AUGUSTA (AP) – Gov. John Baldacci is expected to open the door wider to new budget talks today when he outlines a package of follow-up spending adjustments.

The so-called Part 2 Baldacci budget package is to include spending reductions as well as payments to 12 hospitals to make up for payment shortfalls dating back a dozen years, according to administration sources.

Offering indirectly a renewal of earlier budget discussions, Baldacci plans to detail the need for a contingency plan “as a precautionary measure” in the face of a potential people’s veto of a $450 million borrowing provision in the $5.7 billion two-year state spending package enacted earlier this year.

The governor said his new package, designed to address more than $100 million in state and federal funding for hospitals as well as a federal reimbursement rate reduction costing the state $73 million, would be “consistent” with the approach in his big budget package of curbing Maine’s tax burden, protecting health care and promoting economic growth and jobs.

A Republican legislative leader said Thursday he was increasingly optimistic over the possibility of new budget talks.

House Minority Leader David Bowles, R-Sanford, said he believed Democrats and Republicans were “getting close to some kind of framework where we can sit down and negotiate a replacement for the borrowing piece in the budget.”

Bowles qualified his optimism -“nobody’s flat-out said it” – but added that a successful renegotiation of the contentious borrowing provision could moot a smoldering referendum campaign now in its early stages.

“The people’s veto would no longer have any reason to go forward,” Bowles said.

On March 31, Baldacci held a signing ceremony to mark the passage of a biennial budget that he said would provide property tax relief by providing local schools with an additional $250 million.

Democratic majorities had pushed through a reworked version of the governor’s original plan that still avoided increases in broad-based taxes but scrapped a lottery securitization scheme in favor of a $450 million revenue bonding plan.

Less than two weeks later, five Republican lawmakers joined in the first formal step toward challenging the borrowing provision, going to the secretary of state’s office to begin the process of mounting a people’s veto that would entail gathering more than 50,000 petition signatures by June 28.

Since then, Democrats have stepped up their demands for Republicans to produce a budget alternative while Republicans, who at one time proposed a continuing resolution to guarantee current levels of funding for state government while budget deliberations were extended, have complained they were shut out of shaping the final budget package.

Last week, Democratic lawmakers held a news conference and gave the Republicans until Friday to put forth their own plan. Bowles said Thursday that Republicans would address the issue Friday morning.

Appropriations Committee members already once in public session have explored the possibility of reopening their earlier budget talks. No resolution came at the committee level and House and Senate leaders from both parties have been noncommittal or dismissive.

The potential of a people’s veto has been cited by Baldacci administration officials and State Treasurer David Lemoine as another hurdle that the state would need to overcome to allay Wall Street rating agencies eyeing the state warily.

Lemoine accompanied Baldacci to New York this week and was joined later by administration financial officials for talks in advance of possible rating adjustments that could come as soon as Friday.

As two legislative committees heard testimony Thursday on the potential effects of a cigarette tax increase, Baldacci health policy chief Trish Riley told The Associated Press that “the administration is not ready to embrace a cigarette tax.”