There has been talk in Augusta of budget cuts for years. Now that the governor has proposed a second round of cuts to meet the reality of declining revenue collection, there is growing dismay over what reduced spending looks like. The challenge for lawmakers, who have only a couple months at most to agree on a new budget, is to balance the required cutting against the necessity of government providing services to those most in need.

Gov. Baldacci this week released his plan for further cutting state spending after the Maine Revenue Forecasting Committee predicted a $95 million revenue shortfall through 2009. This is on top of an already expected $95 million drop. There is fear that actual revenue collections, which largely won’t be known until after the April 15 tax filing deadline, will be even lower. This is due to the slowing of the national economy and continued declines in federal funding for state programs, especially health services for the poor.

Because they are by far the largest share of the state budget, the governor proposes to close the gap primarily by cutting state funding to local schools by $34 million and reducing spending by the Department of Health and Human Services by $27.5 million. More than $9 million is proposed to be cut from higher education.

“We must prioritize state spending, restructure government and make sure that our state is on firm financial footing going forward,” Gov. Baldacci said. He is right.

Prioritizing state spending – within and across state departments – is long overdue and will lead to important discussions about what programs and services the state can realistically provide.

A first step is to look at programs with an eye toward efficiency. The governor proposes to eliminate 71 state positions out of a total of 14,000 state jobs. Just as the governor has pushed school districts to consolidate their administration, more effort must be put into ensuring state agencies and programs are also efficient.

A proposal to merge natural resource agencies has met strong resistance, but this type of reorganization and streamlining is required now. Facing a budget shortfall approaching $2 billion, New Jersey Gov. Jon Corzine called for the elimination of the state’s departments of agriculture, commerce and personnel and the elimination of 3,000 state jobs.

Maine doesn’t need to go this far, but it should cut administration before reducing or eliminating services.

Although involving much smaller dollar amounts, the governor’s budget proposals reduce or eliminate funding for dozens of social services. These cuts mean the elderly, disabled, abused, poor and other vulnerable residents will be without services that make daily living possible.

The state’s fiscal constraints have highlighted that state government does essential work – providing health care to the poor and education to all – that other entities can’t or won’t provide. But the shortfall also shows that the state can’t afford to continue to do everything it currently does. Determining what to do more efficiently, what to do less of and what not to do at all are the difficult but necessary decisions facing lawmakers.