AUGUSTA, Maine (AP) — Gov. Paul LePage on Thursday outlined for Maine lawmakers his spending priorities in a two-year budget that increases aid to public schools, cuts taxes and seeks to chip away at a public debt that he believes impedes the creation of badly needed jobs.

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AP Photo/Joel Page

Gov. Paul LePage greets legislators as he prepares to announce his two-year state budget to a joint session of the Maine Legislature, Thursday, Feb. 10, 2011 in Augusta, Maine.

"Our 2012-1013 biennial budget is a jobs bill," the Republican governor said of his first proposed spending blueprint since his election in November. But he also said it also calls for some pain, particularly among state employees, whose retirement age would rise from 62, the age applying to most of the workers, to 65 for new and recent hires. Retirees also would be asked to forego cost-of-living increases in the near term and accept "modest" increases in the future, the governor said.

While the budget includes state worker retirement incentives, it does not call for mass layoffs, furloughs or across-the-board cuts that helped balance recent budgets.

Of the more than $500 million saved in retirement system debt, $63 million more would go to public school education, bringing the total to $914 million by fiscal 2013, LePage told a joint assembly of the House and Senate.

"And it will not be enough," said LePage, whose budget does not include cuts to the state's community college or university systems.

He was interrupted by applause numerous times.

Minority Democrats adopted a wait-and-see attitude on LePage's proposal, which now goes to the Appropriations Committee.

There was no mention of a bottom line in LePage's address. Ryan Low, who has been formulating the package, said not all of the final figures had been developed by Thursday but total general fund spending would be in the $5.6 billion-$5.8 billion range of the current two-year budget.

LePage's budget calls for $203 million in tax reductions through the biennium, which starts July 1. That's accomplished through conformity of state with federal taxes, elimination of the so-called marriage penalty and increasing the personal exemption. Coupled with a higher standard deduction, the changes would completely eliminate state tax liability for 15,000 more Mainers, said LePage, who also wants to lower the top income tax rate and get rid of gasoline tax indexing.

The budget seeks to save $20 million by eliminating what LePage called "instant eligibility" for welfare and a five-year time limit on eligibility. It also calls for MaineCare recipients to contribute, based on their ability to pay, to the cost of state-sponsored health care coverage.

"We're going back to a work environment and not a dependency environment," said LePage, who was raised in poverty and homelessness and remarked, "I've been there and done that."

The governor's presentation drew a mixed response from Democrats, who said they had not seen the fine print and emphasized that a long, arduous legislative review lies ahead.

"It's a good starting point," said Senate Democratic Leader Barry Hobbins of Saco. "But the devil's in the details."

House Democratic Leader Emily Cain of Orono applauded the proposed increases to education and no wide-scale layoffs of state workers, but questioned some of the figures relating to state borrowing and pensions. Asked if there were any provisions that Democrats would find unacceptable, Cain said it wouldn't be fair this early "to draw a line in the sand."

Sen. Justin Alfond of Portland, the assistant Senate Democratic leader, dismissed much of LePage's address as "a lot of sound bites" and a rehash of campaign rhetoric.

Republicans said they too are eager to see the details of the plan, but at first glance it looked good.

Senate President Kevin Raye of Perry said the budgeting process is made more difficult by federal requirements in programs such as Medicaid, but said he's pleased with LePage's efforts to bolster education, reduce the tax burden and preserve vital social services.