AUGUSTA — Leaders of 14 Maine business organizations on Monday applauded Gov. John R. McKernan for proposing a two-year budget that cuts state spending instead of increasing it.

While educators, state employees and advocates for the poor are likely to fight hard against the governor’s cutback plan, the business community is solidly behind it.

“We’re here to express our strong support for Governor McKernan’s decision to propose a budget that lives within anticipated tax revenue,” said John S. Dexter, president of the Maine Chamber of Commerce and Industry. “We truly appreciate his leadership.

“He’s absolutely on the right track. His idea of not raising taxes, not lifting tax exemptions, and allowing $300 million in temporary taxes to expire is absolutely right on.”

Dexter said that because Maine is one of the most heavily taxed states, McKernan was correct in pushing for the repeal of almost $300 million in temporary taxes that were imposed to pull the state through the recession. Those increases were on the sales tax, income tax and gasoline tax.

Dexter said that Maine has lost 35,000 jobs since 1989 when employers went out of business or laid off workers to survive.

“The biggest obstacle to replacing the jobs and businesses is Maine’s uncompetitive business climate,” Dexter said, citing:

A pending 35 percent increase in Workers’ Compensation premiums. Despite the rate increase, Dexter said, the Maine Chamber of Commerce and Industry supports the new Workers’ Compensation system and wants to give it time to work.

A pending jump in unemployment compensation taxes to cover a deficit that could exceed $52 million by the end of 1994.

A regulatory burden that is “still among the heaviest in the nation.”

A tax burden that is No. 1 in New England in terms of total taxes as a percent of personal income and No. 3 in the nation in terms of total income tax.

“The governor recognizes that we can’t tax our way out of this recession,” said Dexter. “The only way to escape is to create jobs, and the only way to create jobs is to improve Maine’s competitiveness. We applaud his stand and urge all Mainers to join with us in standing with him.”

Repealing the temporary tax increases will be more powerful in creating jobs than was the $79 million jobs bond issue approved by voters last spring, Dexter said.

Asked if cutting education wouldn’t hinder the state’s investment in its future, Dexter said, “Nobody is more concerned about the quality of education than the business community. This is not exactly a disastrous cut. We think it’s one that schools can live with. Business has lived with less and we think that schools can, too.”

McKernan has asked schools to get by with about $30 million less in state aid in each of the next two years than they got this year. He also proposes to grant the University of Maine System, Maine Technical College System and Maine Maritime Academy about $8 million less than they got this year in each of the next two years.

Dexter said the proposed cuts in government services were reasonable.

“Businesses have downsized substantially in the last three years,” he said. “We don’t think government has tightened its belt enough so far.”