AUGUSTA (AP) – With major financial challenges facing the state, Gov. John Baldacci will outline his vision of the future shape of state government in his State of the State speech tonight.

The second-term Democratic governor’s speech to a joint House-Senate session, which will air live on statewide public radio and television, comes less than a month after he gave orders to curtail state spending by $38 million to forestall a $95 million shortfall in state revenues.

In his speech, which was still being refined Tuesday, Baldacci is expected to discuss those cutbacks affecting the fiscal year ending June 30 as well as longer-term budget revisions, spokesman David Farmer said Tuesday.

Without going into specifics, Farmer said Baldacci “will be talking about our plans for the future shape of state government.” He said Baldacci will present “some new initiatives, but no huge surprises.”

Baldacci proposed and the Legislature last year enacted a plan now being implemented to consolidate Maine’s 290 school administrative units to no more than 80 to streamline administration.

The governor last summer called for a state takeover of Maine’s county jail network, which also is designed to save taxpayers tens of millions of dollars. Farmer said Baldacci is expected to discuss the jail plan Wednesday night.

The school plan has prompted a petition drive by opponents who want to repeal the law, and the jail plan has drawn strong opposition from county officials.

In a preview of his State of the State speech, Baldacci said last weekend he anticipates strong reactions to budget revisions and other proposals he will present.

“No doubt there’s going to be arguments this year about Maine’s priorities,” Baldacci said. “There will be disagreements, some of them heated.”

Baldacci said that in a major election year, temptations for partisanship, showmanship and confrontation will be great and lawmakers’ patience and perseverance will be tested. But he also expressed confidence that legislators of all political stripes will do “what’s in the best interest for Maine and its people.”

In a rundown of issues facing the Legislature between now and April, Baldacci listed streamlining government, economic development, public education and college access, veterans’ needs, access to health insurance and removing toxins from the environment.

In the Republican response, House Minority Leader Josh Tardy listed other major issues, such as restoring highway and bridge funds that are also affected by a revenue shortfall and his party’s proposal to charge copays for Medicaid, or MaineCare, services.

Tardy, of Newport, also gave the GOP view on addressing the $95 million shortfall, saying, “Piling more taxes on top of our extreme tax burden is not the solution.”

AP-ES-01-08-08 1211EST