan to cut property taxes by as much as $250 million over the biennium. By sending more school money to local government and requiring nearly equal tax cuts on property taxpayers, the governor would shift state K-12 funding to 55 percent of the total, a goal established in the 1980s.

Given that Maine government could not reach this total in the flush years of the late 1990s, it is a tribute to the current governor (and a great deal of public pressure) that the goal seems within reach today.