AUGUSTA (AP) – The Baldacci administration outlined how it would tap school aid to help bridge a $74 million three-year budget gap Friday, while tax committee panelists listened to wide-ranging critiques of sales tax expansions they have been reviewing.

Administration officials said a key element of the revised budget proposal would involve a fiscal 2008 reduction of $17 million in the planned increase in contributions toward local education costs.

Democratic Rep. Emily Cain of Orono worried that failing to proceed with what is known as a ramp-up in school aid to 55 percent of local costs would “set ourselves up for disgrace,” but administration officials sought to reassure her and other skeptics that the reduction would be only in that year and that the state would still meet its 55 percent target in fiscal 2009, as planned.

Initial reaction within the Appropriations Committee was muted. “No shockers that I can think of,” said Republican Rep. Sawin Millett of Waterford, noting favorably that the administration’s package of changes did not touch reserves in a budget stabilization fund and proposed no new sources of revenue.

As the Appropriations Committee listened to Baldacci budget chief Rebecca Wyke and other gubernatorial representatives, a simultaneous Taxation Committee session attracted representatives of the state chamber of commerce and other business groups raising objections to elements of a developing tax reform plan.

Roughed out for discussion is a possible plan to replace the state’s current income tax structure, which includes graduated rates topping out at 8.5 percent, by a flat tax of perhaps 6 percent. Other suggested components could be an increase in a $13,000 homestead exemption to $38,000 and a far-reaching set of sales tax expansions, potentially covering a raft of services not currently taxed.

Meanwhile, leaders of both the Appropriations Committee and the Taxation Committee, which held the informal public forum on its oft-changing tax reform work-in-progress, said the pace of deliberations would slow for a while.

Democratic Sen. Margaret Rotundo of Lewiston, an Appropriations panel co-chair, said budget writers once set on a faster track would now be working to complete their review of Gov. John Baldacci’s $6.4 billion biennial budget package by the end of the first week in May.

Budget deliberations had been interrupted in recent days by marathon negotiations that produced a $295 million bond package that won overwhelming support from the full House and Senate.

In the Taxation Committee room, House Chairman John Piotti, D-Unity, said that panel would temporarily shift its focus from tax reform to other legislation.

The length of such a change of pace appears uncertain. Democratic and Republican leaders are expected to meet with ranking committee members next week.

On Monday, the Appropriations Committee is expected to hear from a subcommittee reworking Gov. John Baldacci’s school system overhaul plan. Looking at an ideal size for a school district of 2,500 students, negotiators have been discussing a reduction in the statewide network of 152 school administrative systems to 80 districts.

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